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Itonis Inc. – ‘SB-2/A’ on 6/26/06

On:  Monday, 6/26/06, at 8:43pm ET   ·   As of:  6/27/06   ·   Private-to-Public:  Document/Exhibit ¶  –  Release Delayed   ·   Accession #:  1062993-6-1843   ·   File #:  333-134032

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/27/06  Itonis Inc.                       SB-2/A¶                5:809K                                   Newsfile Corp/FA

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2/A      Amendment No. 1 to Registration Statement           HTML    642K 
 5: CORRESP   ¶ Comment-Response or Other Letter to the SEC         HTML     28K 
 2: EX-5.1      Opinion of Lang Michener LLP                        HTML     12K 
 3: EX-10.7     2006 Stock Option Plan                              HTML     55K 
 4: EX-23.1     Consent of Independent Auditors                     HTML      8K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2/A
Amendment No. 1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ITONIS INC.
(Name of small business issuer in its charter)

Klimentska 10, 110 00 Prague 1, Czech Republic
+420 296578180
Fax +420 296578199
(Address, including zip code, and telephone number, including area code, of principal executive offices)

Mr. Nicolas Lavaud, President
Klimentska 10, 110 00 Prague 1, Czech Republic
+420 296578180
Fax +420 296578199
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:
Michael H. Taylor, Esq.
Lang Michener LLP
1500 Royal Centre, 1055 West Georgia Street
Vancouver, British Columbia V6E 4N7
Tel: 604-689-9111

Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement
is declared effective.

If any securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act, check the following box. [ x ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. [           ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registrations statement number of the earlier effective registration statement for the same
offering. [           ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [           ]

If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box. [           ]

The information in this prospectus is not complete and may be changed. The selling stockholders may not sell or offer these securities until the registration statement of which this prospectus forms a part filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED u, 2006

PROSPECTUS

ITONIS INC.

6,227,327 SHARES OF COMMON STOCK

This prospectus relates to the resale of up to 6,227,327 shares of common stock of ITonis Inc. that may be offered and sold, from time to time, by the selling stockholders identified in this prospectus. These shares were issued in three separate private transactions, as follows:

These transactions are described in this prospectus under “Selling Stockholders.”

Our common stock is not presently traded on any market or securities exchange, and we have not applied for listing or quotation on any public market. We anticipate seeking sponsorship for the trading of our common stock on the National Association of Securities Dealers OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize. The selling stockholders are required to sell our shares at $0.25 per share until our shares are quoted on the OTC Bulletin Board, or listed for trading or quoted on any other public market, and thereafter at prevailing market prices, prices related to such prevailing market prices or privately negotiated prices. For additional information on the methods of sale, see “Plan of Distribution”.

We will not receive any proceeds from this offering. We agreed to bear substantially all of the expenses in connection with the registration and resale of the shares offered hereby (other than selling commissions).

The purchase of the securities offered by this Prospectus involves a high degree of risk. You should invest in our shares of common stock only if you can afford to lose your entire investment. You should carefully read and consider the section of this prospectus entitled “Risk Factors” beginning on page 5 before buying any shares of our common stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offence.

The date of this prospectus is: u, 2006

TABLE OF CONTENTS

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iii

SUMMARY

As used in this prospectus: (i) unless the context otherwise requires, “we”, “us”, “our”, the “Company” or “ITonis” refers to ITonis Inc. and its subsidiaries; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to US dollars, unless otherwise indicated.

The following summary is not complete and does not contain all of the information that may be important to you. You should read the entire prospectus before making an investment decision relating to the purchase of our shares of common stock.

OUR BUSINESS

We are the owner of a suite of proprietary software applications that we refer to as the “ITonis video solution”. The ITonis video solution enables the on-demand delivery of video content, including television channels and videos, to consumers via broadband Internet for viewing on the consumer’s television.

Our business plan is to market and sell the ITonis video solution as a technology solution that will enable the on-demand delivery of video content via the Internet. The ITonis video solution is one of three components that are essential to the on-demand delivery of video content via broadband Internet, namely:

• the intellectual property rights to distribute the video content;

• a set-top box located near the consumer’s television that is connected to broadband Internet; and

• a technology solution that enables the on-demand delivery of the video content to the consumer’s television via the set top box.

We do not have any plans to engage in the business of acquiring intellectual property rights to distribute video content or manufacturing and selling set top boxes for televisions. Our focus will be on the marketing and sale of the ITonis video solution in circumstances where other parties will be responsible for the provision of the intellectual property rights to distribute the video content and the necessary set-top boxes.

The ITonis video solution is comprised of the following components, each of which will be achieved by the installation of our software applications on computer servers that are used to implement our video solution:

• the ITonis media acquisition system that allows the upload of video content onto media storage servers;

• ITonis media storage servers that provide for the storage of video and other media content;

• ITonis media streamers that provide for the streaming of video content in real time to the end consumer via the Internet;

• an ITonis television portal (“IPTV”) application server that provides the interface between the computer system and the ultimate consumer; and

• an ITonis service server that performs automatic maintenance tasks on the solution.

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We have developed the basic functionality of ITonis video solution and have demonstrated the solution in a laboratory environment. However, we have not deployed the ITonis video solution in any commercial operations to date. We are now attempting to secure pilot projects for the demonstration of the ITonis video solution in “real world” operations. We are also planning to continue additional development of the ITonis video solution in order to extend the functionality of the solution, including the addition of digital rights management features.

We believe that our ITonis video solution may be marketed to the following participants engaged in the telecommunications and media distribution industry:

• video content owners and distributors, including television broadcast and cable companies, that wish to enable their customers to purchase on-demand video content and other value added services via the Internet; and

• Internet service providers that wish to be able to offer their customers the ability to purchase on- demand video content for viewing on their televisions via the Internet.

We plan to commercialize our ITonis video solution using two distinct business models:

• Our direct sales model involves selling the ITonis video solution as an “end to end” computer based platform to video content owners and distributors who will install the ITonis video solution on their computer servers and use the solution to deliver on-demand video content to their customers via the Internet.

• Our Internet service provider model involves partnering with video content providers to provide a fully outsourced video on-demand and television solution to Internet service provider businesses.

Although sales and marketing activities have been initiated, we have earned minimal revenues to date and, as such, we are presently a development stage company. We have not as of yet deployed our ITonis video solution in any commercial operation. Accordingly, we cannot provide any assurance to investors that any of the above business models will be viable or that we will achieve significant revenues. Further, we cannot provide investors with any assurance as to the type of revenue model that will ultimately be acceptable to our customers.

OUR HISTORY

We were incorporated on July 5, 2005 as “Kenshou Inc.” under the laws of the state of Nevada.

We acquired certain intellectual property owned by Onyx Trading Inc. (“Onyx Trading”) relating to its “TV Everywhere” video platform and software components on November 16, 2005. The TV Everywhere software components included the ITonis media acquisition system, the ITonis media storage system and the ITonis media streamers that have since been incorporated into our ITonis television solution.

We changed our corporate name to “ITonis Inc.” effective December 2, 2005. We incorporated our wholly owned Czech subsidiary called “Itonis CZ” on November 25, 2005.

We acquired certain intellectual property owned by Nordic IPTV Company ApS (“Nordic IPTV”) (named “Makeitwork ApS” at the time of the agreement) relating to its television portal application server technology on February 7, 2006. This technology has subsequently been integrated into our ITonis video solution.

We completed a one for two consolidation of our outstanding shares of common stock on June 15, 2006. All information presented in this prospectus is presented on a post-consolidation basis, including all share amounts and per share prices. The accompanying audited consolidated financial statements as at

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November 30, 2005 and unaudited interim financial statements as at February 28, 2006 are presented on a pre-consolidation basis, including all share amounts and per share prices.

We presently have limited funds with which to pursue our plan of operations. While we have completed private placement financings as part of our corporate organization, we will require additional funding in order to pursue our plan of operations over the next twelve months. We currently have no arrangements for any additional financing and there is no assurance that any additional financing will be obtained.

Our principal office is located at Klimentska 10, 110 00 Prague 1, Czech Republic. Our telephone number is +420 296 578 180 and our fax number is +420 296 578 199.

THE OFFERING

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SUMMARY OF FINANCIAL DATA

The summarized consolidated financial data presented below is derived from and should be read in conjunction with:

• our audited consolidated financial statements as at November 30, 2005 and for the period from inception (July 5, 2005) to November 30, 2005, including the notes to those financial statements; and

• our unaudited consolidated interim financial statements as at and for the three months ended February 28, 2006 and for the period from inception (July 5, 2005) to February 28, 2006.

These financial statements are included elsewhere in this prospectus. The following summarized consolidated financial data should also be read in conjunction with the section of this prospectus entitled “Plan of Operations”:

BALANCE SHEET DATA

STATEMENT OF OPERATIONS DATA

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our shares of common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND FINANCIAL CONDITION

As we have yet to commercially deploy the ITonis video solution, there is no assurance that we will ever achieve revenues from the licensing or sales of the ITonis video solution.

Our plan of operation is focused on the commercialization of the ITonis video solution and its various components. While we have completed the development of the ITonis video solution to the stage where its operation can be demonstrated in research and development environments, we will have to complete additional development work in order to advance to the development of the ITonis video solution to the stage where commercialization is possible. Our ability to achieve revenues and future profitability will depend on our ability to complete development of the ITonis video solution and to successfully market and license or sell the ITonis video solution and its various components. There is no assurance that we will be able to complete the successful development of the ITonis video solution as a commercially deployable solution or that our marketing and sales efforts will be successfully in enabling us to generate revenues from sales and deployment of the ITonis video solution.

If we are unable to obtain additional financing to execute our plan of operations, then we will not have sufficient funds with which to carry out our plan of operations and our business will most likely fail.

Our plan of operations is to market and commercialize the ITonis video solution and to generate revenues from the sales of our video solutions and its components. Our planned expenditures over the next year to implement this plan of operations is in excess of our current financial resources. We have limited cash and working capital and we will not be able to fund our operations beyond the next four months without additional financing. Accordingly, we will require additional financing in order to carry out our plan of operations. We presently do not have any arrangements for additional financing in place and there is no assurance that we will be able to arrange for additional financing. If we are not able to arrange for additional financing to cover these additional anticipated expenses, we will not be able to execute our plan of operations with the result that our business may fail and investors may lose a substantial portion or all of their investment.

As we have a limited operating history and our ability to exploit the ITonis video solution is untested, we may never earn revenues or achieve profitability from the licensing or sales of the ITonis video solution.

We were incorporated on July 5, 2005 and only recently acquired the intellectual property for the ITonis video solution that is necessary for our business. In order to fully develop this intellectual property into a commercial product and ensure a delivery capability, ITonis has set up a fully owned subsidiary in the Czech Republic, ITonis CZ, which incorporation process was formally completed on January 4, 2006. Our operating history is limited, and to date we have been involved primarily in organisational and development activities. We have not earned revenues to date from the licensing or sales of the ITonis

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video solution and our ability to commercially exploit our ITonis software is untested. Accordingly, there is no assurance that we will ever achieve revenues or profitability from the licensing or sales of the ITonis video solution.

As we are a start-up company in the development stage without an established technology, there can be no assurance that our business will be successful.

We are a start-up company focused on a new technology, namely our ITonis video solution, which has no proven market acceptance. We are not able to provide investors with any assurance that we will be able to operate our business successfully or that we will be able to achieve profitable operations. Potential investors should consider the fact that we are start-up technology based company that is attempting to develop and commercialize a technology for which there is not yet an established market. There is a high rate of failure of start-up technology based enterprises such as ours that are attempting to complete the development and commercialization of technologies for which there are no established markets. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the commercialization process that we plan to undertake. These potential problems include, but are not limited to, our inability to finalize development of the ITonis video solution, the failure of a market for video on demand services delivered through the Internet to develop, our inability to obtain the necessary financing to complete our planned development and commercialization activities, a reluctance of our potential customers to purchase the ITonis video solution, our inability to enter into arrangements with strategic partners for the sale of ITonis video solution and our inability to provide video solutions that meet the expectations of the end users. If we are unsuccessful in addressing these risks, then we will not achieve revenues and our business will most likely fail.

If we are not able to enter into arrangements with strategic partners for implementing Internet video solutions for Internet service providers, then our plans to generate revenues from Internet service providers who would use our ITonis video solution to outsource Internet video services will fail.

One aspect of our business plan involves entering into arrangements with strategic partners including video content providers and television set-top box providers. With these strategic partners, we plan to market our ITonis video solutions as a video platform Internet service providers who wish to outsource the delivery of Internet video services. There is no assurance that potential strategic partners will enter into these arrangements with us for the deployment of our ITonis video solutions. If we are not able to enter into these strategic relationships, then we will not be able to generate revenues from this model. In this event, we would depend on revenues from direct sales of our ITonis video solutions. There can be no assurance that sales to Internet service providers or direct sales of our video solutions will be achieved.

We have a history of losses and negative cash flows, which is likely to continue unless the ITonis video solution gains sufficient market acceptance to generate a commercially viable level of sales.

Since inception, we have not achieved revenues and we have incurred significant losses. Accordingly, we have a history of negative cash flows. There is no assurance that we will be able to successfully commercialize the ITonis video solution in order to generate revenues from it, achieve profitably and generate positive cash flow in the future. Further, we expect an increase in development and operating costs as we undertake our plan of operations prior to achieving revenues from the ITonis video solution, of which there is no certainty. Consequently, we expect to incur continued operating losses and net cash outflows until such time as the ITonis video solution gains market acceptance sufficient to generate a commercially viable and sustainable level of income, of which there can be no assurance. In addition, our ability to generate revenues will be subject to significant fluctuations due to many factors not within our

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control, such as market acceptance of our video solutions, the unpredictability of when customers will agree to purchase our platforms and the overall demand for video solutions.

If our operating expenses are greater than anticipated, then we will have less funds with which to pursue our plan of operations and our additional financing requirements will be greater than anticipated.

We may find that the costs of carrying out our plan of operations prior to achieving revenues are greater than we anticipate. Increased operating costs will cause the amount of additional financing that we require to increase. Investors may be more reluctant to provide additional financing if we cannot demonstrate that we can control our operating costs. There is no assurance that additional financing required as a result of our operating costs being greater than anticipated will be available to us. If we do not control our operating expenses, then we will have less funds with which to carry out our plan of operations with the result that our business may fail.

As there is a substantial doubt as to our ability to continue as a going concern, there is a significant risk that our business will fail.

In their report on our annual financial statements for the year ended November 30, 2005, our independent auditors included explanatory paragraphs expressing doubt about our ability to continue as a going concern. This is due to the uncertainty of our ability to meet our current operating and capital expenses. As a result, we caution investors that there is a risk that our business may fail.

Substantially all of our assets and our directors and officers are located outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or our directors and officers.

Substantially all of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States. In addition, our directors and officers are residents of the Czech Republic, and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers and directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal securities laws against our directors and officers.

We operate in a highly competitive industry and our failure to compete effectively may adversely affect our ability to generate revenue.

Our industry is highly competitive and subject to rapid change. We expect to experience competition from companies involved in high technologies. We cannot guarantee that our engineering resources will be able to modify our products fast enough to meet customer and market requirements. There are a number of companies that offer video solutions, and some of our current and potential competitors have greater technical, financial, marketing, sales and other resources than we do. Such competition will potentially affect our chances of achieving profitability, with the result that our business may fail.

The ability of our ITonis video solution to be successfully deployed in commercial operations is contingent upon the widespread market penetration of broadband Internet access.

Our ITonis video solution cannot be used to deliver on-demand video services to potential customers who do not have access to broadband Internet access. Accordingly, a key factor for the success of the commercialization of our ITonis video platform is the high penetration of broadband connections to

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potential customers. While rates of penetration of broadband Internet access are increasing, there is risk that penetration will not be as high as expected. If the adoption of broadband connection is slowed down, this would have a material negative impact on our ability to commercialize our ITonis video solution and generate revenues and positive cash flows from our operations.

If we are not able to successful integrate Digital Right Management, or DRM, into our ITonis video solution, then video content owners and distributors may not trust our solution for the delivery of proprietary video content via the Internet with the result that potential customers may refuse to by our products or deploy our ITonis video solution for the delivery of on-demand video.

We plan to incorporate a digital rights management (“DRM”) solution into our ITonis video solution. A DRM solution is used to ensure that video content delivered via the Internet is not copied or used without authorization from the video content owner or distributor. We are presently developing our own DRM solution with the intent to have it incorporated into our ITonis video solution and audited by an independent third party. If we are unable to successfully integrate a DRM solution into our ITonis video solution with sufficient encryption technology to achieve audit by a third party, then video content owners and distributors may not be willing to permit our ITonis video solution to be used for the delivery of their proprietary video content via the Internet. Accordingly, there is a risk that video content owners and distributors will not trust our ITonis video solution and would not be willing to permit their content to be delivered via the Internet using our ITonis video solution. This refusal would adversely impact on our ability to achieve both direct sales of our ITonis video solution and our ability to offer a video outsourcing solution to Internet service providers.

We could lose our competitive advantages if we are not able to protect any proprietary technology and intellectual property rights against infringement, and any related litigation could be time-consuming and costly.

Our success and ability to compete depends to a significant degree on our ITonis software. We have not achieved any trademark protection of the “ITonis” names that we use in connection with our ITonis software and our business. As we have not obtained any trademark protection, we may not be able to prevent any competitor from adopting the same or similar names to the names that we use.

We do not have any patent protection that covers our ITonis software. Accordingly, as present, the only measure that we believe is available to us to protect our ITonis software is a combination of trade secret and copyright law and our ability to ensure confidentiality of the software source codes through non-disclosure agreements. If any of our competitors copy or otherwise gain access to such proprietary technology or software or develop similar technologies independently, our competitive position will be damaged.

There is a risk that employees and third parties with whom we have non-disclosure agreements may breach their agreements with us by disclosing our trade secrets or copying works, such as our computer software, in which we are entitled to copyright protection. Further, employees or third parties may attempt to use our trade secrets and copyrighted works for their own purposes, including competing with us. We cannot provide investors with any assurance that we will have the financial resources to maintain legal actions against persons who we allege have breached their contractual agreements with us or infringed our copyrights or that we will be successful in any legal actions that we commence in an attempt to enforce our intellectual property rights.

As a result of these factors, investors should be aware that we may be unable to protect any intellectual property rights that we have or that we will be able to exploit the intellectual property rights that we do have in order to secure a competitive position in the market-place.

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Our products may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands.

Our industry is characterized by rapid changes in technology and customer demands. As a result, our ITonis video solution may become obsolete and unmarketable. Our future success will depend on our ability to adapt to technological advances, anticipate customer demands, develop new services and video solutions and enhance our current video solutions on a timely and cost-effective basis. Our failure to develop or secure access to additional technologies would delay our development plans and subsequent ability to generate revenue. Further, our video solutions must remain competitive with those of other companies with substantially greater resources. We may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new services or enhanced versions of existing video solutions. Also, we may not be able to adapt new or enhanced services to emerging industry standards, and our new products may not be favourably received..

If we fail to effectively manage our growth, our future business results could be harmed and our managerial and operational resources may be strained.

As we proceed with the commercialization of our ITonis software, we expect to experience significant growth in the scope and complexity of our business. We will need to add staff to market our services, manage operations, handle sales, delivery and support as well as marketing efforts and perform finance and accounting functions. We will be required to hire a broad range of additional personnel in order to successfully manage our operations if we are successful in commercializing our ITonis software. This growth is likely to place a strain on our management and operational and financial resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a materially adverse effect on our ability to deliver video solutions as well as on our business and financial condition.

If we lose the services of one of our officers, then we may not be able to carry out our plan of operations.

We will be dependent upon the services of Mr. Nicolas Lavaud and/or Mr. Antonin Kral to carry out our plan of operations. The loss of the services of one or both of them could have a serious effect on our ability to execute our business plan and succeed in commercializing our ITonis software. We do not maintain any ‘key man’ insurance on our directors.

If government regulations are adopted that impose additional costs or requirements on our ability to provide our video solutions, then our cost of operations may be increased and we may not be able to carry out our plan of operations.

Our industry is highly regulated, and both we and our future customers and clients may be affected by changes in regulation of telecommunication services. The indirect impact of changes in regulation could affect our business adversely even though the specific regulations do not apply directly to us or our products. Changing governmental regulations may impose new and different requirements with which video content is delivered over the Internet. We have no control over regulations and regulatory change and cannot guarantee that our video solutions will meet the minimum standards as set out by applicable future regulation. Establishing compliance may be costly and time-consuming and our failure to do so could result in our inability to commercialize our video solutions and carry out our plan of operations. Further, the existence of government regulation in markets into which we may wish to enter may impose prohibitive costs of operation which could result in our determination not to offer our ITonis video

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solutions in these markets. In addition, laws that handle those issues do not exist in some countries and need to be drafted.

RISKS RELATING TO OUR COMMON STOCK

We have not paid any dividends and do not foresee paying dividends in the future.

Payment of dividends on our common stock is within the discretion of the board of directors and will depend upon our future earnings, our capital requirements, financial condition and other relevant factors. We have no plan to declare any dividends in the foreseeable future.

There is no active trading market for our common stock, and if a market for our common stock does not develop our investors will be unable to sell their shares.

There is currently no active trading market for our common stock and such a market may not develop or be sustained. We currently plan to have our common stock quoted on the National Association of Securities Dealers Inc.’s OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. In order to do this, a market maker must file a Form 15c-211 to allow the market maker to make a market in our shares of common stock. At the date hereof, we are not aware that any market maker has any such intention. We cannot provide our investors with any assurance that our common stock will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize. Further, the OTC Bulletin Board is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. If our common stock is not quoted on the OTC Bulletin Board or if a public market for our common stock does not develop, then investors may not be able to resell the shares of our common stock that they have purchased and may lose all of their investment.

For reasons outside our control, our stock price may be volatile.

The market price of our common stock, if listed, is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including:

• technological innovations or new video solutions and services by us or our competitors;

• additions or departures of key personnel;

• sales of our common stock;

• our ability to integrate operations, technology, products and services;

• our ability to execute our business plan;

• operating results below expectations;

• loss of any strategic partner or relationship;

• industry developments;

• economic and other external factors; and

• period-to-period fluctuations in our financial results.

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Because we have a limited operating history and have earned minimal revenues to date, any one of these factors may have a material adverse effect on our business, results of operations and financial condition. Our stock price may fluctuate widely as a result of any of the above listed factors.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Our common stock will be subject to the “Penny Stock” rules of the SEC, which will make transactions in our common stock cumbersome and may reduce the value of an investment in our common stock.

We currently plan to have our common stock quoted on the National Association of Securities Dealers Inc.’s OTC Bulletin Board, which is generally considered to be a less efficient market than markets such as NASDAQ or other national exchanges, and which may cause difficulty in conducting trades and obtaining future financing. Further, our securities will be subject to the “penny stock rules” adopted pursuant to Section 15(g) of the Exchange Act. The penny stock rules apply generally to companies whose common stock trades at less than $5.00 per share, subject to certain limited exemptions. Such rules require, among other things, that brokers who trade “penny stock” to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade “penny stock” because of the requirements of the “penny stock rules” and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. In the event that we remain subject to the “penny stock rules” for any significant period, there may develop an adverse impact on the market, if any, for our securities. Because our securities are subject to the “penny stock rules”, investors will find it more difficult to dispose of our securities. Further, it is more difficult: (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not publish press releases about such companies, and (iii) to obtain needed capital.

Please read this prospectus carefully. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information provided in this prospectus is accurate as of any date other than the date on the front of this prospectus.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this prospectus include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve assumptions, risks and uncertainties regarding, among others, the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, customer acceptance of our business model and software solutions and other factors. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this prospectus under “Risk Factors”. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this prospectus. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future

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events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. The forward-looking statements in this prospectus are made as of the date of this prospectus and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

The safe harbour for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of common stock offered through this prospectus by the selling stockholders. All proceeds from the sale of the shares will be for the account of the selling stockholders, as described below in the sections of this prospectus entitled “Selling Stockholders” and “Plan of Distribution.” We will, however, incur substantially all of the costs associated with the preparation and filing of the registration statement of which this prospectus forms a part.

We received proceeds from the initial sales of the shares of common stock that are offered by the selling stockholders through this prospectus. We have disclosed how we have applied the proceeds of these offerings to date and how we intend to use the balance of the proceeds of these offerings in our plan operations below under the heading “Management’s Discussion and Analysis and Plan of Operations”.

DETERMINATION OF OFFERING PRICE

As there is no public market for our shares of common stock, we fixed the offering price of the shares hereby offered by reference to our most recent private offering of our common stock, which was effected at $0.25 per share. The selling stockholders will sell their common stock at the price of $0.25 per share, until our common stock is quoted on the OTC Bulletin Board or in another quotation medium and, thereafter, at prevailing market prices or at privately negotiated prices. There is no relationship whatsoever between the offering price for the shares offered hereby and our assets, earnings, book value or any other objective criteria of value.

We have not applied for listing or quotation on any public market. If our common stock becomes publicly traded and a market for the stock develops, the actual offering price of the shares that are the subject of this prospectus will be determined by prevailing market prices at the time of sale, prices related to such prevailing market prices or by private transactions negotiated by the selling stockholders named in this prospectus. The offering price would thus be determined by market factors and the independent decisions of the selling stockholders named in this prospectus.

DILUTION

The common stock to be sold by the selling stockholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing stockholders.

SELLING STOCKHOLDERS

The selling stockholders named in this prospectus are offering all of the 6,227,327 shares of common stock offered by this prospectus. The selling stockholders acquired these shares of common stock from us in the following transactions:

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1.           Certain selling stockholders acquired 4,000,000 shares of our common stock from us at a price of $0.02 per share in a private placement offering that was completed without registration under the Securities Act in accordance with Rule 903 of Regulation S of the Securities Act on September 14, 2005;

2.           Certain selling stockholders acquired 1,488,763 shares of our common stock from us at a price of $0.10 per share in a private placement offering that was completed without registration under the Securities Act in accordance with Rule 903 of Regulation S of the Securities Act on November 16, 2005;

3.           Certain selling stockholders acquired 738,564 shares of our common stock from us at a price of $0.25 per share in a private placement offering that was completed without registration under the Securities Act in accordance with Rule 903 of Regulation S of the Securities Act on April 10, 2006.

The following table provides, as of June 15, 2006, information regarding the beneficial ownership of our common stock by each of the selling stockholders, including:

1.           the number of shares owned by each selling stockholder prior to this offering;

2.           the total number of shares that are to be offered by each selling stockholder;

3.           the total number of shares that will be owned by each selling stockholder upon completion of this offering; and

4.           the percentage owned by each selling stockholder upon completion of this offering.

Information with respect to beneficial ownership is based upon information obtained from the selling stockholders. Information with respect to the total number of shares owned upon completion of the offering assumes the sale of all of the shares offered by this prospectus and no other purchases or sales of our shares of common stock by the selling stockholders. Except as described below, to our knowledge, the named selling stockholders beneficially own and have sole voting and investment power over all shares offered by them. Other than the relationships described below, none of the selling stockholders had or have any material relationship with us. None of the selling stockholders is a broker-dealer or an affiliate of a broker-dealer to our knowledge.

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Notes:

PLAN OF DISTRIBUTION

TIMING OF SALES

The selling stockholders may offer and sell the shares covered by this prospectus at various times. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale.

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NO KNOWN AGREEMENTS TO RESELL THE SHARES

To our knowledge, no selling stockholder has any agreement or understanding, directly or indirectly, with any person to resell the shares covered by this prospectus.

OFFERING PRICE

The selling stockholders will sell their shares at an offering price of $0.25 per share until our shares are listed for trading on the OTC Bulletin Board, or listed for trading or quoted on any other public market. Thereafter, the sales price offered by the selling stockholders to the public may be:

1.           The market price prevailing at the time of sale;

2.           A price related to such prevailing market price; or

3.           Such other price as the selling stockholders determine from time to time.

Our common stock is not currently listed on any national exchange or qualified for trading on any electronic quotation system. To date, no actions have been taken to list our shares on any national exchange or to qualify our shares for trading on any electronic quotation system. If our common stock becomes publicly traded, then the sales price to the public will vary according to the selling decisions of each selling stockholder and the market for our stock at the time of resale.

MANNER OF SALE

The shares may be sold by means of one or more of the following methods:

1.           a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

2.           purchases by a broker-dealer as principal and resale by that broker-dealer for its account pursuant to this prospectus;

3.           ordinary brokerage transactions in which the broker solicits purchasers;

4.           through options, swaps or derivatives;

5.           in transactions to cover short sales;

6.           privately negotiated transactions; or

7.           in a combination of any of the above methods.

The selling stockholders may sell their shares directly to purchasers or may use brokers, dealers, underwriters or agents to sell their shares. Brokers or dealers engaged by the selling stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions, discounts or concessions from the selling stockholders, or, if any such broker-dealer acts as agent for the purchaser of shares, from the purchaser in amounts to be negotiated immediately prior to the sale. The compensation received by brokers or dealers may, but is not expected to, exceed that which is customary for the types of transactions involved. Broker-dealers may agree with a selling stockholder to sell a specified number of shares at a stipulated price per share, and, to the extent the broker-dealer is unable to do so acting as agent for a selling stockholder, to purchase as principal any unsold shares at the price required to fulfill the

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broker-dealer commitment to the selling stockholder. Broker-dealers who acquire shares as principal may thereafter resell the shares from time to time in transactions, which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above, in the over-the-counter market or otherwise at prices and on terms then prevailing at the time of sale, at prices then related to the then-current market price or in negotiated transactions. In connection with re-sales of the shares, broker-dealers may pay to or receive from the purchasers of shares commissions as described above.

If our selling stockholders enter into arrangements with brokers or dealers, as described above, we are obligated to file a post-effective amendment to this registration statement disclosing such arrangements, including the names of any broker dealers acting as underwriters.

The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares may be deemed to be “underwriters” within the meaning of the Securities Act. In that event, any commissions received by broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

SALES PURSUANT TO RULE 144

Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus. Presently, there are no shares of our common stock that are available for resale to the public in accordance with the requirements of Rule 144 of the Securities Act.

In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company’s common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of:

1.           1% of the number of shares of the company’s common stock then outstanding; or

2.           the average weekly trading volume of the company’s common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company.

Under Rule 144(k), a person who is not one of the company’s affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

REGULATION M

The selling stockholders must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. In particular, we will advise the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for, or purchasing for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution.

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Accordingly, during such times as a selling stockholder may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, the selling stockholder must comply with applicable law and, among other things:

1.           may not engage in any stabilization activities in connection with our common stock;

2.           may not cover short sales by purchasing shares while the distribution is taking place; and

3.           may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act.

In addition, we will make copies of this prospectus available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act.

PENNY STOCK RULES

The Securities and Exchange Commission 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, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “institutional accredited investors.” The term “institutional accredited investor” refers generally to those accredited investors who are not natural persons and fall into one of the categories of accredited investor specified in subparagraphs (1), (2), (3), (7) or (8) of Rule 501 of Regulation D promulgated under the Securities Act, including institutions with assets in excess of $5,000,000.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form required by the Securities and Exchange Commission, obtain from the customer a signed and dated acknowledgement of receipt of the disclosure document and to wait two business days before effecting the transaction. The risk disclosure document provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.

The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

STATE SECURITIES LAWS

Under the securities laws of some states, the common shares may be sold in such states only through

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registered or licensed brokers or dealers. In addition, in some states the common shares may not be sold unless the shares have been registered or qualified for sale in the state or an exemption from registration or qualification is available and is complied with.

EXPENSES OF REGISTRATION

We are bearing all costs relating to the registration of the common stock. These expenses are estimated to be $53,000, including, but not limited to, legal, accounting, auditing, printing and mailing fees. The selling stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.

LEGAL PROCEEDINGS

We currently are not party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our executive officers and directors and their respective ages as of June 15, 2006 are as follows:

The following describes the business experience of our directors and executive officers. Mr. Lavaud and Mr. Kral are not and have not in the past been directors of any reporting company under the Exchange Act or any other publicly traded company.

Nicolas Lavaud has been President, Chief Executive Officer, Chief Financial Officer and Secretary since November 16, 2005. He is also managing director of ITonis CZ. Mr. Lavaud holds a Master of Telecommunications degree from Monash University in Melbourne and Ecole Nationale Supérieure des Télécommunications de Paris. Mr. Lavaud worked with Telstra Research Labs (an Australian telecommunications company) in Melbourne from November 1996 to December 1997, contributing to the development of the national data network and providing insight on different leading edge technology projects such as Voice over Internet. From June 1998 to September 1999, Mr. Lavaud was responsible for all technical matters for Delta Partners (network planning software developers) in the United Kingdom where he also provided technical consultancy for software evolution and supported the business development. From October 1999 to August 2004, he held the position of Value Added Services Development manager at Czech Telecom in Prague where he was also responsible for new services and contributed to various projects such as Unified Messaging, fixed SMS and Voice over IP. From August 2000 to August 2003, he developed the Electronic channel Solution Centre in Prague for iPLATO, and

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managed the Centre while developing business and providing consultancy in Eastern Europe. In August 2004, Mr. Lavaud set up and run Xeris s.r.o. ("Xeris"), a fully operational research and development centre capable of delivering short terms solutions but also very complex projects until January 2006, where he was responsible for day to day management, business development, partnership management and recruitment.

Mr. Lavaud presently devotes approximately 40 hours per week of his business time to our business, representing substantially all of his business time. During the first quarter of fiscal 2006, Mr. Lavaud provided approximately 36 hours per month performing administrative tasks for Xeris, with the balance of his time being devoted to our business. This outsourcing work was completed in the first quarter of fiscal 2006 and is not continuing. Accordingly, Mr. Lavaud does not devote any of his current business time to the business of Xeris.

Antonin Kral has been a director and our Chief Technical Officer since February 7, 2006. He is responsible for the complete analysis of ITonis video solution, including the design of network topology. He holds a Masters degree from the Czech Technical University and currently works on his Phd in the Department of Mathematics, Faculty of Nuclear Sciences and Physical Engineering. He has been involved in many projects including the Deployment of IPv6 at Pragonet and the design team when developing the network for DHL computing center. At the University he deployed IPv6 for the whole Czech Technical University (CTU) and managed and administrated the whole CTU campus network (Novel Netware, UNIX servers and 2500 workstations connected to the university backbone and Internet) as well as computer clusters of CTU computer science department. Mr. Kral is a lector at CTU (Computer science) on Computer networks and Textual information Systems. He has also been a Member of the board of experts at the Ministry of Informatics – Czech Republic since October 2004. Mr. Kral has also been involved in research projects, including research on end-to-end performance and QoS at Cesnet (Czech National Research and Education Network operator) and continues to be involved in the COMPASS project as part of CERN (European Organization for Nuclear Research).

Mr. Kral presently devotes approximately 40 hours per week of his business time to our business, representing substantially all of his business time.

TERM OF OFFICE

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

SIGNIFICANT EMPLOYEES

We have 11 other employees other than the officers and directors described above, most of whom are developers/programmers. Of these employees, we believe that the following are significant employees:

Libor Bucinsky is responsible for project delivery at ITonis. Mr. Bucinsky developed his technical knowledge in Expert and Partner Engineering, a Czech based company, where he designed and built networks based on X25 and Frame relay protocols. Also, at Barum Continental, Mr. Bucinsky developed his knowledge in terms of server administration. He was able to design, build and manage the computer network that was connecting the different point of sales of the company.

Mr. Bucinsky joined Datasys support (a start up company) as a director in November 1996 until June 1997. He was managing the technical team and was responsible for the development and support of the Microsoft products. In September 1997, he joined Czech Telecom and became a technical manager for

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VoIP and VAS. He was managing a team of technical people and was responsible for the implementation of key projects in the VAS and VoIP area. Those projects included long term projects such as migration of Voicemail services in a given timeframe as well as shorter projects such as implementation of VoIP services at a given customers. He joined Xeris in October 2004 where he was fully responsible for the delivery of all projects. He designed and implemented effective project management schemes and is responsible for quality control, timeframe and resource management.

Mr. Bucinsky presently devotes approximately 40 hours per week of his business time to our business, representing substantially all of his business time.

Michal Benes is ITonis’ expert in new technologies. He also leads the team of C/C++ programmers. He holds a PhD from the Czech Technical University in the Department of Mathematics, Faculty of Mathematics and Physics. He lead several research and development projects and has contributed to development of computer software that has been programmed in C++ and Java software languages and incorporated into our ITonis video solution. Mr. Benes designed and developed some key software components relating to the ITonis media streamers while with Xeris. Since joining ITonis, Mr. Benes has been involved in continued software development work in connection with the enhancement of the features and performance of the media streamers and with the development a digital rights management solution for ITonis.

Mr. Benes presently devotes approximately 40 hours per week of his business time to our business, representing substantially all of his business time.

Martin Cizek is ITonis’ Java software development team leader. He holds a Masters degree in Computer Sciences from the Czech Technical University. He has lead several key customer projects and contributed to development of our software using the Java software programming language. Mr. Cizek has been involved in Java software development work for our application server software, which work has included analyzing the software acquired from Nordic IPTV and integrating this software into our ITonis video solution. His other achievements include running IT training on Linux, Java, HTML code and scripts, PHP technology as well as contributing to research in end-to-end performance at Cesnet (Czech National Research and Education Network operator). In addition to his development skills, he has extensive network knowledge and provides key insights into ITonis video solution analysis.

Mr. Cizek presently devotes approximately 40 hours per week of his business time to our business, representing substantially all of his business time.

COMMITTEES OF THE BOARD OF DIRECTORS

At present, we do not have an audit committee, compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committee. However, we plan to seek suitable candidates for election as directors, and establish various committees, during the current fiscal year.

FAMILY RELATIONSHIPS

We do not currently anticipate electing or appointing as directors or officers of our company any persons who are related to each other or to our existing officers and directors.

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INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

None of our directors, executive officers and control persons have been involved in any of the following events during the past five years:

1.           any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2.           any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

3.           being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

4.           being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment or decision has not been reversed, suspended, or vacated.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 15, 2006 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors, (iii) each of our officers and certain key employees, and (iv) our officers and directors and certain key employees as a group. Each shareholder listed below possesses sole voting and investment power with respect to the shares shown.

Notes:

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• 2,050,000 shares were transferred to Nicolas Lavaud

• 1,850,000 shares were transferred to Antonin Kral

• 1,850,000 shares were transferred to Libor Bucinsky

Under the terms of their agreements with Onyx Trading, Mr. Lavaud, Mr. Kral and Mr. Bucinsky retain the rights to their shares only when they remain employees of ITonis for a duration of at least 2 years. In accordance with Rule 13d-3, Onyx Trading has not included any portion of these 5,750,000 shares in reporting the number of shares beneficially owned by Onyx Trading as Onyx Trading does not have the right to acquire any of these shares within 60 days of the date hereof. However, in the event that any of Mr. Lavaud, Mr. Kral and Mr. Bucinsky cease their employment with us and Onyx Trading becomes entitled to a return to any of these shares, Onyx Trading will become the beneficial owner of such shares. If we are a reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”) at such time and Onyx Trading is an “insider” at this time, then Onyx Trading will be required to report each acquisition of beneficial ownership of securities on a Form 4 filed with the Securities and Exchange Commission (the “SEC”). Further, Onyx Trading may also be required to file an acquisition report under Section 13(d) of the Exchange Act and the rules of the SEC thereunder.

CHANGES IN CONTROL

We are unaware of any contract, or other arrangement or provision of our Articles or by-laws, the operation of which may at a subsequent date result in a change of control of our company.

DESCRIPTION OF SECURITIES

GENERAL

Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.001 per share, and 5,000,000 shares of preferred stock, with a par value of $0.001 per share. As of June 15, 2006, there were 22,477,327 shares of our common stock issued and outstanding held by eighty-nine shareholders of record. We have not issued any shares of preferred stock.

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COMMON STOCK

Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or as provided in any resolution adopted by our board of directors with respect to any series of preferred stock, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing one-percent (1%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.

Subject to any preferential rights of any outstanding series of preferred stock created by our board of directors from time to time, the holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available therefor. See “Dividend Policy.”

Subject to any preferential rights of any outstanding series of preferred stock created from time to time by our board of directors, upon liquidation, dissolution or winding up of our company, the holders of shares of our common stock will be entitled to receive pro rata all of our assets available for distribution to such holders.

In the event of any merger or consolidation of our company with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash).

Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

PREFERRED STOCK

Our board of directors is authorized by our articles of incorporation to divide the authorized shares of our preferred stock into one or more series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including but not limited to the following:

(a)           the rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends shall accrue;

(b)           whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption;

(c)           the amount payable upon shares of preferred stock in the event of voluntary or involuntary liquidation;

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(d)           sinking fund or other provisions, if any, for the redemption or purchase of shares of preferred stock;

(e)           the terms and conditions on which shares of preferred stock may be converted, if the shares of any series are issued with the privilege of conversion;

(f)           voting powers, if any, provided that if any of the preferred stock or series thereof shall have voting rights, such preferred stock or series shall vote only on a share for share basis with our common stock on any matter, including but not limited to the election of directors, for which such preferred stock or series has such rights; and

(g)           subject to the above, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as our board of directors may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

WARRANTS

As of the date of this prospectus, there are no outstanding warrants to purchase our securities. We may, however, issue warrants to purchase our securities in the future.

OPTIONS

As of the date of this prospectus, there are no options to purchase our securities outstanding. We may, however, in the future grant such options and/or establish an incentive stock option plan for our directors, employees and consultants.

CONVERTIBLE SECURITIES

As of the date of this prospectus, we have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock. We may, however, issue such convertible or exchangeable securities in the future.

LEGAL MATTERS

Lang Michener LLP, Barristers and Solicitors, our independent legal counsel, has provided an opinion on the validity of the shares of our common stock that are the subject of this prospectus.

EXPERTS

The financial statements included in this prospectus and registration statement have been audited by Staley, Okada & Partners, Chartered Accountants, an independent public accounting firm registered with the United States Public Company Accounting Oversight Board, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement of which this prospectus forms a part. These financial statements are included in reliance upon the authority of said firm as experts in auditing and accounting.

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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 common stock 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 registrant, nor was any such person connected with the registrant as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Nevada corporation law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnification can cover expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such a person in connection with the action, suit or proceeding, if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Nevada corporation law also provides that to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defence of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defence. Our articles of incorporation and our by-laws authorize our company to indemnify our directors and officers to the fullest extent permitted under Nevada law, subject to certain enumerated exceptions.

We have been advised that, in the opinion of the Securities and Exchange Commission, indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

ORGANIZATION SINCE INCORPORATION

We were incorporated on July 5, 2005 as Kenshou Inc. under the laws of the state of Nevada.

We completed a private placement of 4,000,000 shares of our common stock at a price of $0.02 per share for proceeds of $80,000 on September 14, 2005.

We entered into an asset purchase agreement dated October 1, 2005 with Onyx Trading. Pursuant to this asset purchase agreement, we issued 10,000,000 of our shares of common stock to Onyx Trading in consideration for the acquisition of certain intellectual property owned by Onyx Trading relating to the “TV Everywhere” video platform and software components. The TV Everywhere software components have since been incorporated into our ITonis television solution. This transaction was completed and the

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shares issued on November 16, 2005. Onyx Trading became one of our principal shareholders upon completion of this transaction.

Concurrent with the acquisition of the “TV Everywhere” intellectual property assets from Onyx Trading, we completed a private placement of 1,488,763 shares of our common stock at a price of $0.10 per share on November 16, 2005 for total proceeds of approximately $148,876.

On November 24, 2005, Onyx Trading sold an aggregate of 5,750,000 shares of the common stock that it acquired from us to Nicolas Lavaud, Antonin Kral and Libor Bucinsky in order to provide them with an ownership interest in Itonis and a performance incentive. In these transactions, Nicolas Lavaud purchased 2,050,000 shares of our common stock, and Antonin Kral and Libor Bucinsky each purchased 1,850,000 shares of our common stock. These transactions were completed pursuant to Rule 903 of Regulation S of the Securities Act of 1933. We were not party to these transactions.

In order to reflect our new business focus upon completion of the Onyx Trading intellectual property acquisition, we change our corporate name from “Kenshou Inc.” to “ITonis Inc.” effective December 2, 2005.

In order to be able to develop the intellectual property purchased from Onyx Trading, we commenced the process of incorporating a wholly owned Czech subsidiary called “Itonis CZ” on November 25, 2005. The incorporation process was formally completed under Czech law on January 4, 2006. We now carry out our software development activities in the Czech Republic through Itonis CZ.

We entered into an asset purchase agreement dated January 31, 2006 with Nordic IPTV (named “Makeitwork ApS” at the time of the agreement). Pursuant to this asset purchase agreement, we issued 6,000,000 of our shares of common stock to Nordic IPTV in consideration for the acquisition of certain intellectual property owned by Nordic IPTV relating to the television portal/ web application server technology that had originally been developed by Danske Broadband. This technology has subsequently been integrated into our ITonis video solution. This transaction was completed and the shares issued on February 7, 2006. Nordic IPTV became one of our principal shareholders upon the completion of this transaction.

Concurrent with the completion of the asset purchase transaction, we entered into a reseller and consulting service agreement with Nordic IPTV dated February 7, 2006. Under this agreement, Nordic IPTV has been appointed as an agent of Itonis to promote and resell our products and services in Europe. These rights are not exclusive other than in Denmark, where Nordic IPTV has been granted exclusive rights. We have agreed to pay a commission to Nordic IPTV based on sales generated by Nordic IPTV at the rate of 40% of the net profits resulting from the sale of the products and services. Nordic IPTV also agreed to provide to ITonis the services of its employee, John Marienhof, to act as commercial director of ITonis for consideration of $30,000 per month. This amount is payable as a non-refundable advance against the commission payable to Nordic IPTV under the agreement. In the event that, in any monthly period, the commissions earned under the agreement are less than $30,000, then the amount of $30,000 will be payable. If the commissions earned are in excess of $30,000, then the amount payable will equal the amount of the commissions earned. In the event that we do not have sufficient cash flow to make payments, the advance will accrue as a liability owed to Nordic IPTV in the form of a non-interest bearing account payable. We have the right to terminate this agreement at any time by giving three month’s advance written notice to Nordic IPTV of our intention to terminate the agreement. Notwithstanding this agreement, we have elected not to engage Mr. Marienhof as a commercial director of Itonis at this time.

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We completed a private placement of 738,564 shares of our common stock at a price of $0.25 per share for proceeds of approximately $184,600 on April 10, 2006.

We completed a one for two consolidation of our outstanding shares of common stock on June 15, 2006. All information presented in this prospectus is presented on a post-consolidation basis, including all share amounts and per share prices. The accompanying audited consolidated financial statements as at November 30, 2005 and unaudited interim financial statements as at February 28, 2006 are presented on a pre-consolidation basis, including all share amounts and per share prices.

DESCRIPTION OF BUSINESS

OVERVIEW

We are the owner of a suite of proprietary software applications that we refer to as the “ITonis video solution”. The ITonis video solution enables the on-demand delivery of video content, including television channels and videos, to consumers via broadband Internet for viewing on the consumer’s television.

Our business plan is to market and sell the ITonis video solution as a technology solution that will enable the on-demand delivery of video content via the Internet. The ITonis video solution is one of three components that are essential to the on-demand delivery of video content via broadband Internet, namely:

• the intellectual property rights to distribute the video content;

• a set top box located near the consumer’s television that is connected to broadband Internet; and

• a technology solution that enables the on-demand delivery of the video content to the consumer’s television via the set top box.

We do not have any plans to engage in the business of acquiring intellectual property rights to distribute video content or manufacturing and selling set top boxes for televisions. Our focus will be on the marketing and sale of the ITonis video solution in circumstances where other parties will be responsible for the provision of the intellectual property rights to distribute the video content and the necessary set-top boxes.

The ITonis video solution is comprised of the following components, each of which will be achieved by the installation of our software applications on computer servers that are used to implement our video solution:

• the ITonis media acquisition system allows the upload of video content onto media storage servers;

• ITonis media storage servers that provide for the storage of video and other media content;

• ITonis media streamers that provide for the streaming of video content in real time to the end consumer via the Internet;

• an ITonis Television portal application server that provides the interface between the computer system and the ultimate consumer; and

• an ITonis service server that performs automatic maintenance tasks on the solution.

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The ITonis video solution is designed to enable consumers to order on-demand video content from their provider in the following manner:

• the consumer will access their set-top box using a remote control;

• the set-top box will communicate with the ITonis video solution via the Internet;

• the consumer will be presented with the interface screens generated by the ITonis Television portal application server that will give the consumer a range of options to select video content on demand;

• the consumer will select a television channel or video content and the selection will be transmitted to the ITonis Television portal application server;

• the ITonis Television portal application server will initiate the broadcast of the video content to the consumer and will record the transaction as a purchase by the consumer of the video content; and

• the ITonis media streamers will access the ITonis media storage servers on which the video content is resident and stream the video content in real time to the consumer.

We have developed the basic functionality of ITonis video solution and have demonstrated the solution in a laboratory environment. We are now attempting to secure pilot projects for the demonstration of the ITonis video solution in “real world” operations. We are also planning to continue additional development of the ITonis video solution in order to extend the functionality of the solution, including adding digital rights managements features.

We have configured set top boxes manufactured by Kreatel Communications AB (a Motorola company) to work with our ITonis video solution. This configuration has been achieved by the installation of software developed by us onto Kreatel set top boxes that are to be used for delivery of video content using our solution. We do not market or sell the Kreatel set top boxes that may be used with our solution.

We believe that our ITonis video solution may be attractive to the following participants engaged in the telecommunications and media distribution industry:

• video content owners and distributors, including television broadcast and cable companies, that wish to enable their customers to purchase video content and other value added services via the Internet; and

• Internet service providers that wish to be able to offer their customers the ability to purchase on- demand video content for viewing on their televisions via the Internet.

We plan to commercialize our ITonis video solution using two distinct business models:

• Our direct sales model involves selling the ITonis video solution as an “end to end” computer based platform to video content owners and distributors who will install the ITonis video solution on their computer servers and use the solution to deliver on-demand video content to their customers via the Internet. In this scenario, we would achieve revenues from sales of the ITonis video solution. We would also have the ability to earn further ongoing product support fees and consulting fees.

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• Our Internet service provider model involves partnering with video content providers to provide a fully outsourced video on-demand and television solution to Internet service provider businesses. By partnering with content provides and set-top box manufactures, we will be able to offer a fully outsourced Video on Demand and Internet Protocol over television (“IPTV”) solution to Internet service providers that would like to provide their customers with this service but do not have the resources to successfully deploy a video on-demand solution. In this model, our plan is to earn revenues either on a revenue sharing basis with the Internet service provider or on a monthly fee basis.

Although sales and marketing activities have been initiated, we have earned minimal revenues to date and, as such, we are presently a development stage company. We have not as of yet deployed our ITonis video solution in any commercial operation. Accordingly, we cannot provide any assurance to investors that any of the above business models will be viable or that we will achieve significant revenues. Further, we cannot provide investors with any assurance as to the type of revenue model that will ultimately be acceptable to our customers.

CORPORATE ORGANIZATION

Incorporation

We were incorporated on July 5, 2005 as Kenshou Inc. under the laws of the state of Nevada. We changed our name to ITonis Inc. on December 5, 2005 to reflect our acquisition of certain intellectual property underlying the ITonis video solution and our new business focus.

We commenced the process of incorporating a wholly owned Czech subsidiary called “Itonis CZ” on November 25, 2005. The incorporation process was formally completed under Czech law on January 4, 2006.

Principal Executive Offices

Our principal executive offices and the offices of Itoniz CZ are located in leased premises at Klimentska 10, 110 00 Prague 1, Czech Republic. We refer to this facility as our research and development facility as this is where we carry out the research, development and testing of our ITonis video solution.

ACQUISITION OF THE ITONIS SOFTWARE

We acquired the intellectual property underlying the ITonis video solution in two separate transactions:

• We acquired the intellectual property rights owned by Onyx Trading relating to the “TV Everywhere” video platform and software components pursuant to an asset purchase agreement dated October 1, 2005 between us and Onyx Trading. Pursuant to this asset purchase agreement, we issued 10,000,000 of our shares of common stock to Onyx Trading. The TV Everywhere software components acquired included the ITonis media acquisition system, the ITonis media storage system and the ITonis media streamers which have since been incorporated into our ITonis television solution. This transaction was completed and the shares issued on November 16, 2005. Onyx Trading became one of our principal shareholders upon completion of this transaction.

• We acquired the intellectual property rights owned by Nordic IPTV relating its Internet television portal application software pursuant to an asset purchase agreement dated January 31, 2006 between us and Nordic IPTV. Pursuant to this asset purchase agreement, we issued 6,000,000

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shares of our common stock to Nordic IPTV. The Internet television portal application software acquired from Nordic IPTV was originally owned by Dansk Broadband, a Danish telecommunications company and developed by Nordija A/S, a Danish software development company. The Internet television portal application software has since been incorporated into our ITonis television solution. Nordic IPTV became one of our principal shareholders upon completion of this transaction.

INDUSTRY BACKGROUND

Broadband Internet

Broadband Internet refers to the ability to access the Internet at high speeds of data connection. These data speeds are measured in terms of kilobits per second (“Kbits”) (ie. 1000 bits of data information per second) per second and megabits per second (“Mbits”) (ie. 1,000,000 bits of data information per second). Broadband Internet generally refers to data speeds in excess of 2 Mbits per second. At these data speeds, it becomes possible to stream video content to consumers via the Internet from computer servers that have been configured and programmed to deliver video streaming.

Broadband Internet connections are becoming increasingly available to consumers as telecommunication companies throughout the world expand their ability to deliver broadband Internet via cable, digital fibre and ADSL connections. As the market penetration of broadband Internet increases, the number of potential consumers for a technology solution that enables the delivery of video content via the Internet increases. Accordingly, as rates of broadband Internet access increase amongst consumers, a market opportunity is generated to provide on-demand video content to these consumers via the Internet.

Video Content

We believe that there is a demand among consumers for the delivery of the following video content which could be satisfied by delivery of on-demand video content via the Internet:

Movies And DVD’s

There is a demand among consumers for the ability to watch movies and other digital video discs (“DVD’s”) on their televisions. This demand is presently satisfied by a combination of DVD rental stores and on-demand services available to some consumers through cable and satellite television services. The ability to offer movies and DVD’s to consumers via the Internet presents a new opportunity for Internet service providers and others to offer movies and DVD’s on demand to their customers.

Internet Television

Delivery of television services has historically been a closed market where delivery was completed by local television broadcast companies or by a limited number of cable companies and satellite television companies. The ability to deliver television via the Internet offers the ability for companies engaged in the business of providing Internet services to offer television via the Internet. In addition, new services can be added to conventional television services due to the digital delivery format of television delivered via the Internet.

Virtual Video Recorder

There is a demand among consumers for the ability to record televisions shows that are broadcast when the consumer is not available in order that the consumer can watch the program at a later, more

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convenient time. This demand is demonstrated by the recent popularity of personal video recorders, such as TiVo, that enable consumers to record programs to a computer hard disk and replay the programs at a later time. We believe that there is potential demand for a “virtual video recorder” that would enable consumers to record television programs via the Internet using a television set-top box device, or other electronic device with Internet access, such as a personal computer or a mobile telephone. A “virtual video recorder” would remove the requirement that the consumer have purchased a device with a computer hard disk as the data would be stored on the servers of the provider of the Internet video services.

TV In The Past

TV In The Past is a service related to a virtual video recorder that enables consumers to have the ability to access television programs that have been broadcast during a recent period. The advantage of TV In The Past is that a consumer would not have to pre-program the recording of the television program, as with the virtual video recorder. The provider of the Internet video services would provide the consumer with the ability to select and view recent television programs that have been broadcast and stored on the servers of the provider of the Internet video services.

Content Owners

The video content that consumers will demand and that may be delivered via the Internet is owned by the creators of this video content and their licensees. The ownership of the video content and the rights to distribute the video content are the subject to intellectual property laws that will prohibit the unauthorized transmission or copying of the video content. Accordingly, any solution for the delivery of on-demand video content via the Internet must be deployed by the owners of the intellectual property rights to distribute the video content or under contractual agreement with the owners of these intellectual property rights.

Digital Rights Management

The incorporation of “digital rights management” is a key element of the success of any service that attempts to deliver video on demand via the Internet. Digital rights management refers to encryption techniques that are used in order to ensure that the video content that is delivered to consumers via the Internet is not copied without authorization from the owner of the intellectual property rights to the video content that has been delivered. We anticipate that owners of video content who authorize the delivery of video content via the Internet will insist on digital rights management features being incorporated into any technology solution that is used to deliver licensed video content via the Internet.

OUR MARKET OPPORTUNITY

We believe that content owners and distributors will be looking at working together to deliver video content to consumers through broadband Internet. The ability of consumers to connect to broadband Internet presents a market opportunity to deliver the following on-demand video content to consumers via the Internet:

• Movies and DVD’s

• Internet Television

• Virtual Video Recorder

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• TV in the Past

Our market opportunity is to develop and deliver a technology solution that enables the on-demand delivery of this video content to consumers via the Internet that respects the ownership rights of the video content owners and incorporates digital rights management features. We believe that the following are potential customers for such a technology solution:

• existing cable and satellite television companies that want to increase the video on-demand services that they are able to offer to their customers;

• Internet service provides that want to be able to offer video on-demand services to their customers via the broadband Internet connection that they are providing to their customers; and

• video content owners that are seeking a new means of delivering their video content to consumers.

We have developed the ITonis video solution with the objective of capitalizing on this market opportunity.

OUR ITONIS VIDEO SOLUTION

The ITonis video solution is one of three components that are essential to the on-demand delivery of video content via broadband Internet, namely:

• the intellectual property rights to distribute the video content;

• a set top box located near the consumer’s television that is connected to broadband Internet; and

• a technology solution that enables the on-demand delivery of the video content to the consumer’s television via the set top box.

The ITonis video solution is comprised of the following components, each of which will be achieved by the installation of our software applications on computer servers that are used to implement our video solution:

• the ITonis media acquisition system that allows the upload of video content onto media storage servers;

• ITonis media storage servers that provide for the storage of video and other media content;

• ITonis media streamers that provide for the streaming video content in real time to the end consumer via the Internet;

• an ITonis Television portal application server that provides the interface between the computer system and the ultimate consumer; and

• an ITonis service server that performs automatic maintenance tasks on the solution.

These key components enable us to offer technology solutions that will enable the delivery to consumers of the following video content via the Internet on an “on-demand” basis:

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• Movies and DVD’s

• Internet Television

• Virtual Video Recorder

• TV in the Past

THE COMPONENTS OF THE ITONIS VIDEO SOLUTION

Each component of the ITonis video solution is a computer software application that is designed to be installed on computer servers that will enable the delivery of on-demand video content via the Internet. The functionality and operation of each component of the ITonis Video Solution is described below:

The ITonis Media Acquisition System

The ITonis media acquisition system is used to upload video content onto the ITonis media storage servers. As illustrated in the diagram below, a video signal generated from a digital video disc (“DVD”) or from a television signal is encoded using the ITonis media acquisition software and then sent to the storage servers. The video data generated from DVD’s is generated by DVD “rippers” or “grabbers” which read the digital information on a DVD and generate a digital signal that contains the video data.

ITonis Media Storage Server

The ITonis media storage software is used for storing all of the video content generated by the ITonis media acquisition system on computer servers in order that the video content can be accessed at a later date as demanded. The software is designed to enable the access and retrieval of video content for on-demand streaming by the ITonis media streamer software described below. The ITonis media storage server enables the data representing the video content to be stored on computer hard drives in arrangements known as a “storage clusters” in order to optimize the retrieval of this data.

ITonis Media Streamer

The ITonis media streamer software is designed to access the video content stored on the ITonis media storage server and to stream video content to end users via the Internet. The ITonis streamer software operates on computer servers known as “streamers” which retrieve video data from the storage clusters and stream the data to the consumer via the Internet.

ITonis Television Portal Application Server

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The ITonis television portal application server acts as the interface between the consumer and the ITonis video solution. This application server generates the screens on the user’s television through which the consumer is presented with video on-demand options and is able to select video content for viewing on their television. This application server communicates with the Metadata database in order to retrieve information regarding video content and with the ITonis media streamers in order to initiate streaming of video content.

Metadata Database

The Metadata database is used to store information regarding video content and subscribers in a database format. This information is accessed by the ITonis Television portal application server when it generates information regarding video content in response to consumer selections. The database also includes accounting and billing information relating to the subscriber’s who are authorized to access the ITonis video solution to obtain on-demand video content.

Service Servers

The storage servers are used to perform maintenance tasks on the ITonis video solution, to monitor performance of the solution and to compile performance statistics.

The interaction of the individual components of the ITonis video solution is illustrated below:

The ITonis video solution is designed to enable consumers to order on-demand video content from their provider in the following manner:

• the consumer will access their set-top box using a remote control;

• the set-top box will communicate with the application servers incorporated into the ITonis video solution via the Internet;

• the consumer will be presented with the interface screens generated by the ITonis application server that will give the consumer a range of options to select video content on demand;

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• the application server will display information regarding the video content options available to the consumer that is stored on and generated by the Metadata database servers;

• the consumer will select a television channel or video content and the selection will be transmitted to the ITonis application server;

• the consumer will enter a personal information number (a “PIN”) that will be sent to the ITonis application server and will be used as a “key” to access the video content selected by the consumer;

• the ITonis application server will verify the consumer’s access authorization via the Metadata database server using the PIN number;

• the ITonis application server will record the transaction as a purchase by the consumer of the video content and the billing information on the Metadata database will be updated;

• the ITonis application server will initiate the broadcast of the video content to the consumer; and

• the ITonis media streamers will access the ITonis media storage servers on which the video content is resident and stream the video content in real time to the consumer.

DEVELOPMENT OF THE ITONIS SOFTWARE

Development History

The ITonis video solution includes software that has been developed from a suite of software products known as the “TV Everywhere” suite of software products. The TV Everywhere software was developed by Xeris, a wholly owned Czech subsidiary of Onyx Trading, and purchased by us from Onyx Trading, as described above under “Corporate Organization – Acquisition of the Itonis Software. The TV Everywhere software included the software that forms the basis of the following components of the ITonis video solution:

• the ITonis media acquisition system;

• the ITonis media storage server; and

• the ITonis media streamers.

Upon completion of the acquisition of the TV Everywhere software, we outsourced additional development of the ITonis video solution to Xeris. Development work was completed by Xeris with the objective of ensuring the commercialisation of the software in line with market conditions, and to increase the flexibility and scalability of the application. With the incorporation of ITonis CZ in January 2006, we have continued the development of the ITonis video solution in-house. In order to ensure a smooth transition between the two development teams, we employed developers from Xeris during a transition period in January 2006.

The ITonis video solution also incorporates the ITonis television portal application server that provides the interface between the computer system and the ultimate consumer. This interface is referred to as a “television portal” as it provides the television screens that are presented to the consumer from which the consumer can select video on-demand content. The computer software that underlies this application server technology was acquired by us from Nordic IPTV in January 2006.

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We have undertaken the following development of the software acquired from Onyx Trading and Nordic IPTV in order to develop the ITonis video solution as an integrated solution:

• Development of the product line based on VoD components

• integration of the ITonis video solution with Kreatel set-top boxes;

• implementation of TCP protocol for streaming ability;

• enhancement of the DVD ripping and encoding capabilities of our media acquisition system;

• implementation of Symulcript protocol for integration of a digital rights management solution owned by a third party;

• analysis and incorporation of the television portal application server software acquired from Nordic IPTV;

• development of a basic user interface;

• development of a basis administration interface; and

• fixing of computer software errors known as “bugs”.

Our ITonis video solution has been developed based on open-source software, meaning software that is available without a license from the creator. The use of open-source software allows us to take advantage of available software and supporting resources without having to purchase license rights.

Current Status Of Development

We have completed development of the ITonis video solution to the state that its operation can be demonstrated in our research and development centre in Prague. We have successfully demonstrated this operation both in a laboratory environment, where all components are connected to a local area network, and in an Internet environment, where the computer server and the set-top box are each connected to the Internet. In order to achieve this successful operation, an Internet connection with a bandwidth of 2 MBits per second is required.

Our focus over the next six months is to further advance the development of the ITonis video solution by adding the additional features and functionality described below. During this period, we plan to deploy our ITonis video solution in a pilot project environment in order that we are able to assess the operation of the ITonis video solution in a commercial environment. We believe that deployment in a pilot project will give us valuable feedback on the work that we need to completed in order to have a fully functioning, commercially deployable solution. During this period, we also plan to start our marketing activities initiating contact with potential customers and industry partners. We believe that the successful deployment of the ITonis video solution in a pilot project environment will greatly assist our efforts to market and achieve sales of the ITonis video solution.

We are able to demonstrate the successful operation of the following features in our demonstrations, both when the system is configured in a laboratory environment and when the server and the set-top box are communicating via the Internet:

• the receipt and display of live video;

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• the ability to search and receive movie listings;

• a parental control function which enables adult content to be filtered;

• the ability of the user to browse the Internet via the set-top box;

• the ability to purchase a video through the entering of a personal identification number;

• the streaming of purchased video content using MPEG 4 AVC over MPEG2 TS formats for video and MPEG 1 format for sound;

• the ability to display subtitles;

• video fast forward and rewind for movies;

• pause/ play feature for movies; and

• the ability to display stream information such as buffer status and transmission rate of the stream.

• We have developed software for the integration of set-top boxes manufactured by Kreatel Communications AB, a subsidiary of Motorola Inc. As such, we currently rely on Kreatel Communications as the sole provider of set-top boxes for the ITonis video solution. We plan to expand the range of set-boxes that will integrate with our ITonis video solution in order to expand the number of available set-top box vendors that may provide customers with set-top boxes for the ITonis video solution.

• We plan to integrate a digital rights management solution into our ITonis video solution. We have deferred integrating a digital rights management solution developed by and available from a third party vender pending our assessment of the requirements of video content owners and their preferred solutions for digital rights management. Pending this decision, we have developed our own basic digital rights management solution that offers encryption of the video stream using a personal “key”.

Additional Development Work To Be Completed

We believe that the following additional development work is required to be completed in order to have a fully commercial solution:

• completion of load tests for all components of the ITonis video solution and optimization of the configuration of each component based on the results of the load tests;

• completion of additional software programming in order that we are able to integrate the ITonis video solution with a range of set-top boxes in addition to the Kreatel set-top box with which the ITonis video solution is presently integrated;

• expansion of the features of the ITonis video solution in order to enable the solution to present subtitles, display movie chapters (such as on a DVD player), handle multiple languages, present teletext features and enable multispeed fast forward and fast rewind;

• enhancement of a proprietary digital rights management solution for incorporation into the ITonis video solution;

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• incorporation of billing functionality into the ITonis video solution;

• integration of a third party digital rights management solution into the ITonis video solution;

• integration of a provisioning tool into the ITonis video solution;

• integration of other Nordic IPTV software components into the end to end solution including billing and provisioning interface features;

• integration of a DVD robot into the media acquisition system; and

• enhancement of the media acquisition system in order to be able to encode live television signals.

• We plan to complete this development over the next six months. We will complete this further development work at our research and development centre located in Prague through our subsidiary, ITonis CZ.

OUR BUSINESS MODEL

We plan to commercialise our ITonis video solution based on two separate business models:

• direct sales of computer platforms incorporating our ITonis video solution to service providers, such as cable and satellite television companies, and content owners; and

• partnering with content providers in order to provide a technology solution for video on-demand services for Internet service providers who wish to out-source the provision of video on-demand services.

Each of these business models represents a significant aspect of our business plan and there will be a significantly higher risk that our business will fail if either of these business models is unsuccessful. While we plan to pursue each business model as part of our plan of operations, we are at the early stages of the commercialization of our technology. Accordingly, there is no assurance that either business model will be successful. Further, we may elect not to pursue either of these business models or change our business model in response to our success or lack of success in pursuing commercialization of our technology.

We may also, from time to time, sell licenses to various components of our ITonis video solution to businesses involved in the telecommunications industry. These sales would be separate and distinct from each of our business models described below. We have recently been selected for delivery of our media acquisition system component to a Czech based telecommunications company. No sale has been completed to date and there is no assurance that this sale will complete.

Each of these separate business models is discussed below:

Direct Sales Model

We plan to contact potential customers directly using our internal sales team. We plan to follow the following steps in soliciting sales:

• introductory presentation to client to identify client requirements;

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• target presentation that describes the ITonis video solution that is required to meet the client’s requirements;

• creation of specifications for client solution;

• proposal to client incorporating client specifications and price and implementation schedule; and

• negotiation and conclusion of sales contract.

We plan to target direct sales to the following companies:

• Internet service providers;

• Cable television providers;

• Satellite television providers;

• Television broadcasters; and

• Mobile telecommunications providers.

We plan to earn revenues under the direct sales model from the following activities:

• Sales from the delivery, integration and deployment of our ITonis video solution to customers;

• Support fees charged to customers for ongoing support of installed ITonis video solutions; and

• Consulting fees charged for providing business and technical consulting services to customers.

We plan to achieve revenues from the sales from the delivery, integration and deployment of our ITonis video solution to customers who use our ITonis video solution to deliver video on-demand services to their customers. We plan to earn fees based on the individual components that are purchased by a customer as follows:

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We anticipate that the fees that we charge will be based on contracts that are negotiated with customers on a case by case basis. As we have not entered into any commercial contracts to date, we cannot provide any assurance that our customers will pay fees based upon this business model. We may be forced to consider alternate payment schemes in order to secure contracts with customers and be competitive within our market place.

We plan to charge customers with fees for support services that we provide after the installation of our ITonis video solution for customers. We plan to offer several levels of service, including:

• Standard support service, where support would be delivered through a call centre opened during business days from local business hours; and

• Gold support service, where support would be available 24 hours a day, seven days a week.

Support services would include diagnosis of problems experienced by subscribers, including system failures and software problems, and the remedy of these problems.

We plan to provide business and technical consulting services to customers as we achieve success with the commercial deployment of our ITonis video solution. We believe that there are potential customers who would pay for our expertise in the deployment of our ITonis video solution once our ability to provide on-demand video solutions using our solution is established. We anticipate that consulting fees would be based on hourly rates and that these rates would vary depending on the country and the use of local workforce.

Internet Service Provider Model

We plan to target businesses that are engaged in the business of providing Internet services as potential customers for an “all-in-one” technology solution for the delivery of on-demand video content via the Internet. We believe that the ability to offer on-demand video services via the Internet offers Internet service providers an opportunity both to generate additional revenues from their customers to whom they provide Internet access services and to distinguish themselves from competitors who may not be able to offer on-demand video services via the Internet.

To achieve this objective, we plan to partner with content providers and set-box manufacturers in order to provide a fully-integrated technology solution that we would jointly sell to Internet services providers. We see this service as an “out-sourcing” model from the perspective of Internet service providers as it would enable them to acquire the ability to deliver on-demand video content services to their Internet access clients without having to become engaged in the business of acquiring the rights to deliver video content or to implement the technology solution required.

Under this business model, the “all-in-one” technology solution would be comprised of the following components:

• the ITonis video solution;

• licensed video content provided by a partner that has acquired ownership or licensed rights to video content for distribution via the Internet; and

• a set-top box that would be purchased by the consumer or by the Internet service provider and that would reside in the consumer’s home near their television set.

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Under this business model, we would deploy and operate the ITonis video solution as a service for the Internet service provider. We would supply the video storage, video streaming and Television portal application that are part of the ITonis video solution and would provide customer support. We would integrate the ITonis video solution with the billing system and network of the Internet service provider. The content provider would provide the video on-demand content and would deliver Metadata files in an electronic form that would be loaded onto the Metadata database incorporated into the ITonis video solution in order that this information could be accessed by customers. The Internet service provider would be responsible for the purchase and distribution of the set-top boxes, the acquisition and provision of subscribers for the on-demand video service, marketing of the services to subscribers, billing of subscribers and collection of fees from subscribers and the necessary interfaces between computer networks.

The successful implementation of this business model would require that we enter into arrangements with partners who would provide the licensed video content and the set-top boxes. With these arrangements in place, we would provide joint proposals to Internet service providers for the delivery of on-demand video services via the Internet to the customers of the Internet service providers.

We envision that the revenues under this business model would be based on either revenue sharing with the Internet service provider, based on revenues generated by providing the service, or a fixed monthly fee that would be charged to the Internet service provider. Revenues earned in connection with the provision of the service would then be divided amongst ourselves and the provider of the licensed video content. The set-top box manufacture would earn revenues from sales of set-top boxes to the Internet service provider or their customers. We would prefer that Internet service providers would purchase the set-top boxes for their customers and recover the cost over time through monthly charges in order to lower the up-front cost to the consumer. However, Internet service providers may not wish to pay this up-front expense and may instead require their customers to purchase the set-top boxes directly. We cannot provide assurance that Internet service providers will accept either our revenue model or our plan to have the Internet service providers acquire the set-top boxes directly.

We have entered into discussions with both a provider of licensed content and a set-top box manufacturer. The set-top box manufacturer is Kreatel, as mentioned above under “Status of Development”. While we have entered into discussions with these parties, we do not have any agreement in place for the submission of proposals to Internet service providers. We have to date submitted one joint proposal with a provider of video content to an Internet service provider located in the Czech Republic, as discussed below. If successful, our installation of the ITonis video solution would be our initial commercial deployment and would in effect be a pilot project for the demonstration and further operational testing of our ITonis video solution. There is no assurance that our initial proposal will be accepted by the Internet service provider or that a contract for the deployment of an ITonis video solution will be concluded.

Our initial proposal to an Internet service provider located in the Czech Republic has passed the first round of evaluation by the Internet service provider. We are now part of a second round of evaluation, with one other competitor. As part of this second round, we will submit a more detailed proposal that will included detailed specifications for the interfaces and the processes for running the video on demand services. As such, we and the Internet service provider will work together at defining together the detailed project plan. A final decision is not expect to be received from the Internet service provider until September 2006, at the earliest. There is no assurance that our proposal will be accepted.

We anticipate that we will be required to complete additional technical work in connection with the provision of each solution for an Internet service provider. The optimal configuration of each solution will depend on a number of factors, including the network infrastructure that the solution will operate on, the capability of the solution in terms of the number of simultaneous video data streams that may be

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handled and any required communications between multiple networks. These factors will need to be discussed with the Internet service provider in the course of submitting proposals and agreeing to contract prices.

We believe that this business model will be attractive to many smaller Internet service providers who do not have the technical capabilities or the financial resources to implement and deliver an on-demand Internet video solution for their clients. We also believe that this business model offers us a means of achieving an initial commercial deployment of our ITonis video solution which we could then use to demonstrate to potential customers who may purchase under our direct sales model.

PRODUCT SUPPORT

Once we achieve commercial deployment of our ITonis video solution, we plan to support installed solutions by a support team. The support team will have the necessary training and knowledge to perform:

• basic maintenance operations

• installation of upgrades to software as upgrades are developed

• application of software “patches” to solve operational problems

• basic troubleshooting of customer operations

Our support team will be based in our research and development facility in Prague and will be supported by our research and development team.

MARKETING AND SALES PLAN

Our marketing activities to date have been centred on introducing and raising the profile of the ITonis software to potential customers and partners. Due to the geographic position of our offices and business relationships, we have mostly targeted our marketing efforts inside Czech Republic and Scandinavia.

The level of our marketing activity has been restrained by our limited financial resources. As such we have been unable to promote our ITonis video solution in regional, national or international press through direct advertising or through web based advertising. Our focus has been to raise our profile through a combination of working with public relations specialists, web site promotions, web forums, industry networking events and trade shows.

Our marketing tools presently include our web site at www.itonis.tv and product leaflets. We are also able to provide product demonstrations of the ITonis video solution at our research and development facility in Prague.

Our initial marketing efforts will consist of promoting directly our solution to our key target groups while working to develop relationships with potential partners to optimize the exposure of our ITonis video solutions. To develop our network of potential partners and seek new business opportunities, we have visited key trade shows and events associated with our industry, including the IPTV World Forum in London, TV over DSL in Paris, and the Consumer Electronics Show in Las Vegas. In the future, we plan to be present at such events as an exhibitor. Parallel to our direct sales approach, we are also attempting to identify potential partners in order to develop our Internet service provider model.

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We also plan to enter into arrangements with key technology distributors who offer the potential to act as distributors or resellers for our ITonis video solution. Many technology distributors have established customer relationships with Internet service providers, mobile telecommunications operators and television cable companies to whom they sell computer hardware and software. As many of these distributors will not have the ability to offer a technology solution for the delivery of on-demand video via the Internet, we believe that there is a business opportunity for us to enable them to deliver this technology solution and in effect become a “one-stop shop” for their customer needs. We also believe that establishing relationships with technology distributors can lead to new business opportunities through customers that approach technology distributors looking for a technology solution for the delivery of on-demand video via the Internet.

We have recently been contacted by a number of resellers that are interested in our technology. We may, subject to having sufficient funding, deploy demonstration video on demand solutions with interested resellers in order that the resellers can demonstrate our solutions to their clients.

EMPLOYEES

As of the date of this prospectus, we have eleven full-time employees and 2 part time employees. All are employed by ITonis CZ and are based in Prague.

COMPETITION

Customer Approach

They are numerous companies that propose to deliver on-demand video solutions over Internet with the goal of offering end users the choice of what they watch and when. To achieve this goal, these companies use the following different concepts, each of which we will compete against as we attempt to commercialise our ITonis video solution:

Intelligent Set top boxes:

Many companies offer intelligent set top boxes with an integrated hard disk for recording programs. Some of the most advanced companies in this field are TiVo and Replay TV.

PC Client based solution:

In this case, the intelligence is located inside the PC. End users must download and install a client on their home PC (connected to the home TV).Using this software, users are able to record programs and stream to various devices. One of the most advanced companies is Orb Networks, Inc.

Network based solution – Local deployment:

The intelligence and the key infrastructure are now located on the network. The players in this category typically address the needs of hotels, hospitals or residential complex. One of the players in this field is Eona.

Network based solution – Regional deployment:

The intelligence and the key infrastructure are again located on the network. However, the solution is much more scalable and thousands of end users can be served nationwide. ITonis belongs to this category. Other major players are Kasenna, Envivio and Orca.

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The following table compares the different customer approaches.

ITonis Positioning

Most of the competitors that we are aware of have identified video on demand as a key service within their business model. Their aim is to provide to their existing customers and others a complete video on demand solution. Most of these competitors did not develop their own solution and, as a result, present

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themselves as systems integrator, although they may provide one or several components. We believe that these competitors will market their solutions to service providers who will then be able to choose the components from the portfolio of technology vendors they support (such as streamers, storage, set top boxes, and digital rights management) and integrate the different components. We believe that their strategy is to play on flexibility and to provide an extensive list of vendors that they are able to integrate.

We believe that the key differentiator between ITonis and our competitors is that we are able to deliver a full end to end video on demand solution developed in-house. By doing so, we intend to compete by offering the potential to significantly cut the integration cost between vendors and limit the interoperability risk between third party vendors. We believe this integration issue is such a challenge that such companies such as Orca have based their whole delivery model on integration. The main components are delivered by third party vendors while they provide the “glue” by integrating the application portal and other end user interfaces. Because of high integration costs, these vendors may not be able to provide solution for small deployments. We have identified small deployments as a market opportunity and intend to target these deployments in order to enable us to achieve commercial deployments of our ITonis video solution and to help us become recognized as a reliable provider of video on demand solutions.

Key Competitors

There are several competitors that offer on-demand video solutions via the Internet. Most of them specialize on specific components that they integrate with other vendors. As a result, they are able to offer a complete end to end solution. The list below presents the main competitors that have been identified.

The potential competitors named below provide video on demand solutions in their portfolio but, to our knowledge, most of them do not have any solutions that are in operation with a major service provider. The market for video on demand delivered over the Internet is very young and large deployments are rare. Most service providers are now looking at deploying the service as part of a pilot to validate the technology and the business model. As we are now able to deliver these video on demand solutions, we regard ourselves as competitors to following companies. Our strategy to compete with these competitors is to obtain as early as possible our first commercial deployment of our ITonis video solution and from this point try to achieve as many commercial deployments as we are able to deliver before competitors enter into arrangements with Internet service providers.

Kasenna

Kasenna is a California based company that focuses on storage and streaming servers. The company was previously focusing on providing local solutions for hotels and hospitals. With the growth of on-demand video and Internet video services, Kasenna’s focus has turned towards the delivery of complete solutions for service operators. Kasenna’s storage servers are used by some major players such as CNN and Fastweb.

Envivio

Envivio is a former division of France Telecom that was spun off in 2000. Envivio is now a United States company that conducts research and development in France.

Orca Interactive

Orca Interactive is part of the Emblaze group which is traded on the London Stock Exchange. Orca is a provider of middleware and applications for Internet and video on-demand solutions. Orca works with

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multiple partners in order to deliver end to end solutions. They provide integrated solutions using the components chosen by their clients.

Sentivision

Sentivision is a Japanese company that conducts research and development in Poland. We understand their objective is to provide a full end to end solution to their clients, including set top boxes. Accordingly, their approach is similar to our approach.

Tandberg Television

Tandberg Television is listed on the Oslo stock market and has operations in Asia, Australia, Europe and Americas. While the company was originally focused on encoders and decoders, we understand they have added an Internet television offering to their product range and are now able to offer this types of solution.

Cisco

We believe Cisco is aiming at entering the television over Internet market. They have recently purchased Scientific Atlanta to enhance their offering of video services.

GD Broadcast

This UK company aims at delivering video content to personal computers and televisions via third parties.

Many of these competitors will have greater financial, technical and personnel resources than we do. Accordingly, they may be able to develop Internet video solutions faster than we can and bring these solutions to the market faster than we would be able to given our limited resources. Further, the brand name and industry recognition of these competitors may result in businesses that are potential customers to us deciding to purchase and deploy the Internet video solutions offered by our competitors.

INTELLECTUAL PROPERTY

General

We own intellectual property rights relating to the ITonis suite of software applications that includes trade secrets and copyright. We seek to protect our intellectual property by generally limiting access to it, treating portions of it as trade secrets and obtaining confidentiality or non-disclosure agreements from persons who are given access to it, including our developers.

TradeMark Applications

We are presently planning to seek trademark protection of the ITonis name and logo. We presently have not been granted any trademark protection of the ITonis name and logo and there is no assurance that we will achieve trademark protection.

Patents

We presently do not have any patents on the ITonis video solution.

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Trade Secrets and Copyright

We enter into non-disclosure agreements with our employees and with arms length parties with whom we may be in business negotiations or with whom we may have contracted with. Further, we provide in our agreements with our employees that the intellectual property that they create during their employment with us is our property. There is a risk that employees and third parties with whom we have non-disclosure agreements may breach their agreements with us by disclosing our trade secrets or copying works, such as our computer software, in which we may be entitled to copyright protection. Further, employees or third parties may attempt to use our trade secrets and copyrighted works for their own purposes, including competing with us.

GOVERNMENT REGULATION

The telecommunications industry is highly regulated, and both we and our future customers and users may be affected by changes in regulation of telecommunication services. As we will be providing the technology solution to those businesses that provide telecommunications directly to consumers, we anticipate that we will not be directly subject to government regulation of the delivery of telecommunications services. However, regulations that restrict or prohibit the delivery of video services via the Internet will have the effect of reducing the potential market for our ITonis video solutions. Accordingly, the indirect impact of changes in government regulation could affect our business adversely even though the specific regulations do not apply directly to us or our services. Modifying our ITonis video solution to enable our customers and users to comply with government regulation may be costly and time-consuming and our failure to do so could result in our inability to commercialize our video solutions and carry out our plan of operations. Further, the existence of government regulation in markets into which we may wish to enter may impose prohibitive costs of operation which could result in our determination not to offer our ITonis video solutions in these markets. In addition, laws that handle those issues do not exist in some countries and need to be drafted.

REPORTS TO SECURITY HOLDERS

At this time, we are not required to provide annual reports to security holders. However, shareholders and the general public may view and download copies of all of our filings with the SEC, including annual reports, quarterly reports, and all other reports required under the Securities Exchange Act of 1934, by visiting the SEC site (http://www.sec.gov) and performing a search of our electronic filings. We plan to register our common stock under the Securities Exchange Act of 1934 concurrent with the effectiveness of this registration statement. Thereafter, annual reports will be delivered to security holders as required or they will be available online.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

PLAN OF OPERATIONS

Our plan of operations is described in detail above under the heading “Description of Business”. For the next twelve months, our plan of operations is to complete the following objectives within the time periods and within the budgets specified:

We plan to carry on the development of the ITonis video solution from our research and development facility in Prague. Our general administrative overhead cost for our Prague office is anticipated to be approximately $40,000 per month. This amount includes salaries, computer hardware, rent and other general expenses associated with our Prague office. If we are successful in securing initial commercial sales of our ITonis video solutions, then we anticipate that this expenses may increase to $80,000 per

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month by the end of 2006. This increase in cost would be attributable to adding additional personnel to our development team and to put in place a team of employees to provide customer support services. Our additional development plans are summarized above in detail under “Description of Business – Development of the ITonis Software -Additional Development Work to be Completed”.

We plan to carry out sales and marketing of our ITonis video solution over the next twelve months with the objective of securing sales to several clients. Our marketing plans are summarized above in detail under “Description of Business – Marketing and Sales Plan”. Our direct marketing activities will be carried out by our employees from our Prague office. As such, the expense for these marketing activities will be within our general and administrative expenses for the Prague office, as outlined above. In addition, Nordic IPTV will undertake sales and marketing activities for which we will pay $30,000 per month or 40% of the net profits, whichever is greater, in accordance with our research and consulting services agreement with Nordic IPTV. We anticipate that we will accrue this amount as a liability during the next twelve months, as contemplated under our agreement with Nordic IPTV.

We plan to launch an operation pilot scale solution for an Internet service provider ISP. The purpose of the pilot project would be to allow us to complete the testing of our ITonis video solution in a live environment and to enable use to have an operating solution that we can use for demonstration purposes in connection with our marketing activities. We anticipate that it would cost approximately $10,000 in additional expenses to launch this operation.

We plan to deploy a small scale commercial solution for an Internet service provider that will offer the basic functionality of the ITonis video solution. We anticipate that this installation would cost approximately $84,000. This cost would cover the hardware and software for the solution. Implementation will be performed by Itonis CZ. This component of our plan of operations is contingent upon us securing an agreement with an Internet service provider.

We anticipate spending approximately $4,000 in ongoing general, legal and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $48,000 over the next twelve months. These general, legal and administrative expenses are external expenses that we anticipate incurring and are in addition to the general and administrative expense of the Prague office discussed above.

We anticipate spending approximately $53,000 in completing the filing of the registration statement of which this prospectus forms a part and becoming a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the completion of this offering.

As at November 30, 2005, we had cash reserves of $164,550 and working capital of $81,093. As at February 28, 2006, our cash reserves had declined to $22,583 and we had a working capital deficit of $60,688. Our planned expenditures over the next twelve months are $1,022,000. Of this amount, we anticipate accruing $360,000 under our agreement with Nordic IPTV. We raised $184,461 in private placement financing in April 2006 and had cash of $72,085 as of May 31, 2006. Our financial requirements remain in excess of our cash reserves and working capital and, accordingly, we anticipate that we will require financing in the amount of approximately $675,000 in order to carry out our plan of operations for the next twelve months, which amount is determined as follows:

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As illustrated above, our anticipated financing requirement of $675,000 over the next twelve months excludes the amount of $360,000 that we anticipate accruing under our agreement with Nordic IPTV.

Our present cash and working capital has been derived from the sales of the shares of common stock that are being offered by the selling shareholders through this prospectus. Further, the amounts that we spent to date in pursuing our plan of operations, as described below under “Results of Operations” have been funded by our sales of the shares of common stock that are being offered by the selling shareholders through this prospectus.

During the twelve month period following the date hereof, we anticipate that we will not generate revenues that exceed our operating costs. We anticipate based on our current cash and working capital and our planned expenses that we will be able to continue our plan of operations over the next two months without additional financing. We are presently reducing our operating costs to a minimum in order to preserve our available cash and working capital so that we can continue to sustain our operations. This projection assumes that we will accrue all amounts under our agreement with Nordic IPTV over the next twelve months. This projection does not account for any revenues that we may earn from licensing sales of components to our ITonis video solution. We believe that we will require additional financing in order to commercialize our ITonis video solution in order to earn revenues that exceed our operating expenses. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We may also seek to obtain additional financing from our principal shareholders, although none of our shareholders have committed to advance any shareholder loans to us. We presently have no arrangements in place for additional financing. In the absence of such additional financing, we may not be able to continue our plan of operations beyond the next five months and our business plan may fail. If we do not obtain the required additional financing, we will initially scale back our business operations and may ultimately be forced to abandon our plan of operations and our business activities.

CRITICAL ACCOUNTING POLICIES

Development Stage Company

We are a development stage company as defined by Financial Accounting Standards No. 7. We are presently devoting all of our present efforts to establishing a new business. All losses accumulated since inception have been considered as part of our development stage activities.

Revenue Recognition

We recognize revenue when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred; the fee is fixed or determinable; and collection is reasonably assured. Revenue derived from the sale of services is initially recorded as deferred revenue on the balance sheet. The amount is recognized as income over the term of the contract.

Revenue from time and material service contracts is recognized as the services are provided. Revenue from fixed price, long-term service or development contracts is recognized over the contract term based on the percentage of services that are provided during the period compared with the total estimated services to be provided over the entire contract. Losses on fixed price contracts are recognized during the period in which the loss first becomes apparent. Payment terms vary by contract.

Foreign Currency Translations

Our functional currency is the Czech Crown and our reporting currency is the U.S. dollar. All transactions initiated in other currencies are translated into U.S. dollars as follows:

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(i)           assets and liabilities at the rate of exchange in effect at the balance sheet date;

(ii)          equity at historical rates; and

(iii)         revenue and expense items at the average rate of exchange prevailing during the period.

Unrealized exchange gains and losses arising from such translations are deferred until realization and are included as a separate component of shareholder’s equity as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized as income in the period when it is realized.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company's historical results as well as management's future expectations. The Company's actual results could vary materially from management's estimates and assumptions.

Software Costs

Our policy is that software development costs related to the product line are charged to expense as incurred in accordance with SFAS No. 86, “Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed”. This Statement specifies that costs incurred internally in creating a computer software product shall be charged to expense when incurred as research and development until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detail program design or, in its absence, completion of a working model. To date, technological feasibility of the software underlying our ITonis video solution has not been achieved.

RESULTS OF OPERATIONS

The following summary of our results of operations should be read in conjunction with our audited financial statements for the year ended November 30, 2006 and our unaudited interim financial statements for the three months ended February 28, 2006 that are included herein. References to the discussion below to fiscal 2006 are to our current fiscal year which will end on November 30, 2006. References to fiscal 2005 are to our fiscal year ended November 30, 2005. References to the first quarter of 2006 are to our fiscal quarter ended February 28, 2006.

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Revenue

We did not generate our initial revenues during the first quarter of 2006. We anticipate that we will not earn any revenues until such time as we have achieved commercial deployment of our ITonis video solution.

Salaries And Wages

Salaries and wages are primarily comprised of salaries paid to employees of ITonis CZ who are employed at our research and development facility in Prague.

Salaries and wages were $nil in fiscal 2005 as we only completed the acquisition of the our initial software technology from Onyx Trading on November 16, 2006. Salaries and wages increased in the first quarter of 2006 as we hired our initial employees and took over development of the ITonis video solution from Xeris.

Marketing And Distribution

Our marketing and distribution expenses include amounts that we pay under our reseller and consulting services agreement with Nordic IPTV. As this agreement was entered into in February 2006, no expenses under this agreement were recorded in fiscal 2005.

We recorded $60,000 in expenses under the Nordic IPTV agreement in the first quarter of 2006 in respect of two months of services provided by Nordic IPTV. In accordance with our agreement with IPTV, these amounts have not been paid but have been accrued.

Accounting And Auditing

Our accounting and auditing expenses include professional fees for accounting and auditing expenses incurred in connection with the preparation and audit of our financial statements.

We incurred significant accounting and auditing expenses during fiscal 2005 in connection with our corporate organization and the preparation of our initial financial statements. Accounting and auditing

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expenses during the first quarter of 2006 were in connection with the preparation and audit of our financial statements for fiscal 2005. Our accounting and auditing expenses will continue during the balance of fiscal 2006 in connection with the preparation of our audited financial statements and unaudited interim financial statements and our preparation and filing of a registration statement with the SEC.

Legal

Our legal expenses include professional fees that we pay to our legal counsel.

Our legal expenses in fiscal 2005 represent amounts paid to legal counsel in connection with our corporate organization. Our legal expenses in the first quarter of fiscal 2006 represent amounts paid to legal counsel in connection with our corporate organization and the preparation of a registration statement for filing with the SEC. Legal expenses will be ongoing during fiscal 2006 as we file our registration statement and as we anticipate becoming subject to the reporting obligations of the Securities Exchange Act of 1934.

Software Development Costs

Software development costs represent amounts that we have paid to others for the development of our proprietary software.

Software development costs during the first quarter of fiscal 2006 were paid to Xeris in respect of development work on our ITonis video solution completed by Xeris prior to our taking over software development activities from Xeris in January 2006.

Consulting

Consulting fees represent amounts that we pay to consultants that are engaged by us.

We did not incur any consulting fees during fiscal 2005 as we were inactive for most of this fiscal year. We incurred consulting fees during the first quarter of 2006 as our business activities increased.

Office

Our office expenses include the rent that we pay for our research and development facility in Prague and general office expenses.

Our office expenses increased significantly in the first quarter of fiscal 2006 as the result of Itonis CZ entering into a lease for our research and development facility in Prague. This lease expense will be ongoing through the balance of fiscal 2006.

Depreciation

Depreciation expenses represents depreciation of our computer hardware and equipment.

Depreciation expenses in fiscal 2005 and in the first quarter of fiscal 2006 represent depreciation of computer hardware and equipment that we have acquired in connection with the development and testing of our ITonis video solution.

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Intellectual Property

We acquired the “TV Everywhere” software technology from Onyx Trading on November 16, 2005 by issuing 10,000,000 common shares. This resulted in Onyx Trading holding approximately 64% of our shares. The value assigned to the 10,000,000 common shares was $447,637, being the historical cost of the technology to Onyx Trading. This is in accordance with SAB Topic 5G as Onyx Trading has retained a substantial indirect interest in the technology that was transferred. This amount was expensed during fiscal 2005 as it did not meet the criteria for capitalization as set out in SFAS No. 86.

We valued the TV portal application software technology that we acquired from Nordic IPTV at $1,500,000 based on a value of $0.25 per share being assigned to the 6,000,000 shares that we issued to Nordic IPTV to acquire this technology. This amount was expensed during the first quarter of fiscal 2006 as it did not meet the criteria for capitalization as set out in SFAS No. 86.

Other Income

Our other income during the first quarter of fiscal 2006 was comprised of:

• Sub-letting part of our ITonis CZ office to iPLATO s.r.o., a company with whom ITonis CZ has one director in common;

• Outsourcing the services of Nicolas Lavaud to Xeris., a company with whom ITonis CZ has one director in common, as managing director; and

• Outsourcing the services of Libor Bucinsky to Devoteam, an arms length party, for the installation of Telefonica Video on Demand platform at Czech Telecom.

• We did not generate any revenues from the sales or deployment of our ITonis video solutions during fiscal 2005 or the first quarter of fiscal 2006.

Liquidity And Capital Resources

As at November 30, 2005, we had cash reserves of $164,550 and working capital of $81,093. As at February 28, 2006, our cash reserves had declined to $22,583 and we had a working capital deficit of $60,688.

Plan Of Operations

Our planned expenditures over the next twelve months are $1,035,000. Of this amount, we anticipate accruing $360,000 under our agreement with Nordic IPTV. While we raised $184,461 in private placement financing in April 2006, our financial requirements remain in excess of our cash reserves and working capital. As described above under “Plan of Operations”, we anticipate that we will require financing in the amount of approximately $675,000 in order to carry out our plan of operations for the next twelve months. While this amount may be offset by any gross profits that we earn from sales of our ITonis video solutions, we anticipate that our cash and working capital will not be sufficient to enable us to undertake our plan of operations over the next twelve months without our obtaining additional financing. Accordingly, we anticipate that we will require additional financing in order to enable us to sustain our operations for the next twelve months, as outlined above under “Plan of Operations”.

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Cash Used In Operating Activities

We used cash in operating activities in the amount of $141,732 during the first quarter of fiscal 2006 and $34,543 in fiscal 2005. Cash used in operating activities was funded by cash from financing activities.

Cash From Investing Activities

We used cash in investing activities in the amount of $31,259 during the first quarter of fiscal 2006 and $30,283 in fiscal 2005. Cash used in investing activities was attributable primarily to the purchase of computer hardware and equipment that we have acquired in connection with the development and testing of our ITonis video solution.

Cash from Financing Activities

We generated cash from financing activities in the amount of $33,875 during the first quarter of fiscal 2006 and $229,376 in fiscal 2005. Cash generated by financing activities is attributable to the private placement financings of our common stock that we have completed since our incorporation. These financings include sales of a portion of the shares that are offered by the selling shareholders through this prospectus. We have applied these proceeds towards our completion of our plan of operations, as described above under “Results of Operations”. We plan to spend the balance of these proceeds as described above under “Plan of Operations”.

Restatement

We restated our consolidated financial statements for the period ended November 30, 2005 in order to properly reflect the value assigned to the intellectual property acquired by us on October 1, 2005 (See Note 4 to our statements for the period ended November 30, 2005) from $1,000,000 to $447,637.

The 10,000,000 shares issued to acquire the intellectual property were re-valued from $0.10 to $0.044 per share to reflect Onyx’s historical cost of $447,637 in relation to developing the intellectual property.

The effects of the restatement on our financial statements for the period ended November 30, 2005 are as follows:

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive business activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

DESCRIPTION OF PROPERTIES

Our executive office is located at Klimentska 10, 110 00 Praha 1, Czech Republic. We occupy the premises under a contract with Achat Real a.s, which provides us with approx. 1680 square feet of office space in consideration of a monthly fee of €1,950.87 ($2,286.27 per month based on a foreign exchange rate on November 30, 2005 of $1: €0.8533) . We use this facility as our research and development facility for out ITonis video solutions. These premises are presently adequate for our current business purposes.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as described below, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

• Any of our directors or officers;

• Any person proposed as a nominee for election as a director;

• Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;

• Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the above persons.

PURCHASE OF FOUNDER’S SHARES

Robert Poncini, our initial director and officer, acquired 250,000 shares of our common stock effective July 8, 2005 at a price of $0.002 per share for a total purchase price of $500.

ONYX TRADING INC.

We entered into an asset purchase agreement dated October 1, 2005 with Onyx Trading. Pursuant to this asset purchase agreement, we issued 10,000,000 of our shares of common stock to Onyx Trading in consideration for the acquisition of certain intellectual property owned by Onyx Trading relating to the “TV Everywhere” video platform and software components. This transaction was completed and the shares issued on November 16, 2005.

Onyx Trading completed the following transfers of shares to certain of our employees with the objective of providing them with an ownership interest Itonis and a corresponding performance incentive:

• 2,050,000 shares were transferred to Nicolas Lavaud

• 1,850,000 shares were transferred to Antonin Kral

• 1,850,000 shares were transferred to Libor Bucinsky

Under the terms of their agreements with Onyx Trading, Mr. Lavaud, Mr. Kral and Mr. Bucinsky retain the rights to their shares only when they remain employees of ITonis for a duration of at least 2 years. Onyx Trading transferred these shares to Mr. Lavaud, Mr. Kral and Mr. Bucinsky in reliance of Rule 903 of Regulation S of the Securities Act of 1933. Each of Mr. Lavaud, Mr. Kral and Mr. Bucinsky has provided us with an investment agreement confirming representations, warranties and agreements necessary to establish the transfer in accordance with Rule 903 of Regulation S.

XERIS S.R.O.

Xeris is a wholly owned subsidiary of Onyx Trading. Itonis and Xeris have a director in common, namely Nicolas Lavaud.

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During fiscal 2005, we purchased $30,283 worth of office furniture and equipment from Xeris. The office furniture and equipment were valued at the estimated fair market value at the date of purchase. The original cost to Xeris was approximately $33,000.

Before ITonis set up its fully own subsidiary in Czech Republic, ITonis used the services of Xeris to continue the development of the intellectual property it acquired from Onyx Trading. These software development costs amounted to $41,121 during the period ended November 30, 2005 and $13,814 during the three months ended February 28, 2006.

During the first quarter of 2006, ITonis outsourced its director Nicolas Lavaud to Xeris, as managing director. The fee was paid for Mr. Lavaud time to perform all the necessary administrative tasks at Xeris. Fees were equal to $17,233 for the three months ended February 28, 2006, which amount is reported as other income on our financial statements.

NORDIC IPTV COMPANY APS (FORMERLY MAKEITWORK APS)

We entered into an asset purchase agreement dated January 31, 2006 with Nordic IPTV. Nordic IPTV is controlled by Mr. John Marienhoff. Pursuant to this asset purchase agreement, we issued 6,000,000 of our shares of common stock to Nordic IPTV in consideration for the acquisition of certain intellectual property owned by Nordic IPTV relating to the television portal/ web application server technology that had originally been developed by Nordija A/S for Danske Broadband. This intellectual property related to the FTH Broadband technology known as the “NVE Fiber Middleware Administration Architecture” This transaction was completed and the shares issued on February 7, 2006.

Concurrent with the completion of the asset purchase transaction, we entered into a reseller and consulting service agreement with Nordic IPTV on John Marienhoff dated February 7, 2006. Under this agreement, Nordic IPTV has been appointed as an agent of ITonis to promote and resell our products and services. We have agreed to pay a commission to Nordic IPTV based on sales generated by Nordic IPTV at the rate of 40% of the net profits resulting from the sale of the products and services. Nordic IPTV also agreed to provide to ITonis the services of its employee, John Marienhof, to act as commercial director of ITonis for consideration of $30,000 per month. This amount is payable as a non-refundable advance against the commission payable to Nordic IPTV under the agreement. In the event that, in any monthly period, the commissions earned under the agreement are less than $30,000, then the amount of $30,000 will be payable. If the commissions earned are in excess of $30,000, then the amount payable will equal the amount of the commissions earned. In the event that we do not have sufficient cash flow to make payments, the advance will accrue as a liability owed to Nordic IPTV in the form of a non-interest bearing account payable. We have the right to terminate this agreement at any time by giving three month’s advance written notice to Nordic IPTV of our intention to terminate the agreement. Notwithstanding this agreement, we have elected not to engage Mr. Marienhof as a commercial director of Itonis at this time. An amount of $60,000 had been accrued under this agreement and was outstanding as at February 28, 2006.

NICOLAS LAVAUD

We have entered into an employment agreement with Mr. Lavaud dated February 1, 2006. The terms and conditions of this employment agreement are described in detail below under the section of this prospectus entitled “Executive Compensation”.

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ANTONIN KRAL

We have entered into an employment agreement with Mr. Kral dated January 1, 2006. The terms and conditions of this employment agreement are described in detail below under the section of this prospectus entitled “Executive Compensation”.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

NO PUBLIC MARKET FOR COMMON STOCK

There is presently no public market for our common stock. We currently plan to have our common stock quoted on the National Association of Securities Dealers Inc.’s OTC Bulletin Board, subject to the effectiveness of the registration statement of which this prospectus forms a part and also subject to the registration of our common stock under section 12(g) of the Exchange Act. In order for our common stock to be quoted on the OTCBB, a market maker that is a member of the NASD must make application to seek quotation of our common stock on the OTC BB. We presently do not have any arrangement with any market maker to submit an application to NASD for the quotation of our common stock on the OTC BB. Accordingly, we can provide no assurance that our shares will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize.

HOLDERS OF OUR COMMON STOCK

As of the date of this registration statement, we had eighty-nine registered stockholders.

RULE 144 SHARES

There are no shares of our common stock that are available for resale to the public in accordance with the requirements of Rule 144 of the Securities Act.

In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company’s common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of:

1.           1% of the number of shares of the company’s common stock then outstanding; or

2.           the average weekly trading volume of the company’s common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company.

Under Rule 144(k), a person who is not one of the company’s affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

REGISTRATION RIGHTS

We have not granted registration rights to the selling stockholders or to any other person.

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OPTIONS, WARRANTS AND OTHER CONVERTIBLE SECURITIES

We do not have any common stock subject to outstanding options or warrants and there are no securities outstanding that are convertible into 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 declaration of dividends is at the discretion of our board. 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 to satisfy the rights of stockholders who have preferential rights 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

SUMMARY COMPENSATION TABLE

The following table sets forth certain compensation information as to our president and chief executive officer, chief technical officer for the fiscal period ended November 30, 2005.

Notes

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EMPLOYMENT AGREEMENTS

Mr. Lavaud provides his services as chief executive officer to us under a contract between Mr. Lavaud and ITonis CZ dated February 1, 2006. Mr. Lavaud is obligated to devote his full business time to our business. We have agreed to pay to Mr. Lavaud a salary of $73,380 (1,800,000 CZK per year based on a foreign exchange rate on November 30, 2005 of $1:24.53CZK) per annum. No shares are issuable to Mr. Lavaud pursuant to his employment contract.

Mr. Kral provides his services as chief technical officer to us under a contract between Mr. Kral and ITonis CZ dated January 1, 2006. Mr. Kral is obligated to devote his full business time to our business. We have agreed to pay to Mr. Kral a salary of $39,136 (960,000 CZK per year based on a foreign exchange rate on November 30, 2005 of $1:24.53CZK) per annum. No shares are issuable to Mr. Kral pursuant to his employment contract. Mr. Kral has been granted options to purchase 120,000 shares of our common stock, as described below under “Grants of Stock Options”.

COMPENSATION OF DIRECTORS

We do not currently pay our directors any fees or other compensation for acting as directors. We have not paid any fees or other compensation to any of our directors for acting as directors to date.

LONG-TERM INCENTIVE PLANS

We do not have any long-term incentive plans in place.

2006 STOCK OPTION PLAN

Our board of directors has approved the Company’s 2006 Stock Option Plan as of June 16, 2006. The 2006 Stock Option Plan provides for the grant of options to purchase up to 1,000,000 shares of common stock of the Company to our directors, officers, employees and eligible consultants.

GRANTS OF STOCK OPTIONS

We granted options to purchase an aggregate of 500,000 shares of common stock to certain employees on June 16, 2006, including 120,000 options to insiders of the Company as detailed below. All options are exercisable at a price of $0.80 per share for a term expiring June 16, 2009 and are subject to the vesting provisions set forth below. All options have been granted pursuant to and are subject to our 2006 Stock Option Plan.

Each option will vest on the following dates (each a “Vesting Date”):

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WE HAVE NOT GRANTED ANY OTHER STOCK OPTIONS SINCE THE DATE OF OUR
INCORPORATION.

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FINANCIAL STATEMENTS

The following financial statements of ITonis Inc. listed below are included with this prospectus. These financial statements have been prepared on the basis of accounting principles generally accepted in the United States and are expressed in U.S. dollars.

ITonis Inc. (Consolidated - Audited)

• Report of Independent Registered Public Accounting Firm

• Consolidated Balance Sheet as at November 30, 2005

• Consolidated Statements of Changes in Stockholders’ Equity for the period from incorporation (July 5, 2005) to November 30, 2005

• Consolidated Statements of Operations for the period from incorporation (July 5, 2005) to November 30, 2005

• Consolidated Statements of Cash Flows for the period from incorporation (July 5, 2005) to November 30, 2005

• Notes to Consolidated Financial Statements

ITonis Inc. (Consolidated - Unaudited)

• Interim Consolidated Balance Sheets as at February 28, 2006 (unaudited)

• Interim Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) for the period from incorporation (July 5, 2005) to February 28, 2006 (unaudited)

• Interim Consolidated Statements of Operations for the three months ended February 28, 2006 and for the period from incorporation (July 5, 2005) to February 28, 2006 (unaudited)

• Interim Consolidated Statements of Cash Flows for the three months ended February 28, 2006 and for the period from incorporation (July 5, 2005) to February 28, 2006 (unaudited)

• Notes to Interim Consolidated Financial Statements (unaudited)

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ITONIS INC.

(Formerly Kenshou Inc.)

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2005

US FUNDS

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders of ITonis Inc.:

We have audited the accompanying consolidated balance sheet of ITonis Inc. (the “Company”) (formerly Kenshou Inc.) as at November 30, 2005 and the related consolidated statements of changes in stockholders’ equity, operations, and cash flows for the period ended November 30, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

As discussed in Note 9 of the consolidated financial statements, these financial statements have been restated to properly reflect the value assigned to the 20,000,000 shares issued for the acquisition of an intellectual property (Note 4) in accordance with SAB Topic 5G. The restatement indicated above resulted to a change in the net loss for the period ended November 30, 2005 and in the accumulated deficit during the development stage.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at November 30, 2005, and the results of its operations and its cash flows for the period ended November 30, 2005, in conformity with United States generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is dependent upon financing to continue operations, and had suffered losses from operation. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

- See Accompanying Notes -

F-3

- See Accompanying Notes -

F-4

- See Accompanying Notes -

F-5

- See Accompanying Notes -

F-6

F-7

F-8

F-9

F-10

F-11