Document/ExhibitDescriptionPagesSize 1: S-1 Raphael Industries Ltd. Form S-1 Filed March 24, HTML 516K 2010.
2: EX-5.1 Opinion of the Law Office of Conrad C. Lysiak, HTML 19K
P.S., Regarding the Legality of the
Shares Being Issued.
3: EX-23.1 Consent of Keith Margetson Ltd., Chartered HTML 8K
Accountant.
4: EX-23.2 Consent of the Law Office of Conrad C. Lysiak, HTML 9K
P.S.
5: EX-99.1 Subscription Agreement. HTML 12K
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO THE PUBLIC:
If any of
the securities being registered on the Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box: [X]
If this
Form is filed to register additional common stock for an offering under Rule
462(b) of the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this
Form is a post-effective amendment filed under Rule 462(c) of the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]
If this
Form is a post-effective amendment filed under Rule 462(d) of the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
[ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large
Accelerated Filer
[ ]
Accelerated
Filer
[ ]
Non-accelerated
Filer
[ ]
Smaller
Reporting Company
[X]
(Do
not check if a smaller reporting
company)
CALCULATION
OF REGISTRATION FEE
Securities
to be
Amount
To Be
Offering
Price
Aggregate
Registration
Fee
Registered
Registered
Per
Share
Offering
Price
[1]
Common
Stock:
10,000,000
$
0.10
$
1,000,000
$
71.30
[1]
Estimated
solely for purposes of calculating the registration fee under Rule
457.
REGISTRANT HEREBY AMENDS THIS
REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE COMMISSION, ACTING UNDER SAID
SECTION 8(a), MAY DETERMINE.
2
PROSPECTUS
RAPHAEL
INDUSTRIES LTD.
NO
MINIMUM - 10,000,000 SHARES OF COMMON STOCK MAXIMUM
This prospectus relates to the sale of
a maximum of 10,000,000 shares of our common stock at an offering price of $0.10
per share, with a no minimum required for us to accept funds. Mr. Ron Hughes,
our President, will sell the common stock to investors inside and/or outside the
United States. For purposes of this offering, our President may be deemed to be
an underwriter of this offering. He is not a registered broker-dealer but will
be offering our shares pursuant to an exemption from such broker-dealer
registration pursuant to Rule 3a4-1 of the Securities Exchange Act of 1934 “the
Exchange Act”. He will receive no selling commissions or other remuneration in
conjunction with this offering of the shares on behalf of Raphael. If the entire
10,000,000 shares of common stock are sold, we will receive gross proceeds of
$1,000,000 before expenses of approximately $30,000. Proceeds from the offering
will be deposited into our account with Wells Fargo NA. If your
subscription is rejected by us, you will receive a full refund of your
investment. We will offer shares pursuant to this prospectus for 270
days from the date it becomes effective. No assurance can be given that we will
be able to sell any shares. We do not have any agreements or arrangements with
affiliates to purchase shares pursuant to this registration statement, nor are
they prohibited from purchasing shares. If our affiliates elect to purchase
shares, it may result in a small number of unaffiliated investors owning our
stock, thereby allowing the affiliates to control or influence all matters
subject to stockholders vote. Additionally, it may make it difficult for us to
establish a liquid public market, reducing your ability to sell your
shares.
There are no arrangements to place the
funds in an escrow, trust, or similar account.
Our common stock will be sold on our
behalf by Ron Hughes, one of our officers and directors. Mr. Hughes
will not receive any commissions or proceeds from the offering for selling
shares on our behalf.
Investing in our common stock involves
risks. See “Risk Factors” starting at page 6.
Offering
Price
Expenses
Proceeds
to Us
Per
Share if All Shares Sold
$
0.10
$
0.0001
$
0.0999
Sale
of All Shares Sold
$
1,000,000
$
30,000
$
970,000
Since September 4, 2007, Raphael
Industries Ltd.’s common stock has been listed on the Financial Industry
Regulatory Authority’s (“FINRA”) OTC Bulletin Board (“OTC BB”) under symbol
“RPHA” and has traded on a limited basis. The last reported sales price per
share of our common stock as reported on the OTC BB on March 19, 2010 was
$0.81.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The
date of this prospectus is _______________________.
The following summary highlights
selected information contained in this prospectus. This summary does not contain
all the information you should consider before investing in the securities.
Before making an investment decision, you should read the entire prospectus
carefully, including the “risk factors” section, the financial statements and
the notes to the financial statements. As used throughout this prospectus, the
terms “we,”“us,” and “our” refers to Raphael Industries Ltd.
Raphael Industries Ltd is a Nevada
company incorporated on October 31, 2005. We are a startup company providing
list management and marketing services in the direct mail marketing industry. A
list is a collection of names with personal information that has been
accumulated through various sources such as subscription-based magazines and
newspapers, catalogues, yellow pages, white pages, incorporation records, real
estate deed transfers and other various sources. Our business model
is to manage and market lists whereby we store, maintain, and rent lists on
behalf of the list owner. We generate revenue by renting the names
and personal information to companies who solicit their products or services to
the individuals on the list. To date, we have had limited revenues
and have been issued a going concern opinion from our auditors. Our registered
office and agent for service is located at 5190 Neil Road, Suite 430 Reno, NV89502. Our telephone and fax numbers are 1-866-261-8853 and 1-414-434-3656,
respectively and our corporate website is www.raphaelindustries.net.
We market one mailing list on a non-exclusive case-by-case basis.
Our auditors have issued a going
concern opinion suggesting there is a real possibility that we will not be able
to maintain our operations. Since inception we have generated limited revenues.
We are dependent on the sale of our securities to fund operations.
About
this Offering
This prospectus relates to the sale of
up to 10,000,000 shares of our common stock at a price of $0.10 per share. The
common stock will be sold by Mr. Ron Hughes, our President, to investors located
both inside and outside the United States. Our shares will be sold on a “best
efforts” basis with no minimum amount required in order to accept funds. No
commissions are being paid in connection with the offering. All expenses of the
registration statement are estimated to be $30,000 including but not limited to,
legal, accounting, printing and mailing fees and will be paid by us. As of March19, 2010, 19,023,000 shares of our common stock are outstanding.
The
Offering
Following is a brief summary of this
offering:
Securities
being offered
A
maximum of 10,000,000 shares of common stock, par value $0.10 and a no
minimum.
Offering
price per share
$0.10
Offering
period
The
shares are being offered for a period not to exceed 270
days.
Net
proceeds to us
Approximately
$970,000, assuming the maximum number of shares are
sold.
Use
of proceeds
We
will use the proceeds to pay for offering expenses, research and
marketing.
Number
of shares outstanding before the offering
19,023,000
Number
of shares outstanding after the offering if all of the shares are
sold
The following summarizes material risks
relating to our business that you should carefully consider. The risks described
below are not the only risks that we face. If any of the following risks
actually occur, they would likely harm our business, financial condition, and
results of operations.
RISK
FACTORS RELATED TO THE BUSINESS
1. Our
auditors have indicated that our inability to generate sufficient revenue raises
substantial doubt as to our ability to continue as a going
concern.
Our audited financial statements, for
the year ended September 30, 2009, were prepared on a going concern basis in
accordance with United States generally accepted accounting principles. The
going concern basis of presentation assumes that we will continue in operation
for the foreseeable future and will be able to realize our assets and discharge
our liabilities and commitments in the normal course of business. However, our
auditors have indicated that our inability to generate sufficient revenue raises
substantial doubt as to our ability to continue as a going concern.
2. We currently market only one list on
a non-exclusive basis.
We have one agreement to market one
list on a non-exclusive basis. If we fail to generate revenues from the
marketing of this mailing list, our business may fail. If we fail to secure
additional lists for rent and marketing, our business may fail. We continue to
seek rental of this list and secure additional lists, however, our prospects for
revenue generation are limited.
3. We have a limited history of
operations and unless we are able to successfully generate rental income from
our lists or secure new lists, our business and operating results will suffer
resulting in the failure of our business.
We have limited history in the
activities described herein and there is no certainty that we will be successful
in marketing and renting the lists. We have had limited sales and even if
revenues meet levels we anticipate, we could sustain losses, and our business
and the price of our common stock may be harmed. See notes accompanying
financial statements for information on our history of losses and anticipation
of continued losses.
4. We have generated
limited revenues from operations and may have additional capital requirements to
continue our operations. Such capital might not be available to us on favorable
terms or at all, and if unavailable our ability to run our business will be
negatively effected.
If we are unable to generate sufficient
revenues to cover operating expenses or raise additional funds, we will unlikely
establish or maintain our business operations resulting in the failure of our
business and the loss of your investment. We currently have no other plans or
arrangements to raise capital for our business beyond funds contemplated in this
prospectus.
5. If we lose the
services of our officers and directors, we will be left without effective
management.
Ms. Heather Grant, Mssrs. Ron Hughes
and Arne Raabe are our executive officers and directors and the loss of their
services will likely result in the failure of our business and the total loss of
your investment.
6
6. Our President, Mr. Ron Hughes is one
of our officers and directors and he is responsible for both establishing and
maintaining internal controls.
Mr. Ron Hughes, one of officers and
directors, is responsible for establishing and maintaining
effective internal controls over financial reporting, establishing and
maintaining proper accounting records, selecting appropriate accounting
principles, safeguarding assets and complying with relevant laws and
regulations. There can be no guarantee that this conflict of interest may not
result in errors and omissions going undetected.
7. Mr. Hughes, one of our officers and
directors, spends 50% of his time on our business. This may diminish our
prospects for growth.
We have three officers and directors
and they have other business interests, which results in their devoting only
approximately 50% of their time to our business. As such it may be difficult to
establish rentals independent of third party agents.
8. We rely on consultants and if we are
unable to retain these or other similarly qualified individuals, we may be
unable to carry out our business operations.
We are dependent upon service
providers, such as database storage companies and third party marketing agents.
Loss of their services will adversely affect our business and our ability to
maintain our operations. We have not entered into any employment or
non-competition agreements with these individuals and do not plan to in the
future. Our success will depend on our ability to attract and retain qualified
personnel. If we cannot attract and retain the necessary individuals our
operating results will suffer.
9. We are entirely dependent on our
sole list license agreement for our continued operations and our business will
fail if we are unable to rent the list or lose our right to market this
list.
We do not own any lists and are
dependent on our sole list agreement. If we lose our right to market
this list or secure additional list agreements, our business will
fail.
10. We are a development stage company
and have conducted limited market research on the viability of our
business.
We have conducted limited market
research on the demand for our products and services. The direct mail industry
is mature and highly competitive and we have not ascertained if there is
sufficient demand for our product and services to support our business plan. If
sufficient demand does not exist in the market, it might result in the failure
of our business and the total loss of your investment.
11. There is no guarantee that we will
be able to generate sufficient revenues to maintain our operations. Failure to
do so will result in the failure of our business.
The market for lists is limited and
there is no assurance that we’ll generate revenues. Failure to attain additional
agreements for mailing lists will result in our inability to generate sufficient
revenue to fund our business, resulting in the failure of our business and the
total loss of your investment.
12. We rely on third party marketers to
assist us in the marketing and sale of licensed lists. Failure to maintain these
relationships will limit our growth prospects.
Our business success is dependent on
the performance of third party management and marketing agents. Revenues derived
from their efforts represent vital funds for our continued operations. The loss
or damage of any of our business relationships and or revenues derived there
from will limit our growth and may result in the failure of our
business.
7
13. The industry in which we operate is
subject to government regulation. There can be no certainty that new regulations
or laws will not arise which may increase our costs and operating
expenses.
During the last decade laws have been
passed to regulate the marketing of personal and private information. These laws
have had the effect of increasing cost for list managers and list providers.
There can be no guarantee that new laws will not make the future marketing of
lists impossible or cost prohibitive.
14. Many large
companies are reducing their use of direct mail advertising and increasing their
use of Internet advertising, including e-mail and banner
advertisements.
As a result of this change in the
direct mail marketing industry, some customers are purchasing less data for
direct mail applications, thereby reducing the potential market for direct
marketing lists.
15. We face intense
competition in the market from larger more established companies that offer a
wider array of products. These competitors will make it difficult for us to
offer competing products and grow our business.
Companies that are larger, better
funded, with longer operating histories like infoGroup Inc. and Harte-Hanks Inc.
dominate our industry. These competitors are able to offer services and
expertise beyond our capabilities which will make it difficult for us to secure
new clients and increase our client base. Failure to expand our client base will
severely limit our prospects for growth.
RISK
FACTORS RELATED TO COMMON STOCK
16. A small active
shareholder base can influence our affairs.
Our bylaws specify a quorum requirement
of 5% at any meeting of shareholders. As a consequence, we can conduct business
at shareholder meetings with only 5% of the shareholders present in person or by
proxy. This can lead to decisions being made by a small active shareholder base
that impact the majority of shareholders, if the majority elects to stay
inactive.
17. There are legal
restrictions on the resale of our common shares, including Penny Stock
Regulations under the U.S. Federal Securities Laws. These restrictions may
adversely affect the ability of investors to resell their
shares.
Our Articles do not restrict the sale
or transfer of our common stock, however, such sale or transfer must be made in
full compliance with applicable state and federal securities laws. Our
securities are subject to the penny stock rules, which apply generally to equity
securities with a price of less than $5.00 per share, other than securities
registered on certain national exchanges or quoted on the NASDAQ system. The
transaction costs associated with penny stocks are high, reducing the number of
broker-dealers willing to engage in the trading of our shares. This results in
reduced liquidity and an increase in the spread between the bid and ask price.
Investors should be aware that the level of trading activity on the secondary
market can be very illiquid and investors may find it expensive and difficult to
sell their shares.
18. There is the possibility of future
dilution.
There is the possibility that we may
still require further capital investment. Our Board of Directors will evaluate
the need for and oversee the sourcing of future capital. There is the
possibility that such additional sources of financing may result in dilution in
the value of our common stock.
8
19. One of our directors, Arne Raabe,
owns 53.6% of our shares allowing him to control our future
direction.
Mr. Raabe controls all matters subject
to stockholder’s vote with 53.5% of the current shares outstanding. If we are
able to sell the maximum allowed pursuant to this prospectus he will still
control 35% of the share outstanding and be in a position to influence all
matters subject to stockholder vote.
20. Trading of our common stock is
limited and trading restrictions imposed on us by regulatory authorities may
further reduce our trading, making it difficult for our shareholders to sell
their shares.
Trading of our Common Stock is
currently conducted on the OTC BB. The liquidity of our Common Stock is limited,
not only in terms of the number of shares that can be bought and sold at a given
price, but may also be adversely affected by delays in the timing of
transactions and reduction in security analysts’ and the media’s coverage of us,
if at all. Currently, there are approximately 75 holders of record of our Common
Stock. These factors may result in lower prices for our Common Stock than might
otherwise be obtained and could also result in a larger spread between the bid
and ask prices for our Common Stock. In addition, without a large float, our
Common Stock is less liquid than the stock of companies with broader public
ownership and, as a result, the trading prices of our Common Stock may be more
volatile. In the absence of an active public trading market, an investor may be
unable to liquidate his investment in our Common Stock. Trading of a relatively
small volume of our Common Stock may have a greater impact on the trading price
of our stock than would be the case if our public float were larger. We cannot
predict the prices at which our Common Stock will trade in the
future.
21. Because there is a limited public
trading market for our common stock, you may not be able to resell your
stock.
There is currently a limited public
trading market for our common stock on the Bulletin Board operated by the
Financial Industry Regulatory Authority under the symbol
“RPHA.” Therefore there you may have difficulty reselling your
shares.
22. Because our common stock is a “penny
stock,” you may not be able to resell your shares of our common stock, and the
market price of our common stock may be adversely affected.
Our common stock is a “penny stock” if,
among other things, the stock price is below $5.00 per share, it is not listed
on a national securities exchange or approved for quotation on the American
Stock Exchange, the NASDAQ Stock Market or any other national stock exchange or
it has not met certain net tangible asset or average revenue requirements.
Broker-dealers who sell penny stocks must provide purchasers of these stocks
with a standardized risk-disclosure document prepared by the Commission. A
broker must also give a purchaser, orally or in writing, bid and offer
quotations and information regarding broker and salesperson compensation, make a
written determination that the penny stock is a suitable investment for the
purchaser, and obtain the purchaser’s written agreement to purchase the penny
stock. Broker-dealers must also provide customers who hold penny stock in their
accounts with such broker-dealer a monthly statement containing price and market
information relating to the penny stock. If a penny stock is sold to an investor
in violation of the penny stock rules, the investor may be able to cancel its
purchase and get its money back.
If applicable, the penny stock rules
may make it difficult for investors to sell their shares of our common stock.
Because of the rules and restrictions applicable to a penny stock, there is less
trading in penny stocks and the market price of our common stock may be
adversely affected. Also, many brokers choose not to participate in penny stock
transactions. Accordingly, investors may not always be able to resell their
shares of our common stock publicly at times and prices that they feel are
appropriate.
9
23. Compliance with changing regulations
concerning corporate governance and public disclosure may result in additional
expenses.
There have been changing laws,
regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act, new regulations promulgated by the
Commission and rules promulgated by the American Stock Exchange, the other
national securities exchanges and the NASDAQ. These new or changed laws,
regulations and standards are subject to varying interpretations in many cases
due to their lack of specificity, and, as a result, their application in
practice may evolve over time as new guidance is provided by regulatory and
governing bodies, which could result in continuing uncertainty regarding
compliance matters and higher costs necessitated by ongoing revisions to
disclosure and governance practices. As a result, our efforts to comply with
evolving laws, regulations and standards are likely to continue to result in
increased general and administrative expenses and a diversion of management time
and attention from revenue-generating activities to compliance activities. Our
board members, Chief Executive Officer and Chief Financial Officer could face an
increased risk of personal liability in connection with the performance of their
duties. As a result, we may have difficulty attracting and retaining qualified
board members and executive officers, which could harm our business. If our
efforts to comply with new or changed laws, regulations and standards differ
from the activities intended by regulatory or governing bodies, we could be
subject to liability under applicable laws or our reputation may be
harmed.
Our offering is being made on a
self-underwritten a no minimum, $1,000,000 maximum basis. The table
below sets forth the use of proceeds if 25%, 50%, 75% or 100% of the offering is
sold.
25%
50%
75%
100%
Gross
proceeds
$
250,000
$
500,000
$
750,000
$
1,000,000
Offering
expenses
$
30,000
$
30,000
$
30,000
$
30,000
Net
proceeds
$
220,000
$
470,000
$
720,000
$
970,000
The net proceeds will be used as
follows:
Legal
and audit
$
30,000
$
40,000
$
50,000
$
60,000
SOX
404 attestation
$
40,000
$
40,000
$
40,000
$
40,000
Travel
and conference
$
45,000
$
90,000
$
140,000
$
190,000
Web
site upgrade
$
0
$
25,000
$
25,000
$
25,000
Marketing
material and printing
$
50,000
$
100,000
$
150,000
$
170,000
International
legal
$
0
$
15,000
$
30,000
$
50,000
Sourcing
agent
$
0
$
50,000
$
80,000
$
110,000
Working
capital
$
55,000
$
110,000
$
205,000
$
325,000
Total
$
220,000
$
470,000
$
720,000
$
970,000
Total offering expenses to be paid from
the proceeds of the offering are $20,000 for legal fees and expenses; $3,000 for
printing our prospectus; $6,400 for accounting/administrative fees; $500 for our
transfer agent; and $100 for our SEC filing fee.
We intend to spend between $30,000 and
$60,000 on domestic legal and audit fees. We anticipate that these fees will
increase in conjunction with our international strategy and intend to spend up
to $50,000 on international legal representation for set up of foreign business
and contract reviews. We will also spend $40,000 on SOX 404
attestation.
10
We intend to spend between $45,000 and
$190,000 on international travel and conference attendance to implement our
international strategy. We will further spend between $50,000 and
$170,000 on creating printed marketing material. This includes design and
translation to different languages and for printing. We intend to contact
chamber of commerce and other business registries for sources of potential
business clients.
We intend to upgrade our web site with
new content, design and languages. We intend to spend $25,000 to complete these
improvements.
We intend to spend between $50,000 and
$110,000 on a sourcing agent for direct access to prospective customers in
Asia.
Included in working capital of $55,000
to $325,000 are expenses for office rent in Hong Kong. We intend to utilize a
package office service to initially reduce our need for full time employees in
the country. Working capital is further comprised of expenses for telephone
service, mail, stationary, acquisition of office equipment and supplies, and
general working capital.
When determining the offering
price of $0.10 per share we considered such factors as the current market price
of our common stock, the limited liquidity of our common stock, the limited
revenue we have generated, and our previous public offering share price. Due to
the lack of trading we placed greatest weight on the previous public offering
price.
The public offering price of the
shares does not bear any relationship to established valuation criteria and is
not indicative of prices that may prevail in the future. You cannot be sure that
a liquid public market for any of our securities will develop and continue or
that the securities will ever trade at a price higher than the offering price in
this offering.
Dilution represents the difference
between the offering price and the net tangible book value per share immediately
after completion of this offering. Net tangible book value is the amount that
results from subtracting total liabilities and intangible assets from total
assets. Dilution arises mainly as a result of our arbitrary determination of the
offering price of the shares being offered. Dilution of the value of the shares
you purchase is also a result of the lower book value of the shares held by our
existing stockholders.
As of December 31, 2009, the net
tangible book value of our shares of common stock was $177,412 or approximately
$0.01 per share based upon 19,023,000 shares outstanding.
If
100% of the Shares Are Sold:
Upon completion of this offering, in
the event all of the shares are sold, the net tangible book value of the
29,023,000 shares to be outstanding will be $1,147,412 or approximately $0.04
per share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.03 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $ 0.04 per share.
After completion of this offering, if
10,000,000 shares are sold, you will own approximately 34% of the total number
of shares then outstanding for which you will have made a $1,000,000 cash
investment, or $0.10 per share. Our existing stockholders will own approximately
66% of the total number of shares then outstanding, for which they have made
contributions of cash totaling $321,150 or approximately $0.02 per
share.
11
If
75% of the Shares Are Sold:
Upon completion of this offering, in
the event 75% of the shares are sold, the net tangible book value of the
26,523,000 shares to be outstanding will be $897,412, or approximately $0.03 per
share. The net tangible book value of the shares held by our existing
stockholders will be increased by $ 0.02 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $ 0.03 per share.
After completion of this offering, if
7,500,000 shares are sold, you will own approximately 28% of the total number of
shares then outstanding for which you will have made a $750,000 cash investment,
or $0.10 per share. Our existing stockholders will own approximately 72% of the
total number of shares then outstanding, for which they have made contributions
of cash totaling $321,150 or approximately $0.02 per share.
If
50% of the Shares Are Sold:
Upon completion of this offering, in
the event 50% of the shares are sold, the net tangible book value of the
24,023,000 shares to be outstanding will be $647,412, or approximately $0.03 per
share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.02 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $0.03 per share.
After completion of this offering, if
5,000,000 shares are sold, you will own approximately 21% of the total number of
shares then outstanding for which you will have made a $500,000 cash investment,
or $0.10 per share. Our existing stockholders will own approximately 79% of the
total number of shares then outstanding, for which they have made contributions
of cash totaling $321,150 or approximately $0.02 per share.
If
25% of the Shares Are Sold:
Upon completion of this offering, in
the event 25% of the shares are sold, the net tangible book value of the
21,523,000 shares to be outstanding will be $391,412, or approximately $0.02 per
share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.01 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $0.02 per share.
After completion of this offering, if
2,500,000 shares are sold, you will own approximately 12% of the total number of
shares then outstanding for which you will have made a $250,000 cash investment,
or $0.10 per share. Our existing stockholders will own approximately 88% of the
total number of shares then outstanding, for which they have made contributions
of cash totaling $321,150 or approximately $0.02 per share.
The following table compares the
differences of your investment in our shares with the investment of our existing
stockholders.
Existing
Stockholders if 100% of the Shares are Sold:
Price
per share
$
0.10
Net
tangible book value per share before offering
$
0.01
Potential
gain to existing shareholders
$
0.03
Net
tangible book value per share after offering
$
0.04
Increase
to present stockholders in net tangible book value per
share
after
offering
$
0.03
Capital
contributions
$
321,150
Number
of shares outstanding before the offering
19,023,000
Number
of shares after offering assuming the sale of the maximum
number
of shares
29,023,000
Percentage
of ownership after offering
66%
12
Purchasers of Shares in this Offering
if 100% of the Shares are Sold
Price
per share
$
0.10
Dilution
per share
$
0.06
Capital
contributions
$
1,000,000
Number
of shares after offering held by public investors
10,000,000
Percentage
of capital contributions by existing shareholders
24%
Percentage
of capital contributions by new investors
76%
Percentage
of ownership after offering
34%
Purchasers of Shares in this Offering
if 75% of the Shares are Sold
Price
per share
$
0.10
Dilution
per share
$
0.07
Capital
contributions
$
750,000
Number
of shares after offering held by public investors
7,500,000
Percentage
of capital contributions by existing shareholders
30%
Percentage
of capital contributions by new investors
70%
Percentage
of ownership after offering
28%
Purchasers
of Shares in this Offering if 50% of the Shares are Sold
Price
per share
$
0.10
Dilution
per share
$
0.07
Capital
contributions
$
500,000
Number
of shares after offering held by public investors
5,000,000
Percentage
of capital contributions by existing shareholders
39%
Percentage
of capital contributions by new investors
61%
Percentage
of ownership after offering
21%
Purchasers
of Shares in this Offering if 25% of the Shares are Sold
Price
per share
$
0.10
Dilution
per share
$
0.08
Capital
contributions
$
250,000
Number
of shares after offering held by public investors
2,500,000
Percentage
of capital contributions by existing shareholders
56%
Percentage
of capital contributions by new investors
We are offering up to 10,000,000 shares
of our common stock no minimum, at $0.10 per share. Mr. Ron Hughes, our
President, will sell the common stock to investors located both inside and
outside the United States. Our shares will be sold on a “best efforts” basis
with no minimum amount of shares of common stock that we must sell in order to
accept funds. No commissions are being paid in connection with the offering. All
expenses of the registration statement are estimated to be $30,000 including but
not limited to, legal, accounting, printing and mailing fees and will be paid by
us.
13
Mr. Ron Hughes, our President, is not a
registered broker-dealer but will be offering our shares pursuant to an
exemption from such broker-dealer registration pursuant to Rule 3a4-1 of the
Securities Exchange Act of 1934 the “Exchange Act”. Rule 3a4-1 sets forth those
conditions under which a person(s) 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 statutorily disqualified, as that term is defined in Section
3(a)(39) of the Act, at the time of his participation;
and,
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) does
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).
Our President is not statutorily
disqualified, and is not being compensated. He is and will continue to be our
President at the end of the offering and has not been during the last twelve
months and is not currently a broker/dealer or associated with a broker/dealer.
He has not during the last twelve months and will not in the next twelve months
offer or sell securities for another corporation. He will receive no selling
commissions or other remuneration in conjunction with the offering of the shares
on our behalf. There are no finders involved in our distribution.
Currently, no restrictions have been
placed on our officer and directors from buying in this offering nor on the
number of shares they may acquire. However, we have no agreements or
arrangements for them to purchase shares and they have no preliminary plans,
intentions or arrangements to buy securities in the offering. Any purchase by
our officer and directors will be done on the same terms and under the same
conditions as those offered to the public and with investment purposes only and
not with the intent to resell.
We intend to sell our shares outside
the United States of America.
Section
15(g) of the Exchange Act
Our shares are covered by Section 15(g)
of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through
15g-6 and Rule 15g-9 promulgated there under. They impose additional sales
practice requirements on broker/dealers who sell our securities to persons other
than established customers and accredited investors (generally institutions with
assets in excess of $15,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $150,000 or $300,000 jointly with their
spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to
brokers-dealers, they do not apply to us.
Rule 15g-1 exempts a number of specific
transactions from the scope of the penny stock rules.
Rule 15g-2 declares unlawful
broker/dealer transactions in penny stocks unless the broker/dealer has first
provided to the customer a standardized disclosure document.
Rule 15g-3 provides that it is unlawful
for a broker/dealer to engage in a penny stock transaction unless the
broker/dealer first discloses and subsequently confirms to the customer current
quotation prices or similar market information concerning the penny stock in
question.
14
Rule 15g-4 prohibits broker/dealers
from completing penny stock transactions for a customer unless the broker/dealer
first discloses to the customer the amount of compensation or other remuneration
received as a result of the penny stock transaction.
Rule 15g-5 requires that a
broker/dealer executing a penny stock transaction, other than one exempt under
Rule 15g-1, disclose to its customer, at the time of or prior to the
transaction, information about the sales persons compensation.
Rule 15g-6 requires broker/dealers
selling penny stocks to provide their customers with monthly account
statements.
Rule 15g-9 requires broker/dealers to
approved the transaction for the customer’s account; obtain a written agreement
from the customer setting forth the identity and quantity of the stock being
purchased; obtain from the customer information regarding his investment
experience; make a determination that the investment is suitable for the
investor; deliver to the customer a written statement for the basis for the
suitability determination; notify the customer of his rights and remedies in
cases of fraud in penny stock transactions; and, the NASD’s toll free telephone
number and the central number of the North American Administrators Association,
for information on the disciplinary history of broker/dealers and their
associated persons. Because the penny stock rules impose
additional obligations on broker/dealers, many broker/dealers are unwilling to
buy or sell penny stock s or open accounts for customers who wish to buyer or
sell penny stock. As a result the penny stock rules may affect your
ability to resell your shares.
Regulation
M
We are subject to Regulation M of the
Securities Exchange Act of 1934. Regulation M governs activities of
underwriters, issuers, selling security holders, and others in connection with
offerings of securities. Regulation M prohibits distribution participants and
their affiliated purchasers from bidding for purchasing or attempting to induce
any person to bid for or purchase the securities being distribute.
Offering
Period and Expiration Date
This offering will start on the
effective date of this prospectus and continue for a period of up to 270
days.
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 US$ denominated funds to us for acceptance or
rejection.
All checks for subscriptions must be
made payable to “Raphael Industries Ltd.”
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 monies
from rejected subscriptions will be returned by us to the subscriber
immediately, without interest or deductions.
You should read the following
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) together with our financial statements and the related
notes thereto appearing elsewhere in this prospectus.
Some of the information contained in
this MD&A or set forth elsewhere in this prospectus and registration
statement, including information with respect to our plans and strategy for our
business and related financing, includes Forward-Looking Statements that involve
risks and uncertainties. In addition, you should read the “Risk Factors” section
of this prospectus and registrations statement for a discussion of important
factors that could cause actual results to differ materially from the results
described in or implied by the Forward-Looking Statements contained in the
following discussion and analysis.
Liquidity
and Capital Resources
During the year ended September 30,2007 we secured $251,150 in capital through the issuing of 5,023,000 common
stock pursuant to an SB-2 registration statement.
Cash on hand is currently our only
source of liquidity. We do not have any lending arrangements in place with
banking or financial institutions and we do not anticipate that we will be able
to secure these funding arrangements in the near future.
We have sufficient cash to carry out
our normal operations for the next twelve months. Any funds raised pursuant to
this prospectus will be added to our working capital and other general corporate
purposes. To the extent that we may require additional funds to support our
operations or the expansion of our business, we may sell additional equity or
issue debt. Any sale of additional equity securities will result in dilution to
our stockholders. There can be no assurance that additional financing, if
required, will be available to us or on acceptable terms.
We do not expect any significant
purchases of plant and equipment or any increase in the number of employees in
the near future.
We do not have any contractual
obligations.
Results
of Operations
During the three months ending December31, 2009, we realized revenues of $0 compared to $9,914 for the same period of
2008 and we incurred an operating loss before taxes of $20,769 compared to an
operating loss of $44,840 for 2008. Total operating expenses for the three
months ended December 31, 2009 were $20,769 (2008 - $44,840). The major
components to expenses faced by the company during the three months were general
and administrative of $24,162 (2008 - $26,733), foreign currency gain of $3,393
(2008 – loss of $22,892), and cost of sales of $0 (2008 - $ 5,129). The industry
is experiencing an ongoing reduction in demand for direct mail lists. This lack
of demand resulted in no revenue generated by us in the last quarter of 2009. We
reduced our general and administrative expenses as our Chief Executive Officer
continued to contribute less time to the company due to his other business
commitments. We also experienced a currency gain as the US dollar weakened
against the Canadian Dollar. We maintain some of our cash reserves in Canadian
Dollars.
The Company further had $12,267 in
accounts payable and accrued liabilities (September 30, 2009 - $5,391), and
$43,410 in licensee fee payable (September 30, 2009 - $43,410). There is no
long-term debt. The Company may, in the future, invest in short-term investments
from time to time but there can be no assurance that these investments will
result in profit or loss.
During the fiscal year ending September30, 2009, we realized revenue of $11,533 compared to $ 48,281 for the year
ending September 30, 2008. Gross profit for the year was $6,674 as compared to
$22,702 in 2008. We incurred an operating loss of $69,354 as compared to a loss
of $93,376 for the period ending September 30, 2008. The major components to
expenses faced by us during the last year were general and administrative of
$72,160 (2008 - $91,708), cost of sales of $4,879 (2008 - $25,579), and foreign
exchange loss of $2,161(2008 - $24,370). The foreign exchange loss was caused by
the strengthening of the dollar vs. the Canadian dollar. We have been
maintaining a portion of its cash in Canadian dollars. The reduction in revenue
was caused by a general decline in demand for direct mailing lists in 2009. The
reduction in operating expenses was due to lower consulting fees donated by our
Chief Executive Officer as he spent more time on other business commitments. We
also realized much lower foreign exchange losses as the US Dollar strengthened
less against the Canadian Dollar than during the previous year.
As of September 30, 2009, we had
$239,248 (2008 - $241,589) in cash, $0 (2008 - $16,920) in accounts receivable,
$100 (2008 - $25) in prepaid expenses, $0 (2008 - $7,480) in website
development, $434 (2008 - $1,114) in property and equipment, $2,891 (2008 -
$2,023) in accounts payable, $2,500 (2008 - $5,003) in accrued liabilities, and
$43,410 (2008 - $35,767) in licensee fee payable. There is no
long-term debt. In the future, we may invest in short-term investments from time
to time, but there can be no assurance that these investments will result in
profit or loss.
Our future growth and success will be
dependent on our ability to market lists for our clients and to secure
additional lists. If we cannot succeed in marketing licensed lists and to secure
contracts to market lists then our prospects for growth are limited. We are in
discussions with list brokers to secure list agreements and other possible
business opportunities.
As of September 30, 2009, our sole
source of revenue has been the list rental and brokerage services. Accordingly,
no table showing percentage breakdown of revenue by business segment or product
line is included.
Off-Balance
Sheet Arrangements
We have no off-balance sheet
arrangements as of December 31, 2009, nor the date of this
prospectus.
Raphael Industries Ltd is a Nevada
company incorporated on October 31, 2005. We are a startup company providing
list management and marketing services in the direct mail marketing industry. A
list is a collection of individual person’s names with information such as their
address, age, income, and marital status that has been accumulated through
various sources like subscription-based magazines and newspapers, catalogues,
yellow pages, white pages, incorporation records, real estate deed transfers,
and various other sources. Our business model is to manage and market lists
whereby we store, maintain, and rent lists on behalf of the list owner. We
generate revenue by renting the names and personal information to companies who
solicit their products or services to the individuals on the list. To date we
have had limited revenues and have been issued a going concern opinion from our
auditors. Our registered office and agent for service is located at 5190 Neil
Road, Suite 430 Reno, NV89502. Our telephone and fax numbers are 1-866-261-8853
and 1-414-434-3656, respectively and our corporate website is
www.raphaelindustries.net.
On November 15, 2005, we signed a
license agreement with Free Enterprise Press Limited for the exclusive right to
market one list which was comprised of subscribers and former subscribers to two
of their financial publications. The license agreement granted us the right to
market the lists for a term of 2 years with the option to renew. The license
agreement included an option to purchase the lists for a total consideration of
$100,000 during the first year of the agreement. On April 14, 2006 we made an
initial payment of US$50,000. We were required to make a final payment of
$50,000 at or before November 15, 2006. On November 15, 2006 we agreed to extend
the option to purchase the licensed list to August 15th, 2007. In consideration
of the extension Raphael paid the licensor $10,000. We elected to let the option
laps without acquiring the licensed list. We renewed the license in November
2007 for an additional 2 years on the same terms and conditions. On November 15,2009, we renewed the agreement for one of the lists on a non-exclusive basis and
abandoned our marketing rights for the other list.
On December 1, 2005, we signed a
license agreement with Global Commodity Press Limited for the right to market
two of their lists, which were assembled from various sources, including public
domain databases, Internet marketing campaigns and media print publications. The
license agreements granted us the right to market the lists for a term of 2
years after which we had the option to renew.
On December 1, 2007, we extended the
license agreement with Global Commodity Press Limited for an additional term of
2 years. On December 1st, 2009 the agreement with Global Commodity
Press Limited lapsed and we have not renewed the license.
In addition to our agreements with the
list owners, on November 22, 2005 and November 28, 2005 we entered into
agreements with Marketing Software Company and ListFusion, respectively. These
agreements provided us with database storage and maintenance. We maintain the
agreement with ListFusion, however terminated the agreement with Marketing
Software Company at the end of our agreement with Global Commodity
Press.
We also entered into two separate
agreements with Kroll Direct Marketing on November 28, 2005 and with Infomat
Inc. December 5, 2005 for the marketing of our licensed lists. The agreement
with Infomat was terminated at the end of our agreement with Global Commodity
Press. Since inception in 2005 and through to the termination of the license
agreement we entered into 78 rental agreements for the then licensed lists and
generated $205,242 in revenue.
On March 17, 2010 we completed a 2-1
stock split of our common stock, all disclosures in this prospectus reflect the
effect of this stock split unless otherwise specified.
18
Business
of the Issuer
Our auditors have issued a going
concern opinion suggesting there is a real possibility that we will not be able
to maintain our operations. Since inception we have generated limited revenues.
We are dependent on the sale of our securities to fund operations.
We provide list management and
marketing services within the direct mail marketing industry. Direct mail
marketing is defined as the practice of delivering promotional messages through
the postal service directly to potential customers on an individual basis. There
are two different categories of lists - response lists and compiled lists.
Response lists are comprised of individuals and companies that have responded to
direct mail solicitations or offers, including subscription-based magazines and
newspapers, catalogues and other response generated offers. Compiled lists are
generated from public sources such as yellow pages, white pages, incorporation
records, real estate deed transfers, and various other sources. Information
about the individuals and companies such as income, and marital status is then
often added to increase the value of the list. Our licensed list has been
generated from response efforts.
List management and marketing entails
storing and maintaining a client’s list, sourcing prospective renters of the
list, securing rentals, approving marketing material that will be mailed to the
list, and securing payment from renters. Our sole source of revenue is the
rental of lists. We do not generate any ongoing revenue from the storing and
maintenance of any client’s lists.
Customers
Our prospective customers include
energy publications such as The Oil and Gas Journal, Offshore
Magazine, World Oil, consumer sales organizations, and manufacturers both
domestic and foreign. We provide our customers rental access to a list of
prospective consumers in the United States. Our list demographic is primarily
men between the ages of 40 to 65 in the medium to high net worth category. This
demographic profile is of marketing interest for many product and service
sellers. We have focused our efforts to date in the commodity and financial
magazine customers.
The main provisions in our rental
agreements require us to forward a copy of the rented list to the customer. This
may entail a portion of a list or the whole list, depending on the agreement
entered into with the customer. The customer has the right to mail marketing
materials to the names of the individuals and companies he has rented on a one
time only basis, unless otherwise agreed. We charge a fee from the customer
based on the number of names the customer rents. For new customers we require
payment prior to forwarding any names and for ongoing customers we follow
standard payment terms in the industry.
Our customers rent the list or a
portion of the list on a multi-use basis (multiple mailings) or on a one time
only basis (single mailing). Ordinarily a small portion of the list is rented to
test its response rate. Response rate refers to the number or percentage of
individuals who responded to the initial marketing solicitation. If the customer
is satisfied with the response rate, they often rent the remaining names, or a
portion of the remaining names depending upon the terms of the agreement. We are
not dependent on any one customer or a few major customers for our ongoing
revenue.
Sales
and marketing
Our business strategy is to continue to
market and rent our sole licensed list and seek contracts with new list owners
to market lists on their behalf. We do not own any lists. We intend
to focus our marketing efforts on two different sectors. We will target energy
sector publications such as The Oil and Gas Journal, Offshore Magazine, and
World Oil. Previous rentals indicate that our licensed list has proven effective
for these types of publications and their efforts to build subscriptions. We
intend to pursue list marketing and rental agreements with these and other
energy publications in an effort to market and rent their lists. We also intend
to expand our marketing efforts by targeting consumer product manufacturers,
like golf manufacturers and other service providers like time share
operators
19
If we raise more than $500,000 we will
expand internationally and target Asian manufacturers, producers, and catalog
marketers. We will attend manufacturing and sourcing conferences and trade shows
in Hong Kong, Shanghai and other major cities to secure contracts for the
marketing of products to our list. We will engage sourcing agents on contract
basis in different Asian markets for ongoing marketing to new prospects. We
anticipate extensive travel to establish relationships and secure contracts in
the Asian market. Many Asian manufacturers are selling their products in the US
through US retailers. Our proposal would potentially increase their margins as
the manufacturer maintains control over a larger part of the distribution
channel. The demographics of our current list and the demographics of
subscribers to other publications are well suited for marketing of leisure and
luxury items.
Our strategy is further to maintain
strict control on fixed overhead by utilizing consultants and service providers
to the maximum extent. We believe this strategy will provide us with reduced
capital requirements, the ability to focus on the revenue generating areas of
our business, and offer greater flexibility to adjust to changes in a dynamic
market.
We have two agreements in place with
service providers for the management and marketing of lists. ListFusion, a
database storage company, is storing and managing lists on a month to month
basis. The agreement with ListFusion provides us with a secure and cost
effective way to manage our client’s list. The agreement is cancellable at any
time without penalty. We also have an agreement with Kroll Direct
Marketing (“Kroll”) for the marketing of our list. The agreement is cancellable
on 45 days written notice and stipulates a 30% commission to Kroll on the gross
rental price on any rentals secured by Kroll.
Industry
and Competition
We operate within the direct mail
marketing industry. According to the most recent Direct Marketing Association
survey, marketers — commercial and nonprofit — spent $176.9 billion on direct
marketing, which accounted for 52.1 percent of all ad expenditures in the United
States. Measured against total US sales, these advertising expenditures
generated approximately $2.057 trillion in incremental sales. In that year,
direct marketing accounted for approximately 10 percent of total US gross
domestic product.
Direct marketing is subject to
technological advancements, high turnover of client personnel who make buying
decisions, client consolidations, changing client needs and preferences,
continual development of competing products and services and an evolving
competitive landscape. This competition comes from numerous local, national and
international direct marketing and advertising companies against whom we compete
for individual projects, entire client relationships and marketing expenditures
by clients and prospective clients. Among the largest companies are infoGroup
Inc. and Harte-Hanks Inc who both generate revenue of approximately $500 million
annually. There are various competitive factors in our industry, including the
quality and scope of services, technical and strategic expertise, the value of
the services provided as compared to the price of the services, reputation and
brand recognition. We also compete against print and electronic media and other
forms of advertising for marketing and advertising dollars in general. Failure
to continually improve our current processes and to develop new products and
services in a timely and cost-effective manner could result in the loss of our
clients or prospective clients to current or future competitors. In addition,
failure to gain market acceptance of our services could adversely affect our
growth. Although we believe that our capabilities and niche expertise within our
segment of the market enable us to compete effectively, our business results may
be adversely impacted by competition.
The direct mail marketing industry is
changing and faces several challenges. The trend in the industry is toward more
comprehensive multi faceted avenues of advertising where direct mail contributes
only a portion of the overall marketing strategy. This trend reduces the overall
budget devoted exclusively toward direct mail and can reduce the demand for
services from firms that only provide one part of the marketing mix. There is
also a greater demand for more cost effective mechanisms to target prospective
consumers, primarily through the use of the Internet and email.
20
Government
Regulations
We are also subject to, or affected by,
numerous domestic laws, regulations and industry standards that regulate direct
marketing activities, including those that address privacy, data security and
unsolicited marketing communications. Examples of some of these laws and
regulations that may be applied to, or affect, our business or the businesses of
our clients include the following:
·
The
Financial Services Modernization Act of 1999, or Gramm-Leach-Bliley Act
(GLB), which, among other things, regulates the use for marketing purposes
of non-public personal financial information of consumers that is held by
financial institutions. Although we are not considered a financial
institution, our clients may be subject to the GLB. The GLB also includes
rules relating to the physical, administrative and technological
protection of non-public personal financial
information.
·
The
Health Insurance Portability and Accountability Act of 1996 (HIPAA), which
regulates the use of personal health information for marketing purposes
and requires reasonable safeguards designed to prevent intentional or
unintentional use or disclosure of protected health
information.
·
Federal
and state laws governing the use of the Internet and regulating
telemarketing, including the federal Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM), which
regulates commercial email and requires that commercial emails give
recipients an opt-out method. Telemarketing activities are regulated by,
among other requirements, the Federal Trade Commission’s Telemarketing
Sales Rule (TSR), the Federal Communications Commission’s Telephone
Consumer Protection Act (TCPA) and various state do-not-call
laws.
·
A
significant number of states in the U.S. have passed versions of security
breach notification laws, which generally require timely notifications to
affected persons in the event of data security breaches or other
unauthorized access to certain types of protected personal
data.
·
The
Fair Credit Reporting Act (FCRA), which governs, among other things, the
sharing of consumer report information, access to credit scores, and
requirements for users of consumer report
information.
·
The
Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which
amended the FCRA and requires, among other things, consumer credit report
notice requirements for creditors that use consumer credit report
information in connection with risk-based credit pricing actions and also
prohibits a business that receives consumer information from an affiliate
from using that information for marketing purposes unless the consumer is
first provided a notice and an opportunity to direct the business not to
use the information for such marketing purposes, subject to certain
exceptions.
There are additional consumer
protection, privacy and data security regulations. These laws regulate the
collection, use, disclosure and retention of personal data and may require
consent from consumers and grant consumers other rights, such as the ability to
access their personal data and to correct information in the possession of data
controllers.
As a result of increasing public
awareness and interest in individual privacy rights, data security and
environmental and other concerns regarding unsolicited marketing communications,
federal, state and industry organizations continue to consider new legislative
and regulatory proposals that would impose additional restrictions on direct
marketing services and products. Examples include data encryption standards,
data breach notification requirements, consumer choice and consent restrictions
and increased penalties against offending parties, among others. We anticipate
that additional proposals will continue to be introduced in the future, some of
which may be adopted. In addition, our business may be affected by the impact of
these restrictions on our clients and their marketing activities. These
additional regulations could increase compliance requirements and restrict or
prevent the collection, management, aggregation, transfer, use or dissemination
of information or data that is
21
currently
legally available. Additional regulations may also restrict or prevent current
practices regarding unsolicited marketing communications. For example, many
states have considered implementing do-not-mail legislation that could impact
our and the businesses of our clients and customers. In addition, continued
public interest in individual privacy rights and data security may result in the
adoption of further voluntary industry guidelines that could impact our direct
marketing activities and business practices.
We cannot predict the scope of any new
legislation, regulations or industry guidelines or how courts may interpret
existing and new laws. Additionally, enforcement priorities by governmental
authorities may change and also impact our business. Compliance with regulations
is costly and time-consuming, and we may encounter difficulties, delays or
significant expenses in connection with our compliance, and we may be exposed to
significant penalties, liabilities, reputational harm and loss of business in
the event that we fail to comply. There could be a material adverse impact on
our business due to the enactment or enforcement of legislation or industry
regulations, the issuance of judicial or governmental interpretations,
enforcement priorities of governmental agencies or a change in customs arising
from public concern over consumer privacy and data security issues.
Patents,
Trademarks, Licenses, Franchises, Concessions, Royalty Agreements, or Labor
Contracts
Although we believe that our operations
do not infringe on any trademark or copyright or other proprietary rights of
third parties, there can be no assurance that those parties will not assert that
our business procedures infringe their proprietary rights. We do not own any
intellectual property.
Development
Activities
Information regarding our development
activities is included in Footnote 1 to the Financial Statements and is
incorporated by reference herein.
Impact
of Environmental Laws
We are not aware of any federal, state,
or local environmental laws that would effect our operations.
Employees
We presently have no full-time
employees. We have agreements with database storage and management firms to
perform storage, maintenance and marketing of the list.
Transfer
Agent and Registrar
Our transfer agent is Interwest
Transfer Company Inc. 1981 East 4800 South Suite 100 Salt Lake City, Utah84117,
(801) 272-9294.
Our
Registered Agent for Service of Process
Our registered office and agent for
service is located at 5190 Neil Road, Suite 430 Reno, NV89502.
Legal
Proceedings
We are not involved in any material
legal proceedings.
Our shares trade on the OTC Bulletin
Board under the symbol RPHA. The shares commenced trading on August 3, 2007.
Only limited or sporadic quotations exists for the stock and no established
public trading market is available.
OTCBB quotations may reflect
interdealer prices, without retail markup, markdown or commission and may not
necessarily reflect actual transactions.
On March 17, 2010, we completed a 2-1
common stock split. All quotations are adjusted to reflect this
split.
At March 19, 2010, there were
19,023,000 common shares issued and outstanding and the current bid price was
$0.80.
Dividend
Policy
We have not paid any cash dividends on
its common equity in the last two fiscal years, and do not plan to do so as any
earnings generated from future operations will be used to finance our
operations. The only restrictions that limit the ability to pay dividends on
common equity are those restrictions imposed by law. Under Nevada corporate law,
no dividends or other distributions may be made which would render us insolvent
or reduce assets to less than the sum of its liabilities plus the amount needed
to satisfy any outstanding liquidation preferences.
Holders
At March 19, 2010, there were
approximately 75 holders of record.
Securities
authorized for issuance under equity compensation plans
We have no equity compensation
plan.
Penny
Stock
The Securities Exchange Commission has
adopted rules that regulate broker-dealer practices in connection with
transactions in penny stocks. Penny stocks are generally equity securities with
a price of less than $5.00, other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system, provided that current price
and volume information with respect to transactions in such securities is
provided by the exchange or system. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the Commission, that: (a)
contains a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading; (b) contains a
description of the broker’s or dealer’s duties to the customer and of the rights
and remedies available to the customer with respect to a violation to such
duties or other requirements of the Securities laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and; (f) contains such other information and
is in such form, including language, type, size and format, as the Commission
shall require by rule or regulation.
23
The broker-dealer also must provide,
prior to effecting any transaction in a penny stock, the customer with (a) bid
and offer quotations for the penny stock; (b) the compensation of the
broker-dealer and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock; and (d) a monthly
account statements showing the market value of each penny stock held in the
customer’s account.
In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
those rules; the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser’s written acknowledgment of the receipt of a risk disclosure
statement, a written agreement to transactions involving penny stocks, and a
signed and dated copy of a written suitability statement.
These disclosure requirements may have
the effect of reducing the trading activity in the secondary market for stock
that is subject to these penny stock rules. Therefore, because our common stock
is subject to the penny stock rules, stockholders may have difficulty selling
those securities.
Our directors and executive officers,
their ages and positions as of the March 19, 2010, are set forth below. All of
our directors will hold office until the next annual meeting of shareholders and
the election and qualification of their successors.
Name
Age
Position(s)
Ronald
Hughes
48
President,
Chief Executive Officer, Chief Accounting Officer, Chief Financial
Officer, Treasurer and Director
Heather
Grant
52
Secretary
Arne
Raabe
40
Director
Ronald Hughes For the last
five years Mr. Hughes has been President, CEO & Director of TransAmerican
Energy Inc., a Canadian based oil and gas exploration company listed on the
TSX-Venture Exchange under ticker symbol TAE. While with TransAmerican, Mr.
Hughes was responsible for the acquisition of the company’s initial producing
oil and gas assets and for the year ended April 30, 2009the company realized
revenues of Canadian Dollar 932,000. Mr. Hughes also sits on the Boards of
VisionQuest Energy Group, and Precision Enterprises Inc., both Canadian based
publicly traded companies on the TSX-Venture Exchange. VisionQuest Energy Group
an enterprise management and development company trades under the symbol VQE.
The principal business of Precision Enterprises is the identification and
evaluation of assets or businesses with a view to completing a Qualifying
Transaction. The company trades under symbol PSC.H. Mr. Hughes has 20 years of
experience in early stage Business Development and he will be responsible for
assessing and evaluating new business opportunities for Raphael. Mr. Hughes
studied Resource Economics & Management from the University of
Alberta.
Arne Raabe Mr.
Raabe received his Bachelor of Finance and Masters of Economics from the
University of South Florida in 1993 and 1996, respectively. Since 2000, Mr.
Raabe has worked as a self employed independent management consultant,
specializing in corporate finance for start up companies. He has held various
positions, including officer and director and advisor to various companies. From
November 2000 to September 2005 he acted as director for Hampton Financial
Partners providing the company general consulting services in the area of
corporate governance compliance. From March 2003 he acted as director and
officer for Secure Automated Filing Enterprises Inc., a Nevada based startup
company providing Edgarizing and filing services for companies reporting to the
Securities and Exchange Commission. Mr. Raabe resigned his position in October
of 2003. In December of 2004 he held the position of Director for American Media
Systems Co. assisting in the startup of the company. Mr. Raabe resigned as a
director for American Media Systems Co. on December 31, 2004 and started Raphael
Industries Ltd. in October of 2005. He has held the positions of Chief Executive
and Chief Financial Officer since
24
inception
of Raphael and to February 2010. He has also held the position of Director since
October 2005. In December, 2005 he was appointed director and Officer and in
June 2006 he consented to act as interim President of Gondwana Energy Ltd.
Gondwana Energy Ltd. was a Nevada based oil and gas company trading on the OTCBB
under symbol GNDW. In October 2006 Mr. Raabe resigned from his positions with
Gondwana Energy Ltd. In December 2008 Mr. Raabe was appointed director and in
March 2008 he was appointed as Chief Financial Officer of Sentry Petroleum Ltd.
Sentry Petroleum Ltd is a Nevada based oil and gas company, fully reporting
issuer under the 1934 Act, and trading on the OTCBB under ticker symbol
SPLM.
Heather Grant has been the
Corporate Secretary since February 27, 2009. In 1995 Ms Grant founded
Aide-de-Camp Services. Since then she has been President of the company
providing specialized services to businesses in the areas of program development
and account services specializing in regulatory procedures and compliance with
federal agencies. Clients include financial planners, a medical device
manufacturer, merchandise importers, and transportation operators. In May of
2007, Ms Grant was appointed secretary of Sentry Petroleum Ltd. Sentry Petroleum
Ltd is a Nevada based oil and gas company, fully reporting issuer under the 1934
Act, and trading on the OTCBB under ticker symbol SPLM.
During the past five years, Ms. Grant
and Mssrs. Hughes and Raabe have not been the subject of the following
events:
1. Any bankruptcy petition filed by or
against any business of which Ms. Grant and Mssrs. Hughes and Raabe were a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time.
2. Any conviction in a criminal
proceeding or being subject to a pending criminal proceeding.
3. An order, judgment, or decree, not
subsequently reversed, suspended or vacated, or any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting Ms. Grant and Mssrs. Hughes and Raabe’s involvement in any
type of business, securities or banking activities.
4. Found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange Commission or the
Commodity Future Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
We do not currently have employment
agreements with our executive officer, but expect to sign an employment
agreement with them in the next approximately twelve (12) months. We do not
currently have a stock option plan. The following table details executive
compensation during the last 3 fiscal years.
Summary
Compensation Table
Nonqualified
Nonequity
deferred
Stock
Option
incentive
plan
compensation
All
other
Name
and principal
Salary
Bonus
awards
awards
compensation
earnings
compensation
Total
Position
Year
($)
($)
($)
($)
($)
($)
($)
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Ronald
Hughes
2009
0
0
0
0
0
0
0
0
CEO,
CFO & Director
2008
0
0
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
0
Heather
Grant
2009
5,066
0
0
0
0
0
0
5,066
Secretary
2008
0
0
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
0
25
Arne
Raabe
2009
0
0
0
0
0
0
0
0
Former
CEO, CFO & Director
2008
0
0
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
0
Option/SAR
Grants
There were no option/SAR Grants during
the 2008 or 2009 fiscal years.
Aggregate
Option Exercises in the Last Fiscal Year and Fiscal Year-End Option
Values
No stock options were exercised by any
named executive officer during the 2008 or 2009 fiscal years and there are no
stock options outstanding at September 30, 2009 or at the date of this
report.
Long-Term
Incentive Plan Awards
We do not have any long-term incentive
plans that provide compensation intended to serve as incentive for performance
to occur over a period longer than one fiscal year, whether such performance is
measured by reference to our financial performance, our stock price, or any
other measure.
Compensation
of directors
Our Directors do not and will not
receive a salary or fees for serving as a director, nor do they receive any
compensation for attending meetings of the Board of Directors or serving on
committees of the Board of Directors. They are not entitled to reimbursement of
expenses incurred in attending meetings. There are no compensation arrangements
for employment, termination of employment or change-in-control between us and
the named Executive Officers. The following table details director compensation
during the last fiscal year.
Fees
Non-equity
Nonqualified
earned
or
Incentive
deferred
paid
in
Stock
Option
plan
compensation
All
other
cash
awards
awards
compensation
earnings
compensation
Total
Name
($)
($)
($)
($)
($)
($)
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Ronald
Hughes
0
0
0
0
0
0
0
Chief
Executive Officer, Chief
Financial
Officer and Director
Arne
Raabe
0
0
0
0
0
0
0
Director
Craig
Wacaser
0
0
0
0
0
0
0
Former
Director
Indemnification
Pursuant to the articles of
incorporation and bylaws of the corporation, we may indemnify an officer or
director who is made a party to any proceeding, including a lawsuit, because of
his position, if he acted in good faith and in a manner he reasonably believed
to be in our best interest. In certain cases, we may advance expenses incurred
in defending any such proceeding. To the extent that the officer or director is
successful on the merits in any such proceeding as to which such person is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney’s fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the state of Nevada.
26
Regarding indemnification for
liabilities arising under the Securities Act of 1933 which may be permitted to
directors or officers pursuant to the foregoing provisions, we are informed
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy, as expressed in the Act and is,
therefore unenforceable.
Security
ownership of certain beneficial owners and management
We are not directly or indirectly owned
or controlled by a corporation or foreign government. As of March 19, 2010, we
had an authorized share capital of 50,000,000 common shares with a par value of
$0.0001 per share of which 19,023,000 shares are issued and
outstanding.
The following table sets forth, as of
March 19, 2010, the beneficial shareholdings of persons or entities holding five
per cent or more of our common stock, each director individually, each named
executive officer and all of our directors and officers as a group. Each person
has sole voting and investment power with respect to the shares of Common Stock
shown, and all ownership is of record and beneficial.
(1)
(2)
(3)
(4)
Amount
and
Name
and
Nature
of Beneficial
Title
of Class
Address
of Beneficial Owner
Owner
Percent
of Class
Common
Arne Raabe,
1)
10,200,000
53.6%
Common
Ronald Hughes
1)
0
0.0%
Common
Heather Grant
1)
0
0.0%
Common
All
Officers and Directors as a Group
10,200,000
53.6%
(three
people)
1) Address
for service for officers and directors is 5190 Neil Road, Suite 430, RenoNV89502
As used in this table, “beneficial
ownership” means the sole or shared power to vote, or to direct the voting of, a
security, or the sole or shared investment power with respect to a security
(i.e., the power to dispose of, or to direct the disposition of, a security). In
addition, for purposes of this table, a person is deemed, as of any date, to
have “beneficial ownership” of any security that such person has the right to
acquire within 60 days after such date.
There are no limitations on future
issuance of our common stock to management, promoters or their affiliates or
associates. We may issue stock to these individuals for services rendered in
lieu of cash payments. An issuance of stock will dilute your ownership in our
company and might result in a reduction of your share value. We currently have
no plans for the issuance of shares to management or promoters or their
affiliates or associates for services rendered.
Our authorized capital stock consists
of 50,000,000 shares of common stock, $0.0001 par value. As of March 19, 2010,
there were 19,023,000 common shares outstanding. There are no provisions in our
charter or by-laws that would delay, defer or prevent a change in our control.
Section 3.10 of our bylaws specifies a quorum requirement of 5% at any meeting
of shareholders. This means we can conduct business at shareholder meetings with
only 5% of the shareholders present in person or by proxy. The effect of section
3.10 is that a small active shareholder base can make decisions that will impact
the majority of shareholders if the majority elects to stay
inactive.
All of our common stock, issued and
unissued, is of the same class and ranks equally as to dividends, voting powers
and participation in our assets on a winding-up or dissolution. No common shares
have been issued subject to call or assessment. Each common share is entitled to
one vote with respect to the election of directors and other matters. The shares
of common stock do not have cumulative voting rights.
Therefore, the holders of a majority of
shares voting for the election of directors can elect all the directors then
standing for election, if they chose to do so, and in such event the holders of
the remaining shares will not be able to elect any directors. Currently, Mr.
Arne Raabe, one of our directors, beneficially owns 53.6% of the outstanding
shares of our common stock and is in a position to control all matters subject
to stockholder vote. See “Security Ownership of Certain Beneficial Owners and
Management.”
The common shares have no preemptive or
conversion rights, and no provisions for redemption, purchase for cancellation,
surrender of sinking fund or purchase fund.
Neither our Articles of Incorporation
nor our Bylaws contain specific provisions that would delay, defer or prevent a
change in control. However, approximately 30,977,000 common stock shares are
authorized but unissued as of March 19, 2010. All of such authorized but
unissued shares are available for future issuance by the Board of Directors
without additional shareholder approval. These additional shares may be used for
a variety of purposes, including future offerings to raise additional capital or
to facilitate acquisitions.
One of the effects of the existence of
unissued and unreserved common stock may be to enable the Board of Directors to
issue shares to persons friendly to current management, which could render more
difficult or discourage an attempt to obtain control of Raphael Industries by
means of a merger, tender offer, proxy contest or otherwise, and thereby protect
the continuity of management. Such additional shares also could be used to
dilute the stock ownership of persons seeking to obtain control of Raphael
Industries.
Warrants
We have no outstanding any warrants to
purchase shares of our common stock.
Options
We have no outstanding any options to
purchase shares of our common stock.
Convertible
Securities
We have not issued and do not have
outstanding any securities convertible into shares of our common stock or any
rights convertible or exchangeable into shares of our common stock.
28
Nevada
Anti-Takeover Laws
Nevada Revised Statutes sections 78.378
to 78.379 provide state regulation over the acquisition of a controlling
interest in certain Nevada corporations unless the articles of incorporation or
bylaws of the corporation provide that the provisions of these sections do not
apply. Our articles of incorporation and bylaws do not state that these
provisions do not apply. The statute creates a number of restrictions on the
ability of a person or entity to acquire control of a Nevada company by setting
down certain rules of conduct and voting restrictions in any acquisition
attempt, among other things. The statute is limited to corporations that are
organized in the state of Nevada and that have 200 or more stockholders, at
least 100 of whom are stockholders of record and residents of the State of
Nevada; and does business in the State of Nevada directly or through an
affiliated corporation. Because of these conditions, the statute currently does
not apply to our company.
Except as otherwise indicated below, we
have not been a party to any transaction, proposed transaction, or series of
transactions in which the amount involved exceeds $60,000, and in which, to our
knowledge, any of our directors, officers, five percent beneficial security
holder, or any member of the immediate family of the foregoing persons has had
or will have a direct or indirect material interest. Our President, Ronald
Hughes will act as our promoter. Mr. Hughes has not and will not receive
anything of value directly or indirectly for his role as our promoter. We have
not and will not acquire any assets from Mr. Hughes.
K.R. Margetson Ltd., independent
certified accountants, have audited our financial statements included in this
prospectus. These financial statements are included herein in reliance upon
their report and upon their authority as experts in accounting and auditing. No
expert or counsel has been hired on a contingent bases, will receive a direct or
indirect interest in Raphael, or has acted as a promoter, underwriter, voting
trustee, director, officer, or employee of Raphael.
The Law Office of Conrad C. Lysiak,
P.S. 601 West First Avenue, Suite 903, Spokane, Washington99201, telephone
(509) 624-1475 passed on the legality of the shares being offered in this
prospectus.
Our fiscal year end is September 30. We
will provide audited financial statements to our stockholders on an annual
basis; the statements will be prepared by a firm of Chartered
Accountants.
Our financial statements from inception
to December 31, 2009 (unaudited) and September 30, 2009 (audited), respectively,
immediately follow:
The
accompanying notes are an integral part of these financial
statements
F-4
33
Raphael
Industries Ltd.
(A
Development Stage Company)
Notes
to the Financial Statements
(Unaudited)
NOTE
1 - NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS
Raphael
Industries Ltd. (“the Company”) was incorporated on October 31, 2005 under the
laws of the State of Nevada. Its principal business is to market database for
commercial use in newsletters, direct mail, and internet marketing
promotions.
The
financial statements are prepared in accordance with generally accepted
accounting principles in the United States on a going concern basis which
contemplates the realization of assets and discharge of liabilities and
commitments in the normal course of business. To date the Company has funded
operations through the issuance of capital stock and the limited generation of
revenues. The Company has limited operating history, has generated limited
revenues from operations, and may require additional capital
requirements. As at December 31, 2009, the Company has an accumulated
deficit of $354,938. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. These financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Management’s
plan is to continue raising additional funds through future equity or debt
financings, as needed, until it can generate sufficient revenues to maintain
sustainable profitable operations. On October 25, 2006, the Company filed an
amended SB-2 Registration Statement with the United States Securities and
Exchange Commission and raised $251,150. It has sufficient capital to maintain
operations for the next 12 months.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Presentation and Fiscal Year
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company’s fiscal year-end is September 30.
(b)
Interim Financial Statements
The
interim financial statements have been prepared on the same basis as the annual
financial statements and in the opinion of management, reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
Company’s financial position, results of operations, and cash flows for the
periods shown. The results of operations for such periods are not necessary
indicative of the results expected for a full year or for any future
period.
(c)
Recent Accounting Pronouncements
The
Company adopts new accounting pronouncements relating to generally accepted
accounting principles applicable to the Company as they are issued, which may be
in advance of their effective adoption date. Management does not
believe that any recently issued but not yet effective standards, if currently
adopted, would have a material effect on these financial
statements.
Consulting
fees of $7,200 (2008: $14,400) were recorded as donated services by the
President of the Company for consulting services provided to the Company during
the three month period ended December 31, 2009. These fees are
included in general and administrative, and recorded as donated
capital.
NOTE
5 - COMMITMENTS
The
Company entered into a license agreement dated December 1, 2007 for the
exclusive use of a database for a period of 24 months. The license
agreement lapsed and has not been renewed.
NOTE
6 – SUBSEQUENT EVENTS
The
Company evaluated subsequent events through the date and time the financial
statements which were issued on February 10, 2010.
F-6
35
K. R. Margetson
Ltd.
Chartered Accountant
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Stockholders,
Raphael
Industries Ltd.
We have
audited the accompanying balance sheets of Raphael Industries Ltd. (A
Development Stage Company) as of September 30, 2009 and 2008 and the related
statements of operations, stockholders’ equity and cash flows for the years
ended September 30, 2009 and 2008 and for the period from October 31, 2005 (Date
of Inception) to September 30, 2009. These financial statements are
the responsibility of the Company’s management. Our responsibility is
to express an opinion on these financial statements based on our
audits. We did not audit the period from October 31, 2005 to
September 30, 2006. That period was audited by other auditors, whose
report dated February 6, 2007, expressed an unqualified opinion on those
statements.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those
standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our
opinion these financial statements present fairly, in all material respects, the
financial position of the Company as of September 30, 2009 and 2008 and the
results of its operations and its cash flows for years ended September 30, 2009
and 2008 and for the period from October 31, 2005 (Date of Inception) to
September 30, 2009 in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared using accounting principles
generally accepted in the Unites States of America assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is a development stage company and has yet to
attain profitable operations, which raises substantial doubt about its ability
to continue as a going concern. Management’s plans in regard to their
planned financing and other matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE
1 - NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS
Raphael
Industries Ltd. (“the Company”) was incorporated on October 31, 2005 under the
laws of the State of Nevada. Its principal business is to market database for
commercial use in newsletters, direct mail, and internet marketing
promotions..
The
financial statements are prepared in accordance with generally accepted
accounting principles in the United States on a going concern basis which
contemplates the realization of assets and discharge of liabilities and
commitments in the normal course of business. To date the Company has funded
operations through the issuance of capital stock and the limited generation of
revenues. The Company has limited operating history, has generated limited
revenues from operations, is dependent on a limited number of databases, is
dependent on the owners of the license agreements for the renewal of the license
agreements, and may require additional capital requirements. The Company
currently has one license to two databases resulting in a limited ability to
market databases. The Company does not have sufficient marketing
capability to consistently undertake rentals independent of third party
marketing and management agents. As at September 30, 2009, the Company has an
accumulated deficit of $338,082. As a result, the Company is dependent on third
party agents to successfully market and rent the databases. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Management’s
plan is to continue raising additional funds through future equity or debt
financings, as needed, until it can generate sufficient revenues to maintain
sustainable profitable operations. On October 25, 2006, the Company filed an
amended SB-2 Registration Statement with the United States Securities and
Exchange Commission and raised $251,150 It has sufficient
capital to maintain operations for the next 12 months.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Presentation and Fiscal Year
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company’s fiscal year-end is September 30.
(b)
Cash and Cash Equivalents
The
Company considers all highly liquid instruments with maturity of three months or
less at the time of issuance to be cash equivalents.
(c)
Use of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
Company regularly evaluates estimates and assumptions related to donated
expenses, stock-based compensation expense and deferred income tax asset
valuations. The Company bases its estimates and assumptions on current facts,
historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Company’s estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.
(d)
Comprehensive Loss
The
Company follows FASB ASC 220 “Comprehensive Income” which
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at September 30, 2009, the
Company has no items that represent a comprehensive loss and, therefore, has not
included a schedule of comprehensive loss in the financial
statements.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Basic and Diluted Earnings Per Share
The
Company computes earnings per share in accordance Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification 260, “Earnings per Share” which
requires presentation of both basic and diluted earnings per share (EPS) on the
face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing Diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. For the period ended
September 30, 2009, there were no dilutive securities outstanding and therefore
diluted earnings per share is not presented.
(f)
Financial Instruments and Concentrations
The
fair value of financial instruments, which include cash, accounts receivable,
accounts payable, licensee fee payable, and amounts due to a related party were
estimated to approximate their carrying values due to the immediate or
short-term maturity of these financial instruments. The Company has some
exposure to market risks from changes in foreign currency rates. The financial
risk is the risk to the Company’s operations that arise from fluctuations in
foreign exchange rates and the degree of volatility of these rates. Currently,
the Company does not use derivative instruments to reduce its exposure to
foreign currency risk. The Company has cash balances in Canadian and
US dollars. Balances in U.S. dollars at Canadian institutions are not
protected by insurance and are therefore subject to deposit risk. In
2009, approximately $95,000 was protected by insurance (2008
$95,000).
(g)
Foreign Currency Translation
The
Company’s functional and reporting currency is the United States dollar.
Monetary assets and liabilities denominated in foreign currencies are translated
in accordance with FASB ASC 830 “Foreign Currency Translation”, using
the exchange rate prevailing at the balance sheet date. Gains and losses arising
on settlement of foreign currency denominated transactions or balances are
included in the determination of income. Foreign currency transactions are
primarily undertaken in Canadian dollars. The Company has not, to the date of
these financials statements, entered into derivative instruments to offset the
impact of foreign currency fluctuations.
(h)
Property and Equipment
Property
and equipment consists of computer hardware and is recorded at cost and is
amortized on a straight-line basis over an estimated life of three
years.
(i)
Long-Lived Assets
In
accordance with FASB ASC 360 Impairment or “Disposal of
Long-Lived Assets”, the Company tests long-lived assets or asset groups
for recoverability when events or changes in circumstances indicate that their
carrying amount may not be recoverable. Circumstances which could trigger a
review include, but are not limited to: significant decreases in the market
price of the asset; significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of the asset; current period cash
flow or operating losses combined with a history of losses or a forecast of
continuing losses associated with the use of the asset; and current expectation
that the asset will more likely than not be sold or disposed significantly
before the end of its estimated useful life.
Recoverability
is assessed based on the carrying amount of the asset and its fair value which
is generally determined based on the sum of the undiscounted cash flows expected
to result from the use and the eventual disposal of the asset, as well as
specific appraisal in certain instances. An impairment loss is recognized when
the carrying amount is not recoverable and exceeds fair value.
(j)
Advertising
The Company expenses advertising costs
as incurred. There have been no advertising expenses incurred by the
Company since inception
The
Company recognizes the costs associated with developing a website in accordance
with FASB ASC 350-50 “Website
Development Costs”. Accordingly costs associated with the
website consist primarily of website development costs paid to a third party.
These capitalized costs will be amortized based on their estimated useful life
over three years upon the website becoming operational. Internal costs related
to the development of website content will be charged to operations as
incurred.
(l)
Revenue Recognition
The
Company recognizes revenue from the licensing of databases in accordance with
FASB ASC 650-45 “Reporting
Revenue Gross as a Principal vs. Net as an Agent”. Revenue consists of
licensing fees and is recognized only when the price is fixed or determinable,
persuasive evidence of an arrangement exists such as a contract or a
written request from the customer, the product has been transferred, and
collectability is reasonably assured. An order from a customer will include the
quantity requested and the price paid by a customer. Revenues are recognized
when the Company has delivered the ordered names to a customer. A customer has
the authority to use the list immediately upon receipt from the Company. To
reasonably assure collectability, the Company requests pre-payments on orders
from customers without an established credit history. Otherwise, the Company
awards credit under terms standard in the industry and regularly review accounts
receivable for any bad debts. At the completion of the transfer of names to a
customer the Company has fulfilled all obligations to that customer. As of
September 30, 2009, $5,872 was written off as unrecoverable
revenue.
(m)
Income Taxes
The
Company has adopted FASB ASC 740 “Accounting for Income Taxes”
as of its inception wherein the Company is required to compute tax asset
benefits for net operating losses carried forward. Potential benefit of net
operating losses have not been recognized in these financial statements because
the Company cannot be assured it is more likely than not it will utilize the net
operating losses carried forward in future years.
(n)
Stock-based Compensation
The
Company records stock-based compensation in accordance with FASB ASC 718 “Stock
Compensation”. Accordingly, compensation costs attributable to
stock options or similar equity instruments granted to employees are measured at
the fair value at the grant date, and expensed over the expected service period
with a corresponding increase to additional paid-in capital. Transactions in
which goods or services based on the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably
measurable. The Company does not have a stock option plan and has not issued any
share based payments since inception.
(o)
Fair Value Measurements
The
Company follows FASB ASC 820, “Fair Value Measurements and
Disclosures”, for all financial
instruments and non-financial instruments accounted for at fair value on a
recurring basis. This new accounting standard establishes a single definition of
fair value and a framework for measuring fair value, sets out a fair value
hierarchy to be used to classify the source of information used in fair value
measurement and expands disclosures about fair value measurements required under
other accounting pronouncements. It does not change existing guidance as to
whether or not an instrument is carried at fair value. The Company defines fair
value as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets
and liabilities, which are required to be recorded at fair value, the Company
considers the principal or most advantageous market in which the Company would
transact and the market-based risk measurements or assumptions that market
participants would use in pricing the asset or liability, such as inherent risk,
transfer restrictions and credit risk. The Company has adopted FASB
ASC 825, “Financial
Instruments”, which allows companies to choose to measure eligible
financial instruments and certain other items at fair value that are not
required to be measured at fair value. The Company has not
elected the fair value option for any eligible financial
instruments.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p)
Derivative Instruments
The
Company follows FASB ASC 815, “Derivatives and Hedges”. This
standard establish accounting and reporting requirements for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. They require that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of which is
to match the timing of gain or loss recognition on the hedging derivative with
the recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change. The Company has not entered into derivative contracts to
hedge existing risks or for speculative purposes.
(q)
Recent Accounting Pronouncements
In
June 2008, FASB issued ASC Topic 815, “Derivatives and Hedging,”
which provides a two-step model to determine whether a financial instrument or
an embedded feature is indexed to an issuer’s own stock and thus able to qualify
for the scope exception in ASC 815-10-15-74. This standard is effective for
financial statements issued for fiscal years beginning after December 15,2008. This standard triggers liability accounting on all instruments
and embedded features exercisable at strike prices denominated in any currency
other than the functional currency of the operating. The adoption of
this pronouncement did not have a material impact on the Company’s financial
statements.
On
January 1, 2009, the Company adopted ASC sub-topic 810-10 (formerly SFAS No.
160, “Accounting and Reporting
on Non-controlling Interest in Consolidated Financial Statements, an Amendment
of ARB 51”). ASC 810-10 states that accounting and reporting for minority
interests are to be recharacterized as noncontrolling interests and classified
as a component of equity. The calculation of earnings per share continues to be
based on income amounts attributable to the parent. ASC 810-10 applies to all
entities that prepare consolidated financial statements, except not-for-profit
organizations, but affects only those entities that have an outstanding
noncontrolling interest in one or more subsidiaries or that deconsolidate a
subsidiary. The adoption of ASC 810-10 did not have a material impact
on the Company’s financial statements.
During
the second quarter of 2009, the Company adopted guidance issued by the FASB in
April 2009 that is intended to provide additional application guidance and
enhance disclosures about fair value measurements and impairments of securities
and guidance that expanded the fair value disclosures required for all financial
instruments within the scope of ASC Topic 825 “Financial Instruments” to
interim periods. The adoption of this guidance did not materially impact the
financial statements.
In
April 2009, the FASB issued an accounting standard to make the
other-than-temporary impairments guidance more operational and to improve the
presentation of other-than-temporary impairments in the financial statements.
This standard will replace the existing requirement that the entity’s management
assert it has both the intent and ability to hold an impaired debt security
until recovery with a requirement that management assert it does not have the
intent to sell the security, and it is more likely than not it will not have to
sell the security before recovery of its cost basis. This standard provides
increased disclosure about the credit and noncredit components of impaired debt
securities that are not expected to be sold and also requires increased and more
frequent disclosures regarding expected cash flows, credit losses, and an aging
of securities with unrealized losses. Although this standard does not result in
a change in the carrying amount of debt securities, it does require that the
portion of an other-than-temporary impairment not related to a credit loss for a
held-to-maturity security be recognized in a new category of other comprehensive
income and be amortized over the remaining life of the debt security as an
increase in the carrying value of the security. This standard became effective
for interim and annual periods ending after June 15, 2009. The adoption of this
standard did not have a material impact on the Company’s financial
statements.
In
April 2009, the FASB issued an accounting standard that requires disclosures
about fair value of financial instruments not measured on the balance sheet at
fair value in interim financial statements as well as in annual financial
statements. Prior to this accounting standard, fair values for these assets and
liabilities were only disclosed annually. This standard applies to all financial
instruments within its scope and requires all entities to
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
q)
Recent Accounting Pronouncements (continued)
disclose
the method(s) and significant assumptions used to estimate the fair value of
financial instruments. This standard does not require disclosures for earlier
periods presented for comparative purposes at initial adoption, but in periods
after the initial adoption, this standard requires comparative disclosures only
for periods ending after initial adoption. The adoption of this standard did not
have a material impact on the disclosures related to its financial
statements.
In
June 2009, the FASB issued an accounting standard amending the accounting and
disclosure requirements for transfers of financial assets. This accounting
standard requires greater transparency and additional disclosures for transfers
of financial assets and the entity’s continuing involvement with them and
changes the requirements for derecognizing financial assets. In addition, it
eliminates the concept of a qualifying special-purpose entity (“QSPE”). This
accounting standard is effective for financial statements issued for fiscal
years beginning after November 15, 2009. The Company has not completed the
assessment of the impact this new standard will have on the Company’s financial
condition, results of operations or cash flows.
In
September 2006, the Company entered into an agreement with a marketing company
to develop a website and corporate identity for the Company for $30,000, of
which $22,000 was capitalized in accordance with FASB ASC 350-50, “Accounting for Web Site Development
Costs”. In 2009, the amortization was completed with a charge
of $7,480.
NOTE
5 - COMMON STOCK
On
April 30, 2007, the Company issued 2,511,500 shares of common stock pursuant to
the Company’s SB-2 registration statement at $0.10 per share for cash proceeds
of $251,150.
On
April 30, 2006, the Company issued 6,500,000 shares of common stock to the
President of the Company at $0.01 per share for cash proceeds of
$65,000.
As
at September 30, 2009, there were no shares subject to options, warrants or
other agreements..
NOTE
6 – RELATED PARTY TRANSACTIONS
Consulting
fees of $36,000 ($57,600 in 2008) were recorded as donated services by the
President of the Company for consulting services provided to the Company during
the year ended September 30, 2009. These fees are included in general
and administrative, and recorded as donated capital.
NOTE
7 - COMMITMENTS
The
Company entered into a license agreement dated December 1, 2007 for the
exclusive use of a database for a period of 24 months. The Company has the
exclusive right to market the database. The agreement calls for the payment of
30% of the generated revenues to the Company.
NOTE
8 - INCOME TAXES
The
Company provides deferred income taxes for differences between the tax reporting
basis and the financial reporting basis of assets and liabilities. The Company
follows the provisions of FASB ASC 740, Accounting for Income Taxes.
The impact of differences between the Company’s reported income tax provision on
operating income and the benefit that would otherwise result from the
application of statutory rates is noted below. As management cannot
determine that it is more likely than not that the Company will realize the
benefit of the net deferred tax asset, a valuation allowance equal to the
deferred tax asset has been recorded.
Balance
September 30
2009
2008
$
$
30%
32%
Net
loss before income taxes
(71,560)
(93,376)
Expected
Statutory rate - 30% in 2009; 32% in 2008
Under
normal circumstances the ability to apply the tax loss of $122,878 will expire
as follows: expiring in 2027 - $56,926; expiring in 2028 - $33,997; expiring in
2029 - $31,955.
NOTE
9 – PRESENTATION
Certain
2008 figures have been reclassified in order to conform to the presentation used
in 2009.
NOTE
10 – SUBEQUENT EVENTS
The
Company did not have any subsequent events up to January 16, 2010
F-18
47
PART
II—INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM
13. OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the
Company in connection with the offering of the securities being registered are
as follows:
Legal
Fees and Expenses*
$
20,000
Accounting
Fees and Expenses*
$
3,000
Financial
Printing*
$
3,000
Transfer
Agent Fees*
$
500
Miscellaneous*
$
3,500
TOTAL*
$
30,000
*
Estimated
ITEM
14. INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
Our officers and directors are
indemnified as provided by the Nevada Revised Statutes and our bylaws. Under the
governing Nevada statutes, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company’s articles of incorporation. Our articles of
incorporation do not contain any limiting language regarding director immunity
from liability. Excepted from this immunity are:
1.
a
willful failure to deal fairly with us or our shareholders in connection
with a matter in which the director has a material conflict of
interest;
2.
a
violation of criminal law (unless the director had reasonable cause to
believe that his or her conduct was lawful or no reasonable cause to
believe that his or her conduct was
unlawful);
3. a
transaction from which the director derived an improper personal profit;
and
4. willful
misconduct.
Our bylaws provide that we will
indemnify our directors and officers to the fullest extent not prohibited by
Nevada law; provided, however, that we may modify the extent of such
indemnification by individual contracts with our directors and officers; and,
provided, further, that we shall not be required to indemnify any director or
officer in connection with any proceeding (or part thereof) initiated by such
person unless:
1. such
indemnification is expressly required to be made by law;
2. the
proceeding was authorized by our Board of Directors;
3.
such
indemnification is provided by us, in our sole discretion, pursuant to the
powers vested us under Nevada law;
or;
4. such
indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance
to any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director or officer, of the company, or is or was serving at the request
of the company as a director or executive officer of another company,
partnership, joint venture, trust or other enterprise, prior to the final
disposition of the proceeding, promptly following request therefore, all
expenses incurred by any director or officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under our bylaws or otherwise.
48
Our bylaws provide that no advance
shall be made by us to an officer of the company, except by reason of the fact
that such officer is or was a director of the company in which event this
paragraph shall not apply, in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, if a determination is reasonably and
promptly made: (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (b) if such
quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, that
the facts known to the decision-making party at the time such determination is
made demonstrate clearly and convincingly that such person acted in bad faith or
in a manner that such person did not believe to be in or not opposed to the best
interests of the company.
ITEM
15. RECENT
SALES OF UNREGISTERED SECURITIES.
No unregistered securities have been
sold by the issuer within the last three years.
Use
of Proceeds from Registered Securities
This use of proceeds information is
being disclosed pursuant to our SB-2 registration statement file # 333-135331
declared effective on November 9, 2006. The offering commenced on November 9,2006 and was terminated on April 30, 2006 with 2,511,500 shares of common stock
issued and $251,150 raised.
Pursuant to the SB-2 registration
statement we registered 5,000,000 shares for sale by the issuer for maximum
proceeds of $500,000 of which 2,511,500 shares were sold for total proceeds of
$251,150.
There was no underwriter in the
offering and no funds have been paid for underwriting discounts or commissions,
finders’ fees, or to underwriters in connection with the offering.
We paid total expenses of $10,787
including legal, audit, and transfer agent fees related to the offering. All
these fees were paid directly by the issuer and none of the fees were paid to a
director, officer, 10% security owners, or any individual or firm with insider
or related party affiliation with the issuer.
Net proceeds to the issuer after taking
account of expense related to the registration statement were $239,299. The
following table details the use of proceeds from April 30, 2007 through December31, 2009
List
and services marketing
$
Web
site and material design
77
Rent,
Audit, General Legal and Office Expenses
50,815
List
updating and enhancement
1,000
TOTAL
$
51,892
ITEM
16. EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES.
(1) To file, during any period in which
it offers or sales securities, a post-effective amendment to this registration
statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration statement;
and
(iii) To include any additional or
changed material information to the plan of distribution.
(2) That, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by
means of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for the purpose of
determining liability under the Securities Act of 1933 to any
purchaser:
Each
prospectus filed by the Registrant pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
50
SIGNATURES
In accordance with the requirements of
the Securities Act of 1933, the Registrant certifies that it has reasonable
grounds to believe that it met all the requirements of filing on this
Registration Statement and authorized this Registration Statement to be signed
on its behalf by the undersigned, in the City of Point Roberts, State of
Washington, on March 24, 2010.
Raphael
Industries Ltd.
(Registrant)
By:
RONALD
HUGHES
Name:
Ronald
Hughes
Title:
Principal
Executive Officer, Principal Accounting Officer, Principal Financial
Officer Treasurer and a member of the Board of
Directors
KNOW ALL MEN BY THESE PRESENT, that
each person whose signature appears below constitutes and appoints Ronald Hughes
as true and lawful attorney-in-fact and agent, with full power of substitution,
for her and in her name, place and stead, in any and all capacities, to sign any
and all amendment (including post-effective amendments) to this registration
statement, and to file the same, therewith, with the Securities and Exchange
Commission, and to make any and all state securities law or blue sky filings,
granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
about the premises, as fully to all intents and purposes as she might or could
do in person, hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the
Securities Act of 1933, this Form S-1 Registration Statement has been signed by
the following persons in the capacities and on the dates indicated:
