NO
MINIMUM TO 10,000,000 MAXIMUM BEING SOLD BY US TO THE PUBLIC
AND
GLOBAL
INK SUPPLY COMPANY
SHARES
OF
COMMON STOCK
2,100,000
SHARES OF COMMON STOCK BEING SOLD BY SELLING
SHAREHOLDERS
Prior
to
this offering, there has been no public trading market for the common stock.
GISC
is
registering up to 10,000,000 shares of common stock at an offering price of
$0.02. The maximum amount to be raised is $200,000. There will be no underwriter
or broker/dealer involved in the transaction and there will be no commissions
paid to any individuals from the proceeds of this sale. The shares are being
offered by GISC through its sole officer and director. There will be no minimum
amount of shares sold and GISC will not create an escrow account into which
the
proceeds from any shares will be placed. The proceeds from all shares sold
by
GISC will be placed into the corporate account and such funds shall be
non-refundable to subscribers except as may be required by applicable law.
GISC
will pay all expenses incurred in this offering. The offering by the GISC will
be for a maximum period of 90 days from ___________________ and may be extended
for an additional 90 days if the Company so chooses to do so. Concurrently
with
GISC’s registration and offering of 10,000,000 common shares certain existing
shareholders of the Company are selling 2,100,000 shares at an offering price
of
$0.02 per share for the duration of the offering, on a best efforts basis,
no
minimum, 2,100,000 shares maximum. There is no escrow account. The offering
by
the selling shareholders will be for a maximum period of 90 days from
___________________ and may be extended for an additional 90 days if the Company
so chooses to do so. GISC does not receive any proceeds from the sale of any
of
the shares held by the selling shareholders.
The
securities have not been approved or disapproved by the Securities and Exchange
Commission or any state securities commission nor has the Securities and
Exchange Commission or any state securities commission passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
INVESTING
IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING AT PAGE 8. PLEASE READ THIS PROSPECTUS
CAREFULLY.
The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Security
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.
1
TABLE
OF CONTENTS
Summary
4
Offering
5
Summary
of Financial Information
6
Risk
Factors
6
Forward-Looking
Statements
12
Available
Information
13
Use
of Proceeds
13
Determination
of Offering Price.
14
Selling
Security Holders
14
Plan
of Distribution
16
Legal
Proceedings
17
Directors,
Officers, Promoters, and Control Persons
17
Security
Ownership of Certain Beneficial Owners and Management
19
Description
of Securities
19
Interests
of Named Experts and Counsel
21
Disclosure
of Commission Position on Indemnification for Security Act Liabilities
22
Description
of Business
22
Plan
of Operation
29
Description
of Property
32
Certain
Relationships and Related Transactions
33
Market
for Common Equity and Related Stockholder Matters
33
Executive
Compensation
34
Changes
in or Disagreements with Accountants Disclosure
34
Financial
Statements
F1
- F8
2
Until
________, 2006, (90 days after the effective date of this prospectus) all
dealers that effect transactions in these securities whether or not
participating in this offering, may be required to deliver a prospectus. This
is
in addition to the dealer's obligation to deliver a prospectus when acting
as
underwriters and with respect to their unsold allotments or
subscriptions.
3
PROSPECTUS
SUMMARY
GLOBAL
INK SUPPLY COMPANY
This
summary highlights certain information contained elsewhere in this prospectus.
You should read the entire prospectus carefully, including our financial
statements and related notes, and especially the risks described under
“Risk
Factors” beginning on page 8.
Corporate
Background
Global
Ink Supply Company (“GISC”) was organized on November 4, 2004. GISC has not
generated any significant revenue to date and is a development stage
corporation. GISC is in the beginning stages of developing an Internet
e-commerce website that will provide a business platform for selling commonly
utilized ink printer cartridges and toners to individuals and businesses
globally.
GISC
will
not manufacture any of the ink printer cartridges or toners, but rather will
attempt to contract with established manufacturers and/or distributors of the
products and sell them through GISC’s proposed website. Currently GISC has no
contract or agreement in place with any manufacturer or distributor of ink
cartridges or toners.
GISC’s
principal office is located at 346 East 8th
Street,
North Vancouver, BC, Canada, V7L1Z3 Phone - (604)990-9924.
As
of May31, 2006 GISC had raised $ 20,800 through the sale of common stock. There
currently is $ 17,707 of cash on hand and in the corporate bank account. GISC
currently has liabilities of $ 1,101 for expenses accrued during the start-up
of
the corporation. In addition, GISC anticipates the total costs associated with
this offering will be approximately $11,000. As of the date of this prospectus
we have not yet generated or realized any significant revenues from our business
operations. Specifically, GISC has generated only one (1) sale (gross amount
$9,200) of ink toners to one customer (net profit approximately of $2,000.)
Please read the entire prospectus including the financial statements contained
herein for more details regarding GISC’s financial condition.
4
The
Offering
Securities
being Offered by the Company and Selling Shareholders,
Common
Stock, par value $0.0001
Up
to 12,100,000 shares of common stock. 2,100,000 common shares being
offered by selling shareholders. 10,000,000 shares of common stock
being
offered by GISC.
Offering
Price Per Share by GISC and Selling Shareholders
$0.02
per share for the duration of the offering.
Number
of Shares Outstanding Before the Offering of Common Shares
7,100,000
common shares are currently issued and outstanding. 2,100,000 of
the
outstanding shares are to be sold under this Prospectus by existing
security shareholders.
Number
of Shares Outstanding After the Offering
17,100,000
common shares (if maximum is sold).
Minimum
Number of Shares to be Sold in this Offering
None
Use
of Proceeds
GISC
will not receive any proceeds from the sale of the common stock by
the
selling shareholders. If all 10,000,000 common shares being offered
by
GISC are sold the total gross proceeds to GISC would be $200,000.
The
intended use of the proceeds from GISC's offering will be allocated
towards developing it’s website expenditures estimated at $5,000. The
total expenses associated with this offering; including the preparation
of
this registration statement has been estimated at
$11,000
Offering
Period
The
shares are being offered for a period not to exceed 90 days from
the date
this Prospectus is effective with the Security and Exchange Commission,
unless extended by the Company for an additional 90
days.
Terms
of the Offering
The
selling security shareholders will determine when and how they will
sell
the common stock offered in this
prospectus.
5
SUMMARY
OF FINANCIAL INFORMATION
The
following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations and the financial statements and the related notes thereto
included in this prospectus.
Global
Ink Supply Company considers the following to be material risks to an investor
in relationship to the purchase of its common shares through this Offering.
Global
Ink Supply Company should be viewed as a high-risk investment and speculative
in
nature. An investment in GISC's common stock may result in a complete loss
in
the amount invested.
THERE
IS SUBSTANTIAL DOUBT ABOUT GISC'S ABILITY TO CONTINUE AS A GOING CONCERN
Our
auditor’s report on our 2006 financial statements expresses an opinion that
substantial doubt exists as to whether we can continue as an ongoing concern.
Because our officer and director may be unable or unwilling to loan or advance
any additional capital to GISC, therefore, you may be investing in a company
that will not have the funds necessary to continue its operations. See “May 31,2006 Audited Financial Statements.”
GISC
HAS NO OPERATING HISTORY, THUS THE COMPANY CANNOT PREDICT WHETHER IT WILL BE
SUCCESSFUL IN REMAINING AN ONGOING CONCERN
GISC
is a
development stage company that was only recently established in November of
2004. Although GISC has begun the process of setting up a web-site for sale
of
printer cartridges and toners it has not begun its initial revenue generating
operations. There can be no assurance that GISC will ever reach a level of
profitability. The revenue and income potential of GISC’s proposed business and
operations is unproven, and the lack of operating history makes it difficult
to
evaluate the future prospects of the business.
GISC'S
WEBSITE IS NOT YET DEVELOPED, THERFORE, THERE IS NO ASSURANCE THAT GISC’S
ANTICIPATED BUSINESS WILL EVER GENERATE REVENUE
GISC
faces multiple risks associated with the development of a new and speculative
business. The Company is a development stage business with no products and
has
limited assets, $ 17,808 as of May 31, 2006. In addition, GISC will be subject
to numerous risks, expenses, and difficulties typically encountered in the
development of new business. There is no assurance that GISC’s anticipated
business will ever be successful or profitable.
6
GISC’S
OPERATING RESULTS IN ONE OR MORE FUTURE PERIODS WILL LIKELY FLUCTUATE
SIGNIFICANTLY
If,
and
when, GISC begins operations, GISC expects significant fluctuations in future
results of operation due to a variety of factors, many of which are outside
of
our control, including, but not limited to:
ü
Demand
for and market acceptance of ink printer cartridges and
toners;
ü
GISC's
ability to expand its market share;
ü
Competitive
factors that affect GISC's pricing
structure;
ü
The
variety and mix of products GISC
sells;
ü
The
timing and magnitude of capital expenditures, including costs relating
to
the start-up, marketing, and continued expansion of
operations;
ü
Conditions
specific to the ink printer cartridge and toner
industry;
ü
Changes
in generally accepted accounting policies, especially those related
to the
Internet sales; and
ü
New
government regulation or
legislation.
GISC
IS A START-UP COMPANY WITH LIMITED FUNDS; THEREFORE IT MAY NOT BE CAPABLE OF
DEVELOPING ITS PROPOSED BUSINESS INTO A REVENUE GENERATING
OPERATION
GISC's
ability to develop the business into a revenue generating operation will depend
on a number of factors, which include the ability to:
ü
Provide
ink printer cartridges and toners that are reliable, and cost
effective;
ü
Effectively
market the sale of ink printer cartridges and
toners;
ü
Establish
relationships with manufactures and distributors within the ink printer
cartridge and toner industry that will allow GISC to sell products
at a
profit; and
ü
Hire
and retain qualified personnel and effectively respond to
competition.
7
If
GISC
is not successful in meeting these challenges and addressing the risks and
uncertainties associated with operating a business with limited funds, GISC
would fail and any investment made in the common stock would significantly
decline in value or be completely lost.
GISC
CURRENTLY HAS NO CUSTOMERS; IF THE COMPANY IS UNABLE TO GAIN CUSTOMERS OR
DEVELOP A MARKET ACCEPTANCE IN A RELATIVELY SHORT PERIOD OF TIME THE COMPANY
WILL FAIL
Selling
ink printer cartridges and toners “on-line" is a relatively new and emerging
market; there can be no assurance that customers will adopt GISC’s proposed
business of selling these products through the Internet medium. Accordingly,
GISC cannot accurately estimate the potential demand for the products GISC
anticipates selling. GISC believes that the acceptance of ink printer cartridges
and toners will depend on its ability to:
ü
Effectively
market GISC's proposed website and provide competitive pricing of
ink
printer cartridges and toners that it anticipates
selling;
ü
Provide
high quality customer support and be able to attract and retain customers;
and
ü
Have
the financial ability to withstand downturns in the general economic
conditions or conditions that would slow sales of generic printer
cartridges and accessories
IF
GISC’S PLAN TO SELL INK PRINTER CARTRIDGES AND TONERS TO CUSTOMERS THROUGH THE
INTERNET IS NOT SUCCESSFUL, GISC WOULD NOT BE ABLE TO GENERATE REVENUE, AND
AS A
RESULT INVESTORS WOULD LOSE THEIR ENTIRE INVESTMENT
GISC
plans to sell ink printer cartridges and toners directly consumers through
its
proposed Internet website. The ability to achieve revenue growth in the future
will depend on the ability to develop and maintain an effective website that
will attract customers, the ability to hire qualified sales and technical
personnel, and offer new generic printing products. In addition, GISC is
dependent on several factors relating to the Internet as a whole, including
the
relatively new and unproven nature the Internet as a medium is for commerce.
Although sales over the Internet have continued to develop and grow over the
past few years the Internet is a developing market and long-term acceptance
of
the Internet as a sales medium has not been statistically proven. Only recently
have a few select companies shown a reasonable profit through Internet business
sales and commerce; there can be no assurance that a trend towards profitability
will continue or be sustained by GISC, of which would result in complete loss
in
its common share value.
CUSTOMER’S
ORDERS MAY SUBSTANTIALLY VARY IN SIZE, MAKING IT DIFFICULT TO FORECAST QUARTERLY
RESULTS AND CREATE FLUCTUATIONS IN FUTURE CASH FLOWS
8
GISC’s
anticipated pricing structure for its proposed internet site will likely range
from a few dollars to several thousand dollars. If customer orders are limited
to lower end equipment or accessories, or on average to lower priced
accessories, GISC may show losses during these times and may not be able to
recoup the losses with future revenue. Due to these factors GISC's
quarter-to-quarter comparisons of future operating results will not be a good
indication of future performance.
IN
THE FUTURE GISC WILL BE REQUIRED TO INCREASE ITS OPERATING EXPENSES IN ORDER
TO
GROW; ANY INCREASE OF EXPENSES MAY NOT BE OFFSET WITH REVENUE, WHICH WILL RESULT
IN SIGNIFICANT LOSSES
GISC
plans to increase operating expenses in order to bring about and support higher
sales of ink cartridges and toners, which will result in losses that GISC may
not be able to offset with revenues. Specifically, GISC plans to increase
operating expenses to expand sales and marketing operations. If revenue falls
below our expectations in any quarter and GISC is not able to quickly reduce
spending in response, GISC’s operations will be adversely affected and may
result in significant losses.
GISC
WILL NEED ADDITIONAL CAPITAL, CURRENTLY ESTIMATED AT $150,000 TO $200,000,
TO
EXPAND ITS PROPOSED BUSINESS AND REMAIN AS A GOING CONCERN, WITHOUT WHICH,
THE
COMPANY WOULD FAIL
As
of
May, 31 2006 the Company had $ 17,808 of cash on hand and available. GISC
anticipates expenses of approximately $11,000 relating to this
offering.
The
remaining proceeds after the expenses relating to this offering have been
estimated at approximately $10,200. This estimated capital will be expended
on
continuing the development of the website (estimated at $4,500) and
administrative/miscellaneous expenses ($5,700). The future expansion of the
business, beyond the initial development stages, as described above will require
significant capital to fund anticipated operating losses, working capital needs,
marketing, and capital expenditures, estimated at $150,000 -$200,000. (See
“Use
of Proceeds” herein.)
Although,
management believes during the next twelve months, GISC will be able to meet
its
cash requirements, there can be no assurance GISC will be successful in raising
future proceeds or that its proposed business will be able to generate a level
of revenue that can sustain the growth and expansion of the business. Any
shortfall of capital, whether an inability to raise funds or generate revenue,
would adversely impact the progress and development of the
business.
Future
equity or debt financing may not be available to GISC on favorable terms, or
perhaps may not be available at all. Borrowing instruments such as credit
facilities and lease agreements will likely have restrictions on lending money
to a start-up company with little or no assets, such as GISC. GISC's inability
to obtain additional capital on satisfactory terms may delay or prevent the
expansion of our business, which would cause the business and prospects to
suffer.
9
GISC
WILL ENCOUNTER INTENSE COMPETITION, WHICH COULD LEAD TO GREATER EXPENSES IN
ESTABLISHING A POSITION WITHIN THE MARKETPLACE; IF THE COMPANY IS UNABLE TO
MEET
THE DEMAND OF THESE EXPENSES THE BUSINESS WOULD FAIL
GISC
will
face intense competition from other businesses that sell and distribute ink
printer cartridges and toners, including but not limited to Internet
distributors and companies with store front sales of printing products. The
competitors will have longer operating histories, greater brand name
recognition, and larger installed customer bases. Competition will pose the
following hurdles to the success of GISC:
ü
The
established competition will have significantly more financial resources,
R&D facilities, and marketing experience than those of GISC. The
competition may create future developments that will render the Company's
proposed business plan obsolete;
ü
GISC
also expects to face competition from new entrants into its targeted
industry segment. The Company anticipates that demand for ink cartridges
and toners will continue to grow. As this occurs, GISC expects competition
to become more intense and there can be no guarantee the Company
will be
able to remain competitive with new entries into the market;
ü
GISC
will likely need to obtain and maintain certain technical, trademark,
and
patent advantages over its competitors. Maintaining such advantages
will
require a continued high level of investment by the GISC in R&D,
marketing, sales, and customer
support;
ü
There
can be no assurance that GISC will have sufficient resources to maintain
its R&D, marketing, sales, and customer support efforts on a
competitive basis, or that the Company will be able to make the
technological advances necessary to maintain a competitive advantage
with
respect to its products; and
ü
Increased
competition could result in price reductions, fewer product orders,
and
reduced operating margins, any of which could materially and adversely
affect the Company's business.
GISC
IS DEPENDENT ON KEY PERSONNEL AND ANY TURNOVER COULD SERIOUSLY IMPEDE THE
SUCCESS OF THE BUSINESS
GISC
success and execution of its business strategy will depend significantly upon
the continuing contributions of, and on its ability to attract, train, and
retain qualified personnel. In this regard, the Company is particularly
dependent upon the services of David Wolstenholme, its President and Director.
GISC does not have an employment agreement with its sole officer or director,
and as a result there is no assurance that David Wolstenholme will continue
to
manage GISC in the future.
The loss
of the services of its Officer, or in the future any key employees would have
a
material adverse impact on the further development of GISC's business.
10
THE
OFFICER AND DIRECTOR, DAVID WOLSTENHOLME, IS EMPLOYED ELSEWHERE; THIS MAY CREATE
A TIME CONFLICT OF INTEREST BETWEEN HIS CURRENT PRIORITIES AND GLOBAL INK SUPPLY
COMPANY, WHICH COULD JEAPARDIZE FUTURE OPERATIONS
Mr.
Wolstenholme, the Officer/Director, is currently employed elsewhere. Mr.
Wolstenholme anticipates devoting a minimum of twelve to fifteen hours per
month
to the furtherance of the business over the next twelve months. This minimum
amount of hours dedicated to the furtherance of GISC may not be enough and
therefore have a negative impact upon the growth of the business because on
occasion more than fifteen hours may need to be spent on issues pertaining
to
GISC and are not, due to other employment obligations currently held by Mr.
Wolstenholme.
THE
LIMITED EXPERIENCE OF GISC’S CURRENT MANAGEMENT COULD HINDER OPERATIONS AND
THEREFORE LIMIT ANY POTENTIAL PROFITABILITY OF THE COMPANY
Current
management of GISC has had limited experience in the start-up and development
of
a new business. In consideration of management’s other employment obligations
and the minimal experience of operating a new business there are potential
conflicts of interest in his acting as officer and directors of the Company.
GISC
CURRENTLY HAS ONE DIRECTOR, DAVID WOLSTENHOLME, WHO HAS SIGNIFICANT CONTROL
ON
ALL MATTERS SUBMITTED FOR STOCKHOLDER APPROVAL WHICH COULD RESULT IN CORPORATE
DECISIONS THAT NEGATIVELY IMPACT OTHER SHAREHOLDERS
Currently,
David Wolstenholme owns 70% of GISC’s issued and outstanding common stock. As a
result, he has significant control on the outcome of all matters submitted
to a
vote by stockholders, which may include the election of directors, amendments
to
the certificate of incorporation, and approval of significant corporate
transactions.
NO
DIVIDEND IS PAID BY GLOBAL INK SUPPLY COMPANY TO ITS HOLDERS OF COMMON SHARES
AND NO DIVIDEND IS ANTICIPATED TO BE PAID IN THE FORESEEABLE FUTURE, WHICH
MAY
DETER POTENTIAL INVESTORS FROM INVESTING IN ITS COMMON
STOCK
GISC
has
not paid any cash or other dividends on its Common Stock and does not expect
to
declare or pay any such cash dividends in the foreseeable future; this may
prevent investors from investing in GISC in the future.
INVESTORS
WILL PAY MORE FOR GISC'S COMMON STOCK THAN THE PRO RATA PORTION OF THE COMPANY’S
ASSETS ARE WORTH; AS A RESULT INVESTING IN THE COMMON STOCK MAY RESULT IN AN
IMMEDIATE LOSS TO SHAREHOLDERS
11
The
arbitrary offering price of $0.02 per common share as determined herein, is
substantially higher than the net tangible book value per share of GISC’s common
stock. GISC’s assets do not substantiate a share price of $0.02 per share. This
premium in share price applies to the terms of this offering and does not
attempt to reflect any forward looking share price subsequent to the company
obtaining a listing on any exchange, or becoming quoted on the OTC Bulletin
Board.
GISC
HAS NO PUBLIC MARKET FOR ITS STOCK AND THERE IS NO ASSURANCE ONE WILL EVER
DEVELOP; IF A MARKET DOES NOT DEVELOP SHAREHOLDERS MAY NOT BE ABLE TO EVER
SELL
THEIR SHARES RESULTING IN A COMPLETE LOSS OF THEIR
INVESTMENT
There
is
no public market for GISC’s shares of common stock. Selling shareholders will be
limited to selling the shares at $0.02 per share (set offering price per share
pursuant to this prospectus) until the shares are quoted on the Over-The-Counter
(OTC) Bulletin Board or an exchange. As such shareholders may not be able to
find buyers of the common shares resulting in a complete loss of their
investment.
VIRTUALLY
ALL OF GISC’S SHAREHOLDERS WILL BE SELLING ALL OF THEIR SHARES, WHICH COULD
NEGATIVELY IMPACT THE SHARE PRICE
The
selling shareholders may sell or attempt to sell all of their shares being
registered herein; as a result, the price of the stock may fall. GISC has a
limited number of shares issued and outstanding. Sale of any significant amount
of shares into the market would depress the share price and the share price
may
not appreciate thereafter.
FORWARD-LOOKING
STATEMENTS
Most
of
the matters discussed within this Registration Statement include forward-looking
statements on GISC’s current expectations and projections about future events.
In some cases you can identify forward-looking statements by terminology such
as
“may,”“should,”“potential,”“continue,”“expects,”“anticipates,”“intends,”“plans,”“believes,”“estimates,” and similar expressions. These statements are
based on the Company’s current beliefs, expectations, and assumptions and are
subject to a number of risks and uncertainties. Actual results and events may
vary significantly from those discussed in the forward-looking statements.
These
forward-looking statements may include, among other things:
ü
Obtaining
and expanding market acceptance of the products GISC offers through
its
proposed Internet website;
ü
Forecasting
the acceptance and sales of commonly used ink printer cartridges
and
toners through the Internet medium; and
ü
Competition
and competitive influences within GISC’s proposed
market.
12
These
forward-looking statements are made as of the date of this Prospectus; Global
Ink Supply Company assumes no obligation to explain the reason why actual
results may differ because of the highly speculative nature of GISC’s proposed
business strategy. In light of these assumptions, risks, and uncertainties,
the
forward-looking events discussed in this Prospectus might not
occur.
AVAILABLE
INFORMATION
GISC
filed a registration statement on Form SB-2 with the Securities and Exchange
Commission, under the Securities Act of 1933, covering the securities in this
offering. As permitted by rules and regulations of the Commission, this
prospectus does not contain all of the information in the registration
statement. For further information regarding both Global Ink Supply Company
and
the securities in this offering, GISC refers you to the registration statement,
including all exhibits and schedules, which may be inspected without charge
at
the public reference facilities of the Commission's Washington, D.C. office,
450
Fifth Street, N.W., Washington, D.C. 20549. Copies may be obtained upon request
and payment of prescribed fees.
As
of the
effective date of this prospectus, GISC has become subject to the information
requirements of the Securities Exchange Act of 1934. Accordingly, GISC will
be
required to file reports and other information with the Commission. These
materials will be available for inspection and copying at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of the material may be obtained from the public
reference section of the Commission at 450 Fifth Street, N.W., Washington,
D.C.
20549, at prescribed rates. The Commission maintains an Internet Website located
at www.sec.gov
that
contains reports, proxy and information statements and other information
regarding issuers that file reports electronically with the
Commission.
Copies
of
our Annual, Quarterly and other Reports filed with the Commission, starting
with
the Quarterly Report for the first quarter ended after the date of this
prospectus (due 45 days after the end of the quarter) will also be available
upon request, without charge, by writing Global Ink Supply Company, 346 East
8th
Street,
North Vancouver BC, V7L1Z3 Canada
USE
OF PROCEEDS
Our
offering is being made on a self-underwritten basis - no minimum of shares
must
be sold in order for the offering to proceed. The offering price per share
is
$0.02. The following table below sets forth the uses of proceeds assuming the
sale of 25%, 50%, 75% and 100% of the securities offered for sale in this
offering by the company.
13
If
25% of Shares
are
Sold
If
50% of Shares
are
Sold
If
75% of Shares
are
Sold
If
100% of Shares
are
Sold
Gross
Proceeds
from
this Offering
$
50,000
$
100,000
$
150,000
$
200,000
Less:
Offering
Expenses
-Legal&
Accounting
8,500
8,500
8,500
8,500
-SEC
Filing Fees
1,000
1,000
1,000
1,000
Postage/Printing
1,500
1,500
1,500
1,500
Total
$
11,000
$
11,000
$
11,000
$
11,000
Less:
Business
Development
-Web
Development
12,000
35,000
54,900
75,150
-Marketing
18,000
42,000
67,100
91,850
Total
$
30,000
$
77,000
$
122,000
$
167,000
Less:
Admin.
Expenses
-Corp.
State Fees
500
500
500
500
-Transfer
Agent
2,000
2,000
2,000
2,000
-Telephone/Printing/
Mail/Office
7,000
10,000
15,000
20,000
Total
$
9,500
$
12,500
$
17,500
$
22,500
Totals
$
50,000
$
100,000
$
150,000
$
200,000
Investors
must be aware that the above figures represent only estimated
costs.
DETERMINATION
OF OFFERING PRICE
Currently,
there is no established public market for our common shares. As a result, the
offering price and other terms and conditions relative to our shares have been
arbitrarily determined by GISC in order for us to raise up to a total of
$200,000 in this offering. The offering price bears no relationship whatsoever
to our assets, earnings, book value or other criteria of value. Among the
factors considered were:
*
Our
lack of operating history;
*
Proceeds
to be raised by this offering;
*
The
amount of capital to be contributed by purchasers in this Offering
in
proportion to the amount of stock to be retained by our existing
Stockholders; and
*
Our
cash requirements.
In
addition, no investment banker, appraiser, or other independent third party
has
been consulted concerning the offering price for the shares or the fairness
of
the offering price considered for the shares.
SELLING
SECURITY HOLDERS
The
following table sets forth information as of August 31, 2006 with respect to
the
beneficial ownership of our common stock both before and after the offering.
The
table includes all those who beneficially own any of our outstanding common
stock AND are selling their shares in the concurrent offering.
NOTE:
Our
sole office and director, David Wolstenholme, as of the date of this Prospectus
owns 5,000,000 common shares, which are subject to Rule 144
restrictions.
14
Selling
shareholders will still be limited to selling the shares at $0.02 per share
(set
offering price per share pursuant to this prospectus) until the shares are
quoted on the Over-The-Counter (OTC) Bulletin Board or an exchange. To date,
there have been no steps taken to list GISC’s common stock on any public
exchange for listing.
The
percentages determined in these calculations are based upon 7,100,000 of our
common shares issued and outstanding as of the date of this Prospectus. The
table set forth below shows the number of shares and percentage before and
after
the public offering.
All
of
the shares registered herein will become tradable on the effective date of
this
registration statement. The following table sets forth the beneficial ownership
of the shares held by each person who is a selling security holder and by all
selling security holders as a group.
Name
of Selling
Security
Holder
Shares
Owned
Prior
to
This
Offering
Percentage
Owned
Prior
to
This
Offering
Total
of
Shares
Offered
For
Sale
Total
Shares
After
Offering
Percentage
Owned
After
Offering
Haining
Yang
350,000
4.9%
350,000
0
0.0%
Susan
Buch,
350,000
4.9%
350,000
0
0.0%
Sharon
Proudfoot
350,000
4.9%
350,000
0
0.0%
Tony
Tanti,
350,000
4.9%
350,000
0
0.0%
Brian
LeMaire
350,000
4.9%
350,000
0
0.0%
Michelle
Morrison
350,000
4.9%
350,000
0
0.0%
Selling
Security Holders as a Group
2,100,000
29.4%
2,100,000
0
0.0%
The
shares were acquired in June of 2005 by non-U.S. citizens; we issued 2,100,000
common shares for total consideration of $16,800, which was accounted for as
a
purchase of common stock. The shares offered for sale were not registered under
the 1933 Act, and were offered and sold in reliance upon the exemptions
specified in Regulation S promulgated pursuant thereto.
Excluding
the mentioned officer and director herein, to our knowledge, none of the selling
shareholders:
1.
Has
had a material relationship with Global Ink Supply Company other than as a
shareholder, as noted above at any time since inception, November 2004;
or
2.
Has
ever been an officer or director of Global Ink Supply Company.
The
selling security holders, as a group, are hereby registering 2,100,000 common
shares, of which after the effective date of this registration statement, they
may sell at any time.
15
In
the
event the selling security holders receive payment for the sale of their shares,
GISC will not receive any of the proceeds from such sales. GISC is bearing
all
expenses in connection with the registration of the shares of the selling
security holders.
PLAN
OF DISTRIBUTION
General
We
are
offering 10,000,000 shares on a self-underwritten basis. The offering price
has
been set at $0.02 per share for the duration of the offering.
A
group
of selling shareholders is endeavoring to sell their shares of common stock
at
the same time and at the same price per share. Currently, the percentage of
the
total outstanding common stock being offered by the selling shareholders is
approximately 29% based upon 7,100,000 of our common shares that are issued
and
outstanding as of the date of this Prospectus. GISC will not receive the
proceeds from the sale of the shares by the selling security
holders.
We
will
sell the shares only through David Wolstenholme, our president and a director.
Mr. Wolstenholme will receive no commission from the sale of any shares. He
will
not register as a broker/dealer under Section 15 of the Securities Exchange
Act
of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions
under which a person associated with an issuer may participate in the offering
of the issuer's securities and not be deemed to be a broker/dealer. The
conditions are that:
1.
The
person is not subject to a statutory disqualification, as that term
is
defined in Section 3(a)(39) of the Act, at the time of his
participation;
2.
The
person is not compensated in connection with his participation by
the
payment of commissions or other remuneration based either directly
or
indirectly on transactions in
securities;
3.
The
person is not at the time of their participation, an associated person
of
a broker/-dealer; and
4.
The
person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1
of the
Exchange Act, in that he (A) primarily performs, or is intended primarily
to perform at the end of the offering, substantial duties for or
on behalf
of the Issuer otherwise than in connection with transactions in
securities; and (B) is not a broker or dealer, or an associated person
of
a broker or dealer, within the preceding twelve (12) months; and
(C) do
not participate in selling and offering of securities for any Issuer
more
than once every twelve (12) months other than in reliance on Paragraphs
(a)(4)(i) or (a)(4)(iii).
16
Mr.
Wolstenholme is not statutorily disqualified, is not being compensated, and
is
not associated with a broker/dealer. He is and will continue to be our president
and a director at the end of the offering and has not been during the last
twelve months and is currently not a broker/dealer or associated with a
broker/dealer. Mr. Wolstenholme has not during the last twelve months and will
not in the next twelve months offer or sell securities for another corporation.
Mr. Wolstenholme is not selling any of his shares in this offering and has
not
sold any during the last twelve months.
Only
after our prospectus is effective by the SEC, do we intend to advertise, through
tombstones, and hold investment meetings in various states where the offering
will be registered. We will not use the Internet to advertise our offering.
We
will also distribute the prospectus to potential investors at the meetings
and
to our friends and relatives who are interested in us and a possible investment
in the offering.
We
confirm that we have not engaged and will not be engaging a finder in connection
with this offering.
Offering
Period and Expiration Date
This
offering will start on the date of this prospectus and continue for a period
of
90 days. We may extend the offering period for an additional 90 days, or unless
the offering is completed.
Procedures
for Subscribing
If
you
decide to subscribe for any shares in this offering, you must
1.
Execute
and deliver a subscription agreement;
and
2.
Deliver
a check or certified funds to us for acceptance or
rejection.
All
checks or money orders for subscriptions must be made payable to "Global Ink
Supply Co."
Right
to
Reject Subscriptions
We
have
the right to accept or reject subscriptions in whole or in part, for any reason
or for no reason. All moneys from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours after
we receive them.
LEGAL
PROCEEDINGS
GISC
is
not a party to or aware of any threatened litigation of a material
nature.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The
following table and subsequent discussion contains information concerning our
directors and executive officers, their ages, term served and all of our
officers and their positions, who will serve in the same capacity with GISC
upon
completion of the offering.
17
Name
Age
Term
Served
Title
David
Wolstenholme
35
Since
inception
President,
Director and Chief Financial
Officer
Mr.
Wolstenholme may be deemed a “promoter” of GISC as that term is defined in the
rules and regulations promulgated under the Securities and Exchange Act of
1933.
There
are
no other persons nominated or chosen to become directors or executive officers,
nor do we have any employees other than above mentioned officer and director.
The By-laws of GISC require no less than one member on the board of directors
and no more than ten.
GISC
is a
development stage corporation, and is not a successor of any predecessor company
or business.
Officer
and Director Background:
David
Wolstenholme: Mr. Wolstenholme has been a technology entrepreneur for the
past 12 years having been involved in the startup and growth of a number of
firms. In 1994 he co-founded the first "flat rate" Internet provider in Canada.
"Internet Direct" grew from an initial startup of 2 people
with zero revenue to more than $10,000,000 in less than three years. The
company was ultimately acquired and became the basis for publicly traded, Look
Communications on the TSX. In 1997, Mr. Wolstenholme continued in the technology
sector and raised in excess of $5,000,000 for another firm called MediaDepot
which focused on web based file management. In 2000
he then joined another Canadian publicly traded firm,
Appareo Software as the Chief Operating Officer. Both the Canadian and
American components of Appareo Software were sold to US and Canadian
interests with profitable shareholder returns. Education: Mr.
Wolstenholme holds an Arts degree from Simon Fraser University with a major
in
Communications. He also is involved with a continuing education program from
the
Business School at Harvard University in "Launching New Ventures and Innovation
in the Enterprise".
Currently
GISC has no employees other than the current officer and director, David
Wolstenholme, which may create potential conflicts of interest. The Officer
anticipates devoting, at a, minimum twelve to fifteen hours per month to the
furtherance of GISC over the next twelve months. However, there is no guarantee
that we will be successful in developing the business as we are subject to
the
many risks described in this Registration Statement beginning on page 8.
Our
director holds office until the next annual meeting of shareholders and the
election and qualification of their successors. The next such meeting is
scheduled for November 2006. Directors receive no compensation for serving
on
the board of directors other than reimbursement of reasonable expenses incurred
in attending meetings. Officers are appointed by the board of directors and
serve at the discretion of the board.
We
have
not entered into any employment agreements with any of our employees, and
employment arrangements are all subject to the discretion of our board of
directors.
18
No
executive Officer or Director of GISC has been convicted in any criminal
proceeding (excluding traffic violations) or is the subject of a criminal
proceeding that is currently pending.
No
executive Officer or Director of GISC is the subject of any pending legal
proceedings.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information with respect to the beneficial
ownership of our common stock as it relates to our named Director and executive
Officer, and each person known to GISC to be the beneficial owner of more than
five percent (5%) of said securities, and all of our directors and executive
officers as a group:
Name
and Position
Shares
Percent
Security
David
Wolstenholme
President
and Director
5,000,000
70%
Common
Officers
and Directors as
a
Group
5,000,000
70%
Common
David
Wolstenholme address is 346 East 8th
Street,
North Vancouver, BC V7L1Z3 Canada
The
above
referenced common shares were paid for and issued in February 2005, for
consideration of $0.0008 per share and total consideration of
$4,000.
DESCRIPTION
OF SECURITIES
The
following statements set forth summaries of the material provisions of our
Certificate of Incorporation and Bylaws, and are qualified in their entirety
by
reference to the detailed provisions of our Certificate of Incorporation and
Bylaws, which have been provided as Exhibits to this registration statement.
The
shares registered pursuant to the registration statement of which this
prospectus is a part, are shares of common stock, all of the same class and
entitled to the same rights and privileges as all other shares of common
stock.
Common
Stock
GISC’s
Certificate of Incorporation authorizes the issuance of 25,000,000 shares of
common stock, $.0001 par value per share. As of the date of this Prospectus,
there are 7,100,000 common shares issued and outstanding. The holders of Common
Stock are entitled to one vote for each share held of record on all matters
to
be voted on by the shareholders. There is no cumulative voting with respect
to
the election of directors, with the result that the holders of more than 50
percent of the Shares voted for the election of directors can elect all of
the
directors. The holders of Common Stock are entitled to receive dividends when,
as and if declared by the board of directors out of funds legally available
therefore. In the event of liquidation, dissolution, or winding up of GISC,
the
holders of Common Stock are entitled to share ratably in all assets remaining
available for distribution to them after payment of liabilities and after
provision has been made for each class of stock, if any, having preference
over
the common stock. The holders of Common Stock do not have preemptive rights.
In
the future, preemptive rights may be granted by way of amendment of GISC’s
articles of incorporation, which would require a vote by the board of directors
and shareholders on such matter.
19
Preferred
Stock
GISC
has
not authorized any Preferred Stock, but in the future reserves the right to
do
so at the discretion of the shareholders and the board of directors.
Options
and Warrants
GISC
does
not presently have any options or warrants authorized or any securities that
may
be convertible into common stock. However, our Board of Directors may later
determine to authorize options and warrants for GISC.
Dividend
Policy
GISC
has
not previously paid any cash dividends on our common stock and do not anticipate
or contemplate paying dividends on our common stock in the foreseeable future.
Our present intention is to utilize all available funds for the development
of
our business. There is no assurance that GISC will ever have excess funds
available for the payment of dividends. The only legal restrictions that limit
the ability to pay dividends on common equity or that are likely to do so in
the
future are those restrictions imposed by State Laws.
Transfer
Agent
Currently,
GISC has not engaged the services of a Transfer Agent.
Additional
Information Describing Stock
The
above
descriptions concerning the stock of GISC do not purport to be complete.
Reference is made to GISC’s Certificate of Incorporation and By-Laws which are
included as exhibits to the registration statement of which this registration
statement is a part and which are available for inspection at GISC’s office.
If
GISC
can meet the qualifications, it intends to apply for quotation of its securities
on the Pink sheets through its Pink Sheets' Electronic Quotation Service. This
service is not an exchange, but a service in which market makers display
real-time prices and potential liquidity of domestic equities, ADRs and foreign
ordinaries. Pink Sheets offers a quotation service to companies that are unable
to list their securities on the OTC Bulletin Board, NASDAQ, or an exchange.
The
requirements for listing on the Pink Sheets are considerably lower and less
regulated than those of the OTC Bulletin Board, NASDAQ, or an exchange. Although
this is an advantage for companies seeking to have their securities listed
it is
not an advantage to an investor as additional research and greater understanding
of high risk investment is generally required to buy and sell shares listed
on
the Pink Sheets.
20
To
qualify for quotation on the Pink Sheets, an equity security must have one
registered broker-dealer, known as the market maker, willing to list bid or
sale
quotations and to sponsor such a Company listing. GISC intends to contact a
registered broker-dealer for sponsorship of GISC’s common stock on the Pink
Sheets within the next twelve months. The market maker will be required to
file
a Form
211
with the
NASD OTC Compliance Unit. Pink Sheets quotes will only be permitted after a
successful review by NASD Compliance. No assurance can be given that a
broker-dealer will contract with GISC, or if so, that the NASD will approve
our
Form 211 and allow the securities to be listed for trading on the Pink Sheets.
Reports to Shareholders: GISC plans to furnish to its shareholders annual
reports containing audited financial statements, examined and reported upon,
and
with an opinion expressed by, an independent certified public accountant. GISC
may issue other unaudited interim reports to its shareholders, as it deems
appropriate. Selling shareholders will still be limited to selling the shares
at
$0.02 per share (set offering price per share pursuant to this prospectus)
until
the shares are quoted on the Over- The-Counter (OTC) Bulletin Board or an
exchange.
Penny
Stock Regulation
Broker-dealer
practices in connection with transactions in "penny stocks" are regulated by
certain penny stock rules adopted by the Securities and Exchange Commission.
Penny stocks generally are equity securities with a price of less than $5.00.
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 that provides information about penny stocks and the 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. In addition, the penny stock rules generally require that prior to
a
transaction in a penny stock, the broker-dealer 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 a stock that becomes subject to the penny
stock rules. As our shares immediately following this offering will likely
be
subject to such penny stock rules, investors in this offering will in all
likelihood find it more difficult to sell their securities.
INTEREST
OF NAMED EXPERTS AND COUNSEL
The
financial statements of Global Ink Supply Company for the period from inception
on November 4, 2004 to May 31, 2005 included in this prospectus have been
audited by, Kyle Tingle, CPA an independent certified public accountant, as
indicated in his report, and are included in this Prospectus in reliance on
the
report given upon the authority of that firm as experts in accounting and
auditing.
21
The
validity of the issuance of the common stock offered in this offering will
be
passed upon for Global Ink Supply Company by The Law Office of Timothy S. Orr,
PLLC and is included in this prospectus.
No
expert
or counsel named in this registration statement as having prepared or certified
any part of this statement 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 will 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
Our
directors and officer are indemnified as provided by the Delaware Revised
Statutes and our bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising
under
the Securities Act of 1933 is against public policy as expressed in the
Securities Act of 1933, 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.
DESCRIPTION
OF BUSINESS
General
Global
Ink Supply Company was incorporated on November 4, 2004 in the State of
Delaware. GISC is a development stage company that plans to sell generic printer
cartridges and other consumables directly to the commercial marketplace,
individual consumers. The Company plans to develop and market an e-commerce
enabled website which will attract prospective clientele and distribution
partners. The Company’s mailing address is 346 East 8th
Street,
North Vancouver, BC Canada V7L 1Z3. The telephone number of our principal
executive office is (604) 990-9924.
Overview
- Ink Printer Cartridge and Toner Market
Management
believes the ink printer cartridge and toner market is synonymous to the
personal hygiene shaving products market. For example, a razor manufacturer’s
primary profits come from the sale of replacement blades for the specific razor
product; whereas printer manufacturers make their primary profit on ink and
toner cartridge replacements for the specific printer they generally sell at
very narrow profit margins. Generally replacement ink cartridges and toners
are
expensive no matter the manufacturer of the printer; as such management has
identified a potential market opportunity to offer replacement cartridges and
toners through the Internet medium at discount prices to the consumer.
22
Current
market estimates put the consumables business at 90 percent of the more than
$31
billion annual global printer market. With shipments of digital copiers and
printers projected to reach 4.31 million units in 2006, management believes
the
installed base is swelling at a tremendous rate, thereby creating a potential
huge and growing market for consumable ink printer cartridges and
toners.
The
ink
printer cartridge and toner market is well established with two primary segments
in the marketplace (corporate and individual consumer). Within those two markets
there are two tiers of organizations, name brand and generic manufacturers.
GISC
plans to market generic products to both of these primary segments within the
industry. Name-brand companies such as Hewlett Packard, Canon, Epson and others
dominate the name brand marketplace sales of ink cartridges and toners. However,
according to Lyra
Research,
in the
past five years the share of generic/remanufactured printer cartridges in the
cartridge market rose from 14% to 17%. Lyra expects the share of remanufactured
printer cartridges to rise to 24% by 2008 and that by 2008, 24% of consumables
will be generic. Based upon the current pricing structure within the name brand
ink cartridges and toners management believes that the offering of inexpensive
and reliable generic cartridges and toners will be increasingly popular. The
Company plans to profit by selling generic printer cartridges and toners through
its website (www.globalinksupply.com). Through the use of our proposed website
and a targeted approach, GISC feels that an opportunity exists to create a
sizeable business.
GISC
has
not incurred any significant research and development costs, and therefore
does
not expect to pass any such costs on to our prospective customers. At this
time
government approval is not necessary for our business, and GISC is unaware
of
any significant government regulations that may impact its proposed business
within the e-commerce marketplace.
Internet
Industry
The
distribution of products over the Internet is one of the fastest growing
business segments in the world. Management believes that with the proper
marketing campaign, GISC’s e-commerce enabled website can develop into a
profitable business selling generic ink printer cartridges and
toners.
Marketing
and Strategy
Target
Market
While
the
market for generic ink printer cartridges and toners is large and competitive,
management believes it has identified potential target market for its product
offering. The primary target market identified is the individual consumer and
businesses as well as membership bases of computer user groups and other
associations globally.
23
Specifically,
various computer user groups and associations in North America alone number
in
excess of 45,000 clubs with a combined membership base of more than 1,000,000
people. Lists of these members that can be easily targeted have been identified
at (www.marketingsource.com.)
Management
believes this group of individuals is ideal targets to not only purchase its
products, but to successfully market its products for a variety of
reasons:
1.
As
members of a user group or association they are often provided attractive
offers for their members. As such, the offer we are able to provide
reliable and cost competitive printer cartridges and
accessories;
2.
A
large percentage have a need for the products since many are active
computer users/owners and know other users/owners as well;
and
3.
Association
members and user group members by definition are happy to assist
and
inform other people (and not necessarily user group members) of valuable
products and services.
Based
upon these factors management believes that computer user groups and
associations would be a valuable and cost effective method for the distribution
and sales of generic ink cartridges and toners. Through this wholesale type
approach, the user group members will be able to purchase bulk packages of
cartridges and accessories that they can sell to both their friends and
corporate contacts that they may have. In effect, becoming independent sales
agents and creating a network of customers, of who if interested that can also
become sales agents as well. This model has seen great success with companies
such as Amway, Qixtar, Regal and others.
Furthermore,
as part of the expansion plan, GISC has plans to develop a volume based,
decreasing pricing model to incentive to customers who buy large wholesale
amounts for resale to their network of friends and associates. Management
believes by taking this approach it will minimize the costs associated with
marketing, specifically expenses related to sales personnel.
Marketing
GISC
is
currently in the process of developing an Internet website with full electronic
commerce capabilities and functionality to assist the network of independent
sales agents. The website’s address is www.globalinksupply.com. GISC plans to
market its website by developing a network of independent sales representatives,
which will primarily be reliant upon “word of mouth” and referral dynamics of
the user group and association members. GISC cannot provide any assurance that
association membership marketing will be effective for its proposed business
operations.
24
The
Company anticipates directing initial marketing strategies towards development
of a network of independent sales representatives. Some specific strategies
include but are not limited to:
·
Distinctive
Product Packaging;
·
Tiered
costing models based on volume and purchase frequency;
and
·
Prizes,
additional compensation and other incentive programs for top
salespeople
It
is
important to note that GISC has not yet fully developed its website and there
can be no assurance that GISC will be able to implement any marketing campaigns
and strategies successfully if and when the website becomes
functional.
The
Company also anticipates listing its website with search engines (target lists)
in order to expose its site to individuals and business that may become
potential customers for the Company as well as to individuals whom may be
interested in becoming an affiliate sales representative for GISC.
In
addition to targeted lists, management plans to utilize targeted e-mail
announcements, industry forums and corporate blog with information about GISC
products that can be sent to individual association members who have expressed
an interest in receiving information regarding our generic printer cartridges
and accessories. The advantage of this method is that individuals have
voluntarily signed up to receive e-mail messages about specific topics and
are
thereby more likely to read them. Response rates ranging from 1% to 5% are
expected with targeted e-mails. GISC plans to strive to maintain a clean
corporate image by practicing proper “etiquette” when sending e-mail messages.
In order to differentiate between e-mail messages that are voluntarily requested
and true “spamming” from unwelcome sources, GISC plans to only send targeted
e-mail to those individuals who have voluntarily requested to receive such
announcements, and always give the participants the option to remove themselves
from the e-mail lists obtained from a third party source or compiled internally
through GISC proposed website.
Products
GISC
does
not manufacture or design any products. Rather GISC plans to distribute products
via its proposed internet site and in turn develop a network of independent
sales agents from user groups and associations to sell its ink printer
cartridges and toners. The website itself will be structured to host a
comprehensive catalog from which these individuals can research, place orders
and talk with others about the various ink printer cartridges and
toners.
GISC
has
secured the domain name www.globalinksupply.com and has begun to plan the
initial development of its website. Investors must be aware that as of the
date
of this prospectus the website is not complete and is not capable of generating
any revenues or acting as a tool for any affiliate sales agent.
If
and
when the offering as described herein is successful the Company plans to
allocate the funds as follows depending upon the amount raised:
25
If
25% of Shares
are
Sold
If
50% of Shares
are
Sold
If
75% of Shares
are
Sold
If
100% of Shares
are
Sold
Gross
Proceeds
from
this Offering
$
50,000
$
100,000
$
150,000
$
200,000
Less:
Offering
Expenses
-Legal&
Accounting
8,500
8,500
8,500
8,500
-SEC
Filing Fees
1,000
1,000
1,000
1,000
Postage/Printing
1,500
1,500
1,500
1,500
Total
$
11,000
$
11,000
$
11,000
$
11,000
Less:
Business
Development
-Web
Development
12,000
35,000
54,900
75,150
-Marketing
18,000
42,000
67,100
91,850
Total
$
30,000
$
77,000
$
122,000
$
167,000
Less:
Admin.
Expenses
-Corp.
State Fees
500
500
500
500
-Transfer
Agent
2,000
2,000
2,000
2,000
-Telephone/Printing/
Mail/Office
7,000
10,000
15,000
20,000
Total
$
9,500
$
12,500
$
17,500
$
22,500
Totals
$
50,000
$
100,000
$
150,000
$
200,000
Global
Ink plans the completed website to have multiple product lines that the
independent agents can readily navigate through and provide them with
appropriate product information, sales support and service. Each of the product
lines will display specific products such as cartridges for different printers
and ink for different recycled cartridges.
Global
Ink can make no guarantees or assurances that it will accomplish its goals
within the dates specified. Moreover, management has no current plan to
substitute any additional products or services except those described herein
(generic printer cartridges and accessories). No guarantee or assurance can
be
made that GISC’s proposed business model will be effective in distributing these
products.
The
website will be designed to meet Global Inks’ strategy of providing a broad
selection of generic printer cartridges and accessories from multiple
manufactures and distributors giving independent agents the following
benefits:
ü
Compelling
Merchandise.
A
large selection of desirable products,
within
the
generic printer cartridge and accessory industry.
ü
Competitive
Pricing.
By providing a broad selection of generic printer cartridges and
accessories for bulk purchase, the site will provide interested parties
with relevant information and competitive pricing. In order to maintain
competitive pricing, Global Ink plans to monitor the competition’s pricing
schemes and respond quickly to any changes by the competition by
adjusting
it’s pricing to be competitive within the marketplace. Global Ink will
have to apportion time to accomplish this while attempting to keep
costs
of doing business at a minimum. There can be no assurance Global
Ink will
be able to maintain it goal of competitive pricing; if it fails to
do so
the proposed business would suffer
materially.
26
ü
Business.
With very little money and flexible terms, GISC is providing independent
sales representatives the ability to create a business with a recurring
revenue stream (as sales representatives customers use the products,
they
will require more)
ü
Convenience.
Through the website, Global Ink will be able to supply generic printer
cartridges and accessories to the buyer in a convenient
way.
ü
Buyers
will not need not travel to fixed locations during limited hours
to
purchase items. The website will enable them to browse, order, and
purchase 24 hours a day and 7 days a
week.
ü
Customer
Service. On
the website, GISC plans to have links labeled as “Customer Service” or
“Questions about this Product?” where buyers can e-mail any question that
they may have. GISC plans to readily respond to the questions via
e-mail
and if necessary follow-up with a telephone call. As the business
develops
GISC will be required to hire additional personal to ensure quick
response
to customers. If GISC is unable top provide quality customer service
it
would materially impair the growth of the business.
GISC
believes it will have an advantage with the current competition by developing
effective relationships with its clientele. Management believes this can be
accomplished by combining the above benefits with consistently quality customer
service. However, competitors may prove to be too dominating and prevent Global
Ink from ever establishing these relationships, as Global Ink is currently
a
development stage business with no proven track record.
Potential
investors should realize that as of the date of this Prospectus, GISC is
currently in the process of developing the Internet website and at this time
it
is not fully operational.
Even
if
GISC is successful in developing and ultimately launching its proposed website
(www.globalinksupply.com),
its
future success will be dependent on several critical factors including, but
not
limited to, successfully raising of capital, market acceptance, and management’s
continued focus on the development of the business. Furthermore, GISC cannot
assure investors that it will be able to overcome the risks described within
this Registration Statement to meet the goal of its strategic business plan.
(See Risk Factors, beginning on page 8.)
Once
the
website is fully operational, GISC plans to obtain a small amount of inventory
for the cartridges and accessories displayed on the website. In order to do
so
the Company will have to apply for credit status with the suppliers of the
generic printer cartridges and accessories. At this time no credit status
application has been filed with any supplier. Management believes that once
the
website is operational, suppliers will be willing to provide credit status
to
GISC; however, there can be no assurance or guarantee that this will be the
case.
27
If
GISC
is successfully in obtaining inventory, commercial space will be required to
store the products (see “Description of Property below.) GISC plans to provide
various options for shipping the product to customers including FEDEX and the
traditional Postal Service. Global Ink anticipates passing the cost of shipping
directly to the customer.
GISC
believes by providing a broad selection of quality products along with detailed
information about the products through its proposed website, it will be able
to
compete within the growing marketplace for generic printer cartridges and
accessories.
Current
Market Conditions
Management
believes that the Internet as a medium for conducting business will continue
to
grow and will have a positive impact on its offerings. Management believes
that
the significant growth of companies already selling cartridges and accessories
is a strong indication of the current and future demand. However, There can
be
no assurance that the Company is correct in its diagnosis of the future market
of generic printer cartridges and accessories and as such each potential
investor should conduct his/her own research of this marketplace.
Employees
GISC
has
no employees. Presently, David Wolstenholme, officer/director, plans to devote
approximately a minimum of 12 -15 hours per month, on the business.
Competition
The
generic printer cartridge and accessory market is extremely competitive as
shown
with the number of online vendors. However, the majority of these vendors are
not focused on the bulk wholesale market and the business model with independent
sales agents but rather the retail business selling “one cartridge at a time”.
This large number of vendors is what makes GISC’s opportunity significant.
Management believes that by providing bulk product through its proposed website
providing a high quality, user friendly environment, where buyers will be
comfortable in purchasing generic printer cartridges. Management believes this
approach will enable the Company differentiate itself from the current
competition and grow quickly. However, GISC currently has not fully developed
its website and there can be no assurance that the Company will be able to
develop a website to which buyers will be receptive to its proposed business
platform.
In
addition, there are companies that are already well established and have greater
financial resources than those of GISC such as the current “name brand”
cartridge providers (Epson, Canon, etc.). GISC would likely not be able to
compete with either of these companies if they dropped their price significantly
or develop some technology to prevent the use of generic printer cartridges.
Also, additional start-up companies may exist seeking to capitalize within
the
same marketplace that GISC anticipates profiting from, which would present
additional competition to the Company that it may not be able to overcome,
resulting in failure of the business plan.
28
In
the
ink supply marketplace, GISC will be in direct competition on the provisioning
of cartridges and printing supplies with established companies such
as: www.wholesale-suppliers.net,
www.MonsterMarketplace.com, www.nextag.com, www.AsianProducts.com
and
BizRate.com all
of
which have established websites that specialize in the distribution of printer
cartridges and accessories. Although the market is highly competitive,
management believes if it is able to maintain its current focus and successfully
develop its proposed business platform as described herein it will able to
compete effectively and eventually become a profitable company. Management
cannot provide investors any assurance or guarantee that it will ever be
successful in developing its business or become profitable in the
future.
The
information within this registration statement focuses primarily on details
regarding toner and ink cartridges and not on the industry as a whole in which
GISC plans to operate. Potential investors should conduct their own separate
investigation of the marketplace in order to obtain a broader insight in
assessing GISC’s future business prospects. For example, a potential investor
may want to view websites of the competitors listed above.
Patents
Global
Ink Supply Company holds no patents.
Government
Regulation
Government
approval is not necessary for our business, and it is anticipated that
government regulations will have little or no effect on GISC’s proposed
business.
MANAGEMENT
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The
following discussion should be read in conjunction with GISC’s audited financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus.
Company
Overview
GISC
was
organized on November 4, 2004 and has not yet commenced any significant
revenue-generating operations. Our common stock is not listed on any recognized
exchange or quoted on any quotation medium. There can be no assurance that
our
common stock will ever be listed or quoted in the future or ever have a market
develop for its common stock.
Plan
of Operations - General
Our
plan
of operations is to sell generic printer cartridges and accessories to
businesses and individual consumers through our website at
www.globalinksupply.com.
29
As
of
August 31, 2006 GISC had $ 17,707 of cash on hand and available for expenses.
Management believes this amount will satisfy the cash requirements of GISC
for
the next twelve months or until such a time additional proceeds are raised.
GISC
plans to satisfy our future cash requirements by additional equity financing.
This will be in the form of private placements of common stock. There is no
additional offering in the works at present. There can be no assurance that
GISC
will be successful in raising additional equity financing, and, thus, be able
to
satisfy our future cash requirements, which primarily consist of working capital
directed towards the development of the website and marketing campaigns, as
well
as legal and accounting fees. GISC depends upon capital to be derived from
future financing activities such as subsequent offerings of our stock. There
can
be no assurance that GISC will be successful in raising the capital the company
requires. Management believes that if subsequent private placements are
successful, GISC will be able to generate revenue from online sales of generic
printer cartridges and accessories and achieve liquidity within the following
twelve to fourteen months thereof. However, investors should be aware that
this
is based upon speculation and there can be no assurance that the Company will
ever be able reach a level of profitability.
As
of the
date of this registration statement GISC has generated only one (1) sale
resulting in a net profit of approximately $2,000, it has not generated any
other revenue through its proposed business. All additional proceeds received
by
GISC were a result of the sale of its common stock.
GISC
does
not anticipate any significant research of any products. The Company does not
expect the purchase or sale of plant or any significant equipment, and GISC
does
not anticipate any change in the number of employees. GISC has no current
material commitments.
GISC
has
no current plans, preliminary or otherwise, to merge with any other entity.
GISC
is
still considered to be a development stage company, with no significant revenue,
and GISC will be dependent upon the raising of additional capital through
placement of our common stock in order to continue with the business plan.
There
can be no assurance that GISC will be successful in raising the capital it
requires through the sale of our common stock in order to continue as a going
concern.
Management
anticipates the following steps and related expenses within the next twelve
months:
1.)
Complete the development of the website. Management has estimated the time
frame
to accomplish this to be the First or Second Quarter of 2007 and cost
approximately $3,000 -$5,000.
2.)
In
addition, GISC plans to allocate approximately $1,500 towards the initial phases
of the marketing plan described herein.
3.)
GISC
has allocated $11,000 towards administrative expenses, which the Company plans
to direct towards: Any deficiencies, if any, in the estimated expenses
anticipated for completion of this registration statement and the completion
of
the website as described herein. Any additional funds allocated as
administrative expenses will be designated as working capital and used for
miscellaneous corporate expenses including but not limited to office supplies
and postage.
30
The
specific steps anticipated over the next twelve months involve continuing to
develop the website by adding product lines to the site. The product line will
represent major manufacturers of generic printer cartridges, including but
not
limited those cartridges that work on Epson, Canon and other manufacturer’s
printers. The cartridges represented from each product line will include
specific cartridges for the specific manufacturers GISC hopes to accomplish
this
by the end of the fourth quarter of 2007.
Each
of
the product lines will display specific cartridges and accessories. GISC plans
to provide the following links with each specific product:
1.)
Comparative
cartridges -
other cartridges/colors that may suit the customers needs;
and
2.)
Accessories
-
Provide the customer with additional printing accessory
options.
If
and
when the website is completed, over the subsequent twelve months, GISC plans
to
allocate proceeds towards it marketing campaign directed specifically at
building traffic “potential buyers” to its website. For this purpose management
anticipates employing a third party who specializes in increasing web traffic
to
websites, such as PerfectTraffic.com, WebSiteTraffic.com and/or HitWise.com.
Management anticipates the cost for such a service who can guarantee visitors
to
its website will cost approximately $ 200.00 per month for every 50,000
visitors. However, even if GISC is successful in developing its proposed website
and contracting a third party to increase web traffic there can be no guarantee
or assurance that individuals will buy any of the products listed on GISC’s
website.
Additionally,
management plans to develop a Company presentation after the website has been
developed and is functional and contact various venture capitalists, private
investment company(s), and other financial institutions. The second round of
financing would be required after GISC has fully developed its proposed website
and has begun initial operations and is generating revenue. GISC currently
estimates that its proposed website will be fully operational by the end of
the
first quarter of 2007.
As
GISC
expands its business, it will likely incur losses. Management plans on funding
these losses through revenues generated through its proposed website. If GISC
is
unable to satisfy its capital requirements through its revenue production or
if
the Company is unable to raise additional capital through the sale of its common
stock it may have to borrow funds in order to sustain its business. There can
be
no assurance or guarantee given that GISC will be able to borrow funds because
it is a new business and the future success of the Company is highly
speculative.
Although
management believes the above timeframes for the related business steps are
conservative and can likely be accomplished by GISC, potential investors should
be aware that several unforeseen or unanticipated delays may impede GISC from
accomplishing the above-described steps such as:
31
ü
Problems
may arise during the development of the Internet website with the
programming and testing that management cannot overcome, creating
a time
delay and additional costs;
ü
GISC
may find that potential financiers are unreceptive to its business
plan
and provide no options to raise the additional capital required to
funds
its marketing campaign.
If
either
of these events should occur GISC would not be able to continue as a going
concern and investors would lose all of their investment. In addition to the
above factors investors should carefully read the Risk Factors described herein
beginning on page 8.
In
the
event additional funds are secured by GISC there is no guarantee that the
proposed marketing strategy will be effective in accomplishing the goals GISC
has set. This may force management to redirect its efforts and create the need
for additional time, money, and resources, of which, GISC may not be successful
in providing.
At
this
time, management does not plan to commit any of their own funds towards the
company’s development. If and when this changes, management will file the
appropriate disclosures in a timely manner.
DESCRIPTION
OF PROPERTY
GISC’s
principle address is 346 East 8th
Street,
North Vancouver BC V7L1Z3 Canada. Mr. Wolstenholme, Officer/Director, is
currently providing his home office for GISC’s office and mailing address. Mr.
Wolstenholme plans to continue to contribute this office space at no cost to
the
Company until such a time that the Company begins operations. The telephone
number is 604-990-9924.
GISC
believes the property arrangement satisfies the Company’s current needs and will
be adequate up to the point that GISC begins operations, which is currently
estimated to be at the end of the second quarter of 2006 at which point it
may
be required to rent or lease commercial property that is capable of providing
adequate storage and office space. Management anticipates rent on a per month
basis for adequate commercial space will cost GISC approximately $1,500. This
estimate is based upon local commercial spaces with approximately 2,000 -3,000
square feet of storage capability and 500 to 1,000 square feet of office space.
However, management plans to continue to utilize Mr. Wolstenholme’s home office
until that space is no longer adequate. At this time no commercial property
has
been secured by GISC and there can be no assurance that an adequate space will
be found by GISC when needed; or if adequate space can be found at the price
currently estimated by management.
32
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
February
28, 2005 5,000,000 shares of common stock were issued to David Wolstenholme,
Officer/Director, at a price of $0.0008 per share. Mr. Wolstenholme’s common
shares are deemed “restricted” according to Rule 144.
June28,2005, 2,100,000 common shares were issued to six (6) individual shareholders
paying consideration of $0.008 per share. Each of these individual shareholders
is registering all of their holdings of GISC’s common stock within this
Registration Statement.
Related
Party Transactions
Currently,
there are no contemplated transactions that GISC may enter into with our
officer, director or affiliates. If any such transactions are contemplated
we
will file such disclosure in a timely manner with the SEC on the proper form
making such transaction available for the public to view.
GISC
has
no formal written employment agreement or other contracts with our current
officer, and there is no assurance that the services to be provided by him
will
be available for any specific length of time in the future. David Wolstenholme
anticipates initially devoting at a minimum of twelve to fifteen hours per
month
of their available time to GISC’s affairs. If and when the business operations
increase and a more extensive time commitment is needed, David Wolstenholme
is
prepared to devote more time to GISC’s affairs, in the event that becomes
necessary. The amounts of compensation and other terms of any full time
employment arrangements would be determined, if and when, such arrangements
become necessary.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
There
is
no trading market for GISC’s Common Stock at present and there has been no
trading market to date. There is no assurance that a trading market will ever
develop, or, if such a market does develop that it will continue.
David
Wolstenholme, officer and director, currently owns 5,000,000 shares of common
stock. The shares were issued in February 2005 and are deemed restricted
securities pursuant to Rule 144. The Company is not registering any of the
5,000,000 Rule 144 shares on this Registration Statement. February of 2006,
the
5,000,000 Rule 144 shares purchased by Mr. Wolstenholme will be eligible for
sale pursuant to Rule 144(d)(1) and Rule 144(e)(1). However, the amount of
shares that may be sold by either Mr. Wolstenholme will be limited to the amount
of securities sold, together with all the sales of restricted and other sold
common stock within the previous three months which shall not exceed the greater
(i) one percent of the shares or other units of the class outstanding as shown
by the most recent report or statement published by the Company, or (ii) if
and
when a market develops the average weekly reported volume of trading of the
Common Stock on all national securities exchanges and quotation systems during
the four calendar weeks preceding the filing notice required under Rule 144(h).
33
Holders
As
of the
date of this registration statement, there were a total of seven (7) active
stockholders, including the officer and director.
Dividends
GISC
has
not paid any dividends to date, and has no plans to do so in the foreseeable
future.
EXECUTIVE
COMPENSATION
GISC
has
made no provisions for cash compensation or for non-cash compensation to our
officers and directors. No salaries are being paid at the present time, and
will
not be paid unless, and until, there is available cash flow being generated
from
operations to pay salary. There have been no grants of options or SAR grants
given to any of our executive officers for the life of GISC.
GISC
does
not presently have a stock option plan. However, in the future, GISC may develop
an incentive based stock option plan for our officers and directors and may
reserve up to ten percent of our outstanding shares of common stock for that
purpose.
CHANGES
IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
GISC
has
had no disagreements with its accountants, and has no further financial
disclosure other than the financial statements included herein.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BALANCE
SHEETS
STATEMENTS
OF OPERATIONS
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)
STATEMENTS
OF CASH FLOWS
NOTES
TO FINANCIAL STATEMENTS
F-1
Report
of Independent Registered Public Accounting Firm
To
the
Board of Directors
Global
Ink Supply Company
Las
Vegas, Nevada
We
have
audited the accompanying balance sheets of Global Ink Supply Company (A
Development Stage Enterprise) as of May 31, 2006 and 2006 and the related
statements of operations, stockholders’ deficit, and cash flows for the years
then ended and the period November 4, 2004 (inception) through May 31, 2006.
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. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Global Ink Supply Company (A
Development Stage Enterprise) as of May 31, 2006 and 2005 and the results
of its
operations and cash flows for the years then ended and the period November4,2004 (inception) through May 31, 2006, in conformity with U.S. generally
accepted accounting principles.
The
accompanying 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 has limited operations and has no established source
of
revenue. This raises substantial doubt about its ability to continue as a
going
concern. Management’s plan in regard to these matters is also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Adjustments
to reconcile net loss to net cash used in operating
activities:
Inventory
7,556
(7,556
)
-
Accounts
payable and accrued liabilities
(99
)
1,200
1,101
NET
CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES
4,564
(7,556
)
(2,992
)
CASH
FLOWS FROM FINANCING ACTIVITIES
Proceeds
from sale of common stock
16,800
4,000
20,800
Related
party advances
(8,000
)
8,000
-
NET
CASH PROVIDED BY FINANCING ACTIVITIES
8,800
12,000
20,800
NET
INCREASE IN CASH
13,364
4,444
17,808
CASH,
BEGINNING OF PERIOD
4,444
-
-
CASH,
END OF PERIOD
$
17,808
$
4,444
$
17,808
Supplemental
cash flow information:
Cash
paid for:
Interest
$
-
$
-
$
-
Income
taxes
$
-
$
-
$
-
The
accompanying notes are an integral part of these financial
statements
F-6
GLOBAL
INK SUPPLY COMPANY
(A
Development Stage Enterprise)
NOTES
TO THE FINANCIAL STATEMENTS
NOTE
1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Global
Ink Supply Company (the “Company”) is in the initial development stage and has
incurred losses since inception totalling $4,093. The Company was incorporated
on November 4, 2004 in the State of Delaware. The Company’s fiscal year end is
May 31. The Company is a Development Stage Enterprise that plans to sell generic
printer cartridges and other consumables directly to the commercial marketplace
and to an Internet based reseller network. To date the Company has had limited
business operations.
The
ability of the Company to continue as a going concern is dependent on raising
capital to fund its business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company’s ability to continue as a going concern. The Company is funding its
initial operations by way of issuing Founders’ shares and a Private Placement
Offering for 7,000,000 shares at $.008 per share. As of May 31, 2006, the
Company had sold 7,100,000 shares and had received $20,800 in proceeds from
the
sale of the Company’s common stock of which 5,000,000 Founders’ shares were
issued at $.0008 per share for net proceeds of $4,000 and 2,100,000 shares
were
issued at $.008 per share for net proceeds of $16,800 pursuant to the Private
Placement Offering Memorandum.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
Use
of Estimates and Assumptions
Preparation
of the financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Revenue
Recognition
The
Company is engaged in the sale of printer ink toner cartridges. The Company
recognizes the revenue at the time of shipping of the product when
responsibility of the product is transferred to the purchaser and payment
has
been accepted or assured.
Income
Taxes
The
Company follows the liability method of accounting for income taxes. Under
this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in
the
years in which those differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the date of enactment or
substantive enactment. As of May 31, 2006, the Company had net operating loss
carryforwards; however, due to the uncertainty of realization the Company has
provided a full valuation allowance for the deferred tax assets resulting from
these loss carryforwards.
Net
Loss per Share
Basic
loss per share includes no dilution and is computed by dividing loss available
to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive losses per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
Foreign
Currency Translation
The
financial statements are presented in United States dollars. In accordance
with
SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary assets
and liabilities are translated to their United States dollar equivalents using
foreign exchange rates which prevailed at the balance sheet date. Revenue and
expenses are translated at average rates of exchange during the period. Related
translation adjustments are reported as a separate component of stockholders'
equity (deficit), whereas gains or losses resulting from foreign currency
transactions are included in results of operations.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-based
Compensation
The
Company has not adopted a stock option plan and has not granted any stock
options. Accordingly no stock-based compensation has been recorded to
date.
Recent
Accounting Pronouncements
In
May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error
Corrections, a replacement of APB No. 20 and FASB Statement No. 3”
(“SFAS No. 154”). SFAS No. 154 requires retrospective
application to prior periods’ financial statements of a voluntary change in
accounting principle unless it is impracticable. APB Opinion No. 20
“Accounting Changes,” previously required that most voluntary changes in
accounting principle be recognized by including in net income of the period
of
the change the cumulative effect of changing to the new accounting principle.
This statement is effective for our Company as of January 1, 2006.
The Company does not believe that the adoption of SFAS No. 154 will have a
material impact on our financial statements.
In
November 2005, the FASB issued FASB Staff Position FAS 115-1 and FAS 124-1,
“The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments” (“FSP 115-1”), which provides guidance on determining when
investments in certain debt and equity securities are considered impaired,
whether that impairment is other-than-temporary, and on measuring such
impairment loss. FSP 115-1 also includes accounting considerations subsequent
to
the recognition of an other-than temporary impairment and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. FSP 115-1 is required to be applied to
reporting periods beginning after December 15, 2005. We do not expect the
adoption of FSP 115-1 will have a material impact on our financial condition
or
results of operations.
In
February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 155, “Accounting for Certain Hybrid Financial Instruments—an Amendment
of FASB Statements No. 133 and 140” (“SFAS No. 155”). SFAS
No. 155 allows financial instruments that contain an embedded derivative
and that otherwise would require bifurcation to be accounted for as a whole
on a
fair value basis, at the holders’ election. SFAS No. 155 also clarifies and
amends certain other provisions of SFAS No. 133 and SFAS No. 140. This
statement is effective for all financial instruments acquired or issued in
fiscal years beginning after September 15, 2006. We do not expect that the
adoption of SFAS No. 155 will have a material impact on our financial
condition or results of operations.
In
March
2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
Assets—an Amendment of FASB Statement No. 140” (“SFAS No. 156”). SFAS
No. 156 provides guidance on the accounting for servicing assets and
liabilities when an entity undertakes an obligation to service a financial
asset
by entering into a servicing contract. This statement is effective for all
transactions in fiscal years beginning after September 15, 2006. We do not
expect that the adoption of SFAS No. 156 will have a material impact on our
financial condition or results of operations.
In
July
2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the
recognition threshold and measurement of a tax position taken on a tax return.
FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN
48 also requires expanded disclosure with respect to the uncertainty in income
taxes. We are currently evaluating the requirements of FIN 48 and the impact
this interpretation may have on our financial statements.
.
NOTE
3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
In
accordance with the requirements of SFAS No. 107, the Company has determined
the
estimated fair value of financial instruments using available market information
and appropriate valuation methodologies. The fair value of financial instruments
classified as current assets or liabilities approximate their carrying value
due
to the short-term maturity of the instruments.
The
Company’s capitalization is 25,000,000 common shares with a par value of $0.0001
per share. No preferred shares have been authorized or issued.
As
of May31, 2006, the Company has not granted any stock options and has not recorded
any
stock-based compensation.
During
the period ended May 31, 2005, a director purchased 5,000,000 shares of common
stock in the Company at $0.0008 per share with proceeds to the Company totalling
$4,000.
On
February 22, 2005, the Company authorized a Private Placement Offering to sell
up to 7,000,000 shares at $0.008 per share. During June and July of 2005 the
total amount raised in this financing was $16,800. As of May 31, 2006, the
Company had sold 2,100,000 shares and had received $16,800 in proceeds from
the
sale of the Company’s common stock.
NOTE
5 - RELATED PARTY TRANSACTIONS
On
May16, 2005, a director of Global Ink Supply Co. advanced the Company $8,000.
The
amounts payable are unsecured and non-interest bearing with no set terms of
repayment. The amount was repaid in full on December 30, 2005.
NOTE
6 - INCOME TAXES
The
Company accounts for its income taxes in accordance with FASB No. 109,
“Accounting for Income Taxes.” As of May 31, 2006, the Company had net operating
loss carry forwards of approximately $4,093 that may be available to reduce
future years’ taxable income and will expire commencing in 2015. Availability of
loss usage is subject to change of ownership limitations under Internal Revenue
Code 382. Future tax benefits which may arise as a result of these losses have
not been recognized in these financial statements, as their realization is
determined not likely to occur and accordingly, the Company has recorded a
valuation allowance for the deferred tax asset relating to these tax loss
carryforwards.
F-9
Dates Referenced Herein and Documents Incorporated by Reference
