Attached files
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EX-10.1 - EQUITY INCENTIVE PLAN - Vape Holdings, Inc. | fs1a1ex10i_peoplestring.htm |
EX-23.1 - ACCOUNTANTS CONSENT - Vape Holdings, Inc. | fs1a1ex23i_peoplestring.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
|
Washington,
D.C. 20549
|
FORM
S-1
|
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
|
Registration
No. 333-163290
|
PEOPLESTRING CORPORATION |
(Exact name of registrant as specified in its charter) |
AMENDMENT NO. 1 |
Delaware |
(State or other jurisdiction of incorporation or organization) |
7389 |
(Primary Standard Industrial Classification Code Number) |
90-0436540 |
(I.R.S. Employer Identification No.) |
157
Broad Street, Suite 109
Red
Bank, NJ 07701
Fax:
(732) 741-2842
|
(Address,
including zip code, and telephone number, including area code, of
Registrant’s principal executive offices)
|
Darin
M. Myman
157
Broad Street, Suite 109
Red
Bank, NJ 07701
Fax:
(732) 741-2842
|
(Address,
including zip code, and telephone number, including area code, of agent
for service)
|
Copies
to:
Barbara
R. Mittman, Esq.
551
Fifth Avenue, Suite 1601
New
York, NY 10176
Tel:
(212) 697-9500
|
From time to time after the effective date of this Registration Statement |
(Approximate date of commencement of proposed sale to the public) |
If
any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 check the following box: x
|
If
this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. o
|
|
If
this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
|
|
If
this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
|
|
Indicate
by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange
Act.
|
|
Large
accelerated filer o
|
Accelerated
filer o
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Non-accelerated
filer o (Do not
check if a smaller reporting company)
|
Smaller
reporting company x
|
Calculation
of Registration Fee
Title
of Each Class of Securities
to
be Registered
|
Amount
to be
Registered
(1)(2)
|
Proposed
Offering
Price
Per Share (3)(4)
|
Proposed
Maximum
Aggregate
Offering
Price (3) (4)
|
Amount
of
Registration
Fee
|
||||||||||||
Common
Stock,
$0.00001
par value per share
|
8,800,000 | $ | 0.125 | $ | 1,100,000 | $ | 61.38 |
(1)
|
An
indeterminate number of additional shares of common stock shall be
issuable pursuant to Rule 416 to prevent dilution resulting from stock
splits, stock dividends or similar transactions and in such an event the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416 under the Securities Act of
1933, as amended (the “Securities
Act”).
|
(2)
|
Represents
shares issued by Peoplestring Corporation in private placement
transactions completed on October 30,
2009.
|
(3) This
price was arbitrarily determined by PeopleString Corporation.
(4)
|
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(c) under the Securities Act of 1933, as amended (the
“Securities Act”).
|
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
SUBJECT
TO COMPLETION, DATED ________________, 2010
PEOPLESTRING
CORPORATION
8,800,000
SHARES OF COMMON STOCK
The
selling stockholders named in this prospectus are offering the 8,800,000 shares
of common stock of PeopleString Corporation. The selling stockholders acquired
the shares directly from our company in private offerings that were exempt from
the registration requirements of the Securities Act of 1933. We have been
advised by the selling stockholders that they may offer to sell all or a portion
of their shares of common stock being offered in this prospectus from time to
time. The selling stockholders will sell the shares of our common stock at a
fixed price of $0.125 per share until shares of our common stock are quoted on
the OTC Bulletin Board or listed for trading or quoted on any other public
market, other than quotation in the pink sheets, and thereafter at prevailing
market prices or privately negotiated prices. Our common stock is not now, nor
has ever been, traded on any market or securities exchange, and we have not
applied for listing or quotation on any public market. Although we intend to
seek to have our common stock quoted on the OTC Bulletin Board, we cannot
provide any assurance that our common stock will ever be quoted on the OTC
Bulletin Board or traded on any securities exchange. The purchaser in this
offering may be receiving an illiquid security. In order to apply for quotation
of our common stock, a market maker must file a Form 15c-211 to allow the market
maker to make a market in our shares of common stock. At the date hereof, we are
not aware that any market maker has any such intention. We cannot provide any
assurance that we will be able to locate a market maker willing to file a Form
15c-211 for our company. We will not receive any proceeds from the sale of
shares of our common stock by the selling stockholders. We will pay for the
expenses of this offering.
The
purchase of the securities offered through this prospectus involves a high
degree of risk. You should carefully read and consider the section of this
prospectus entitled “Risk Factors” on pages 6 through 17 before buying any
shares of our common stock.
Neither
the United States Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The
information contained in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the United States Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
The Date
of this Prospectus is: ________________, 2010
TABLE
OF CONTENTS
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You
should rely only on the information contained in
this prospectus. We have not authorized anyone to provide you with different
information. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the front of this
prospectus.
SUMMARY INFORMATION, RISK FACTORS AND RATIO OF EARNINGS TO
FIXED CHARGES
As used
in this prospectus, unless the context otherwise requires, “we,” “us,” “our,”
the “Company” and “PeopleString” refers to PeopleString Corporation. All dollar
amounts in this prospectus are in U.S. dollars unless otherwise stated. You
should read the entire prospectus before making an investment decision to
purchase our common stock.
Overview
of Our Business
PeopleString
Corporation has developed and operates a social network with a multi-tiered
affiliate program that shares revenue the Company generates through the social
network with PeopleString’s users. We share revenue generated from advertising
and marketing affiliations with the “active users” of our social network, which
are defined as those users who are registered users and have logged onto their
account within 30 days (or 90 days for premium users) of the date that the
revenue is received. In addition, pursuant to our shopping rewards program, a
user who purchases through our website will share in the revenue received by us
as a result of such purchases. In addition to our free user accounts, we offer
premium services that may be purchased by our users, including web
development.
We also
affiliate with other Internet companies, such as Google Inc. and LinkShare
Corporation, regarding advertisements and other marketing promotions which can
be accessed through our website (www.peoplestring.com). For
example, through these marketing affiliations, we post banner ads (an
advertisement for a specific company or product) on our website which generate
revenue for us if our users access such advertisements or access such
advertisements and purchase the products and services offered. Moreover, certain
of our marketing affiliations generate revenue for us when our users visit
another website using our services.
Company
Information
We were
incorporated on January 2, 2009, pursuant to the laws of the State of Delaware.
Our principal executive offices are located at 157 Broad Street, Suite 109, Red
Bank, NJ 07701 and our telephone number is (732) 741-2840. Our Internet address
is www.PeopleString.com.
About
this Prospectus
You
should only rely on the information contained in this prospectus. We have not,
and the selling stockholders have not, authorized anyone to provide information
different from that contained in this prospectus. The selling stockholders are
offering to sell, and seeking offers to buy, shares of our common stock only in
jurisdictions where offers and sales are permitted. You should not assume that
the information in this prospectus is accurate as of any date other than the
date on the front of the document.
Special
Note Regarding Forward-Looking Statements
Some of
the statements under “Overview of Our Business,” “Risk Factors,” “Plan of
Operation,” “Business,” and elsewhere in this prospectus constitute
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “intends to,” “estimated,” “predicts,” “potential,”
or “continue” or the negative of such terms or other comparable terminology.
These statements are only predictions and involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by such forward-looking statements. These factors include, among other
things, those listed under “Risk Factors,” “Plan of Operation” and elsewhere in
this prospectus. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements. We undertake no obligation to
update any of the forward-looking statements after the date of this prospectus
to conform forward-looking statements to actual results.
The
Offering
Selling
Security Holders:
|
The
selling stockholders named in this prospectus are existing stockholders of
PeopleString who purchased shares of our common stock in private placement
transactions completed on October 30, 2009. The issuance of the shares by
us to the selling stockholders was exempt from the registration
requirements of the Securities Act of 1933 (the “Securities Act”). See
“Selling Security Holders.”
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Securities
Being Offered:
|
Up
to 8,800,000 shares of our common stock, par value $0.00001 per
share.
|
Offering
Price:
|
The
selling stockholders will sell the shares of our common stock at a fixed
price of $0.125 per share until shares of our common stock are quoted on
the OTC Bulletin Board or listed for trading or quoted on any other public
market, other than quotation in the pink sheets, and thereafter at
prevailing market prices or privately negotiated prices. We intend to seek
to have our common stock quoted on the OTC Bulletin upon our becoming a
reporting entity under the Securities Exchange Act of 1934 (the “Exchange
Act”), but we cannot provide any assurance that our common stock will ever
be quoted on the OTC Bulletin Board or traded on any securities
exchange.
|
Minimum
Number of Shares To Be Sold in This Offering:
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None.
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Common
Stock Outstanding Before and After the Offering:
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33,900,000
shares of our common stock are issued and outstanding as of the date of
this prospectus. All of the 8,800,000 shares of common stock to be sold
under this prospectus will be sold by existing
stockholders.
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Use
of Proceeds:
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We
will not receive any proceeds from the sale of the common stock by the
selling stockholders.
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Risk
Factors:
|
See
“Risk Factors” below and the other information in this prospectus for a
discussion of the factors you should consider before deciding to invest in
shares of our common stock.
|
Summary
Financial Information
The
following summary financial data of PeopleString as of June 30, 2009 are derived
from the audited financial statements of PeopleString. The financial data of
PeopleString as of September 30, 2009 are derived from the financial statements
of PeopleString that have not been audited by independent accountants. However,
in the opinion of management, the summary financial data as of September 30,
2009 includes all adjustments (which include normal recurring adjustments)
necessary for a fair presentation of the data. Operating results for the nine
months ended September 30, 2009 are not necessarily indicative of results that
may be expected for the entire year ending December 31, 2009 or for any other
period. The data should be read in conjunction with the financial statements,
related notes and other financial information included in this
prospectus.
September
30, 2009
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June
30, 2009
|
|||||||
(Unaudited)
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(Audited)
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|||||||
BALANCE
SHEET DATA
|
||||||||
Total
Assets
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$ | 239,134 | $ | 201,181 | ||||
Total
Liabilities
|
101,342 | 24,838 | ||||||
Stockholder's
equity
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$ | 137,792 | $ | 176,343 |
Period
January 2, 2009
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Period
January 2, 2009
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|||||||
(Date
of Formation)
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(Date
of Formation)
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|||||||
Through
September
30, 2009
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Through
June
30, 2009
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|||||||
(Unaudited)
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(Audited)
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|||||||
OPERATING
DATA
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||||||||
Revenue
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$ | 338,991 | $ | 83,633 | ||||
Net
(loss) earnings
|
(138,173 | ) | 478 | |||||
Net
(loss) earnings per common share
|
$ | (0.01 | ) | $ | 0.00 |
For the period January 2, 2009 (Date of Formation) through June
30, 2009, we operated at a gain. For the period January 2, 2009 (Date of
Formation) through September 30, 2009, we operated at a loss, and we cannot
assure that we will operate at a profit in the future. Because we have operated
at loss, we have relied upon a private placement of common stock to fund our
operations since our inception . We may continue to rely on debt or equity investments
until we operate profitably, if ever.
RISK FACTORS
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock, if we publicly trade at
a later date, could decline due to any of these risks, and you may lose all or
part of your investment.
Risks
Related to Our Business
We
cannot assure that we will become profitable since
we have a limited operating history, limited revenue and plan to increase our
expenses to develop our business.
For the
period January 2, 2009 (Date of Formation) through September 30, 2009, we had
accumulated net losses of $138,173. Our limited operating history, limited
revenue to date and the uncertainty of the market in which we operate, make it
very difficult for us to predict our future results of operations or whether we
will achieve profitability. We expect to considerably increase our operating
expenses in the future, particularly expenses relating to licensing and
developing technology, payroll, sales and marketing, user payments, general
corporate matters and compliance with applicable securities laws. You may lose
all or substantially all of your investment if we are unable to continue to
develop our business and generate a profit.
We
may need additional capital to expand our
operations until we are able to generate a sustainable profit.
At
October 31, 2009, we had cash on hand of $463,586. We do
not currently have contractual commitments for revenues (i.e., backlog) or any
other funding beyond receivables. At October 31, 2009, our existing capital
resources and contractual commitments were $506,711. Revenues for the three months ended March 31, 2009, June 30, 2009
and September 30, 2009 were $3,400, $80,233 and $255,358, respectively. Revenues
for the three months ended December 31, 2009 are expected to be approximately
$400,000. While we do not have contractual commitments for revenues (i.e.,
backlog), new revenues and existing capital are expected to be sufficient to
fund our operations and base plan for the next twelve
months.
We plan to expand our business. If we do not generate profits
above the level needed to sufficiently fund both our operations for the next
twelve months and to expand, we will seek to raise additional capital. We cannot
assure that we will be able to raise additional capital on terms
favorable to us or at all. Our inability to raise capital could require us to
delay or eliminate our plans to expand, and would likely impact revenues beyond 12 months . In
addition, any future sale of our equity securities would dilute the ownership
and control of your shares and could be at prices substantially below the price
you paid for your shares.
Our
key executive officers and directors may have potential conflicts of interest as
key executives and board members of BigString Corporation.
BigString
Corporation is an email service provider in which Darin M Myman is the Chief
Executive Office and a Director, Robert
S. DeMeulemeester is the Chief Financial Officer and a Director, and Adam M.
Kotkin, is the Chief Operating Officer and a Director. PeopleString
is a social networking company with a multi-tiered affiliate program that shares
revenue generated through the social network with PeopleString’s users.
PeopleString began as a wholly-owned subsidiary of BigString Corporation
(“BigString”), a public company, but as of October 31, 2009, BigString owned
approximately 29% of PeopleString’s outstanding common stock. PeopleString utilizes BigString’s messaging technology
for email and instant messaging; these services are non-material to the
operation or continued operation of PeopleString Corporation, The key executive
officers and board of directors is currently the same for both PeopleString
Corporation and BigString Corporation which may create potential conflicts of
interest.
Our
plans are dependent upon key individuals and the ability to
attract qualified personnel to be successful.
We will
be dependent upon our executive officers and board of directors who have other
commitments and cannot devote their full attention to the Company. Nevertheless,
the loss of any of the foregoing individuals could have a material adverse
effect upon the Company's business prospects and prohibit the Company from
successfully achieving its goals. Moreover our success continues to depend to a
significant extent on our ability to identify, attract, hire, train and retain
qualified professional, creative, technical and managerial personnel.
Competition for such personnel is intense, and there can be no assurance that we
will be successful in identifying, attracting, hiring, training and retaining
such personnel in the future. The competition for web developers, creative
personnel and technical directors is especially intense because of the high
demand for such individuals. If we are unable to hire, assimilate and retain
such qualified personnel in the future, such inability would have a material
adverse effect on our business, operating results and financial condition. The
Company may also depend on Third party contractors and other partners to further
develop its website and proprietary technologies as well as any future
enhancements thereto. There can be no assurance that we will be successful in
either attracting and retaining qualified personnel, or creating arrangements
with such Third parties. The failure to succeed in these endeavors will have a
material adverse effect on the Company and its ability to consummate its
business plans.
Our
key personnel may provide only limited amounts of time to our
business.
Our
future ability to execute our business plan depends upon the continued service
of our executive officers, including Darin M. Myman, our President and Chief
Executive Officer, Robert S. DeMeulemeester, our Executive Vice President, Chief
Financial Officer and Treasurer, Adam M. Kotkin, our Chief Operating Officer and
Secretary , and other key technology, marketing,
sales and support personnel or other employees, three of whom are also executive
officers of BigString Corporation and as such may be
limited in the amount of time they can devote to the Company. However, they plan on devoting a minimum of at least 20 hours per week to the
Company. We currently do not have any employment agreements with our key
personnel. However, key technology support personnel are required to enter into
a non-disclosure, non-competition and assignment of inventions agreement with
PeopleString, which provides, among other things, that the employee will not
compete with us or solicit any of our customers or employees for a period of one
year after his or her employment terminates for any reason. If we lost the
services of one or more of our key personnel, or if one or more of our executive
officers or employees joined a competitor or otherwise competed with us, our
business may be adversely affected. In particular, the services of key members
of our research and development team would be difficult to replace. We cannot
assure that we will be able to retain or replace our
key personnel.
Limitations on
director and officer liability and indemnification of our Company’s officers and
directors by us may discourage stockholders from bringing suit against an
officer or director.
Our
Company’s articles of incorporation and bylaws provide, with certain exceptions
as permitted by governing state law, that a director or officer shall not be
personally liable to us or our stockholders for breach of fiduciary duty as a
director, except for acts or omissions which involve intentional misconduct,
fraud or knowing violation of law, or unlawful payments of dividends. These
provisions may discourage stockholders from bringing suit against a director for
breach of fiduciary duty and may reduce the likelihood of derivative litigation
brought by stockholders on our behalf against a director.
If
the website fails to gain market acceptance, we may not have sufficient capital
to pay our expenses and to continue to operate.
Our
ultimate success will depend on generating revenues from the advertisement
placements on the website and sale of services through the website. We have no
direct advertising sales of our own. All of our advertising revenue is dependent
on independent third parties. As a result, if we do not generate enough users,
we may be unable to generate sufficient advertising for our site. We may
not achieve and sustain market acceptance sufficient to generate revenues to
cover our costs and allow us to become profitable or even continue to
operate.
We
could be subjected to claims and incur compliance costs related to improper
conduct by users of our website .
We
operate a website that facilitates social interaction among users, which can
facilitate unlawful behavior by these users. The terms of use of our websi te prohibits a broad range of unlawful or undesirable
conduct. While we have put in place a variety of measures to enforce these terms
of use, the nature of online social interaction poses enforcement challenges. We
may be unable to block access in all instances to users who are determined to
gain access to our sites for improper motives. Although we do not believe that
current law subjects us to liability for the activities of such users, this area
of law is unsettled. Claims may be threatened or brought against us using
various legal theories based on the nature and content of information that may
be posted online or generated by our users. Investigating and defending any of
these types of claims could be expensive, even to the extent that the claims do
not ultimately result in liability.
We
may be dependent on third parties to add new features and
expand the website and proprietary technologies, and any increased costs
associated with third party developers or any delay or interruption in
production would negatively affect both our ability to expand the website and proprietary technologies and our
ability to expand our operations.
We may
need to rely on third parties to add new features and
expand portions of the website and proprietary technologies. The costs
associated with relying on third parties may increase our development costs and
negatively affect our ability to operate. Since we have less control over a
third party because we cannot control the developer’s personnel, schedule or
resources, we may experience delays in finalizing upgrades
to the website. In addition, aspects of the website and proprietary
technologies may not match our expectations. If this happens we could lose
anticipated revenues from the website and may not have the capital
necessary to continue our operations. In addition, we may be required to rely on
certain technology that we will license from third parties, including technology
that we integrate and use with our internally developed technology. We cannot
provide any assurances that these third party technology licenses will be
available to us on commercially reasonable terms. The inability to
establish any of these technology licenses, or the loss of such licenses if
established, could result in delays in completing upgrades to our website and proprietary
technologies until equivalent technology could be identified, licensed and
integrated. Any such delays could materially adversely affect our business,
operating results and financial condition. For instance, we
plan upgrades to our advertising platform. Any delays to adding new features to
the advertising platform could materially affect planned
revenues.
We
operate in a highly competitive industry and compete against many large
companies.
Many
companies worldwide are dedicated to social networking and similar services
related to social networking. We expect more companies to enter this industry.
Our competitors vary in size from small companies to very large companies with
dominant market shares and substantial financial resources. The Company’s
website will be in competition with these companies, such as Facebook, MySpace
and Okrut, and others. Many of our competitors have significantly greater
financial, marketing and development resources than we have. As a result, we may
not be able to devote adequate resources to develop, acquire or license new
technologies, undertake extensive marketing campaigns, adopt aggressive pricing
policies or adequately compensate our developers to the same degree as certain
of our competitors. As the social networking services in many of our proposed
markets are relatively new and rapidly evolving, our current or future
competitors may compete more successfully as the industry matures. In
particular, any of our competitors may offer products and services that have
significant performance, price, creativity and/or other advantages over our
website and technologies. These products and services may significantly affect
the demand for our services. In addition, any of our current or future
competitors may be acquired by, receive investments from or enter into other
strategic relationships with larger, longer-established and better-financed
companies and therefore obtain significantly greater financial, marketing and
technology licensing and development resources than we have. If we are unable to
compete effectively in our principal markets, our business, financial condition
and results of operations could be materially and adversely
affected.
Unexpected
network interruptions, security breaches or computer virus attacks could harm
our business.
The
Company may be required to develop and maintain a substantial computer network
infrastructure in order to protect the website and proprietary technologies. Any
failure to maintain satisfactory performance, reliability, security and
availability of such network infrastructure, whether maintained by us or by
third parties, may cause significant harm to our ability to attract and maintain
users for our services. Major risks relating to any such future network
infrastructure include:
•
|
any
breakdowns or system failures, including from fire, flood, earthquake,
typhoon or other natural disasters, power loss or telecommunications
failure, resulting in a sustained shutdown of all or a material portion of
our servers; and
|
|
•
|
any
security breach caused by hacking, loss or corruption of data or
malfunctions of software, hardware or other computer equipment, and the
inadvertent transmission of computer viruses.
|
Any of
the foregoing factors could reduce a future users’ satisfaction, harm our
business and reputation, have a material adverse effect on our financial
condition and results of operations and result in the loss of an investor’s
entire investment.
Our
lack of patent and/or copyright protection and any unauthorized use of the
website and/or proprietary technologies by third parties, may harm our business.
We have
filed a provisional patent application, “Track and pay for performance direct
mail.” However, as of the date of this filing, we have not received a patent
and/or copyright protection for our website, planned proprietary technologies
and/or planned products. Presently we intend to rely on trade secret protection
and/or confidentiality agreements with our key technology support
personnel, customers, business partners and others to protect our
intellectual property rights. Despite certain precautions taken by us, it may be
possible for third parties to obtain and use our intellectual property without
authorization. This risk may be increased due to the lack of any patent and/or
copyright protection. If any of our proprietary rights are misappropriated or we
are forced to defend our intellectual property rights, we will have to incur
substantial costs. Such litigation could result in substantial costs and
diversion of our resources, including diverting the time and effort of our
senior management, and could disrupt our business, as well as have a material
adverse effect on our business, prospects, financial condition and results of
operations. Management will from time to time determine whether applying for
patent and copyright protection is appropriate for us. We have no guarantee
that, if filed, any applications will be granted or, if awarded, whether they
will offer us any meaningful protection from other companies in our business.
Furthermore, any patent or copyrights that we may be granted may be held by a
court to infringe on the intellectual property rights of others and subject us
to awards for damages.
We
may be subject to claims with respect to the infringement of intellectual
property rights of others, which could result in substantial costs and diversion
of our financial and management resources to defend
such claims and/or lawsuits against us .
We cannot
be certain that the website and proprietary technologies will not infringe upon
patents, copyrights or other intellectual property rights held by third parties.
While we know of no basis for any claims of this type, the existence of and
ownership of intellectual property can be difficult to verify and we have not
made an exhaustive search of all patent filings. Additionally, most patent
applications are kept confidential for twelve to eighteen months, or longer, and
we would not be able to be aware of potentially conflicting claims that they
make. We may become subject to legal proceedings and claims from time to time
relating to the intellectual property of others in the ordinary course of our
business. If we are found to have violated the intellectual property rights of
others, we may be enjoined from using such intellectual property, and we may
incur licensing fees or be forced to develop alternative technology or obtain
other licenses. In addition, we may incur substantial expenses in defending
against these third party infringement claims and be diverted from devoting time
to our business and operational issues, regardless of the merits of any such
claim. Successful infringement or licensing claims against us may result in
substantial monetary damages, which may materially disrupt the conduct of our
business and have a material adverse effect on our reputation, business,
financial condition and results of operations.
Our
future growth is largely dependent upon our ability to develop technologies that
achieve market acceptance with acceptable margins.
Our
future growth rate depends upon a number of factors, including our ability to:
identify emerging technological trends in our target end-markets; develop and
maintain competitive products; create our website and proprietary
technologies with innovative features that differentiate our products from
those of our competitors; and develop, manufacture and bring products to market
quickly and cost-effectively. Our ability to further develop the website and
proprietary technologies will require substantial technological innovation
and requires the investment of significant resources. These development
efforts may not lead to the complete development of the website and/or
proprietary technologies on a timely basis or that meet the needs of our
customers as fully as competitive offerings. In addition, the markets for our
products may not develop or grow as we anticipate. The failure of our products
to gain market acceptance or their obsolescence due to more attractive offerings
by competitors could significantly reduce our revenues and adversely affect our
business, operations and financial results.
We
may incur substantial unanticipated costs related to our website and proprietary
technologies.
Due to
changes in technology, new product announcements, competitive pressures, system
design and/or other specifications we may be required to change the current
plans for our website and proprietary technologies. Therefore, we cannot provide
any assurances that the website and proprietary technologies can be completed
within our projections. In case of budget over-runs and additional expansions,
we may choose to finance such capital expenditures through the issuance of
additional equity or debt securities, by obtaining a credit facility or by some
other financing mechanism. If we choose to seek financing for such expenditures,
we cannot provide any assurances that such financing will be available on terms
reasonably acceptable to us or at all.
Any
capacity constraints or system disruptions could result in
the loss of business.
Our
business will rely significantly on Internet technologies and infrastructure.
Additionally, we are dependent on a third party email service provider for our
email and website hosting. Therefore, the performance and reliability of our
Internet sites and network infrastructure will be critical to our ability to
attract and retain users, advertisers, merchants and strategic partners. Any
system error or failure, or a sudden and significant increase in traffic, may
result in the unavailability of sites and significantly delay response times.
Individual, sustained or repeated occurrences could result in a loss of
potential or existing users, advertisers or strategic partners and we could
seriously damage our business.
Our
systems and operations will be vulnerable to interruption or malfunction due to
certain events beyond our control, including natural disasters,
telecommunications failures, hardware and software failures and computer
hacking. We will also rely on Web browsers and online service providers to
provide Internet access to our sites. There can be no assurance that we will be
able to expand our network infrastructure, either ourself or through use of
third-party hosting systems or service providers, on a timely basis sufficient
to meet demand. We may also have to build redundant facilities or systems,
produce a formal disaster recovery plan and possibly obtain sufficient business
interruption insurance to compensate for losses that may occur. Any interruption
to our systems or operations could have a material adverse effect on the
Company’s business and its ability to retain users, advertisers and strategic
partners. Currently, the company does not have the above-stated plans in
place.
Natural
disasters can affect our business in a negative manner.
The
Company's operations and services depend on the extent to which its computer
equipment and the computer equipment of its third-party network providers is
protected against damage from fire, earthquakes, power loss, telecommunications
failures, and similar events.
Despite
precautions taken by the Company and its third-party network providers, over
which it has no control, a natural disaster or other unanticipated problems at
its headquarters or a third-party provider could cause interruptions in the
services that it provides. If disruptions occur, the Company may have no means
of replacing these network elements on a timely basis or at all. The Company
does not currently maintain fully redundant or back-up Internet services or
backbone facilities or other fully redundant computing and telecommunications
facilities. Any accident, incident, system failure, or discontinuance of
operations involving our network or a third-party network that causes
interruptions in our operations could have a material adverse effect on our
ability to provide services to our customers and, in turn, on our business,
financial condition, and results of operations.
Our
business will be dependent upon broadband carriers.
The
Company will rely on broadband providers to provide high speed data
communications capacity to our customers. The Company may experience disruptions
or capacity constraints in these Broadband services. If disruptions or capacity
constraints occur, the Company may have no means of replacing these services, on
a timely basis or at all. In addition, broadband access may be limited or
unavailable in certain areas, thereby reducing our potential
market.
As
a public company, we will incur substantial expenses.
Since we will become subject to the information and
reporting requirements of the U.S. securities laws, we will
be subject to review, audit, and public reporting of our
financial results, business activities, and other matters. Recent SEC
regulation, including regulation enacted as a result of the Sarbanes-Oxley Act
of 2002, has also substantially increased the accounting, legal, and other costs
related to becoming and remaining an SEC reporting company. If we do not have
current information about our company available to market makers, they will not
be able to trade our stock. The public company costs of preparing and filing
annual and quarterly reports, and other information with the SEC and furnishing
audited reports to stockholders, will cause our expenses to be higher than they
would be if we were privately-held. In addition, we are incurring substantial
expenses in connection with the preparation of this Registration Statement.
These increased costs may be material and may include the hiring of additional
employees and/or the retention of additional advisors and professionals. Our
failure to comply with the federal securities laws could result in private or
governmental legal action against us and/or our officers and directors, which
could have a detrimental effect on our business and finances, the value of our
stock, and the ability of stockholders to resell their stock.
We may be exposed to potential risks
resulting from new requirements under the Sarbanes-Oxley Act of
2002.
In
addition to the costs of compliance with having our Shares listed on the OTC
Bulletin Board, there are substantial penalties that could be imposed upon us if
we fail to comply with all of regulatory requirements. In particular, under the
Sarbanes-Oxley Act of 2002 we may be required to include in our annual report
our assessment of the effectiveness of our internal control over financial
reporting as of the end of our fiscal year. Furthermore, our independent
registered public accounting firm may be required to attest to whether
our assessment of the effectiveness of our internal control over financial
reporting is fairly stated in all material respects and separately report on
whether it believes we have maintained, in all material respects, effective
internal control over financial reporting. We have not yet completed our
assessment of the effectiveness of our internal control over financial
reporting. We expect to incur additional expenses and diversion of management’s
time as a result of performing the system and process evaluation, testing and
remediation required in order to comply with the management certification and
auditor attestation requirements.
The
offering price of the Shares in this Offering was not determined by traditional
criteria of value.
The
offering price of the Shares being offered pursuant to this Offering was arbitrarily established by us and was not
determined by reference to any traditional criteria of value, such as book
value, earnings or assets.
If
a market for our Shares does not develop, shareholders may be unable to sell
their Shares.
A market
for the Shares may never develop. We intend to contact an authorized OTC
Bulletin Board market-maker for sponsorship of our securities on the OTC
Bulletin Board upon the effectiveness of the registration statement of which
this prospectus forms a part. However, our Shares may never be traded on the OTC
Bulletin Board, or, if traded, a public market may not materialize. If our
Shares are not traded on the OTC Bulletin Board or if a public market for our
Shares does not develop, investors may not be able to re-sell the shares of our
Shares that they have purchased and may lose all of their
investment.
Because
we do not expect to pay dividends for the foreseeable future, investors seeking
cash dividends should not purchase the Shares.
We have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our board of directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit agreements that we may be a
party to at the time. Accordingly, investors must rely on sales of their own
common stock after price appreciation, which may never occur, as the only way to
realize their investment. Investors seeking cash dividends should not purchase
Shares.
Because
we will be subject to the “Penny Stock” rules if the Shares are quoted on the
OTC Bulletin Board, the level of trading activity in the Shares may be
reduced.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted on
FINRA). The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer’s presumed control over the market, and
monthly account statements showing the market value of each penny stock held in
the customer’s account. In addition, broker-dealers who sell these securities to
persons other than established customers and “accredited investors” must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and investors in the Shares may find it difficult to sell
their Shares.
If
the Shares are quoted on the OTC Bulletin Board, we will be required to remain
current in our filings with the SEC and our securities will not be eligible for
quotation if we are not current in our filings with the SEC.
In the
event that the Shares are quoted on the OTC Bulletin Board, we will be required
to remain current in our filings with the SEC in order for the Shares to be
eligible for quotation on the OTC Bulletin Board. In the event that we become
delinquent in our required filings with the SEC, quotation of the Shares will be
terminated following a 30 day grace period if we do not make our required filing
during that time. If the Shares are not eligible for quotation on the OTC
Bulletin Board, investors in the Shares may find it difficult to sell their
Shares.
FORWARD-LOOKING
STATEMENTS AND INFORMATION
This
prospectus contains forward-looking statements, which relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts” or “potential” or
the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
“Risk Factors” beginning on page 9 that may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.
While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results. The safe harbor for forward-looking statements provided in
the Private Securities Litigation Reform Act of 1995 does not apply to the
offering made in this prospectus.
USE
OF PROCEEDS
We are
not selling any shares of common stock in this offering and, therefore, we will
not receive any of the proceeds from the sale of the shares of our common stock
being offered for sale by the selling stockholders. The selling stockholders
will pay any brokerage commissions and/or similar charges incurred in connection
with the sale of the shares.
Our
common stock is not now, nor has ever been, traded on any market or securities
exchange and we have not applied for listing or quotation on any public market.
In order for our stock to be quoted on the OTC Bulletin Board, a market maker
must file an application on behalf of the Company in order to make a market for
the common stock. We cannot provide our investors with any assurance that our
common stock will ever be quoted on the OTC Bulletin Board or traded on any
exchange. The offering price of $0.125 per share has been determined arbitrarily
and does not have any relationship to any established criteria of value, such as
book value or earning per share. Additionally, because we have no significant
operating history and have not generated any material revenues to date, the
price of the common stock is not based on past earnings, nor is the price of the
common stock indicative of the current market value of the assets owned by us.
No valuation or appraisal has been prepared for our business and potential
business expansion.
DILUTION
The
common stock to be sold by the selling stockholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution in
terms of the number of shares held by our existing stockholders. However, there
will be price dilution, since shares were acquired at a considerable
discount.
SELLING STOCKHOLDERS
The
selling stockholders are offering up to 8,800,000 shares of common stock. The
selling stockholders acquired the shares of common stock offered herein from private placement transactions pursuant to Section 4(2) of the Securities
Act of 1933. At the time of purchase of such securities, each of the selling
stockholders had no agreement or understanding, directly or indirectly, with any
person to distribute such securities.
The
shares to be offered by the selling stockholders are “restricted” securities
under applicable federal and state laws and are being registered under the
Securities Act of 1933, as amended (the “Securities Act”) to give the selling
stockholders the opportunity to publicly sell these shares.
The
registration of these shares does not require that any of the shares be offered
or sold by the selling stockholders. The selling stockholders may from time to
time offer and sell all or a portion of their shares in the over-the-counter
market, in negotiated transactions, or otherwise, at prices then prevailing or
related to the then current market price or at negotiated prices.
Selling
shareholders will sell their shares at a fixed price of $0.125.
Other
than the costs of preparing this prospectus and a registration fee to the
Securities and Exchange Commission, we are not paying any costs relating to the
sales by the selling stockholders.
The
following is a list as of October 31, 2009 of selling stockholders who own an
aggregate of 33,250,000 shares of our common stock covered in this prospectus.
Unless otherwise indicated, the selling stockholders have sole voting and
investment power with respect to their shares.
Shareholder
(7)
|
Shares
Owned
Before
the Offering
|
Shares
Being
Offered
|
Percentage
of
Class
Owned
Before
the
Offering
|
Percentage
of
Class
After
Offering Assuming
Maximum
Sold
|
BigString
Corporation (1)
|
10,000,000
|
900,000
|
29.5%
|
26.8%
|
Darin
M. Myman (1)
|
2,500,000
|
250,000
|
36.9 %
|
33.5 %
|
Robert
S. DeMeulemeester (1)
|
2,500,000
|
250,000
|
36.9 %
|
33.5 %
|
Adam
M. Kotkin (1)
|
2,500,000
|
250,000
|
36.9 %
|
33.5 %
|
Peter
Shelus
|
800,000
|
80,000
|
2.4%
|
2.1%
|
Craig
Myman (2)
|
800,000
|
80,000
|
2.4%
|
2.1%
|
Robb
Knie
|
3,000,000
|
1,475,000
|
8.8%
|
4.5%
|
Barry
Honig (3)
|
2,950,000
|
1,450,000
|
8.7%
|
4.4%
|
Alan
S. Honig (3)
|
610,000
|
300,000
|
1.8%
|
0.9%
|
Alan
S. Honig Custodian for Cameron Honig UTMA F/L (3)
|
585,000
|
75,000
|
1.7%
|
1.5%
|
Alan
S. Honig Custodian for Harrison Honig UTMA F/L (3)
|
585,000
|
75,000
|
1.7%
|
1.5%
|
Alan
S. Honig Custodian for Jacob Honig UTMA F/L (3)
|
585,000
|
75,000
|
1.7%
|
1.5%
|
Alan
S. Honig Custodian for Ryan Honig UTMA F/L (3)
|
585,000
|
75,000
|
1.7%
|
1.5%
|
Jonathan
Honig
|
1,000,000
|
450,000
|
2.9%
|
1.6%
|
Kim
& Matthew Barra
|
200,000
|
100,000
|
0.6%
|
0.3%
|
Sara
& Patrick Vertucci
|
100,000
|
50,000
|
0.3%
|
0.1%
|
Revolutionary
Asset Management LLC (4)
|
100,000
|
50,000
|
0.3%
|
0.1%
|
Milton
& Olga Cohen
|
70,000
|
35,000
|
0.2%
|
0.1%
|
Bruce
Duane Van Heel
|
1,000,000
|
150,000
|
2.9%
|
2.5%
|
Barbara
R. Mittman (5)
|
300,000
|
150,000
|
0.9%
|
0.4%
|
Joseph
A. Noel (6)
|
560,000
|
560,000
|
1.7%
|
0.0%
|
Sheena
Kong (6)
|
560,000
|
560,000
|
1.7%
|
0.0%
|
Frank
D'Agostino (6)
|
400,000
|
400,000
|
1.2%
|
0.0%
|
Robert
S. Coleman Trust (6)
|
400,000
|
400,000
|
1.2%
|
0.0%
|
Michael
Brauser (6)
|
400,000
|
400,000
|
1.2%
|
0.0%
|
Katherine
Noel Zuniga (6)
|
160,000
|
160,000
|
0.5%
|
0.0%
|
TOTAL
SHARES OFFERED BY SELLING SHAREHOLDERS
|
33,250,000
|
8,800,000
|
Notes:
Includes,
when applicable, shares owned of record by such person’s minor children over
whose shares of common stock such person has custody, voting control, or power
of disposition.
Except as
disclosed below, none of the selling stockholders:
(i) has had a
material relationship with us other than as a stockholder at any time within the
past three years; or
(ii) has
ever been one of our officers or directors.
(1)
|
Mr.
Myman, Mr. DeMeulemeester and Mr. Kotkin are officers and directors of the
board of BigString Corporation and have sole voting and dispositive
control over the shares held by BigString Corporation.
|
(2)
|
Craig
Myman is the brother of Darin M. Myman. Craig Myman has sole voting and
dispositive control over his shares.
|
(3)
|
Barry
Honig’s father, Alan S. Honig, is the custodian and controlling person for
Barry Honig’s children: Cameron Honig, Harrison Honig, Jacob Honig and
Ryan Honig. Barry Honig disavows any control over shares held in his
children’s custodial accounts.
|
(4)
|
The
controlling persons for this selling stockholder are Richard
McGuire
|
(5)
|
Barbara
R. Mittman is an independent attorney for PeopleString.
|
(6)
|
PeopleString
agreed to provide the selling shareholders with registration
rights.
|
(7)
|
None
of the selling shareholders listed above have or have had any position,
office, or other material relationship within the past three years with
the registrant or any of its predecessors or affiliates, except Mr. Myman,
Mr. DeMeulemeester and Mr. Kotkin who control BigString Corporation
shares. None of the selling shareholders is a broker-dealer or affiliate
of a broker-dealer in the United
States.
|
Based on
information provided to us, none of the selling stockholders are affiliated or
have been affiliated with any broker-dealer in the United States.
We may
require the selling stockholders to suspend the sales of the shares of our
common stock offered by this prospectus upon the occurrence of any event that
makes any statement in this prospectus or the related registration statement
untrue in any material respect or that requires the changing of statements in
those documents in order to make statements in those documents not
misleading.
PLAN
OF DISTRIBUTION
We are
registering the shares currently held by certain of our stockholders to permit
them and their transferees or other successors in interest to offer the shares
from time to time. We will not offer any shares on behalf of any selling
stockholder, and we will not receive any of the proceeds from any sales of
shares by such stockholders. The prices at which the selling security holders
may sell the shares has arbitrarily been determined to be at $0.125 per share or
until a market price for the shares is determined upon quotation on the OTC
Bulletin Board or listed on a securities exchange. The selling stockholders and
any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their registered shares of common stock on any stock
exchange market or trading facility on which our shares may be traded or in
private transactions.
The
selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions, if our shares are ever approved for trading on an
exchange or by other means. In the event that any donee, pledgee, transferee or
other successor-in-interest sells shares received from a person set forth on the
“Selling Stockholders” table after the date of this prospectus, we will amend
this prospectus by filing a post effective amendment to include the names
of such donee, pledgee, transferee or other successor-in-interest selling such
shares and disclose the applicable compensation arrangements.
If our
shares are approved for such trading, as to which we cannot provide any
assurance, these dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices. The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein if our shares are approved for listing
on an exchange or for trading on the OTC Bulletin Board:
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principle and resale by the broker-dealer for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transaction;
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
·
|
specified
number of such shares at a stipulated price per
share;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
As of the
date of this prospectus, we have no information on the manner or method by which
any selling stockholder may intend to sell shares. The selling stockholders have
the sole and absolute discretion not to accept any purchase offer or make any
sale of shares if they deem the purchase price to be unsatisfactory at any
particular time.
If a
trading market for our common stock develops, the selling stockholders may also
sell the shares directly to market makers acting as principals and/or
broker-dealers acting as agents for themselves or their customers. Such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of shares for
whom such broker-dealers may act as agents or to whom they sell as principal, or
both, which compensation as to a particular broker-dealer might be in excess of
customary commissions. Market makers and block purchasers purchasing the shares
will do so for their own account and at their own risk. It is possible that a
selling stockholder will attempt to sell shares of common stock in block
transactions to market makers or other purchasers at a price per share which may
be below the then market price. We cannot assure
that all or any of the shares offered by this prospectus will be sold by
the selling stockholders. The selling stockholders and any brokers, dealers or
agents, upon effecting the sale of any of the shares offered by this prospectus,
may be deemed "underwriters" as that term is defined under the Securities Act or
the Securities Exchange Act of 1934, or the rules and regulations
thereunder.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered by this prospectus through an underwriter. No selling stockholder has
entered into an agreement with a prospective underwriter. If a selling
stockholder enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revision to this prospectus.
The
selling stockholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Securities Exchange Act of 1934 and the rules and regulations thereunder,
including, without limitation, Regulation M, which may restrict certain
activities of, and limit the timing of purchases and sales of any of the shares
by the selling stockholders or any other such person. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. All of these limitations may affect the marketability of the
shares.
Under the
regulations of the Securities Exchange Act of 1934, any person engaged in a
distribution of the shares offered by this prospectus may not simultaneously
engage in market making activities with respect to our common stock during the
applicable "cooling off" periods prior to the commencement of such distribution.
In addition, and without limiting the foregoing, the selling stockholders will
be subject to applicable provisions, rules and regulations of the Securities
Exchange Act of 1934 and the rules and regulations thereunder, which provisions
may limit the timing of purchases and sales of common stock by the selling
stockholders.
We have
advised the selling stockholders that, during such time as they may be engaged
in a distribution of any of the shares we are registering on their behalf in
this registration statement, they are required to comply with Regulation M as
promulgated under the Securities Exchange Act of 1934. In general, Regulation M
precludes any selling stockholder, any affiliated purchasers and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase,
any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a "distribution" as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a "distribution participant" as an
underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution. Our officers
and directors, along with affiliates, will not engage in any hedging, short, or
any other type of transaction covered by Regulation M. Regulation M prohibits
any bids or purchases made in order to stabilize the price of a security in
connection with the distribution of that security, except as specifically
permitted by Rule 104 of Regulation M. These stabilizing transactions may cause
the price of the common stock to be higher than it would otherwise be in the
absence of those transactions. We have advised the selling stockholders that
stabilizing transactions permitted by Regulation M allow bids to purchase our
common stock so long as the stabilizing bids do not exceed a specified maximum,
and that Regulation M specifically prohibits stabilizing that is the result of
fraudulent, manipulative, or deceptive practices. Selling stockholders and
distribution participants will be required to consult with their own legal
counsel to ensure compliance with Regulation M.
Prior to
the date of this prospectus, there has not been any established trading market
for our common stock. Following the consummation of this offering, we do not
anticipate that any such trading market will develop. Accordingly, purchasers of
our shares in this offering should be prepared to hold those shares
indefinitely. We will seek a market maker to sponsor our common stock on the OTC
Bulletin Board. Application will then be made by the market maker to sponsor our
shares of common stock on the OTC Bulletin Board. No market maker has yet
undertaken to sponsor our common stock on the OTC Bulletin Board, and there can
be no assurance that any market maker will make such an application or if a
market does develop for our common stock as to the prices at which the our
common stock will trade, if at all. Until our common stock is fully distributed
and an orderly market develops, if ever, in our common stock, the price at which
it trades may fluctuate significantly. Prices for our common stock will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity of the market for shares of our common stock,
developments affecting our businesses generally, including the impact of the
factors referred to in "Risk Factors," on page 9 through 15, above, investor
perception of the Company and general economic and market conditions. No
assurances can be given that an orderly or liquid market will ever develop for
the shares of our common stock.
Registered Shares of common stock owned by our
stockholders will be freely transferable, except for shares of our common stock
received by persons who may be deemed to be "affiliates" of the Company under
the Securities Act. Persons who may be deemed to be affiliates of the Company
generally include individuals or entities that control, are controlled by or are
under common control with us, and may include our senior officers and directors,
as well as principal stockholders. Persons who are affiliates will be permitted
to sell their shares of common stock only pursuant to an effective registration
statement under the Securities Act or an exemption from the registration
requirements of the Securities Act, such as the exemption afforded by Section
4(1) of the Securities Act or Rule 144 adopted under the Securities
Act.
Penny
Stock Regulations
Our
common stock will be considered a "penny stock" as defined by Section 3(a)(51)
and Rule 3a51-1 under the Securities Exchange Act of 1934. A penny stock is any
stock that:
·
|
sells
for less than $5 a share,
|
·
|
is
not listed on an exchange, and
|
·
|
is
not a stock of a "substantial
issuer."
|
We are
not now a "substantial issuer" and cannot become one until we have net tangible
assets of at least $5 million, which we do not now have.
Statutes
and Securities and Exchange Commission regulations impose strict requirements on
brokers that recommend penny stocks. Before a broker-dealer can recommend and
sell a penny stock to a new customer who is not an institutional accredited
investor, the broker-dealer must obtain from the customer information concerning
the person's financial situation, investment experience and investment
objectives. Then, the broker-dealer must "reasonably determine"
·
|
that
transactions in penny stocks are suitable for the person
and
|
·
|
the
person, or his/her advisor, is capable of evaluating the risks in penny
stocks.
|
After
making this determination, the broker-dealer must furnish the customer with a
written statement describing the basis for this suitability determination. The
customer must sign and date a copy of the written statement and return it to the
broker-dealer. Finally the broker-dealer must also obtain from the customer a
written agreement to purchase the penny stock, identifying the stock and the
number of shares to be purchased. Compliance with these requirements can often
delay a proposed transaction and can result in many broker-dealer firms adopting
a policy of not allowing their representatives to recommend penny stocks to
their customers.
Another
Securities and Exchange Commission rule requires a broker-dealer that recommends
the sale of a penny stock to a customer to furnish the customer with a “risk
disclosure document.” This document includes a description of the penny stock
market and how it functions, its inadequacies and shortcomings, and the risks
associated with investments in the penny stock market. The broker-dealer must
also disclose the stock's bid and ask price information and the dealer's and
salesperson's compensation for the proposed transaction. Finally, the
broker-dealer must furnish the customer with a monthly statement including
specific information relating to market and price information about the penny
stocks held in the customer's account.
The above
penny stock regulatory scheme is a response by the Congress and the Securities
and Exchange Commission to abuses in the marketing of low-priced securities by
“boiler room” operators. The scheme imposes market impediments on the sale and
trading of penny stocks. It limits a stockholder's ability to resell a penny
stock.
Our
management believes that the market for penny stocks has suffered from patterns
of fraud and abuse. Such patterns include:
·
|
Control
of the market for the security by one or a few broker-dealers that are
often related to the promoter or
issuer;
|
·
|
Manipulation
of prices through prearranged matching of purchases and sales and false
and misleading press releases;
|
·
|
“Boiler
room” practices involving high pressure sales tactics and unrealistic
price projections by inexperienced sales
persons;
|
·
|
Excessive
and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
|
·
|
Wholesale
dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the inevitable
collapse of those prices with consequent investor
losses.
|
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Capital
Stock
Our
authorized capital stock consists of 250,000,000 shares of PeopleString’s common
stock, par value $0.00001 per share. As of October 31, 2009, a total of
33,900,000 shares of PeopleString’s common stock are issued and outstanding,
held by 29 registered stockholders. All issued and outstanding shares of
PeopleString’s common stock are fully paid and non-assessable.
Our
common stock
The
holders of our common stock:
•
|
have
equal ratable rights to dividends from funds legally available if and when
declared by our board of directors;
|
•
|
are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
•
|
do
not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
and
|
•
|
have
unlimited voting rights, with each share being entitled to one
non-cumulative vote per share on all matters on which stockholders may
vote.
|
INTERESTS
OF NAMED EXPERTS AND COUNSEL
The
validity of the shares of our common stock offered under this prospectus is
being passed upon for us by Barbara R. Mittman, Attorney at Law, New York, NY.
Ms. Mittman beneficially owns 300,000 shares of our common stock.
Our
financial statements for the period January 2, 2009 (Date of Formation) through
June 30, 2009 appearing in this prospectus which is part of a registration
statement have been audited by Weiner Goodman & Company P.C., Certified
Public Accountants, and are included in reliance upon such reports given upon
the authority of Weiner Goodman & Company P.C., as experts in accounting and
auditing.
INFORMATION
WITH RESPECT TO THE REGISTRANT
OUR
BUSINESS
Overview
PeopleString
is a company which began as a wholly-owned subsidiary of BigString Corporation
(“BigString”), a public company, but as of October 31, 2009, BigString owned
approximately 29% of PeopleString’s outstanding common stock. PeopleString has
created an incentive-based social network that allows users to aggregate and
share the revenue generated from their online communication and social
networking through website located at www.peoplestring.com.
Revenues are generated through the use of email, instant messaging, Internet
searches, watching videos, shopping and our proprietary opt-in direct mail
program.
Industry
Background
Internet
based social networking is a complex and evolving industry. Because this
industry is relatively new, revenue models continue to evolve and the definition
of what constitutes an Internet based social network continues to change and
grow over time. The primary revenue sources currently for social networking
sites are sponsorship and advertising.
Multi-Tiered
Affiliate Program
Our
multi-tiered affiliate program drives the growth of our business. Rather than
using traditional advertising and marketing methods, we chose to create a
multi-tiered affiliate program to develop new customers. Once a user is referred
and signed up, they are part of the multi-tiered affiliate program. Every time
the user earns money, whether it be by viewing an ad, performing an Internet
search, shopping through our Web site, receiving a piece of direct mail or using
one of our premium services, the initial user that referred the new user will
earn money, as well as those in the tiered affiliate program above them for five
levels. Pursuant to this program, we share revenue generated from advertising
and marketing affiliations with the “active users” of our services, which are
defined as those users who are registered users and have logged onto their
account within 30 days (90 days for premium users) of the date that the revenue
is shared with users. “Active users” consist of both paying (e.g., Premium) and
non-paying users of our services. As of December 31, 2009,
PeopleString had 46,860 Active users, of which 2,756 were premium (paid) members
and 44,104 were free users. Up to seventy percent of the revenue
generated from advertising and marketing affiliations will be distributed to the
“active users” in amounts that will be determined by PeopleString and based on
the registered users’ status (e.g., Free or Premium), and up to twenty percent
of such revenue will be distributed as referral fees to those users who
participated in the referral of the source of the advertising revenue. For the period January 2, 2009 (Date of Formation) through
September 30, 2009, PeopleString made payments to its users totaling $87,755. In
addition, for the period January 2, 2009 (Date of Formation) through September
30, PeopleString accrued an additional $87,166 for active users with balances
earned, but not yet paid.
Social
Networking
The
PeopleString Social Network allows individuals, entrepreneurs and small business
to manage and aggregate their personal, business and social communications into
one user-friendly online dashboard. PeopleString provides the tools necessary to
manage and streamline social networking into an easy-to-use command center with
useful features.
Services
Free
Account:
Free
account users earn 5% of their direct referrals, plus 2% of levels 2-6 beneath
them. The Free Account also allows users basic use of PeopleString’s
entrepreneur’s communication platform, including social networking, email,
messaging, video mail, photo albums, personal blogs and cash-back shopping. A
free account remains active as long as the user log’s into the Web site at least
once every 30 days. Payments are made to free account users every thirty days
when they have accrued $25 in earnings in their account
Entrepreneur
Account:
Entrepreneur
account users earn 20% of their direct referrals, plus 6% of levels 2-6 beneath
them. The Entrepreneur account also allows for full use of PeopleString’s
entrepreneur’s communication platform, including Web page development, social
networking, email, messaging, video mail, photo albums, personal blogs and
cash-back shopping. An entrepreneur account remains active as long as the user
log’s into the Web site at least once every 90 days. Payments are made to
entrepreneur account users every 15 days when they have accrued $25 in earnings
in their account.
Email
Accounts and Shared Services Agreement:
On April
2, 2009, PeopleString entered into a verbal agreement with BigString to license
BigString’s messaging technology and share the cost of certain common services.
The agreement renews annually and is subject to adjustment periodically. Under
the agreement, PeopleString provides outsourced email and instant messenger
services to PeopleString users. The shared services include hosting and general
and administrative expenses. Both the messaging technology and shared common
services are non-material to PeopleString’s business, and PeopleString could
replace the services with other providers or eliminate email from PeopleString’s
product offering
Competition
Our chief
competition comes from the social networking industry which is rapidly growing.
As a result, the number and sophistication of competitors are also rapidly
growing. We hope to distinguish ourselves from those competitors by the
combination of services we offer and the high quality of our website and
technology.
Government
Regulations
We will
be subject to state, federal and international laws and regulations applicable
to online commerce, including user privacy policies, product pricing policies,
Web site content and general consumer protection laws. Laws and regulations have
been adopted, and may be adopted in the future, that address Internet-related
issues, including online content, privacy, online marketing, unsolicited
commercial email, taxation, pricing and quality of products and services. Some
of these laws and regulations, particularly those that relate specifically to
the Internet, were adopted relatively recently and their scope and application
may still be subject to uncertainties. Interpretations of these laws, as well as
any new or revised law or regulation, which could decrease demand for our
services, increase our cost of doing business, result in liabilities for us,
restrict our operations or otherwise cause our business to suffer. Our failure,
or the failure of our business partners, to accurately anticipate the
application of these laws and regulations, or to comply with such laws and
regulations, could create liability for us, result in adverse publicity and
negatively affect our business.
Privacy, Data and Consumer
Protection. The FTC and many state attorneys general are applying federal
and state consumer protection laws to the online collection, use and
dissemination of personal information and the presentation of Web site content.
These regulations include requirements that we establish procedures to disclose
and notify users of privacy and security policies, obtain consent from users for
collection and use of certain types of information and provide users with the
ability to access, correct and delete some of their personal information stored
by us. These regulations also include enforcement and redress provisions. The
specific limitations imposed by these regulations are subject to interpretation
by courts and other governmental authorities. In addition, the FTC has conducted
investigations into the privacy practices of companies that collect personal
user information over the Internet and the use and disclosure of that
information. We may become subject to the FTC's regulatory and enforcement
efforts with respect to current or future regulations, or those of other
governmental bodies, which may adversely affect our ability to collect
demographic and personal information from users and our ability to use this
information in our communications to users, which could adversely affect our
marketing efforts. We believe that our information collection and disclosure
policies will comply with existing laws, but a determination by a state or
federal agency or court that any of our practices do not meet these standards
could result in liability and adversely affect our business.
We may
also be subject to regulation not specifically related to the Internet,
including laws affecting direct marketers and advertisers. Compliance with these
laws, or the adoption or modification of laws applicable to Internet advertising
or marketing, could affect our ability to market our services, decrease the
demand for our services, increase our costs or otherwise adversely affect our
business.
Internet
Websites
We have
secured the rights to the Internet domain name www.peoplestring.com.
We intend to more fully develop and market our e-commerce website. Information
on our website is not a part of this registration.
Employees
We
currently have five full-time employees. We believe that our relationship with
our employees is satisfactory. We have not suffered any labor problems since our
inception. Darin M. Myman, Robert S. DeMeulemeester and Adam M. Kotkin are the
members of the board of directors. At this time, the board of directors does not
anticipate expanding the number of members on the board of
directors.
Equity
Incentive Plan
On April
1, 2009, we adopted the 2009 Equity Incentive Plan. The purpose of the plan is
to attract and retain qualified persons upon whom our sustained progress, growth
and profitability depend, to motivate these persons to achieve long-term company
goals and to more closely align these persons' interests with those of our other
shareholders by providing them with a proprietary interest in our growth and
performance. Our executive officers, employees, consultants and non-employee
directors are eligible to participate in the plan. 12,000,000 shares of our
common stock have been reserved for issuance under the 2009 Equity Incentive
Plan.
Transfer
Agent
PeopleString
is currently in the process of selecting a transfer agent.
MANAGEMENT’S
DISCUSSION OF FINANCIAL CONDITION OR PLAN OF
OPERATION
The
following discussion should be read in conjunction with the financial statements
section included elsewhere in this prospectus.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
With the
exception of historical matters, the matters discussed herein are
forward-looking statements that involve risks and uncertainties. Forward-looking
statements include, but are not limited to, statements concerning anticipated
trends in revenues and net income, projections concerning operations and
available cash flow. Our actual results could differ materially from the results
discussed in such forward-looking statements. The following discussion of our
financial condition and results of operations should be read in conjunction with
our audited financial statements for the period January 2, 2009 (Date of
formation) through June 30, 2009 and the related notes thereto and our financial
statements for the period January 2, 2009 (Date of formation) through September
30, 2009 and the related notes thereto appearing elsewhere herein. Our financial
statements are stated in United States dollars and are prepared in accordance
with United States generally accepted accounting principles.
Overview
In order
for us to grow our business and increase our revenue, it is critical for us to
attract and retain new users. For us to increase our revenue, we need to
establish a large customer base. A large customer base of our free services
provides us with more opportunities to sell our premium services, which could
result in increased revenue. In addition, a large customer base may
allow us to increase our advertising rates and attract other Internet based
advertising and marketing firms to advertise and form marketing affiliations
with us, which could result in increased advertising and product fee
revenues.
Certain
criteria we review to measure our performance are set forth
below:
●
|
the
number of first time users of our social
network;
|
●
|
the
number of repeated users of our social
network;
|
●
|
the
number of free users;
|
●
|
the
number of paid users; and
|
●
|
the
number of referrals by each of our
users.
|
Plan
of Operation
Over the
twelve month period starting upon the effective date of this registration
statement, if we do not generate profits above the level
needed to sufficiently fund both our operations and to expand, we will seek
to raise $500,000 in additional capital for data storage, server
management, two new programmers and marketing. We cannot
assure that we will be able to raise additional capital on terms favorable to us
or at all. Our inability to raise capital could require us to delay or eliminate
our plans to expand, and would likely impact revenues beyond 12
months.
If we
continue to increase our usage of the website and we receive a positive reaction
from our potential users, we will attempt to raise additional money through a
private placement, public offering or long-term loans to expand our business to attract larger numbers of users. We will also
continually refine our web sites and optimize our marketing efforts from the
market feedback we receive during the initial marketing phase and from our
user’s feedback. We do not at this time have an estimate for this
stage.
At the
present time, we have not made any arrangements to raise additional cash;
however, if we do not generate profits above the level
needed to sufficiently fund both our operations for the next twelve months and
to expand, we will seek to raise additional
capital through private placements once we gain a quotation on the OTC Bulletin
Board, for which there is no assurance. If we need additional cash but are
unable to raise it, we will likely scale back
operations until we do raise the cash. Other
than as described in this paragraph, we have no other financing
plans.
The
additional costs associated with being a publicly reporting company include a
transfer agent, financial printing, filing fees, attorney and financial
accountant costs estimated to be $85,000. We believe the company is currently in
a position to pay for these additional costs for at least the next 12
months. In the event we are unable to obtain funding in the future,
the company may cease maintain its public reporting status.
If we are
unable to expand our business because we don't have
enough money, we will likely scale back operations
until we raise money. Attempting to raise capital after failing in any phase of
our development plan could be difficult. As such, if we cannot secure additional
proceeds we may have to cease operations and
investors could lose their entire
investment.
Management
plans to hire two additional employees at this time. Our officers and directors
will be responsible for developing and further implementing the build out of our
technology infrastructure and marketing strategies.
Results
of Operations
Period
January 2, 2009
|
Period
January 2, 2009
|
|||||||
(Date
of Formation)
|
(Date
of Formation)
|
|||||||
Through
September
30, 2009
|
Through
June
30, 2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
OPERATIONS
|
||||||||
Revenue
|
$ | 338,991 | $ | 83,633 | ||||
Operating
expenses
|
477,381 | 83,201 | ||||||
Net
(loss) earnings
|
$ | (138,173 | ) | $ | 478 |
For the
period January 2, 2009 (Date of Formation) through June 30, 2009, revenues were
$83,633, of which $72,800 was generated from online services, $7,127 was
generated from affiliates and $3,706 was generated from
advertising.
For the
period January 2, 2009 (Date of Formation) through September 30, 2009, revenues
were $338,991, of which $300,429 was generated from online services, $24,126 was
generated from affiliates and $14,436 was generated from
advertising.
While
online services revenue for the period July 1, 2009 through September 30, 2009
(3 months) increased 313% over the period January 2, 2009 (Date of Formation)
through June 30, 2009 (6 months), we expect the revenue growth rate to diminish
over time. Furthermore, while affiliate and advertising revenue growth rates
similarly increased 239% and 290%, respectively, we expect affiliate and
advertising revenue growth rates to become greater than the revenue growth rate
for online services.
The
following table shows a breakdown of material components of our
expenses:
Period
January 2, 2009
|
Period
January 2, 2009
|
|||||||
(Date
of Formation)
|
(Date
of Formation)
|
|||||||
Through
September
30, 2009
|
Through
June
30, 2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
EXPENSES
|
||||||||
Cost
of revenues
|
$ | 180,271 | $ | 41,186 | ||||
Professional
fees
|
115,788 | 15,687 | ||||||
General
and administrative
|
$ | 181,322 | $ | 26,328 |
Margins
after Cost of revenues were 51% for the period January 2, 2009 (Date of
Formation) through June 30, 2009 and decreased to 47% for the period January 2,
2009 (Date of Formation) through September 30, 2009 as the proportion of online
services revenues grew. As we grow affiliate and advertising revenues, margins
may not increase above 50%, depending partly upon how aggressively we pursue new
business.
Our cash
positions at June 30, 2009, September 30, 2009 and October 31, 2009 were
$183,729, $200,033 and $483,586, respectively. As outlined in the Statement of
Cash Flows in the accompanying financial statements, the increase in cash at
June 30, 2009 from January 2, 2009 (Date of Formation) was due to $174,415 from
financing activities and $9,314 from operating activities. The increase in cash
at September 30, 2009 from January 2, 2009 (Date of Formation) was due to
$209,515 from financing activities, partially offset by $9,482 used in operating
activities. The increase in cash at October 31, 2009 from September 30, 2009,
was primarily due to $310,000 of financing in October
2009.
Financing
Activities
If we do not generate profits above the level needed to
sufficiently fund both our operations for the next twelve months and to expand,
we will seek additional funding through public or private financings.
However, if we are unable to raise additional capital when required or on
acceptable terms, or achieve cash flow positive operations, we may have to
significantly delay product development and scale back operations, both of which
would likely impact revenues beyond 12
months.
Satisfaction
of Our Cash Obligations for the Next Twelve Months
As of
October 31, 2009, our cash balance was $463,586. Our plan for satisfying our
cash requirements for the next twelve months is through new
revenues, including online services, affiliate fees and
advertising-generated income. We also plan to expand our
business. If we do not generate profits above the level needed to sufficiently
fund both our operations for the next twelve months and to expand, we will seek
to raise additional capital through sale of shares of our common stock,
third party financing, and/or traditional bank financing. Consequently, we
intend to make appropriate plans to insure sources of additional capital in the
future to fund growth and expansion through additional equity or debt financing
or credit facilities.
Our
Future is Dependent upon Future Profitable Operations
and Our Ability to Obtain Financing.
If we do
not generate profits above the level needed to sufficiently fund both our
operations for the next twelve months and to expand, we will seek equity and/or
debt financing. Our inability to raise capital could require us to delay or
eliminate our plans to expand, and would likely impact revenues beyond 12
months.
Liquidity
and Capital Resources
Since
inception, we have financed our cash flow requirements through issuance of
PeopleString’s common stock and revenues. At October 31,
2009, we had cash on hand of $463,586. We do not currently have contractual
commitments for revenue (i.e., backlog) or any other funding beyond receivables.
At October 31, 2009, our existing capital resources and contractual commitments
were $506,711. Revenues for the
three months ended March 31, 2009, June 30 ,
2009 and September 30, 2009 were $3,400, $80,233 and $255,359, respectively.
Revenues for the three months ended December 31, 2009 are expected to be
approximately $400,000. While we do not have contractual commitments for
revenues (i.e., backlog), new revenues and existing capital are expected to be
sufficient to fund our operations and base plan for the next twelve
months.
As we
expand our activities, we may, and most likely will, experience net negative
cash flows from operations, pending receipt of listing. If we do not generate
profits above the level needed to sufficiently fund both our operations for the
next twelve months and to expand, we will seek to raise additional capital, to
the extent available.
We
anticipate that we will incur operating losses in the next twelve months. Our
lack of operating history makes predictions of future operating results
difficult to ascertain. Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving
markets. Such risks for us include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address these
risks, we must, among other things, expand our customer base, implement and
successfully execute our business and marketing strategy, respond to competitive
developments, and attract, retain and motivate qualified personnel. There can be
no assurance that we will be successful in addressing such risks, and the
failure to do so can have a material adverse effect on our business prospects,
financial condition and results of operations.
Additional
Disclosure of Outstanding Share Data
As of
October 31, 2009, we had 33,900,000 shares of PeopleString’s common stock issued
and outstanding.
DESCRIPTION OF PROPERTY
We do not
own any property, real or otherwise. Our principal
offices are located at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701.
We occupy this office of approximately 1,426 square feet of office space, which
is leased by BigString, under a shared services agreement with BigString.
PeopleString pays for a portion of the monthly occupancy which is $2,300 per
month. We also share certain servers off-site at a facility located in Newark,
New Jersey. In addition, PeopleString outsources servers with another vendor.
While we believe that the office space is adequate to meet our current
requirements, we continue to evaluate facility needs and requirements for the
future.
We do not
have any investments or interests in any real estate. Our company does not
invest in real estate mortgages, nor does it invest
in securities of, or interests in, persons primarily engaged in real
estate activities.
LEGAL
PROCEEDINGS
We are
not a party to, and none of our property is the subject of, any pending legal
proceedings. To our knowledge, no governmental authority is contemplating any
such proceedings.
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We do not
expect to enter into financial instruments for trading or hedging purposes. We
do not currently anticipate entering into interest rate swaps and/or similar
instruments.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Holders
of Our Common Stock
As of the
date of this prospectus, we had 29 registered stockholders.
No
Public Market for Common Stock
There is
currently no public or other market for our Shares, and we cannot guarantee that
any such market will develop in the foreseeable future. We do not intend to
apply to list our common stock on any securities exchange. We intend to engage
one or more registered broker-dealers to file an application with the FINRA
on our behalf so as to be able to quote the shares of our common stock on the
OTC Bulletin Board maintained by the FINRA. As of the date of this prospectus,
we have not identified any such broker-dealers and are not in negotiations with
any. There can be no assurance that any such broker-dealer will ever file such
an application. We are not permitted to file such application on our own behalf,
and we are not aware of any broker-dealer intending to file such an application.
Accordingly, purchasers of our Shares may never be able to liquidate their
investment.
The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or quotation
system. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock, to deliver a standardized risk disclosure document prepared by
the Securities and Exchange Commission, that: (a) contains a description of the
nature and level of risk in the market for penny stocks in both public offerings
and secondary trading; (b) contains a description of the broker's or dealer's
duties to the customer and of the rights and remedies available to the customer
with respect to a violation to such duties or other requirements of Securities
laws; (c) contains a brief, clear, narrative description of a dealer market,
including bid and ask prices for penny stocks and the significance of the spread
between the bid and ask price; (d) contains a toll-free telephone number for
inquiries on disciplinary actions; (e) defines significant terms in the
disclosure document or in the conduct of trading in penny stocks; and (f)
contains such other information and is in such form, including language, type,
size and format, as the Securities and Exchange Commission shall require by rule
or regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, the customer with: (a) bid and offer quotations for the penny stock; (b)
the compensation of the broker-dealer and its salesperson in the transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market for
such stock; and (d) monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
those rules; the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser’s written acknowledgment of the receipt of a risk disclosure
statement, a written agreement to transactions involving penny stocks, and a
signed and dated copy of a suitably written statement.
These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock if it becomes subject to these penny stock
rules. Therefore, if our common stock becomes subject to the penny stock rules,
stockholders may have difficulty selling those securities.
Outstanding
Options, Warrants or Convertible Securities
As of the
date of this prospectus, we do not have any outstanding options, warrants to
purchase our common stock or securities convertible into shares of our common
stock.
Rule
144 Shares
None of
shares of our common stock are eligible for sale pursuant to Rule 144 under the
Securities Act. In general, under Rule 144, a person who is not one of our
affiliates and who is not deemed to have been one of our affiliates at any time
during the three months preceding a sale and who has beneficially owned shares
of our common stock for at least six months would be entitled to sell them
without restriction, subject to the continued availability of current public
information about us (which current public information requirement is eliminated
after a one-year holding period).
A person
who is an affiliate and who has beneficially owned shares of a company’s common
stock for at least six months, subject to the continued availability of current
public information about us, is entitled to sell within any three month period a
number of shares that does not exceed the greater of:
|
1. One
percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 339,000 shares
as of the date of this prospectus;
or
|
|
2.
The average weekly trading volume of the company's common stock during the
four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
|
Rule 144
is not available for either a reporting or non-reporting shell company, as
defined under Rule 405 of the Securities Act, unless the company:
·
|
has
ceased to be a shell Company;
|
·
|
is
subject to the Exchange Act reporting
obligations;
|
·
|
has
filed all required Exchange Act reports during the preceding twelve
months; and
|
·
|
at
least one year has elapsed from the time the Company filed with the SEC,
current Form 10 type information reflecting its status as an entity that
is not a shell company.
|
Dividends
There are
no restrictions in our Articles of Incorporation or Amended and Restated Bylaws
that would prevent us from declaring dividends. We have not declared any
dividends and we do not plan to declare any dividends in the foreseeable
future.
Our
fiscal year end is December 31. Our financial statements are stated in U.S.
dollars and are prepared in conformity with generally accepted accounting
principles of the United States.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We have
had no disagreements with our independent auditors on accounting or financial
disclosures.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
Number of
Directors. Our board
of directors currently consists of three individuals. Our Amended and
Restated Bylaws provide that the board of directors may consist of a minimum of
three directors and a maximum of nine, as determined by the board of directors
from time to time.
Audit
Committees. On April 4, 2009, we adopted an audit committee composed of
two members. The Audit Committee of the Board is responsible for developing and
monitoring the audit of PeopleString. The Audit Committee selects the outside
auditor and meets with the Board to discuss the results of the annual audit and
any related matters. The Audit Committee also receives and reviews the reports
and findings and any other information presented to members of the Audit
Committee by the officers of PeopleString regarding financial reporting policies
and practices.
For the
nine months ended September 30, 2009, the Audit Committee consisted of directors
Robert S. DeMeulemeester and Adam M. Kotkin. Mr. DeMeulemeester served as the
Chair of the Audit Committee. No directors who served on the Audit Committee for
the nine months ending September 30, 2009 qualified as an independent director
under NASDAQ’s definition of “independent director.” In addition, the Board has
determined that Mr. DeMeulemeester qualifies as a financial expert under the
rules of the Securities and Exchange Commission. The Audit Committee selected
the accounting firm of Wiener, Goodman & Company, P.C. to act as
PeopleString’s independent public accounting firm for the six months ended June
30, 2009 and audit the financial statements of PeopleString for the period
January 2, 2009 (Date of Formation) through June 30, 2009.
Compensation for
Board of Directors: Currently members of the board of directors do not
receive compensation for their services as Board members. Upon sale of the
Shares in this Offering the Company may adopt a policy which will compensate
existing and/or new board members. Board members may receive
additional compensation for participating in the Committees. The amount of any
compensation paid to board members and/or committee members will be set and
approved by the Board based on the Board’s review of compensation paid by
companies which are similarly situated to the Company.
Our
executive officers and directors and their respective ages as of the date of
this prospectus are as follows:
Name
and Address
|
Age
|
Position(s)
|
Darin
M. Myman
|
44
|
President,
Chief Executive Officer and Director
|
Robert
S. DeMeulemeester
|
42
|
Executive
Vice President, Chief Financial Officer, Treasurer and
Director
|
Adam
M. Kotkin
|
30
|
Chief
Operating Officer, Secretary and
Director
|
Darin M. Myman (Age 44) – President
and Chief Executive Officer. Darin has
served as the President and Chief Executive Officer of PeopleString Corporation
since its inception on January 2, 2009. He is also a co-founder and CEO of
BigString Corporation, a publicly traded company, since
October 2003. Prior to BigString, Mr. Myman was a co-founder and Chief
Executive Officer of LiveInsurance.com, the first online insurance broker that
pioneered the electronic storefront for large national insurance agencies. Prior
to co-founding LiveInsurance.com, he served as a Vice President of the online
brokerage services unit of Westminster Securities
Corporation.
Robert S. DeMeulemeester (Age 42) –
Executive Vice President, Chief Financial Officer and Treasurer. Robert
has served as Executive Vice President, Chief Financial Officer and Treasurer of
PeopleString since January 2, 2009. Robert is also the Executive Vice President,
Chief Financial Officer and Treasurer of BigString Corporation since September
2006. Prior to joining BigString Corporation, from 1998 to 2006, Mr.
DeMeulemeester served as managing director and treasurer of the Securities
Industry Automation Corporation ("SIAC"), a New York based provider of automated
information and communication systems that supports NYSE Euronext, the American
Stock Exchange and related affiliates. He also served as managing director, CFO
and controller of Sector, Inc. From 1993 to 1997, he served as an executive in
marketing, business development and finance at Honeywell International Inc.
(formerly AlliedSignal, Inc.) and from 1989 to 1991 as a management consultant
at Accenture (formerly Andersen Consulting). Mr. DeMeulemeester earned his MBA
at Columbia Business School, Columbia University and his Bachelor of Science, in
Industrial Engineering at Lehigh University.
Adam M. Kotkin (Age 30) – Chief
Operating Officer and Secretary. Adam has
served as the Chief Operating Officer of PeopleString Corporation since January
2, 2009. Adam is also the COO and a co-founder of BigString, since October 2003 . Prior to joining BigString,
he served as a business manager for InsuranceGenie.com. Prior thereto, Mr.
Kotkin served as business developer and sales manager at LiveInsurance.com from
March 1999 until December 2000. Mr. Kotkin graduated with distinction from New
York University with a BA in Economics.
The
following table sets forth information concerning the annual and long-term
compensation of the Named Executive Officers (as defined below) for services in
all capacities to PeopleString for the period January 2, 2009 (Date of
Formation) to October 31, 2009. The Named Executive Officers are (1) Darin M.
Myman, President and Chief Executive Officer, (2) Robert S. DeMeulemeester,
Executive Vice President, Chief Financial Officer and Treasurer, and (3) Adam M.
Kotkin, Chief Operating Officer and Secretary (the “Named Executive
Officers”).
Summary
Compensation Table (1)
|
|||||||||||||||||||||||||||||||||
Name
and Position
|
Year
(1)
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Nonqualified
Deferred Compensation Earnings ($)
|
All
Other Compensation ($)
|
Total
($)
|
||||||||||||||||||||||||
Darin
M. Myman,
President and Chief Executive
Officer
|
2009
|
$ | 16,252 | $ | - | $ | - | $ | - | $ | $ | $ | - | $ | 16,252 | ||||||||||||||||||
Robert
S. DeMeulemeester, Executive Vice President,
Chief Financial Officer and Treasurer
|
2009
|
5,773 | - | - | - | - | - | - | 5,773 | ||||||||||||||||||||||||
Adam
M. Kotkin,
Chief Operating
Officer
and
Secretary
|
2009
|
11,255 | - | - | - | - | - | - | 11,255 |
(1)
|
Compensation
is for the period January 2, 2009 (Date of Formation) to October 31,
2009.
|
Our
executive compensation is determined by our board of directors and based upon a
number of factors, including the experience and expertise of our
executives. However, to date, our board of directors has limited cash
compensation to our officers in an effort to preserve cash for use in the
development of PeopleString’s products and services. As we grow, our
board of directors expects to form a compensation committee which will evaluate
executive compensation of our officers using industry standards
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth, as of the date of this prospectus, the total number
of shares owned beneficially by our officers, directors, and employees,
individually and as a group, and the present owners of 5% or more of our total
outstanding shares. The table also reflects what their ownership will be
assuming completion of the sale of all shares in this offering. The stockholders
listed below have direct ownership of their shares and possess sole voting and
dispositive power with respect to those shares.
Title
of Class
|
Name
and Address of Beneficial Owner
|
Amount
and Nature
of
Beneficial
Ownership
|
Percent
of
Class before Offering
|
Amount
outstanding after the Offering
|
Common
Stock
|
Darin
M. Myman (1)(2)(3)
157
Broad Street, Suite 109
Red
Bank, NJ 07701
|
2,500,000
|
7.4%
|
2,250,000
|
Common
Stock
|
Robert
S. DeMeulemeester (1)(3)(4)
157
Broad Street, Suite 109
Red
Bank, NJ 07701
|
2,500,000
|
7.4%
|
2,250,000
|
Common
Stock
|
Adam
M. Kotkin (1)(3)(5)
157
Broad Street, Suite 109
Red
Bank, NJ 07701
|
2,500,000
|
7.4%
|
2,250,000
|
Common
Stock
|
BigString
Corporation (3)(6)
157
Broad Street, Suite 109
Red
Bank, NJ 07701
|
10,000,000
|
29.5%
|
9,100,00
|
Common
Stock
|
Robb
Knie
6
Horizon Road, Suite 1903
Fort
Lee, NJ 07024
|
3,000,000
|
8.8%
|
1,525,000
|
Common
Stock
|
Barry
Honig
595
South Federal Highway, Suite 600
Boca
Raton, FL 33432
|
2,950,000
|
8.7%
|
1,500,000
|
Common
Stock
|
Alan
S. Honig (7)
1501
Broadway, Suite 1313
New
York, NY 10036
|
2,950,000
|
8.7%
|
2,350,000
|
All
Officers and Directors as a Group (3 people)
|
17,500,000
|
51.6%
|
15,850,000
|
(1)
|
Such
person currently serves as a director of PeopleString
Corporation.
|
(2)
|
Mr.
Myman serves as the President and Chief Executive Officer of
PeopleString.
|
(3)
|
Such
person currently serves as an executive officer and director of BigString
Corporation.
|
(4)
|
Mr.
DeMeulemeester serves as Executive Vice President, Chief Financial Officer
and Treasurer of PeopleString.
|
(5)
|
Mr.
Kotkin serves as Chief Operating Officer and Secretary of
PeopleString.
|
(6)
|
The
officers/directors of PeopleString Corporation are also the officers and
directors of BigString Corporation, a public
company.
|
(7)
|
Includes
2,340,000 shares held in the name of Alan S. Honig Custodian for Cameron
Honig UTMA F/L, Alan S. Honig Custodian for Harrison Honig UTMA F/L, Alan
S. Honig Custodian for Jacob Honig UTMA F/L and Alan S. Honig Custodian
for Ryan Honig UTMA F/L, for the benefit of Mr. Barry Honig’s minor
children, Cameron, Harrison, Jacob and Ryan, under the Uniform Transfers
to Minors Act, as to which shares Mr. Barry Honig disclaims any beneficial
ownership.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On
January 2, 2009, PeopleString issued 10,000,000 shares of its common stock to
BigString Corporation at a per share purchase price of $0.00005 for a total
purchase price of $500.
On
January 2, 2009, PeopleString offered to issue 2,500,000 shares of its common
stock to Darin M. Myman. On April 2, 2009, Darin M. Myman purchased 2,500,000 of
our common shares at a purchase price of $0.00005 per share for a total purchase
price of $125.
On
January 2, 2009, PeopleString offered to issue 2,500,000 shares of its common
stock to Robert S. DeMeulemeester. On April 2, 2009, Robert S. DeMeulemeester
purchased 2,500,000 of our common shares at a purchase price of $0.00005 per
share for a total purchase price of $125.
On
January 2, 2009, PeopleString offered to issue 2,500,000 shares of its common
stock to Adam M. Kotkin. On April 2, 2009, Adam M. Kotkin purchased 2,500,000 of
our common shares at a purchase price of $0.00005 per share for a total purchase
price of $125.
On
January 2, 2009, PeopleString offered to issue 800,000 shares of its common
stock to Peter Shelus. On April 2, 2009, Peter Shelus purchased 800,000 of our
common shares at a price of $0.00005 per common share for a total purchase price
of $40.
On
February 2, 2009, PeopleString offered to issue 3,000,000 shares of its common
stock to Robb Knie. On April 15, 2009, the offer was accepted. PeopleString
issued 3,000,000 of its common shares to Robb Knie at a purchase price of $0.001
per share for a total purchase price of $3,000. The resulting subscription
receivable of $3,000 was received in July 2009.
On April
2, 2009, PeopleString issued 800,000 of its Common Shares to Craig Myman, the
brother of Darin M. Myman, as compensation for consulting services.
On April
2, 2009, PeopleString issued 400,000 of its Common Shares to Marc Dutton as
compensation for consulting services.
On April
2, 2009, PeopleString issued 200,000 of its Common Shares to Jeffrey Kay as
compensation for consulting services.
On April
2, 2009, PeopleString issued 50,000 of its Common Shares to Randi Karmin as
compensation for consulting services.
In June
2009, PeopleString initiated a private placement of securities to sell 6,900,000
shares of its common stock at a per share purchase price of $0.03. PeopleString
received $150,000 in gross proceeds in June 2009 and issued 5,683,690 shares of
its common stock in June 2009. In July 2009, PeopleString received $32,100 for
the remainder of shares of its common stock subject to the private placement at
a per share purchase price of $0.03. PeopleString issued 1,216,310 shares of its
common stock in July 2009. The shares of common stock were allocated as
follows:
Name
|
Common
Shares
|
|||
Barry
Honig
|
2,950,000 | |||
Alan
S. Honig
|
610,000 | |||
Alan
S. Honig Custodian for Cameron Honig UTMA F/L
|
585,000 | |||
Alan
S. Honig Custodian for Harrison Honig UTMA F/L
|
585,000 | |||
Alan
S. Honig Custodian for Jacob Honig UTMA F/L
|
585,000 | |||
Alan
S. Honig Custodian for Ryan Honig UTMA F/L
|
585,000 | |||
Jonathan
Honig
|
1,000,000 |
Also in
June 2009, PeopleString initiated a private placement of securities to sell
shares of its common stock at a per share purchase price of $0.05. PeopleString
received deposits on its common stock of $23,500 in gross proceeds in June 2009
and subsequently issued 470,000 shares of its common stock in July 2009. The
shares of common stock were allocated as follows:
Name
|
Common
Shares
|
|||
Kim
& Matthew Barra
|
200,000 | |||
Sara
& Patrick Vertucci
|
100,000 | |||
Revolutionary
Asset Mgmt, LLC
|
100,000 | |||
Milton
& Olga Cohen
|
70,000 |
On August
15, 2009, PeopleString issued 1,000,000 of its Common Shares to Bruce Van Heel
as compensation for consulting services.
On August
15, 2009, PeopleString issued 300,000 of its Common Shares to Barbara R. Mittman
as compensation for legal services.
In October 2009, PeopleString
initiated a private placement of securities under rule 506 Regulation D to sell
shares of its common stock at a per share purchase price of $0.125. PeopleString received deposits on its common stock in gross
proceeds in October 2009 and subsequently issued
2,480,000 shares of its common stock in July
2009. The shares of common stock were
allocated as follows :
Name
|
Common
Shares
|
|||
Joseph
A Noel
|
560,000
|
|||
Sheena
Kong
|
560,000
|
|||
Frank
D’Agostino
|
400,000
|
|||
Robert
S. Coleman Trust
|
400,000
|
|||
Michael
Brauser
|
400,000
|
|||
Katherine
Noel Zuniga
|
160,000
|
REPORTS
TO STOCKHOLDERS
Up on the effective date of this Registration Statement on
Form S-1; we will be considered a Section 15(d)
filer rather than a fully reporting company and we
will only be required to file annual and quarterly reports with the Securities
and Exchange Commission for a period of twelve months as compared to a fully
reporting company which is required to file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission. While we are a Section 15(d) filer and until we become a fully
reporting company we are not subject to the Proxy Rules outlined in Section 14
of the Exchange Act and are therefore not required to file proxy statements with
the Securities and Exchange Commission. We do intend to file a Registration
Statement on Form 8-A with the Securities and Exchange Commission concurrently
with, or immediately following, the effectiveness of this Registration Statement
on Form S-1. The filing of the Registration Statement on Form 8-A will cause us
to become a fully reporting company with the Securities and Exchange Commission
under the Exchange Act. Our Securities and Exchange Commission filings will be
available to the public over the internet at the Securities and Exchange
Commission’s website at http://www.sec.gov.
We have
filed a Registration Statement on Form S-1 under the Securities Act with the
Securities and Exchange Commission with respect to the shares of our common
stock offered through this prospectus. This prospectus is filed as a part of
that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of PeopleString Corporation. We refer you to
our registration statement and each exhibit attached to it for a more detailed
description of matters involving PeopleString Corporation, and the statements we
have made in this prospectus are qualified in their entirety by reference to
these additional materials. You may inspect the registration statement, exhibits
and schedules filed with the Securities and Exchange Commission at the
Securities and Exchange Commission's principal office in Washington, D.C. Copies
of all or any part of the registration statement may be obtained from the Public
Reference Section of the SEC, Room 1580, 100 F Street NE, Washington D.C. 20549.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The Securities and
Exchange Commission also maintains a website at http://www.sec.gov that contains
reports, proxy statements and information regarding registrants that file
electronically with the Securities and Exchange Commission. Our Registration
Statement and the referenced exhibits can also be found on this
website.
No
finder, dealer, sales person or other person has been authorized to give any
information or to make any representation in connection with this offering other
than those contained in this prospectus and, if given or made, such information
or representation must not be relied upon as having been authorized by our
company. This prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
DISCLOSURE
OF THE COMMISSION POSITION OF
INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of our company under
Delaware law or otherwise, our company has been advised that the opinion of the
Securities and Exchange Commission is that such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
SUBJECT
TO COMPLETION, DATED ________________, 2010
PROSPECTUS
PEOPLESTRING
CORPORATION
8,800,000
SHARES
COMMON
STOCK
Dealer
Prospectus Delivery Obligation
Until
_______________________, all dealers that effect transactions in these
securities whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PEOPLESTRING
CORPORATION
FINANCIAL
STATEMENTS
FOR
THE PERIOD
JANUARY
2, 2009 (DATE OF FORMATION) THROUGH JUNE 30, 2009
PEOPLESTRING
CORPORATION
INDEX TO FINANCIAL
STATEMENTS
PAGE | |
38
|
|
39
|
|
40
|
|
41
|
|
42
|
|
43
|
|
WG
Joel Wiener, CPA |
Wiener
Goodman & Company,
P.C.
Certified Public Accountants &
Consultants
|
Gerald Goodman, CPA |
One Industrial Way West
Building A
Eatontown, NJ 07724
P: (732) 544-8111
F: (732) 544-8788
E-mail: tax@wgpc.net
|
Memberships:
PCPS of AICPA
American Institute of CPA
New Jersey Society of
CPA
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
PeopleString
Corporation
Red Bank,
New Jersey
We have
audited the accompanying balance sheet of PeopleString Corporation (the
“Company”) as of June 30, 2009, and the related statements of operations,
stockholders’ equity and cash flows the period January 2, 2009 (Date of
Formation) through June 30, 2009. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, such financial statements present fairly, in all material respects, the
financial position of the Company as of June 30, 2009, and the results of its
operations and its cash flows for the period January 2, 2009 (Date of Formation)
through June 30, 2009, in conformity with accounting principles generally
accepted in the United States of America.
/s/
Wiener, Goodman & Company, P.C.
WIENER,
GOODMAN & COMPANY, P.C.
Eatontown,
New Jersey
August
14, 2009, except for Note 2, for which the date is January
4, 2010
PEOPLESTRING
CORPORATION
BALANCE
SHEET
June
30, 2009
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Cash and cash
equivalents
|
$ | 183,729 | ||
Accounts receivable
- net of allowance of $20
|
3,847 | |||
Prepaid expenses
and other current assets
|
13,605 | |||
Total
current assets
|
$ | 201,181 | ||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
Current
liabilities:
|
||||
Accounts
payable
|
$ | 2,975 | ||
Accrued
expenses
|
21,863 | |||
Total
current liabilities
|
24,838 | |||
Stockholders'
equity:
|
||||
Common stock,
$0.00001 par value - authorized 250,000,000 shares; outstanding
28,433,690
|
284 | |||
Additional paid in
capital
|
155,081 | |||
Deposit on common
stock
|
20,500 | |||
Retained
earnings
|
478 | |||
Total
stockholders' equity
|
176,343 | |||
Total liabilities and
stockholders' equity
|
$ | 201,181 | ||
See notes
to financial statements.
PEOPLESTRING
CORPORATION
STATEMENT OF OPERATIONS
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
June
30, 2009
|
||||
Operating
revenues
|
$ | 83,633 | ||
Operating
expenses: (1)
|
||||
Cost of
revenues
|
41,186 | |||
Research,
development, sales, general and administrative
|
42,015 | |||
Total
operating expenses
|
83,201 | |||
Income
from operations
|
432 | |||
Other
income:
|
||||
Interest
income
|
46 | |||
Total
other income
|
46 | |||
Net
earnings
|
$ | 478 | ||
Net
earnings per common share:
|
||||
Basic and
diluted
|
$ | 0.00 | ||
Weighted
average common shares outstanding:
|
||||
Basic and
diluted
|
16,571,486 | |||
(1)Non-cash,
stock-based compensation by function above:
|
||||
Cost of
revenues
|
$ | - | ||
Research,
development, sales, general and administrative
|
1,450 | |||
See notes
to financial statements.
PEOPLESTRING
CORPORATION
STATEMENT
OF STOCKHOLDERS’ EQUITY
Common
Stock
|
Additional
|
Deposit
on
|
||||||||||||||||||||||
No.
of
|
Paid-In
|
Common
|
Retained
|
|||||||||||||||||||||
Total
|
Shares
|
Amount
|
Capital
|
Stock
|
Earnings
|
|||||||||||||||||||
Balance,
January 2, 2009
|
$ | - | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Issuance
of common stock (at $0.00005 per share)
|
500 | 10,000,000 | 100 | 400 | - | - | ||||||||||||||||||
Sale
of common stock (at $0.00005 per share)
|
415 | 8,300,000 | 83 | 332 | - | - | ||||||||||||||||||
Issuance
of common stock for services (valued at $0.001 per share)
|
1,450 | 1,450,000 | 14 | 1,436 | - | - | ||||||||||||||||||
Sale
of common stock (at $0.001 per share)
|
- | 3,000,000 | 30 | 2,970 | (3,000 | ) | - | |||||||||||||||||
Sale
of common stock (at $0.03 per share)
|
150,000 | 5,683,690 | 57 | 149,943 | - | - | ||||||||||||||||||
Sale
of common stock (at $0.05 per share)
|
23,500 | - | - | - | 23,500 | - | ||||||||||||||||||
Net
earnings
|
478 | - | - | - | - | 478 | ||||||||||||||||||
Balance,
June 30, 2009
|
$ | 176,343 | 28,433,690 | $ | 284 | $ | 155,081 | $ | 20,500 | $ | 478 |
See notes
to financial statements.
PEOPLESTRING
CORPORATION
STATEMENT OF CASH FLOWS
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
June
30, 2009
|
||||
Cash
flows from operating activities:
|
||||
Net
earnings
|
$ | 478 | ||
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
||||
Non-cash,
stock-based compensation
|
1,450 | |||
Changes
in operating assets and liabilities:
|
||||
(Increase) in accounts
receivable, net
|
(3,847 | ) | ||
(Increase) in prepaid
expenses and other assets
|
(13,605 | ) | ||
Increase in accounts
payable
|
2,975 | |||
Increase in accrued
expenses and other liabilities
|
21,863 | |||
Net
cash provided by operating activities
|
9,314 | |||
Cash
flows from financing activities:
|
||||
Proceeds from
issuance of common stock
|
174,415 | |||
Net
change in cash and cash equivalents
|
183,729 | |||
Cash
and cash equivalents - beginning of period
|
- | |||
Cash
and cash equivalents - end of period
|
$ | 183,729 | ||
Supplementary
information:
|
||||
Non-cash
transactions during the periods for:
|
||||
Common stock issued
for services
|
$ | 1,450 | ||
See notes
to financial statements.
PEOPLESTRING CORPORATION
NOTES
TO FINANCIAL STATEMENTS
FOR THE PERIOD JANUARY 2,
2009 (DATE OF FORMATION) THROUGH JUNE 30, 2009
NOTE
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
ORGANIZATION
PeopleString
Corporation (“PeopleString”) was incorporated in the State of Delaware on
January 2, 2009. PeopleString was formed to develop technology that would allow
users of social networks to earn incentives through online and offline
activities by the user and his or her network. In March 2009, PeopleString’s
incentive-based social network was introduced to the market.
USE OF
ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, PeopleString
evaluates its estimates. Actual results could differ from those
estimates.
CASH
EQUIVALENTS
Cash
equivalents include short-term investments in United States treasury bills and
commercial paper with an original maturity of three months or less when
purchased. At June 30, 2009, cash and cash equivalents approximated
$184,000.
CERTAIN RISKS AND
CONCENTRATION
Financial
instruments which potentially subject PeopleString to concentrations of credit
risk consist principally of temporary cash investments. PeopleString places its
temporary cash investments with quality financial institutions and commercial
issuers of short term paper.
PeopleString
grants credit to customers based on an evaluation of the customer’s financial
condition, sometimes without requiring collateral. Exposure to losses on
receivables is principally dependent on each customer’s financial condition.
PeopleString controls its exposure to credit risk through credit approvals,
credit limits and monitoring procedures and establishes allowances for
anticipated losses.
REVENUE
RECOGNITION
PeopleString
derives revenue from online services, electronic commerce, advertising and data
network services. PeopleString also derives revenue from marketing affiliations.
PeopleString recognizes revenue in accordance with the guidance contained in the
Securities and Exchange Commission (the “SEC”) Staff Accounting Bulletin (“SAB”)
No. 104, “Revenue Recognition in Financial Statements.”
Consistent
with the provisions of the Financial Accounting Standards Board (the “FASB”)’s
Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue Gross as
a Principal Versus Net as an Agent,” PeopleString generally recognizes revenue
associated with its advertising and marketing affiliation programs on a gross
basis due primarily to the following factors: PeopleString is the primary
obligor; has general inventory risk; has latitude in establishing prices; has
discretion in supplier selection; performs part of the service; and determines
specifications.
Consistent
with EITF Issue No. 01-9, “Accounting for Considerations Given by a Vendor to a
Customer (Including the Reseller of the Vendor’s Product),” PeopleString
accounts for cash considerations given to customers, for which it does not
receive a separately identifiable benefit or cannot reasonable estimate fair
value, as a reduction of revenue rather than an expense. Accordingly, any
corresponding distributions to customers are recorded as a reduction of gross
revenue.
PeopleString
records its allowance for doubtful accounts based upon an assessment of various
factors, including historical experience, age of the accounts receivable
balances, the credit quality of customers, current economic conditions and other
factors that may affect customers’ ability to pay. At June 30, 2009, the
allowance was $20.
RESEARCH AND
DEVELOPMENT
PeopleString
accounts for research and development costs in accordance with accounting
pronouncements, including Statement of Financial Accounting Standards (“SFAS”)
No. 2, “Accounting for Research and Development Costs,” and SFAS No. 86,
“Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed.” PeopleString has determined that technological feasibility for its
software products is reached shortly before the products are released. Research
and development costs incurred between the establishment of technological
feasibility and product release have not been material and have accordingly been
expensed when incurred.
INCOME
TAXES
PeopleString
accounts for income taxes using an asset and liability approach under which
deferred income taxes are recognized by applying enacted tax rates applicable to
future years to the differences between the financial statement carrying amounts
and the tax basis of reported assets and liabilities. A valuation allowance
reduces the deferred tax assets to the amount estimated more likely than not to
be realized.
The
principal items giving rise to deferred taxes are timing differences between
book and tax assets and other expenditures.
EARNINGS PER COMMON
SHARE
Basic
earnings per common share is computed by dividing net earnings by the weighted
average number of common shares outstanding during the specified period. Diluted
earnings per common share is computed by dividing net earnings by the weighted
average number of common shares and potential common shares outstanding during
the specified period. PeopleString does not have any contingent
securities.
STOCK-BASED
COMPENSATION
PeopleString
accounts for stock-based compensation under SFAS No. 123(R), “Share-Based
Payment” (“SFAS No. 123(R)”). The compensation cost for the portion of awards is
based on the grant-date fair value of those awards as calculated for either
recognition or pro forma disclosures under SFAS No. 123, “Accounting for Stock
Based Compensation.”
PeopleString
issues shares of common stock to non-employees as stock-based compensation.
PeopleString accounts for the services using the fair market value of the
consideration issued, generally measured as the most recent price in the sale of
PeopleString’s common stock. For the period January 2, 2009 (Date of Formation)
through June 30, 2009, PeopleString recorded compensation expense of $1,450 in
connection with the issuance of shares of common stock to
non-employees.
PeopleString
has one stock-based compensation plan under which incentive and nonqualified
stock options or rights to purchase stock may be granted to employees, directors
and other eligible participants. The fair values of the stock options are
estimated on the date of grant using the Black-Scholes option-pricing model. For
the period January 2, 2009 (Date of Formation) through June 30, 2009,
PeopleString did not grant stock options.
FAIR VALUE OF FINANCIAL
INSTRUMENTS
For
financial instruments, including cash investments, accounts receivable, accounts
payable and accrued expenses, the carry amount approximates fair value because
of the short maturities of such instruments.
NEW FINANCIAL ACCOUNTING
STANDARDS
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (“GAAP”)
in the United States. PeopleString adopted SFAS No. 162 on January 2, 2009, and
it did not have a material impact on PeopleString’s financial position, cash
flows and results of operations.
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
enhances existing guidance for measuring assets and liabilities using fair
value. This standard provides a single definition of fair value, together with a
framework for measuring it, and requires additional disclosure about the use of
fair value to measure assets and liabilities. In February 2008, the FASB
issued FASB Staff Position (“FSP”) SFAS 157-1, “Application of SFAS No. 157 to
SFAS No. 13 and Its Related Interpretative Accounting Pronouncements that
Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS
157-2, “Effective Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1
excludes SFAS No. 13 and its related interpretive accounting pronouncements that
address leasing transactions from the requirements of SFAS No. 157, with the
exception of fair value measurements of assets and liabilities recorded as a
result of a lease transaction but measured pursuant to other pronouncements
within the scope of SFAS No. 157. FSP SFAS 157-2 delays the effective date
of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements
on a recurring basis (at least annually). PeopleString adopted SFAS No. 157, FSP
SFAS 157-1 and FSP SFAS 157-2 effective January 2, 2009, and they did not have a
material impact on PeopleString’s financial position, cash flows and results of
operations.
NOTE
2. INCOME TAXES
PeopleString
applies the provisions of the FASB Financial Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes” (“FIN 48”). A valuation allowance is provided
when it is more likely than not that some portion or all of the deferred tax
assets will not be realized.
The
provision for income taxes consists of the following:
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
June
30, 2009
|
||||
Current:
|
||||
Federal
|
$ | - | ||
State
|
- | |||
Foreign
|
- | |||
Total
|
- | |||
Deferred:
|
||||
Federal
|
- | |||
State
|
- | |||
Foreign
|
- | |||
Total
|
- | |||
Provision
of income taxes
|
$ | - |
A
reconciliation of taxes computed at the federal statutory rate to the amount
provided is as follows:
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
June
30, 2009
|
||||
Tax
provision (benefit) computed at the federal statutory rate of
35%
|
$ | 167 | ||
Decrease
in taxes resulting from permanent differences
|
(167 | ) | ||
$ | - |
The
Company will file income tax returns in all jurisdictions in which it has reason
to believe it is subject to tax. The Company is subject to examination by
various taxing jurisdictions. To date, there have been no examinations.
Nonetheless, any tax jurisdiction may contend that a filing position claimed by
the Company regarding one or more of its transactions is contrary to that
jurisdiction’s laws or regulations. Significant judgment is required in
determining the worldwide provisions for income taxes. In the ordinary course of
business of a global business, the ultimate tax outcome is uncertain for many
transactions. It is the Company’s policy to establish provisions for taxes that
may become payable in future years as a result of an examination by tax
authorities. The Company establishes the provisions based upon management’s
assessment of exposure associated with permanent tax differences and tax credits
applied to temporary difference adjustments. The tax provisions are analyzed
periodically (at least quarterly) and adjustments are made as events occur that
warrant adjustments to those provisions.
NOTE
3. COMMON STOCK
On
January 2, 2009, PeopleString was incorporated in the state of Delaware. Under
PeopleString’s Certificate of Incorporation, the number of shares of common
stock PeopleString is authorized to issue is 250,000,000 shares of common stock,
par value $0.00001 per share.
In
January 2009, the month of PeopleString’s formation, PeopleString issued
10,000,000 shares of its common stock to BigString Corporation (“BigString”) at
a per share purchase price of $0.00005.
Also in
January 2009, PeopleString offered to issue 8,300,000 shares of its common stock
to its founders at a per share purchase price of $0.00005. In April 2009,
PeopleString received $415 and issued 8,300,000 shares of its common
stock.
In
February 2009, PeopleString offered to issue 3,000,000 shares of its common
stock to a strategic shareholder at a per share purchase price of $0.001. In
April 2009, the offer was accepted PeopleString issued 3,000,000 shares of its
common stock. The resulting subscription receivable of $3,000 was received in
July 2009.
In April
2009, PeopleString issued 1,450,000 shares of its common stock, valued at $0.001
per share, in consideration for consulting services provided by four marketing
consultants. PeopleString recorded consulting expense of $1,450 in connection
with the issuance of these shares. Fair market value was based on the most
recent private placement per share purchase price.
In June
2009, PeopleString initiated a private placement of securities to sell 6,900,000
shares of its common stock at a per share purchase price of $0.03. PeopleString
received $150,000 in gross proceeds in June 2009 and issued 5,683,690 shares of
its common stock in June 2009.
Also in
June 2009, PeopleString initiated a private placement of securities to sell
shares of its common stock at a per share purchase price of $0.05. PeopleString
received deposits on its common stock of $23,500 in gross proceeds in June 2009
and subsequently issued 470,000 shares of its common stock in July
2009.
NOTE
4. SHARE-BASED COMPENSATION
PeopleString
adopted SFAS No. 123(R) requiring the recognition of compensation expense in the
statements of operations related to the fair value of its employee and
non-employee share-based options. SFAS No. 123(R) revises SFAS No. 123,
“Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees.” SFAS No. 123(R) is supplemented by
SAB No. 107 and SAB No. 110 which express the SEC staff’s views regarding the
interaction between SFAS No. 123(R) and certain SEC positions and regulations
including the valuation of share-based payment arrangements.
Equity
Incentive Plan:
At the
2009 annual meeting of stockholders of PeopleString, the PeopleString
Corporation 2009 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted
and approved by a majority of PeopleString’s stockholders. Under the Equity
Incentive Plan, incentive and nonqualified stock options and rights to purchase
PeopleString’s common stock may be granted to eligible participants. Options
granted under the Equity Incentive Plan are generally priced to be at least 100%
of the fair market value of PeopleString’s common stock at the date of the
grant. Options granted under the Equity Incentive Plan are generally granted for
a term of five or ten years. Options granted under the Equity Incentive Plan
generally vest between one and five years.
For the
period January 2, 2009 (Date of Formation) through June 30, 2009, PeopleString
did not grant stock options.
NOTE
5. COMMITMENTS AND CONTINGENCIES
Network
Earnings Commitments:
PeopleString
is an incentive based social network, where users earn money based on their
online and offline activities. PeopleString makes payments twice a month to
premium users who have an earned balance of at least $25 and have been active
users in the past 90 days, and once a month to free users who have an earned
balance of at least $25 and have been active users in the past 30 days. Network
earnings are monitored by PeopleString’s management. For the period January 2,
2009 (Date of Formation) through June 30, 2009, PeopleString made payments
totaling $21,093. In addition, for the period January 2, 2009 (Date of
Formation) through June 30, PeopleString accrued an additional $19,143 for
active users with balances earned, but not yet paid.
Other
Commitments:
In the
ordinary course of business, PeopleString may provide indemnifications to
customers, vendors, lessors, marketing affiliates, directors, officers and other
parties with respect to certain matters. It is not possible to determine the
aggregate maximum potential loss under these indemnification agreements due to
the limited history of prior indemnification claims and unique circumstances
involved in each agreement. To date, PeopleString has not incurred material
costs as a result of obligation under these agreements and has not accrued any
liabilities related to such agreements.
As of
June 30, 2009, PeopleString did not have any relationships with unconsolidated
entities or financial partnerships, such as structured finance or special
purpose entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements or other limited purposes.
PeopleString is not exposed to financing, liquidity, market or credit risks that
could arise under such relationships.
NOTE
6. RELATED PARTY TRANSACTIONS
Technology
License and Shared Services Agreement:
On April
2, 2009, PeopleString entered into an agreement with BigString to license
BigString’s messaging technology and share the cost of certain common services.
At June 30, 2009, BigString was a significant, non-majority stockholder of
PeopleString’s common stock. The agreement renews annually and is subject to
adjustment periodically. For the period January 2, 2009 (Date of Formation)
through June 30, 2009, PeopleString incurred expenses of $15,595 under the terms
of the agreement.
NOTE
7. SUBSEQUENT EVENTS
In July
2009, PeopleString received $32,100 for the remainder of shares of its common
stock subject to the private placement at a per share purchase price of $0.03.
PeopleString issued 1,216,310 shares of its common stock in July
2009.
PEOPLESTRING
CORPORATION
FINANCIAL
STATEMENTS
FOR
THE PERIOD
JANUARY
2, 2009 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 2009
PEOPLESTRING
CORPORATION
INDEX TO FINANCIAL
STATEMENTS
PAGE
|
|
49
|
|
50
|
|
51
|
|
52
|
|
53
|
|
54
|
|
FINANCIAL
STATEMENTS
Certain
information and footnote disclosures required under accounting principles
generally accepted in the United States of America have been condensed or
omitted from the following financial statements pursuant to the rules and
regulations of the Securities and Exchange Commission (the “SEC”). It is
suggested that the following financial statements be read in conjunction with
the audited financial statements and notes thereto for the period January 2,
2009 (Date of Formation) through June 30, 2009 of PeopleString Corporation
(“PeopleString”).
The
results of operations for the period January 2, 2009 (Date of Formation) through
September 30, 2009 are not necessarily indicative of the results of the entire
fiscal year or for any other period.
PEOPLESTRING
CORPORATION
BALANCE SHEET
(Unaudited)
September
30, 2009
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Cash and cash
equivalents
|
$ | 200,033 | ||
Accounts receivable
- net of allowance of $150
|
18,551 | |||
Prepaid expenses
and other current assets
|
20,550 | |||
Total
current assets
|
$ | 239,134 | ||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
Current
liabilities:
|
||||
Accounts
payable
|
$ | 7,594 | ||
Accrued
expenses
|
93,748 | |||
Total
current liabilities
|
101,342 | |||
Stockholders'
equity:
|
||||
Common stock,
$0.00001 par value - authorized 250,000,000 shares; outstanding 31,420,000
shares
|
314 | |||
Additional paid in
capital
|
275,651 | |||
Deficit
|
(138,173 | ) | ||
Total
stockholders' equity
|
137,792 | |||
Total
liabilities and stockholders' equity
|
$ | 239,134 |
See notes
to unaudited financial statements.
PEOPLESTRING
CORPORATION
STATEMENT
OF OPERATIONS
(Unaudited)
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
September
30, 2009
|
||||
Operating
revenues
|
$ | 338,991 | ||
Operating
expenses: (1)
|
||||
Cost of
revenues
|
180,271 | |||
Research,
development, sales, general and administrative
|
297,110 | |||
Total
operating expenses
|
477,381 | |||
Loss
from operations
|
(138,390 | ) | ||
Other
income:
|
||||
Interest
income
|
217 | |||
Total
other income
|
217 | |||
Net
loss
|
$ | (138,173 | ) | |
Net
loss per common share:
|
||||
Basic and
diluted
|
$ | (0.01 | ) | |
Weighted
average common shares outstanding:
|
||||
Basic and
diluted
|
21,326,487 | |||
(1)Non-cash,
stock-based compensation by function above:
|
||||
Cost of
revenues
|
$ | - | ||
Research,
development, sales, general and administrative
|
66,450 | |||
See notes
to unaudited financial statements.
PEOPLESTRING
CORPORATION
STATEMENT
OF STOCKHOLDERS’ EQUITY
(Unaudited)
Common
Stock
|
Additional
|
|||||||||||||||||||
No.
of
|
Paid-In
|
|||||||||||||||||||
Total
|
Shares
|
Amount
|
Capital
|
Deficit
|
||||||||||||||||
Balance,
January 2, 2009
|
$ | - | - | $ | - | $ | - | $ | - | |||||||||||
Issuance
of common stock (at $0.00005 per share)
|
500 | 10,000,000 | 100 | 400 | - | |||||||||||||||
Sale
of common stock (at $0.00005 per share)
|
415 | 8,300,000 | 83 | 332 | - | |||||||||||||||
Issuance
of common stock for services (valued at $0.001 per share)
|
1,450 | 1,450,000 | 14 | 1,436 | - | |||||||||||||||
Sale
of common stock (at $0.001 per share)
|
3,000 | 3,000,000 | 30 | 2,970 | - | |||||||||||||||
Sale
of common stock (at $0.03 per share)
|
182,100 | 6,900,000 | 69 | 182,031 | - | |||||||||||||||
Sale
of common stock (at $0.05 per share)
|
23,500 | 470,000 | 5 | 23,495 | - | |||||||||||||||
Issuance
of common stock for services (valued at $0.05 per share)
|
65,000 | 1,300,000 | 13 | 64,987 | - | |||||||||||||||
Net
loss
|
(138,173 | ) | - | - | - | (138,173 | ) | |||||||||||||
Balance,
September 30, 2009
|
$ | 137,792 | 31,420,000 | $ | 314 | $ | 275,651 | $ | (138,173 | ) |
See notes
to unaudited financial statements.
PEOPLESTRING
CORPORATION
STATEMENT
OF CASH FLOWS
(Unaudited)
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
September
30, 2009
|
||||
Cash
flows from operating activities:
|
||||
Net
loss
|
$ | (138,173 | ) | |
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
||||
Non-cash,
stock-based compensation
|
66,450 | |||
Changes
in operating assets and liabilities:
|
||||
Increase in accounts
receivable, net
|
(18,551 | ) | ||
Increase in prepaid
expenses and other assets
|
(20,550 | ) | ||
Increase in accounts
payable
|
7,594 | |||
Increase in accrued
expenses and other liabilities
|
93,748 | |||
Net
cash used in operating activities
|
(9,482 | ) | ||
Cash
flows from financing activities:
|
||||
Proceeds from
issuance of common stock
|
209,515 | |||
Net
change in cash and cash equivalents
|
200,033 | |||
Cash
and cash equivalents - beginning of period
|
- | |||
Cash
and cash equivalents - end of period
|
$ | 200,033 | ||
Supplementary
information:
|
||||
Non-cash
transactions during the periods for:
|
||||
Common
stock issued for services
|
$ | 66,450 | ||
See notes
to unaudited financial statements.
PEOPLESTRING CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD JANUARY 2,
2009 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 2009
NOTE
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
ORGANIZATION
PeopleString
Corporation (“PeopleString” or the “Company”) was incorporated in the State of
Delaware on January 2, 2009. PeopleString was formed to develop technology that
would allow users of social networks to earn incentives through online and
offline activities by the user and his or her network. In March 2009,
PeopleString’s incentive-based social network was introduced to the
market.
USE OF
ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, PeopleString
evaluates its estimates. Actual results could differ from those
estimates.
CASH
EQUIVALENTS
Cash
equivalents include short-term investments in United States treasury bills and
commercial paper with an original maturity of three months or less when
purchased. At September 30, 2009, cash and cash equivalents approximated
$200,000.
CERTAIN RISKS AND
CONCENTRATION
Financial
instruments which potentially subject PeopleString to concentrations of credit
risk consist principally of temporary cash investments. PeopleString places its
temporary cash investments with quality financial institutions and commercial
issuers of short term paper.
PeopleString
grants credit to customers based on an evaluation of the customer’s financial
condition, sometimes without requiring collateral. Exposure to losses on
receivables is principally dependent on each customer’s financial condition.
PeopleString controls its exposure to credit risk through credit approvals,
credit limits and monitoring procedures and establishes allowances for
anticipated losses.
REVENUE
RECOGNITION
PeopleString
derives revenue from online services, electronic commerce, advertising and data
network services. PeopleString also derives revenue from marketing affiliations.
PeopleString recognizes revenue in accordance with the guidance contained in the
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 605, “Revenue Recognition” (“ASC 605”).
Consistent
with the provisions of ASC 605-45-05, PeopleString generally recognizes revenue
associated with its advertising and marketing affiliation programs on a gross
basis due primarily to the following factors: PeopleString is the primary
obligor; has general inventory risk; has latitude in establishing prices; has
discretion in supplier selection; performs part of the service; and determines
specifications.
Consistent
with ASC 605-50-15, PeopleString accounts for cash considerations given to
customers, for which it does not receive a separately identifiable benefit or
cannot reasonable estimate fair value, as a reduction of revenue rather than an
expense. Accordingly, any corresponding distributions to customers are recorded
as a reduction of gross revenue.
PeopleString
records its allowance for doubtful accounts based upon an assessment of various
factors, including historical experience, age of the accounts receivable
balances, the credit quality of customers, current economic conditions and other
factors that may affect customers’ ability to pay. At September 30, 2009, the
allowance was $150.
RESEARCH AND
DEVELOPMENT
PeopleString
accounts for research and development costs in accordance with accounting
pronouncements, including FASB ASC 730, “Research and Development” (“ASC 730”)
and FASB ASC 985, “Software” (“ASC 985”). PeopleString has determined that
technological feasibility for its software products is reached shortly before
the products are released. Research and development costs incurred between the
establishment of technological feasibility and product release have not been
material and have accordingly been expensed when incurred.
INCOME
TAXES
PeopleString
accounts for income taxes using an asset and liability approach under which
deferred income taxes are recognized by applying enacted tax rates applicable to
future years to the differences between the financial statement carrying amounts
and the tax basis of reported assets and liabilities. A valuation allowance
reduces the deferred tax assets to the amount estimated more likely than not to
be realized.
The
principal items giving rise to deferred taxes are timing differences between
book and tax assets and other expenditures.
EARNINGS (LOSS) PER COMMON
SHARE
Basic
earnings (loss) per common share is computed by dividing net earnings (loss) by
the weighted average number of common shares outstanding during the specified
period. Diluted earnings (loss) per common share is computed by dividing net
earnings (loss) by the weighted average number of common shares and potential
common shares outstanding during the specified period. PeopleString does not
have any contingent securities.
STOCK-BASED
COMPENSATION
PeopleString
accounts for stock-based compensation under FASB ASC 718, “Compensation-Stock
Compensation” (“ASC 718”). The compensation cost for the portion of awards is
based on the grant-date fair value of those awards as calculated for either
recognition or pro forma disclosures under ASC 718.
PeopleString
issues shares of common stock to non-employees as stock-based compensation.
PeopleString accounts for the services using the fair market value of the
consideration issued, generally measured as the most recent price in the sale of
PeopleString’s common stock. For the period January 2, 2009 (Date of Formation)
through September 30, 2009, PeopleString recorded compensation expense of
$66,450 in connection with the issuance of shares of common stock to
non-employees.
PeopleString
has one stock-based compensation plan under which incentive and nonqualified
stock options or rights to purchase stock may be granted to employees, directors
and other eligible participants. The fair values of the stock options are
estimated on the date of grant using the Black-Scholes option-pricing model. For
the period January 2, 2009 (Date of Formation) through September 30, 2009,
PeopleString did not grant stock options.
FAIR VALUE OF FINANCIAL
INSTRUMENTS
The
Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC
820”) on January 1, 2008, for all financial assets and liabilities that are
recognized or disclosed at fair value in the condensed consolidated financial
statements on a recurring basis or on a nonrecurring basis during the reporting
period. While the Company adopted the provisions of ASC 820 for nonfinancial
assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a recurring basis, no such assets or liabilities existed
at the balance sheet date. As permitted by ASC 820, the Company delayed
implementation of this standard for all nonfinancial assets and liabilities
recognized or disclosed at fair value in the financial statements on a
nonrecurring basis and adopted these provisions effective January 2,
2009.
The fair
value is an exit price, representing the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The Company utilizes market data or
assumptions that market participants would use in pricing the asset or
liability. ASC 820 establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These tiers include: Level
1, defined as observable inputs such as quoted market prices in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable
inputs about which little or no market data exists, therefore requiring an
entity to develop its own assumptions.
As of
September 30, 2009, the Company held certain financial assets that are measured
at fair value on a recurring basis. These consisted of cash and cash
equivalents. The fair value of the cash and cash equivalents is determined based
on quoted market prices in public markets and is categorized as Level 1. The
Company does not have any financial assets measured at fair value on a recurring
basis as Level 2 or Level 3 and there were no transfers in or out of Level 2 or
Level 3 during the period January 2, 2009 (Date of Formation) through September
30, 2009.
The
following table sets forth by level, within the fair value hierarchy, the
Company’s financial assets accounted for at fair value on a recurring basis as
of September 30, 2009.
Assets
at Fair Value as of September 30, 2009 Using:
|
||||||||||||||||
Total
|
Quoted
Prices in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
|||||||||||||
Cash
and cash equivalents
|
$ | 200,033 | $ | 200,033 | $ | - | $ | - |
The
Company had no financial assets accounted for on a non-recurring basis as of
September 30, 2009.
There
were no changes to the Company’s valuation techniques used to measure asset fair
values on a recurring or nonrecurring basis during the nine months ended
September 30, 2009 and the Company did not have any financial liabilities as of
September 30, 2009.
The
Company has other financial instruments, such as receivables, accounts payable
and other liabilities which have been excluded from the tables above. Due to the
short-term nature of these instruments, the carrying value of receivables,
accounts payable and other liabilities approximate their fair
values.
NEW FINANCIAL ACCOUNTING
STANDARDS
During
the second quarter of 2009, the Company implemented additional interim
disclosures about fair value of financial instruments, as required by FASB ASC
Paragraph 825-10-65-1, “Financial Instruments-Overall-Transition and Open
Effective Date Information” (“ASC 825-10-65-1”). Prior to implementation,
disclosures about fair values of financial instruments were only required to be
disclosed annually. As the required modifications only related to additional
disclosures of fair values of financial instruments in interim financial
statements, the adoption did not affect the Company’s financial position or
results of operations.
Beginning
in the second quarter of 2009, the Company must disclose the date through which
subsequent events have been evaluated, in accordance with the requirements in
FASB ASC Paragraph 855-10-50-1, “Subsequent Events -Overall-Disclosure” (“ASC
855-10-50-1”). With regards to these financial statements and notes to financial
statements, the Company has evaluated all subsequent events through November 6,
2009 (the date the Company’s financial statements are issued).
In
September 2009, the FASB implemented certain modifications to FASB ASC 860,
“Transfers and Servicing” (“ASC 860”), as a means to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets, the effects of a transfer on its financial position, financial
performance, and cash flows, and a transferor’s continuing involvement, if any,
in transferred financial assets. These modifications must be applied as of the
beginning of each reporting entity’s first annual reporting period that begins
after November 15, 2009. The Company does not expect the adoption of this
standard to have an impact on the Company’s results of operations, financial
condition or cash flows.
During
the third quarter of 2009, the Company adopted the FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles in
accordance with FASB ASC Topic 105, “Generally Accepted Accounting Principles”
(“ASC 105” or the “Codification”). The Codification has become the source of
authoritative U.S. generally accepted accounting principles (“GAAP”) recognized
by the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the SEC under authority of federal securities laws are also sources
of authoritative GAAP for SEC registrants. Effective with the Company’s adoption
on July 1, 2009, the Codification has superseded all prior non-SEC accounting
and reporting standards. All other non-grandfathered non-SEC accounting
literature not included in the Codification has become non-authoritative. As the
adoption of the Codification only affected how specific references to GAAP
literature have been disclosed in the notes to the Company’s financial
statements, it did not result in any impact on the Company’s results of
operations, financial condition or cash flows.
Updates to the FASB
Codification Applicable to the Company
The FASB
has published FASB Accounting Standards Update No. 2009-12, “Fair Value
Measurements and Disclosures (Topic 820)-Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent).” This Update amends
FASB ASC 820-10, “Fair Value Measurements and Disclosures-Overall” (“ASC
820-10”) to permit a reporting entity to measure the fair value of certain
investments on the basis of the net asset value per share of the investment (or
its equivalent). This Update also requires new disclosures, by major category of
investments, about the attributes of investments included within the scope of
this amendment to the Codification. The guidance in this Update is effective for
interim and annual periods ending after December 15, 2009. The Company does not
expect the adoption of this standard to have an impact on the Company’s results
of operations, financial condition or cash flows.
Components
of deferred income tax assets are as follows:
Period
|
||||
January
2, 2009
|
||||
(Date
of Formation)
|
||||
Through
|
||||
September
30, 2009
|
||||
Deferred
tax assets - current
|
||||
Benefit
due to loss carryforward
|
$ | 48,361 | ||
Valuation
allowance
|
(48,361 | ) | ||
$ | - |
The
Company will file income tax returns in all jurisdictions in which it has reason
to believe it is subject to tax. The Company is subject to examination by
various taxing jurisdictions. To date, there have been no examinations.
Nonetheless, any tax jurisdiction may contend that a filing position claimed by
the Company regarding one or more of its transactions is contrary to that
jurisdiction’s laws or regulations. Significant judgment is required in
determining the worldwide provisions for income taxes. In the ordinary course of
business of a global business, the ultimate tax outcome is uncertain for many
transactions. It is the Company’s policy to establish provisions for taxes that
may become payable in future years as a result of an examination by tax
authorities. The Company establishes the provisions based upon management’s
assessment of exposure associated with permanent tax differences and tax credits
applied to temporary difference adjustments. The tax provisions are analyzed
periodically (at least quarterly) and adjustments are made as events occur that
warrant adjustments to those provisions.
NOTE
2. INCOME TAXES
PeopleString
applies the provisions of the FASB ASC 740, “Income Taxes” (“ASC 740”). A
valuation allowance is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Valuation
allowances as of September 30, 2009 have been applied to offset the deferred tax
assets in recognition of the uncertainty that such tax benefits will be realized
as PeopleString may incur losses.
NOTE
3. COMMON STOCK
On
January 2, 2009, PeopleString was incorporated in the state of Delaware. Under
PeopleString’s Certificate of Incorporation, the number of shares of common
stock PeopleString is authorized to issue is 250,000,000 shares of common stock,
par value $0.00001 per share.
In
January 2009, the month of PeopleString’s formation, PeopleString issued
10,000,000 shares of its common stock to BigString Corporation (“BigString”) at
a per share purchase price of $0.00005.
Also in
January 2009, PeopleString offered to issue 8,300,000 shares of its common stock
to its founders at a per share purchase price of $0.00005. In April 2009,
PeopleString received $415 and issued 8,300,000 shares of its common
stock.
In
February 2009, PeopleString offered to issue 3,000,000 shares of its common
stock to a strategic shareholder at a per share purchase price of $0.001. In
April 2009, the offer was accepted. PeopleString issued 3,000,000 shares of its
common stock. The resulting subscription receivable of $3,000 was received in
July 2009.
In April
2009, PeopleString issued 1,450,000 shares of its common stock, valued at $0.001
per share, in consideration for consulting services provided by four marketing
consultants. PeopleString recorded consulting expense of $1,450 in connection
with the issuance of these shares. Fair market value was based on the most
recent private placement per share purchase price.
In June
2009, PeopleString initiated a private placement of securities to sell 6,900,000
shares of its common stock at a per share purchase price of $0.03. PeopleString
received $150,000 in gross proceeds in June 2009 and issued 5,683,690 shares of
its common stock in June 2009. PeopleString received $32,100 in gross proceeds
in July 2009 and issued 1,216,310 shares of its common stock in July
2009
Also in
June 2009, PeopleString initiated a private placement of securities to sell
shares of its common stock at a per share purchase price of $0.05. PeopleString
received deposits on its common stock of $23,500 in gross proceeds in June 2009
and subsequently issued 470,000 shares of its common stock in July
2009.
In August
2009, PeopleString issued 1,300,000 shares of its common stock, valued at $0.05
per share, in consideration for services provided by two vendors. PeopleString
recorded expense of $65,000 in connection with the issuance of these shares.
Fair market value was based on the most recent private placement per share
purchase price.
58
NOTE
4. SHARE-BASED COMPENSATION
PeopleString
adopted ASC 718 requiring the recognition of compensation expense in the
statements of operations related to the fair value of its employee and
non-employee share-based options.
Equity
Incentive Plan:
At the
2009 annual meeting of stockholders of PeopleString, the PeopleString
Corporation 2009 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted
and approved by a majority of PeopleString’s stockholders. Under the Equity
Incentive Plan, incentive and nonqualified stock options and rights to purchase
PeopleString’s common stock may be granted to eligible participants. Options
granted under the Equity Incentive Plan are generally priced to be at least 100%
of the fair market value of PeopleString’s common stock at the date of the
grant. Options granted under the Equity Incentive Plan are generally granted for
a term of five or ten years. Options granted under the Equity Incentive Plan
generally vest between one and five years.
For the
period January 2, 2009 (Date of Formation) through September 30, 2009,
PeopleString did not grant stock options.
NOTE
5. COMMITMENTS AND CONTINGENCIES
Network
Earnings Commitments:
PeopleString
is an incentive based social network, where users earn money based on their
online and offline activities. PeopleString makes payments twice a month to
premium users who have an earned balance of at least $25 and have been active
users in the past 90 days, and once a month to free users who have an earned
balance of at least $25 and have been active users in the past 30 days. Network
earnings are monitored by PeopleString’s management. For the period January 2,
2009 (Date of Formation) through September 30, 2009, PeopleString made payments
totaling $87,755. In addition, for the period January 2, 2009 (Date of
Formation) through September 30, PeopleString accrued an additional $87,166 for
active users with balances earned, but not yet paid.
Other
Commitments:
In the
ordinary course of business, PeopleString may provide indemnifications to
customers, vendors, lessors, marketing affiliates, directors, officers and other
parties with respect to certain matters. It is not possible to determine the
aggregate maximum potential loss under these indemnification agreements due to
the limited history of prior indemnification claims and unique circumstances
involved in each agreement. To date, PeopleString has not incurred material
costs as a result of obligation under these agreements and has not accrued any
liabilities related to such agreements.
As of
September 30, 2009, PeopleString did not have any relationships with
unconsolidated entities or financial partnerships, such as structured finance or
special purpose entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements or other limited purposes.
PeopleString is not exposed to financing, liquidity, market or credit risks that
could arise under such relationships.
NOTE
6. RELATED PARTY TRANSACTIONS
Technology
License and Shared Services Agreement:
On April
2, 2009, PeopleString entered into an agreement with BigString to license
BigString’s messaging technology and share the cost of certain common services.
At September 30, 2009, BigString was a significant, non-majority stockholder of
PeopleString’s common stock. The agreement renews annually and is subject to
adjustment periodically. For the period January 2, 2009 (Date of Formation)
through September 30, 2009, PeopleString incurred expenses of $117,576 under the
terms of the agreement.
NOTE
7. SUBSEQUENT EVENTS
In
October 2009, PeopleString received $310,000 for shares of its common stock
subject to a private placement at a per share purchase price of $0.13.
PeopleString issued 2,480,000 shares of its common stock in October 2009.
Subsequent events were evaluated through November 6, 2009 (the date the
Company’s financial statements are issued).
PART
II
INFORMATION
NOT REQUIRED IN THIS PROSPECTUS
Item
13. Other Expenses of Issuance and
Distribution
The
estimated costs of this Offering are as follows:
Expenses
(1)
|
||||
SEC
registration fee
|
$ | 61 | ||
Accounting
fees and expenses
|
20,000 | |||
Legal
fees and expenses
|
15,000 | |||
Printing
and engraving expenses
|
7,500 | |||
Blue
Sky fees and expenses
|
2,500 | |||
Transfer
Agent and Registrar expenses
|
2,500 | |||
Miscellaneous
expenses
|
10,000 | |||
TOTAL
|
$ | 57,561 |
(1) All
amounts are estimates, other than the Security and Exchange Commission's
registration fee.
We are
paying all expenses of the Offering listed above. No portion of these expenses
will be paid by the selling stockholders. The selling stockholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Item
14. Indemnification of Directors and
Officers
Section 145
of the Delaware General Corporation Law empowers a Delaware corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation) by reason of the fact that such person is or was
a director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. A corporation may, in advance of the final
disposition of any civil, criminal, administrative or investigative action, suit
or proceeding, pay the expenses (including attorneys’ fees) incurred by any
officer, director, employee or agent in defending such action, provided that the
director or officer undertakes to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation. A
corporation may indemnify such person against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
The
indemnification provisions in our certificate of incorporation and by-laws also
permit indemnification for liabilities arising under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable.
Item
15. Recent Sales of Unregistered
Securities.
Since our
inception in January 2, 2009, the Registrant has issued the following shares of
common stock, with the associated cash received, aggregate
offering price, and exemption relied upon for each sale of unregistered
securities:
Date
|
Name
|
Common
Shares
|
Cash
Received
|
Aggregate
Offering Price
per
Share
|
Exemption
Relied On
|
|
1/2/2009
|
BigString
Corporation
|
10,000,000
|
$ 500
|
$ 0.0001
|
4(2)
|
|
4/2/2009
|
Darin
M. Myman
|
2,500,000
|
125
|
0.0001
|
4(2)
|
|
4/2/2009
|
Robert
S. DeMeulemeester
|
2,500,000
|
125
|
0.0001
|
4(2)
|
|
4/2/2009
|
Adam
M. Kotkin
|
2,500,000
|
125
|
0.0001
|
4(2)
|
|
4/2/2009
|
Peter
Shelus
|
800,000
|
40
|
0.0001
|
4(2)
|
|
4/2/2009
|
Craig
Myman
|
800,000
|
-
|
4(2)
|
||
4/2/2009
|
Marc
Dutton
|
400,000
|
-
|
4(2)
|
||
4/2/2009
|
Jeffrey
Kay
|
200,000
|
-
|
4(2)
|
||
4/2/2009
|
Randi
Karmin
|
50,000
|
-
|
4(2)
|
||
4/15/2009
|
Robb
Knie
|
3,000,000
|
3,000
|
0.0010
|
4(2)
|
|
6/15/2009
|
Barry
Honig
|
2,950,000
|
77,854
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Alan
S. Honig
|
610,000
|
16,099
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Alan
S. Honig Custodian for Cameron Honig UTMA F/L
|
423,015
|
11,164
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Alan
S. Honig Custodian for Harrison Honig UTMA F/L
|
423,015
|
11,164
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Alan
S. Honig Custodian for Jacob Honig UTMA F/L
|
423,015
|
11,164
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Alan
S. Honig Custodian for Ryan Honig UTMA F/L
|
423,015
|
11,164
|
0.0264
|
506
Reg D
|
|
6/15/2009
|
Jonathan
Honig
|
431,630
|
11,391
|
0.0264
|
506
Reg D
|
|
7/2/2009
|
Alan
S. Honig Custodian for Cameron Honig UTMA F/L
|
161,985
|
4,275
|
0.0264
|
506
Reg D
|
|
7/2/2009
|
Alan
S. Honig Custodian for Harrison Honig UTMA F/L
|
161,985
|
4,275
|
0.0264
|
506
Reg D
|
|
7/2/2009
|
Alan
S. Honig Custodian for Jacob Honig UTMA F/L
|
161,985
|
4,275
|
0.0264
|
506
Reg D
|
|
7/2/2009
|
Alan
S. Honig Custodian for Ryan Honig UTMA F/L
|
161,985
|
4,275
|
0.0264
|
506
Reg D
|
|
7/2/2009
|
Jonathan
Honig
|
568,370
|
15,000
|
0.0264
|
506
Reg D
|
|
7/13/2009
|
Kim
& Matthew Barra
|
200,000
|
10,000
|
0.0500
|
506
Reg D
|
|
7/13/2009
|
Sara
& Patrick Vertucci
|
100,000
|
5,000
|
0.0500
|
506
Reg D
|
|
7/13/2009
|
Revolutionary
Asset Mgmt, LLC
|
100,000
|
5,000
|
0.0500
|
506
Reg D
|
|
7/13/2009
|
Milton
& Olga Cohen
|
70,000
|
3,500
|
0.0500
|
506
Reg D
|
|
8/15/2009
|
Bruce
Van Heel (1)
|
1,000,000
|
-
|
4(2)
|
||
8/15/2009
|
Barbara
R. Mittman (2)
|
300,000
|
-
|
4(2)
|
||
10/19/2009
|
Joseph
A. Noel
|
560,000
|
70,000
|
0.1250
|
506
Reg D
|
|
10/19/2009
|
Sheena
Kong
|
560,000
|
70,000
|
0.1250
|
506
Reg D
|
|
10/19/2009
|
Frank
D'Agostino
|
400,000
|
50,000
|
0.1250
|
506
Reg D
|
|
10/19/2009
|
Robert
S. Coleman Trust
|
400,000
|
50,000
|
0.1250
|
506
Reg D
|
|
10/19/2009
|
Michael
Brauser
|
400,000
|
50,000
|
0.1250
|
506
Reg D
|
|
10/19/2009
|
Katherine
Noel Zuniga
|
160,000
|
20,000
|
0.1250
|
506
Reg D
|
All of
the above offerings and sales were made pursuant to
Section 3(b), 4(2) and/or rule 506 of Regulation D of the Securities Act of
1933, as amended. No advertising or general solicitation was employed in
offering the securities. The offerings and sales were made to a limited number
of persons, all of whom were accredited investors, business associates of the
Company and/or its executive officers or directors, and transfer was restricted
by the Company in accordance with the requirements of the Securities Act of
1933. In addition to representations by the above-referenced persons, we have
made independent determinations that all of the above-referenced persons were
capable of analyzing the merits and risks of their investment, and that they
understood the speculative nature of their investment. No underwriting discounts
or commissions were paid in connection with the sale of such
securities.
(1) Shares
were issued to Bruce Van Heel in lieu of sales and marketing
services.
(2) Shares
were issued to Barbara R. Mittman in lieu of legal
fees.
Item
16. Exhibits and Financial Statement
Schedules
Exhibit
Number
|
Description
of Exhibits
|
3.1
*
|
Articles
of Incorporation
|
3.2
*
|
Amended
and Restated Bylaws
|
5.1
*
|
Opinion
of Barbara R. Mittman, Esq. regarding the legality of the securities being
registered
|
10.1
**
|
2009
Equity Incentive Plan
|
23.1
**
|
Consent
of Weiner Goodman & Company, P.C., Certified Public
Accountants
|
* Filed
Previously
**
Filed Herewith
|
Item
17. Undertakings
The
Registrant hereby undertakes:
1.
|
To
file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement
to:
|
|
i.
|
Include
any prospectus required by Section 10(a)(3) of the Securities
Act;
|
|
ii.
|
Reflect
in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration
statement; and notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
|
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
|
2.
|
For
determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and
the offering of the securities at that time to be the initial bona fide
offering.
|
|
3.
|
File
a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the
offering.
|
|
4.
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
|
|
5.
|
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment of the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by the Registrant is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on January 12, 2010 .
PEOPLESTRING CORPORATION |
By: /s/ Darin M. Myman, |
President
and Chief Executive Officer
and
Director
|
By: /s/ Robert S. DeMeulemeester, |
Executive
Vice President,
Chief
Financial Officer, Treasurer
and
Director
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
By: /s/ Darin M. Myman, |
President
and Chief Executive Officer
and Director
|
By: /s/ Robert S. DeMeulemeester, |
Executive
Vice President,
Chief
Financial Officer, Treasurer
and Director
|
Date:
January 12, 2010
63