As
filed with the Securities and Exchange Commission on February 4,
2008
Registration
No. 333-149036
U.
S. SECURITIES AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
S-1/A
Pre-Effective
Amendment No. 1 to Form SB-2
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
TITLE
STARTS ONLINE, INC.
(Name
of
Registrant in its Charter)
Nevada
(State
or Jurisdiction of
Incorporation
or Organization)
|
6541
(Primary
Standard Industrial
Classification
Code Number)
|
26-1394771
(I.R.S.
Employer
Identification
No.)
|
7007
College Boulevard
Suite
270
Overland
Park, KS 66211
(Address
and Telephone Number of Principal Executive Offices)
Mark
DeFoor
President
and Chief Executive Officer
Title
Starts Online, Inc.
7007
College Boulevard
Suite
270
Overland
Park, KS 66211
913.832.0072
(Name,
Address and Telephone Number of Agent for Service)
Copies
of all communications to:
Bartly
J.
Loethen
Synergy
Law Group, LLC
730
West
Randolph Street, 6th
Floor
Chicago,
IL 60661
312.454.0015
Approximate
Date of Commencement of Proposed Sale to the Public:
As soon
as practicable after the effective date of this Registration Statement.
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act, check the
following box. o
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If
this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated file, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
|
o
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Accelerated
filer
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o
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Non-accelerated
filer
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o
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Smaller
reporting company
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x
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CALCULATION
OF REGISTRATION FEE
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Title of Each Class of
Securities to Be Registered
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Amount to Be
Registered
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Proposed Maximum
Offering Price per Share(1)
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Proposed Maximum
Aggregate Offering Price
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Amount of
Registration Fee(2)
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Common
Stock
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900,000
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$
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0.25
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$
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225,000
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$
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8.84
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(1)
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This
price was arbitrarily determined by the Company.
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(2)
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Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457 under the Securities Act.
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(3)
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Previously
paid.
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The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
EXPLANATORY
NOTE:
Title
Starts Online, Inc. previously filed a registration statement on Form SB-2
(SEC
File No. 333-149036) on February 4, 2008 to register 900,000 shares of common
stock. This pre-effective amendment amends the registration statement to update
certain information contained therein and is filed as a registration statement
on Form S-1 to comply with SEC rules and regulations which became effective
February 4, 2008.
The
information in this prospectus is not complete and may be changed. We 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 jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, dated May 5, 2008
PRELIMINARY
PROSPECTUS
TITLE
STARTS ONLINE, INC.
900,000
SHARES OF COMMON STOCK
This
prospectus relates to the offering of up to 900,000 shares of common stock
of
Title Starts Online, Inc., (the “Company”) in a self-underwritten direct public
offering, without any participation by underwriters or broker-dealers. The
shares will be sold through the efforts of our officers and director. The
offering price is $0.25 per share (the “Offering Price”). The offering period
will begin on the date this registration statement is declared effective by
the
Securities and Exchange Commission (the “SEC”) and continue, unless extended or
terminated, until 5:00 P.M. Local Time, on August 29, 2008 (the “Offering
Period”). In the event that 200,000 shares are not sold within the Offering
Period, all money received by us will be promptly returned without interest
or
deduction of any kind. Subscription funds will be held until closing in a
separate account at an insured institution. The minimum purchase requirement
for
each investor in this offering is $1,250 or 5,000 shares. Prior to this
offering, there has been no public market for the common stock.
THE
PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 6.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
You
should rely only on the information contained in this Prospectus and the
information we have referred you to. We have not authorized any person to
provide you with any information about this Offering, the Company, or the shares
of our Common Stock offered hereby that is different from the information
included in this Prospectus. If anyone provides you with different information,
you should not rely on it.
The
date
of this prospectus is May 5, 2008
TABLE
OF CONTENTS
Prospectus
Summary
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4
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Risk
Factors
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6
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Forward
Looking Statements
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10
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Use
of Proceeds
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11
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Determination
of Offering Price
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11
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Plan
of Distribution
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12
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Legal
Proceedings
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13
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Directors
and Officers
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13
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Beneficial
Ownership
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14
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Description
of Securities
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14
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Interests
of Named Experts and Counsel
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15
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Disclosure
of Commission Position on Indemnification for
Securities Act Liabilities
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16
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Description
of Business
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16
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Management's
Discussion and Analysis or Plan of Operation
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19
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Description
of Property
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20
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Experts
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20
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Certain
Relationships and Related Transactions
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20
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Market
for Common Equity and Related Stockholder Matters
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20
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Executive
Compensation
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21
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22
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Financial
Statements
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F-1
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Prospectus
Summary
This
summary highlights information contained elsewhere in this Prospectus and may
not contain all of the information you should consider before investing in
the
shares. You are urged to read this Prospectus in its entirety, including the
information under “Risk Factors. Unless the context indicates otherwise, the
words “we,” “us” “our” or the “Company” refer to Title Starts Online, Inc.
Overview
This
Prospectus relates to the offering of shares by Title Starts Online, Inc.,
a
Nevada corporation. The Company proposes to raise a minimum amount of $50,000
(the “Minimum Offering Amount”) and an maximum amount of $225,000 (the “Maximum
Offering Amount”) through the sale of a minimum of 200,000 shares and a maximum
of 900,000 shares of Company common stock with a par value $.001 (each a “Share”
and collectively the “Shares”) at the price of $0.25 per Share (the “Offering”)
as more fully described in “Plan
of Distribution.”
The
Company
Title
Starts Online, Inc. was incorporated under the laws of the state of Nevada
on
November 13, 2007. The Company's principal offices are located at 7007 College
Boulevard, Suite 270, Overland Park, KS 66211. Our telephone number there is
913.832.0072. Our fax number is 913.747.3001. We are also in the process of
creating a website which will be www.titlestarts.com. Information included
on
our website is not a part of this Prospectus.
The
Company is in its development stage with no revenues to date. The majority
of
the activities to date have revolved around defining requirements from
residential title abstractors in the Kansas City area to determine the value
proposition of a consolidated title start website business. In the title
insurance business, abstractors are required to research any and all
encumbrances on specific properties which are in the process of being refinanced
or sold. This search is completed by merging data from a variety of sources,
some online and some in log books physically maintained by local governmental
entities and private production plants. The research results are then compiled
into a commitment of title insurance which is submitted to the entity requesting
the information. The Company intends to develop a central repository for title
starts and plans to deliver two categories of products - title starts and a
title search template - along with a tips and tools area via the Company’s
website. The website will have the functionality to manage new title search
findings based on unique user identification to facilitate order processing,
to
offer remote storage and minimize redundant data entry. Users will also have
the
ability to shop for existing title starts and utilize innovative search
techniques to expedite their search.
Mark
DeFoor, the primary founder of the Company, is also a Director, President and
Chief Executive Officer. Mr. DeFoor earned a Bachelor’s of Business
Administration (1993) and a Master’s of Business Administration (1995) from the
University of Missouri at Kansas City. Mr. DeFoor’s previous experience includes
the development of the National Association of Insurance Commissions Central
Repository of Producer Agents as well as the operation, purchase and sale of
several title insurance companies. The Company’s registration of the Shares is
intended to provide title abstractors an incentive to become a part of the
Company through acquiring shares in a company for which there is a potential
market to sell the Shares. While the registration of its Shares is for the
purpose of creating a public market, there is no guarantee that a public market
will ever exist for the Company’s Shares or that, if developed, can be
sustained.
The
Offering
Securities
Being Offered
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The
Company is offering for sale a minimum of 200,000 and a maximum of
900,000
shares of its common stock.
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Initial
Offering Price
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The
Offering Price is $0.25 per Share. The Offering Price was determined
arbitrarily by the Company.
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Terms
of the Offering
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The
Shares will be sold through the efforts of our officers and director
beginning on the date this registration statement is declared effective
by
the SEC.
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Termination
of the Offering
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The
Offering will conclude on August 29, 2008 unless extended in the
sole
discretion of the Company. We may, in our sole discretion, terminate
the
Offering prior to the end of the Offering Period for any reason
whatsoever.
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Risk
Factors
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The
securities offered hereby involve a high degree of risk and should
not be
purchased by investors who cannot afford the loss of their entire
investment. See ‘‘Risk Factors’’ beginning on page
6.
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Common
Stock Issued And Outstanding Before Offering
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3,100,000
shares of our common stock are issued and outstanding as of the date
of
this Prospectus.
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Common
Stock Issued And Outstanding After Offering
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Upon
completion of the Offering, we will have 4,000,000 shares of common
stock
issued and outstanding if we sell all of the Shares offered in this
Offering.
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Use
of Proceeds
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The
Company will use the net proceeds from the Offering substantially
for
general corporate purposes primarily in the areas of marketing,
advertising, promotion, acquiring relationships and general working
capital.
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Summary
Financial Information
Balance Sheet Data
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12/31/07
(Audited)
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3/31/08
(Unaudited)
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Cash
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0
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2,500
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Total
Assets
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18,391
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30.442
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Liabilities
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17,091
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30,062
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Total
Stockholders’ Equity
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1,300
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380
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Statement of Loss
From Incorporation on November 13, 2007
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To 12/31/07
(Audited)
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To 3/31/08
(Unaudited)
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Revenue
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0
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0
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Net
Loss
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(1,800
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)
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(920
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)
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Risk
Factors
You
should carefully consider the risks and uncertainties described below and the
other information in this Prospectus before deciding whether to invest in the
Shares we are offering. The risks described below are not the only ones we
will
face. Additional risks and uncertainties not presently known to us or that
we
currently deem immaterial may also impair our financial performance and business
operations. If any of these risks actually occur, our business and financial
condition or results of operation may be materially adversely affected, the
trading price of our common stock could decline and you may lose all or part
of
your investment. We make various statements in this section which constitute
“forward-looking” statements under Section 27A of the Securities
Act.
Risks
Related to Our Company
Purchasers
may have difficulty evaluating the Company’s business because of the absence of
any operating history.
The
Company was incorporated on November 13, 2007, and to date, we have been
involved primarily in organizational activities. The Company has no revenue
history, no operating history and has not delivered any products or
product-related services to customers. Potential investors should be aware
of
the difficulties normally encountered by development stage companies and the
high rate of failure of such enterprises. There is no guarantee that we will
commence business operations or that our business operations will be profitable.
For this reason, investors are encouraged to review the Company’s financial
information and prospects, to have discussions with representatives of the
Company and to engage professional advisors to evaluate an investment in the
Company.
If
we do not obtain additional financing, our business will fail.
Our
business plan calls for ongoing expenses in connection with the development
of
the business of the Company. We have not generated any revenue from operations
to date. We may not be able to implement our business plan without obtaining
additional financing. If this financing is not available or obtainable,
investors may lose a substantial portion or all of their investment. If adequate
funds are not available to satisfy our immediate or intermediate capital
requirements, we will limit our operations significantly. There can be no
assurance that such additional financing will be available to us on acceptable
terms, or at all. The most likely source of future funds presently available
to
us is through the sale of additional shares of common stock, which could result
in dilution to existing shareholders.
The
Company has a lack of profit and uncertain profit outlook.
The
Company has no history in operating its business on which to evaluate the
Company and its prospects. If customers do not adopt the Company’s products and
services due to the Company’s operating history, the Company’s profits will be
significantly and negatively affected. The Company's prospects must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered in this context.
If
the Company does not generate sales in a timely manner, the Company may run
out
of cash.
The
Company’s business plan is dependent on sales and provides that such sales will
commence in the third quarter of 2008. The Company will hire staff and incur
recurring expenses and plans to increase staffing and expense levels in
anticipation of revenues. In the event that revenues do not occur in a timely
manner, the Company will need to dramatically reduce costs and may run out
of
cash.
If
the market chooses to buy competitive products and services, the Company will
not be financially viable.
Although
the Company believes that its products will be of commercial usefulness, there
is no verification by the marketplace that the Company’s products and services
will be purchased by customers. If the market chooses to buy competitive
products and services, it may be more difficult for the Company to be profitable
and the Company's business would be substantially harmed. The Company believes
that the purchase of its products is also highly dependent on perceptions of
risk, financial viability of the Company, ability to provide related services
and support, and other factors including brand perception, references, and
commercial linkage between these sales and other products and services. If
the
Company is not able to manage these perceptions, it may not be able to meet
its
forecasts and projections.
The
Company’s competitors are larger and have greater resources, giving them the
ability to utilize commercial practices that prevent customers from buying
the
Company’s products and services.
The
Company's competitors are larger and have resources greater than those of the
Company; therefore, there can be no assurance that potential customers will
buy
from the Company, as opposed to the Company's competitors. If potential
customers do not buy from the Company, the Company's business would be
significantly harmed. Competitors may also have greater leverage and stronger
relationships with their customers, as well as the ability to offer lower
prices, which could affect the Company’s ability to procure customers or cause
customers to change vendors.
The
Company’s results may fluctuate significantly.
The
Company’s revenue projections are based largely on projections.
The
Company is reliant on senior management.
The
Company believes that its success is significantly dependent upon the continued
participation and collective skills of the executive officers. In addition,
certain knowledge and skills possessed by executive officers and key Company
employees may not be able to be replaced quickly or at all. Members of senior
management are under no obligations to remain with the Company. If several
senior management members do not remain with the Company, the Company's business
would be significantly harmed.
The
Company plans significant expenses for research and
development.
The
Company’s market is characterized by rapidly changing technologies and evolving
industry standards. The Company plans to incur significant research and
development expenses intended to adapt and expand to this evolving industry
and
achieve competitive advantage. If the Company does not generate sufficient
profit, the business could be harmed. If it is necessary to raise additional
funds to pay for further research and development through the issuance of equity
securities, the current stockholders would be diluted and their interests might
become subordinate to the rights and preferences of the holders of new equity
securities.
The
Company has an uncertain ability to meet future cash
needs.
It
is
likely that the Company will need additional financing in the future, either
as
a result of adverse developments, or as a result of rapid growth or volatility
in business levels or business conditions. If such financing is unavailable,
it
could have a serious adverse effect on the Company’s ability to
survive.
The
Company must develop delivery and support infrastructure to be viable in the
market.
The
Company is in an early stage of development, and if the Company does not develop
the necessary infrastructure to support its customers, its business could suffer
or fail.
The
Company’s business plan is highly sensitive to many factors, and thus Company
performance is not easily predictable.
The
title
insurance industry is sensitive to many factors, including competition with
larger companies, market demand, research and development expenditures, and
the
ability to stay competitive in the industry. Given these and other market
factors, the Company cannot predict with certainty its short- and long-term
performance and profitability. In addition, even if the Company achieves
profitability, given these many factors affecting the Company’s business, the
Company may not be able to maintain profitability in the future.
If
the Company does not manage growth effectively, the Company’s business could be
harmed.
Resource
infrastructure and geographic expansion will be required to realize the
Company’s growth strategy. Operations growth will place significant demands on
the management and other resources of the Company, which demands are likely
to
continue. To manage future growth, the Company will need to continue to attract,
hire and retain highly skilled and motivated officers, managers and employees
for:
1. Sales,
marketing, business development and customer service;
2. Technical
support, software development and integration;
3. Operational
and financial management; and
4. Training,
integrating and managing the growing employee base.
The
Company may not be successful in selecting, managing or expanding its operations
and markets or maintaining adequate management, financial and operating systems
and controls. The Company may not be able to achieve desired geographic
expansion without additional investment.
Experience
of management may not be adequate to achieve projections.
While
Company’s officers have history and experience in the title industry, there is
no guarantee that such experience will ensure that they are able to reach the
Company’s projections.
Any
additional financing through sales of our common stock will result in dilution
to existing shareholders.
We
will
require additional capital in order to achieve our business plan. Our most
likely source of additional capital will be through the sale of additional
shares of common stock. The sale of additional shares of common stock will
result in dilution to our existing stockholders and will negatively affect
the
value of an investor’s Shares.
Risks
Related To the Title Insurance Industry
The
title insurance industry is intensely competitive, and if the Company fails
to
successfully compete in this industry, its market share and business will be
harmed.
The
markets for the products and services offered by the Company are intensely
competitive and characterized by rapidly changing technology, evolving
regulatory requirements and changing consumer demands. Large companies may
at
any time attain positions of competitive advantage that the Company will find
difficult to counteract.
There
can
be no assurance that the Company will be able to successfully compete with
any
current or potential providers of products and services competitive with those
of the Company.
The
Company’s success depends, in part, on its ability to protect, develop and
secure proprietary information and intellectual property.
Although
the Company intends to pursue protection of its intellectual property, there
is
no assurance that such protection will be available or sufficient to preclude
competition. Competitors may develop similar or superior products, software,
business models and intellectual property. This could have serious impact on
the
ability of the Company to succeed. If the Company fails to protect, develop
and
secure proprietary information and intellectual property, the value of the
Company could be impaired.
If
the Company is unable to adapt to the rapid technological change in its
industry, the Company will not remain competitive and its business will
suffer.
The
Company’s market is characterized by rapidly changing technologies and evolving
industry standards. The recent growth of the Internet and intense competition
in
the industry exacerbate these market characteristics. The Company’s future
success will depend on the Company’s ability to adapt to rapidly changing
technologies by continually improving the features and reliability of its
products. The Company may experience difficulties that could delay or prevent
the successful introduction or marketing of new products and services. In
addition, new enhancements must achieve significant market acceptance. The
Company could also incur substantial costs if the Company needs to modify its
service or infrastructures or adapt its technology to respond to these changes.
The
title insurance industry is subject to natural fluctuation.
The
title
business is seasonal for purchase transactions and depends largely on interest
rates in connection with refinance transactions. It is likely that the Company
will be subject to these same types of performance fluctuations.
Risks
Related To Regulations
The
Company's failure to comply with existing regulations and future regulations
could subject the Company to penalties.
The
Company will provide products and services in multiple jurisdictions. Any
failure of the Company to comply with existing regulations or regulations
adopted in the future in those jurisdictions could subject the Company to
penalties. Compliance matters could also increase the Company’s costs and affect
the Company’s ability to meet its projections. The Company will assess
regulations and requirements of certain jurisdictions for its products and
may
need to retain outside experts in order to ensure compliance. While the Company
does not believe that its current structure will require it to obtain insurance
licenses or other types of licenses, it is possible that state insurance
commissions would take an alternate view, which could subject the Company to
penalties and fines and require the Company to go through the costly and
time-consuming licensing application process in each such jurisdiction which
takes the position that the Company must hold an insurance license
therein.
Risks
Related To Customers
The
Company’s products are not yet proven with customers.
Until
the
Company has finished developing its products, there is uncertainty regarding
the
products’ acceptability to customers and as a result, their viability within the
customers’ sales channels. In the event that acceptance is delayed, or in the
event that customers promote competitive products, the Company would be
seriously harmed.
Risks
Related To Purchase and Ownership of Stock
The
Offering Price of the Shares is arbitrary.
The
price
of the Shares has been determined arbitrarily by the Company and bears no
relationship to the Company's assets, book value, potential earnings or any
other recognized criteria of value.
The
Company has a lack of dividend payments.
The
Company has no plans to pay any dividends in the foreseeable
future.
Certain
Company actions and the interests of stockholders may
differ.
The
voting control of the Company could discourage others from initiating a
potential merger, takeover or another change of control transaction that could
be beneficial to stockholders. As a result, the value of stock could be harmed.
Purchasers should be familiar with the equity breakdowns among stockholders
of
the Company.
The
Company’s management team will have broad discretion over the use of
proceeds.
The
Company’s management will retain broad discretion as to the allocation of the
proceeds of this Offering, and the Company may not be able to invest these
proceeds to yield a significant return.
Purchasers
will experience immediate and substantial book value
dilution.
The
price
of the Shares offered hereunder is expected to be substantially higher than
the
net tangible book value of each outstanding share of stock. Investors who
purchase Shares in this Offering will suffer immediate and substantial dilution.
The
Company may be subject to rights of preferred stockholders including mandatory
redemption.
At
some
point in the future, the Company may authorize and issue preferred stock. The
rights attached to preferred shares could affect the Company’s ability to
operate, which could force the Company to seek other financing. Such financing
may not be available on commercially reasonable terms or at all and could cause
substantial dilution to existing stockholders.
Our
Common Stock may be subject to “penny stock” rules which may be detrimental to
investors.
The
SEC
has adopted regulations which generally define “penny stock” to be any equity
security that has a market price (as defined) of less than $5.00 per share
or an
exercise price of less than $5.00 per share. Such securities are subject to
rules that impose additional sales practice requirements on broker-dealers
who
sell them. For transactions covered by these rules, the broker-dealer must
make
a special suitability determination for the purchaser of such securities and
have received the purchaser’s written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the SEC relating to the penny stock market.
The
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account
and
information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
We
have the right to issue up to 75,000,000 shares of preferred stock, which may
adversely affect the voting power of the holders of other of our securities
and
may deter hostile takeovers or delay changes in management control.
We
may
issue up to 75,000,000 shares of our preferred stock from time to time in one
or
more series, and with such rights, preferences and designations as our board
of
directors may determine from time to time. To date, we have not issued any
shares of preferred stock. Our board of directors
is
authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights, liquidation preferences and other rights and
restrictions relating to any series of our preferred stock. Issuances of shares
of preferred stock, while providing flexibility in connection with possible
financings, acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of our common stock
and
may, under certain circumstances, have the effect of deterring hostile takeovers
or delaying changes in management control.
Forward
Looking Statements
This
Prospectus contains projections and statements relating to Company that
constitute "forward-looking statements." These forward-looking statements may
be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "intends," "believes," "anticipates," "expects,"
"estimates," "may," "will," or similar terms. Such statements speak only as
of
the date of such statement, and the Company undertakes no ongoing obligation
to
update such statements. These statements appear in a number of places in this
Prospectus and include statements regarding the intent, belief or current
expectations of the Company, and its respective directors, officers or advisors
with respect to, among other things: (1) trends affecting the Company’s
financial condition, results of operations or future prospects, (2) the
Company’s business and growth strategies and (3) the Company’s financing plans
and forecasts. Potential investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that, should conditions change or should any one
or
more of the risks or uncertainties materialize or should any of the underlying
assumptions of the Company prove incorrect, actual results may differ materially
from those projected in the forward-looking statements as a result of various
factors, some of which are unknown. The factors that could adversely affect
the
actual results and performance of the Company include, without limitation,
the
Company’s inability to raise additional funds to support operations and capital
expenditures, the Company’s inability to effectively manage its growth, the
Company’s inability to achieve greater and broader market acceptance in existing
and new market segments, the Company’s inability to successfully compete against
existing and future competitors, the Company’s reliance on independent
manufacturers and suppliers, disruptions in the supply chain, the Company’s
inability to protect its intellectual property, other factors described
elsewhere in this Prospectus, or other reasons. Potential investors are urged
to
carefully consider such factors. All forward-looking statements attributable
to
the Company or persons acting on its behalf are expressly qualified in their
entirety by the foregoing cautionary statements and the "Risk Factors" described
herein.
Use
of
Proceeds
Assuming
900,000 Shares are subscribed for in this Offering, and after netting
anticipated Offering expenses, the net proceeds from the sale of the Shares
will
be approximately $188,800. The Company intends to use the net proceeds from
the
Offering substantially for general corporate purposes primarily in the areas
of
marketing, advertising, promotion, acquiring relationships with title
abstractors and title agencies and general working capital. We believe these
proceeds will be sufficient to fund our operations for a period of six months.
Set forth below is the Company’s proposed use of proceeds assuming the sale of
all of the Shares offered hereunder:
Working
Capital
The
Company plans to hire employees with technical expertise to refine its products
and services. Working capital will support personnel costs as well as the
general administration and management of the Company’s start-up
phase.
Research
and Development
The
Company anticipates continuing its research and development efforts to enhance
its sales and market position by developing an electronic central title starts
repository. Proceeds of this Offering will support the Company’s ongoing
research and development efforts.
Marketing/Advertising/Promotion
The
Company expects to explore the most advantageous means of marketing, advertising
and promotion of the Company’s products and services. The funds generated from
this Offering will support the Company’s marketing strategies.
Because
of the number and variability of factors that determine the use of the net
proceeds from this Offering, we cannot assure you that the actual uses of the
net proceeds from this Offering will not vary substantially from our currently
planned uses. Pending use of the net proceeds from this Offering, we intend
to
invest the net proceeds from this Offering in money market accounts at insured
institutions.
Determination
of
Offering Price
Prior
to
this Offering, there has been no market for our common stock. The Offering
Price
of the Shares offered hereunder was arbitrarily determined by the Company and
bears no direct relationship to the value of our assets, book value, net worth,
historical or prospective earnings, actual results of operations, trading price
of our stock, or any other recognized criteria of value. The Offering Price
of
the Shares should not be considered as an indication of the actual or trading
value of a share of our common stock.
Plan
of Distribution
General
There
is
no public market for our common stock. Therefore, the current and potential
market for our common stock is limited and the liquidity of our shares may
be
severely limited. To date, we have made no effort to obtain listing or quotation
of our securities on a national stock exchange or association. We have not
identified or approached any broker/dealers with regard to assisting us to
apply
for such listing. We are unable to estimate if or when we expect to undertake
this endeavor. No market may ever develop for our common stock, or if developed,
such market may not be sustained in the future. Accordingly, the Shares should
be considered totally illiquid, which inhibits investors’ ability to sell their
Shares. The market price of the Shares of common stock is likely to be highly
volatile and may be significantly affected by factors such as actual or
anticipated fluctuations in the Company’s operating results, announcements of
technological innovations, new products and/or services or new contracts by
the
Company or its competitors, developments with respect to copyrights or
proprietary rights, adoption of new accounting standards or regulatory
requirements affecting the insurance business, general market conditions and
other factors. In addition, the stock market from time to time experiences
significant price and volume fluctuations that may adversely affect the market
price for the Company’s common stock.
The
Offering
The
Company is offering to sell up to 900,000 Shares pursuant to the terms of this
Prospectus in a self-underwritten direct public offering, without any
participation by underwriters or broker-dealers. The Offering Price is $0.25
per
Share. The Offering Period will begin on the date this registration statement
is
declared effective by the Securities and Exchange Commission and continue until
5:00 P.M. Local Time, on August 29, 2008. We may extend the Offering Period
unless the Offering is completed within the Offering Period. We may, within
our
sole discretion, terminate the Offering prior to the end of the Offering Period.
The closing of the Offering and the disbursement of funds are conditioned upon
our receipt of subscriptions aggregating no less than $50,000. The minimum
dollar amount of Shares that may be purchased by any subscriber is $1,250,
unless the Company waives this minimum dollar requirement.
Until
the
Company receives and accepts subscriptions for a minimum of $50,000, all
subscription funds will be held by the Company in a separate escrow account.
If
subscriptions for at least $50,000 have not been received before the expiration
of the Offering Period, including any extensions, all subscription funds will
be
returned to the subscribers, without any interest earned on the funds. If an
investor subscribes for at least $1,250 and its subscription is accepted by
Company, the subscription funds, together with any interest earned on the funds,
will be drawn upon and used by the Company following the closing of the
Offering.
The
affiliates, officers, directors, employees and stockholders of the Company
reserve the right at their option to purchase Shares, but all such purchases
shall be without discount and at the full Offering Price per Share. Any such
purchase will be counted in determining if the Minimum Offering Amount has
been
satisfied.
Shares
will be sold through the efforts of the officers and director of the Company.
There will be no participation by underwriters or broker-dealers. The Shares
will be qualified or registered for sale under the “blue sky” laws of certain
states. The states in which the Company currently plans to offer the Shares
include California, Florida, Kansas, Missouri and Nevada.
Expenses
of Offering
The
Company will pay all of the costs and expenses in connection with the Offering,
including but not limited to all expenses incurred to prepare, reproduce or
print this Prospectus, legal expenses and other expenses incurred in qualifying
the Offering for sale under federal securities laws and applicable state
securities, or “blue sky,” laws. It is estimated that the expenses of the
Offering will not exceed $36,200.
Subscription
Procedures
If
after
carefully reviewing and studying this Prospectus, you desire to purchase Shares,
you must do the following:
(1) Complete,
execute, date and deliver to us the Subscription Agreement which accompanies
this Prospectus.
(2) Forward
the Subscription Agreement to Carol McMahan, Synergy Law Group, LLC, 730 West
Randolph, Suite 600, Chicago, IL 60661, with a check payable to “Title Starts
Online, Inc.” in an amount equal to the total purchase price for the number of
Shares you desire to purchase.
All
funds
received in connection with the sale of the Shares shall be held in an escrow
account in an insured institution.
Right
to Reject Subscriptions
We
have
the right to accept or reject subscriptions in whole or in part for any reason
or for no reason. We will return all monies from rejected subscriptions to
the
subscriber without interest or deduction.
Legal
Proceedings
There
are
no pending, nor to our knowledge threatened, legal proceedings against the
Company.
Directors and
Officers
The
directors of the Company hold office for annual terms and will remain in their
positions until successors have been elected and qualified. The officers are
appointed by the board of directors of the Company and hold office until their
death, resignation or removal from office. The ages, positions held, and
duration of terms of the directors and executive officers are as
follows:
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
|
|
Mark
DeFoor
|
|
|
37
|
|
|
Director,
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
Melissa
Yarnell
|
|
|
40
|
|
|
Secretary
|
|
Mark
DeFoor, Director, President, Chief Executive Officer:
Mark
DeFoor is a Director, President and Chief Executive Officer of Title Starts
Online, Inc. Mr. DeFoor earned a Bachelor’s of Business Administration (1993)
and a Master’s of Business Administration (1995) from the University of Missouri
at KC. Mr. DeFoor’s previous experience includes the development of the National
Association of Insurance Commissions Central Repository of Producer Agents
as
well as the purchase, operation and sale of several title insurance
companies.
Melissa
Yarnell, Secretary:
Melissa
Yarnell is the Secretary of Title Starts Online, Inc. Mrs. Yarnell attended
Kansas City Kansas Community College and has been in the title insurance
business since 1990. From 1990 to 1994 Mrs. Yarnell served as an Escrow Closer
at ATI/American Land Title Agency and from 1994 to 2003 served as Escrow Manager
of Nations Title Agency, Inc. Mrs. Yarnell is currently the Vice President
of
Escrow Services for Capital Title Agency, Inc. in Kansas City, MO.
Term
of Office
Our
directors are appointed for one-year terms to hold office until the next annual
meeting of our shareholders or until removed from office in accordance with
our
By-Laws. Our officers are appointed by our board of directors and hold office
until removed by the board.
Director
Independence
Our
determination of independence of directors is made using the definition of
‘‘independent director’’ contained under Rule 4200(a)(15) of the Rules of the
Financial Industry Regulatory Authority (“FINRA”). However, we are not at this
time required to have our board comprised of a majority of “independent
directors” because we are not subject to the listing requirements of any
national securities exchange or national securities association.
Employees
At
the
present time, we have no paid employees. Mark DeFoor, our President and Chief
Executive Officer, is currently managing the start-up operations of the Company
without compensation.
Beneficial
Ownership
The
following table sets forth certain information as of May 5, 2008 with respect
to
the beneficial ownership of the outstanding common stock of the Company by
(i)
any holder of more than five (5%) percent; (ii) each of the Company’s executive
officers and directors; and (iii) the Company’s directors and executive officers
as a group. Unless otherwise indicated below, the persons and entities named
in
the table have sole voting and sole investment power with respect to all shares
beneficially owned. The percentage of class is based on 3,100,000 shares of
common stock issued and outstanding as of the date of this Prospectus. Unless
otherwise indicated below, the address for each individual is 7007 College
Boulevard, Suite 270, Overland Park, KS 66211.
Name and Address of Beneficial Owner
|
|
Amount of Beneficial
Ownership
|
|
Percentage of
Class
|
|
Mark
DeFoor
|
|
|
3,100,000
|
|
|
100
|
%
|
Melissa
Yarnell
|
|
|
0
|
|
|
0
|
|
_______________ |
|
|
|
|
|
|
|
Directors
and Executive Officers as a Group
(2
persons)
|
|
|
|
|
|
100
|
%
|
Description
of
Securities
The
following statements are qualified in their entirety by reference to the
detailed provisions of our Articles of Incorporation and By-Laws. The Shares
registered pursuant to the registration statement of which this prospectus
is a
part are shares of common stock, all of the same class and entitled to the
same
rights and privileges as all other shares of common stock.
Capital
Stock
The
authorized capital stock of the Company is 500,000,000 shares of capital stock,
consisting of 425,000,000 shares of common stock with full voting rights and
with a par value of $0.001 per share, and 75,000,000 shares of preferred stock,
with a par value of $0.001 per share (the “Preferred Stock”).
Preferred
Stock may be issued from time to time in one or more series with such
designations, preferences and relative participating, optional or other special
rights and qualifications, limitations or restrictions thereof, as shall be
provided by Board resolution authorizing the issuance of such Preferred Stock
or
series thereof; and the Board is vested with authority to fix such designations,
preferences and relative participating, optional or other special rights or
qualifications, limitations, or restrictions for each series, including the
power to fix the redemption and liquidation preferences, the rate of dividends
payable and the time for and the priority of payment thereof and to determine
whether such dividends shall be cumulative or not and to provide for and fix
the
terms of conversion of such Preferred Stock or any series thereof into the
common stock of the Company and fix the voting power, if any, of shares of
Preferred Stock or any series thereof.
As
of the
date of this prospectus, there are 3,100,000 shares of common stock issued
outstanding. There are no outstanding shares of Preferred Stock.
As
of the
date of this prospectus, there is one (1) holder of record of the Company’s
common stock, who is an affiliate of the Company.
Options
and Warrants
There
are
no outstanding options or warrants or other securities that are convertible
into
our common stock.
Voting
Rights
Each
shareholder is entitled to one (1) vote for each share of voting stock.
Shareholders are not entitled to cumulative voting rights.
Dividend
Policy
We
intend
to retain and use any future earnings for the development and expansion of
our
business and do not anticipate paying any cash dividends in the foreseeable
future.
Transfer
Agent
The
transfer agent for our common stock will be Empire Stock Transfer Inc. upon
completion of this Offering. Its address and telephone number are 2470 Saint
Rose Pkwy, Suite 304, Henderson, NV 89074, 702.818.5898. Until the present
time, we have acted as our own transfer agent and registrar.
Penny
Stock Regulation
The
SEC
has adopted regulations which generally define “penny stock” to be any equity
security that has a market price (as defined) of less than $5.00 per share
or an
exercise price of less than $5.00 per share. Such securities are subject to
rules that impose additional sales practice requirements on broker-dealers
who
sell them. For transactions covered by these rules, the broker-dealer must
make
a special suitability determination for the purchaser of such securities and
have received the purchaser’s written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the SEC relating to the penny stock market.
The
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account
and
information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
Interests
of
Named
Experts and Counsel
No
expert
or counsel named in this prospectus as having prepared or certified any part
of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the Shares was employed on a contingency basis, or had, or is
to
receive, in connection with the Offering, a substantial interest, direct or
indirect, in the Company, nor was any such person connected with the Company
as
a promoter, managing or principal underwriter, voting trustee, director, officer
or employee.
Disclosure
of Commission
Position on Indemnification
for
Securities Act Liabilities
Our
Articles of Incorporation and By-Laws provide for the indemnification of Company
officers and directors in regard to their carrying out the duties of their
offices. We have been advised that in the opinion of the SEC indemnification
for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment
by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by one of our directors, officers or controlling persons
in connection with the securities being registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
Description
of Business
Company
Overview
Title
Starts Online, Inc. is a corporation, incorporated in the State of Nevada on
November 13, 2007. The Company's principal offices are currently located at
7007
College Boulevard, Suite 270, Overland Park, KS 66211. Our telephone number
there is 913.832.0072. Our fax number is 913.747.3001. All operations, from
administration to product development, take place at this location. The Company
occupies space within a customer facility owned by our President and Chief
Executive Officer, Mark DeFoor, for which it currently pays no rent. There
is no
obligation for or guarantee that this arrangement will continue in the
future.
The
Company is in its development stage with no current revenues to date. The
majority of the activities to date have revolved around defining requirements
from residential title abstractors in the Kansas City area to determine the
value proposition of a consolidated title start website business. In the title
insurance business, abstractors are required to research any and all
encumbrances on specific properties which are in the process of being refinanced
or sold. This search is completed by merging data from a variety of sources,
some online and some in log books physically maintained by local governmental
entities and private production plants. The research results are then compiled
into a commitment of title insurance which is submitted to the entity requesting
the information.
Organizational
Structure
Our
President and Chief Executive Officer, Mark DeFoor, is the only individual
currently participating in the Company’s start-up activities. At present, he is
contributing less than 10 hours per week to handle the operational business
functions including corporate administration and development
responsibility.
Upon
the
successful acquisition of funding or an increase in sales, we plan to expand
the
current staff by adding employees with technical expertise. We anticipate the
cost of each of these technical employment positions to be approximately
$80,000.00 per year, and we may choose to compensate these employees with
consideration other than cash, such as shares of common stock or options to
purchase shares of common stock.
We
expect
to hire employees to fill the following positions:
DBA
-
Database Administrator
.Net
Systems Developer
Document
Management Specialist
We
would
also like to retain commissioned sales representatives or partner with national
insurance underwriters to cross-sell our services. As sales increase, we will
be
in a position to add customer service representatives to handle inbound calls,
handle setup, and assist in operational troubleshooting.
Products
and Services
The
mission of the Company is to provide fast and reliable title starts to
abstractors of small and large title agencies and underwriters.
The
Company intends to develop a central repository for title starts and plans
to
deliver two categories of products - title starts and a title search template
-
along with a tips and tools area via the Company’s website. The website will
have the functionality to manage new title search findings based on unique
user
identification to facilitate order processing, to offer remote storage and
minimize redundant data entry. Users will also have the ability to shop for
existing title starts and utilize innovative search techniques to expedite
their
search.
The
existing inventory of title starts will be indexed by multiple categories.
This
database-driven approach will allow users the ability to search by a number
of
separate of variables including addresses, names and/or property legal
descriptions. The Company will not store any nonpublic information such as
social security numbers or dates of birth on the website.
Users
will play a unique role in the population of the data on the Company website.
As
a user places a new title start online, that user will be able to access one
of
the existing starts placed by another user. Users will then have the capability
of ranking the accuracy and completeness of another user’s search.
The
Company will use a ranking system for users similar to the ranking system used
for sellers on e-bay. Abstractors will be ranked by their peers as to the
completeness and accuracy of their searches. If the ranking of an abstractor
falls below our pre-determined acceptance level, they will have a “restricted”
ranking which will alert purchasers to the quality of the title start requested
from a “restricted” user.
Startup
and Plan
of Operation
The
Data
Model (Database back-end which houses the physical data logically for efficient
access) has entered its second stage of development. We would like to establish
an advisory panel of front line abstractors to determine the primary data
components. This proof of concept at this stage will allow for a more efficient
development phase of version I of the GUI interface.
The
GUI
(Graphical User Interface) design is pending approval of the Data Model with
the
advisory panel. We are planning two separate interfaces for the initial launch.
The first is the information entry screen which will give abstractors at the
plant the ability to upload and utilize a standard process to search title.
The
second will be a search engine which will give the abstractors the ability
to
access property information.
Over
time, we see a third component to the system. This final component will allow
imports from industry standard software through an easy-to-use interface. This
component may need to be non-standard as each import would require a small
amount of mapping to ensure that the load would match our Data Model. If we
are
successful in acquiring a large, national agency or underwriter as a business
partner, we will elevate the priority of the development of this component.
Sales
Strategies
We
are
currently in the development stage of sales strategies. Initially, it appears
that the most cost-effective way to generate sales will be to direct as many
users as possible to the Company’s website. The site should be developed in a
manner which would allow screens to be exported to media for
distribution.
Technology
/ Platform
The
web
real estate of titlestarts.com is currently being developed utilizing the
following products offered remotely by godaddy.com:
Database:
|
SQLServer
|
GUI:
|
Microsofts
.net framework
|
Both
products run on the Microsoft’s Server platform.
Godaddy.com
is also hosting the Company’s email services and storage of
information.
Future
Products and Services
As
the
use of the website grows, the repository of information will become increasingly
valuable and, in turn, marketable. Real estate property-related entities, such
as property and casualty insurers, home improvement businesses and pest control
companies, will be able to see what starts have been viewed and, therefore,
ascertain the identity of the properties being transferred.
We
also
see a cross-marketing potential with the American Land Title Association wherein
the website could provide continuing education to abstractor members who use
the
product. The Company website could easily provide an online tutorial on proper
search methods which would promote good practices and which could potentially
reduce claims against agencies and underwriters.
Market
Needs
Abstractors,
also known as searchers, spend a significant portion of their time searching
paper documents in local county offices or production plants. Production plants
are repositories for real estate property records where plant members have
the
ability to view information. These production plants are expensive to maintain
and are used exclusively by medium or large title agencies and underwriters.
The
Company intends to offer to small and large title agencies and underwriters
electronic access to the same information which is available at production
plants. This will allow all abstractors the ability to acquire title starts
on a
transaction fee basis.
An
electronic central title start repository offers the potential for an enormous
reduction in the time involved in research by abstractors. The online repository
would allow the work of an already researched property to be reutilized for
a
small transaction fee.
Market
Trends
Almost
every insurance agency and underwriter in the title industry is intensely
interested in the developments in and benefits of technological advances in
the
industry. These companies are developing brand specific applications to speed
the delivery of title commitments to market. While they are spending tremendous
amount of time and money on these systems, the systems themselves are not
benefiting the front line abstractors.
It
is our
thought that the future will bring a consolidation of information across
agencies and underwriters. Such a vehicle does not currently exist, and the
Company hopes to be in a position to offer a central repository of property
information to all abstractors eliminating travel and search time in many
areas.
Market
Growth
Business
in all aspects of the real estate industry has constricted over the past year.
Mortgage applications have declined, and the ability of the mortgage
professionals to place those applications has also declined. Most mortgage
lenders have either closed or tightened the guild lines associated with placing
the loans.
Title
Starts Online, Inc can utilize this time to create, implement and market our
solution. The Company hopes that when an upswing in the real estate market
occurs, it will be in a position to capture market share.
Competition
The
title
industry does not currently have a public online resource for title starts.
Information is fragmented between legacy log books within local county records
and company records within a variety of insurance agencies and
underwriters.
The
primary competition will be our customers themselves. As a title insurance
agency searches a property, the “title start” or searched information is saved
within a customer’s file. This record can be either a physical paper file or an
image of the documents stored electronically. If, by chance, a title company
is
asked to research the property again, then the old customer file is opened
and
the title start will be utilized. In most cases, customers are not in the
position of having multiple searches on the same property.
Some
title agencies currently have an internal system which will access county
records remotely and import them into their system. This system requests new
searches from the county each time a property is searched. A system of this
type
would require data mapping for every county in the United States which is
currently web enabled.
Management's
Discussion and
Analysis
or Plan
of Operation
The
following discussion of our financial condition and plan of operation should
be
read in conjunction with the Company’s financial statements, the notes to those
statements and the information included elsewhere in this prospectus. This
discussion includes forward-looking statements that involve risks and
uncertainties. As a result of many factors, such as those set forth under
“Risk
Factors”
and
elsewhere in this prospectus, our actual results may differ materially from
those anticipated in these forward-looking statements.
Plan
of Operation
We
are a
start-up company and have not yet generated or realized any revenues from our
business operations.
Limited
Operating History; Need for Additional Capital
There
is
no historical financial information about us upon which to base an evaluation
of
our performance. We are in the start-up phase of development, have not generated
any revenues from operations and cannot guarantee we will be successful in
our
business operations.
Liquidity
and Capital Resources
We
are
attempting to raise money from this Offering to generate cash to begin
operations. As of December 31, 2007, our total assets were $18,391, and our
total liabilities were $17,091. As of March 31, 2008, our total assets were
$30,442, and our total liabilities were $30,062.
Important
Assumptions
The
recent downturn in the mortgage refinance market has significantly reduced
the
number of transactions we believe will be able to be performed. Although the
numbers of transactions are not expected to be as high as in recent years,
the
quantity of companies requiring our product will also decrease. This reduction
in the number of companies in the market will make it easier for market
penetration and standardization of data inputs.
Description
of
Property
The
Company owns no real estate. Title Starts Online, Inc. is currently utilizing
space within a customer facility in Overland Park, KS. The facility is owned
by
our President and Chief Executive Officer, Mark DeFoor, and the Company
presently pays no rent to occupy the space. There is no obligation for or
guarantee that this arrangement will continue in the future.
The
website is co-located with www.godaddy.com to insure favorable service times
while offering the flexibility of increasing data storage and bandwidth without
the delay of acquisition and installation of owned services. When revenues
and/or raised capital allows, a development environment will be created within
the physical location to speed access. Long term, the Chief Technology Officer
will make a determination as to the operational location of the production
website.
Experts
The
financial statements of Title Starts Online, Inc. as of December 31, 2007 and
for the period from November 13, 2007 (inception) through December 31, 2007,
included in this Registration Statement have been audited by
Schumacher & Associates, Inc., independent registered public
accounting firm, and have been so included in reliance upon the report of
Schumacher & Associates, Inc. given on the authority of such firm
as experts in accounting and auditing.
Certain
Relationships and
Related Transactions
Since
inception, the following transactions were entered into with our shareholders.
Our
sole
shareholder, Mark DeFoor, acquired his shares with the intent to hold the shares
for investment purposes and not with a view to further resale or distribution,
except as permitted under exemptions from registration requirements under
applicable securities laws.
The
certificate was issued with a restrictive legend with respect to the issuance
of
securities pursuant to exemptions from registration requirements under the
Securities Act.
Our
sole
shareholder, Mark DeFoor, has agreed to loan up to $25,000 to the Company as
needed to aid start-up of Company operations pending receipt of proceeds from
this Offering. Any such loan will be made on commercially reasonable terms
and
will be documented by a promissory note.
Market
for
Common Equity and Related Stockholder Matters
No
Public Market for Common Stock
There
is
no public market for our common stock. Therefore, the current and potential
market for our common stock is limited and the liquidity of our shares may
be
severely limited. To date, we have made no effort to obtain listing or quotation
of our securities on a national stock exchange or association. We have not
identified or approached any broker/dealers with regard to assisting us to
apply
for such listing. We are unable to estimate if or when we expect to undertake
this endeavor. No market may ever develop for our common stock, or if developed,
may not be sustained in the future. Accordingly, our shares should be considered
totally illiquid, which inhibits investors’ ability to sell their Shares. The
market price of the Shares of common stock is likely to be highly volatile
and
may be significantly affected by factors such as actual or anticipated
fluctuations in the Company’s operating results, announcements of technological
innovations, new products and/or services or new contracts by the Company or
its
competitors, developments with respect to copyrights or proprietary rights,
adoption of new accounting standards or regulatory requirements affecting the
insurance business, general market conditions and other factors. In addition,
the stock market from time to time experiences significant price and volume
fluctuations that may adversely affect the market price for the Company’s common
stock.
Shareholders
of Our Common Shares
As
of the
date of this prospectus, we have one shareholder of record.
Rule
144 Shares
There
are
currently no outstanding warrants for the purchase of shares of common stock
and
no shares of common stock reserved under any employee stock option plans. As
of
the date of this prospectus, 3,100,000 shares of common stock are issued and
outstanding. There currently are no shares of common stock or common stock
equivalents which can be resold in the public market in reliance upon the safe
harbor provisions of Rule 144, as promulgated under the Securities Act of 1933.
Upon
the
date this Registration Statement becomes effective, a total of 900,000 shares
of
our common stock will become available for sale to the public. The 3,100,000
shares of common stock outstanding as of the date of this prospectus are
considered “restricted securities” because they were issued in reliance upon an
exemption from the registration requirements of the Securities Act and not
in
connection with a public offering. On May 13, 2008 these 3,100,000 shares will
become available for resale to the public under Rule 144 under the Securities
Act. In general, under Rule 144, as amended and effective February 15, 2008,
an
affiliate of a reporting company may resell restricted securities after a
six-month holding period, subject to the current public information
requirements, volume limitations, manner of sale requirements and notice of
proposed sale requirements.
As
of the
date of this prospectus, one person, who is an affiliate, holds 100% of our
outstanding shares of common stock.
Stock
Option Grants
To
date,
we have not granted any stock options.
Registration
Rights
We
have
not granted registration rights to any holder of shares of our common stock.
Dividends
There
are
no restrictions in our Articles of Incorporation or By-Laws that prevent us
from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the
dividend:
|
1.
|
We
would not be able to pay our debts as they become due in the usual
course
of business; or
|
|
2.
|
Our
total assets would be less than the sum of our total liabilities
plus the
amount that would be needed, if the Company were to be dissolved
at the
time of the distribution, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior
to
those receiving the distribution.
|
We
have
not declared any dividends, and we do not plan to declare any dividends in
the
foreseeable future.
Executive
Compensation
We
have
not entered into any contracts for employment or alternative compensation for
any directors or executive officers. There are also no arrangements or plans
to
provide retirement, pension or similar benefits. We do not currently have any
bonus or incentive plans available. However, stock options may be granted at
the
direction of the board of directors.
Reports
to
Security Holders
We
have
filed with the SEC a Registration Statement on Form S-1/A (including exhibits)
under the Securities Act with respect to the shares to be sold in this Offering.
This prospectus, which forms part of the registration statement, does not
contain all the information set forth in the Registration Statement as some
portions have been omitted in accordance with the rules and regulations of
the
SEC. For further information with respect to our Company and the Shares offered
in this prospectus, reference is made to the Registration Statement, including
the exhibits filed thereto, and the financial statements and notes filed as
a
part thereof. With respect to each such document filed with the SEC as an
exhibit to the Registration Statement, reference is made to the exhibit for
a
more complete description of the matter involved. We are not currently subject
to the informational requirements of the Securities Exchange Act of 1934 (the
“Exchange Act”). As a result of the offering of the Shares of our common stock,
we will become subject to the informational requirements of the Exchange Act,
and, in accordance therewith, we will file quarterly and annual reports and
other information with the SEC and send a copy of our annual report together
with audited consolidated financial statements to each of our shareholders.
The
Registration Statement, such reports and other information may be inspected
and
copied at the Public Reference Room of the SEC located at 100 F Street, N.
E.,
Washington, D. C. 20549. Copies of such materials, including copies of all
or
any portion of the Registration Statement, may be obtained from the Public
Reference Room of the SEC at prescribed rates. You may call the SEC at
1-800-SEC-0330 to obtain information on the operation of the Public Reference
Room. Such materials may also be accessed electronically by means of the SEC’s
home page on the internet (http://www.sec.gov).
TITLE
STARTS ONLINE, INC.
AS
OF
DECEMBER 31, 2007
AND
FOR
THE PERIOD NOVEMBER 13, 2007 (INCEPTION)
THROUGH
DECEMBER 31, 2007
AND
FOR
THE PERIOD ENDED MARCH 31, 2008
(UNAUDITED)
Financial
Statements
Table
of Contents
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Balance
Sheets
|
F-3
|
|
|
Statements
of Operations
|
F-4
|
|
|
Statement
of Changes in Stockholders’ Equity
|
F-5
|
|
|
Statements
of Cash Flows
|
F-6
|
|
|
Notes
to the Financial Statements
|
F-7
|
REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board
of
Directors and Shareholders
Title
Starts Online, Inc.
Overland
Park, Kansas
We
have
audited the accompanying balance sheet of Title Starts Online, Inc. as of
December 31, 2007 and the related statements of operations, changes in
stockholders’ equity and cash flows for the period from November 13, 2007
(inception) to December 31, 2007. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based upon our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. 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 assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Title Starts Online, Inc. as of
December 31, 2007, and the results of its operations and its cash flows for
the period from November 13, 2007 (inception) to December 31, 2007, in
conformity with accounting principles generally accepted in the United States
of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As described in Note 2, the Company has no
business operations and has negative working capital and minimal stockholders’
equity, which raise substantial doubt about its ability to continue as a going
concern. Management’s plan in regard to this matter is also discussed in Note 2.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
Schumacher &
Associates, Inc.
|
April 24,
2008
|
Denver,
Colorado
|
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
|
|
|
|
March 31, 2008
|
|
|
|
December 31, 2007
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
$
|
2,500
|
|
Stock
subscriptions receivable
|
|
|
3,100
|
|
|
600
|
|
TOTAL
CURRENT ASSETS
|
|
|
3,100
|
|
|
3,100
|
|
|
|
|
|
|
|
|
|
Deferred
offering costs
|
|
|
15,291
|
|
|
27,342
|
|
TOTAL
ASSETS
|
|
$
|
18,391
|
|
$
|
30,442
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
17,091
|
|
$
|
30,062
|
|
TOTAL
CURRENT LIABILITIES
|
|
|
17,091
|
|
|
30,062
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Notes 2, 4, 5, 6 and 7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value
|
|
|
|
|
|
|
|
Authorized:
75,000,000 shares
|
|
|
|
|
|
|
|
Issued
and outstanding: None
|
|
|
- |
|
|
- |
|
Common
stock, $0.001 par value
|
|
|
|
|
|
|
|
Authorized:
425,000,000 shares
|
|
|
|
|
|
|
|
Issued
and outstanding: 3,100,000 shares
|
|
|
3,100
|
|
|
3,100
|
|
Deficit
accumulated during the development stage
|
|
|
(1,800
|
)
|
|
(2,720
|
)
|
TOTAL
STOCKHOLDERS' EQUITY
|
|
|
1,300
|
|
|
380
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
18,391
|
|
$
|
30,442
|
|
The
accompanying notes are an integral part of the financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS
|
|
|
|
|
|
For the period from
|
|
|
|
For the period from
|
|
For the three
|
|
November 13, 2007
|
|
|
|
November 13, 2007
|
|
months ended
|
|
(Inception) to
|
|
|
|
(Inception) to
|
|
March 31, 2008
|
|
March 31, 2008
|
|
|
|
December 31, 2007
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
|
|
|
|
|
|
|
|
Legal
fees
|
|
|
1,800
|
|
|
920
|
|
|
2,720
|
|
Total
Expenses
|
|
|
1,800
|
|
|
920
|
|
|
2,720
|
|
NET
(LOSS)
|
|
$
|
(1,800
|
)
|
$
|
(920
|
)
|
$
|
(2,720
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
3,100,000
|
|
|
3,100,000
|
|
|
3,100,000
|
|
The
accompanying notes are an integral part of the financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY
FOR
THE
PERIOD NOVEMBER 13, 2007 (INCEPTION) TO MARCH 31, 2008
(The
period from January 1, 2008 to March 31, 2008 is unaudited)
|
|
|
|
(Deficit)
|
|
|
|
|
|
Common Stock,
|
|
Accumulated
|
|
Total
|
|
|
|
$0.001 Par Value
|
|
During the
|
|
Stockholders'
|
|
|
|
Shares
|
|
Amount
|
|
Development Stage
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued at $0.001 per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
November 13, 2007
|
|
|
3,100,000
|
|
$
|
3,100
|
|
$
|
-
|
|
$
|
3,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, period ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
|
-
|
|
|
-
|
|
|
(1,800
|
)
|
|
(1,800
|
)
|
Balance,
December 31, 2007
|
|
|
3,100,000
|
|
|
3,100
|
|
|
(1,800
|
)
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, period ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31, 2008 (Unaudited)
|
|
|
-
|
|
|
-
|
|
|
(920
|
)
|
|
(920
|
)
|
Balance,
March 31, 2008 (Unaudited)
|
|
|
3,100,000
|
|
$
|
3,100
|
|
$
|
(2,720
|
)
|
$
|
380
|
|
The
accompanying notes are an integral part of the financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS
|
|
|
|
|
|
For the period from
|
|
|
|
For the period from
|
|
For the three
|
|
November 13, 2007
|
|
|
|
November 13, 2007
|
|
months ended
|
|
(Inception) to
|
|
|
|
(Inception) to
|
|
March 31, 2008
|
|
March 31, 2008
|
|
|
|
December 31, 2007
|
|
(Unaudited)
|
|
(Unaudited)
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)
|
|
$
|
(1,800
|
)
|
$
|
(920
|
)
|
$
|
(2,720
|
)
|
Adjustments
to reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
|
|
used
in operating activities:
|
|
|
|
|
|
|
|
|
|
|
(Increase)
in deferred offering costs
|
|
|
(15,291
|
)
|
|
(12,051
|
)
|
|
(27,342
|
)
|
Increase
in accounts payable
|
|
|
17,091
|
|
|
12,971
|
|
|
30,062
|
|
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
-
|
|
|
2,500
|
|
|
2,500
|
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
-
|
|
|
2,500
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE
IN CASH
|
|
|
-
|
|
|
2,500
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH,
BEGINNING OF PERIOD
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH,
END OF PERIOD
|
|
$
|
-
|
|
$
|
2,500
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Income
taxes paid
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
NON-CASH TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|
|
Issuance
of stock for stock subscriptions receivable
|
|
$
|
3,100
|
|
$
|
600
|
|
$
|
600
|
|
The
accompanying notes are an integral part of the financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO
THE FINANCIAL STATEMENTS
DECEMBER
31, 2007 AND MARCH 31, 2008
(References
to March 31, 2008 are unaudited)
1 ORGANIZATION
AND BUSINESS OPERATIONS
Title
Starts Online, LLC (the "Company") was incorporated in the State of Nevada
on November
13, 2007. The Company is a Development Stage Company as defined by Statement
of Financial Accounting Standards ("SFAS") No. 7. The Company plans
to offer
an
online repository of title starts for abstractors.
2 SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis
of
Presentation
The
financial statements have been prepared on a going concern basis,
which contemplates
the realization of assets and liquidation of liabilities in the normal
course of
business. However, the Company has no business operations and has negative
working capital and minimal stockholders’
equity. These conditions raise substantial doubt about the
ability
of the Company to continue as a going concern.
In
view
of these matters, continuation as a going concern is dependent upon the
continued operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, raise additional capital,
and the success of its future operations. The financial statements do not
include any adjustments to the amount and classification of assets and
liabilities that may be necessary should the Company not continue as a going
concern.
The
company plans to improve its financial condition thru a public offering as
described in Note 6. However, there is no assurance that the company will be
successful in accomplishing this objective. Management believes that this plan
provides an opportunity for the Company to continue as a going
concern.
b) Cash
and
Cash Equivalents
The
company considers all highly liquid instruments with a maturity of three months
or less at the time of issuance to be cash equivalents.
c) Use
of
Estimates and Assumptions
The
preparation of financial statements in conformity with accounting principles
enerally accepted in the United States 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 or revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d) Fair
Value of Financial Instruments
SFAS
107,
"Disclosures About Fair Value of Financial Instruments," requires disclosure
of
fair value information about financial instruments. Fair value estimates
discussed herein are based upon certain market assumptions and pertinent
information available to management as of December 31, 2007.
The
respective carrying value of certain on-balance-sheet financial instruments
approximate their fair values. These financial instruments include cash, stock
subscriptions receivable, and accounts payable. Fair values were assumed to
approximate carrying values for these financial instruments since they are
short
term in nature and their carrying amounts approximate fair value, or they are
receivable or payable on demand.
e) Revenue
Recognition
The
Company has not generated any revenues since entering the development
stage. It is
the
Company's policy that revenues will be recognized in accordance with SEC Staff
Bulletin (SAB) No. 104, "Revenue Recognition". Under SAB 104, product revenues
(or service revenues) are recognized when persuasive evidence of an arrangement
exists, delivery has occurred (or service has been performed), the sales price
is fixed and determinable, and collectability is reasonably
assured.
f) Stock-based
Compensation
Stock-based
compensation is accounted for at fair market value in accordance with SFAS
No.
123 and 123 R. To date, the company has not adopted a stock option plan and
has
not granted and stock options.
g) Income
Taxes
Income
taxes are accounted for under the assets and liabilites method. Deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts
of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.
h) Basic
and
Diluted Net Loss per Share
The
company computes net loss per share in acordance with SFAS No. 128, "Earnings
per Share". SFAS No. 128 requires presentation of both basic and diluted per
share (EPS) on the face of the income statement. Basic EPS is computed by
dividing net loss available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all potentially dilutive shares if their effect is
anti-dilutive.
i) Development
Stage Company
Based
on
the Company's business plan, it is a development stage company since planned
principle operations have not yet commenced. Accordingly, the Company presents
its financial statements in conformity with the accounting principles generally
accepted in the United States of America that apply to developing enterprises.
As a development stage enterprise, the Company discloses its retained earnings
(or deficit accumulated) during the development stage and the cumulative
statements of operations and cash flows from commencement of development stage
to the current balance sheet date. The development stage began on November
13,
2007, when the Company was organized.
j) Concentrations
The
Company is not currently a party to any financial instruments that potentially
subject it to concentrations of credit risk.
k) Recent
Pronouncements
There
were various accounting standards and interpretations issued during 2008 and
2007, none of which are expected to have a material impact on the Company's
financial position, operations, or cash flows.
3 CAPITAL
STOCK
Preferred
Stock.
The
Company has authorized 75,000,000 shares of preferred stock with a par value
of
$.001 per share. These shares may be issued in series with such rights and
perferences as may be determined by the Board of Directors. The Company has
not
issued any preferred shares.
Common
Stock.
The
Company has authorized 425,000 shares of common stock with a par value of $.001
per share. As of December 31, 2007, there were 3,100,000 shares issued and
outstanding
On
November 13, 2007, (inception), the Company issued 3,100,000 shares of common
stock to a director of the Company at $.001 per share, for a total of $3,100
in
stock subscriptions receivable. Subsequent to December 31, 2007, the Company
collected the remaining balance of the stock subscriptions
receivable.
4 INCOME
TAXES
Deferred
income taxes arise from temporary timing differences in the recognition of
income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit form operating loss (NOL)
carry forwards. The net operating loss carry forward, if not used, will expire
in various years through 2028, and is severely restricted as per the Internal
Revenue code, if there is a change in ownership. The Company's deferred tax
assets are offset by a valuation allowance due to the uncertainty of the
realization of the net operating loss carry forwards. Net operating loss carry
forwards may be further limited by other provisions of the tax
laws.
The
Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
|
|
Estimated
|
|
|
|
Estimated
|
|
|
|
Change in
|
|
|
|
|
|
NOL Carry-
|
|
NOL
|
|
Tax Benefit
|
|
Valuation
|
|
Valuation
|
|
Net Tax
|
|
Period
Ending: |
|
Forward
|
|
Expires
|
|
from NOL
|
|
Allowance
|
|
Allowance
|
|
Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
|
1,800
|
|
|
2027
|
|
|
270
|
|
|
(270
|
)
|
|
(270
|
)
|
|
-
|
|
March
31, 2008
|
|
|
2,720
|
|
|
2028
|
|
|
408
|
|
|
(408
|
)
|
|
(138
|
)
|
|
-
|
|
Income
taxes at the statutory rate are reconciled to the Company's actual income taxes
as follows:
Income
tax
|
|
|
(15.00
|
)%
|
Deferred
income
|
|
|
15.00
|
%
|
Actual
tax rate
|
|
|
0
|
%
|
5 RELATED
PARTY TRANSACTIONS
The
Company uses the offices of its President for its minimal office facility needs
for no consideration. No provision for these costs has been provided since
it
has been determined that they are immaterial.
6 DEFERRED
OFFERING COSTS
As
of
December 31, 2007 and March 31, 2008, the Company had incurred $15,291 and
$27,342, respectively, related to a proposed public offering of its securities.
The Company has carried these costs as deferred offering costs in its financial
statements. If the offering is successful, these costs will be charged against
the proceeds. If the offering is unsuccessful, these costs will be
expensed.
7 SUBSEQUENT
EVENT
Stock
Subscription Receivable
Subsequent
to December 31, 2007, the Company collected the remaining balance of the stock
subscriptions receivable.
Part
II
Information
Not Required in Prospectus
Item
24. Indemnification
of Directors and Officers
The
Company’s directors and executive officers are indemnified as provided by the
Nevada Revised Statutes and its By-Laws. These provisions state that certain
persons (hereinafter called "lndemnitees") may be indemnified by a Nevada
corporation pursuant to the provisions of applicable law, namely, any person
(or
the heirs, executors or administrators of such 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,
by
reason of the fact that such person is or was a director, officer, employee
or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The Company will
indemnify the Indemnitees in each and every situation where the Company is
obligated to make such indemnification pursuant to the aforesaid statutory
provisions. The Company will also indemnify the Indemnitees in each and every
situation where, under the aforesaid statutory provisions, the Company is not
obligated, but is nevertheless permitted or empowered, to make such
indemnification. Before making such indemnification with respect to any
situation covered under the foregoing sentence, the Company will make a
determination as to whether each Indemnitee acted in good faith and in a manner
such Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, in the case of any criminal action or proceeding,
had no reasonable cause to believe that such Indemnitee's conduct was unlawful.
No such indemnification shall be made (where not required by statute) unless
it
is determined that such Indemnitee acted in good faith and in a manner such
Indemnitee reasonably believed to be in or not opposed to the best interests
of
the Company, and, in the case of any criminal action or proceeding, had no
reasonable cause to believe that such Indemnitee's conduct was
unlawful.
We
have
been advised that in the opinion of the SEC indemnification for liabilities
arising under the Securities Act is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for
indemnification against such liabilities (other than payment by the Company
of
expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by one of our directors, officers or controlling persons in connection with
the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
Item
25. Other
Expenses of Issuance and Distribution
The
following table sets forth all estimated costs and expenses payable by the
Company in connection with the Offering for the securities included in this
registration statement:
SEC
registration fee
|
|
$
|
9.00
|
|
Blue
Sky fees and expenses
|
|
$
|
500.00
|
|
Printing
and shipping expenses
|
|
$
|
91.00
|
|
Legal
fees and expenses
|
|
$
|
30,000.00
|
|
Accounting
fees and expenses
|
|
$
|
5,000.00
|
|
Transfer
agent and miscellaneous expenses
|
|
$
|
600.00
|
|
Total
|
|
$
|
36,200.00
|
|
All
expenses are estimated except the SEC filing fee.
Item
26. Recent
Sales Of Unregistered Securities
In
connection with the organization of the Company, the sole shareholder of the
Company purchased an aggregate of 3,100,000 shares of Company common stock
on
November 13, 2007.
The
foregoing sale to a director with superior access to all corporate and financial
information of the Company was exempt from the registration requirements of
the
Securities Act on the basis that the transaction did not involve a public
offering.
Item
27. Exhibits
Exhibit No.
|
|
Description
|
3.1
|
|
Articles
of Incorporation*
|
3.2
|
|
By-Laws*
|
4.1
|
|
Specimen
common stock certificate*
|
5.1
|
|
Opinion
of Synergy Law Group, LLC
|
10.1
|
|
Subscription
Agreement
|
23.1
|
|
Consent
of Synergy Law Group, LLC (see Exhibit 5.1)
|
23.2
|
|
Consent
of Schumacher & Associates, Inc. for use of their
report
|
*Previously
filed as an exhibit to the Company’s Registration Statement on Form SB-2 (File
No. 333-149036) filed with the SEC on February 4, 2008.
Item
28. Undertakings
We
hereby
undertake:
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 in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and
any
deviation from the low or high end of the estimated maximum offering range
may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no
more than a 20 percent change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the effective Registration
Statement; and
(iii) To
include any additional or changed material information on the plan of
distribution.
2. That,
for
the purpose of determining any liability under the Securities Act, 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 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. Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, 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 the Registrant of expenses incurred
or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, 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 by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
5. For
determining any liability under the Securities Act of 1933:
(i) we
shall
treat the information omitted from the form of prospectus filed as part of
this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by us under Rule 424(b)(1) or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective. For determining any liability under the
Securities Act of 1933, we shall treat each post-effective amendment that
contains a form of prospectus as a new registration statement for the securities
offered in the registration statement, and that offering of the securities
at
that time as the initial bona fide offering of those securities.
(ii) we
shall
treat each prospectus filed by us pursuant to Rule 424(b)(3) as part of the
registration statement as of the date the filed prospectus was deemed part
of
and included in the registration statement. 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 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
(iii) we
shall
treat each prospectus filed pursuant to Rule 424 (b) as part of a registration
statement relating to an offering, other than registration statement relying
on
Rule 430B or other than prospectuses filed in reliance on rule 430A, shall
be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement
made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to
such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made
in
any such document immediately prior to such date of first use.
Signatures
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-1/A and authorized this registration statement
to be signed on its behalf by the undersigned in the City of Overland Park,
State of Kansas on May 5, 2008.
|
Title
Starts Online, Inc.
|
|
|
|
By:
/s/ Mark DeFoor
|
|
President
and Chief Executive Officer
|
In
accordance with the requirements of the Securities Act, this Registration
Statement was signed by the following persons in the capacities and on the
dates
stated.
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/
Mark DeFoor
|
|
President,
Chief Executive Officer and
|
|
|
|
|
Director
(principal executive officer;
|
|
May
5, 2008
|
|
|
principal
financial and accounting officer)
|
|
|
|
|
|
|
|
/s/
Melissa Yarnell
|
|
Secretary
|
|
May
5, 2008
|