Attached files
file | filename |
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EX-23.1 - CONSENT OF INDEPENDENT AUDITOR - WISE SALES, INC. | exhibit_23-1.htm |
EX-99.(E) - NOTE PAYABLE DATED MARCH 9, 2009 - WISE SALES, INC. | exhibit_99-e.htm |
EX-99.(F) - NOTE PAYABLE EXTENSION DATED SEPTEMBER 30, 2009 - WISE SALES, INC. | exhibit_99-f.htm |
EX-99.(D) - NOTE PAYABLE DATED NOVEMBER 5, 2008 - WISE SALES, INC. | exhibit_99-d.htm |
EX-5 - OPINION OF JOSEPH L. PITTERA, ESQ. - WISE SALES, INC. | exhibit_5.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
(AMENDMENT NUMBER 2)
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
|
||
Wise
Sales, Inc.
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||
(Name
of small business issuer in its charter)
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||
Nevada
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7938
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26-3386352
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(State
or jurisdiction of incorporation or organization)
|
(Primary
Standard Industrial Classification Code Number)
|
(I.R.S.
Employer Identification
No.)
|
4701
Washington Ave., Suite 210
Racine,
Wisconsin 53406
(262)
886- 6328
(Address
and telephone number of registrant’s principal offices)
Brandon
G. O’Bryon
N95
W16075 Richfield Way, Suite 3
Menomonee
Falls, Wisconsin 53501
Telephone
(262) 293-2128
(Name,
address and telephone number of registrant’s agent for service)
Copies
To:
Joseph
Lambert Pittera, Esq.
Law
Office of Joseph Lambert Pittera, Esq.
2214
Torrance Boulevard, Suite 101
Torrance,
California 90501
Telephone:
(310) 328-3588
Facsimile
Number: (310) 328-3063
(Name,
address and telephone number of agent for service)
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, check the
following box: x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. 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 filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer o
Accelerated filer o Non-accelerated
filer o
Smaller reporting company x
1
CALCULATION
OF REGISTRATION FEE
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|
|||||||||||||||
Proposed
|
Proposed
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|||||||||||||||
Amount
to
|
Offering
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Aggregate
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Amount
of
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|||||||||||||
Title
of Each Class of Security
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be
registered
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Price
per
|
Offering
Price
|
Registration
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||||||||||||
to
be Registered
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(1)
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Share
($)
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($)(2)
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Fee
($)
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||||||||||||
Common
stock, par value $.001
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3,000,000 | $ | 0.01 | $ | 30,000 | $ | 1.67 |
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1)
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3,000,000
shares are being offered by a direct offering at a price of $.01 per
share.
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2)
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Estimated
solely for purposes of calculating the registration fee in accordance with
Rule 457 of the Securities Act, based upon the fixed price of the direct
offering.
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The
Registrant herby amends this Registration Statement on such date 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.
2
PROSPECTUS
WISE
SALES, INC.
3,000,000
Shares of Common Stock
$.01 per
share
$30,000
Wise
Sales, Inc. (“Company”) is offering on a best-efforts, all or
none basis 3,000,000 shares of its common stock at a price of $.01 per
share. This is the initial offering of Wise Sales, Inc and no public market
exists for the securities being offered. The Company is offering the shares on a
self-underwritten, “best efforts,” all or none basis directly through our sole
officer and director. The shares will be offered at a fixed price of $.01 per
share for a period not to exceed 180 days from the date of this prospectus.
There is
no minimum number of shares required to be purchased. Kurt Wise,
the sole officer and director of Wise Sales, Inc., intends to sell the shares
directly. No commissions or other compensation related to the sale of the shares
will be paid to our sole officer and director. The intended methods of
communication include, without limitation, telephone, and personal contact. For
more information, see the section titled “Plan of Distribution” and “Use of
Proceeds’ herein.
The
proceeds from the sale of the shares in this offering will be payable to Law
Offices of Joseph L. Pittera, Esq., Ltd., Escrow Agent f/b/o Wise Sales, Inc. A
Trust Account will hold all of the subscription funds pending placement of the
entire offering. This offering is on a best effort, all-or-none basis, meaning
if all shares are not sold and the total offering amount is not deposited by the
expiration of the offering, all monies will be returned to investors, without
interest or deduction.
The
officer and director of the issuer and any affiliated party thereof will not
participate in this offering.
The
offering shall terminate on the earlier of (i) the date when the sale of all
3,000,000 shares is completed or (ii) one hundred and eighty (180) days from the
date of this prospectus. Wise Sales, Inc. will not extend the offering period
beyond one hundred and eighty (180) days from the effective date of this
prospectus.
Our common stock is presently not traded or quoted on any market
or securities exchange. In order to be quoted on the Over The Counter Electronic Bulletin Board (“OTCBB”) , a
market maker must file an application on our behalf in order to make a market
for our common stock. After this prospectus has been
declared effective, we intend to request that a market maker file such an
application. There can be no assurance that a market maker will agree to
file the necessary documents with FINRA, which operates the OTCBB, nor can there
be any assurance that such an application for quotation will be approved. See
Risk Factor “There is no current trading market for our securities and if
a trading market does not develop, purchasers of our securities may have
difficulty selling their shares” on page 12 .
Wise
Sales, Inc. is a development stage start-up, and currently has no operations.
Any investment in the shares offered herein involves a high degree of risk. You
should only purchase shares if you can afford a complete loss of your
investment.
BEFORE
INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS AND, PARTICULARLY, THE RISK
FACTORS SECTION, BEGINNING ON PAGE 8.
NEITHER
THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES DIVISION
HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Prior to
this offering, there has been no public market for Wise Sales, Inc.’s common
stock.
The
information in this prospectus is not complete and may be changed. Wise Sales,
Inc. may not sell these securities until the registration statement filed with
the 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.
Wise
Sales, Inc. does not plan to use this offering prospectus before the effective
date.
Subject
to Completion, Dated __________,
2010
3
TABLE
OF CONTENTS
PAGE
SUMMARY
OF PROSPECTUS
|
5
|
General
Information about Our Company
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5
|
The
Offering
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6
|
RISK
FACTORS
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8
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RISKS
ASSOCIATED WITH OUR COMPANY
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8
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RISKS
ASSOCIATED WITH THIS OFFERING
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12
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 14 |
USE
OF PROCEEDS
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15
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DETERMINATION
OF OFFERING PRICE
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15
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DILUTION
OF THE PRICE YOU PAY FOR YOUR SHARES
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16
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PLAN
OF DISTRIBUTION
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16
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Offering
will be Sold by Our Officer and Director
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16
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Terms
of the Offering
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17
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Deposit
of Offering Proceeds
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17
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Procedures
for and Requirements for Subscribing
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17
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DESCRIPTION
OF SECURITIES
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18
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INTEREST
OF NAMED EXPERT AND COUNSEL
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18
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DESCRIPTION
OF OUR BUSINESS
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19
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General
Information
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19
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Industry
Background
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19
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Principal
Products and their Markets
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19
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Distribution
Methods
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19
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Status
of Any Publicly Announced Products
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21
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Competition
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21
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Sources
and Availability of Products
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22
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Dependence
on One of a Few Major Customers
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22
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Patents
and Trademarks
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22
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Need
for Any Government Approval of Principal Products
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22 |
Government
and Industry Regulation
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22 |
Research
and Development Activities
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22 |
Environmental
Laws
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23 |
Employees
and Employment Agreements
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23 |
DESCRIPTION OF PROPERTY | 23 |
LEGAL PROCEEDINGS | 23 |
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | 23 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 25 |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 29 |
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON | 29 |
EXECUTIVE COMPENSATION | 29 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 31 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 32 |
INDEMNIFICATION | 32 |
AVAILABLE INFORMATION | 33 |
4
WISE
SALES, INC.
4701
WASHINGTON AVE, SUITE 210
RACINE,
WISCONSIN 53406
Telephone
(262)
886-6328
SUMMARY
OF PROSPECTUS
You
should read the following summary together with the more detailed business
information, financial statements and related notes that appear elsewhere in
this prospectus. In this prospectus, unless the context otherwise denotes,
references to “we,” “us,” “our” and “Company” refer to Wise Sales,
Inc.
General
Information About the Company
Wise
Sales, Inc. was incorporated on September 10, 2008 pursuant to the laws of the
State Nevada. The Company will recruit and develop a
network of independent sales representatives to sell Internet-based revenue
generating promotional programs, advertising and merchant processing services to
small and medium sized businesses on behalf of clients that may include Wise
Savings, LLC (“Wise Savings”) and Wise Exchange, LLC (“Wise Exchange”). Both
Wise Savings and Wise Exchange (collectively, the “Affiliates”) are affiliated
with the Company through common ownership and management. See ‘’Relationship
with Wise Savings, LLC and Wise Exchange, LLC.”
The
Company will focus its sales efforts on servicing small and medium sized local
businesses and expects to generate revenue from four primary
sources:
·
|
It
will generate commissions through the sale of advertising on behalf of
advertising platforms that include web search engines, which are designed
to perform algorithmically driven searches for information on the
Internet, Internet directories, which allow users to search human-selected
Internet resources that have been arranged and classified by subject or
location, and mobile content providers that offer factual or entertainment
related resources to their
users.
|
·
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It
will offer fee-based account management services to help its advertisers
optimize their wed-based advertising campaigns, including editorial and
keyword selection recommendations and the analysis of their advertising
results. These services will be performed pursuant to contractual
relationships that may be ongoing or limited to one advertising
campaign.
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·
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It
will offer local campaign management services that assist its advertising
clients in the consolidation of their advertising purchasing, management
and internal reporting. The Company expects to perform these services
pursuant to a contractual relationship with fixed
fees.
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·
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It
will be compensated by its Affiliates for each business that it recruits
for its Affiliates. In the case of Wise Savings, this compensation will
include a one-time payment for each business that is brought under
contract for the Wise Savings online directory and residual payments that
are tied to a continuing and expanded business relationship between the
business and Wise
Savings.
|
The
Company has not yet entered into any contractual relationships with any
advertisers or web advertising platforms, other than with Wise Savings, LLC,, a
company that is affiliated with the Company.(See “Relationships with Wise
Savings, LLC and Wise Exchange, LLC.” There can be no assurances that the
Company will be able to enter into any contractual relationships with
advertisers or web advertising platforms, or that the terms of these contractual
relationships, if any, will be beneficial to the Company. The Company will rely
on its internal sales force to recruit advertising platform partners and on its
independent sales representatives to recruit advertising
customers.
Wise
Sales, Inc. is a development stage company that has not yet significantly
commenced its planned operations. The operations of the Company to date have
been devoted primarily to start-up and development activities, which include the
following:
|
1)
|
Formation
of the Company;
|
|
2)
|
Development
of the Wise Sales, Inc. business
plan;
|
|
3)
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Entered
into a non-exclusive Independent Contractor Agreement with Wise
Savings; and
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4)
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Begun
the process of identifying sales personnel for recruitment by the
Company.
|
Wise
Sales, Inc. is attempting to become operational and anticipates that it will
begin generating revenue in approximately six months following the placement of
our offering. In order to generate revenues, Wise Sales, Inc. must address the
following areas:
|
1)
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Finalize and implement our
marketing plan. The Company must recruit advertising clients
to service and develop marketing plans to promote and support the
sale of its client’s programs and
services.
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|
2)
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Develop an independent sales
representation organization. The Company must recruit and train
qualified sales personnel for its organization. It must develop a
supervisory staff to manage its sales
organization.
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3)
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Develop an administrative
infrastructure to support the Company’s sales activities. The
Company must recruit qualified administrative personnel to support its
sales organization.
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5
SUMMARY OF PROSPECTUS
-
continued
General Information About
the Company -
continued
The
Company believes that raising $30,000 through the sale of common equity is
sufficient for the Company to become operational and sustain operations for the
next twelve (12) months. The capital to be raised has been budgeted to establish
our infrastructure and become a fully reporting company. We believe that the
recurring revenue generated from commissions and fixed fees will be sufficient
to support ongoing operations. Unfortunately, there can be no assurance that the
actual expenses incurred will not materially exceed our estimates or that the
cash flow from our revenue sources will be adequate to maintain our business. As
a result, our independent auditors have expressed substantial doubt about our
ability to continue as a going concern in the independent auditors’ report to
the financial statements included in the registration statement.
Wise
Sales, Inc. currently has one officer and director. This individual allocates
time and personal resources to Wise Sales, Inc. on a part-time basis and devotes
approximately 10 hours per week to the Company.
As of the
date of this prospectus, Wise Sales, Inc. has 6,000,000 shares of $.001 par
value common stock issued and outstanding, all of which are owned by Kurt Wise,
the Company’s President,
Secretary, Treasurer, Director, Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer . Upon completion of the
Offering, Mr. Wise will own approximately 66.67% of the Company’s voting shares.
As a result, Mr. Wise will be able to control the vote on all matters requiring
approval by a simple majority of the shareholders of the Company, to elect the
entire Board of Directors and, effectively, to control the operations of the
Company.
Our
principal and executive offices are located at 4701 Washington Avenue, Suite
210, Racine, Wisconsin 53406. The office space has been provided rent fee by
Wise Savings, one of our Affiliates.
Wise
Sales, Inc.’s fiscal year end is December 31.
THE
OFFERING
Following
is a brief summary of this offering. Please see the “Plan of
Distribution” section for a more detailed description of the terms of the
offering.
Securities
Being Offered:
|
3,000,000
shares of common stock, par value $0.001.
|
Offering Price per Share: | $.01 |
Offering
Period:
|
The
shares are being offered for a period not to exceed 180 days. The shares
are being offered on a best efforts, all or none basis. In the event
we do not sell all of the shares before the expiration date of the
offering, all funds raised will be promptly returned to the investors,
without interest or deduction.
|
Escrow
Period:
|
The
proceeds from the sale of the shares in the offering will be payable to
“Law Offices of Joseph L. Pittera, Esq., Escrow Agent f/b/o Wise Sales,
Inc.” and will be deposited in a non-interest/minimal interest bearing
bank account until all offering proceeds are raised. All subscription
agreements and checks are irrevocable and should be delivered to Law
Offices of Joseph L. Pittera, Esq. Failure to do so will result in checks
being returned to the investor who submitted the check. Wise Sales, Inc.
trust agent Joseph L. Pittera, Esq. Acts as legal counsel of Wise Sales,
Inc. and is therefore not an independent third party.
|
Gross Proceeds to Our Company: | $30,000. |
6
SUMMARY
OF PROSPECTUS -
continued
THE OFFERING -
continued
Use
of Proceeds:
|
We
intend to use the proceeds to expand our business
operations.
|
Number
of Shares Outstanding Before
the Offering:
|
6,000,000 |
Number of Shares Outstanding After the Offering: | 9,000,000 |
The
offering price of the common stock bears no relationship to any objective
criterion of value and has been arbitrarily determined. The price does not bear
any relationship to Wise Sales, Inc. assets, book value, historical earnings, or
net worth.
Wise
Sales, Inc. will apply the proceeds from the offering to pay for accounting
fees, legal and professional fees, salaries/contractors, sales and marketing,
and general working capital.
The
Company has not presently secured an independent stock transfer agent. Wise
Sales, Inc. has identified an agent to retain that will facilitate the
processing of the certificates upon closing of the offering. Such transfer agent
identified is Island Stock Transfer, 100 Second Avenue S., Suite 104N, St.
Petersburg, Florida 33701, having a telephone number of (727)
289-0010.
The
purchase of the common stock in this offering involves a high degree of risk.
The common stock offered in this prospectus is for investment purposes only and
currently no market for Wise Sales, Inc. common stock exists. Please refer to
the sections herein titled “Risk Factors” and “Dilution” before making an
investment in this stock.
SUMMARY
FINANCIAL INFORMATION
The
following table sets forth summary financial data derived from Wise Sales, Inc.
financial statements.
Statements
of operations data
For the
nine months ending September 30, 2009 and the period from inception (September
10, 2008) to September 30, 2009:
Inception
|
||||||||
Nine
Months
|
(September
10, 2008)
|
|||||||
Ending
|
Through
|
|||||||
September
30, 2009
|
September
30, 2009
|
|||||||
|
||||||||
Revenues
|
$ | - | $ | - | ||||
|
||||||||
Operating
expenses
|
||||||||
Administrative
expenses
|
6,629 | 22,581 | ||||||
Total
operating expenses
|
6,6,29 | 22,581 | ||||||
|
||||||||
Operating
loss
|
(6,629 | ) | (22,581 | ) | ||||
|
||||||||
Interest
expense
|
688 | 811 | ||||||
|
||||||||
Net
operating loss
|
$ | (7,317 | ) | $ | (23,392 | ) | ||
|
||||||||
Basic
earnings (loss) per share
|
$ | (0.00 | ) | |||||
|
||||||||
Weighted
average number of common shares outstanding
|
6,000,000 | |||||||
|
7
RISK
FACTORS
This offering and an investment in
our securities involves a high degree of risk. You should carefully consider the
risks described below and the other information in this prospectus, including
our financial statements and the notes to those statements, before you purchase
any Common Stock. The risks and uncertainties described below are not the only
ones we face. Additional risks and uncertainties not presently known to us, or
that we currently deem immaterial, could negatively impact our business, results
of operations or financial condition in the future. If any of the following
risks and uncertainties develops into actual events, our business, results of
operations or financial condition could be adversely affected. In those cases,
the trading price of our securities could decline, and you may lose all or part
of your investment.
RISKS
ASSOCIATED WITH OUR COMPANY
We
have a limited operating history that you can use to evaluate us
We were
incorporated in Nevada on September 10, 2008. We have no operating history upon
which an evaluation of our future success or failure can be made. We have no
significant financial resources and we have not generated any revenues. The
likelihood of our success must be considered in light of the problems, expenses,
difficulties, complications and delays that are frequently encountered by a
small development stage company starting a new business enterprise and the
highly competitive environment in which we will operate. We are a
start-up company that is attempting to develop an independent sales
representation organization for the purpose of selling online advertising and
other programs and services to small and medium sized local businesses on behalf of advertising platforms that include Internet search
engines, Internet directories and mobile content
providers .
Our
ability to achieve and maintain profitability and positive cash flow is
dependent upon our ability to raise the capital necessary to fund our
operations, to successfully market our products and to generate
revenue.
Our
auditor has expressed substantial doubt as to our ability to continue as a going
concern
Our
independent certified public accountants have included a going concern paragraph
in their opinion that expresses substantial doubt about our ability to continue
as a going concern, and notes that as of December 31, 2008 we have generated no
revenues, have an accumulated deficit of $16,075 and have a working capital
deficit of $10,075. As of September 30, 2009, we have generated no revenues,
have an accumulated deficit of $23,392 and have a working capital deficit of
$17,392. Our ability to continue as a going concern is dependent upon obtaining
additional capital to finance our business plan.
We
will require financing to implement our current business strategy, and our
inability to obtain such financing could prohibit us from executing our business
plan
We will
require financing through public or private debt or the sale of equity
securities before we can begin to implement our current business strategy, which
is to build a network of independent sales representatives who will sell
advertising and other Internet based programs and services to small and medium sized local businesses on behalf of
advertising platforms that include web search engines,
Internet directories and mobile content providers . If the
Company is unable to raise such funding, it may be unable to recruit a network
of independent sales representatives, which would make it difficult, if not
impossible, for the Company to generate revenue. The Company may have to cease
operations. Such financing may not be available when needed, and even if such
financing is available, it may be on terms that are materially adverse to your
interests with respect to dilution of book value, dividend preferences,
liquidation preferences, or other terms. Our capital requirements to implement
our business strategy may be significant. The Company believes that
raising $30,000 through the sale of common equity is sufficient for the Company
to become operational and sustain operations for the next twelve
months.
If
we are unable to obtain financing on reasonable terms, we could be forced to
delay or scale back our plans for expansion. In addition, such inability to
obtain financing on reasonable terms could have a material adverse effect on our
business, operating results, or financial condition.
The
loss of key personnel could adversely affect our business; we could face
potential labor shortages
The
Company’s success will depend largely on the abilities of its senior manager,
Kurt Wise, President, Secretary, Treasurer, Director , Principal Executive Officer, Principal Financial Officer and Principal Accounting
Officer of the Company. The loss of the services of Mr. Wise could have a
material adverse effect on the Company’s results of operations and financial
condition.
Our
success depends, in part, upon our ability to attract, train, motivate and
retain a sufficient number of skilled managers, administrative staff,
independent sales representatives and customer service personnel necessary for
the daily operation of our business. Qualified individuals needed to fill these
positions are often in short supply. Additionally, competition for qualified
employees and independent contractors could require us to pay higher
compensation to attract sufficient personnel, which could result in higher labor
costs. There can be no assurance that the Company will be able to
identify, recruit, train, integrate and retain sufficient personnel, and the
inability to do so would have a material adverse effect on the Company’s results
of operations and financial condition.
8
RISKS ASSOCIATED WITH OUR
COMPANY -
continued
Control
by principal shareholder
Kurt
Wise, President, Secretary, Treasurer, Director ,
Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer of the Company, currently
owns 100% of the outstanding common stock of the Company. Upon completion of the
Offering, Mr. Wise will own approximately 66.67% of the Company’s voting shares.
As a result, Mr. Wise will be able to control the vote on all matters requiring
approval by a simple majority of the shareholders of the Company, to elect the
entire Board of Directors and, effectively, to control the Company. Mr. Wise’s
voting control may discourage transactions involving a change of control of the
Company, including transactions in which the shareholders might otherwise
receive a premium for their common shares over their purchase
price.
Reliance
on affiliates
The
Company has entered into a non-exclusive Independent Contractor Agreement with
Wise Savings, LLC and is in the process of negotiating a similar agreement with
Wise Exchange, LLC. Wise Savings, LLC and Wise Exchange, LLC are affiliated with
the Company through common ownership and management. Kurt Wise, the controlling
shareholder President, Secretary, Treasurer, Director Principal Executive Officer, Principal Financial Officer and Principal Accounting
Officer of the Company, is also the founder, controlling shareholder, sole
director and Chief Executive Officer of Wise Savings, LLC and Wise Exchange,
LLC. Additionally, the Company may outsource certain services from, and share
personnel with, its affiliates. Although we anticipate that our dealings with
our affiliates will be no different than if we were dealing with unaffiliated
third parties, Mr. Wise is in a position to direct the affairs of the three
companies in a manner that may favor our affiliates and adversely affect the
operating results and financial condition of the Company. See “Certain
Relationships and Related Party Transactions.”
If
we do not acquire a critical mass of advertisers and the
advertising platforms to service those advertisers , the value of our
services could be adversely affected.
Our
success will depend, in large part, on the acquisition of a critical mass of
advertisers and the advertising platform partners to
service those advertisers, Additionally, our success will depend on the level of
interest advertisers have in the performance-based advertising and search
marketing services that we will offer, which will
include the programs of our third party Affiliates. Advertisers will
generally seek the most competitive return on investment from advertising and
marketing services. Our advertising platform
partners will also seek the most favorable payment terms available in the
market. Advertisers and advertising platform
partners may change business partners or the volume of business with a
business partner, unless the service and terms are competitive. In this
environment, we must compete to acquire and maintain a network of advertisers
and advertising platform partners .
If our
business is unable to acquire a base of advertisers, our future advertising platform partners may be discouraged from
working with us, and this may create obstacles for us to enter into agreements
with new advertising platform partners. If we are unable to recruit a network of advertising platform
partners, and add to that network over time, our prospective advertising clients may reduce or terminate this portion
of their business with us. Any decline in the number of advertisers and advertising platform partners could adversely affect the
value of our services.
We
may incur liabilities for the activities of our advertisers, advertising platform partners and other users of our
services, which could adversely affect our business.
Many of
the advertisement generation and distribution processes that are used by our
prospective advertising platform partners are
automated. In most cases, advertisers use these online tools to create and
submit advertiser listings. These advertiser listings will
be submitted in a bulk data feed to our prospective
advertising platform partners. Although we intend to monitor our advertising platform partners on an ongoing basis
primarily for traffic quality, these partners will
control the distribution of the advertiser listings provided in the data
feed.
As a
result, we will not conduct a manual editorial review of a substantial number of
the advertiser listings that are directly submitted by advertisers to our online
advertising platform partners . In cases where we
provide editorial or value-added services, such as ad creation and optimization
for local advertisers, we may rely on the content and information provided to us
by these advertisers. We may not investigate the individual business activities
of these advertisers other than the information provided to us. We may not
successfully avoid liability for unlawful activities carried out by our
advertisers and other users of our services, or unpermitted uses of our
advertiser listings by our advertising platform
partners and their affiliates.
Our
potential liability for the unlawful activities of our advertisers and other
users of our services or unpermitted uses of our advertiser listings and
advertising services and platform by our advertising
platform partners, could require us to implement measures to reduce our
exposure to such liability, which may require us, among other things, to spend
substantial resources, to discontinue certain service offerings or to terminate
certain advertising platform partner relationships.
For example, as a result of the actions of our advertisers, we may be subject to
private or governmental actions relating to a wide variety of issues, such as
privacy, gambling, promotions, and intellectual property ownership and
infringement. Under agreements with certain of our larger advertising platform partners, we may be required to
indemnify these advertising platform partners
against liabilities or losses resulting from the content of our advertiser
listings or resulting from third-party intellectual property infringement
claims. Although we will require our advertisers to indemnify us with respect to
claims arising from these listings, we may not be able to recover all or any of
the liabilities or losses incurred by us as a result of the activities of our
advertisers.
Our
insurance policies may not provide coverage for liability arising out of
activities of users of our services. Furthermore, we may not be able to obtain
or maintain adequate insurance coverage to reduce or limit the liabilities
associated with our businesses. Any costs incurred as a result of such liability
or asserted liability could have a material adverse effect on our business,
operating results and financial condition.
9
RISKS ASSOCIATED WITH OUR
COMPANY -
continued
We
will be substantially dependent on our independent sales representative
network
Our
success will be dependent upon our ability to create, train, retain, expand, and
enhance our independent sales representative network. We will rely on this
network to sell online advertising, enroll new businesses in the programs of our
affiliates and to train those businesses in the use of our client’s programs and
services. We cannot assure you that the market for our products and services
will develop as expected. If our industry does not grow, becomes saturated with
competitors, if our products and services do not achieve market acceptance, or
if our independent sales representatives are unsuccessful in selling online
advertising and enrolling new businesses to equalize the attrition of
businesses and consumers who cease using our client’s programs and services, the
overall share of the markets serviced by our clients could be reduced, and
consequently our operating results and financial condition may be materially and
adversely affected.
Competition
Many of
the Company’s competitors have longer operating histories, larger customer and
distribution bases, greater brand recognition and greater financial, marketing
and other resources than we have. Many current and potential competitors can
devote substantially greater resources than we can to marketing and website and
systems development. In addition, as the use of the Internet and other online
services increases, there will likely be larger, more well-established and
well-financed entities that acquire companies relevant to our business strategy;
and invest in or form joint ventures in categories that are relevant to our
business strategy; all of which could adversely impact our business. Any of
these trends could increase competition, reduce the demand for any of our
services and could have a material adverse effect on our business, operating
results and financial condition.
We will
provide our services to and may also compete with online
advertisers, partners who provide an advertising
platform network for online advertising and other intermediaries who may
provide purchasing and/or sales opportunities, including advertising agencies,
search engine marketing companies and search engine optimization companies. We
may compete directly or indirectly with some of our partners. We will depend on
recruiting, maintaining and continually expanding our network of partners and
advertisers to generate transactions online. If we have competitive
disagreements with our partners, those disagreements could have a material
adverse effect upon our results of operations and financial
condition.
The
online advertising and marketing services industry is highly competitive. In
addition, we believe that today’s typical Internet advertiser is becoming
increasingly sophisticated in utilizing the different forms of Internet
advertising, purchasing Internet advertising in a cost-effective manner, and
measuring return on investment. The competition for this pool of advertising
dollars has also put downward pressure on pricing points and online advertisers
have demanded more effective means of reaching customers. We believe that these
factors have contributed to the growth in performance-based advertising relative
to certain other forms of online advertising and marketing, and as a result this
sector has attracted many competitors. The inability of the Company to adapt to
this changing environment could have a material adverse effect upon our results
of operations and financial condition.
Interruptions
to our systems, or the systems of our clients, that impair customer access to
our websites or impair the ability of our clients to serve up online
advertisements, would damage our reputations and brands and substantially harm
our business and results of operations
The
satisfactory performance, reliability and availability of our website, and the
websites of our clients, transaction processing systems and network
infrastructure are critical to our reputation and our ability to attract and
retain customers, and to maintain adequate customer service levels. Our business
could be adversely affected if our clients are unable to serve up online
advertisements in a timely and efficient manner. Any systems interruptions or
downtime or technical difficulties that result in the unavailability of our
websites or reduce order fulfillment performance could result in negative
publicity, damage our reputation and brands and cause our business and results
of operations to suffer. We may be susceptible to such disruptions. We may also
experience temporary system interruptions for a variety of other reasons,
including power failures, failures of Internet service and telecommunication
providers, software or human errors or an overwhelming number of visitors trying
to reach our websites during periods of strong seasonal demand or promotions.
Because we will be dependent in part on third parties for the implementation and
maintenance of certain aspects of our systems and because some of the causes of
system interruptions may be outside of our control, we may not be able to remedy
such interruptions in a timely manner, or at all.
10
RISKS ASSOCIATED WITH OUR COMPANY
-
continued
Our
business depends on continued and unimpeded access to the Internet
Our
customers will rely on the Internet to access the products and services provided
by the Company and its clients. The Company will be selling online
advertisements and other programs that will be accessed and administered over
the Internet. Incumbent telephone companies, cable companies, mobile
communications companies, and large Internet service providers provide that
access. Some of these providers could degrade, disrupt, or increase the cost
of access to our services, and the programs and advertisements served up by
our clients, by restricting or prohibiting the use of their lines for our
offerings, by filtering, blocking or delaying the packets containing the data
associated with our services, or by charging increased fees for the use of their
lines to provide our offerings. These activities are technically feasible and
may be permitted in the U.S. after recent regulatory changes, including recent
decisions by the U.S. Supreme Court and Federal Communications
Commission.
In
addition, Internet service providers could attempt to charge us each time our
clients and advertisers use our offerings, or could charge us for delivery
of email to our clients and advertisers. Worldwide, a number of companies have
announced plans to take such actions or are selling products designed to
facilitate such actions. Interference with our offerings or higher charges for
access to our offerings, whether paid by us or by our clients and advertisers,
could cause us to lose future clients and advertisers, impair our ability to
attract new clients and advertisers, and harm our revenue and
growth.
Our
failure to address risks associated with payment methods, credit card fraud and
other consumer fraud could damage our reputation and brands and may cause our
business and results of operations to suffer
Under
current credit card practices, we are liable for fraudulent credit card
transactions because we do not obtain a cardholder’s signature. We do not
currently carry insurance against this risk and may face the risk of significant
losses from this type as we expand. Our failure to adequately control fraudulent
credit card transactions could damage our reputation and brand and substantially
harm our business and results of operations. Additionally, for certain payment
transactions, including credit and debit cards, we will pay interchange and
other fees, which may increase over time and raise our operating costs and lower
our operating margins.
Government
regulation of the Internet and e-commerce is evolving and unfavorable changes
could substantially harm our business and results of operations.
We are
not currently subject to direct federal, state or local regulation, other than
regulations applicable to businesses generally, that are directly applicable to
retailing and online commerce. However, as the Internet becomes increasingly
popular, it is possible that laws and regulations may be adopted with respect to
the Internet, which may impede the growth of the Internet or other online
services. These regulations and laws may cover issues such as taxation,
advertising, intellectual property rights, freedom of expression, pricing,
restrictions on imports and exports, customs, tariffs, information security,
privacy, data protection, content, distribution, electronic contracts and other
communications, the provision of online payment services, broadband residential
Internet access and the characteristics and quality of products and services.
Further, the growth of online commerce may prompt calls for more stringent
consumer protection laws. Several states have proposed legislation to limit the
uses of personal user information gathered online or require online companies to
establish privacy policies. The Federal Trade Commission has also initiated
action against at least one online company regarding the manner in which
personal information is collected from users and provided to third parties. The
adoption of additional privacy or consumer protection laws could create
uncertainty in Internet usage and reduce the demand for our products and
services.
We are
not certain how our business may be affected by the application of existing laws
governing issues such as property ownership, copyrights, personal property,
encryption and other intellectual property issues, taxation, libel, obscenity,
qualification to do business and export or import matters. The vast majority of
these laws were adopted prior to the advent of the Internet. As a result, they
do not contemplate or address the unique issues of the Internet and related
technologies. Changes in laws intended to address these issues could create
uncertainty for those conducting online commerce. This uncertainty could reduce
demand for our products and services or increase the cost of doing business as a
result of litigation costs and may substantially harm our business and results
of operations.
Our
failure to protect the confidential information of our customers and our network
against security breaches could damage our reputation and substantially harm our
business and results of operations
A
significant barrier to online commerce and communications is the secure
transmission of confidential information over public networks. Our failure to
prevent these security breaches could damage our reputation and brand and
substantially harm our business and results of operations. We anticipate that
some of the transactions executed by our customers will be billed to their
credit card accounts directly. We will rely on encryption and authentication
technology that is licensed by from third parties to effect secure transmission
of confidential information, including credit card numbers. Advances in computer
capabilities, human errors and new discoveries in the field of cryptography or
other developments may result in a compromise or breach of the technology used
by us to protect customer transaction data. In addition, any party who is able
to illicitly obtain a user’s password could access the customer’s transaction
data. An increasing number of websites and Internet companies have reported
breaches of their security. Any such compromise of our security could damage our
reputation, business and brand and expose us to a risk of loss or litigation and
possible liability, which would substantially harm our business, and results of
operations. In addition, anyone who is able to circumvent our security measures
could misappropriate proprietary information or cause interruptions in our
operations, damage our computers or those of our users, or otherwise damage our
reputation and business. These issues are likely to become more difficult as we
expand our operations. We may need to expend significant resources to protect
against security breaches or to address problems caused by
breaches.
11
RISKS ASSOCIATED WITH OUR
COMPANY -
continued
We
will depend on the continued growth of online commerce and
communications
The
business of serving up advertisements and conducting transactions over the
Internet is dynamic and relatively new. Concerns about fraud, privacy, and other
problems may discourage additional consumers from adopting the Internet as a
medium of commerce. In order to attract and expand our customer base, we must
appeal to and recruit businesses who historically may have used more traditional
means of commerce to advertise and access programs similar to the programs being
offered by the Company. If we are unable to attract a sufficient number of
businesses that will allow us to gain efficiencies in our operating costs, our
business could be adversely impacted.
The
Company and its advertising platform partners may be
subject to intellectual property claims, which could adversely affect our
financial condition and ability to use certain critical technologies, divert our
resources and management attention from our business operations and create
uncertainty about ownership of technology essential to our
business.
Our
success depends, in part, on the ability of the Company and its advertising platform partners to protect their
intellectual property and to operate without infringing on the intellectual
property rights of others in the process. There can be no guarantee that the
intellectual property of the Company and its advertising
platform partners will be adequately safeguarded, or that it will not be
challenged by third parties. The Company and its advertising platform partners may be subject to patent
infringement claims or other intellectual property infringement claims that
would be costly to defend and could limit our ability to use certain critical
technologies.
Any
patent or other intellectual property litigation could negatively impact our
business by diverting resources and management attention from other aspects of
the business and adding uncertainty as to the ownership of technology, services
and property that we view as proprietary and essential to our business. In
addition, a successful claim of patent infringement against the Company and its
advertising platform partners and our failure or
inability to use the infringed or similar technology on reasonable terms, or at
all, could prevent us from using critical technologies which could have a
material adverse effect on our business.
RISKS
ASSOCIATED WITH THIS OFFERING
There
is no current trading market for our securities and if a trading market
does not develop, purchasers of our securities may have difficulty selling their
shares
There is
currently no established public trading market for our securities and an active
trading market in our securities may not develop or, if developed, may not be
sustained. After this prospectus has been declared
effective by the SEC, we intend to request a market maker to file an application
with FINRA, which operates the OTC Electronic Bulletin Board, so that our
securities can be quoted on the NASD OTC Bulletin Board. If for any
reason our common stock is not quoted on the OTC Bulletin Board or a public
trading market does not otherwise develop, purchasers of the shares may have
difficulty selling their common stock should they desire to do so. In order to
be quoted on the OTCBB, a market maker must file an application on our behalf in
order to make a market for our common stock. No market makers have committed to
becoming market makers for our common stock and none may do so.
State
securities laws may limit secondary trading, which may restrict the states in
which, and conditions under which you can, sell the Common shares offered by
this prospectus
Secondary
trading in common stock sold in this offering will not be possible in any state
until the common stock is qualified for sale under the applicable securities
laws of the state or there is confirmation that an exemption, such as listing in
certain recognized securities manuals, is available for secondary trading in the
state. If we fail to register or qualify, or to obtain or verify an exemption
for the secondary trading of, the common stock in any particular state, the
common stock could not be offered or sold to, or purchased by, a resident of
that state. In the event that a significant number of states refuse to permit
secondary trading in our common stock, the liquidity for the common stock could
be significantly impacted thus causing you to realize a loss on your
investment.
12
RISKS ASSOCIATED WITH THIS
OFFERING -
continued
Our
common shares are subject to the "Penny Stock" rules of the SEC and the
trading market in our securities may be limited, which makes transactions in our
stock cumbersome and may reduce the value of an investment in our
stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
|
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
|
·
|
the
broker or dealer receives from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
|
·
|
obtain
financial information and investment experience objectives of the person;
and
|
|
·
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
|
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our Common shares and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
We
may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value
Our
corporate charter authorizes us to issuance 1,000,000,000 shares of common
stock. The future issuance of all or part of our remaining authorized but
currently unissued common stock may result in substantial dilution in the
percentage of our common stock held by our then existing shareholders. We may
value any common stock issued in the future on an arbitrary basis. The issuance
of common stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might cause the price of our common stock to decline.
Because
we do not intend to pay any cash dividends on our common stock, our stockholders
will not be able to receive a return on their shares unless they sell
them
We intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common stock in
the foreseeable future. Unless we pay dividends, our stockholders will not be
able to receive a return on their shares unless they sell them. There is no
assurance that stockholders will be able to sell shares when
desired.
13
RISKS ASSOCIATED WITH THIS
OFFERING -
continued
There
is limited liquidity on the OTC Bulletin Board, which may impact your ability to
sell your shares
We plan
to apply for listing of our shares on the OTC Bulletin Board. However, merely
because a security is listed on the OTC Bulletin Board does not guaranty that
there will be any trading volume in our shares. When fewer shares of a security
are traded on the OTC Bulletin Board, price volatility may increase and price
movement may outpace the ability of the OTC Bulletin Board to deliver accurate
quote information. If there is low trading volume in our common stock, there may
be a lower likelihood of orders for shares of our common stock being executed,
and current prices may differ significantly from prices quoted by the OTC
Bulletin Board at the time of order entry.
There
may be a greater risk of fraud on the OTC Bulletin Board
OTC
Bulletin Board securities are frequently targets for fraud or market
manipulation because they are not regulated as closely as securities listed on
exchanges. Dealers may dominate the market and set prices that are not based on
competitive forces. Individuals or groups may create fraudulent markets and
control the sudden, sharp increase of price and trading volume and the equally
sudden collapse of market prices. While there is regulation of the OTC Bulletin
Board, it is not as comprehensive as the regulation of the listed exchange or
NASDAQ. If our shares are listed on the OTC Bulletin Board and this should
occur, the value of an investment in our common stock could decline
significantly.
It
can be difficult to edit or cancel orders on the OTC Bulletin Board, which may
impair your ability to sell our common stock at a favorable price
Orders
for OTC Bulletin Board securities may be canceled or edited like orders for
other securities. All requests to change or cancel an order must be submitted
to, received and processed by the OTC Bulletin Board. Due to the manual order
processing involved in handling OTC Bulletin Board trades, order processing and
reporting may be delayed. As a result, it may not be possible to edit orders.
Consequently, it may not be possible to sell our common stock at a favorable
price.
Increased
dealer compensation could adversely affect the price of our common
stock
If our
shares are listed on the OTC Bulletin Board, the dealer's spread (the difference
between the bid and ask prices) may be larger than that for shares traded on an
exchange, and may result in substantial losses to the seller of shares of our
common stock on the OTC Bulletin Board if such stock must be sold immediately.
Further, purchasers of our shares of common stock may incur an immediate "paper"
loss due to the price spread. Moreover, dealers trading on the OTC Bulletin
Board may not have a bid price for shares of our common stock on the OTC
Bulletin Board due to the foregoing demand for the shares of our common stock on
the OTC Bulletin Board may be decreased or eliminated.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Except
for historical facts, the statements in this prospectus are forward-looking
statements. Forward-looking statements are merely our current predictions of
future events. These statements are inherently uncertain, and actual events
could differ materially from our predictions. Important factors that could cause
actual events to vary from our predictions include those discussed under the
headings "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Description of Business." We assume no
obligation to update our forward-looking statements to reflect new
information or developments. We urge readers to review carefully the risk
factors described in this prospectus and the other documents that we file with
the Securities and Exchange Commission. You can read these documents at www.sec.gov.
We do not
undertake any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, or to
reflect any events or circumstances after the date of this prospectus or the
date of any applicable prospectus supplement. Although we believe that our
plans, intentions and expectations reflected in or suggested by the
forward-looking statements made are reasonable, ultimately we may not achieve
such plans, fulfill such intentions or meet such expectations.
We have
not authorized any dealer, salesperson or other person to give you any
information or to make any representations to you, other than those contained or
incorporated by reference in this prospectus, in connection with the offer
contained in this prospectus and, if given or made, you should not rely on such
information or representations as having been authorized by us.
This
prospectus has been prepared based on information provided by us and by other
sources that we believe are reliable. In addition, this prospectus summarizes
certain documents and other information in a manner we believe to be accurate,
but we refer you to the actual documents, if any, for a more complete
understanding of the documents that we discuss in this prospectus. In making a
decision to invest in our common stock, you must rely on your own examination of
our company and the terms of the offering and the common stock, including the
merits and risks involved.
We are
not making any representation to you regarding the legality of an investment in
our common stock by you under any legal investment or similar laws or
regulations. You should not consider any information in this prospectus to be
legal, business, tax or other advice. You should consult your own attorney,
business advisor and tax advisor for legal, business and tax advice regarding an
investment in the common stock.
14
USE
OF PROCEEDS
When all
of the shares are sold the gross proceeds from this Offering will be $30,000. We
expect to disburse the proceeds from this offering in the priority set forth
below, within the first 12 months after successful completion of this
Offering.
The
Company intends to use the proceeds from this offering a follows:
Percentage
|
||||||||
Application
of Proceeds
|
Amount
($)
|
of
Total
|
||||||
Total
Offering Proceeds
|
30,000 | 100.00 | % | |||||
Offering
Expenses
|
||||||||
Legal
and professional fees
|
3,000 | 10.00 | % | |||||
Blue-sky
fees
|
1,000 | 3.33 | % | |||||
Total
Offering Expenses
|
4,000 | 13.33 | % | |||||
Net
Proceeds from Offering
|
26,000 | 86.67 | % | |||||
Use
of Net Proceeds
|
||||||||
Sales
and marketing
|
9,500 | 31.67 | % | |||||
Furniture
and equipment
|
2,000 | 6.67 | % | |||||
Contractor
compensation
|
2,000 | 6.67 | % | |||||
Legal
and professional fees
|
2,000 | 6.67 | % | |||||
Salaries
|
8,000 | 26.67 | % | |||||
Working
Capital (1)
|
2,500 | 8.33 | % | |||||
Total
Use of Net Proceeds
|
26,000 | 86.67 | % | |||||
Total
Use of Proceeds
|
30,000 | 100.00 | % |
Note:
(1) The
category of Working Capital may include, but is not limited to, postage,
telephone services, overnight delivery services and other general operating
expenses. Any line item amounts not expended completely shall be held
in reserve as working capital and subject to reallocation to other line item
expenditures as required for ongoing operations
DETERMINATION
OF OFFERING PRICE
The
offering price of the shares of our common stock does not necessarily bear
any relationship to our book value, assets, past operating results, financial
condition or any other established criteria of value. The facts considered in
determining the offering price were our financial condition and prospects, our
limited operating history and the general condition of the securities market.
Our common stock is presently not traded or quoted on any
market or securities exchange. In order to be quoted on the
Over The Counter Bulletin Board (“OTCBB”) , a market maker must file an application on our
behalf in order to make a market for our common stock. After this prospectus has been declared effective by the SEC, we
intend to request that a market maker file such an application. There can
be no assurance that a market maker will agree to file the necessary documents
with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be
any assurance that such an application for quotation will be approved. See Risk
Factor “There is no current trading market for our securities and if
a trading market does not develop, purchasers of our securities may have
difficulty selling their shares” on page 12 .
In
addition, there is no assurance that our common stock will trade at market
prices in excess of the initial public offering price as prices for the common
stock in any public market which may develop will be determined in the
marketplace and may be influenced by many factors, including the depth and
liquidity.
15
DILUTION
The
difference between the public offering price per share of common stock and the
pro forma net tangible book value per share of our common stock after this
offering constitutes the dilution to investors in this offering. Net tangible
book value per share is determined by dividing our net tangible book value,
which is our total tangible assets less our total liabilities, divided by the
number of outstanding shares of our common stock.
The level
of dilution in this Offering has been increased by the relatively low book value
of the Company’s issued and outstanding common stock. This is due in part due to
the 6,000,000 shares of common stock that have been issued to the Company’s sole
officer and director at $.001 per share. Please refer to the section titled
“Certain Transactions”, herein, for more information. As of September 30, 2009,
our net tangible book value deficiency was $(17,392), or approximately $(.0029)
per share of common stock. After giving effect to the sale of 3,000,000 shares
of common stock included in the Offering by this prospectus, our pro forma net
tangible book value at September 30, 2009, net of estimated offering expensed of
$4,000, would have been $8,600 or $.0010 per share, representing an immediate
increase in net tangible book value of $.0039 per share to our initial
stockholders and an immediate dilution of $.0090 per share or 90.00% to the new
investors.
Book
value per share before the Offering
|
$ | (0.0029 | ) | |
Book
value per share after the Offering
|
$ | 0.0010 | ||
Net
increase per share to original shareholder
|
$ | 0.0039 | ||
Net
decrease per share to new shareholders
|
$ | 0.0090 | ||
Dilution
to new shareholders (percentage)
|
90.00 | % |
PLAN
OF DISTRIBUTION
Offering
will be sold by our officer and director
This is a
self-underwritten offering. This Registration Statement is part of a Prospectus
that permits Kurt Wise, our President,
Secretary, Treasurer, Director, Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer , to sell the Common
Shares directly to the public, with no commission or other remuneration payable
to him for any Common Shares that are sold by him. There are no plans or
arrangements to enter into any contracts or agreements to sell the Common Shares
with a broker or dealer. Mr. Kurt Wise, our sole officer and director, intends
to offer the Common Shares to friends, family members and business
acquaintances. In offering the securities on our behalf, Mr. Wise will rely on
the safe harbor from
broker dealer registration set out in Rule 3a4-1 under the Securities Exchange
Act of 1934. Mr. Wise does not intend to use any mass-advertising methods such
as the Internet or print media.
Mr. Wise
will register not as a broker-dealer pursuant to Section 15 of the Securities
Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those
conditions under which a person associated with an Issuer may participate in the
offering of the Issuer’s securities and not be deemed to be a
broker-dealer.
|
a)
|
Mr.
Wise is an officer and director and is not subject to a statutory
disqualification, as that term is defined in Section 3(a)(39) of the Act,
at the time of his participation;
and
|
|
b)
|
Mr.
Wise is an officer and director and will not be compensated in connection
with his participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities;
and
|
|
c)
|
Mr.
Wise is an officer and director and is not, nor will not be at the time of
his participation in the offering, an associated person of a
broker-dealer; and
|
|
d)
|
Mr.
Wise is an officer and director and meets the conditions of paragraph
(a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he (A) primarily
performs, or intends primarily to perform at the end of the offering,
substantial duties for or on behalf of our company, other than in
connection with transactions in securities; and (B) is not a broker or
dealer, or been associated person of a broker or dealer, within the
preceding twelve months; and (C) has not participated in selling and
offering securities for any Issuer more than once every twelve months
other than in reliance on Paragraphs (a)(4)(i) and
(a)(4)(iii).
|
Our sole
officer, director, control person and affiliates of same do not intend to
purchase shares in this offering.
16
PLAN OF DISTRIBUTION -
continued
Terms
of the Offering
The
Company is offering on a self-underwritten, best-efforts, all or none basis,
3,000,000 shares of its common stock at a price of $0.01 per share. This is the
initial offering of Common Stock of Wise Sales, Inc. and no public market exists
for the securities being offered. The shares will be offered directly
through our sole officer and director at a fixed price of $.01 per share for a
period not to exceed 180 days from the date of this prospectus. There is no
minimum number of shares required to be purchased. This offering is on a best
effort, all-or-none basis, meaning if all shares are not sold and the total
offering amount is not deposited by the expiration of the offering, all monies
will be returned to investors, without interest or deduction. No
commission or other compensation related to the sale of the shares will be paid
to Mr. Wise. The intended methods of communication include, without
limitations, telephone, and personal contact. For more information, see the
section titled “Plan of Distribution” and “Use of Proceeds”
herein.
The sole
officer and director of the issuer and any affiliated parties thereof will not
participate in this offering.
The
offering shall terminate on the earlier of (i) the date when the sale of all
3,000,000 shares is completed or (ii) one hundred and eighty (180) days from the
date of this prospectus. Wise Sales, Inc. will not extend the
offering period beyond one hundred and eighty (180) days from the effective date
of this prospectus.
There can
be no assurance that the shares in this offering
will be sold. As of the date of this Prospectus, The Company has not entered
into any agreements or arrangements for the sale of the shares with any
broker/dealer or sales agent. However, if the Company were to enter into such
arrangements, the Company will file a post effective amendment to disclose those
arrangements because any broker/dealer participating in the offering would be
acting as an underwriter and would have to be so named in the
prospectus.
In order
to comply with the applicable securities laws of certain states, the securities
may not be offered or sold unless they have been registered or qualified for
sale in such states or an exemption from such registration
or qualification requirement is available and with which Wise Sales, Inc. has
complied. The purchasers in this offering and in any subsequent trading market
must be residents of such states where the shares have been registered or
qualified for sale or an exemption from such registration or qualification
requirement is available. As of the date of this Prospectus, Wise Sales, Inc.
has not identified the specific states where the offering will be sold. Wise
Sales, Inc. will file a pre-effective amendment indicating which state(s) the
securities are to be sold pursuant to this registration statement.
Deposit
of Offering Proceeds
The
proceeds from the sale of the shares in this offering will be payable to Law Offices of Joseph L.
Pittera, Esq., Escrow Agent f/b/o Wise Sales, Inc. (“Trust Account”) and
will be deposited in a non-interest/minimal interest bearing bank account. All
subscription agreements and checks are irrevocable and should be delivered to
Law Offices of Joseph L. Pittera, Esq., 2214 Torrance Boulevard, Torrance,
California 90501. Failure to do so will result in checks being
returned to the investor, who submitted the check. All subscription funds will
be held in the Trust Account pending and no funds shall be released to Wise
Sales, Inc. until such a time as the entire offering is sold. If the entire
offering is not sold, and proceeds received within one hundred and eighty (180)
days of the date of this prospectus, all subscription funds will be returned to
investors promptly without interest or deduction of fees. The fee of the Trust
Agent is $2,000. (See Exhibit 99(b)).
Procedures
and Requirements for Subscription
Prior to
the effectiveness of the Registration Statement, the Issuer has not provided
potential purchasers of the securities being registered herein with a copy of
this prospectus. Investors can purchase common stock in this offering
by completing a Subscription Agreement (attached hereto as Exhibit 99(a)) and
sending it together with payment in full to Law Offices of Joseph L. Pittera,
Esq., Escrow Agent f/b/o Wise Sales, Inc., 2214 Torrance Boulevard, Torrance,
California 90501. All payments are required in the form of United
States currency either by personal check, bank draft, or by cashier’s check.
There is no minimum subscription requirement. All subscription agreements and
checks are irrevocable. Wise Sales, Inc. reserves the right to either accept or
reject any subscription. Any subscription rejected within this 30-day period
will be returned to the subscriber within five business days of the rejection
date. Furthermore, once a subscription agreement is accepted, it will be
executed without reconfirmation to or from the subscriber. Once Wise Sales, Inc.
accepts a subscription, the subscriber cannot withdraw it.
17
DESCRIPTION
OF SECURITIES
Common
Stock
Our
authorized capital stock consists of 1,000,000,000 shares of common stock with a
par value of $.001 per share. The holders of our common stock (i) have equal
ratable rights to dividends from funds legally available therefore, when, as and
if declared by our Board of Directors; (ii) are entitled to share in all of our
assets available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; (iii) do not have preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights; and (iv) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote.
It is the
opinion of Joseph L. Pittera, Esq. the Company’s counsel, that all of the shares
of common stock that are now outstanding are fully paid and non-assessable
and that all of the shares of common stock which are the subject of this
offering, when issued, will be fully paid and non-assessable. There are
presently 6,000,000 common shares issued and outstanding with only one
shareholder.
Non-cumulative
Voting
The
holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in such event, the holders of the remaining shares will not
be able to
elect any of our directors. After this offering is completed, the present
stockholder will own 66.67% of our outstanding shares and the purchasers in this
offering will own 33.33%.
Preemptive
Rights
No holder
of any shares of Wise Sales, Inc. stock has preemptive or preferential rights to
acquire or subscribe for any shares not issued of any class of stock or any
unauthorized securities convertible into or carrying any right, option, or
warrant to subscribe for or acquire shares of any class of stock not disclosed
herein.
Dividends
Holders
of the common stock our entitled to dividends when, as and if declared by our
Board of Directors out of funds legally available therefore. We have never
declared or paid any cash dividends and currently do not intend to pay cash
dividends in the foreseeable future on our shares of common stock. We intend to
retain earnings, if any, to finance the development and expansion of our
business. Payment of future dividends on our common stock will be subject to the
discretion of our Board of Directors and will be contingent on future earnings,
if any, our financial condition, capital requirements, general business
conditions and other factors. Therefore, there can be no assurance that any
dividends on our common stock will ever be paid.
Reports
After
this offering, Wise Sales, Inc. will furnish its shareholders with annual
financial reports certified by independent accountants. The effectiveness of
this registration statement will render us subject to the informational
requirements of the Exchange Act which requires us to file reports, proxy
statements and other information with the SEC. Such reports, proxy statements
and other information along with the registration statement, including the
exhibits and schedules thereto, may be inspected at public reference facilities
of the SEC at 100 F Street N.E., Washington D.C. 20549. Copies of such
material can be obtained from the Public Reference Section of the SEC at
prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference room. Because we file documents
electronically with the SEC, you may also obtain this information by visiting
the SEC’s Internet website at http://www.sec.gov.
Interest
of Named Experts and Counsel
None of
the below described experts or counsel have been hired on a contingent basis and
none of them will receive a direct or indirect interest in the
Company.
The
accounting firm of Seale and Beers, CPAs has audited the financial statements
for the period from our inception to December 31, 2008 that have been included
in this prospectus. We include the financial statements in reliance on their
report, given upon their authority as experts in accounting and
auditing.
The Law
Offices of Joseph L. Pittera, 2214 Torrance Boulevard, Suite 101, Torrance,
California 90501, has passed upon the validity of the shares being offered and
certain other legal matters and is representing us in connection with this
offering.
18
DESCRIPTION
OF BUSINESS
General
Information
Wise
Sales, Inc. was incorporated on September 10, 2008 pursuant to the laws of the
State Nevada. The Company intends to develop a business as a seller of
advertising and other Internet based programs and services on behalf of advertising platform platforms that will include Internet
search platforms, Internet directories and mobile content
providers . The Company’s products and services will be sold primarily to
local small and medium sized businesses through a network of independent sales
representatives. The Company’s services will offer businesses an effective
method of advertising to consumers by listing their products and services in
distributed Internet search results, which provide relevant listings of products
and services to consumers in a targeted search context. The Company will also
provide account management and campaign management services to its small and
medium sized advertising clients.
Two of
the Company’s clients will include Wise Savings, LLC (“Wise Savings”) and Wise
Exchange, LLC (“Wise Exchange”), entities (collectively, the “Affiliates”), that
offer a unique suite of products and services that are delivered over a
proprietary e-commerce software platform. The Company believes that its ability
to offer the programs and services of its Affiliates will give it an advantage
when it competes for the business of local advertisers. See ‘’Relationship with
Wise Savings, LLC and Wise Exchange, LLC.”
The
Company will focus its sales efforts on servicing small and medium sized local
businesses and expects to generate revenue from four primary
sources:
·
|
It
will generate commissions through the sale of advertising on behalf of
advertising platforms that include web search engines, which are designed
to perform algorithmically driven searches for information on the
Internet, Internet directories, which allow users to search human-selected
Internet resources that have been arranged and classified by subject or
location, and mobile content providers that offer factual or entertainment
related resources to their
users.
|
·
|
It
will offer fee-based account management services to help its advertisers
optimize their wed-based advertising campaigns, including editorial and
keyword selection recommendations and the analysis of their advertising
results. These services will be performed pursuant to contractual
relationships that may be ongoing or limited to one advertising
campaign.
|
·
|
It
will offer local campaign management services that assist its advertising
clients in the consolidation of their advertising purchasing, management
and internal reporting. The Company expects to perform these services
pursuant to a contractual relationship with fixed
fees.
|
·
|
It
will be compensated by its Affiliates for each business that it recruits
for its Affiliates. In the case of Wise Savings, this compensation will
include a one-time payment for each business that is brought under
contract for the Wise Savings online directory and residual payments that
are tied to a continuing and expanded business relationship between the
business and Wise
Savings.
|
The
Company is still in its development stage and has not yet entered into any
contractual relationships with any advertisers or web advertising platforms,
other than with Wise Savings, LLC, a company that is affiliated with the
Company. See “Relationships with Wise Savings, LLC and Wise Exchange, LLC.”
There can be no assurances that the Company will be able to enter into any
contractual relationships with advertisers or web advertising platforms, or that
the terms of these contractual relationships, if any, will be beneficial to the
Company. The Company will rely on its internal sales force to recruit
advertising platform partners and on its independent sales representatives to
recruit advertising customers.
The
Company is still negotiating a compensation arrangement with Wise Exchange. Wise
Exchange was incorporated for the purpose of creating an international trade and
barter exchange.
Industry
Background
The
Internet has become one of the primary mediums through which people communicate,
search, shop, socialize, stay informed on current events and become connected to
their local communities. The shift in consumer usage from traditional media
sources to the Internet has led advertisers to spend an increasing percentage of
their advertising expenditures online. According to the March 2009 “The IAB
Internet Advertising Report,” prepared by PricewaterhouseCoopers LLP and
sponsored by the Interactive Advertising Bureau (“IAB”), Internet advertising
revenues totaled $23.4 billion in 2008, an increase of 10.6% from the $21.2
billion recorded in 2007.
One of
the key catalysts driving online advertising revenue growth has been the
increasing frequency at which consumers are turning to the Internet to find
information about local products and services. Every day, millions of consumers
search online to find relevant local information about a new restaurant, to
compare hotel prices, to look-up a plumber’s phone number or to search for a
reputable doctor. The same desire for localized business information that
propelled the growth of the multibillion dollar Yellow Pages industry during the
twentieth century is now propelling the growth of the Internet advertising
industry.
In March 2009, the Yellow Pages Association reported that “the
practice of using online search tools to find local businesses, products, or
services -- grew 58 percent in 2008, reaching an annual total of 15.7 billion
searches. By comparison, overall U.S. Web core searches grew at a much smaller
rate of 21 percent year-over-year, nearing 137 billion searches by the end of
2008.” The report was based on a study conducted for the Yellow Pages
Association by comScore, Inc., an Internet research firm (“Local Search Growth
Outpaces Overall Online Search”).
In 2008 more than 86% of search engine users searched for local products and
services, up from 70% a year earlier, and more than 90% of the transactions
resulting from these searches are completed offline in local stores
(“Nielson-Net Ratings 2007” and “Yahoo! The Next Wave of Advertising
2007”).
Other
trends in Internet based marketing programs include performance-based pricing ad
formats, real-time reporting and the targeting capabilities of Internet
advertising that provide advertisers with greater control, and an understanding
of the return on investment that they receive from their advertising dollars.
According to “The IAB Internet Advertising Report,” 57% of the 2008 Internet
advertising revenues were performance based, up from 51% in the prior year. The
Company believes that in the future these trends will command greater budget
allocations by advertisers versus the less targeted traditional
media.
19
DESCRIPTION
OF BUSINESS - continued
Industry
Background - continued
The
Company believes that another key catalyst driving online local advertiser
growth is the fact that small and medium sized businesses are increasingly
turning to online advertising to reach consumers, and that these businesses are
specifically targeting those consumers who are using the Internet to find local
products and services, rather than traditional offline informational sources
such as the Yellow Pages. We believe that those companies that specifically
focus on fulfilling the needs of local advertisers, particularly those that can
provide full search marketing services and performance based programs that are
scaleable, will be well positioned to capture a significant share of the local
advertising opportunity.
Principal
Products and Their Markets
The
Company intends to develop and sell a suite of products and services that
facilitates the efficient and cost-effective marketing and selling of goods and
services for local small and medium sized advertisers who want to sell their
goods and services online. It will generate commissions through the sale of advertising on
behalf of advertising platforms that include web search engines, which are
designed to perform algorithmically driven searches for information on the
Internet, Internet directories, which allow users to search human-selected
Internet resources that have been arranged and classified by subject or
location, and mobile content providers that offer factual or entertainment
related resources to their users. The Company will also offer its
advertisers an opportunity to enroll in programs offered by Wise Savings that
are designed to generate incremental revenues.
Local Search
Networks. The Company will primarily focus on
placing advertisements on behalf of its clients on local search networks.
The Company believes that for small and medium sized businesses, the most
cost-effective method of advertising to consumers is by listing their products
and services in distributed Internet search results, which provide relevant
listings of products and services to consumers in a targeted search context.
These advertisements will include pay-per-click listings, as well as other forms
of advertising, including banner advertisements and sponsorships. Pay-per-click
advertisements will generally be ordered based on
the amount that our advertisers choose to pay for a placement and the relevancy
of their ads to the keyword search. Advertisers pay the
advertising platform provider a percentage of the revenue that is generated when a user “clicks-through” to their
site(s).
Account
Management Services. The Company will offer account management services
to help its advertisers optimize their pay-per click campaigns, including
editorial and keyword selection recommendations and analysis.
Local Campaign
Management Services. The Company will offer local campaign management
services which will enable its advertising clients to consolidate their
purchasing, management, optimization and reporting. If the
Company is able to enter into partnerships with web
search engines, Internet directories and mobile content providers , it
will be able to place and manage its advertising clients’ paid listings directly
within their account management systems and provide detailed reporting and
conversion tracking that will enable the advertisers to track the effectiveness
of their online advertising campaigns across the different channels. With our
campaign management services, we may suggest additional channels, search engines
or pay-per-click networks as well as editorial guidance that may broaden the
reach and improve the effectiveness of our advertisers’
campaigns.
Wise Savings
programs. The Wise Savings programs provide small and medium sized
businesses with an opportunity to generate incremental revenues, both through
their participation in loyalty and rewards programs, and by allowing them to
sell credit items, including gift certificates, through their own websites or
through websites that are under contract either to the businesses or to Wise
Savings. These programs mimic the programs offered by much larger companies, but
without the costs associated with developing those programs internally. The Wise
Savings platform provides full accountability and real-time tracking
capabilities to its customers. The Wise Savings software platform makes it easy
for a consumer to register and use credit cards, debit cards or the Wise Savings
Universal Gift Card. Consumers may also purchase gift certificates directly
online through the Company’s E-commerce website. The Wise Savings Business
Builder program allows businesses to use their credit items to purchase
advertising in traditional media outlets that are under contract with Wise
Savings, primarily radio stations and newspapers.
Wise Exchange
programs. Wise Exchange was incorporated for the purpose of creating an
international trade and barter exchange. The company is still in the development
stage.
Strategy
The
Company’s operations will be focused on selling advertising and other Internet
based programs and services on behalf of a advertising
platform providers that will include web search engines, which are designed
to perform algorithmically driven searches for information on the Internet,
Internet directories, which allow users to search human-selected Internet
resources that have been arranged and classified by subject or location, and
mobile content providers that offer factual or entertainment related resources
to their users . It will
have no responsibility for maintaining and enhancing the software platforms on
which its clients will execute transactions of behalf of their customers. The
Company’s success will be dependent upon its ability to grow its network of advertising platforms and attract advertising
clients. The Company will rely on its internal
sales force to recruit advertising platform partners and on its independent
sales representatives to recruit advertising
customers.
Recruit and
maintain a network of advertising platform providers. The Company
will generate revenue as a seller of advertising and other Internet based
programs and services on behalf of a network of advertising
platform providers that will include web search engines, directories and mobile
content providers . The success of the Company will be dependent upon its
ability to recruit and maintain a network of advertising
platform providers . The Company will recruit an
internal business development and partnership management staff that will
be responsible for its network of advertising platform
provider relationships.
Develop an
internal sales organization. The Company will recruit and train an
internal sales force. To supplement its internal personnel, the Company will
recruit national and local networks of independent sales organizations that will
be responsible for the recruitment, training and management of the individual
sales representatives who will market the programs and services of the Company
and its clients. The independent sales representatives will be responsible for
signing up and enrolling new businesses and for selling advertising and other
programs to these businesses on behalf of the Company and its clients. The sales
representatives will also be responsible for updating the businesses with
information about new products and services when they are introduced by the
Company and its clients.
20
DESCRIPTION
OF BUSINESS - continued
Develop a network
of independent sales organization. The Company views its prospective
network of independent sales organizations and sales representatives as vital to
its long-term success and will work hard to support and empower them. The
success of the Company will be dependent upon the number of businesses that are
recruited by the independent sales organization and the rate of repeat business
that is conducted by the consumers serviced by our advertising clients. The
Company views the quality and frequency of our sales representative interactions
with our advertising clients as an important element of our business strategy.
We will work on establishing a strong cooperative relationship with our sales
representative organizations and will strengthen that relationship by investing
significant resources to provide training, marketing materials and programs,
Internet and computer-related support and incentive programs.
The
independent sales organizations will be paid commissions for selling advertising
and other programs on behalf of the Company and its clients, for recruiting new
businesses, and on the individual transactions that are executed by these
businesses and consumers. The sales representatives may receive a monthly draw
against their commissions.
Train the
independent sales representatives to sell the Wise Savings programs. The
Company believes that its ability to offer the programs and services of Wise
Savings will give it an advantage when it competes for the business of local
advertisers. The Company will work with Wise Savings to ensure that its
independent sales representatives are knowledgeable about the Wise Savings
programs.
Sales
and Marketing
Our sales
department, working with our independent sales representatives, will focus on
adding new advertising clients, while our business development and partnership
management department will focus on adding new advertising
platform partners.
The
Company’s marketing strategy will be primarily focused on promoting the products
and services of its clients and will rely heavily on its independent sales
organizations and educational programs that are specifically targeted at small
and medium sized businesses. The Company will provide customizable tools for its
independent sales representatives to use in their consultative efforts,
including pre-designed advertisements, brochures and sales presentations to give
the Company a consistent look and message in all of its markets.
Status
of any Publicly Announced Products
The
Company has not announced any new products.
Competition
Many of
the Company’s competitors have longer operating histories, larger customer and
distribution bases, greater brand recognition and greater financial, marketing
and other resources than we have. Many current and potential competitors can
devote substantially greater resources than we can to marketing and website and
systems development. In addition, as the use of the Internet and other online
services increases, there will likely be larger, more well-established and
well-financed entities that acquire companies relevant to our business strategy;
and invest in or form joint ventures in categories that are relevant to our
business strategy; all of which could adversely impact our business. Any of
these trends could increase competition, reduce the demand for any of our
services and could have a material adverse effect on our business, operating
results and financial condition.
We will
provide our services to and may also compete with online
advertisers, partners who provide a distribution network for online
advertising and other intermediaries who may provide purchasing and/or sales
opportunities, including advertising agencies, search engine marketing companies
and search engine optimization companies. We may compete directly or indirectly
with some of our partners. We will depend on recruiting, maintaining and
continually expanding our network of partners and advertisers to generate
transactions online.
The online advertising and marketing services industry is highly competitive. In addition, we believe that today’s typical Internet advertiser is becoming more sophisticated in utilizing the different forms of Internet advertising, purchasing Internet advertising in a cost-effective manner, and measuring return on investment. The competition for this pool of advertising dollars has also put downward pressure on pricing points and online advertisers have demanded more effective means of reaching customers. We believe that these factors have contributed to the growth in performance-based advertising relative to certain other forms of online advertising and marketing, and as a result this sector has attracted many competitors.
Due to
the long-term growth trends in online advertising, these competitors, real and
potential, range in size and focus. Our competitors may include such diverse
participants as small referral companies, established advertising agencies,
inventory resellers, search engines, and destination websites. We will also be
affected by the competition among destination websites that reach users or
customers of search services. The online search industry continues to experience
consolidation of major websites and search engines, which has the effect of
increasing the negotiating power of these parties in relation to smaller
providers. The major destination websites and distribution providers may have
leverage to demand more favorable contract terms, such as pricing, renewal and
termination provisions.
There are
additional competitive factors relating to attracting and retaining users, which
include the quality and relevance of our services, the usefulness,
accessibility, integration and personalization of the online services that we
offer, as well as the overall user experience on our distribution network. We
may also compete with traditional offline media such as television, radio and
print and direct marketing companies, for a share of advertisers’ total
advertising budgets.
21
DESCRIPTION
OF BUSINESS - continued
Sources
and Availability of Products
The
Company is primarily an internet based company offering its products over the
internet.
Dependence
on One or a Few Major Customers
Initially,
the Company’s sales efforts will be dependent upon its relationships with its
affiliates, Wise Savings, LLC and Wise Exchange, LLC. The long term
objective of the Company is to attract small and medium sized businesses who are
interested in advertising their local products and services over the
Internet.
Technology
The
Company will internally develop or purchase its own administrative and sales
management software programs. As the Company enters into partnerships with the
leading search engines, directories, vertical Web sites and mobile applications,
it will rely heavily on the software capabilities of its partners, which should
allow the Company to place and manage its advertising clients’ paid listings
directly within their account management systems and provide detailed reporting
and conversion tracking that will enable the advertisers to track the
effectiveness of their online advertising campaigns across the different
channels.
When
marketing the programs and services of its Wise Savings, it will rely on the
technology developed by Wise Savings. The Wise Savings proprietary software is a
scalable, automated, transactional database that tracks debits and credits in
real-time with full transparency and accountability. The software can be used to
administer rewards programs and to issue and track gift certificates that are
purchased either in person or over the Internet. The software can also be used
to support and administer a broad variety of other programs and applications
that include purchasing, inventory control and data mining.
Patents
and Trademarks
The
Company will rely on a combination of trademark, copyright, trade secret and
patent laws as well as non-disclosure procedures and contractual provisions to
protect its proprietary technologies and brands. The Company also enters into
confidentiality and proprietary rights agreements with its employees,
consultants and other third parties and controls access to software,
documentation and other proprietary information.
In the
future, the Company may receive communications from third parties claiming that
it has infringed on the intellectual property rights of others. Any intellectual
property claims, regardless of merit, may require the Company to seek licenses
to that technology. The Company will be dependent upon the intellectual property
rights of its Affiliates for a potion of its business. The Company’s Affiliates
license third-party technologies that are incorporated into some elements of
their services. Licenses from third-party technologies may not continue to be
available to the Company’s Affiliates at a reasonable cost, or at all, which
could have an adverse effect upon the financial results of the Company...
Additionally, the steps that the Company and its Affiliates have taken to
protect their intellectual property rights may not be adequate. Third parties
may infringe or misappropriate the proprietary rights of the Company and its
Affiliates. Competitors may also independently develop technologies that are
substantially equivalent or superior to the technologies that the Company and
its Affiliates employ in their services. If the Company and its Affiliates fail
to protect their proprietary rights adequately, their competitors could offer
similar services, potentially significantly harming their competitive position
and decreasing their revenues.
Relationship
with Wise Savings, LLC and Wise Exchange, LLC
On
September 30, 2008, the Company entered into a non-exclusive Independent
Contractor Agreement (“ICA”) with Wise Savings, pursuant to which the Company
will market and sell the programs and services of Wise Savings to small and
medium sized businesses. The Company will receive a one-time payment for each
business brought under contract for the Wise Savings online directory, and
residual payments of as much as fifty percent (50%) of the ongoing revenues
generated by Wise Savings from each of the individual businesses, assuming that
the individual businesses meet certain performance criteria. Additionally, the
Company will receive a 9% commission on any revenues generated by the individual
businesses from advertisements that they place on media properties that are
under contract with Wise Savings. The term of the ICA is one year and is
renewable automatically on an annual basis unless either party gives the other
party a written notice of its intention to terminate the ICA not less than 30
days prior to the expiration of the current term of the ICA. The Company is
currently negotiating s a similar ICA with Wise Exchange, LLC. Both of these
companies are affiliated with Wise Sales, Inc. Kurt Wise, the President,
Secretary, Treasurer, Directo, Chief Executive Officer, Chief Financial Officer
and Chief Accounting Officer of the Company, is also the founder,
controlling shareholder and Chief Executive Officer of Wise Savings, LLC and
Wise Exchange, LLC. The Company may outsource certain services from, and share
personnel with, its Affiliates.
Need
for Any Government Approval of Principal Products
There is
no need for government approval of the Company’s principal
products.
Government
and Industry Regulation
The
Company will be subject to various federal, state and local laws, regulations
and administrative practices that will affect our businesses, including, among
others, the requirement to obtain business licenses, withhold taxes, remit
matching contributions for our employees’ social security accounts, and other
such legal requirements, regulations and administrative practices that are
required of businesses in general.
With
respect to our online technologies, there are currently few laws or regulations
directly applicable to access to or commerce on the Internet. However, it
is possible that a number of laws and regulations may be adopted with respect to
the Internet, covering issues such as taxes, user privacy, information security,
pricing, and quality of products and services. The Company cannot predict
the impact, if any, that future Internet-related regulation or regulatory
changes might have on our business.
Research
and Development Activities
The
Company is not engaged in any extensive research and development
activities. The Company is focused on developing its marketing
strategies which will be the principal means by which the Company will derive
its revenue.
22
DESCRIPTION OF BUSINESS
-
continued
Environmental
Laws
The
Company’s activities will not be affected by environmental laws.
Employees
and Employment Agreements
The
Company currently only has one employee, Mr. Kurt Wise, but does not have any
employment agreements.
Seasonality
The
Company does not expect its business to be seasonal in nature.
Description
of Property
Our
business office is located at 4701 Washington Avenue, Suite 210, Racine,
Wisconsin 53406. The office space has been provided rent fee by Wise Savings,
LLC, an entity affiliated with Mr. Wise, the Company’s President, Secretary,
Treasurer, Director Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer.
Legal
Proceedings
There are
no legal proceedings pending or threatened against us.
Market
for common equity and related stockholder matters
Our
common stock is presently not traded or quoted on any market or securities
exchange. In order to be quoted on the Over-The-Counter Electronic Bulletin
Board (“OTCBB”), a market maker must file an application on our behalf in order
to make a market for our common stock. After this prospectus is declared
effective by the SEC, we intend to request that a market maker file such an
application. There can be no assurance that a market maker will agree to file
the necessary documents with FINRA, which operates the OTCBB, nor can there be
any assurance that such an application for quotation will be approved. See Risk
Factor “There is no current trading market for our securities and if
a trading market does not develop, purchasers of our securities may have
difficulty selling their shares” on page 12.
Penny
Stock Considerations
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
system).
A
purchaser is purchasing penny stock, which limits the ability to sell the stock.
The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document, which:
|
·
|
Contains
a description of the nature and level of risk in the market for penny
stock in both Public offerings and secondary
trading;
|
·
|
Contains
a description of the broker’s or dealer’s duties to the customer and of
the rights and remedies available to the customer with respect to a
violation of such duties or other requirements of the Securities Act of
1934, as amended;
|
23
Penny Stock
Considerations -
continued
|
·
|
Contains
a brief, clear, narrative description of a dealer market, including “bid”
and “ask” price for the penny stock and the significance of the spread
between the bid and ask price;
|
|
·
|
Contains
a toll-free number for inquiries on disciplinary
actions;
|
|
·
|
Defines
significant terms in the disclosure document or in the conduct of trading
penny stocks; and
|
|
·
|
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, to the customer:
|
·
|
The
bid and offer quotations for the penny
stock;
|
|
·
|
The
compensation of the broker-dealer and its salesperson in the
transaction;
|
|
·
|
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
|
|
·
|
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 acknowledgement of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
Regulation
M
Our sole
officer and director, who will offer and sell the common shares in this
Offering, is required to comply with the provisions of Regulation M as
promulgated under the Securities Exchange Act of 1934, as amended. With certain
exceptions, Regulation M precludes the officers and directors, sales agents, any
broker-dealer or other person who participate in the distribution of shares in
this offering 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.
Reports
We are
subject to certain reporting requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountants We will
also furnish the annual financial report and un-audited quarterly financial
reports in our quarterly reports that will be filed electronically with the SEC.
All reports and information filed by us can be found at the SEC website, www.sec.gov.
Stock
transfer agent
We
currently do not have a stock transfer agent. Wise Sales, Inc. has
identified an agent to retain that will facilitate the processing of the
certificates upon closing of the offering. Such transfer
agent identified is Island Stock Transfer, 100 Second Avenue S., Suite 104N, St.
Petersburg, Florida 33701, having a telephone number of (727)
289-0010.
24
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The
Company was incorporated on September 10 2008. The following discussion should
be read in conjunction with our financial statements and notes thereto contained
elsewhere in this prospectus. This discussion may contain certain
forward-looking statements that reflect our views with respect to future events
and financial performance. Forward-looking statements are often identified with
words like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause results to differ materially from our predictions.
The
following table provides selected financial data about the Company for the
period from September 10, 2008 through September 30, 2009. For detailed
financial information, see the financial statements included in this
prospectus.
Balance
Sheet Data
Cash:
$1,619
Total
assets: $1,619
Total
liabilities: $19,011
Shareholders’
equity: $(17,392)
Other
than the shares offered by this prospectus, no other source of capital has been
identified or sought. If we experience a shortfall in operating capital prior to
funding from the proceeds of this offering, our director has verbally agreed to
advance the Company funds to complete the registration
process.
PLAN
OF OPERATIONS
Going
Concern
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the liquidation of liabilities in the normal course of business. As of
December 31, 2008 and September 30, 2009, respectively, the Company had
accumulated deficits of $16,075 and $23,392, working capital deficits of $10,075
and $17,392, and has earned no revenues since inception. The Company intends to
fund its operations through equity financing arrangements, which may be
insufficient to fund its capital expenditures, working capital and other cash
requirements.
The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue operations, and
the implementation of its business plan. These factors, among others, raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Proposed
Milestones to Implement Business Operations
The
following milestones are based on the estimates made by management. The
working capital requirements and the projected milestones are approximations and
subject to adjustments. Our 12-month budget is based on minimum operations,
which will be completely funded by the $30,000 raised through this
offering. If we begin to generate profits, we will increase our marketing
and sales activity accordingly. We estimate sales to begin approximately
three to six months following closing of the offering. The costs associated
with operating as a public company are included in our budget. Management
will be responsible for the preparation of the required documents to keep the
costs to a minimum. We plan to complete our milestones as
follows:
0
to 3 Months
The
management of the company will initially focus its efforts in two areas. It will
recruit and train an internal sales and business development staff that will
focus on negotiating and signing nonexclusive contracts with web-based
advertising platforms that include web search engines, which are designed to
perform algorithmically driven searches for information on the Internet,
Internet directories, which allow users to search human-selected Internet
resources that have been arranged and classified by subject or location, and
mobile content providers that offer factual or entertainment related resources
to their users. The Company expects to receive commissions for selling
advertising and promotional programs of behalf of these clients. Simultaneously,
the Company will recruit and train a network of local and national independent
sales representatives that will be responsible for selling advertising and
promotional programs to small and medium sized local businesses on behalf of the
Company’s advertising platform clients. These independent sales representatives
are not expected to work exclusively on behalf of the Company and will only be
compensated by the Company if they generate revenue for the
Company.
The
Company plans to purchase a computer, a printer and some accounting software
with the $2,000 that is specified in the “Use of Proceeds” line item for
Furniture and Equipment. The Company has budgeted expenditures for legal fees,
salaries, outside contractors and sales and marketing in the amounts of $500,
$2,000, $500 and $2,375, respectively.
25
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -
continued
PLAN OF OPERATIONS -
continued
4
to 6 Months
The
Company expects to have completed its recruitment of an
internal sales staff, which will begin to negotiate non exclusive representation
agreements with web-based advertising platforms, and a local network of
independent sales representatives which will begin to sign
up local small and medium sized businesses interested in advertising on the advertising platforms
represented by the Company. Personnel from Wise Savings, LLC and Wise
Exchange, LLC will provide training to the Company’s network of sales
representatives to aid them in their efforts to sell the programs and services
offered by the two companies. The Company has budgeted expenditures for legal
fees, salaries, outside contractors and sales and marketing in the amounts of
$500, $2,000, $500 and $2,375, respectively.
7
to 9 Months
The
Company will continue to pursue new business with
advertising platforms and local businesses . The Company has budgeted
expenditures for legal fees, salaries, outside contractors and sales and
marketing in the amounts of $500, $2,000, $500 and $2,375,
respectively.
10
to 12 Months
The
Company will continue to pursue new business with
advertising platforms and local businesses . The Company has budgeted
expenditures for legal fees, salaries, outside contractors and sales and
marketing in the amounts of $500, $2,000, $500 and $2,375,
respectively.
Note: The
Company planned milestones are based on quarters following the closing of the
offering. Any line item amounts not expended completely, as detailed in the “Use
of Proceeds,” shall be held in reserve as working capital and subject to
reallocation to other line item expenditures as required for ongoing
operations.
CRITICAL
ACCOUNTING POLICIES
Our
financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which require management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, the disclosure of
contingent assets and liabilities, and the reported amounts of revenues and
expenses during the reporting period. We base our estimates and assumptions on
historical experience and other factors that we believe to be reasonable under
the circumstances. We evaluate our estimates and assumptions on an ongoing
basis. Our actual results may differ from these estimates under different
assumptions and conditions. See Note 2 to our financial statements included
elsewhere in this prospectus for additional information about these critical
accounting policies, as well as a description of our other significant
accounting policies.
Income
taxes
Revenue
recognition
The
Company will recognize revenue upon the completion of its performance
obligation, and only when evidence of a payment arrangement exists and the sales
proceeds are determinable and collectable. The Company’s advertising revenues
will be presented net of a provision for advertiser credits, which will be
estimated and established in the period in which services are provided. These
credits will generally be issued in the event that solutions do not meet
contractual specifications. Actual results could differ from these estimates.
Revenue from account management and local campaign management services will be
recognized as the services are performed. The Company will not recognize any
revenue related to the businesses that it recruits on behalf of its Affiliates
until after the Affiliate has generated revenue from these unaffiliated third
parties.
Allowance
for doubtful accounts
Accounts
receivable balances are presented net of allowance for doubtful accounts. The
allowance for doubtful accounts is our best estimate of the amount of probable
credit losses in our accounts receivable. We will determine our allowance based
on an analysis of our historical bad debts, advertiser concentrations,
advertiser creditworthiness and current economic trends. We will review the
allowance for collectability on a quarterly basis. Account balances will be
written off against the allowance after all reasonable means of collection have
been exhausted and the potential recovery is considered remote. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, or if we underestimated the allowances required,
additional allowances may be required which would result in increased general
and administrative expenses in the period such determination was
made.
Stock-based
compensation
The
Company accounts for its employee stock-based compensation arrangements in
accordance with the provisions of ASC Topic 718, Compensation—Stock-Compensation,
under the prospective method, which requires the Company to recognize expense
for all share-based compensation awards granted to employees. Compensation
expense is determined based on the grant date fair value of share-based
compensation awards and is recognized on a straight-line basis over the
requisite service period of the award. Under the prospective method, ASC Topic
718 applies to new awards and to awards modified, repurchased, or canceled after
December 31, 2005.
26
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -
continued
PLAN OF OPERATIONS -
continued
Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with “SFAS Number 109, “Accounting for Income Taxes,”
which requires the use of the asset/liability method of accounting for income
taxes. Under this method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry-forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in results of operations in
the period that includes the enactment date. When it is not considered to be
more likely than not that a deferred tax asset will be realized, a valuation
allowance is provided for the excess. Although the Company has loss
carry-forwards available to reduce future income for tax purposes, no amount has
been reflected on the balance sheet for deferred income taxes as any deferred
tax asset has been fully offset by a valuation allowance.
Cash
and cash equivalents
Cash and
cash equivalents include cash in banks, money market funds and certificates of
term deposits with maturities of less than three months from inception, which
are readily convertible to known amounts of cash and which, in the opinion of
management, are subject to an insignificant risk of loss in value.
Start-up
Costs
In
accordance with the American Institute of Certified Public Accountants Statement
of Position 98-5, “Reporting on the Costs of Start-up Activities,” the Company
has expensed all costs incurred in connection with the start-up and organization
of the Company.
Fair
value of financial instruments and derivative financial instruments
The
Company has adopted SFAS Number 119, “Disclosure about Derivative Financial
Instruments and Fair Value of Financial Instruments.” The carrying
amount of accrued liabilities approximates its fair value because of the short
maturity of this item. Certain fair value estimates may be subject to
and involve, uncertainties and matters of significant judgment, and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect these estimates. The Company does not hold or
issue financial instruments for trading purposes, nor does it utilize derivative
instruments in the management of its foreign exchange, commodity price or
interest rate market risks.
Property
and equipment
|
Property
and equipment is stated at cost and depreciated using the straight-line method
over the shorter of the estimated life of the asset or the lease term. We
periodically review the useful lives of our assets to confirm that such useful
life determination is appropriate. If we determine that the estimated useful
life of our assets needs to be adjusted to reflect depreciation expense over the
remaining time that the assets are expected to remain in service, future income
or losses will be impacted in the subsequent periods after such a determination
is made.
Earnings
(loss) per share
The
Company has adopted Financial Accounting Standards Board (“FASB”) Statement
Number 128, “Earnings per Share” (“EPS”) which requires presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. In the accompanying financial statements,
basic earnings (loss) per share is computed by dividing net income/loss by the
weighted average number of shares of common stock outstanding during the
period. There are no dilutive shares outstanding. No significant
realized exchange gains or losses were recorded from inception (September 10,
2008) to March 31, 2009.
Comprehensive
income (loss)
SFAS No.
130, “Reporting Comprehensive Income” establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements. For the periods ended March 31, 2009 and
December 31, 2008, the Company had no items of other comprehensive income.
Therefore, net loss equals comprehensive loss for the periods ending March 31,
2009 and December 31, 2008.
New
accounting pronouncements
In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our financial position and
results of operations if adopted.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial Guarantee Insurance Contracts-and interpretation of
FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company’s financial position, statements of operations, or cash flows at this
time.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles”. SFAS No.
162 sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB’s amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company’s financial position, statements of operations, or cash flows at
this time.
27
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -
continued
PLAN OF OPERATIONS -
continued
In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s financial position, results of
operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51. This
statement amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting non-controlling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company’s financial position, results of operations
or cash flows.
In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations’. This Statement replaces FASB Statement No. 141,
Business Combinations, but retains the fundamental requirements in
Statement 141. This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Non-controlling Interests in
Consolidated Financial Statements. The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments in Debt and
Equity Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company
adopted SFAS No. 159 beginning January 1, 2009 and is currently evaluating the
potential impact the adoption of this pronouncement will have on its financial
statements.
In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company has adopted this statement, and it is not believed that this will
have an impact on the Company’s financial position, results of operations
or cash flows.
LIQUIDITY
AND CAPITAL RESOURCES
The
Company is in a development stage and has no operating history. To date, the
Company has financed its developmental activities with two loans totaling
$12,000 from its sole director, officer and shareholder. We are currently
operating with insufficient working capital, which, among other things has
constrained our ability to market our services. As a result, there can be no
assurance that we will be successful in our business model.
IMPACT
OF INFLATION
To date
inflationary factors have not had a significant effect on our operations. We are
not aware of any material trend, event or capital commitment, which would
potentially adversely affect liquidity.
28
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
MATTERS
On August
10, 2009, the Board of Directors of the Company dismissed Moore & Associates
Chartered, its independent registered public accounting firm and engage the
accounting firm of Seale and Beers, CPAs as the Company's new independent
registered public accounting firm. The report of Moore & Associates
Chartered on the Company's financial statements for the year ended December 31,
2008, and from the period of inception on September 10, 2008 through December
31, 2008, did not contain an adverse opinion or disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope or accounting principles,
except that the Registrant's audited financial statements for the fiscal year
ended December 31, 2008 contained a going concern qualification.
During
the Company's year ended December 31, 2008, and from the period of inception on
September 10, 2008 through August 10, 2009 , there
were no disagreements with accountants or financial disclosure
matters. The company does not expect to obtain a
letter from Moore & Associates, Chartered.
FINANCIAL
DISCLOSURE
Our
fiscal year end is December 31. We intend to provide financial statements
audited by an Independent Registered Accounting Firm to our shareholders in our
annual reports. The audited financial statements for the period from the
date of incorporation, September 10, 2008, to December 31, 2008 are located in
the section titled “Financial Statements”.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors
of the corporation are elected by the stockholders to a term of one year and
serve until a successor is elected and qualified. Officers of the corporation
are appointed by the Board of Directors to a term of one year and serves until a
successor is duly appointed and qualified, or until he or she is removed from
office. The Board of Directors has no nominating, auditing or compensation
committees.
The name,
address, age and position of our sole officer and director is set forth
below:
Name
|
Age
|
Position
|
||
Kurt
Wise
|
44
|
President,
Secretary, Treasurer, Director, Principal Executive Officer, Principal Financial Officer and Principal
Accounting
Officer
|
The term
of office of the director of the Company ends at the next annual meeting of the
Company's stockholders or when such director's successor is elected and
qualifies. No date for the next annual meeting of stockholders is specified in
the Company's bylaws or has been fixed by the Board of Directors. The term of
office of the officer of the Company ends at the next annual meeting of the
Company's Board of Directors, expected to take place immediately after the next
annual meeting of stockholders, or when such officer's successor is elected and
qualifies.
Directors
are entitled to reimbursement for expenses in attending meetings but receive no
other compensation for services as directors. Directors who are employees may
receive compensation for services other than as director. No compensation has
been paid to directors for services.
The
following information sets forth the backgrounds and business experience of the
directors and executive officers.
Kurt Wise
has served as our President, Secretary, Treasurer, Directo Principal Executive
Officer, Principal Financial Officer and Principal Accounting Officer since the
inception of the company on September 10, 2008. Since 2002, Mr. Wise has served
as the Chief Executive Officer and Managing Partner of Wise Savings, LLC. Since
January 2008, Mr. Wise has served as the President and Managing Partner of Wise
Exchange, LLC.
29
DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS -
continued
Involvement
in Certain Legal Proceedings
Our
sole director, executive officer, promoter and control person has not been
involved in any of the following events during the past five years:
·
|
Had
any petition under the federal bankruptcy laws or any state insolvency law
filed by or against, or had a receiver, fiscal agent, or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years
before the time of such filing, or any corporation or business association
of which he was an executive officer at or within two years before the
time of such filing;
|
·
|
Been
convicted in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
|
·
|
Been
the subject of any order, judgment, or decree, not subsequently reversed,
suspended, or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining him from, or otherwise limiting, the following
activities: (i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity
Futures Trading Commission, or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in
connection with such activity; (ii) Engaging in any type of business
practice; or (iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodities
laws;
|
·
|
Been
the subject of any order, judgment, or decree, not subsequently reversed,
suspended, or vacated, of any federal or state authority barring,
suspending, or otherwise limiting for more than 60 days the right of such
person to engage in any activity described in (i) above, or to be
associated with persons engaged in any such
activity;
|
·
|
Been
found by a court of competent jurisdiction in a civil action or by the SEC
to have violated any federal or state securities law, where the judgment
in such civil action or finding by the SEC has not been subsequently
reversed, suspended, or vacated;
or
|
·
|
Been
found by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal
commodities law, where the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended, or vacated.
|
BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of our common
stock. Officers, directors and greater than ten percent stockholders
are required by SEC regulation to furnish us with copies of all Section 16(a)
forms they file.
We intend
to ensure to the best of our ability that all Section 16(a) filing requirements
applicable to our officers, directors and greater than ten percent beneficial
owners are complied within a timely fashion.
EXECUTIVE
COMPENSATION
Currently,
our sole director and officer has received no compensation for the services that
he has provided during the development stage of our business operations, though
he is reimbursed for any out-of-pocket expenses that he incurs on our behalf. In
the future, we may approve payment of salaries for officers and directors, but
currently, no such plans have been approved. We also do not currently
have any benefits, such as health or life insurance, available to our
employees.
Non-Qualified
|
|||||||||||||||||||||||||||||||||
Name
|
Non-Equity
|
Deferred
|
|||||||||||||||||||||||||||||||
and
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
||||||||||||||||||||||||||||
Principal
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Totals
|
|||||||||||||||||||||||||
Position
|
Year
|
($)
|
($)
|
($)
(1)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||||||||||||||||
Kurt
Wise
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
President,
|
2008
|
0 | 0 | 6,000 | 0 | 0 | 0 | 0 | 6,000 | ||||||||||||||||||||||||
Secretary,
|
|||||||||||||||||||||||||||||||||
Treasurer,
|
|||||||||||||||||||||||||||||||||
Director,
|
|||||||||||||||||||||||||||||||||
Principal
|
|||||||||||||||||||||||||||||||||
Executive
|
|||||||||||||||||||||||||||||||||
Officer,
|
|||||||||||||||||||||||||||||||||
Principal
|
|||||||||||||||||||||||||||||||||
Financial
|
|||||||||||||||||||||||||||||||||
Officer
and
|
|||||||||||||||||||||||||||||||||
Principal
|
|||||||||||||||||||||||||||||||||
Accounting
|
|||||||||||||||||||||||||||||||||
Officer
|
(1)
Officer and Director compensation of 6,000,000 restricted shares at $0.001 par
value for total consideration of $6,000.00.
30
EXECUTIVE COMPENSATION -
continued
Option
Grants
There
have been no individual grants of stock options to purchase our common stock
made to the executive officer named in the Summary Compensation
Table.
Aggregated
Option Exercises and Fiscal Year-end Option Value
There
have been no stock options exercised by the executive officer named in the
Summary Compensation Table.
Long-term
Incentive Plan (“LTIP”) Awards
There
have been no awards made to a named executive officer in the last completed
fiscal year under any LTIP.
Compensation
of Directors
Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation
of directors. No amounts have been paid to, or accrued to, our director in
such capacity.
Employment
Agreements and Officers’ Compensation
Since the
date of its inception, the Company has not paid any cash compensation to any
officer, director, or employee. The Board of Directors will determine future
compensation and may execute employment agreements. We do not have
any employment agreements in place with our sole officer and
director.
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 directors, officers and key employees,
individually and as a group, and the present owners of 5% or more of our total
outstanding shares. The table also reflects what the percentage of
ownership will be assuming completion of the sale of all shares in this
offering, which we cannot guarantee. The
stockholders listed below have direct ownership of their shares and possess sole
voting and dispositive power with respect to the shares.
Amount
of
|
Percent
of Class
|
||||||||
Title
of
|
Name,
Title and Address of
|
Beneficial
|
Before
|
After
|
|||||
Class
|
Beneficial
Owner of Shares (1)
|
Ownership
(2)
|
Offering
|
Offering
(3)
|
|||||
Common
|
Kurt
Wise, President, Director,
|
6,000,000
|
100.00%
|
66.67%
|
|||||
Secretary,
Treasurer, Principal Executive Officer, Principal
Financial Officer and Principal Accounting
Officer
|
|||||||||
Common
|
All
Officers and Directors as
|
||||||||
a
Group
|
6,000,000
|
100.00%
|
66.67%
|
1. The
address of each executive officer and director is c/o Wise Sales, Inc., 4701
Washington Ave, Suite 210, Racine, Wisconsin 53406.
2. As
used in this table, “beneficial ownership” means the sole or shared power to
vote, or to direct the voting of, a security, or the sole or share investment
power with respect to a security (i.e., the power to dispose of, or to direct
the disposition of a security).
3.
Assumes the sale of 3,000,000 shares of common stock in this offering by
Wise Sales, Inc. The aggregate amount of shares to be issued and
outstanding after the offering is 9,000,000.
31
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
continued
FUTURE
SALES BY EXISTING SHAREHOLDERS
A total
of 6,000,000 shares have been issued to the existing stockholder, all of which
are held by our sole officer and director and are restricted securities as that
term is defined in Rule 144 of the Rules and Regulations of the SEC promulgated
under the Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing one year after their acquisition. Any sale of shares held
by the existing stockholder (after applicable restrictions expire) and/or the
sale of shares purchased in this Offering (which would be immediately resalable
after the offering), may have a depressive effect on the price of our common
stock in any market that may develop, of which there can be no
assurance.
Our
principal shareholder does not have any plans to sell his shares at any time
after this Offering is complete.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On
November 5, 2008, Kurt Wise, our President, Secretary,
Treasurer, Director, Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer, loaned the Company $10,000. The
one-year note payable, which was due on November 4, 2009, bears an annual
interest rate of 8.0%. On September 30, 2009, the Company
extended the due date of this note payable to Kurt Wise from November 4, 2009 to
May 5, 2010. On March 9, 2009, Mr. Wise loaned the Company $2,000.
The one-year note payable, which is due on March 8, 2010, bears an annual
interest rate of 8.0%. The Company believes that the terms of its loan agreement
are comparable with the terms that would have been available from unaffiliated
third parties. We are currently operating out of the premises of Wise Savings,
LLC, an affiliate of the Company, on a rent-free basis for administrative
purposes. There is no written agreement or other material terms or
arrangements relating to said arrangement.
Wise
Exchange, LLC, an affiliate of the Company, has advanced the Company $6,200 that
was used to pay professional fees associated with the formation of the Company.
The liability does not have a maturity date and will be repaid by the Company
from commissions that it earns, if any, from Wise Exchange, LLC.
On
September 30, 2008, the Company entered into a non-exclusive Independent
Contractor Agreement (“ICA”) with Wise Savings, pursuant to which the Company
will market and sell the programs and services of Wise Savings to small and
medium sized businesses. The Company will receive a one-time payment for each
business brought under contract for the Wise Savings online directory, and
residual payments of as much as fifty percent (50%) of the ongoing revenues
generated by Wise Savings from each of the individual businesses, assuming that
the individual businesses meet certain performance criteria. Additionally, the
Company will receive a 9% commission on any revenues generated by the individual
businesses from advertisements that they place on media properties that are
under contract with Wise Savings. The term of the ICA is one year and is
renewable automatically on an annual basis unless either party gives the other
party a written notice of its intention to terminate the ICA not less than 30
days prior to the expiration of the current term of the ICA. The Company is
currently negotiating s a similar ICA with Wise Exchange, LLC. Both of these
companies are affiliated with Wise Sales, Inc. Kurt Wise, the President, Secretary, Treasurer, Director, Principal
Executive Officer, Principal Financial Officer and Principal Accounting
Officer of the Company, is also the founder, controlling shareholder and
Chief Executive Officer of Wise Savings, LLC and Wise Exchange, LLC. The Company
may outsource certain services from, and share personnel with, its
Affiliates.
We do not
currently have any conflicts of interest by or among our current officer,
director, key employee or advisors. We have not yet formulated a
policy for handling conflicts of interest, however, we intend to do so upon
completion of this offering and, in any event, prior to hiring any additional
employees.
On
September 19, 2008, the Company issued a total of 200,000 shares of common stock
to Mr. Wise for services valued at $200, or at $0.001 par value. On December 15,
2008, the Company issued a total of 5,800,000 shares of common stock to Mr. Wise
for services valued at $5,800, or at $0.001 par value.
CODE
OF ETHICS
As we
presently have only one employee, we have not yet found the need to adopt a code
of ethics. However, it is our intent to adopt such a code with respect to our
executive officers once we have a minimum of 10 full-time
employees.
INDEMNIFICATION
Pursuant
to the Articles of Incorporation and By-Laws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if he acted in good faith and in
a manner he reasonably believed to be in our best interest. In
certain cases, we may advance expenses incurred in defending any such
proceeding. To the extent that the officer or director is successful
on the merits in any such proceeding as to which such person is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney’s fees. With respect to a derivative action, indemnity may
be made only for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by a court
order. The indemnification is intended to be to the fullest extent
permitted by the laws of the State of Nevada.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have 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 by us of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding,
is asserted by one of our directors, officers, or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification is
against public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
32
AVAILABLE INFORMATION
We have
filed with the SEC a registration statement on Form S-1 under the Securities Act
with respect to the common stock offered hereby. This prospectus, which
constitutes part of the registration statement, does not contain all of the
information set forth in the registration statement and the exhibits and
schedule thereto, certain parts of which are omitted in accordance with the
rules and regulations of the SEC. For further information regarding our common
stock and our company, please review the registration statement, including
exhibits, schedules and reports filed as a part thereof. Statements in this
prospectus as to the contents of any contract or other document filed as an
exhibit to the registration statement, set forth the material terms of such
contract or other document but are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit to
the registration statement, each such statement being qualified in all respects
by such reference.
The
effectiveness of this registration statement will render us subject to the
informational requirements of the Exchange Act which requires us to file
reports, proxy statements and other information with the SEC. Such reports,
proxy statements and other information along with the registration statement,
including the exhibits and schedules thereto, may be inspected at public
reference facilities of the SEC at 100 F Street N.E.,
Washington D.C. 20549. Copies of such material can be obtained from
the Public Reference Section of the SEC at prescribed rates. You may call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Because we file documents electronically with the SEC, you may
also obtain this information by visiting the SEC’s Internet website at
http://www.sec.gov.
33
Wise
Sales, Inc.
(A
Development Stage Company)
INDEX
TO FINANCIAL STATEMENTS
PAGE
|
|
Report of Independent Registered Public Accounting Firm |
F-2
|
Balance Sheet as of December 31, 2008 |
F-3
|
|
|
Statement of Operations from Inception (September 10, 2008) through December 31, 2008 |
F-4
|
Statement of Equity from Inception (September 10, 2008) through December 31, 2008 |
F-5
|
Statement of Cash Flows from Inception (September 10, 2008) through December 31, 2008 |
F-6
|
Notes to Financial Statements |
F-7
to F-10
|
Report of Independent Registered Public Accounting Firm | F-11 |
Balance
Sheet as of June 30, 2009
|
F-12 |
Statement
of Operations from Inception {September 10, 2008) through June 30,
2009
|
F-13 |
Statement
of Equity from Inception (September 10, 2008) through June 30,
2009
|
F-14 |
Statement
of Cash Flows Inception (September 10, 2008) through June 30,
2009
|
F-15 |
Notes
to Financial Statements
|
F-16 to F-19 |
F-1
SEALE
AND BEERS, CPAs
PCAOB
& CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors
Wise
Sales, Inc.
(A
Development Stage Company)
We have
audited the accompanying balance sheet of Wise Sales, Inc. (A Development Stage
Company) as of December 31, 2008, and the related statements of operations,
stockholders’ equity and cash flows since inception on September 10, 2008
through December 31, 2008. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We
conduct our audits in accordance with standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan
and perform the audits 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 audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wise Sales, Inc. (A Development
Stage Company) as of December 31, 2008, and the related statements of
operations, stockholders’ equity and cash flows since inception on
September 10, 2008 through December 31, 2008, in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has an accumulated deficit of $16,075 and a
working capital of $10,075, which raises substantial doubt about its ability to
continue as a going concern. Management’s plans concerning these
matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/
Seale and Beers, CPAs
Seale and
Beers, CPAs
Las
Vegas, Nevada
December
14, 2009
50
S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 FAX:
(888)782-2351
F-2
Wise
Sales, Inc.
|
||||
(A
Development Stage Company)
|
||||
Balance
Sheet
|
||||
December
31, 2008
|
||||
ASSETS
|
||||
Current
assets
|
||||
Cash
|
$ | 4,948 | ||
|
||||
Total
current assets
|
4,948 | |||
Total
assets
|
$ | 4,948 | ||
LIABILITIES
AND STOCKHOLDER'S EQUITY
|
||||
Current
Liabilities
|
||||
Accounts
payable
|
$ | 1,700 | ||
Related
party payable
|
3,200 | |||
Note
payable - related party
|
10,000 | |||
Accrued
interest - related party
|
123 | |||
Total
current liabilities
|
15,023 | |||
Stockholder's
equity
|
||||
Common
stock – 1,000,000,000 common shares
|
||||
authorized
with a par value of $.001; 6,000,000
|
||||
issued
and outstanding at December 31, 2008
|
6,000 | |||
Additional
paid-in-capital
|
- | |||
Accumulated
deficit
|
(16,075 | ) | ||
Total
stockholder's equity
|
(10,075 | ) | ||
Total
liabilities and stockholder's equity
|
$ | 4,948 | ||
The
accompanying notes are an integral part of the financial
statements
|
F-3
Wise
Sales, Inc.
|
||||
(A
Development Stage Company)
|
||||
Statement
of Operations
|
||||
Inception
|
||||
(September
10, 2008)
|
||||
Through
|
||||
December
31, 2008
|
||||
|
||||
Revenues
|
$ | - | ||
|
||||
Operating
expenses
|
||||
Administrative
expenses
|
15,952 | |||
Total
operating expenses
|
15,952 | |||
|
||||
Operating
loss
|
(15,952 | ) | ||
|
||||
Interest
expense - related party
|
123 | |||
|
||||
Net
operating loss
|
$ | (16,075 | ) | |
|
||||
Basic
earnings (loss) per share
|
$ | (0.01 | ) | |
|
||||
Weighted
average number of common shares outstanding
|
1,080,357 | |||
|
||||
|
||||
The
accompanying notes are an integral part of the financial
statements
|
F-4
Wise
Sales, Inc.
|
||||||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||||||
Statement
of Equity
|
||||||||||||||||||||
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
|
Additional
|
During
|
||||||||||||||||||
Common
Stock
|
Paid-in
|
Development
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Stock
issues for services on
|
|
|||||||||||||||||||
September
10, 2008 @$.001
|
||||||||||||||||||||
per
share
|
200,000 | $ | 200 | $ | 0 | $ | 200 | |||||||||||||
|
||||||||||||||||||||
Net
loss for period ending
|
||||||||||||||||||||
December
31, 2008 @$.001
|
||||||||||||||||||||
per
share
|
5,800,000 | 5,800 | 5,800 | |||||||||||||||||
Net
loss
|
(16,075 | ) | (16,075 | ) | ||||||||||||||||
|
||||||||||||||||||||
Balance
at December 31, 2008
|
6,000,000 | $ | 6,000 | $ | 0 | $ | (16,075 | ) | $ | (10,075 | ) | |||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
The
accompanying notes are an integral part of the financial
statements
|
F-5
Wise
Sales, Inc.
|
||||
(A
Development Stage Company)
|
||||
Statement
of Cash Flows
|
||||
Inception
|
||||
(September
10, 2008)
|
||||
Through
|
||||
December
31, 2008
|
||||
Operating
Activities
|
||||
Net
income (loss)
|
$ | (16,075 | ) | |
Stock
compensation
|
6,000 | |||
Accrued
interest - related party
|
123 | |||
Accounts
payable
|
1,700 | |||
Net
cash provided by (used in) operating activities
|
(8,252 | ) | ||
|
||||
Investing
Activities
|
||||
Purchase
of property and equipment
|
- | |||
Net
cash provided by (used in) investing activities
|
- | |||
|
||||
Financing
Activities
|
||||
Note
payable - related party
|
10,000 | |||
Related
party payable
|
3,200 | |||
Net
cash provided by (used in) financing activities
|
13,200 | |||
|
||||
Net
increase (decrease) in cash
|
4,948 | |||
|
||||
Cash
at beginning of period
|
- | |||
|
||||
Cash
at end of period
|
$ | 4,948 | ||
|
||||
Supplemental
information
|
||||
Cash
paid for
|
||||
Interest
|
$ | - | ||
Taxes
|
$ | - | ||
Non-cash
activities
|
||||
Common
stock issued for services
|
$ | 6,000 |
The
accompanying notes are an integral part of the financial
statements
F-6
WISE
SALES, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
Note
1 – Organization, business operations and going concern
consideration
Wise
Sales, Inc. (the "Company") was incorporated in the State of Nevada on September
10, 2008. It was formed for the purpose of developing an independent sales
representation organization to sell selling Internet-based revenue generating
advertising, promotional programs and merchant processing services to small and
medium sized businesses on behalf of clients that may include Wise Savings, LLC
(“Wise Savings”) and Wise Exchange, LLC (“Wise Exchange”). Both Wise Savings and
Wise Exchange (collectively, the “Affiliates”) are affiliated with the Company
through common ownership and management.
The
Company is a development stage company and is subject to the risks associated
with development stage companies. As of the date of this report, the Company has
not yet commenced operations. The Company's primary activities since
incorporation have been organizational in nature and related to the Company’s
formation and pending registration statement. The Company has not generated any
revenues from these activities and, accordingly, it is in the development
stage.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accounting and reporting policies of the Company conform to U.S. generally
accepted accounting principles applicable to development stage
enterprises.
Fiscal
year
The
Company has selected December 31 as its fiscal year-end.
Use
of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Revenue
recognition
The
Company will recognize revenue upon the completion of its performance
obligation, and only when evidence of a payment arrangement exists and the sales
proceeds are determinable and collectable. The Company’s advertising revenues
will be presented net of a provision for advertiser credits, which will be
estimated and established in the period in which services are provided. These
credits will generally be issued in the event that solutions do not meet
contractual specifications. Actual results could differ from these estimates.
Revenue from account management and local campaign management services will be
recognized as the services are performed. The Company will not recognize any
revenue related to the businesses that it recruits on behalf of its Affiliates
until after the Affiliate has generated revenue from these unaffiliated third
parties.
Cash
and cash equivalents
Cash and
cash equivalents include cash in banks, money market funds and certificates of
term deposits with maturities of less than three months from inception, which
are readily convertible to known amounts of cash and which, in the opinion of
management, are subject to an insignificant risk of loss in value.
Start-up
Costs
In
accordance with the American Institute of Certified Public Accounts Statement of
Position 98-5, “Reporting on the Costs of Start-up Activities,” the Company has
expensed all costs incurred in connection with the start-up and organization of
the Company.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense for the period from
September 10, 2008 through December 31, 2008.
F-7
WISE
SALES, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Fair
value of financial instruments and derivative financial
instruments
The
Company has adopted Statement of Financial Accounting Standards (“SFAS”) Number
119, “Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments.” The carrying amount of accrued liabilities
approximates its fair value because of the short maturity of this
item. Certain fair value estimates may be subject to and involve,
uncertainties and matters of significant judgment, and, therefore, cannot be
determined with precision. Changes in assumptions could significantly
affect these estimates. The Company does not hold or issue financial
instruments for trading purposes, nor does it utilize derivative instruments in
the management of its foreign exchange, commodity price or interest rate market
risks.
Federal
income taxes
Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with SFAS Number 109, “Accounting for Income Taxes,”
which requires the use of the asset/liability method of accounting for income
taxes. Under this method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry-forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in results of operations in
the period that includes the enactment date. When it is not considered to be
more likely than not that a deferred tax asset will be realized, a valuation
allowance is provided for the excess. Although the Company has loss
carry-forwards available to reduce future income for tax purposes, no amount has
been reflected on the balance sheet for deferred income taxes as any deferred
tax asset has been fully offset by a valuation allowance.
Earnings
(loss) per share
The
Company has adopted Financial Accounting Standards Board (“FASB”) Statement
Number 128, “Earnings per Share” (“EPS”) which requires presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. In the accompanying financial statements,
basic earnings (loss) per share is computed by dividing net income/loss by the
weighted average number of shares of common stock outstanding during the
period. There are no dilutive shares outstanding.
No
significant realized exchange gains or losses were recorded from inception
(September 8, 2008) to December 31, 2008.
Comprehensive
income (loss)
SFAS No.
130, “Reporting Comprehensive Income” establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements. For the period ended December 31, 2008,
the Company had no items of other comprehensive income. Therefore, net loss
equals comprehensive loss for the period ending December 31, 2008.
New
accounting pronouncements
In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our financial position and
results of operations if adopted.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial Guarantee Insurance Contracts-and interpretation of
FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company’s financial position, statements of operations, or cash flows at this
time.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles”. SFAS No.
162 sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB’s amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company’s financial position, statements of operations, or cash flows at
this time.
F-8
WISE
SALES, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities—an amendment of
FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its financial position, results of operations or
cash flows.
In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s financial position, results of
operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51. This
statement amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting non-controlling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company’s financial position, results of operations
or cash flows.
In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations’. This Statement replaces FASB Statement No. 141,
Business Combinations, but retains the fundamental requirements in
Statement 141. This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Non-controlling Interests in
Consolidated Financial Statements. The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
In
February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities—Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments in Debt and
Equity Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will
adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the
potential impact the adoption of this pronouncement will have on its financial
statements.
In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements
for that fiscal year, including financial statements for an interim period
within that fiscal year. The Company will adopt this statement March 1, 2008,
and it is not believed that this will have an impact on the
Company’s financial position, results of operations or cash
flows.
F-9
WISE
SALES, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
3 – CAPITAL STOCK
Authorized
Stock
The
Company has authorized 1,000,000,000 common shares with a par value of $0.001
per share. Each common share entitles the holder to one vote, in
person or proxy, on any matter on which action of the stockholder of the
corporation is sought.
Share
Issuance
On
September 10, 2008, the Company issued 200,000 common shares valued at $.001 to
its Chief Executive Officer. On December 15, 2008, the Company issued 5,800,000
common shares at $.001 to its Chief Executive Officer. The shares issued were
accounted for in accordance with the provisions of ASC Topic 718, Compensation—Stock-Compensation,
under the prospective method, which requires the Company to recognize expense
for all share-based compensation awards granted to employees. Compensation
expense is determined based on the grant date fair value of share-based
compensation awards and is recognized on a straight-line basis over the
requisite service period of the award.
On
December 15, 2008, the company directed the preparation of a Form S-1 to
register 3,000,000 common shares of the Company at a price of $.01 per share to
raise $30,000 for the Company.
NOTE
4 – GOING CONCERN AND LIQUIDITY ISSUES
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the liquidation of liabilities in the normal course of business. As at
December 31, 2008, the Company has an accumulated deficit of $16,075, working
capital deficit of $10,075 and has earned no revenues since inception. The
Company intends to fund its operations through equity financing arrangements,
which may be insufficient to fund its capital expenditures, working capital and
other cash requirements.
The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue operations, and
the implementation of its business plan. These factors, among others, raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE
5 – RELATED PARTY TRANSACTIONS
On
September 30, 2008, Wise Exchange, LCC advanced $3,200 to an independent
consultant on behalf of the Company. The liability has been recorded as a
“Related party payable” on the books of the Company.
On
November 5, 2008, Kurt Wise, the Company’s sole officer and director, loaned the
Company $10,000. The one-year note payable, which is due on November 4, 2009,
bears an annual interest rate of 8.0%. Wise Exchange, Inc., an affiliate of the
Company, has advanced the Company $3,200 that was used to pay professional fees
associated with the formation of the Company. The Company utilizes the office
space and equipment of Wise Savings, LLC, an affiliate of the Company, at no
cost. The Company’s management estimates such amounts to be
immaterial.
On
September 30, 2008, the Company entered into a non-exclusive Independent
Contractor Agreement (“ICA”) and a non-exclusive Override Compensation Agreement
(“OCA”) with Wise Savings, pursuant to which the Company will market and sell
the programs and services of Wise Savings to small and medium sized businesses
through delegated agents who have entered into sales and marketing agreements
with the company. Pursuant to the OCA, the Company will receive management fees
in an amount equal to 3% of the total revenues generated by the Company’s
agents. The Company’s agents will receive a one-time payment for each business
brought under contract for the Wise Savings online directory, and residual
payments of as much as fifty percent (50%) of the ongoing revenues generated by
Wise Savings from each of the individual businesses, assuming that the
individual businesses meet certain performance criteria. Additionally, the
agents will receive a 9% commission on any revenues generated by the individual
businesses from advertisements that they place on media properties that are
under contract with Wise Savings. The term of the ICA and OCA agreements are one
year and are renewable automatically on an annual basis unless either party
gives the other party a written notice of its intention to terminate either the
ICA or OCA not less than 30 days prior to the expiration of the current term of
the ICA or OCA. The Company is currently negotiating similar agreements with
Wise Exchange, LLC. Both of these companies are affiliated with Wise Sales, Inc.
Kurt Wise, the founder controlling shareholder and President of the Company, is
also the founder, controlling shareholder and Chief Executive Officer of Wise
Savings, LLC and Wise Exchange, LLC. The Company may outsource certain services
from, and share personnel with, its Affiliates.
NOTE
6 – COMMITMENTS AND CONTINGENCIES
None.
NOTE
7 – SUBSEQUENT EVENTS
On
September 30, 2009, the Company extended the due date of the note payable to
Kurt Wise from November 5, 2009 until May 5, 2010.
F-10
SEALE
AND BEERS, CPAs
PCAOB
& CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Wise
Sales, Inc.
(A
Development Stage Company)
We have
reviewed the accompanying balance sheet of Wise Sales, Inc. as of September 30,
2009, and the related statements of operations, stockholders equity and cash
flows for the three-month and nine-month period ended September 30, 2009, period
of inception September 10, 2008 through September 30, 2008 and from inception
September 10, 2008 through September 30, 2009. These interim financial
statements are the responsibility of the Corporation’s management.
We
conduct our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists of principally applying analytical procedures and making
inquiries of persons responsible for the financials and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on
our reviews, we are not aware of any material modifications that should be made
to such financial statements for them to be in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been reviewed assuming that the Company
will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has an accumulated deficit of $23,392, a
working capital deficit of $17,392 and has earned no revenues, which raises
substantial doubt about its ability to continue as a going
concern. Management’s plans concerning these matters are also
described in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
Seale and Beers, CPAs
Seale and
Beers, CPAs
Las
Vegas, Nevada
December
29, 2009
50
S. Jones Blvd Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax:
(888)782-2351
F-11
Wise
Sales, Inc.
|
||||||||
(A
Development Stage Company)
|
||||||||
Balance
Sheet
|
||||||||
|
December
31.
|
|||||||
September
30, 2009
|
2008
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 1,619 | $ | 4,948 | ||||
|
||||||||
Total
current assets
|
$ | 1,619 | $ | 4,948 | ||||
Total
assets
|
$ | 1,619 | $ | 4,948 | ||||
LIABILITIES
AND STOCKHOLDER'S EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
0 | 1,700 | ||||||
Related
party payable
|
6,200 | 3,200 | ||||||
Note
payable - related party
|
12,000 | 10,000 | ||||||
Accrued
interest - related party
|
811 | 123 | ||||||
Total
current liabilities
|
$ | 19,011 | $ | 15,023 | ||||
Stockholder's
equity
|
||||||||
Common
stock – 1,000,000,000 common shares
|
||||||||
authorized
with a par value of $.001; 6,000,000
|
||||||||
common
shares issued and outstanding
|
||||||||
at
September 30, 2009 and December 31, 2008
|
6,000 | 6,000 | ||||||
Additional
paid-in-capital
|
0 | 0 | ||||||
Accumulated
deficit
|
(23,392 | ) | (16,075 | ) | ||||
Total
stockholder's equity
|
$ | (17,392 | ) | $ | (10,075 | ) | ||
Total
liabilities and stockholder's equity
|
$ | 1,619 | $ | 4,948 | ||||
The
accompanying notes are an integral part of the financial
statements
|
F-12
Wise
Sales, Inc.
|
||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||
Statements
of Operations
|
||||||||||||||||
Period
of
|
Period
of
|
|||||||||||||||
Inception
|
Inception
|
|||||||||||||||
Three
|
(September
|
Nine
|
(September
|
|||||||||||||
Months
|
10, 2008) |
Months
|
10, 2008) | |||||||||||||
Ending
|
through
|
Ending
|
through
|
|||||||||||||
September
|
September
|
September
|
September
|
|||||||||||||
30, 2009 | 30, 2008 | 30, 2009 | 30, 2009 | |||||||||||||
|
||||||||||||||||
Revenues
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
|
||||||||||||||||
Operating
expenses
|
||||||||||||||||
Administrative
expenses
|
45 | 200 | 6,629 | 22,581 | ||||||||||||
Total
operating expenses
|
$ | 45 | $ | 200 | $ | 6,629 | $ | 22,581 | ||||||||
|
||||||||||||||||
Operating
loss
|
(45 | ) | (200 | ) | (6,629 | ) | (22,581 | ) | ||||||||
|
||||||||||||||||
Interest
expense - related party
|
245 | 0 | 688 | 811 | ||||||||||||
|
||||||||||||||||
Net
operating loss
|
$ | (290 | ) | $ | (200 | ) | $ | (7,317 | ) | $ | (23,392 | ) | ||||
|
||||||||||||||||
Basic
earnings (loss) per share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||||||
Weighted
average number of
|
||||||||||||||||
common
shares outstanding
|
6,000,000 | 200,000 | 6,000,000 | |||||||||||||
|
||||||||||||||||
|
||||||||||||||||
The
accompanying notes are an integral part of the financial
statements
|
F-13
Wise
Sales, Inc.
|
||||||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||||||
Statements
of Stockholders Equity
|
||||||||||||||||||||
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
|
Additional
|
During
|
||||||||||||||||||
Common
Stock
|
Paid-in
|
Development
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Stock
issues for services on
|
|
|||||||||||||||||||
September
10, 2008 at $.001
|
||||||||||||||||||||
per
share
|
200,000 | 200 | 0 | 200 | ||||||||||||||||
|
||||||||||||||||||||
Stock
issues for services on
|
||||||||||||||||||||
December
15, 2008 at $.001
|
||||||||||||||||||||
per
share
|
5,800,000 | 5,800 | 5,800 | |||||||||||||||||
Net
loss for 2008
|
(16,075 | ) | (16,075 | ) | ||||||||||||||||
|
||||||||||||||||||||
Balance
at December 31, 2008
|
6,000,000 | $ | 6,000 | $ | 0 | $ | (16,075 | ) | $ | (10,075 | ) | |||||||||
Net
loss for nine months
|
||||||||||||||||||||
ending
September 30, 2009
|
(7,317 | ) | (7,317 | ) | ||||||||||||||||
|
||||||||||||||||||||
Balance
at September 30, 2009
|
6,000,000 | $ | 6,000 | $ | 0 | $ | (23,392 | ) | $ | (17,392 | ) | |||||||||
|
||||||||||||||||||||
The
accompanying notes are an integral part of the financial
statements
|
F-14
Wise
Sales, Inc.
|
||||||||
(A
Development Stage Company)
|
||||||||
Statements
of Cash Flows
|
||||||||
Inception
|
||||||||
Nine
Months
|
(September
10, 2008)
|
|||||||
Ending
|
Through
|
|||||||
September
30, 2009
|
September
30, 2009
|
|||||||
Operating
Activities
|
||||||||
Net
income (loss)
|
$ | (7,317 | ) | $ | (23,392 | ) | ||
Accounts
payable
|
(1,700 | ) | 0 | |||||
Stock
compensation
|
0 | 6,000 | ||||||
Accrued
interest - related party
|
688 | 811 | ||||||
Net
cash provided by (used in) operating activities
|
$ | (8,329 | ) | $ | (16,581 | ) | ||
|
||||||||
Investing
Activities
|
||||||||
Purchase
of property and equipment
|
0 | 0 | ||||||
Net
cash provided by (used in) investing activities
|
0 | 0 | ||||||
|
||||||||
Financing
Activities
|
||||||||
Note
payable - related party
|
2,000 | 12,000 | ||||||
Related
party payable
|
3,000 | 6,200 | ||||||
Net
cash provided by (used in) financing activities
|
$ | 5,000 | $ | 18,200 | ||||
|
||||||||
Net
increase (decrease) in cash
|
$ | (3,329 | ) | $ | 1,619 | |||
|
||||||||
Cash
at beginning of period
|
$ | 4,948 | $ | 0 | ||||
Cash
at end of period
|
$ | 1,619 | $ | 1,619 | ||||
|
||||||||
Supplemental
information
|
||||||||
Cash
paid for
|
||||||||
Interest
|
$ | 0 | $ | 0 | ||||
Taxes
|
$ | 0 | $ | 0 | ||||
Non-cash
activities
|
||||||||
Common
stock issued for services
|
$ | 0 | $ | 6,000 | ||||
|
||||||||
|
||||||||
The
accompanying notes are an integral part of the financial
statements
|
F-15
Wise
Sales, Inc.
(A
Development Stage Company)
Notes
to Interim Financial Statements
(Unaudited)
Note
1 – Organization, business operations and going concern
consideration
Wise
Sales, Inc. was incorporated on September 10, 2008 pursuant to the laws of the
State Nevada. The Company will develop a network of independent sales
representatives to sell Internet-based revenue generating promotional programs,
advertising and merchant processing services to small and medium sized
businesses on behalf of clients that may include Wise Savings, LLC (“Wise
Savings”) and Wise Exchange, LLC (“Wise Exchange”). Both Wise Savings and Wise
Exchange (collectively, the “Affiliates”) are affiliated with the Company
through common ownership and management.
The
Company is a development stage company and is subject to the risks associated
with development stage companies. As of September 30, 2009, the Company has not
yet commenced operations. The Company's primary activities since incorporation
have been organizational in nature and related to the Company’s formation and
pending registration statement. The Company has not generated any revenues from
these activities and, accordingly, it is in the development stage.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accounting and reporting policies of the Company conform to U.S. generally
accepted accounting principles applicable to development stage
enterprises.
Fiscal
year
The
Company has selected December 31 as its fiscal year-end.
Use
of estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of expenses during the
reporting period. Actual results could differ from those estimates.
Revenue
recognition
The
Company will recognize revenue upon the completion of its performance
obligation, and only when evidence of a payment arrangement exists and the sales
proceeds are determinable and collectable. The Company’s advertising revenues
will be presented net of a provision for advertiser credits, which will be
estimated and established in the period in which services are provided. These
credits will generally be issued in the event that solutions do not meet
contractual specifications. Actual results could differ from these estimates.
Revenue from account management and local campaign management services will be
recognized as the services are performed. The Company will not recognize any
revenue related to the businesses that it recruits on behalf of its Affiliates
until after the Affiliate has generated revenue from these unaffiliated third
parties.
Cash
and cash equivalents
Cash and
cash equivalents include cash in banks, money market funds and certificates of
term deposits with maturities of less than three months from inception, which
are readily convertible to known amounts of cash and which, in the opinion of
management, are subject to an insignificant risk of loss in value.
Start-up
Costs
In
accordance with the American Institute of Certified Public Accounts Statement of
Position 98-5, “Reporting on the Costs of Start-up Activities,” the Company has
expensed all costs incurred in connection with the start-up and organization of
the Company.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense for the period from
September 10, 2008 through December 31, 2008.
F-16
Wise
Sales, Inc.
(A
Development Stage Company)
Notes
to Interim Financial Statements
(Unaudited)
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Fair
value of financial instruments and derivative financial instruments
The
carrying amount of accrued liabilities approximates its fair value because of
the short maturity of this item. Certain fair value estimates may be
subject to and involve, uncertainties and matters of significant judgment, and,
therefore, cannot be determined with precision. Changes in
assumptions could significantly affect these estimates. The Company
does not hold or issue financial instruments for trading purposes, nor does it
utilize derivative instruments in the management of its foreign exchange,
commodity price or interest rate market risks.
Federal
income taxes
Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes. This treatment requires the use of the asset/liability method of
accounting for income taxes. Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carry-forwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
results of operations in the period that includes the enactment date. When it is
not considered to be more likely than not that a deferred tax asset will be
realized, a valuation allowance is provided for the excess. Although the Company
has loss carry-forwards available to reduce future income for tax purposes, no
amount has been reflected on the balance sheet for deferred income taxes as any
deferred tax asset has been fully offset by a valuation allowance.
Earnings
(loss) per share
The
presentation of basic and diluted “Earnings per Share” (“EPS”) on the face of
the income statements for all entities with complex capital structures requires
a reconciliation of the numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS computation. In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income/loss by the weighted average number of shares of
common stock outstanding during the period. There are no dilutive
shares outstanding.
No
significant realized exchange gains or losses were recorded from inception
(September 8, 2008) to September 30, 2009.
Comprehensive
income (loss)
For the
period from inception (September 10, 2008) to September 30, 2009, the Company
had no items of other comprehensive income. Therefore, net loss equals
comprehensive loss for the period from inception (September 10, 2008) to
September 30, 2009.
New
accounting pronouncements
June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The provisions of
SFAS 166, in part, amend the derecognition guidance in FASB Statement No. 140,
eliminate the exemption from consolidation for qualifying special-purpose
entities and require additional disclosures. SFAS 166 is effective for financial
asset transfers occurring after the beginning of an entity’s first fiscal year
that begins after November 15, 2009. The Company does not expect the provisions
of SFAS 166 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In
June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No.
46(R) (“SFAS 167”). SFAS 167 amends the consolidation guidance applicable to
variable interest entities. The provisions of SFAS 167 significantly affect the
overall consolidation analysis under FASB Interpretation No. 46(R). SFAS 167 is
effective as of the beginning of the first fiscal year that begins after
November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010.
The Company does not expect the provisions of SFAS 167 to have a material effect
on the financial position, results of operations or cash flows of the
Company.
In June
2009, the Securities and Exchange Commission’s Office of the Chief Accountant
and Division of Corporation Finance announced the release of Staff Accounting
Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds
portions of the interpretive guidance included in the Staff Accounting Bulletin
Series in order to make the relevant interpretive guidance consistent with
current authoritative accounting and auditing guidance and Securities and
Exchange Commission rules and regulations. Specifically, the staff is updating
the Series in order to bring existing guidance into conformity with recent
pronouncements by the Financial Accounting Standards Board, namely, Statement of
Financial Accounting Standards No. 141 (revised 2007), Business Combinations,
and Statement of Financial Accounting Standards No. 160, Non-controlling
Interests in Consolidated Financial Statements. The statements in staff
accounting bulletins are not rules or interpretations of the Commission, nor are
they published as bearing the Commission's official approval. They represent
interpretations and practices followed by the Division of Corporation Finance
and the Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
F-17
Wise
Sales, Inc.
(A
Development Stage Company)
Notes
to Interim Financial Statements
(Unaudited)
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
In
December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures
about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP
FAS 132(R)-1 requires additional fair value disclosures about employers’ pension
and postretirement benefit plan assets consistent with guidance contained in
SFAS 157. Specifically, employers will be required to disclose
information about how investment allocation decisions are made, the fair value
of each major category of plan assets and information about the inputs and
valuation techniques used to develop the fair value measurements of plan assets.
This FSP is effective for fiscal years ending after December 15,
2009. The Company does not expect the adoption of FSP FAS 132(R)-1
will have a material impact on its financial condition or results of
operation.
In
September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities,” and FASB Interpretation 46 (revised December 2003),
“Consolidation of Variable Interest Entities − an
interpretation of ARB No. 51,” as well as other
modifications. While the proposed revised pronouncements have not
been finalized and the proposals are subject to further public comment, the
Company anticipates the changes will not have a significant impact on the
Company’s financial statements. The changes would be effective March
1, 2010, on a prospective basis.
NOTE
3 – CAPITAL STOCK
Authorized
Stock
The
Company has authorized 1,000,000,000 common shares with a par value of $0.001
per share. Each common share entitles the holder to one vote, in
person or proxy, on any matter on which action of the stockholder of the
corporation is sought.
Share
Issuance
On
September 10, 2008, the Company issued 200,000 common shares at $.001 to its
Chief Executive Officer as compensation for services rendered to the Company. On
December 15, 2008, the Company issued 5,800,000 common shares at $.001 to its
Chief Executive Officer as compensation for services rendered to the
Company.
On
December 15, 2008, the company directed the preparation of a Form S-1 to
register 3,000,000 common shares of the Company at a price of $.01 per share to
raise $30,000 for the Company. The Company filed an S-1 registration statement
with the Securities and Exchange Commission on May 4, 2009.
NOTE
4 – GOING CONCERN AND LIQUIDITY ISSUES
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the liquidation of liabilities in the normal course of business. As of
September 30, 2009, the Company has an accumulated deficit of $23,392, a working
capital deficit of $17,392 and has earned no revenues since inception. The
Company intends to fund its operations through equity financing arrangements,
which may be insufficient to fund its capital expenditures, working capital and
other cash requirements.
The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue operations, and
the implementation of its business plan. These factors, among others, raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE
5 – RELATED PARTY TRANSACTIONS
On
September 30, 2008 and March 12, 2009, respectively, Wise Exchange, LCC advanced
$3,200 and $3,000 to an independent consultant on behalf of the Company. These
non-interest bearing liabilities are payable on demand and have been recorded as
a “Related party payable” on the books of the Company.
On
November 5, 2008, Kurt Wise, the Company’s sole officer and director, loaned the
Company $10,000. The one-year note payable, which is due on November 4, 2009,
bears an annual interest rate of 8.0%. On September 30, 2009, the Company
extended the due date of the note payable until May 5, 2010. On March 9, 2009,
Mr. Wise loaned the Company $2,000. The one-year note payable, which is due on
March 8, 2010, bears an annual interest rate of 8.0%.
Wise
Exchange, Inc., an affiliate of the Company, has advanced the Company $6,200
that was used to pay professional fees associated with the formation of the
Company and the preparation of the Company’s registration statement. The Company
utilizes the office space and equipment of Wise Savings, LLC, an affiliate of
the Company, at no cost. The Company’s management estimates such amounts to be
immaterial.
F-18
Wise
Sales, Inc.
(A
Development Stage Company)
Notes
to Interim Financial Statements
(Unaudited)
NOTE
5 – RELATED PARTY TRANSACTIONS - continued
On
September 30, 2008, the Company entered into a non-exclusive Independent
Contractor Agreement (“ICA”) and a non-exclusive Override Compensation Agreement
(“OCA”) with Wise Savings, pursuant to which the Company will market and sell
the programs and services of Wise Savings to small and medium sized businesses
through delegated agents who have entered into sales and marketing agreements
with the company. Pursuant to the OCA, the Company will receive management fees
in an amount equal to 3% of the total revenues generated by the Company’s
agents. The Company’s agents will receive a one-time payment for each business
brought under contract for the Wise Savings online directory, and residual
payments of as much as fifty percent (50%) of the ongoing revenues generated by
Wise Savings from each of the individual businesses, assuming that the
individual businesses meet certain performance criteria. Additionally, the
agents will receive a 9% commission on any revenues generated by the individual
businesses from advertisements that they place on media properties that are
under contract with Wise Savings. The term of the ICA and OCA agreements are one
year and are renewable automatically on an annual basis unless either party
gives the other party a written notice of its intention to terminate either the
ICA or OCA not less than 30 days prior to the expiration of the current term of
the ICA or OCA. The Company is currently negotiating similar agreements with
Wise Exchange, LLC. Both of these companies are affiliated with Wise Sales, Inc.
Kurt Wise, the founder controlling shareholder and President of the Company, is
also the founder, controlling shareholder and Chief Executive Officer of Wise
Savings, LLC and Wise Exchange, LLC. The Company may outsource certain services
from, and share personnel with, its Affiliates.
NOTE
6 – SUBSEQUENT EVENTS
The
Company has evaluated subsequent events from the balance sheet date through
December 29 , 2009 and has determined that there are
no events to disclose.
F-19
NO
DEALER, SALESMAN OR OTHER PERSON HAS BEEN GIVEN ANY INFORMATION OR HAS BEEN
AUTHORIZED TO MAKE ANY REPRESENTATIONS OTHER THAN THE INFORMATION CONTAINED OR
INCORPORATED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US, BY THE
SELLING STOCKHOLDER OR BY ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SHARES DESCRIBED IN THIS PROSPECTUS
OR AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY SUCH SHARES IN ANY
CIRCUMSTANCES IN, WHICH SUCH OFFER, OR SOLICITATION IS UNLAWFUL.
PART
II – INFORMATION NOT REQUIRED IN THE PROSPECTUS
Other
Expense of Issuance and Distribution
The
following table sets forth the costs and expenses payable by Wise Sales, Inc. in
connection with registering the sale of the common stock. Wise Sales, Inc. has
agreed to pay all costs and expenses in connection with this offering of common
stock. Set for the below is the estimated expenses of issuance and
distribution.
Legal
and professional fees
|
$ | 11,000 | ||
Accounting
fees
|
3,500 | |||
Blue
Sky Qualification fees
|
1,000 | |||
$ | 15,500 |
Indemnification
of Directors and Officers
Wise
Sales, Inc.'s Certificate of Incorporation permits indemnification to the
fullest extent permitted by Nevada law. Wise Sales, Inc.’s by-laws require Wise
Sales to indemnify any person who was or is an authorized representative of Wise
Sales, and who was or is a party or is threatened to be made a party to any
corporate proceeding, by reason of the fact that such person was or is an
authorized representative of Wise Sales, against expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such third party proceeding if such person acted in
good faith and in a manner such person reasonably believed to be in, or not
opposed to, the best interests of Wise Sales and, with respect to any criminal
third party proceeding (including any action or investigation which could or
does lead to a criminal third party proceeding) had no reasonable cause to
believe such conduct was unlawful. Wise Sales shall also indemnify any person
who was or is an authorized representative of Wise Sales and who was or is a
party or is threatened to be made a party to any corporate proceeding by reason
of the fact that such person was or is an authorized representative of Wise
Sales, against expenses actually and reasonably incurred by such person in
connection with the defense or settlement of such corporate action if such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interests of Wise Sales, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to Wise Sales unless and only to the
extent that the court in which such corporate proceeding was pending shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such authorized representative is
fairly and reasonably entitled to indemnity for such expenses which any court
shall deem proper. Such indemnification is mandatory under Wise Sale’s by-laws
as to expenses actually and reasonably incurred to the extent that an authorized
representative of Wise Sales has been successful on the merits or otherwise in
defense of any third party or corporate proceeding or in defense of any claim,
issue or matter therein. The determination of whether an individual is entitled
to indemnification may be made by a majority of disinterested directors,
independent legal counsel in a written legal opinion or the shareholders. Wise
Sales currently does not maintain a directors and officers liability insurance
policy.
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court’s decision.
34
Indemnification of
Directors and Officers -
continued
NEVADA
LAW
Pursuant
to the provisions of Nevada Revised Statutes 78.751, Wise Sales, Inc. shall
indemnify any director, officer and employee as follows: Every director,
officer, or employee of Wise Sales, Inc. shall be indemnified by us against all
expenses and liabilities, including counsel fees, reasonably incurred by or
imposed upon him/his in connection with any proceeding to which he/she may be
made a party, or in which he/she may become involved, by reason of being or
having been a director, officer, employee or agent of Wise Sales, Inc. or is or
was serving at the request of Wise Sales, Inc. as a director, officer, employee
or agent of Wise Sales, Inc., partnership, joint venture, trust or enterprise,
or any settlement thereof, whether or not he/she is a director, officer,
employee or agent at the time such expenses are incurred, except in such cases
wherein the director, officer, employee or agent is adjudged guilty of willful
misfeasance or malfeasance in the performance of his/his duties; provided that
in the event of a settlement the indemnification herein shall apply only when
the Board of Directors approves such settlement and reimbursement as being for
the best interests of Wise Sales, Inc.. Wise Sales, Inc. shall provide to any
person who is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of Wise Sales, Inc. as a director, officer,
employee or agent of the corporation, partnership, joint venture, trust or
enterprise, the indemnity against expenses of a suit, litigation or other
proceedings which is specifically permissible under applicable law.
Item
15. Recent Sale of Unregistered Securities
Set forth
below is information regarding the issuance and sales of securities without
registration since inception. No such sales involved the use of an underwriter;
no advertising or public solicitation was involved; the securities bear a
restrictive legend; and no commissions were paid in connection with the sale of
any securities.
The
Issuer has not since inception raised any funds through sales of its common
stock.
These
securities were issued in reliance upon the exemption contained in Section 4(2)
of the Securities Act of 1933.
Item
16. Exhibits
The
following exhibits are included with this registration statement:
** Previously filed
Item
17. Undertakings
Under
Rule 415 of the Securities Act, we are registering securities for an offering to
be made on a continuous or delayed basis in the future. The registration
statement pertains only to securities (a) the offering of which will be
commenced promptly, will be made on a continuous basis and may continue for a
period in excess of 30 days from the date of initial effectiveness and (b) are
registered in an amount which, at the time the registration statement becomes
effective, is reasonably expected to be offered and sold within two years from
the initial effective date of the registration.
Based on
the above-referenced facts and in compliance with the above-referenced rules,
Wise Sales, Inc. includes the following undertakings in this Registration
Statement:
A. The
undersigned Registrant hereby undertakes:
(1)
To file,
during any period, in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
(i)
To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933, as amended;
35
Item 17. Undertakings -
continued
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC
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 the Registration Fee” table in the
effective Registration Statement; and
(iii) To
include any additional material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
as amended, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) For
determining liability of the undersigned registrant under the Securities Act to
any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
i.
Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424.
|
|
ii.
Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
|
iii.
The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
iv. Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser
|
(5)
For the purpose of determining liability under the Securities Act of 1933
to any purchaser:
|
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.
|
(6)
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
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable ground to believe that it meets all of the
requirements of filing this Registration Statement and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
city of Racine, Wisconsin, on February
22, 2010 .
WISE
SALES, INC.
(Registrant)
By: | /s/ Kurt Wise | ||||
Director, President, Secretary, Treasurer, | |||||
Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer |
In
accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE |
TITLE
|
DATE
|
||
/s/
Kurt Wise
|
Director,
President, Secretary, Treasurer, Principal Executive Officer, Principal
Financial Officer and Principal Accounting
Officer
|
February
22,
2010
|
36