Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to __________
Commission file number 000-52317
NETFONE, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 98-0438201
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
5100 Westheimer, Suite 200
Houston, TX, 77056
(Address of principal executive offices)
713.968.7569
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 12,658,000 common shares issued and
outstanding as at February 18, 2010.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
PART I
ITEM 1. FINANCIAL STATEMENTS
Our financial statements are stated in United States dollars and are prepared in
accordance with United States Generally Accepted Accounting Principles.
NETFONE, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 2009
(Unaudited)
BALANCE SHEETS 3
STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTE TO THE FINANCIAL STATEMENTS 6
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NETFONE, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, September 30,
2009 2009
--------- ---------
(Unaudited) (Audited)
ASSETS
Total Assets $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 6,175 $ 6,957
Due to related parties 157,936 150,415
--------- ---------
164,111 157,372
--------- ---------
STOCKHOLDERS' DEFICIT
Common stock
Authorized:
100,000,000 common shares; par value of $0.001
20,000,000 preferred shares; par value of $0.001
Issued and outstanding:
12,658,000 common shares (September 30, 2009: 12,658,000) 12,658 12,658
Additional paid-in capital 278,542 278,542
Deficit accumulated during the development stage (455,311) (448,572)
--------- ---------
(164,111) (157,372)
--------- ---------
$ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements.
3
NETFONE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
June 8, 2004
Three months ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
------------ ------------ ------------
REVENUE $ -- $ -- $ 12,000
------------ ------------ ------------
EXPENSES
Accounting fees 4,250 1,500 96,201
Depreciation -- -- 52
Bank fees and interest -- 51 586
Consulting fees -- -- 14,623
Equipment write-off -- -- 1,358
Filing fees and incorporation costs 1,545 -- 13,168
Legal fees -- -- 49,910
Foreign exchange gain -- -- (748)
Office and general expenses 944 -- 4,754
------------ ------------ ------------
6,739 1,551 179,904
------------ ------------ ------------
NET LOSS FROM CONTINUED OPERATIONS 6,739 1,551 167,904
------------ ------------ ------------
DISCONTINUED OPERATIONS
Loss from operations -- -- (333,472)
Gain on sale of subsidiary -- -- 46,065
------------ ------------ ------------
NET LOSS $ 6,739 $ 1,551 $ 455,311
============ ============ ============
BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 12,658,000 12,658,000
============ ============
The accompanying notes are an integral part of these financial statements.
4
NETFONE, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
June 8, 2004
Three months ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (6,739) $ (1,551) $(167,904)
Add item not affecting cash
Equipment write-off -- -- 1,358
Amortization -- -- 52
Receivable write-off -- -- 307
Changes in operating assets and liabilities
Accounts receivable -- -- (307)
Accounts payable and accrued liabilities (782) 1,500 6,175
--------- --------- ---------
Net cash used in continuing operations (7,521) (51) (160,319)
Net cash used in discontinued operations -- -- (312,407)
--------- --------- ---------
Net cash used in operating activities (7,521) (51) (472,726)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Due to related parties 7,521 -- 157,936
Proceeds from sale of Netfone Services Inc. -- -- 25,000
Proceeds of common stock issuances -- -- 291,200
--------- --------- ---------
Net cash provided by financing activities 7,521 -- 474,136
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Equipment additions -- -- (1,410)
--------- --------- ---------
Net cash used in investing activities -- -- (1,410)
--------- --------- ---------
NET DECREASE IN CASH -- (51) --
CASH, BEGINNING -- 163 --
--------- --------- ---------
CASH, ENDING $ -- $ 112 $ --
========= ========= =========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -- $ -- $ --
========= ========= =========
Cash paid for taxes $ -- $ -- $ --
========= ========= =========
The accompanying notes are an integral part of these financial statements.
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NETFONE, INC.
(A Development Stage Company)
NOTE TO THE FINANCIAL STATEMENTS
December 31, 2009
(Unaudited)
Note 1 Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in
accordance with United States generally accepted accounting principles for
interim financial information and with the rules and regulations of the
Securities and Exchange Commission ("SEC"). They do not include all information
and footnotes required by United States generally accepted accounting principles
for complete financial statements. However, except as disclosed herein, there
has been no material changes in the information disclosed in the notes to the
financial statements for the year ended September 30, 2009 included in the
Company's Annual Report on Form 10-K filed with the SEC. The unaudited interim
financial statements should be read in conjunction with those financial
statements included in the Form 10-K. In the opinion of Management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal recurring adjustments, have been made. Operating results for the three
months ended December 31, 2009 are not necessarily indicative of the results
that may be expected for the year ending September 30, 2010.
We have evaluated events occurring between the end of our fiscal quarter
December 31, 2009 and February 19, 2010 when the financial statements were
issued.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements as that term is
defined in the Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", "potential" or "continue" or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled "Risk Factors", that
may cause our or our industry's actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Our financial statements are stated in United States dollars and are prepared in
accordance with United States Generally Accepted Accounting Principles. In this
quarterly report, unless otherwise specified, all dollar amounts are expressed
in United States dollars. All references to "common shares" refer to the common
shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", and "Netfone"
means Netfone, Inc. and our wholly owned subsidiary, Netfone Services, Inc.,
unless otherwise indicated.
GENERAL
We have sold NetFone Services Inc (our wholly-owned Canadian subsidiary
providing internet protocol phone service). We were incorporated in the State of
Nevada on June 8, 2004. From inception of our business on June 8, 2004, we were
engaged in the development of communication technology and services for internet
protocol (IP), telephony and video applications.
The address of our principal executive office is 5100 Westheimer, Suite 200,
Houston, TX, 77056. Our telephone number is 713-968-7569.
OUR CURRENT BUSINESS
During our year ended September 30, 2007, management determined that the Voice
over IP market was becoming increasingly competitive with diminishing margins.
In addition, we could not acquire additional financing in order for our
subsidiary to market its products, pay support staff or maintain equipment, nor
did we have the resources to acquire insurance especially related to liability
arising from 911emergency calls for our company directly or for our directors.
In light of this determination, we sold all of the assets of our wholly owned
subsidiary, NetFone Services Inc., with the exception of the software assets
purchased on January 4, 2007, which were retained by our company.
We are currently seeking other business opportunities.
RESULTS OF OPERATIONS
From the date of our incorporation on June 8, 2004 to December 31, 2009, we have
been a development stage company that has generated minimal revenues. During the
3 month period ended December 31, 2009, we generated $Nil (2008: $Nil) in
revenues.
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THREE MONTH PERIOD ENDED DECEMBER 31, 2009 COMPARED WITH THE THREE MONTH PERIOD
ENDED DECEMBER 31 2008.
We posted an operating loss of $6,739 for the three month period ended December
31, 2009 compared to operating losses of $1,551 for the three month period ended
December 31, 2008, and operating losses of $167,904 since inception to December
31, 2009.
Our operating expenses for the three month period ended December 31, 2009
compared to the three month period ended December 31, 2008 are classified
primarily into the following three categories:
* Accounting and auditing fees for the year end audit. The amount
incurred by our company during for the three month period ended
December 31, 2009 was $4,250, compared to the three month period ended
December 31, 2008 of $1,500;
* Filing Fees. The amount incurred by our company during the three month
period ended December 31, 2009 was $1,545 compared to $Nil for the
three month period ended December 31, 2008.
* Office and general expenses. The amount incurred by our company during
the three month period ended December 31, 2009 was $944 compared to
$Nil for the three month period ended December 31, 2008.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2009, we had a working capital deficit of $164,111.
At December 31, 2009, we had assets of $Nil.
At December 31, 2008, our total liabilities were $164,111.
At December 31, 2009 we had cash on hand of $Nil.
PLAN OF OPERATION
We anticipate we will require up to $25,000 for the 12 months ending September
30, 2010 to fund our obligations in respect of our ongoing operational expenses.
EMPLOYEES
As of December 31, 2009, we have no employees.
RESEARCH AND DEVELOPMENT
We did not spend any specific funds on research and development activities
during the quarter ended December 31, 2009.
PERSONNEL PLAN
We do not currently plan to add more personnel to our company. As we start
offering service, we will consider outsourcing customer support or hiring
additional personnel.
CASH REQUIREMENTS
We are not currently generating revenues. Management projects that we will
require additional funding to maintain our current operations and to enable us
to address our current and ongoing expenses and continue seeking new business
opportunities.
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There is some doubt about our ability to continue as a going concern as the
continuation of our business is dependent upon the continued support of our
major shareholders and raising additional capital.
We have incurred operating losses since inception. As we had no cash on hand as
at December 31, 2009, management projects that we may require an additional
$25,000 to fund our ongoing operating expenditures, offering expenses and
working capital requirements for the twelve month period ending September 30,
2010, broken down as follows:
Estimated Funding Required During the Twelve Month Period
Ending September 30, 2010
Operating expenditures
General and Administrative $20,000
Working capital 5,000
-------
Total $25,000
=======
Due to the uncertainty of our ability to meet our current operating and capital
expenses, in their report on the annual financial statements for the period from
incorporation on June 8, 2004 to September 30, 2009, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
There are no assurances that we will be able to obtain further funds as may be
required for our continued operations. If required, we will pursue various
financing alternatives to meet our immediate and long-term financial
requirements, which we anticipate will consist of further private placements of
equity securities, advances from related parties or shareholder loans. We have
not entered into any definitive agreements with any shareholders or related
parties for the provision of loans or advances. There can be no assurance that
additional financing will be available to us when needed or, if available, that
it can be obtained on commercially reasonable terms. If we are not able to
obtain the additional financing on a timely basis, we will not be able to meet
our other obligations as they become due and we will be forced to scale down or
perhaps even cease our operations.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not anticipate that we will expend any significant amount on equipment for
our present or future operations.
GOING CONCERN
Due to our being a development stage company and not having generated revenues,
in their report on our financial statements for the period from incorporation on
June 8, 2004 to December 31, 2009, our independent auditors included an
explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that lead to this disclosure.
We have historically incurred losses, and through December 31, 2009 have
incurred losses of $455,351 from our inception. Because of these historical
losses, we will require additional working capital to develop our business
operations. We intend to raise additional working capital through private
placements, public offerings, bank financing and/or advances from related
parties or shareholder loans.
The continuation of our business is dependent upon obtaining further financing
and achieving a break even or profitable level of operations. The issuance of
additional equity securities by us could result in a significant dilution in the
equity interests of our current or future stockholders. Obtaining commercial
loans, assuming those loans would be available, will increase our liabilities
and future cash commitments.
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There are no assurances that we will be able to either (1) achieve a level of
revenues adequate to generate sufficient cash flow from operations; or (2)
obtain additional financing through either private placements, public offerings
and/or bank financing necessary to support our working capital requirements. To
the extent that funds generated from operations and any private placements,
public offerings and/or bank financing are insufficient, we will have to raise
additional working capital. No assurance can be given that additional financing
will be available, or if available, will be on terms acceptable to us. If
adequate working capital is not available we may not increase our operations.
These conditions raise substantial doubt about our ability to continue as a
going concern. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might be necessary should we be unable to
continue as a going concern.
RISK FACTORS
Much of the information included in this quarterly report includes or is based
upon estimates, projections or other "forward-looking statements". Such
forward-looking statements include any projections or estimates made by us and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.
Such estimates, projections or other "forward-looking statements" involve
various risks and uncertainties as outlined below. We caution readers of this
quarterly report that important factors in some cases have affected and, in the
future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward-looking statements". In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.
THE FACT THAT WE HAVE NOT EARNED SUBSTANTIAL REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We have generated small revenues since our incorporation and we will continue to
incur operating loss for the foreseeable future. We had cash in the amount of
$Nil as of December 31, 2009. We estimate our average monthly operating expenses
to be approximately $2,000. As a result, we need to generate significant
revenues from our operations or acquire financing. We cannot assure that we will
be able to successfully explore and develop our business. These circumstances
raise substantial doubt about our ability to continue as a going concern as
described in an explanatory paragraph to our independent auditors' report on our
financial statements for the year ended September 30, 2009.
WE HAVE BEEN UNABLE TO FUND OUR OPERATIONS WITH INTERNALLY GENERATED FUNDS
BECAUSE OUR BUSINESS HAS NOT GENERATED SUBSTANTIAL REVENUE. WITHOUT ADDITIONAL
FINANCING, WE WILL NEED TO GENERATE FUNDS INTERNALLY TO FUND OUR OPERATIONS
DURING THE FISCAL YEAR ENDING SEPTEMBER 30, 2010 OR WE WILL BE UNABLE TO
CONTINUE OUR OPERATIONS AND BUSINESS.
We currently do not have any operations which generate substantial income or
cash flow. We have not generated substantial revenues since our incorporation
and we have required and will continue to require substantial capital to fund
the operation and development of our business (estimated at $25,000 for the 12
month period ending September 30, 2010). We will not generate any material funds
internally in the near future.
THE LOSS OF CHARLES EL-MOUSSA MAY AFFECT OUR ABILITY TO RAISE ADDITIONAL
CAPITAL.
Our president, secretary and treasurer, Charles El-Moussa, was instrumental in
the development of our business and the development of our fund raising strategy
and locating the sources of our capital. Our ability to raise additional capital
depends upon the continued service and performance of Mr. El-Moussa.
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BECAUSE OUR OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS CONTROL A MAJORITY OF
OUR COMMON STOCK, INVESTORS WILL HAVE LITTLE OR NO CONTROL OVER OUR MANAGEMENT
OR OTHER MATTERS REQUIRING SHAREHOLDER APPROVAL.
Our officers and directors, in the aggregate, beneficially own 63.6% of issued
and outstanding shares of our common stock. As a result, they have the ability
to control matters affecting minority shareholders, including the election of
our directors, the acquisition or disposition of our assets, and the future
issuance of our shares. Because our officers, directors and principal
shareholders control the company, investors will not be able to replace our
management if they disagree with the way our business is being run. Because
control by these insiders could result in management making decisions that are
in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT DIFFICULT FOR OUR
STOCKHOLDERS TO RESELL THEIR SHARES.
Our common stock is quoted on the OTC Bulletin Board service of the National
Association of Securities Dealers. Trading in stock quoted on the OTC Bulletin
Board is often thin and characterized by wide fluctuations in trading prices,
due to many factors that may have little to do with the company's operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like Nasdaq or a stock exchange like Amex. Accordingly,
shareholders may have difficulty reselling any of the shares.
SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC
MARKET BY THE SELLING STOCKHOLDERS MAY RESULT IN SIGNIFICANT DOWNWARD PRESSURE
ON THE PRICE OF OUR COMMON STOCK AND COULD AFFECT THE ABILITY OF OUR
STOCKHOLDERS TO REALIZE ANY CURRENT TRADING PRICE OF OUR COMMON STOCK.
Sales of a substantial number of shares of our common stock in the public market
could cause a reduction in the market price of our common stock, when and if
such market develops. When our registration statement was declared effective,
the selling stockholders had the ability to sell up to 33% of the issued and
outstanding shares of our common stock. As a result of such registration
statement, a substantial number of our shares of common stock which have been
issued may be available for immediate resale when and if a market develops for
our common stock, which would have the effect of decreasing the price of our
common stock. As a result of any such decreases in price of our common stock,
purchasers who acquire shares from the selling stockholders may lose some or all
of their investment.
Any significant downward pressure on the price of our common stock as the
selling stockholders sell the shares of our common stock could encourage short
sales by the selling stockholders or others. Any such short sales could place
further downward pressure on the price of our common stock, which may result in
the loss of some or all of an investment in our common stock.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND THE NADSD'S SALES PRACTICE REQUIREMENTS, WHICH MAY
LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors". The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. 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 in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
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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
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these 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 agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the NASD has adopted rules that require that in
recommending an investment to a customer, a broker-dealer must have reasonable
grounds for believing that the investment is suitable for that customer. Prior
to recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, the NASD believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. The NASD requirements make it more
difficult for broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our stock.
OTHER RISKS
BECAUSE SOME OF OUR OFFICERS AND DIRECTORS ARE LOCATED IN NON-U.S.
JURISDICTIONS, YOU MAY HAVE NO EFFECTIVE RECOURSE AGAINST THE MANAGEMENT FOR
MISCONDUCT AND MAY NOT BE ABLE TO ENFORCE JUDGEMENT AND CIVIL LIABILITIES
AGAINST OUR OFFICERS, DIRECTORS, EXPERTS AND AGENTS.
All of our directors and officers are nationals and/or residents of countries
other than the United States, specifically Canada, and all or a substantial
portion of such persons' assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our officers or directors, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof. Similar difficulties will exist for
enforcements of judgments against our Canadian operating subsidiary that we
utilize, or any effort to attach the assets of such subsidiary, to the extent
that such assets are located outside of the United States.
ITEM 3. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, as of the end of the period
covered by this quarterly report, being December 31, 2009, we have carried out
an evaluation of the effectiveness of the design and operation of our company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our company's management, including
our company's president and chief financial officer. Based upon that evaluation,
our company's president along with our company's chief financial officer
concluded that our company's disclosure controls and procedures are effective as
at the end of the period covered by this report. There have been no changes in
our company's internal controls that occurred during our most recent fiscal
quarter that have materially affected, or are reasonably likely to materially
affect our internal controls subsequent to the date we carried our evaluation.
Disclosure controls and procedures and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time period specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our president and chief
financial officer as appropriate, to allow timely decisions regarding required
disclosure.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against our company,
nor are we involved as a plaintiff in any material proceeding or pending
litigation. There are no proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial shareholder, is an adverse party or
has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibits Required by Item 601 of Regulation S-B.
(3) CHARTER AND BY-LAWS
3.1 Articles of Incorporation (incorporated by to our Registration Statement on
Form SB-2 filed December 1, 2004)
3.2 By-laws (incorporated by to our Registration Statement on Form SB-2 filed
December 1, 2004)
(10) MATERIAL CONTRACTS
10.1 Consulting Agreement dated July 1, 2004 between Rafeh Hulays and Netfone
Services Inc. (incorporated by to our Registration Statement on Form SB-2
filed December 1, 2004)
10.2 Form of Subscription Agreement (incorporated by to our Registration
Statement on Form SB-2 filed December 1, 2004)
10.3 Purchase Order to Asterisk IT Pty Ltd. dated January 4, 2007 (incorporated
by reference from our current report on Form 8-K filed January 10, 2007)
10.4 Purchase Order to Arezqui Belaid dated January 4, 2007 (incorporated by
reference from our current report on Form 8-K filed January 10, 2007)
(21) SUBSIDIARIES
Netfone Services Inc., a federal Canadian Company
(31) SECTION 302 CERTIFICATIONS
31.1* Certification of Charles El-Moussa
(32) SECTION 906 CERTIFICATIONS
32.1* Certification of Charles El-Moussa
----------
* filed herewith
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NETFONE, INC.
By: /s/ Charles El-Moussa
---------------------------------------------------------------
Charles El-Moussa, President, Secretary, Treasurer and Director
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer)
Date: February 18, 2010
1
