Attached files
As filed with the Securities and Exchange Commission on July 2, 2013
Registration No. 333-188610
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 1
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Zlato Inc.
(Exact name of registrant as specified in its charter)
Nevada 7372
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
Mlynska 28, 040 01 Kosice, Slovak Republic
Ph: 646-875-5747
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
State Agent and Transfer Syndicate, Inc.
112 North Curry Street
Carson City, NV 89703-4934
Ph: 775-882-1013
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies of Communications to:
Thomas E. Puzzo
Law Offices of Thomas E. Puzzo, PLLC
3823 44th Ave. NE
Seattle, Washington 98105
Telephone: (206) 522-2256
Fax: (206) 260-0111
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 of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
======================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities To Amount To Be Offering Price Aggregate Offering Registration
Be Registered Registered Per Share Price (1) Fee
------------------------------------------------------------------------------------------------------
Common Stock, par
value $0.001 1,000,000 $0.05 $50,000 $6.82
======================================================================================================
(1) There is no current market for the securities. The price at which the
shares are being offered has been arbitrarily determined by the Company and
used for the purpose of computing the amount of the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
This Registration Statement shall also cover any additional shares of our common
stock which may become issuable by reason of any stock dividend, stock split,
recapitalization or other similar adjustments.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the U.S. Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED. THE
REGISTRANT 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.
SUBJECT TO COMPLETION DATED _________, 2013
PRELIMINARY PROSPECTUS
ZLATO INC.
1,000,000 SHARES OF COMMON STOCK AT $0.05 PER SHARE
This Prospectus relates to the offer and sale of a maximum of 1,000,000 shares
(the "Maximum Offering") of common stock, $0.001 par value, by Zlato Inc., a
Nevada company ("we", "us", "our", "Zlato", "Company" or similar terms). This is
the Company's initial public offering and there is no minimum for this Offering.
The Offering will commence promptly on the date upon which this prospectus is
declared effective by the SEC and will continue for 180 days. At the discretion
of our board of directors, we may discontinue the Offering before expiration of
the 180 day period or extend the Offering for up to 90 days following the
expiration of the 180-day Offering period. We will pay all expenses incurred in
this Offering. We are an "emerging growth company" under applicable Securities
and Exchange Commission rules and will be subject to reduced public company
reporting requirements.
The offering of the 1,000,000 shares is a "best efforts" offering, which means
that our sole director and officer will use her best efforts to sell the common
stock and there is no commitment by any person to purchase any shares. The
shares will be offered at a fixed price of $0.05 per share for the duration of
the offering. There is no minimum number of shares required to be sold to close
the offering. Proceeds from the sale of the shares will be used to fund the
initial stages of our business development. We have not made any arrangements to
place funds received from share subscriptions in an escrow, trust or similar
account. Any funds raised from the offering will be immediately available to us
for our immediate use. Accordingly, if we file for bankruptcy protection or a
petition for involuntary bankruptcy is filed by creditors against us, your funds
will become part of the bankruptcy estate and administered according to the
bankruptcy laws. If a creditor sues us and obtains a judgment against us, the
creditor could garnish the bank account and take possession of the
subscriptions. As such, it is possible that a creditor could attach your
subscription which could preclude or delay the return of money to you. If that
happens, you will lose your investment and your funds will be used to pay
creditors.
This is a direct participation offering, since we are offering the stock
directly to the public without the participation of an underwriter. Our sole
officer and director will be solely responsible for selling shares under this
Offering and no commission will be paid on any sales.
Prior to this Offering, there has been no public market for our common stock and
we have not applied for the listing or quotation of our common stock on any
public market. We have arbitrarily determined the offering price of $0.05 per
share in relation to this Offering. The offering price bears no relationship to
our assets, book value, earnings or any other customary investment criteria.
After the effective date of the registration statement, we intend to seek a
market maker to file an application with the Financial Industry Regulatory
Authority ("FINRA") to have our common stock quoted on the OTC Bulletin Board.
We currently have no market maker who is willing to list quotations for our
stock. There is no assurance that an active trading market for our shares will
develop or will be sustained if developed.
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this Prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common shares.
BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS, PARTICULARLY, THE
RISK FACTORS SECTION BEGINNING ON PAGE 5.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), NOR ANY
STATE SECURITIES COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _________, 2013
TABLE OF CONTENTS
Prospectus Summary 3
Risk Factors 5
Forward Looking Statements 14
Plan of Distribution 15
Use of Proceeds 16
Determination of Offering Price 18
Dilution 18
Capitalization 19
Description of Securities to be Registered 19
Interests of Named Experts and Counsel 21
Information with Respect to the Registrant 21
Description of Property 29
Legal Proceedings 29
Market for Common Equity and Related Stockholder Matters 29
Where You Can Find More Information 31
Financial Statements 32
Management's Discussion and Analysis of Financial Condition and
Results of Operations 32
Changes In Disagreements With Accountants On Accounting and
Financial Disclosures 38
Directors, Executive Officers, Promoters and Control Persons 38
Executive Compensation 39
Security Ownership of Certain Beneficial Owners and Management 40
Certain Relationships and Related Transactions 41
Indemnification 41
Until ____________, 2013 (90 business days after the effective date of this
prospectus) all dealers that effect transactions in these securities whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer's obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
DEALER PROSPECTUS DELIVERY OBLIGATION
Securities offered through this prospectus will not be sold through dealers, but
will be sold on a direct participation basis only.
2
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes thereto appearing elsewhere
in this Prospectus. Prospective investors should consider carefully the
information discussed under "RISK FACTORS" and "USE OF PROCEEDS" sections,
commencing on Page 5 and Page 16, respectively. An investment in our securities
presents substantial risks, and you could lose all or substantially all of your
investment.
CORPORATE BACKGROUND AND BUSINESS OVERVIEW
Our Company was incorporated in the State of Nevada on February 25, 2013 to
engage in the development and sale of electronic medical record ("EMR") software
for small and medium sized physician offices and clinics. Our principal
executive offices are located at Mlynska 28, 040 01 Kosice, Slovak Republic. Our
phone number is (646) 875-5747. We are a development stage company, we only just
completed our first fiscal year end on March 31 and we have no subsidiaries. We
are also a shell company as defined under Rule 405 in the Securities Act,
because we currently have nominal operations and our assets consist solely of
cash and cash equivalents.
We are in the early stages of developing our EMR software. We currently have no
revenues, no operating history, and no users or revenues for our proposed
software. Our plan of operations over the 12 month period following successful
completion of our offering is to gain support for our concept and create fully
functional EMR software. This product, when completed, will be commercially
viable and available for commercial sale. Initially, the EMR software is planned
to be a software tool that will collect and capture patient data electronically,
and store it in a format that enables efficient access and viewing, and
distribution by printing or email. We are also planning to design all data
fields with a text-based editor to allow for physician and any other user notes
to be easily entered and captured on the patient file. Our planned second phase
product development will focus on interconnectivity of our EMR software with
various third party vital signs monitors, such as blood pressure monitors or
temperature monitors. We will achieve this by developing a sophisticated
`software development kit', or software tool which will enable diagnostic
manufacturers to have their vital sign monitors "speak" to our system, so that
patient vital signs can be correctly and electronically captured in the EMR
system. We believe this is very important to our long term survival and
profitability, as it will increase clinical workflow, reduce clinic operating
costs and reduce patient errors for our clients, and give us a competitive edge
over our competitors.
Our current planned offering is only sufficient to complete development of the
basic EMR software. We currently estimate that we will require an additional
$200,000 for the commercial launch of our basic EMR software and subsequent to
the completion of the basic EMR software, another 8-10 months and $50,000 to
develop the software development kit for interoperability with third parties.
(See "Business of the Company" and "Plan of Operations".)
From inception until the date of this filing we have had limited operating
activities, primarily consisting of the incorporation of our company and the
initial equity funding by our officer and director. We received our initial
funding of $15,000 through the sale of common stock to our officer and director,
who purchased 5,000,000 shares at $0.003 per share.
We are an "emerging growth company" as defined in the Jumpstart our Business
Startups Act of 2012. For as long as we are an emerging growth company, we will
not be required to comply with the requirements that are applicable to other
public companies that are not "emerging growth companies" including, but not
limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy
statements and the exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. We intend to take advantage of these
reporting exemptions until we are no longer an emerging growth company.
3
Our financial statements from inception on February 25, 2013 through March 31,
2013 report no revenues and a net loss of $(555). Our independent auditor has
issued an audit opinion for our Company which includes a statement expressing
substantial doubt as to our ability to continue as a going concern.
The following is a brief summary of this Offering:
Securities being offered: 1,000,000 shares of common stock, par value $0.001
Offering price per share: $0.05
Offering period: The shares are being offered for a period not to
exceed 180 days from the effectiveness of this
Prospectus, unless extended by our Board of
Directors for an additional 90 days.
Net proceeds to us *: If 10% of the shares are sold - $(5,500)
If 25% of the shares are sold - $ 2,000
If 50% of the shares are sold - $14,500
If 75% of the shares are sold - $27,000
If 100% of the shares are sold - $39,500
* net of estimated offering registration costs of
$10,500. For further information on the Use of
Proceeds, please to Page 16.
Number of shares outstanding
before the offering:
5,000,000
Number of shares outstanding
after the offering: If 10% of the shares are sold - 5,100,000
If 25% of the shares are sold - 5,250,000
If 50% of the shares are sold - 5,500,000
If 75% of the shares are sold - 5,750,000
If the maximum number of
shares are sold - 6,000,000
Registration costs We estimate our total offering registration costs
to be $10,500.
SUMMARY OF FINANCIAL INFORMATION
The summarized audited financial data presented below is derived from our
audited financial statements (Please refer to Page F-1 in this prospectus) and
related notes from February 25, 2013 to March 31, 2013.
As at
March 31, 2013
--------------
Current Assets $ 14,445
Current Liabilities --
Shareholders' Equity $ 14,445
From February 25, 2013
(inception) to
March 31, 2013
--------------
Revenue $ --
Net Loss $ (555)
4
We have just commenced our operations and are currently without revenue. Our
accumulated deficit at March 31, 2013 was $(555). We anticipate that we will
continue to incur net losses from our operations for the foreseeable future.
RISK FACTORS
An investment in our securities is considered to be highly speculative due to
various factors, including the nature of our business and the present stage of
our development. An investment in our securities should only be undertaken by
persons who have sufficient financial resources to afford the total loss of
their investment. In addition to the usual risks associated with investment in a
business, you should carefully consider the following known material risk
factors and all other information contained in this Prospectus before deciding
to invest in our shares of common stock. If any of the following risks occur,
our business, financial condition and results of operations could be materially
and adversely affected. Additional risks and uncertainties we do not presently
know or that we currently deem immaterial may also impair our business,
financial condition or operating results.
RISKS RELATING TO OUR BUSINESS
WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH
WE EXPECT TO CONTINUE INTO THE FUTURE.
We were incorporated on February 25, 2013 and have very limited operations. We
have not realized any revenues to date. Our proposed EMR software product is
under development and is not ready for commercial sale. We have no operating
history at all upon which an evaluation of our future success or failure can be
made. Our net loss from inception to March 31, 2013 is $(555). Based upon our
proposed plans, we expect to incur significant operating losses in future
periods. This will happen because there are substantial costs and expenses
associated with the development, marketing and sale of our proposed product. We
may fail to generate revenues in the future. If we cannot attract a significant
number of users, we will not be able to generate any significant revenues or
income. Failure to generate revenues will cause us to go out of business because
we will not have the money to pay our ongoing expenses.
In particular, additional capital may be required in the event that:
- the actual expenditures required to be made are at or above the higher
range of our estimated expenditures;
- we incur unexpected costs in completing the development of our product
or encounter any unexpected difficulties;
- we incur delays and additional expenses related to the development of
our product or a commercial market for our product;
- we are unable to create a substantial market for our products; or
- we incur any significant unanticipated expenses.
The occurrence of any of the aforementioned events could adversely affect our
ability to meet our business plans and achieve a profitable level of operations.
IF WE ARE UNABLE TO OBTAIN THE NECESSARY FINANCING TO IMPLEMENT OUR BUSINESS
PLAN WE WILL NOT HAVE THE MONEY TO PAY OUR ONGOING EXPENSES AND WE MAY GO OUT OF
BUSINESS.
Because we have not generated any revenue from our business, and we are at least
18-24 months (from the date hereof) away from being in a position to generate
revenues, we will need to raise significant, additional funds for the future
5
development of our business and to respond to unanticipated requirements or
expenses.
As of the date hereof, our net cash and working capital balance is $11,055. We
believe our current cash and net working capital balance is only sufficient to
cover our expenses for the next 4-6 months. Even under a limited operations
scenario to maintain our corporate existence, we believe we will require a
minimum of $11,000 in additional cash over the next 12 months to pay for the
remainder of our total offering costs, and to maintain our regulatory reporting
and filings. Other than our planned offering, we currently have no arrangement
in place to cover this shortfall. If we cannot raise any additional financing
prior to the expiry of this timeframe, we will be forced to cease operations and
our business will fail.
In order to achieve our stated business plan goals, we require the maximum
funding from this offering. Because we are a development stage company, with no
operating history and have generated no revenue and only losses to date, we
cannot guarantee that we will be able to sell all the shares required. If we are
successful, any money raised will be applied to the items set forth in the Use
of Proceeds section of this prospectus.
Even if we are successful in raising all of the funding under this offering, we
will still not be in a position to generate any significant revenues or become
profitable. We must raise significant additional funding to continue with our
business. The offering is only sufficient to enable us to develop our basic EMR
software. We believe we will require an additional $200,000 for marketing
expenses for the commercial launch of our basic EMR software when it is
completed and another 8-10 months and $50,000 to develop the software
development kit for interoperability with third party monitoring equipment
manufacturers.
These funds will have to be raised through equity financing, debt financing, or
other sources, which may result in the dilution in the equity ownership of our
shares. We will also need more funds if the costs of commercialization and
further development are greater than we have budgeted. We will also require
additional financing to sustain our business operations if we are ultimately not
successful in earning revenues. We currently do not have any arrangements
regarding this Offering or following this Offering for further financing and we
may not be able to obtain financing when required. Obtaining additional
financing would be subject to a number of factors, including investor acceptance
of our planned EMR software product and our business model. The issuance of
additional equity securities by us would result in a significant dilution in the
equity interests of our current stockholders. Obtaining commercial loans,
assuming those loans would be available, will increase our liabilities and
future cash commitments, and there can be no assurance that we will even have
sufficient funds to repay our future indebtedness or that we will not default on
our future debts if we are able to even obtain loans.
There are no assurances that we will be able to obtain further funds required
for our continued operations. Even if additional financing is available, it may
not be available on terms we find favorable. At this time, there are no
anticipated sources of additional funds in place. Failure to secure the needed
additional financing will have an adverse effect on our ability to remain in
business and our business would likely fail.
IF OUR ESTIMATES RELATED TO EXPENDITURES ARE ERRONEOUS OUR BUSINESS WILL FAIL
AND YOU WILL LOSE YOUR ENTIRE INVESTMENT.
Our success is dependent in part upon the accuracy of our management's estimates
of expenditures, which includes an additional $250,000, which we will need to
raise in addition to this offering for the commercial launch of our product and
further development for interoperability with third party monitoring equipment.
If such estimates are erroneous or inaccurate we may not be able to carry out
our business plan, which could, in a worst-case scenario, result in the failure
of our business and you losing your entire investment.
OUR BUSINESS MODEL MAY NOT BE SUFFICIENT TO ENSURE OUR SUCCESS IN OUR INTENDED
MARKET
Our survival is currently dependent upon the success of our efforts to gain
market acceptance of one software product in our targeted industry when it is
completed. Should our target market not be as responsive to our EMR software as
we anticipate, we may not have in place alternate products or services that we
can offer to ensure our survival.
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PRODUCT DEVELOPMENT SCHEDULES ARE LONG AND FREQUENTLY UNPREDICTABLE, AND WE MAY
EXPERIENCE DELAYS IN INTRODUCING OUR PRODUCT, WHICH MAY ADVERSELY AFFECT OUR
REVENUES.
The development cycle for products such as that we are planning is long. We
currently believe that the total cycle for development of our basic product will
take approximately 18 months from the date hereof. Interoperability with third
party monitoring equipment is contingent on additional capital and will take
significantly longer to complete and commercialize. If any unanticipated delays
affect the release of our software, we may not achieve anticipated revenues and
will instead experience increased losses. Revenues will also be adversely
affected if market interest declines from what we believe it is at present.
TECHNOLOGY CHANGES RAPIDLY IN OUR BUSINESS AND IF WE FAIL TO ANTICIPATE OR
SUCCESSFULLY IMPLEMENT NEW TECHNOLOGIES OR THE MANNER IN WHICH PEOPLE USE OUR
SOFTWARE, THE QUALITY, TIMELINESS AND COMPETITIVENESS OF OUR PRODUCTS AND
SERVICES WILL SUFFER.
Rapid technology changes in our industry require us to anticipate, sometimes
years in advance, which technologies we must implement and take advantage of in
order to make our products and services competitive in the market. Therefore, we
must start our product development with a range of technical development goals
that we hope to be able to achieve. We may not be able to achieve these goals,
or our competition may be able to achieve them more quickly and effectively than
we can. In either case, our products and services may be technologically
inferior to our competitors', less appealing to users, or both. If we cannot
achieve our technology goals within the original development schedule of our
products and services, then we may delay their release until these technology
goals can be achieved, which may delay or reduce revenue and increase our
development expenses. Alternatively, we may increase the resources employed in
research and development in an attempt to accelerate our development of new
technologies, either to preserve our product or service launch schedule or to
keep up with our competition, which would increase our development expenses. Any
such failure to adapt to, and appropriately allocate resources among, emerging
technologies would harm our competitive position, reduce our market share and
significantly increase the time we take to bring our product to market.
WE WILL BE DEPENDENT ON THIRD PARTIES TO DEVELOP OUR EMR SOFTWARE. ANY INCREASE
IN THE AMOUNTS WE HAVE TO PAY TO HAVE OUR SOFTWARE DEVELOPED OR ANY DELAY OR
INTERRUPTION IN PRODUCTION WOULD NEGATIVELY AFFECT BOTH OUR ABILITY TO MAKE A
TIMELY INTRODUCTION, GENERATE REVENUES AND OUR RESULTS OF OPERATIONS.
We are planning to use third parties to develop our EMR software. We will have
less control over third parties because we cannot control their personnel,
schedule or resources. It will be more difficult to detect design faults and
software errors. Any such fault or error could cause delays in delivering our
product or require design modifications delays or defects would likely have a
more detrimental impact on our business than if we were a more established
company.
Any of these factors could cause our software not to meet our quality standards
or expectations, or not to be completed on time or at all. If this happens, we
could lose anticipated revenues, or our entire investment in our software
development.
IF WE ARE UNABLE TO COMPLETE THE DEVELOPMENT OF OUR EMR SOFTWARE WE WILL NOT BE
ABLE TO GENERATE REVENUES AND YOU WILL LOSE YOUR INVESTMENT.
We have not completed development of our EMR software and we have no revenues
from the sale or use of our product. The success of our proposed business will
depend on the completion and the acceptance of our product by our target market.
Achieving such acceptance will require significant marketing investment. Our
software, once developed and tested, may not be accepted by our prospective
users at sufficient levels to support our operations and build our business. If
our EMR software is not accepted at sufficient levels, our business will fail.
WE CURRENTLY HAVE NO PROTECTION BY ANY TRADEMARKS, PATENTS AND/OR OTHER
INTELLECTUAL PROPERTY REGISTRATIONS. IF WE ARE UNABLE TO PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS, OUR PROPOSED BUSINESS WILL FAIL.
7
We have not applied for any trademark, patent or other intellectual property
registration with any governmental agency for our name or for our software
product. At present we are planning to enter into non-disclosure agreements with
employees and contractors to protect our technology. Despite our precautions
taken to protect our proposed software programs, unauthorized parties may
attempt in the future to reverse engineer, copy or obtain and use our software.
If they are successful we could lose our technology or they could develop
similar programs, which could create more competition for us and even cause our
proposed business operations to fail.
WE DEPEND TO A SIGNIFICANT EXTENT ON CERTAIN KEY PERSONNEL, THE LOSS OF ANY OF
WHOM MAY MATERIALLY AND ADVERSELY AFFECT OUR COMPANY.
Currently, we have only one employee who is also our sole officer and director.
We depend entirely on Ms. Gallovicova for all of our operations. The loss of Ms.
Gallovicova will have a substantial negative effect on our company and may cause
our business to fail. Ms. Gallovicova has not been compensated for her services
since our incorporation, and it is highly unlikely that she will receive any
compensation unless and until we generate substantial revenues. There is intense
competition for skilled personnel and there can be no assurance that we will be
able to attract and retain qualified personnel on acceptable terms. The loss of
Ms. Gallovicova's services could prevent us from completing the development of
our product and developing revenues. In the event of the loss of services of
such personnel, no assurance can be given that we will be able to obtain the
services of adequate replacement personnel.
We do not have any employment agreements or maintain key person life insurance
policies on our officer and director. We do not anticipate entering into
employment agreements with her or acquiring key person insurance in the
foreseeable future.
WE HAVE LIMITED BUSINESS, SALES AND MARKETING EXPERIENCE IN OUR INDUSTRY.
We have not completed the development of our product and have yet to generate
revenues. Our officer and director does not have any prior selling industry
experience. While we have plans for marketing and sales, there can be no
assurance that such efforts will be successful. There can be no assurance that
our proposed EMR software product will gain wide acceptance in its target market
or that we will be able to effectively market our product.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST OUR COMPETITORS.
We believe that the main competitive factors in our industry segment include:
data security; software features; brand name recognition; ease of use; price;
marketing support and quality of customer service. There are currently many
companies worldwide that offer products such as the product we are proposing to
develop and sell. We expect more companies to enter this industry, as the
medical profession continues to convert its patient records to electronic format
from paper based records. Our competitors vary in size from small companies with
limited resources to very large integrated corporations with significantly
greater financial, marketing, and product development resources than we have. We
are to be considered as one of the smallest with no commercial products at
present.
As EMR software is relatively new and rapidly evolving, our current or future
competitors may compete more successfully as the industry matures. In
particular, any of our competitors may offer products and services that have
significant security, performance, price, and other advantages over our proposed
software technology. These products and services may significantly affect the
demand for our services. If we are unable to compete successfully, we could lose
sales and market share. We also could experience difficulty hiring and retaining
qualified software developers and other employees. Any of these consequences
would significantly harm our business, results of operations and financial
condition. There can be no assurance that we will be able to effectively compete
with our competitors or that their present and future offerings would render our
product obsolete or noncompetitive. This intense competition may have a material
adverse effect on our results of operations and financial condition and prevent
us from achieving profitable revenue levels from our product.
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PATIENT MEDICAL RECORDS LAWS AND REGULATIONS COULD RESTRICT OUR BUSINESS,
PREVENT US FROM OFFERING SERVICE OR INCREASE OUR COST OF DOING BUSINESS.
There are numerous laws and regulations that govern the use, storage and
transmission of patient medical records to protect privacy. Laws and regulations
vary significantly by country, and even by state in the USA. Because patient
privacy is of critical importance, laws and regulations are expected to become
even more burdensome to protect against electronic theft, or unauthorized
transmission or use of patient records. In order to comply, we will likely be
required to modify our software and data storage for each jurisdiction in which
we intend to sell our product. Additionally, we are unable to predict the impact
that these modifications and future legislation, legal decisions or regulations
concerning our EMR software may have on our business, financial condition, and
results of operations. If we are found to be negligent in the design of our
software which results in unauthorized transmission or use of patient data, we
could be subject to significant lawsuits and penalties which could severely
affect our business.
IF OUR PROTECTION OF PATIENT DATA OR OTHER SECURITY MEASURES ARE COMPROMISED AND
AS A RESULT, DATA IS ACCESSED IMPROPERLY, MADE UNAVAILABLE, OR IMPROPERLY
MODIFIED, OUR PRODUCTS AND SERVICES MAY BE PERCEIVED AS VULNERABLE, OUR
REPUTATION COULD BE DAMAGED, OUR CUSTOMERS COULD STOP USING OUR PRODUCTS AND
SERVICES, ALL OF WHICH COULD SEVERELY AFFECT OUR BUSINESS, INCREASE OUR EXPENSES
AND EXPOSE US TO SIGNIFICANT LEGAL CLAIMS.
We are required under federal regulations to build in 5 important safeguards
into our EMR software, being:
* Access control which grants access only to authorized users
* Audit control to report on activity
* Data integrity to ensure against improper alteration or destruction
* Person or entity authentication to verify authorized access
* Transmission security utilizing data encryption and scrambling to
ensure protection of data
Other jurisdictions and even states may impose even more stringent regulations
which we must comply with in order to sell our EMR software. However, since the
Internet and user environments are not 100% secure, we cannot ensure or warrant
the security of any relevant information, and the cost of insurance to our
company would be prohibitive, if it were even available at all. Cyberattacks or
other security incidents, including employee malfeasance, could penetrate or
bypass our data protection and other security measures and gain unauthorized
access to, or compromise networks, systems and patient data of our prospective
customers. These risks increase significantly if customers elect to host and
store their data on servers that we maintain. Even if we have properly addressed
all of the applicable regulatory requirements, if our products or services are
perceived as having security vulnerabilities, customers could lose confidence in
the security and reliability of our products and services, which could severely
affect our business.
The costs we would incur to address and fix security incidents would increase
our expenses. Security incidents, whether they result from a fault or deficiency
in our software or not, could also lead to lawsuits, regulatory investigations,
including costs related to customer notification and fraud monitoring
OUR SOLE OFFICER AND DIRECTOR IS ENGAGED IN OTHER ACTIVITIES AND MAY NOT DEVOTE
SUFFICIENT TIME TO OUR AFFAIRS, WHICH MAY AFFECT OUR ABILITY TO CONDUCT
OPERATIONS AND GENERATE REVENUES.
Our officer and director has existing responsibilities to provide management and
services to other entities. We initially expect Ms. Gallovicova to spend
approximately 20 hours a week on the business of our company. As a result,
demands for the time and attention from Ms. Gallovicova from our company and
other entities may conflict from time to time. Because we rely primarily on Ms.
Gallovicova to maintain our business contacts and to promote our product, her
limited devotion of time and attention to our business may hurt the operation of
our business.
OUR INDEPENDENT AUDITORS' REPORT STATES THAT THERE IS A SUBSTANTIAL DOUBT THAT
WE WILL BE ABLE TO CONTINUE AS A GOING CONCERN.
9
Our independent auditors, Goldman Accounting Services CPA, PLLC, state in their
audit report dated May 14, 2013 and included herein, that we are a development
stage company, have no established source of revenue and are dependent on our
ability to raise capital from shareholders or other sources to sustain
operations. As a result, there is a substantial doubt that we will be able to
continue as a going concern.
This qualification clearly highlights that we will, in all likelihood, continue
to incur expenses without significant revenues into the foreseeable future until
our product gains significant popularity. Our only source of funds to date has
been the sale of our common stock from Ms. Gallovicova. Because we cannot
currently assure anyone that we will be able to generate enough interest in our
product, or that we will be able to generate any significant revenues or income,
the identification of new sources equity financing becomes significantly more
difficult. If we are successful in closing on any new financing, existing
investors will experience substantial dilution. The ability to obtain debt
financing is also severely impacted, and likely not even feasible, given that we
do not have revenues or profits to pay interest or repay principal.
As a result, if we are unable to obtain additional financing at this stage in
our operations, our business will fail and you may lose some or all of your
investment in our common stock.
INVESTORS WILL HAVE LITTLE VOICE REGARDING THE MANAGEMENT OF ZLATO DUE TO THE
LARGE OWNERSHIP POSITION HELD BY OUR EXISTING MANAGEMENT AND THUS IT WOULD BE
DIFFICULT FOR NEW INVESTORS TO MAKE CHANGES IN OUR OPERATIONS OR MANAGEMENT, AND
THEREFORE, SHAREHOLDERS WOULD BE SUBJECT TO DECISIONS MADE BY MANAGEMENT AND THE
MAJORITY SHAREHOLDERS, INCLUDING THE ELECTION OF DIRECTORS.
Ms. Gallovicova, our sole officer and director, currently owns 100% of Zlato's
issued and outstanding common stock. If we are successful in completing the
Maximum Offering she will own 83.3% of the company's issued and outstanding
common stock, and is still in a position to continue to control Zlato. If we
close our Offering with less than the Maximum, her percentage ownership is even
higher. Such control may be risky to the investor because our company's
operations are dependent on a very few people who could lack ability, or
interest in pursuing our operations. In such event, our business may fail and
you may lose your entire investment. Moreover, investors will not be able to
effect a change in the company's board of directors, business or management.
WE INTEND TO BECOME A REPORTING ISSUER AND WILL BE SUBJECT TO THE PERIODIC
REPORTING REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, WHICH WILL
REQUIRE US TO INCUR AUDIT FEES AND LEGAL FEES IN CONNECTION WITH THE PREPARATION
OF SUCH REPORTS. THESE ADDITIONAL COSTS WILL NEGATIVELY AFFECT OUR ABILITY TO
EARN A PROFIT.
Following the effective date of the registration statement in which this
prospectus is included, we intend to become a reporting issuer and will be
required to file all periodic and other required reports with the Securities and
Exchange Commission, pursuant to the Securities Exchange Act of 1934 and the
rules and regulations thereunder. In order to comply with such requirements, our
independent registered auditors will have to review our financial statements on
a quarterly basis and audit our financial statements on an annual basis.
Moreover, our legal counsel will have to review and assist in the preparation of
such reports. Although we believe (Please refer to "Use of Proceeds" and Plan of
Operations") that the $12,000 we have estimated for these costs should be
sufficient for the 12 month period following the completion of our offering, the
costs charged by these professionals for such services may vary significantly.
Factors such as the number and type of transactions that we engage in and the
complexity of our reports cannot accurately be determined at this time and may
have a major negative affect on the cost and amount of time to be spent by our
auditors and attorneys. However, the incurrence of such costs will obviously be
an expense to our operations and thus have a negative effect on our ability to
meet our overhead requirements and earn a profit.
THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY
IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES
LAWS.
10
Ms. Gallovicova lacks public company experience, which could impair our ability
to comply with legal and regulatory requirements such as those imposed by
Sarbanes-Oxley Act of 2002. She has never been responsible for managing a
publicly traded company. Such responsibilities include complying with federal
securities laws and making required disclosures on a timely basis. Any such
deficiencies, weaknesses or lack of compliance could have a materially adverse
effect on our ability to comply with the reporting requirements of the
Securities Exchange Act of 1934 which is necessary to maintain our public
company status. If we were to fail to fulfill those obligations, our ability to
continue as a U.S. public company would be in jeopardy in which event you could
lose your entire investment in our company.
AS AN "EMERGING GROWTH COMPANY" UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON
EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to, rely on exemptions from certain disclosure
requirements. For so long as we are an emerging growth company, we have elected
not to:
- have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
- comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information
about the audit and the financial statements (i.e., an auditor
discussion and analysis);
- submit certain executive compensation matters to shareholder advisory
votes, such as "say-on-pay" and "say-on-frequency;" and
- disclose certain executive compensation related items such as the
correlation between executive compensation and performance and
comparisons of the Chief Executive's compensation to median employee
compensation.
Additionally, under the JOBS Act, "emerging growth companies" can delay adopting
new or revised accounting standards until such time as those standards apply to
private companies. We have irrevocably elected not to avail ourselves to this
exemption from new or revised accounting standards and, therefore, we will be
subject to the same new or revised accounting standards as other public
companies that are not "emerging growth companies"..
We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period.
Rule 12b-2 of the Securities Exchange Act of 1934, as amended, defines a
"smaller reporting company" as an issuer that is not an investment company, an
asset-backed issuer), or a majority-owned subsidiary of a parent that is not a
smaller reporting company and that:
* Had a public float of less than $ 75 million as of the last business
day of its most recently completed second fiscal quarter, computed by
multiplying the aggregate worldwide number of shares of its voting and
non-voting common equity held by non-affiliates by the price at which
the common equity was last sold, or the average of the bid and asked
prices of common equity, in the principal market for the common
equity; or
* In the case of an initial registration statement under the Securities
Act or Exchange Act for shares of its common equity, had a public
float of less than $75 million as of a date within 30 days of the date
11
of the filing of the registration statement, computed by multiplying
the aggregate worldwide number of such shares held by non-affiliates
before the registration plus, in the case of a Securities Act
registration statement, the number of such shares included in the
registration statement by the estimated public offering price of the
shares; or
* In the case of an issuer whose public float as calculated under
paragraph (1) or (2) of this definition was zero, had annual revenues
of less than $50 million during the most recently completed fiscal
year for which audited financial statements are available.
We qualify as a smaller reporting company, and so long as we remain a smaller
reporting company, we benefit from the same exemptions and exclusions as an
emerging growth company. In the event that we cease to be an emerging growth
company as a result of a lapse of the five year period, but continue to be a
smaller reporting company, we would continue to be subject to the exemptions
available to emerging growth companies until such time as we were no longer a
smaller reporting company.
After, and if ever, we are no longer an "emerging growth company," we expect to
incur significant additional expenses and devote substantial management effort
toward ensuring compliance with those requirements applicable to companies that
are not "emerging growth companies," including Section 404 of the Sarbanes-Oxley
Act.
Until such time, however, we cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors
find our common stock less attractive as a result, there may be a less active
trading market for our common stock and our stock price may be more volatile.
AS A SHELL COMPANY THERE ARE RESTRICTIONS IMPOSED UPON THE TRANSFERABILITY OF
OUR UNREGISTERED SHARES
We are considered to be a shell company as defined under Rule 405 in the
Securities Act, with nominal operations and assets consisting solely of cash and
cash equivalents. Accordingly, there will be illiquidity of any future trading
market until the company is no longer considered a shell company. Until such
time, any unregistered securities sold by our Company can only be resold through
registration under the Securities Act of 1933, or by meeting the conditions of
Rule 144(i).
RISKS ASSOCIATED WITH OUR COMMON STOCK
IT WILL BE DIFFICULT FOR ZLATO STOCKHOLDERS TO RESELL THEIR STOCK DUE TO A LACK
OF PUBLIC TRADING MARKET.
There is presently no public trading market for our common stock, we have not
applied for a trading symbol or quotation, and it is unlikely that an active
public trading market can be established or sustained in the foreseeable future.
We intend to seek out a market maker to apply to have our common stock quoted on
the OTC Bulletin Board upon completion of this Offering. However, there can be
no assurance that Zlato's shares will be quoted on the OTC Bulletin Board. Until
there is an established trading market, holders of our common stock may find it
difficult to sell their stock or to obtain accurate quotations for the price of
the common stock. If a market for our common stock does develop, our stock price
may be volatile.
BROKER-DEALERS MAY BE DISCOURAGED FROM EFFECTING TRANSACTIONS IN OUR SHARES
BECAUSE THEY ARE CONSIDERED PENNY STOCKS AND ARE SUBJECT TO THE PENNY STOCK
RULES.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934
impose sales practice and disclosure requirements on NASD broker-dealers who
make a market in "penny stocks". A penny stock generally includes any non-Nasdaq
equity security that has a market price of less than $5.00 per share. Our shares
currently are not traded on Nasdaq nor on any other exchange nor are they quoted
on the OTC/Bulletin Board or "OTC/BB". Following the date that the registration
statement, in which this prospectus is included, becomes effective we hope to
find a broker-dealer to act as a market maker for our stock and file on our
12
behalf with the NASD an application on Form 15c(2)(11) for approval for our
shares to be quoted on the OTC/BB. As of the date of this prospectus, we have
not attempted to find a market maker to file such application for us. If we are
successful in finding such a market maker and successful in applying for
quotation on the OTC/BB, it is very likely that our stock will be considered a
"penny stock". In that case, purchases and sales of our shares will be generally
facilitated by NASD broker-dealers who act as market makers for our shares. The
additional sales practice and disclosure requirements imposed upon
broker-dealers may discourage broker-dealers from effecting transactions in our
shares, which could severely limit the market liquidity of the shares and impede
the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $1,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to sale, unless the broker-dealer or
the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.
INVESTORS THAT NEED TO RELY ON DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE
SHARES OF OUR COMMON STOCK.
We have not declared or paid any dividends on our common stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future. Investors that need to rely on dividend income should not
invest in our common stock, as any income would only come from any rise in the
market price of our common stock, which is uncertain and unpredictable.
Investors that require liquidity should also not invest in our common stock.
There is no established trading market and should one develop, it will likely be
volatile and subject to minimal trading volumes.
BECAUSE WE CAN ISSUE ADDITIONAL SHARES OF COMMON STOCK, PURCHASERS OF OUR COMMON
STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.
We are authorized to issue up to 75,000,000 shares of common stock. At present,
there are 5,000,000 issued and outstanding common shares, and if we are
successful in completing the Maximum Offering there will be 6,000,000 shares
outstanding. Our Board of Directors has the authority to cause us to issue
additional shares of common stock without consent of any of our stockholders.
Consequently, the stockholders may experience more dilution in their ownership
of our Company in the future, which could have an adverse effect on the trading
market for our common shares.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF NEVADA STATE LAW HINDER A
POTENTIAL TAKEOVER OF ZLATO INC.
Though not now, in the future we may become subject to Nevada's control share
law. A corporation is subject to Nevada's control share law if it has more than
200 stockholders, at least 100 of whom are stockholders of record and residents
of Nevada, and it does business in Nevada or through an affiliated corporation.
The law focuses on the acquisition of a "controlling interest" which means the
ownership of outstanding voting shares sufficient, but for the control share
law, to enable the acquiring person to exercise the following proportions of the
voting power of the corporation in the election of directors:
(i) one-fifth or more but less than one-third, (ii) one-third or more but less
than a majority, or (iii) a majority or more. The ability to exercise such
voting power may be direct or indirect, as well as individual or in association
with others.
13
The effect of the control share law is that the acquiring person, and those
acting in association with it, obtains only such voting rights in the control
shares as are conferred by a resolution of the stockholders of the corporation,
approved at a special or annual meeting of stockholders. The control share law
contemplates that voting rights will be considered only once by the other
stockholders. Thus, there is no authority to strip voting rights from the
control shares of an acquiring person once those rights have been approved. If
the stockholders do not grant voting rights to the control shares acquired by an
acquiring person, those shares do not become permanent non-voting shares. The
acquiring person is free to sell its shares to others. If the buyers of those
shares themselves do not acquire a controlling interest, their shares do not
become governed by the control share law.
If control shares are accorded full voting rights and the acquiring person has
acquired control shares with a majority or more of the voting power, any
stockholder of record, other than an acquiring person, who has not voted in
favor of approval of voting rights is entitled to demand fair value for such
stockholder's shares.
Nevada's control share law may have the effect of discouraging takeovers of the
corporation.
In addition to the control share law, Nevada has a business combination law
which prohibits certain business combinations between Nevada corporations and
"interested stockholders" for three years after the "interested stockholder"
first becomes an "interested stockholder," unless the corporation's board of
directors approves the combination in advance. For purposes of Nevada law, an
"interested stockholder" is any person who is (i) the beneficial owner, directly
or indirectly, of ten percent or more of the voting power of the outstanding
voting shares of the corporation, or (ii) an affiliate or associate of the
corporation and at any time within the three previous years was the beneficial
owner, directly or indirectly, of ten percent or more of the voting power of the
then outstanding shares of the corporation. The definition of the term "business
combination" is sufficiently broad to cover virtually any kind of transaction
that would allow a potential acquiror to use the corporation's assets to finance
the acquisition or otherwise to benefit its own interests rather than the
interests of the corporation and its other stockholders.
The effect of Nevada's business combination law is to potentially discourage
parties interested in taking control of us from doing so if it cannot obtain the
approval of our board of directors.
OTHER RISKS
ALL OF OUR ASSETS AND OUR OFFICER AND DIRECTOR IS LOCATED OUTSIDE OF THE USA.
THIS MAY CAUSE ANY ATTEMPTS TO ENFORCE LIABILITIES UNDER THE U.S. SECURITIES AND
BANKRUPTCY LAWS TO BE VERY DIFFICULT.
Currently, all of our assets are either located or controlled in the country of
the Slovak Republic. Ms. Gallovicova also resides in the Slovak Republic. This
is likely to remain so for at least the next 12 months. Therefore, any investor
that attempts to enforce against the company or against Ms. Gallovicova
liabilities that accrue under U.S. securities laws or bankruptcy laws will face
the difficulty of complying with local laws in these countries, with regards to
enforcement of foreign judgments. This could make it impracticable or uneconomic
to enforce such liabilities.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements relating to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"intends", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential", or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors which may cause our or our
industry's actual results, levels of activity or performance to be materially
different from any future results, levels of activity or performance expressed
or implied by these forward-looking statements.
14
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity or performance. You should not place undue reliance on these
statements, which speak only as of the date that they were made. Actual results
are most likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced as
described in the "RISK FACTORS" section and elsewhere in this prospectus.
Factors which may cause the actual results or the actual plan of operations to
vary include, among other things, decisions of the board of directors not to
pursue a specific course of action based on its re-assessment of the facts or
new facts, or changes in general economic conditions and those other factors set
out in this prospectus.
PLAN OF DISTRIBUTION
OUR OFFERING WILL BE SOLD BY OUR SOLE OFFICER AND DIRECTOR
This is a self-underwritten offering, and Ms. Gallovicova, our sole officer and
director, will sell the shares directly to family, friends, business associates
and acquaintances, with no commission or other remuneration payable to her for
any shares she may sell. There are no plans or arrangements to enter into any
contracts or agreements to sell the shares with a broker or dealer. In offering
the securities on our behalf, she will rely on the safe harbor from broker
dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of
1934.
Our sole officer and director will not register 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, as noted herein, 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:
1. Our officer and director 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,
2. Our officer and director will not be compensated in connection with
her participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
3. Our officer and director is not, nor will be at the time of their
participation in the offering, an associated person of a
broker-dealer; and
4. Our officer and director meets the conditions of paragraph (a)(4)(ii)
of Rule 3a4-1 of the Exchange Act, in that she (A) primarily perform,
or intend 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
an 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) or (a)(4)(iii).
Our sole officer, director, control person and affiliate does not intend to
purchase any shares in this offering.
TERMS OF THE OFFERING
We are offering a total of 1,000,000 shares of our common stock in a
self-underwritten public offering, with no minimum purchase requirement. We do
not have an arrangement to place the proceeds from this offering in an escrow,
trust, or similar account. Any funds raised from the offering will be
immediately available to us for our immediate use. Accordingly, if we file for
bankruptcy protection or a petition for involuntary bankruptcy is filed by
creditors against us, your funds will become part of the bankruptcy estate and
administered according to the bankruptcy laws. If a creditor sues us and obtains
a judgment against us, the creditor could garnish the bank account and take
possession of the subscriptions. As such, it is possible that a creditor could
attach your subscription which could preclude or delay the return of money to
you. If that happens, you will lose your investment and your funds will be used
to pay creditors.
15
The shares will be sold at the fixed price of $0.05 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
This offering will commence on the date of this prospectus and continue for a
period of 180 days (the "Expiration Date"). At the discretion of our board of
directors, we may discontinue the Offering before expiration of the 180 day
period or extend the Offering for up to 90 days following the expiration of the
180-day Offering period. If the board of directors votes to extend the offering
for the additional 90 days, a post-effective amendment to the registration
statement will be filed to notify subscribers and potential subscribers of the
extended offering period.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check, bank
draft, wire or cashier's check payable to the company. Subscriptions, once
received by the company, are irrevocable. All checks for subscriptions should be
made payable to Zlato Inc.
USE OF PROCEEDS
The following table provides the use of proceeds based on the closing of the
Offering. If the Company is not successful in selling all 1,000,000 shares
within the prescribed 180 day period (which may be extended an additional 90
days in our sole discretion), then we will not be able to proceed with our
business plan unless additional funds are raised in some other manner.
If 10% of If 25% of If 50% of If 75% of If 100% of
Shares Sold Shares Sold Shares Sold Shares Sold Shares Sold
----------- ----------- ----------- ----------- -----------
SHARES SOLD 100,000 250,000 500,000 750,000 1,000,000
GROSS PROCEEDS $ 5,000 $ 12,500 $ 25,000 $ 37,500 $ 50,000
NET CASH - MARCH 31, 2013 14,445 14,445 14,445 14,445 14,445
TOTAL BEFORE EXPENSES 19,445 26,945 39,445 51,945 64,445
OFFERING EXPENSES
Legal & Accounting 7,200 7,200 7,200 7,200 7,200
Edgar Agent Fees 800 800 800 800 800
Transfer Agent Fees 2,500 2,500 2,500 2,500 2,500
-------- -------- -------- -------- ----------
TOTAL OFFERING EXPENSES 10,500 10,500 10,500 10,500 10,500
-------- -------- -------- -------- ----------
NET AFTER OFFERING EXPENSES 8,945 16,445 28,945 41,445 53,945
EXPENDITURES (1)
Public company reporting expenses 12,000 12,000 12,000 12,000 12,000
Create web layout/design and launch 1,200 1,200 1,200 1,200
Create product overview slideshow 800 800 800
Research and identify security compliance
requirements 2,000 2,000 2,000 2,000
Design User Interface for data input 1,250 1,250 1,250
Software development for basic EMR system 7,500 20,000 20,000
Alpha product testing 1,500
Sales Consultant 9,000
Press and investor materials (2) 3,000 3,000 5,000
Office & misc 1,000 1,000 1,000 1,000
-------- -------- -------- -------- ----------
Net remaining balance (3) $ (3,055) $ 245 $ 195 $ 195 $ 195
======== ======== ======== ======== ==========
16
----------
(1) Expenditures for the 12 months following the completion of this Offering.
The expenditures are categorized by significant area of activity.
(2) We budgeting this amount for press and printed materials and other costs
associated with planned activities required to raise sufficient suitable
funds to market our software and proceed with our planned second phase
software development
(3) If we are only successful in raising 10% of our planned Offering we will
not be able fund the cash shortfall to maintain our public reporting
obligations, unless we can obtain alternative financing through further
equity issuances, debt financing or shareholder loans. We currently have no
plans in place to cover the shortfall.
Please see a detailed description of the use of proceeds in the "Plan of
Operation" section of this Prospectus.
Our offering expenses of approximately $10,500 are comprised primarily of legal
and accounting expenses, Securities and Exchange Commission ("SEC") and EDGAR
filing fees and transfer agent fees. Our officer and director will not receive
any compensation for their efforts in selling our shares.
If we are not able to sell 750,000 shares we can maintain our reporting
requirements with the SEC and complete our research of compliance and regulatory
issues but we will not be able to develop our basic EMR software. If we are not
able to sell a minimum of 500,000 shares of our common stock in this Offering,
we can develop our website and maintain our reporting with the SEC and remain in
good standing with the state of Nevada. If we do not sell at least 250,000
shares of our common stock we will not be able to maintain our reporting status
with the SEC and remain in good standing with the state of Nevada without
additional funds.
We currently do not have any arrangements regarding this Offering or following
this Offering for further financing and we may not be able to obtain financing
when required. Our future is dependent upon our ability to obtain further
financing, the successful development of our planned EMR software, a successful
marketing and promotion program, and achieving a profitable level of operations.
The issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments. There are no assurances that we will be
able to obtain further funds required for our continued operations. Even if
additional financing is available, it may not be available on terms we find
favorable. At this time, there are no anticipated sources of additional funds in
place. Failure to secure the needed additional financing will have an adverse
effect on our ability to remain in business.
If we are successful in selling all 1,000,000 common shares under this Offering,
the net proceeds will be used for our business plan and general working capital,
during the twelve months following the successful completion of this Offering.
In all instances, after the effectiveness of the registration statement of which
this prospectus is a part, we will require some amount of working capital to
maintain our basic operations and comply with our public reporting obligations.
In addition to changing our allocation of cash because of the amount of proceeds
received, we may change the use of proceeds because of changes in our business
plan. Investors should understand that we have wide discretion over the use of
proceeds.
17
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately held company. In determining
the number of shares to be offered and the offering price, we took into
consideration our cash on hand and the amount of money we would need to
implement our business plan. Accordingly, the offering price should not be
considered an indication of the actual value of the securities.
DILUTION
Dilution represents the difference between the Offering price and the net
tangible book value per share immediately after completion of this Offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the Offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholder.
The historical net tangible book value as of March 31, 2013 was $14,445 or
approximately $0.0029 per share. Historical net tangible book value per share of
common stock is equal to our total tangible assets less total liabilities,
divided by the number of shares of common stock outstanding as of March 31,
2013.
The following table sets forth as of March 31, 2013, the number of shares of
common stock purchased from us and the total consideration paid by our existing
stockholders and by new investors in this offering if new investors purchase
10%, 25%, 50%, 75% or 100% of the offering, after deduction of offering expenses
payable by us, assuming a purchase price in this offering of $0.05 per share of
common stock.
Percent of Shares Sold from Maximum
Offering Available 10% 25% 50% 75% 100%
------------------ ---------- ---------- ---------- ---------- ----------
Offering price per share 0.05 0.05 0.05 0.05 0.05
Post offering net tangible book value 8,945 16,445 28,945 41,445 53,945
Post offering net tangible book value per share 0.0018 0.0031 0.0053 0.0072 0.0090
Pre-offering net tangible book value per share 0.0029 0.0029 0.0029 0.0029 0.0029
Increase (Decrease) in net tangible book value
per share after offering (0.0011) 0.0002 0.0024 0.0043 0.0061
Dilution per share 0.0482 0.0469 0.0447 0.0428 0.0410
% dilution 96% 94% 89% 86% 82%
Capital contribution by purchasers of shares 5,000 12,500 25,000 37,500 50,000
Capital Contribution by existing stockholders 15,000 15,000 15,000 15,000 15,000
Percentage capital contributions by purchasers
of shares 25% 45% 63% 71% 77%
Percentage capital contributions by existing
stockholders 75% 55% 37% 29% 23%
Gross offering proceeds $ 5,000 $ 12,500 $ 25,000 $ 37,500 $ 50,000
Anticipated net offering proceeds $ (5,500) $ 2,000 $ 14,500 $ 27,000 $ 39,500
Number of shares after offering held by public
investors 100,000 250,000 500,000 750,000 1,000,000
Total shares issued and outstanding 5,100,000 5,250,000 5,500,000 5,750,000 6,000,000
Purchasers of shares percentage of ownership
after offering 2.0% 4.8% 9.1% 13.0% 16.7%
Existing stockholders percentage of ownership
after offering 98.0% 95.2% 90.9% 87.0% 83.3%
18
CAPITALIZATION
The following table sets forth, as of March 31, 2013, the capitalization of the
Company on an actual basis, and the capitalization of the Company as adjusted to
give effect to the sale of common stock being offered hereby at the initial
public offering price of $0.05 per share and the application of the estimated
offering costs as described in "Use of Proceeds." This table should be read in
conjunction with the more detailed financial statements and notes thereto
included elsewhere herein.
Actual as of Percent of Shares Sold from Maximum Offering Available
March 31, 2013 10% 25% 50% 75% 100%
--------- --------- --------- --------- --------- ---------
Short-term Debt -- -- -- -- -- --
Issued and Outstanding Common Shares
As Adjusted 5,000 5,100 5,250 5,500 5,750 6,000
Additional Paid in Capital 10,000 14,900 22,250 34,500 46,750 59,000
Accumulated Deficit (555) (555) (555) (555) (555) (555)
Shareholders Equity (Deficit) 14,445 19,445 26,945 39,445 51,945 64,445
Total Capitalization 14,445 19,445 26,945 39,445 51,945 64,445
Shares Issued and Outstanding 5,000,000 5,100,000 5,250,000 5,500,000 5,750,000 6,000,000
DESCRIPTION OF SECURITIES TO BE REGISTERED
COMMON STOCK
The authorized capital stock of the Company consists of 75,000,000 shares of
Common Stock, par value $.001. The holders of common stock currently:
(i) have equal ratable rights to dividends from funds legally available
therefore, when, as and if declared by the Board of Directors of the
Company;
(ii) are entitled to share ratably in all of the assets of the Company
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of the affairs of the Company;
(iii)do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights applicable
thereto, and;
(iv) are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
All shares of common stock now outstanding are fully paid for and
non-assessable. All shares of common stock which are the subject of this
Offering, when issued, will be fully paid for and non-assessable.
The holders of shares of common stock of the Company do not have cumulative
voting rights, which means that the holders of more than 50% of such 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 the Company's directors. Assuming the
Maximum Offering is completed, our officer and director will own 83.3% of the
outstanding shares. (See "Principal Stockholders".)
NEVADA ANTI-TAKEOVER LAWS
The Nevada Business Corporation Law contains a provision governing "Acquisition
of Controlling Interest." This law provides generally that any person or entity
that acquires 20% or more of the outstanding voting shares of a publicly-held
Nevada corporation in the secondary public or private market may be denied
voting rights with respect to the acquired shares, unless a majority of the
disinterested stockholders of the corporation elects to restore such voting
rights in whole or in part. The control share acquisition act provides that a
19
person or entity acquires "control shares" whenever it acquires shares that, but
for the operation of the control share acquisition act, would bring its voting
power within any of the following three ranges: (1) 20 to 33 1/3%, (2) 33 1/3 to
50%, or (3) more than 50%. A "control share acquisition" is generally defined as
the direct or indirect acquisition of either ownership or voting power
associated with issued and outstanding control shares. The stockholders or board
of directors of a corporation may elect to exempt the stock of the corporation
from the provisions of the control share acquisition act through adoption of a
provision to that effect in the Articles of Incorporation or Bylaws of the
corporation. Our Articles of Incorporation and Bylaws do not exempt our common
stock from the control share acquisition act. The control share acquisition act
is applicable only to shares of "Issuing Corporations" as defined by the act. An
Issuing Corporation is a Nevada corporation, which; (1) has 200 or more
stockholders, with at least 100 of such stockholders being both stockholders of
record and residents of Nevada; and (2) does business in Nevada directly or
through an affiliated corporation.
At this time, we do not have 100 stockholders of record resident of Nevada.
Therefore, the provisions of the control share acquisition act do not apply to
acquisitions of our shares and will not until such time as these requirements
have been met. At such time as they may apply to us, the provisions of the
control share acquisition act may discourage companies or persons interested in
acquiring a significant interest in or control of the Company, regardless of
whether such acquisition may be in the interest of our stockholders.
The Nevada "Combination with Interested Stockholders Statute" may also have an
effect of delaying or making it more difficult to effect a change in control of
the Company. This statute prevents an "interested stockholder" and a resident
domestic Nevada corporation from entering into a "combination," unless certain
conditions are met. The statute defines "combination" to include any merger or
consolidation with an "interested stockholder," or any sale, lease, exchange,
mortgage, pledge, transfer or other disposition, in one transaction or a series
of transactions with an "interested stockholder" having; (1) an aggregate market
value equal to 5 percent or more of the aggregate market value of the assets of
the corporation; (2) an aggregate market value equal to 5 percent or more of the
aggregate market value of all outstanding shares of the corporation; or (3)
representing 10 percent or more of the earning power or net income of the
corporation. An "interested stockholder" means the beneficial owner of 10
percent or more of the voting shares of a resident domestic corporation, or an
affiliate or associate thereof. A corporation affected by the statute may not
engage in a "combination" within three years after the interested stockholder
acquires its shares unless the combination or purchase is approved by the board
of directors before the interested stockholder acquired such shares. If approval
is not obtained, then after the expiration of the three-year period, the
business combination may be consummated with the approval of the board of
directors or a majority of the voting power held by disinterested stockholders,
or if the consideration to be paid by the interested stockholder is at least
equal to the highest of: (1) the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he became an
interested stockholder, whichever is higher; (2) the market value per common
share on the date of announcement of the combination or the date the interested
stockholder acquired the shares, whichever is higher; or (3) if higher for the
holders of preferred stock, the highest liquidation value of the preferred
stock. The effect of Nevada's business combination law is to potentially
discourage parties interested in taking control of us from doing so if it cannot
obtain the approval of our board of directors.
DIVIDENDS
As of the date hereof, the Company has not declared or paid any cash dividends
to stockholders. The declaration or payment of any future cash dividend will be
at the discretion of the Board of Directors and will depend upon the earnings,
if any, capital requirements and financial position of the Company, general
economic conditions, and other pertinent factors. It is the present intention of
the Company not to declare or pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in the Company's business operations.
20
INTERESTS OF NAMED EXPERTS AND COUNSEL
We have not hired or retained any experts or counsel on a contingent basis, who
would receive a direct or indirect interest in the Company, or who is, or was, a
promoter, underwriter, voting trustee, director, officer or employee of the
Company.
Our financial statements for the period from inception to the year ended March
31, 2013, included in this prospectus, have been audited by Goldman Accounting
Services CPA, PLLC. We include the financial statements in reliance on their
report, given upon their authority as experts in accounting and auditing.
The Law Offices of Thomas E. Puzzo, PLLC, has acted as special counsel to Zlato
in connection with the registration and proposed sale of the 1,000,000 shares of
common stock at $0.05 per share.
INFORMATION WITH RESPECT TO THE REGISTRANT
DESCRIPTION OF BUSINESS
We were incorporated on February 25, 2013 in the State of Nevada. We have never
declared bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings. Since incorporation, we have not
made any significant purchase or sale of assets. We are not a blank check
registrant as that term is defined in Rule 419(a)(2) of Regulation C of the
Securities Act of 1933, since we have a specific business plan or purpose. We
have not had preliminary contact or discussions with, nor do we have any present
plans, proposals, arrangements or understandings with any representatives of the
owners of any business or company regarding the possibility of an acquisition or
merger.
PRINCIPAL PRODUCTS AND SERVICES
Our company's business is focused on the development and when complete,
commercial sale of electronic medical records software for small to medium sized
primary care physician offices and medical clinics. We are in the early stages
of developing our proposed product and currently have no revenues or customers.
We anticipate that we will not have a commercial product for at least 12 months
from the completion of our offering, and currently estimate that we will require
an additional $200,000 for an adequate marketing program to launch our product
and subsequent to the development of our basic product, an additional 8-10
months and $50,000 to further develop our software to interface with third party
diagnostic and vital signs monitor equipment suppliers.
An Electronic Medical Record ("EMR") is the digital or software based version of
a paper-based medical record, which is generated by the patient's healthcare
provider for each patient encounter or visit. EMRs contain the data captured or
transcribed in electronic format from all medical departments related to the
particular visit, such as laboratory or blood work, pharmacy prescriptions, or
x-ray or other forms of radiology or body scanning. Digital EMRs are stored on a
computer database, either onsite or offsite, and the software is designed to
provide a structured and integrated method of gathering, storing, retrieving,
and sharing of a particular patient's healthcare record. This compares to
traditional paper based records, which are written by hand and stored in
physical paper files in the health care providers' physical office.
In the USA and most other developed countries that have either privately or
publically funded healthcare, paper based and EMR software and records are
maintained and controlled by the healthcare provider organization (hospital,
clinic or physician). We believe our product can potentially provide a superior
solution to reduce the time and cost to record patient data through the
standardization of data entry, enable more comprehensive real time data entry,
and enable the smaller and medium sized offices to better manage their patient
records all of which can potentially reduce record errors.
EMR solutions help to achieve paperless administration across the healthcare
industry. This form of administration facilitates creation of a centralized
patient repository. The records generated through successful implementation of
EMRs in healthcare practices can be used for various purposes such as patient
21
care, administration, research, healthcare quality improvement, and processing
of reimbursements. EMR is a part of healthcare information technology that is
used to make paperless computerized patient data in order to increase efficiency
of primary care facilities.
The adoption of EMRs and the automation of vital signs is essential for better
patient care and reducing errors, which directly affects workflow and budgets.
We are planning to design and develop an online, real time computer based EMR
software product that will consist of an easy to use physician/medical personnel
interface, and an electronic database backend which will collect and organize
all patient data (including automating vital signs) in an efficient, error free,
and secure, and private manner. We are planning to build our proposed EMR
software to satisfy all mandatory regulatory and compliance issues in the
countries where we offer the product, and ensure that it qualifies for any
available EMR incentive funding available from government agencies.
Additionally, many malpractice insurance carriers offer Physicians a substantial
discount for utilizing EMR software within their practice, due to the
minimization of lost records or errors. Our software will be designed with open
architecture in mind, therefore allowing changes, additions, modifications of
EMR components with ease. This flexibility will be paramount when we begin to
seek multiple device manufacturers for connectivity, as each device will require
its unique components to interface with our system to capture patient data
without the need for human interface. Most of today's EMR's lack integration and
interoperability, which is a necessary and key element in the reduction of
further patient errors and cost reduction.
To date, we have only obtained our website url (zlatoinc.com) along the logo for
our brand. Our website will be developed from the proceeds of our offering and
will ultimately serve as the initial method to promote our company, our current
and planned products, and gain feedback on our commercial product offerings.
Our planned distribution and revenue models may undergo significant revisions,
as we get closer to launching our commercial product. At this stage in our
development, there can be no assurance that we will be successful in generating
revenues from our product, or that users will be receptive to even using the
product.
THE MARKET
We consider our proposed business to be a segment of the overall health care
industry. When our product is ready for commercial use, we initially plan on
targeting small to medium sized physician offices and clinics in the USA.
According to the Federation of State Medical Boards 2012 census, there were
approximately 878,000 physicians in the USA in 2012 and although there are no
current definitive government statistics, various private surveys of medical
professionals generally indicate that a significant majority were practicing in
groups of 9 or less. According to a July 2012 report published by the Centers
for Disease Control and Prevention, National Center for Health Statistics only
29% of solo practitioners were adopters of EHR systems. The proportion of
physicians who were adopters increased as the size of the practice increased,
with 60% of physicians in 2-physician practices, 62% of physicians in
3-to-10-physician practices, and 86% of physicians in practices with 11 or more
physicians having adopted EHR systems. We are also planning to focus on the USA
because the USA is primarily a private, for profit system under which physicians
have significant autonomy over equipping their practices and related
infrastructure.
Two primary factors are driving the conversion to EMR from paper based records.
First, is the rising demand for the healthcare cost containment and need to
improve the quality of healthcare service. EMR solutions will help to improve
clinical efficiency in the following ways:
* Provide improved accessibility to patient records
* Improved communication between provider and clinical departments such
as pharmacy, laboratory, and other clinical departments
* Improved communication among healthcare facilities
* Reduced transcription errors, resulting in saved time / costs and
lesser number of chart
22
* Improved clinical decision making with correct data
* Automated Vital Signs Integration from Device/Monitoring systems
* Increases Profitability for Physicians
Secondly, EMR adoption is expected to increase significantly due to incentive
funding for EMR implementation as part of the American Recovery and Reinvestment
Act (See "Government Regulations"). Beginning in 2013, doctors who don't
prescribe electronically will be penalized financially. Although this mandate is
Medicare-driven, Medicare collects statistics for patients of all ages and
insurance groups, not just those receiving Medicare benefits. Because of their
size and use, we believe Medicare requires will eventually drive conversion to
EMR for all records, whether Medicare related or not.
COMPETITION AND COMPETITIVE STRATEGY
We do not yet have a commercial product available for sale. When complete, our
EMR software will be competing in the healthcare industry for primarily small
and medium sized physician offices and clinics. The U.S. EMR software market
currently has many competitors. We believe that Allscripts is currently the
market leader. Our competitors vary in size and cost structure from very small
companies with limited resources to very large, diversified corporations with
greater financial and marketing resources than ours. We are considered the
smallest as we do not currently have a commercial product yet available for sale
or use. We will be competing with well funded start-ups, traditional independent
software developers and manufacturers, and fully integrated large private and
publicly held companies producing a wide range of products and services. We will
likely face additional competition from the entry of new companies into our
target market.
Our competitors have significantly greater resources and are able to spend more
time and money on concept and focus testing, software and product development,
testing and marketing. Lead times are significant for the adoption and regular
use of EMR software by any given small to medium sized physician office or
clinic. Conversions of paper records to EMR databases usually involve
customization and significant time to train personnel and convert paper records.
Competition is also based on product quality and features, data storage,
brand-name recognition, ease of use, effectiveness of marketing and price. In
order to compete effectively, we believe we must offer:
- Competitive pricing
- 24 hour user support
- 99.999% guaranteed uptime for hosted solutions
- Rapid development of new features
- Incentives and bonuses to clients who refer new customers
- Dedicated sales and support staff
- Work directly with users to develop features according to their needs
- Work directly with all the major device manufacturers to integrate
their devices seamlessly into our system
In addition, regardless of our competitor's market position, financial resources
or size, our success also depends on our ability to successfully execute several
other competitive strategies, which we believe must successfully address the
following for our customers:
* Increase office productivity and clinical workflow: We must design and
build our EMR software specifically to reduce office transition time
and resources to convert the existing paper records, in addition to
ongoing daily data record keeping. We plan on developing software that
will enable simple conversion of paper based formats to electronic
formats through the use of simple readily available paper scanners
which can convert the paper file into digital and PDF format. We
consider this a key feature, as the PDF can be easily saved to the
computer database, reducing staff time.
* Connectivity and integrated automation of patient vital signs:
Ultimately, our EMR software must have the ability to record patient
vital signs directly from a given monitoring device, such as a blood
pressure monitor, seamlessly into the EMR database. This reduces human
data entry errors and increases office productivity. In the future, we
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plan to incorporate this functionality by creating vital signs capture
through the use of an integrating software development kit for use
with various diagnostic monitoring equipment manufacturers.
* Reduced user cost through the use of open source software: We believe
we can achieve a pricing advantage over our competitors, as our
development will be initially created from `open-source software.' and
modified to suit our needs. As a result, our capital costs for
development are reduced, which enables us to pass these savings onto
customers and reduce start-up costs for the Company. Open source
software is where the original creator provides the rights to study,
change and distribute the software for free to anyone and for any
purpose. Typically, open source software is found on the internet and
is obtained at no cost, free of licensing fees, which enables us to
pass on those savings to our users
* Data back-up: We plan to design our EMR database for instant back-up
when data is entered. The back up facilities can either be managed in
house on separate servers or with independent third party data storage
facilities.
* Physician/operator remote access: We are planning to offer physicians
and their approved operators the ability to remotely login and view
patient records via secure access. We believe remote access is a
competitive advantage that most other EMR providers do not provide,
and is an invaluable feature when physicians and care providers not in
the office and require patient data.
* Data Security & Encryption: Data security must be a key aspect of our
software to comply with HIPAA security rules (See "Government
Regulations") and ensure security measures are met. Encryption is the
conversion of data into a form, often called ciphertext, which cannot
be understood by another party, human or machine, without being
decrypted first. Our software programs will be built to offer a high
level of protection through the use of algorithms to scramble the
original input data into a new form which cannot be read without the
use of decryption keys.
In order for our software and our company to be successful, we will first need
to alert our target market about our proposed EMR product and the advantages we
intend to offer our prospective customers when our product is completed. We will
also have to develop a comprehensive, ongoing marketing plan to sell the
software. We believe our marketing and promotion strategy will be subject to
major revisions are we get closer to actually launching the product.
SALES STRATEGY
We are still in the planning and formulation stages with respect to the
development and commercialization of our product. As of the date hereof, we
believe we are at least 18-24 months away, from the date hereof, from being in a
position to generate revenues from our proposed product. Our planned sales
strategy, as discussed herein, may change significantly as we get closer to
commercialization.
We plan to price our software product competitively when it is ready for
commercial sale. Current EMR software is generally licensed to the user by the
developer or distributor. The user typically pays a one time implementation fee
for the basic system. In North America, the fee typically varies from $500.00
for single practitioners to $1,500-2,000 for medium sized offices and clinics
with 10+ physicians. Annual license fees, which include technical support,
currently average approximately $4,500 per year. Software development kits for
connectivity to vitals monitors and third party monitoring equipment is priced
in addition to the basic implementation and licensing fees, and is generally
determined on a case by case basis.
Initially, we plan to use our corporate website and contract a professional
sales consultant to market and sell our proposed product. In addition to
corporate information and other standard sections contained on the website, we
plan to use our website as a sales tool for our initial product release, new
releases and updates, new industry trends and concepts. We will seek out a
24
contract professional with extensive experience in Health Information Technology
("HIT") and a solid data base of medical industry contacts and relationships.
HIT includes both basic EMR recordkeeping and databases, vitals and other
monitor connectivity. Additionally, we plan to focus all of our selling
activities on the concept of return on investment ("ROI") to both end use
customers and distributors. We believe the economic focus on ROI for adoption
and use of our product will assist the growth of initial sales, resultant
testimonials and ultimately, proof that clearly demonstrates the effectiveness
of our EMR solution. We believe this will allow us to leverage sales contracts
early, and ultimately drive revenue. This focus should also demonstrate to our
prospective customers that we have a strong grasp on the various components that
contribute to a positive and beneficial ROI to the user. The primary ROI metrics
that we plan to focus on include the following:
* Increase number of patients seen per provider by reducing time spent
on chart documentation.
* Reduce time spent by nurses and clerical staff on patient intake
information
* EMR charting features can potentially automatically generate and
transmit charges to billing applications via interfaces.
* Reduce pharmacy call-backs by electronically sending prescriptions
directly to the pharmacy.
* Malpractice insurance carriers frequently offer discounts to
organizations using an EMR system.
* Paper charts are reduced, therefore costs associated with external
storage space and errors are reduced.
Ultimately, we need to demonstrate that the scope of improved efficiency varies
with degree of implementation, and includes reduced labor costs, improved cash
flow, streamlined clinical and financial management workflow, increased
reimbursement, and detailed financial reporting, all of which can potentially
increase profits for our users.
Several months prior to product launch, we plan to identify various medical
conferences, forums and trade shows across the country, which focus on Medical
devices and/or information technology. Attending a select number of trade shows
will be a key component of our initial sales and marketing strategy to
demonstrate the technology and the positive attributes of our solution. These
forums include:
Medical Associations (i.e.: American Medical Association): We will inform the
large national medical associations of our intent to launch EMR with the
advantage of automated connectivity to various vital sign monitors. This
information will be essential and highly advantageous for the associations to
share with their respective members, as automation of patient diagnostics is
still very early stage and yet an important necessity.
Trade Shows & Medical conferences - We will identify the top medical technology
and medical device forums, conferences, and trade shows to demonstrate our EMR
and engage physicians to adopt our EMR in order to improve the quality of care
they provide to their patients. These environments will be a prime opportunity
to showcase our technology to a key target audience.
Physician Education Campaigns: We will engage the most well respected education
forums/campaigns, which aim at increasing awareness of electronic medical record
keeping systems and overall health information technology. These campaigns are
typically driven by not-for-profit societies who target physician offices to
raise levels of understanding of pressing medical issues.
DISTRIBUTION OF PRODUCTS OR SERVICES
When our EMR software is ready for commercial sale, we plan to distribute it
through four primary channels:
25
1. Direct Selling: Our contract sales consultant will be responsible for
developing direct sales. This channel will involve licensing our
technology to end users at variable yet affordable rates, based on the
number of physicians in the clinic. As a result, smaller clinics with
fewer physicians will pay less than larger clinics with greater
implementation. This model will allow the Company to have direct
control and influence over customization for vital sign automation
with specific customers.
2. Partnerships with diagnostic vital sign monitor manufacturers: This
channel is invaluable for two primary reasons. These manufacturers
already have a captive audience with physicians and clinics, and they
also have significant interest in developing interoperability with
their vital signs equipment.
3. Medical Distribution Companies: This channel would entail medical
distribution supply companies re-selling our product to our target
market. This will involve establishing `list price' and
industry-comparable distributor discounts of approximately 30-40% off
list. Our list price will be similar to our direct selling model
pricing. Third party re-seller distribution in this manner provides
the ability to capture a large portion of the market share, by dealing
directly with companies who see our primary and secondary markets
daily. This will also allow us to reduce our overhead of additional
sales consultants. Under this model, it will more difficult to oversee
the "ROI" selling model, but we plan to work collaboratively with
these organizations to ensure their approach is ROI-centric.
4. SAAS model: Software as a service, meaning that our staff will run the
application and store the data. The data would be encrypted and stored
on secured servers.
Our distribution plans may change significantly as we get closer to
commercializing our product.
SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES
There are no constraints on the sources or availability of outsource software
developers and supplies related to our business. We are planning to hire local
third party software development contractors or firms based in Eastern Europe to
develop our EMR product and any custom interfaces for third party monitors and
diagnostic equipment. All applications and data base storage systems will be
developed specifically to work on unix operating systems, which are currently
one of the most preferred and prevalent operating systems for commercial
applications. We should not have to purchase any software licenses, because all
of the operating system software tools that we are planning to use are available
from the open source community. We also plan to use the python development
language and the Django python framework because it is open sourced, with many
pre-built data and templating tools which will be very useful and timesaving in
our software development process. We intend to rely on open source tools,
because in addition to cost efficiencies, these technologies are proven and used
by large companies like Google, Nasa and Facebook. They will allow us to develop
our software and grow our business more smoothly without running into
development bottlenecks, since open source software security or performance
enhancements developed by others is put into the main repository and will then
be available for our use.
The initial development parameters, and related user interfaces and databases
that we will include in our EMR software are:
Patient Profile: First & Last Name, (Address - street / city / zip code /
country / phone / email), Health Care Number, Birthdate, Gender, Race, Weight,
Height, Patient History (family history), Medications
Appointment History
Scheduling
Patient Next Steps (Specialist? Pharmacy? Radiology? Routines? Other?)
Billing
26
All parameters will be PDF format enabled, and will have a designated output
directory associated with them for efficient clinical access and viewing. In
addition, all fields will be designed in text-based editor to allow for
Physician notes to be easily entered and captured on the patient file.
In accordance with government regulations, we will be developing algorithms into
our software to ensure data is scrambled and unreadable in the event that our
system is accessed by intruders or unauthorized users. To further enable
security measures algorithms will be designed to change on a regular basis, and
will rely on a specific decryption "key" which will give the authorized user the
right algorithm to use to unlock the data, and how to use it to decrypt the
data. Therefore, if any intruder was able to access the encryption software,
they would still require the key for that specific day, as the algorithms change
at pre-determined time intervals. In addition to encryption and decryption
security features, other technical safeguards will be implemented to control
software access for authorized users only. These access controls will include,
unique user ID's, emergency access procedures, and automatic log-off.
We have not yet identified or contracted any software developers. We currently
estimate we will require three multi-purpose senior software developers with 6+
years of experience. In addition to having experience developing web
applications in python, they also must have experience as database
administrators and unix systems administrators. They will also require an
extensive background in application security. We may hire individuals or a
suitable firm to carry out this work. We have not yet entered into any contracts
for these services. We will select the successful firm or individuals based on
evaluations of their expertise in developing products in a specific category
such as our planned software, and we will enter into a contract that will
specify milestones, work requirements and cost. We will also ensure that we
retain all rights to all software, enhancements and improvements, conversions,
and add-ons to the product being produced by any third party developer or
contractor. We are planning to complete our basic EMR software, which will be
ready for commercial sale within 6-12 months following the successful completion
of our offering.
Successful completion of our planned product is highly dependent on the
individual contractors or firm we ultimately choose to develop the software. Our
officers and directors will be responsible for the entire development and
production process including manpower requirements and the supervision and
coordination of internal and external resources. We currently do not anticipate
any supply or manpower availability constraints with respect to identifying and
choosing any of the contractors we require. We also believe we have access to
more abundant and cost effective software development contractors in eastern
Europe than in North America or Asia. Because we are at least 12 months away,
from the date hereof, from starting development of the EMR software, any
significant change in these circumstances could materially impact our ability to
complete development and commercialization of the software, our cash
requirements and our operations.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
We plan on selling our products and services directly and indirectly to small
and medium sized, end use, physician offices and clinics. Therefore, we do not
anticipate dependence on one or a few major customers.
GOVERNMENT REGULATIONS
There are numerous laws and regulations that govern the use, storage and
transmission of patient medical records to protect privacy. Laws and regulations
vary significantly by country, and even by state in the USA. Because patient
privacy is of critical importance, laws and regulations are expected to become
even more burdensome to protect against electronic theft, or unauthorized
transmission or use of patient records. In order to comply, we will likely be
required to modify our software and data storage for each jurisdiction in which
we intend to sell our product. Additionally, we are unable to predict the impact
that these modifications and future legislation, legal decisions or regulations
concerning our EMR software may have on our Trademarks associated with elements
of business, financial condition, and results of operations. If we are found to
be negligent in the design of our software which results in unauthorized
transmission or use of patient data, we could be subject to lawsuits and
penalties which could severely affect our business.
27
At the federal level in the USA, the privacy of individually identifiable health
information, the security of electronic protected health information including
EMRs, and confidentiality of identifiable information being used to analyze
patient safety events and improve patient safety is protected under the Health
Insurance Portability and Accountability Act ("HIPPA"). HIPAA requirements and
security rules give patients more control over their health information, set
limits on the use and release of their medical records, and establishes a series
of privacy standards for health care providers which provides penalties for
those who do not follow these standards. EMRs require the use of data encryption
for transmission and storage, ensuring that only the intended recipients are
able to view them. There are other HIPAA data security systems that are
typically installed on health care computer systems and networks, including
firewalls to prevent unauthorized access, and electronic auditing systems which
require users to identify themselves and which log specific records that are
accessed by them. Many health care providers find it useful to have HIPAA data
security audits of their systems performed on a regular basis. These
examinations and reports, if addressed properly, can serve to ensure a high
level of compliance and also to mitigate penalties for inadvertent problems.
HIPAA electronic medical records privacy rules allow health care providers to
use or disclose patient health information, such as diagnostic images,
laboratory tests, diagnoses, and other medical information for treatment
purposes without the patient's authorization. This includes sharing the
information to consult with other providers, including providers who themselves
are not covered entities (as defined by HIPAA), to aid in the treatment of a
different patient, or to refer the patient to a specialist.
Our business is also subject to the HITECH Act (Health Information Technology
for Economic and Clinical Health) which is part of the American Recovery and
Reinvestment Act of 2009. The Act, which is considered to be beneficial to our
business, (provided we can introduce our product in a timely manner), outlines
many new initiatives for the use of technology in the healthcare industry,
including certain incentive payments for implementation of EMR systems by early
adopters by 2014, disincentives for late adopters subsequent to 2014, and
certain "meaningful use" criteria. Meaningful use is the set of standards
defined by the Centers for Medicare & Medicaid Services (CMS) Incentive Programs
that governs the use of electronic health records and allows eligible providers
and hospitals to earn incentive payments by meeting specific criteria. The goal
of meaningful use is to promote the spread of electronic health records to
improve health care in the United States. The benefits of the meaningful use of
EMR's include:
COMPLETE AND ACCURATE INFORMATION: With electronic medical records, providers
have the information they need to provide the best possible care. Providers will
know more about their patients and their health history before they walk into
the examination room.
BETTER ACCESS TO INFORMATION: Electronic medical records facilitate greater
access to the information providers need to diagnose health problems earlier and
improve the health outcomes of their patients. Electronic health records also
allow information to be shared more easily among doctors' offices, hospitals,
and across health systems, leading to better coordination of care.
PATIENT EMPOWERMENT: Electronic health records will help empower patients to
take a more active role in their health and in the health of their families.
Patients can receive electronic copies of their medical records and share their
health information securely over the Internet with their families.
Because we are intending to sell our product in the USA, we do not believe that
regulations of the Slovak Republic will have a material impact on the way we
conduct our business until we sell our products and services in the country.
PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS
& CONCESSIONS
We currently do not own any intellectual property have not obtained any
copyrights, patents or trademarks in respect of any intellectual property.
Software is susceptible to piracy and unauthorized copying. Our primary
28
protection against unauthorized use, duplication and distribution of our
products is copyright and trademark protection of planned software product and
any related elements and enforcement to protect these interests. As we get
closer to developing our product, we plan to copyright and trademark the
following:
* the software, such as any logos;
* Trademarks under which the software is marketed;
* the copyrights for the software
We do not anticipate copyrighting or trademarking any assets over the next 12
months. We plan to register copyrights and trademarks in countries where we
distribute our product. We may seek other protection over these assets if we
have the cash resources to do so.
We have not entered into any franchise agreements or other contracts that have
given, or could give rise to obligations or concessions.
RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS
We plan on spending $22,750 for software development activities over 12 months
from the successful completion of our entire offering. This includes all user
input design, design and programming our basic EMR software and testing. We
believe we will require an additional $50,000 to design and program our planned
vital signs equipment inoperability kit, which is dependent on raising
additional financing and which will follow completion of the basic EMR software.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
In addition to being our sole officer and director, Ms. Gallovicova is currently
our only employee. She is currently planning to devote 20 hours per week to
company matters. Subsequent to successful completion of this Offering, she is
planning to devote as much time as the board of directors determines is
necessary to manage the affairs of the company. There is no formal employment
agreement between the Company and Ms. Gallovicova. If we are successful raising
the maximum amount under our offering, we plan on hiring a full time sales
consultant within 9 months of the completion of the offering. We do not
anticipate hiring any additional employees for the next 12 months.
DESCRIPTION OF PROPERTY
We do not currently own any real property. Our corporate offices are located at
Mlynska 28, 040 01 Kosice, Slovak Republic. We pay $470 annually for this shared
office space. This location will serve as our primary executive offices for the
foreseeable future. Management believes the current premises arrangements are
sufficient for its needs for at least the next 12 months.
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
We plan to contact a market maker immediately following the completion of the
offering and apply to have the shares quoted on the OTC Electronic Bulletin
Board ("OTCBB"). The OTCBB is a regulated quotation service that displays
real-time quotes, last sale prices and volume information in over-the-counter
(OTC) securities. The OTCBB is not an issuer listing service, market or
exchange. Although the OTCBB does not have any listing requirements to be
eligible for quotation on the OTCBB, issuers must remain current in their
filings with the SEC. Market makers are not permitted to begin quotation of a
security of an issuer that does not meet this requirement. Securities already
quoted on the OTCBB that become delinquent in their required filings will be
removed following a 30 or 60 day grace period if they do not make their required
29
filing during that time. We cannot guarantee that our application will be
accepted or approved and our stock listed and quoted for sale. As of the date of
this filing, there have been no discussions or understandings between Zlato with
any market maker regarding participation in a future trading market for our
securities.
As of the date of this filing, there is no public market for our securities.
There has been no public trading of our securities, and, therefore, no high and
low bid pricing. As of the date of this prospectus, we have one shareholder of
record.
RULE 144 SHARES
As of the date of this prospectus, our Officer and Director (affiliate)
beneficially owns all of the 5,000,000 total outstanding shares. These shares
are currently restricted from trading under Rule 144. They will only be
available for resale, within the limitations of Rule 144, to the public if:
* We are no longer a shell company as defined under section 12b-2 of the
Exchange Act. A "shell company" is defined as a company with no or
nominal operations, and with no or nominal assets or assets consisting
solely of cash and cash equivalents.
* We have filed all Exchange Act reports required for at least 12
consecutive months; and
* If applicable, at least one year has elapsed from the time that we
file current Form 10-type of information on Form 8-K or other report
changing our status from a shell company to an entity that is not a
shell company.
At present, we are considered to be a shell company under the Regulations. If we
subsequently meet these requirements, our officer and director would be entitled
to sell within any three month period a number of shares that does not exceed
the greater of: 1% of the number of shares of our common stock then outstanding,
or the average weekly trading volume of Zlato common stock during the four
calendar weeks, preceding the filing of a notice on Form 144 with respect to the
sale for sales exceeding 5,000 shares or an aggregate sale price in excess of
$50,000. If fewer shares at lesser value are sold, no Form 144 is required.
DIVIDENDS
As of the filing of this prospectus, we have not paid any dividends to our
shareholders. There are no restrictions which would limit our ability to pay
dividends on common equity or that are likely to do so in the future. The Nevada
Revised Statutes, however, do prohibit us from declaring dividends where, after
giving effect to the distribution of the dividend, Zlato would not be able to
pay its debts as they become due in the usual course of business, or its total
assets would be less than the sum of the total liabilities plus the amount that
would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
STOCK OPTIONS AND WARRANTS
There are no outstanding stock options or warrants
PENNY STOCK RULES
The Securities and Exchange Commission has also 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
30
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 stocks 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;
* 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 telephone 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 the following to the customer, prior to
effecting any transaction in a penny stock:
- 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 acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a 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 shares, is aware that
she is required to comply with the provisions of Regulation M, promulgated under
the Securities Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes officers and directors, sales agents, any broker-dealer
or other person who participates 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.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Commission a Registration Statement on Form S-1, under
the Securities Act of 1933, as amended, with respect to the securities offered
by this prospectus. This prospectus, which forms a part of the registration
statement, does not contain all the information set forth in the registration
statement, as permitted by the rules and regulations of the Commission. For
further information with respect to us and the securities offered by this
prospectus, reference is made to the registration statement. We have not yet
registered our common shares pursuant to Section 12 of the Act, but we intend to
do so to become a reporting issuer upon effectiveness of this Registration
Statement. As a reporting issuer, we will be required to to file all periodic
31
reports and other information required under the Exchange Act, andfollow the
SEC's proxy rules and distribute an annual report to our securities holders. You
may read or obtain a copy of any information we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information regarding the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public from the SEC web site at www.sec.gov, which contains all of our reports,
and other information we file electronically with the SEC.
FINANCIAL STATEMENTS
The financial statements and related notes of Zlato for our first fiscal year
ended March 31, 2013, and cumulative from inception to March 31, 2013 included
in this prospectus have been audited by Goldman Accounting Services CPA, PLLC
and start on Page F-1.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIMITED OPERATING HISTORY AND NEED FOR ADDITIONAL CAPITAL
Our Company was incorporated in the State of Nevada on February 25, 2013 to
engage in the development and sale of EMR software for small to medium sized
physician offices and clinics. We are a development stage company with very
limited financial backing and assets. We are in the early stages of developing
our proposed product. We currently have no revenues or operating history, and no
customers or users for our product. We anticipate that we will not have a
commercial product ready for sale for at least 12 months from the successful
completion of our Maximum Offering of $50,000. We will then need to raise
additional financing to commercially launch our product and provide additional
functionality. From inception until the date of this filing we have had limited
operating activities, primarily consisting of the incorporation of our company
and the initial equity funding by our officer and director. We received our
initial funding of $15,000 through the sale of common stock to our officer and
director, who purchased 5,000,000 shares at $0.003 per share. We have also
recently developed our Company logo and letter head.
We currently have no employees. During the first stages of our company's growth,
our officer and director will provide her time free of charge to execute our
business plan. Due to limited financial resources, she is planning to dedicate
between 20 hours per week, to ensure all operations are executed. Since we
intend to operate with very limited administrative support, our officer and
director will continue to be responsible for administering the company for at
least the first year of operations. Management has no intention at this time to
hire additional employees during the first year of operations, unless we are
successful in raising the maximum amount under our offering. If so, we plan on
hiring one sales consultant 9 months after the completion of the offering..
We cannot guarantee we will be successful in our business operations. Our
business is subject to all of the risks inherent in the establishment of a new
business enterprise and we are at least 18-24 months away (from the date hereof)
from generating any revenue, if at all. We believe that the funds from this
offering will allow us to operate for one year, only if we are successful in
raising the Maximum Offering.
12 MONTH PLAN OF OPERATION
Our plan of operations over the 12 month period following successful completion
of our offering is to create fully functional and compliant EMR software. This
product will be commercially viable, and available for purchase when completed.
Initially, the EMR system is planned to be a software tool that will collect and
capture patient data in electronic format. We are also planning to provide file
output in PDF format, so it can be emailed by the user.
The patient features that our EMR will include in this first phase are:
32
Patient Profile: First & Last Name, Contacts (street / city / zip code / country
/ phone / email)
Birthdate, Gender, Race, Weight, Height
Government or private care provider health identification number
Patient history including (family history
Medication history
Detailed appointment history
Scheduling
Patient next steps (Specialist? Pharmacy? Radiology? Routines? Other?)
Billing
All parameters will be PDF format enabled for printing and email, and will have
a designated output directory associated with them for efficient clinical access
and viewing. We are also planning to design all data fields with a text-based
editor to allow for physician and any other user notes to be easily entered and
captured on the patient file. In order to achieve our plan, we have established
the following goals for this initial 12 month period (please refer to the
section below entitled "Milestones" for a detailed description of our 12 month
Plan of Operation):
* Create product overview and slide deck for investors
* Identify all security and compliance requirements for our target
market
* Test and analyze various platform architectures and operating systems
to ensure support of the functional / security requirements
* Develop software on all parameters including bug tracking and project
management
* Quality control tests on all software parameters
* Prepare test data into prototype
* Launch fully functional EMR software
* Secure additional suitable financing to market our initial EMR
software product and commence with the second phase of our product
development.
Second phase product development will focus on interconnectivity of our EMR
software with various third party vital signs monitors, such as blood pressure
monitors or temperature monitors. We will achieve this by developing a
sophisticated `software development kit', or software tool which will enable
diagnostic manufacturers to have their vital sign monitors "speak" to our
system, so that patient vital signs can be correctly captured in the EMR system.
We believe this is very important to our long term survival and profitability,
as it will increase clinical workflow, reduce clinic operating costs and reduce
patient errors for our clients, and give us a competitive edge over our
competitors.
We currently believe we will require and additional $200,000 for the commercial
launch of our basic EMR software and another 8-10 months (subsequent to the
completion of our basic EMR software) and $50,000 to develop the software
development kit for interoperability with third parties. We do not have any
arrangements in place for this additional financing.
Our long term business objectives are:
* Achieve ongoing profitability from the sale of our products and create
value for our stockholders, users and clients.
* Become a well-recognized brand for easy to use , cost effective EMR
software and connectivity to third party diagnostic equipment
* Develop a leadership role over time in our specialty.
Our ability to achieve our 12 month business objectives and goals is entirely
dependent upon the amount of shares sold in this Offering.
If we are not able to sell 750,000 shares we can maintain our reporting
requirements with the SEC and complete our research of compliance and regulatory
issues but we will not be able to develop our basic EMR software. If we are not
able to sell a minimum of 500,000 shares of our common stock in this Offering,
33
we can develop our website and maintain our reporting with the SEC and remain in
good standing with the state of Nevada. If we do not sell at least 250,000
shares of our common stock we will not be able to maintain our reporting status
with the SEC and remain in good standing with the state of Nevada without
additional funds. These funds may be raised through equity financing, debt
financing, or other sources such as shareholder loans, which may result in the
dilution in the equity ownership of our shares. We currently do not have any
arrangements in place to cover this cash shortfall.
We currently do not have any arrangements regarding this Offering or following
this Offering for further financing and we may not be able to obtain financing
when required. Our future is dependent upon our ability to obtain further
financing, the successful development of our planned product, a successful
marketing and promotion program, and achieving a profitable level of operations.
The issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments. There are no assurances that we will be
able to obtain further funds required for our continued operations. Even if
additional financing is available, it may not be available on terms we find
favorable. At this time, there are no anticipated sources of additional funds in
place. Failure to secure the needed additional financing will have an adverse
effect on our ability to remain in business.
If we are successful in selling all 1,000,000 common shares under this Offering,
the net proceeds will be used for the development of our basic EMR software,
hire a sales consultant to commence with initial marketing, and general working
capital, during the twelve months following the successful completion of this
Offering. In all instances, after the effectiveness of the registration
statement of which this prospectus is a part, we will require some amount of
working capital to maintain our basic operations and comply with our public
reporting obligations. In addition to changing our allocation of cash because of
the amount of proceeds received, we may change the use of proceeds because of
changes in our business plan. Investors should understand that we have wide
discretion over the use of proceeds.
PROPOSED ACTIVITIES
EXPENDITURES
The following chart provides an overview of our budgeted expenditures for the 12
months following the completion of this Offering. The expenditures are
categorized by significant area of activity.
If 10% of If 25% of If 50% of If 75% of If 100% of
Shares Sold Shares Sold Shares Sold Shares Sold Shares Sold
----------- ----------- ----------- ----------- -----------
SHARES SOLD 100,000 250,000 500,000 750,000 1,000,000
GROSS PROCEEDS $ 5,000 $ 12,500 $ 25,000 $ 37,500 $ 50,000
NET CASH - MARCH 31, 2013 14,445 14,445 14,445 14,445 14,445
TOTAL BEFORE EXPENSES 19,445 26,945 39,445 51,945 64,445
OFFERING EXPENSES
Legal & Accounting 7,200 7,200 7,200 7,200 7,200
Edgar Agent Fees 800 800 800 800 800
Transfer Agent Fees 2,500 2,500 2,500 2,500 2,500
-------- -------- -------- -------- ----------
TOTAL OFFERING EXPENSES 10,500 10,500 10,500 10,500 10,500
-------- -------- -------- -------- ----------
NET AFTER OFFERING EXPENSES 8,945 16,445 28,945 41,445 53,945
EXPENDITURES
Public company reporting expenses 12,000 12,000 12,000 12,000 12,000
Create web layout/design and launch 1,200 1,200 1,200 1,200
Create product overview slideshow 800 800 800
34
Research and identify security compliance
requirements 2,000 2,000 2,000 2,000
Design User Interface for data input 1,250 1,250 1,250
Software development for basic EMR system 7,500 20,000 20,000
Alpha product testing 1,500
Sales Consultant 9,000
Press and investor materials 3,000 3,000 5,000
Office & misc 1,000 1,000 1,000 1,000
-------- -------- -------- -------- ----------
Net remaining balance $ (3,055) $ (245) $ 195 $ 195 $ 195
======== ======== ======== ======== ==========
MILESTONES
Below is a brief description of our planned activities which we expect to
commence immediately after the Offering is completed, assuming that we were able
to sell 1,000,000 shares of our common stock.
MONTHS 1 TO 6 FOLLOWING COMPLETION OF THIS OFFERING
We are planning the following tasks:
* Develop and plan out preliminary website layout, design and content
with an experienced third party website developer. We plan to use our
website for our corporate and product slide presentation, in addition
to an investor submission form and contact information.
* Build and launch the website
* Keyword and geo-location Google and other related search engine
optimization
* Design our company logo and initial corporate trademark
We are budgeting $1,200 for all website related costs.
Upon completion of our website, we then plan create the downloadable,
interactive, corporate and detailed product overview slideshow which we will
make available on our website. We will work closely with a creative development
firm, which we will have to select. We are budgeting $800 for this task.
We will also:
* Research and develop security and compliance requirements for the USA
and each state where we ultimately plan to sell our EMR software.
Medical records contain sensitive and confidential individual patient
information that is afforded different levels of protection in
different jurisdictions. We need to ensure that we comply with all
regulations and store all patient information safely and securely.
* Develop all user interfaces and user screen mockups, which will be
used as blueprints by our software developers for the design and
programming of our EMR software. These graphical images govern the
overall architecture of how the user works with the EMR input and
displays and how it relates to our patient database.
MONTHS 6 TO 12 FOLLOWING COMPLETION OF THIS OFFERING
We plan to develop and test our first phase EMR software during this period.
This process will include the following steps:
* Setup development, testing and production of a functional prototype of
our basic EMR system. This will also encompass the selection of the
ideal operating system and database and hardware configurations.
35
* Test and confirm our proposed software programs will support
functional and security requirements, as it relates to our patient
profile features. This will ensure the security characteristics are
recognized within our feature functionality sets, and work properly.
* Ensure software functions according to specifications. This will
include numerous tests using various data, similar to that to be
encountered by physicians and health professionals in real settings,
and quality assurance cycles. If we find that it appears to be
functioning properly, we then plan to release it to potential clients
for further beta product testing. The objective is to discover bugs
and user issues which occur in situations we might not have thought
of. Customers often use the software in ways we might not understand
and this will give us the opportunity to rectify the issues prior to
actual commercial release.
Concurrent with the EMR software development, we plan to develop an automated
software deployment system which will enable us to either run the software for
licensed users on our servers, or sell our software to clients via the internet.
Fixes and updates can also be easily deployed through this system, ensuring that
all of our clients are running on the latest version.
We are budgeting $23,000 for the above noted development. We also plan to hire a
contract sales consultant at a monthly cost of $3,000 or $9,000 in total
commencing in the third quarter. His or her initial responsibilities will focus
on the selection of several beta test clients to test our software prior to
commercial sale.
Ms. Gallovicova will also be responsible for developing all job specifications
for our third party contract software developers or firms. She will also lead
the selection of the appropriate open source operating system and database
software. She will be responsible for developing the specifications for the
software and will select the user interfaces, and how the user interacts with
all aspects of the EMR software. She will also be responsible for hiring the
sales consultant, and will oversee the sales consultant in their role
specifically as beta test subjects are selected and the marketing plan is
developed.
Concurrent with the development and testing of our EMR software, our Officer and
Director will also focus her efforts on securing suitable additional financing
to complete the commercial development successfully launch our EMR software. We
currently estimate that we will require $200,000 for our initial commercial
launch and $50,000 for interoperability of our software with various third party
diagnostic and vital signs monitor equipment companies. In conjunction with this
task, we plan to:
* Identify potential financial/investment contacts
* Create a comprehensive investment information package including our
existing software features & functionality, competitive differences
and current market overview, proposed automation with vital signs
capabilities, overall software architecture (software map showing
entire system), financing requirements and planned use of proceeds.
GOING CONCERN
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated within
the next 12 months. There is no assurance we will ever reach that point.
RESULTS OF OPERATIONS
From the inception of our company on February 25, 2013 to March 31, 2013 (our
first fiscal year end) we incurred a loss of $555 all of which was incurred for
the incorporation of our company. We believe we will continue to incur losses
into the foreseeable future as we develop our business.
36
PURCHASE OR SALE OF EQUIPMENT
We have not purchased or sold any plants or significant equipment, and have no
plans to do so over the next 12 months.
REVENUES
We did not generate any revenues from February 25, 2013 (inception) to March 31,
2013. We will not be in a position to generate revenues for at least 18-24
months from the date hereof. Future revenue generation is dependent on the
successful development and commercial launch of our EMR software. We currently
estimate that we will require an additional financing of $200,000 to launch our
product.
LIQUIDITY AND CAPITAL RESOURCES
Historically, we have financed our cash flow and operations solely from the sale
of $15,000 of common stock to our director. Of the $15,000 we raised, $555 was
used for operating activities since our inception on February 25, 2013. As of
March 31, 2013, our resultant cash and net working capital balance was $14,445.
As of the date hereof, our net cash and working capital balance is $11,055. We
believe our current cash and net working capital balance is only sufficient to
cover our expenses for the next 4-6 months. If we cannot raise any additional
financing prior to the expiry of this timeframe, we will be forced to cease
operations and our business will fail.
Even under a limited operations scenario to maintain our corporate existence, we
believe we will require a minimum of $11,000 in additional cash over the next 12
months to pay for the remainder of our total offering costs, and to maintain our
regulatory reporting and filings. Other than our planned offering, we currently
have no arrangement in place to cover this shortfall.
In order to achieve our stated business plan goals, we require the funding from
this offering. We are a development stage company and have generated no revenue
to date. We cannot guarantee that we will be able to sell all the shares
required. If we are successful, any money raised will be applied to the items
set forth in the Use of Proceeds section of this prospectus.
Even if we are successful in raising all of the funding under this offering, we
will still not be in a position to generate any significant revenues or become
profitable. We still must raise significant additional funding to continue with
our business. The offering is only sufficient to enable us to develop our basic
EMR software. We believe we will require an additional $200,000 for marketing
expenses for the commercial launch of our basic EMR software and another 8-10
months and $50,000 to develop the software development kit for interoperability
with third party monitoring equipment manufacturers.
These funds will have to be raised through equity financing, debt financing, or
other sources, which may result in the dilution in the equity ownership of our
shares. We will also need more funds if the costs of commercialization and
further development are greater than we have budgeted. We will also require
additional financing to sustain our business operations if we are ultimately not
successful in earning revenues. We currently do not have any arrangements
regarding this Offering or following this Offering for further financing and we
may not be able to obtain financing when required. Obtaining commercial loans,
assuming those loans would be available, will increase our liabilities and
future cash commitments.
There are no assurances that we will be able to obtain further funds required
for our continued operations. Even if additional financing is available, it may
not be available on terms we find favorable. At this time, there are no
anticipated sources of additional funds in place. Failure to secure the needed
additional financing will have an adverse effect on our ability to remain in
business.
37
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on our results of operations, financial position or
cash flow.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES
There have been no changes in and/or disagreements with Goldman Accounting
Services CPA, PLLC on accounting and financial disclosure matters.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
All directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Date First Elected
Name Position Held with the Company Age or Appointed
---- ------------------------------ --- ------------
Dana Gallovicova President, CEO Secretary Treasurer 40 February 25, 2013
and Director
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience of
each director and executive officer during at least the past five years,
indicating each person's business experience, principal occupation during the
period, and the name and principal business of the organization by which he was
employed.
MS. DANA GALLOVICOVA, PRESIDENT, CEO, SECRETARY TREASURER AND MEMBER OF THE
BOARD OF DIRECTORS
Ms. Gallovicova has been serving as our President, CEO, Secretary Treasurer and
a Director since February 25, 2013. The term of her office is for one year and
is renewable on an annual basis.
She received an Economics Diploma from the Business Academy of Kosice, Slovakia
in 1991 and a Nursing Care Certificate from the Nursing College of Bratislava,
Slovakia in 1995. She has acted as the Executive Assistant to the Mayor's Office
for the City of Kosice, Slovakia since 2005. Kosice is the second largest city
in Slovakia Republic with a population of approximately 250,000 inhabitants. Her
duties include oversight of over 5,000 property tax accounts and she is
responsible for assessments, invoicing and collections. She is also responsible
for planning and organizing civic functions and events for the Mayor, and
assists the City Manager with civic budgets, related presentations and business
plans for the city. These experiences, qualifications and attributes have led to
our conclusion that Ms. Gallovicova should be serving as a member of our Board
of Directors in light of our business and structure.
She is currently devoting approximately 20 hours a week of his time to our
company, and is planning to devote 40 hours per week if necessary during the
next 12 months of operation.
She is not an officer or director of any reporting company that files annual,
quarterly, or periodic reports with the United States Securities and Exchange
Commission.
38
COMMITTEES OF THE BOARD
We do not have an audit or compensation committee at this time.
FAMILY RELATIONSHIPS
None.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Our sole director, executive officer and control person has not been involved in
any of the following events during the past ten years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
CONFLICT OF INTEREST
Our sole officer or director is not subject to a conflict of interest.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid by
us to our sole officer from our date of incorporation on February 25, 2013 to
March 31, 2013, our first completed fiscal year end.
SUMMARY COMPENSATION TABLE
Change in
Pension
Value &
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary($) Bonus($) Awards($) Awards($) sation($) Earnings($) sation($) Totals($)
------------ ---- --------- -------- --------- --------- --------- ----------- --------- ---------
Dana Gallovicova 2013 0 0 0 0 0 0 0 0
President, CEO
Secretary Treasurer
39
Since our date of incorporation to the date of this prospectus, our executive
officer has not received and are not accruing any compensation. She anticipates
this arrangement will remain in effect for the next 12 months. We have not
entered into any employment or consulting agreements with our sole director and
executive officer.
The following table sets forth information with respect to compensation paid by
us to our director from our date of incorporation on February 25, 2013 to March
31, 2013, our first completed fiscal year end.
DIRECTOR COMPENSATION TABLE
Change in
Pension
Fees Value and
Earned Non-Equity Nonqualified All
or Incentive Deferred Other
Paid in Stock Option Plan Compensation Compen-
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) sation($) Total($)
---- ------- --------- --------- --------------- ----------- --------- --------
Dana Gallovicova 0 0 0 0 0 0 0
All compensation received by our sole officer and director has been disclosed.
OPTION/SAR GRANTS
There are no stock option, retirement, pension, or profit sharing plans for the
benefit of our sole officer and director.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans.
DIRECTORS COMPENSATION
We have no formal plan for compensating our director for his services in her
capacity as director. Our director is entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. The board of directors may award special
remuneration to any director undertaking any special services on behalf of Zlato
other than services ordinarily required of a director. Since inception to the
date hereof, no director received and/or accrued any compensation for her
services as a director, including committee participation and/or special
assignments.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following is a table detailing the current shareholders of Zlato owning 5%
or more of the common stock, and shares owned by our directors and officers as
of June 28, 2013:
40
Amount and Amount and
Nature of Nature of
Beneficial Beneficial
Ownership Ownership
Title of Name and Address of Percent of Class Prior to Subsequent to
Class Beneficial Owner Prior to Offering(2) Offering Offering
----- ---------------- -------------------- -------- --------
Common Dana Gallovicova 5,000,000 5,000,000 100.00%
Common Directors and officers
as a group (1) 5,000,000 5,000,000 100.00%
----------
1. Represents beneficial ownership
2. Based on the total of 5,000,000 outstanding common shares as of the date
hereof
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ms. Gallovicova will not be paid for any underwriting services that she performs
on our behalf with respect to this offering. She will not receive any interest
on any funds that she may advance to us for expenses incurred prior to the
offering being closed. Any funds that she may loan to our company will be repaid
from the proceeds of the offering.
Ms. Gallovicova purchased 5,000,000 shares of our common stock for $0.003 per
share. All of these shares are restricted securities, and are held by the sole
officer and director of our Company. (See "Principal Stockholders".)
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/her position, if he/she acted in good faith
and in a manner he/she 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/her 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 sin 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.
41
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of ZlatoInc.
We have audited the accompanying balance sheet of Zlato Inc. (a development
stage company) (the"Company") as of March 31, 2013 and the related statements of
operations, stockholders' equity, and cash flows for the period from February
25, 2013 (inception) to March 31, 2013. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Zlato Inc. as of March 31, 2013
and the results of its operations and its cash flows for the period from
February 25, 2013 (inception) to March 31, 2013, in conformity with accounting
principles generally accepted in the United States of America.
As discussed in Note 3 to the financial statements, the Company is a development
stage company engaged in developing and then marketing electronic medical
records software to small and medium sized physician offices and clinics. There
is substantial doubt about the Company's ability to continue as a going concern
because of the Company's uncertainty to raise capital and the uncertainty of
management's ability to execute on its business plan. Management's plans
concerning these matters are also described in Note 3. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
/s/ Goldman Accounting Services CPA, PLLC
--------------------------------------------------
Goldman Accounting Services CPA, PLLC
Suffern, NY
May 14, 2013
F-1
ZLATO INC.
(A Development Stage Company)
BALANCE SHEET
March 31, 2013
--------------
ASSETS
Current assets
Cash $ 14,445
--------
Total current assets 14,445
--------
Total assets $ 14,445
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities $ --
--------
Stockholders' equity (Note 4,5)
Authorized:
75,000,000 common shares par value $0.001
Issued and outstanding:
5,000,000 common shares 5,000
Additional paid-in capital 10,000
Deficit accumulated during the development stage (555)
--------
Total stockholders' equity 14,445
--------
Total liabilities and stockholders' equity $ 14,445
========
The accompanying notes are an integral part of these financial statements.
F-2
ZLATO INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Date of
Incorporation on
February 25, 2013 to
March 31, 2013
--------------
REVENUE $ --
-----------
OPERATING EXPENSES
Organization 555
-----------
Loss before income taxes (555)
Provision for income taxes --
-----------
Net loss $ (555)
===========
Basic and diluted loss per common share (1)
Weighted average number of common shares
outstanding (Note 4) 5,000,000
===========
----------
(1) less than $0.01
The accompanying notes are an integral part of these financial statements.
F-3
ZLATO INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Additional During the Total
-------------------- Paid in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, February 25, 2013 -- $ -- $ -- $ -- $ --
Initial capitalization, sale of
common stock to Director at
$0.003 per share on February 25, 2013 5,000,000 5,000 10,000 -- 15,000
Net loss for the period -- -- -- (555) (555)
--------- ------- ------- --------- ---------
Balance March 31, 2013 5,000,000 $ 5,00 $10,00 $ (555) $ 14,445
========= ======= ======= ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
ZLATO INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Date of
Incorporation on
February 25, 2013 to
March 31, 2013
--------------
OPERATING ACTIVITIES
Net loss for the period $ (555)
--------
Net cash used for operating activities (555)
--------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 15,000
--------
Net cash provided by financing activities 15,000
--------
Increase in cash during the period 14,445
Cash, beginning of the period --
--------
Cash, end of the period $ 14,445
========
Supplemental disclosure with respect to cash flows:
Cash paid for income taxes $ --
Cash paid for interest $ --
The accompanying notes are an integral part of these financial statements.
F-5
ZLATO INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
The Company was originally incorporated under the laws of the state of Nevada on
February 25, 2013. The Company is devoting substantially all of its present
efforts to establish a new business. It is considered a development stage
company, and has had no revenues from operations to date.
Initial operations have included organization and capital formation. Management
is planning to develop and then market electronic medical record software for
small to medium sized physician offices and clinics.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
The accounting and reporting policies of the Company conform to U.S. generally
accepted accounting principles applicable to development stage enterprises. In
the opinion of management, all adjustments considered necessary for fair
presentation have been included in the financial statements. All losses
accumulated since inception has been considered as part of the Company's
development stage activities.
DEVELOPMENT STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development-stage companies.
A development-stage company is one in which planned principal operations have
not commenced or if its operations have commenced, there has been no significant
revenues there from.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared using the accrual
basis of accounting in accordance with generally accepted accounting principles
in the United States of America and are presented in U.S. dollars. The Company
has adopted a March 31 fiscal year end.
F-6
ZLATO INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity. The Company has not issued any options or warrants or
similar securities since inception.
DIVIDENDS
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
CASH
The Company's cash consists of funds deposited with its lawyer into the law
firm's trust account.
FOREIGN CURRENCY TRANSLATION
The Company has adopted the US dollar as its functional and reporting currency
because most of its transactions are denominated in US currency.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates the fair value of financial instruments using the
available market information and valuation methods. Considerable judgment is
required in estimating fair value. Accordingly, the estimates of fair value may
not be indicative of the amounts the Company could realize in a current market
exchange.
INCOME TAXES
A deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carryforwards.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion, or all of the deferred
tax assets, will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
F-7
ZLATO INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
The Company will recognize revenue when products are fully delivered or services
have been provided and collection is reasonably assured.
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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and satisfaction of liabilities in the normal
course of business. The Company has net losses from the date of incorporation on
February 25, 2013 to March 31, 2013 of $555. The Company intends to fund its
expenditures through equity financing arrangements, which may be insufficient to
fund its proposed development expenditures, working capital and other cash
requirements through the next fiscal year ending March 31, 2014.
The ability of the Company to emerge from the development stage and continue as
a going concern is dependent upon the Company's successful efforts to raise
sufficient capital for its business plans and then attaining profitable
operations. In response to these issues, management has planned the following
actions:
- The Company is planning to file and clear a Registration Statement
with the SEC to raise additional equity funds through a public
offering.
- Management is currently formulating plans to develop and sell
electronic medical records software to generate future revenues. There
can be no assurances, however, that management's expectations of
future revenues will be realized.
F-8
ZLATO INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
NOTE 3. GOING CONCERN (CONTINUED)
As of the date of the financial statements, there were no commitments for the
additional equity funding. Management estimates the minimum amount of additional
funding necessary to enable the Company to carry out its intended business plan
and remain viable for at least the twelve months following the date of the
financial statements is approximately $50,000. These factors, among others,
raise substantial doubt about the Company's ability to continue as a going
concern. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 4. STOCKHOLDERS' EQUITY
AUTHORIZED
The Company is authorized to issue 75,000,000 shares of $0.001 par value common
stock. All common stock shares have equal voting rights, are non-assessable and
have one vote per share. Voting rights are not cumulative and, therefore, the
holders of more than 50% of the common stock could, if they choose to do so,
elect all of the directors of the Company.
ISSUED AND OUTSTANDING
On February 25, 2013 (inception), the Company issued 5,000,000 shares of its
common shares to its President, Secretary Treasurer and Director for cash of
$.003 per share or$15,000 in aggregate. See Note 5.
NOTE 5. RELATED PARTY TRANSACTIONS
The Company's officer and director is involved in other business activities and
may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
On February 25, 2013, the Company issued 5,000,000 shares of its common stock to
its President, Secretary Treasurer and Director for cash of $15,000. See Note 4.
NOTE 6. INCOME TAXES
Net deferred tax assets are $0. Realization of deferred tax assets is dependent
upon sufficient future taxable income during the period that deductible
temporary differences and carry-forwards are expected to be available to reduce
taxable income. As the achievement of required future taxable income is
uncertain, the Company recorded a 100% valuation allowance. Management believes
it is likely that any deferred tax assets will not be realized.
F-9
ZLATO INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
NOTE 6. INCOME TAXES (CONTINUED)
The Company has a net operating loss carry forward of approximately $555 which
will expire by March 31, 2033.
NOTE 7. SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations
subsequent to March 31, 2013 and has determined that it does not have any
material subsequent events to disclose in these financial statements.
F-10
INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering are denoted below. Please note that all
costs are currently estimates.
Expenditure Item Amount
---------------- ------
Legal Review and Opinion $ 3,500
Audit and review Fees 3,700
Edgar conversion fees and printing 800
Transfer agent 2,500
-------
TOTAL $10,500
=======
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of Zlato allow for the indemnification of our officers and directors
in regard to their carrying out the duties of their offices. The board of
directors will make determination regarding the indemnification of the director,
officer or employee as is proper under the circumstances if he/she has met the
applicable standard of conduct set forth in the Nevada General Corporation Law.
Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
"1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals there from, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
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3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection
with the defense.
4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
d. If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
a. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to section 2 or for the advancement of expenses made
pursuant to section 5, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or
omission involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
b. Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
c. The Articles of Incorporation provides that "the Corporation shall
indemnify its officers, directors, employees and agents to the fullest
extent permitted by the General Corporation Law of Nevada, as amended
from time to time."
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling Impact Explorations, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
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RECENT SALES OF UNREGISTERED SECURITIES
We have sold securities within the past three years without registering the
securities under the Securities Act of 1933 on one occasion.
On February 25, 2013 Ms. Dana Gallovicova, our sole officer and Director,
purchased 5,000,000 shares of our common stock for $0.003 per share or an
aggregate of $15,000. No underwriters were used, and no commissions or other
remuneration was paid except to Zlato. The securities were sold in an offshore
transaction relying on Rule 903 of Regulation S of the Securities Act of 1933.
Ms. Gallovicova is not a U.S. person as that term is defined in Regulation S. No
directed selling efforts were made in the United States by Zlato, any
distributor, any of their respective affiliates or any person acting on behalf
of any of the foregoing. We are subject to Category 3 of Rule 903 of Regulation
S and accordingly we implemented the offering restrictions required by Category
3 of Rule 903 of Regulation S by including a legend on all offering materials
and documents which stated that the shares have not been registered under the
Securities Act of 1933 and may not be offered or sold in the United States or to
US persons unless the shares are registered under the Securities Act of 1933, or
an exemption from the registration requirements of the Securities Act of 1933 is
available. The offering materials and documents also contained a statement that
hedging transactions involving the shares may not be conducted unless in
compliance with the Securities Act of 1933. The shares continue to be subject to
Rule 144 of the Securities Act of 1933.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Number Description
------ -----------
3.1 Articles of Incorporation. (1)
3.2 Bylaws. (1)
5.1 Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the
legality of securities being offered. (1)
10.1 Form of Subscription Agreement.
23.1 Consent of Independent Auditor.
23.2 Consent of Law Offices of Thomas E. Puzzo, PLLC (contained in
Exhibit 5.1). (1)
----------
(1) Incorporated by reference to Registration Statement on Form S-1 (File No.
333-188610) filed with the Commission May 15, 2013.
UNDERTAKINGS
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;
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
II-3
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
2. That, for the purpose of determining any liability under the Securities
Act of 1933, 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. That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B (230.430B of this chapter):
A. Each prospectus filed by the registrant pursuant to Rule
424(b)(3)shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and
included in the registration statement; and
B. Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act of
1933 shall be deemed to be Part of and included in the
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the
first contract of sale of securities in the offering described in
the prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. 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 effective date, 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 effective date; or
ii. 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
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statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date
of first use.
5. That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 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.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to our director, officer and controlling persons of the small business
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer 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 small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act, and will be governed by the
final adjudication of such issue.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form S-1, as amended, and authorized this
registration statement to be signed on its behalf by the undersigned, in the
city of Kosice, Slovak Republic on July 2, 2013.
/s/ Dana Gallovicova
-----------------------------------
Dana Gallovicova
President, CEO Secretary/Treasurer,
Principal Executive, Financial and
Accounting Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
/s/ Dana Gallovicova July 2, 2013
-----------------------------------
Dana Gallovicova
Director
Principal Executive, Financial and
Accounting Officer
II-6
EXHIBIT INDEX
Number Description
------ -----------
3.1 Articles of Incorporation. (1)
3.2 Bylaws. (1)
5.1 Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the
legality of securities being offered. (1)
10.1 Form of Subscription Agreement.
23.1 Consent of Independent Auditor.
23.2 Consent of Law Offices of Thomas E. Puzzo, PLLC (contained in
Exhibit 5.1). (1)
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(1) Incorporated by reference to Registration Statement on Form S-1 (File No.
333-188610) filed with the Commission May 15, 2013.
