form-10.htm
 

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

FORM 10-Q
 
 
FOR THE QUARTER ENDED September  30, 2008
 
(Mark One)
 
     
x
  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the Period Ending September  30, 2008
 
     
o
  
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from to
 
 
 
New York
4814
01-0671426
State or Other Jurisdiction of Incorporation
of Organization
Primary Standard
Industrial Code
(I.R.S. Employer Identification No.)
     
 
Ron Kallus, CEO
2 Ingrid Road
Setauket, NY 11733-2218
Tel: 631-458-1120
 
 
(Address and Telephone Number of Registrants Principal Place of Business)
 


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Accelerated filer ¨
   
Non-accelerated filer ¨
Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x

Transitional Small Business Disclosure Format (check one): Yes ¨ No x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x

 
 
The number of shares outstanding of the Registrant's Common Stock as of November 12, 2008 was 6,434,000 shares.


 
 

 
 
 

 
 
 
 
 
   
PART I    FINANCIAL INFORMATION
 
  
Item
1
Financial Statements
  
       
   
Balance Sheet at  September  30, 2008 (Unaudited)  and  March 31, 2008 (Audited)
 2
   
Statement of Cash Flows for Six  Month  Ending September 30, 2008 and 2007 (Unaudited)
 3
   
Statement of Operations for Three and Six Month Ending September 30, 2008 and 2007  (Unaudited)
 4 
   
Notes to Financial Statements                                                                                                                                                                                 
5
Item
2
Management Discussion & Analysis
 
7
Item
3
Financial Controls & Procedures
9
       
   
PART II OTHER INFORMATION
 
  
Item
1
Legal Proceedings
 10
Item
2
Changes in Securities
 10
Item
3
Default Upon Senior Securities
 10
Item
4
Submission of Matters to a Vote of Securities Holders
 10
Item
5
Other Information
 10
Item
6
Exhibits And Reports on Form 8K
 10
 
 
 

 
 
 
 
 
 
1
 
 
Item 1.  Financial Statements 
 
 
 
VGTel, Inc.
(A Development Stage Company)
Balance Sheet
As at
 


                         
                         
   
September 30,
          
March 31,
        
   
2008
          
2008
        
ASSETS
                        
                         
                         
CURRENT ASSETS
                        
   Cash and cash equivalents
   $ 2,354           $ 5,126        
   Accounts receivable
     1,929             1,232        
                             
          Total Current Assets
           $ 4,283             $ 6,358  
                                 
FIXED AND OTHER ASSETS
                                
   Property and equipment
     4,744               4,744          
                                 
       less: Accumulated depreciation
     (4,744 )             (4,744 )        
   Net- Property and equipment
     0               0          
   Intellectual property
     29,000               29,000          
       less: Accumulated amortization
     (15,950 )             (13,050 )        
   Net -Intellectual property
     13,050               15,950          
   Deferred tax asset
     0               0          
                                 
          Total Fixed and Other Assets
             13,050               15,950  
                                 
         Total Assets
           $ 17,333             $ 22,308  
                                 
                                 
                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                                
                                 
CURRENT LIABILITIES
                                
   Accrued expenses and accounts payable
   $ 0.00             $ 34,027          
   Due to shareholders
     41,065               16,323          
                                 
          Total Current Liabilities
             41,065             $ 50,350  
                                 
COMMITMENTS AND CONTINGENCIES
                                
                                 
STOCKHOLDERS' EQUITY
                                
 Preferred Stock,, $.001 par value,
                                
    Authorized 10,000,000 shares, none issued
                                
  Common stock, $ .0001  par value ,
                                
    Authorized 200,000,000  shares Issued  &
                                
   outstanding  6,434,000 4,800,00
     643               480          
  Additional paid in capital
     281,707               213,020          
  Accumulated other comprehensive  gain (loss)
     0               0          
  Retained Earnings (Deficit)
   $ (306,082 )             (241,542 )        
                                 
          Total Stockholders' Equity
             (23,732 )             (28,042 )
                                 
Total Liabilities and Stockholders' Equity
           $ 17,333             $ 22,308  
                                 
                                 
                                 
                                 
                                 
 
 
See accompanying notes to financial statements

 
2
 
 
VGTel, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Periods
 

                   
               
Accumulated
  
   
Six Month Period
    
Six Month Period
    
From Inception
  
   
April 1, 2008
    
April 1, 2007
    
July 27, 2004-
  
   
September 30, 2008
    
September 30, 2007
    
September 30, 2008
  
                   
Cash flows from operating activities
                  
     Net  Income (loss)
   $ (64,540 )   $ (37,441 )   $ (306,082 )
     Adjustments to reconcile net loss to net
                        
       cash provided by operating activities:
                        
          Officers compensation & Rent charged to paid in capital
     28,000       28,000       155,000  
          Depreciation and amortization
     2,900       2,900       15,950  
                         
                         
          Changes in assets and liabilities:
                        
             Accrued expenses
     (34,027 )     (4,483 )     0  
Accounts Receivable
     (697 )             (1,930 )
                         
Net cash provided ( used)  in operating activities
     (68,364 )     95       (137,062 )
                         
Cash flows from investing activities
                        
     Purchase  of fixed assets & intellectual properties
     0       0       (29,000 )
                      0  
Net cash provided (used) in investing  activities
     0       0       (29,000 )
                         
                         
Cash flows from financing activities
                        
Officers Loan
     24,742       0       41,065  
   Issuance of common stock for services rendered
     16,850       0       26,850  
   Sale of units
             0       34,000  
   Additional paid in capital credited for shareholder contributions
     24,000       0       66,500  
                         
Net increase  provided (used) in financing activities
     65,592       0       168,415  
                         
Net increase  (decrease ) in cash
     2,772       95       2,354  
                         
Cash and cash equivalents, beginning of period
     5,126       7,179       0  
                         
Cash and cash equivalents, end of period
   $ 2,354     $ 7,274     $ 2,354  
                         
                         
                         
Supplemental disclosures
                        
                         
Noncash investing and financing activities:
                        
Additional paid in capital credited in exchange for Intellectual property
   $ 0     $ 0     $ 66,500  
Issuance of common stock in exchange for services rendered
     16,850     $ 0     $ 26,850  
Officers Compensation and Rent credited to Additional Paid in capital
     28,000    
$____________28,000
     $ 155,000  
                         
                         



See accompanying notes to financial statements

 
3
 

 
VGTel, Inc.
(A Development Stage Company)
Statement of Operations
For the Periods
                               
                               
                               
   
Three Month Period
    
Six Month Period
          
Accumulated from
  
                           
Inception
  
   
July 1, 2008
    
July 1, 2007
    
April 1, 2008
    
April 1, 2007
    
(July 27, 2004)-
  
   
Sep. 30, 2008
    
Sep. 30, 2007
    
Sep. 30, 2008
    
September 30, 2007
    
September 30, 2008
  
                               
                               
REVENUES
   $ 5,651     $ 2,957     $ 9,364     $ 7,683     $ 50,911  
                                         
                                         
OPERATING EXPENSES
                                        
  General   and administrative
     8,864       11,832       43,004       14,229       185,129  
  Officers' compensation & rent
     14,000       14,000       28,000       28,000       155,000  
  Depreciation and amortization
     1,450       1,450       2,900       2,900       16,185  
     Total operating expenses
     24,314       27,282       73,904       45,124       356,314  
                                         
      Income (loss) from operations
   $ (18,675 )   $ (24,325 )   $ (64,540 )   $ (37,441 )   $ (305,403 )
                                         
OTHER INCOME
                                        
  Investment income
                                        
                                         
     Loss before income taxes
   $ (18,675 )   $ (24,325 )   $ (64,540 )   $ (37,410 )   $ (305,403 )
                                         
Federal Income Tax
                                        
                                         
     NET INCOME (LOSS)
   $ (18,675 )   $ (24,325 )   $ (64,540 )   $ (37,410 )   $ (305,403 )
                                         
Discontinued Operations
                                        
Loss from discontinued operations
     0       0       0       0       (679 )
Income tax benefit
     0       0       0       0       0  
Net Loss from Discontinued
     0       0               0       (679 )
operations
                                        
     NET INCOME (LOSS)
   $ (18,675 )   $ (24,325 )   $ (64,540 )   $ (37,410 )   $ (306,082 )
PER COMMON SHARE-
                                        
INCOME (LOSS)
                                        
                                         
Basic and Diluted
   $ 0.00     $ 0.00     $ 0.00     $ 0.00          
                                         
                                         
                                         
WEIGHTED AVERAGE NUMBER
                                        
OF SHARES OUTSTANDING
     6,434,000       4,800,000       6,300,000       4,800,000          
                                         
                                         
                                         


See accompanying notes to financial statements

 
4
 


 
VGTel, Inc.
(A Development Stage Company)
Notes to Financial Statements
For the Three Month Ended September 30, 2008
 

 
 
 
 
 
NOTE 1 -  FINANCIAL STATEMENTS
 
The accompanying condensed financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September  30, 2008   and for all periods presented have been made.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2008  audited financial statements.  The results of operations for the period ended September  30, 2008 are not necessarily indicative of the operating results for the full years.
 
NOTE 2 - GOING CONCERN 
 
The Company's financial statements are prepared using accounting principles   generally   accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.
 
In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management is currently seeking funding from significant shareholders and outside funding sources sufficient to  meet its minimal operating expenses.   However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3-DUE TO SHAREHOLDERS
 
Various funds had been advanced by the CEO, Mr. Ron Kallus  to the company.  As of September  30, 2008  Mr. Kallus has advanced an aggregate of $41,065.  The Officer has forgiven his right to the interest for the March 31, 2006 loan thus no interest has been charged or accrued 
                                                
NOTE 5-OFFICERS ' COMPENSATION
 
The Officer has taken no actual compensation since inception. For financial statement purposes  the Statement of Operations -officers compensation has been charged for $12,500  for the quarter ended September  30, 2008 and 2007 respectively.   
 
 
NOTE 6-COMMITMENTS AND CONTINGENCIES
 
The Company is occupying the premises of its President rent free.  For financial statement purposes  the Statement of Operations -rent has been charged for $1,500 for the quarterly   periods ended Setember  30,   2008 and 2007, respectively.   Additional paid in capital has been credited for the corresponding amount.
 
 
The company has an obligation to repay the loan to Mr. Kallus pursuant to the Officer's loan agreement.   .
As of  September 30, 2008 Mr. Kallus advanced  an aggregate of $41,065.  The Officer has forgiven his right to the interest for the June 30, 2006 loan thus no interest has been charged or accrued. 

 
Legal Proceedings
 
There are no material legal proceedings to which the Company is a party to or which any of their property is subject.
 
NOTE 7- STOCKHOLDERS’ EQUITY
 
NYN International, LLC (the accounting acquiror) was organized as a Limited Liability Company in the State of Texas.  No shares were issued to its founders.   
 
Tribeka Tek, Inc, (the legal acquiror) was organized in the State of New York on February 5, 2002.  Tribeka Tek, Inc. authorized 1500 common shares par value $1.00.  In February 2002 Tribeka Tek, Inc. issued 1500 common shares par value $1.00.  to its founders.    On June 29, 2005 Tribeka Tek board of directors voted to increase the common Shares authorized from 1500 to 200,000,000 and decrease the par value from $1.00 to $0.0001.  On January 18, 2006 the Company authorized a forward split of 826.67 for each share outstanding, bringing the total issued and outstanding shares from 1,500 to 1,240,000.   On January 18, 2006 the Company issued 2,760,000 restricted common shares par value $0.0001 per share  to shareholders of NYN International LLC in exchange for the rights to its intellectual properties, bringing the total shares issued and outstanding to 4,000,000.
 
 
 
 
5
 
In February 2006 the Company offered 800,000 Series A Units at $.025 per Unit to accredited and non-accredited investors in a private placement offering pursuant to Regulation D 506. Each Series A Units consists of (i) 1 share of the Company's common stock, $.0001 par value ("Common Stock") and (ii) 1 Series A (iii) 1 Series B (iv) 1 Series C (v) and 1 Series D Common Stock Purchase Warrants ("Warrant Series ]") to purchase shares of the Company's Common Stock, $.0001 par value. Each Series A, B, C, D Warrants are exercisable at $0.25 cents per Warrant. Each Warrant entitles the holder upon exercise, to receive one share of common stock underlying each Warrant. Warrants are exercisable at intervals as follows:

(ii) 1 Series A warrants exercisable at the "Initial Exercise Date" beginning 90 days following effectiveness of Registration Statement and expiring on the 2nd anniversary from the effective date.

(iii) 1 Series B warrants exercisable at the "Initial Exercise Date" beginning 120 days following effectiveness of Registration Statement and expiring on the 2nd anniversary from the effective date.

(iv) 1 Series C warrants exercisable at the "Initial Exercise Date" beginning 150 days following effectiveness of Registration Statement and expiring on the 2nd anniversary from the effective date.

(v) 1 Series D warrants exercisable at the "Initial Exercise Date" beginning 180 days following effectiveness of Registration Statement and expiring on 2nd anniversary from the effective date.
 
In February and March 2006, 400,000 units consisting of 400,000 shares of common stock and four series of common stock purchase warrants were sold for total consideration of $10,000.
 
In May of  2006, 400,000 shares of common stock and four series of common stock purchase warrants  were issued for research & development services rendered.  
 
Additional paid in capital has been credited $56,000 and $15,000 in the periods ended March 31, 2008 and 2007  respectively for officer's compensation and rent.

Additional paid in capital has been credited $12,500  and $1,500 in the periods ended June 30, 2008  and 2007  respectively for officer's compensation and rent.
 
No preferred shares have been issued. It is within the discretion of the Board of Directors to determine the preferences of the preferred stock. The Company has not yet determined the preferences of the preferred stock

On May 28, 2008   the Registrant sold in a private placement  transaction an aggregate $24,000 of Series A Units of its securities, at a price of $.025 per unit.    Each Series A unit consists of One share of the Company's Common stock, One Series A Warrant, One Series B Warrant, One Series C Warrant and One Series D Warrant.  Each of the four series of warrants entitles the holder to purchase one share of the Company's Common Stock at an exercise price of $0.25 per Share.  The private placement was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated there under, inasmuch as the securities were sold to accredited investors only.    The shares will bear a 144 Restrictive legend.  The Company has not offered Registration Rights to the subscriber. 
 
              On May 28, 2008 the Registrant issued 674,000 shares for services rendered valued at $16,850  in lieu of cash.  The shares issued are restricted shares and are subject to Rule 144. 
 
Additional paid in capital has been credited for $12,500 and $1,500 in periods ending September 30, 2008 and 2007 respectively for officer's compensation and rent. 

 

 
6
 

 
Item 2.  Management Discussion & Analysis
 
We are a development stage company currently testing a newly developed telemarketing campaign product called Global Messaging Gateway (GMG). The GMG system is designed to enable the User of the system to set up telemarketing campaigns to distribute messages to bulk lists of recipients. Messages can be delivered in the medium of text, voice, Fax or multimedia. Messages can be delivered from one control center to thousands of clients anywhere in the world simultaneously. The GMG System uses the internet instead of traditional telephone equipment.
 
The Global Messaging Gateway (GMG) is currently the first and only product of the Company. We currently have only one User that is using our system.  Since inception, we generated an aggregate of $50,911, of which the sum of $5,651 was generated during the three  month period ending September 30, 2008.    Platin pays a monthly fee for the lines and a per call fee for each successful call placed.    Platin Ltd., is a related party.  Israel Hason is the Chief Marketing Officer of our Company and a Director. Mr. Hason is also the managing partner and principal shareholder of Platin Ltd. Israel.   Mr. Hason has agreed to recuse himself from any corporate decision relating to Platin Ltd business relationship with VGTel, Inc.
 
 
Ongoing Development of our GMG Systems.
 
Our development activities with Kanaga include adding features, fixing problems and integrating new customer driven ideas. Each new feature is being integrated into the commercial operating environment and gets tested immediately under real commercial conditions. Additionally, Kanaga will continue the ongoing development of the GMG Alert System and the GMG Notification application for K-12 Educational Sector.   During the next 12 months we will require  further development costs of $15,000.   Our objective is to continue working with Kanaga during 2008 to support our planned pipeline of products and services.  However, we do not have the funds available for additional development costs.   Further development of the GMG system and other products is dependent on our ability to raise additional funds. 

 
 The Company plans to raise additional funds in order to expand its business and fully execute its Plan of Operations.  There is no assurance that the Company will be successful in raising sufficient funds to execute its expansion agenda.   If additional capital is raised through the sale of additional equity or convertible securities, substantial dilution to our stockholders is likely to occur which may result in a partial or substantial loss to your investment in our common stock. 
 
If we are successful in raising additional funds, we plan to hire and train key individuals for positions which include global management, marketing, and administrative. The number of employees hired will be dependent upon a variety of factors including our progress in implementing our business plan and available capital. By the third quarter of 2008, we expect to require approximately 5 employees and anticipate incurring $30,000 per month for payroll. The hiring of employees will be an ongoing process during the company’s existence. Additionally, the Company plans to utilize outside marketing and public relations firms to facilitate strategic alliances with potential franchisers and telemarketers. Depending on the availability of funds, the Company plans to spend $50,000 in advertising and marketing of its products and services during the second Phase of our operations.  
 
 
Results of Operations: 
 
 
Revenues:
 
Revenues during the three  months ended September  30, 2008 was $5,651 compared to $2,957 for the corresponding period ending September 30, 2007.  Revenues during the six month period ending September 30, 2008 was $9,364 as compared to $7,683  for the corresponding period ending September  30, 2007.
 
Total operating expenses for the three months period ended September  30, 2008 was $24,314 as compared to $27,282 for  the three month period ending September 30, 2008.    Total operating expenses for the six  months period ended September  30, 2008 was $73,904 as compared to $45, 124 six  month period ending September 30, 2008.  Our only customer Platin, who is a related party has been experiencing a decrease in referable business.  We have not been able to attract additional clients.   
 
Net loss for the three months period ended September  30, 2008 was $18,675 as compared to $24,325 for  the three month period ending September 30, 2008.   Net loss for the Six months period ended September  30, 2008 was $65,540 as compared to 37,441 for the six  month period ending September 30, 2008. 
 
We incurred $4,500 additional development  expenses during the quarter ending September  30, 2008.   
 
Pre-Technological
Feasibility
Twelve Month
Period
Ending
3-31-2006
 
Expensed
  
$
37,500
  
Development of
Product
Twelve Month
Period
Ending
3-31-2006
 
Capitalized
  
$
29,000
  
Pre-Technological Feasability
(Brain & Power Ltd.) $10,000
 
Post Operational
Development  (Kanaga) $13,500
Twelve Month
Period
Ending
3-31-07
 
Expensed
  
$
 
23,500
  
 
Post Operational Development Kanaga
 
Nine  Month Period Ending December  31 ,2007    
 
Expensed
  
$
8,500
  
Post Operational Development Kanaga
Three Month Ending 
March 31, 2008           
  Expensed    $ 2,000   
 
Post Operational Development Kanaga
  Quarter Ending June 30, 2008      -----    $ 0   
 
Post Operational Development    Kanaga                                                                                
  Quarter Ending September 30, 2008  Expensed    $            $4,500   


 
7
 
 
 
The company has not yet succeeded in increasing its revenues while overall administrative expenses have been increasing.    The Company is currently focusing on finding additional clients for its GMG System, in hope of diversifying its clientele.   As of September  30,  2008, the Company has not signed on any new clients for its services.  The company is seeking to raise additional funds in order to engage in marketing of its product to a wider audience. With the current available funds the company is unable to initiate a marketing campaign which is necessary in order to become a viable business. There is no assurance that the company will be successful in raising funds.  If the Company is unable to raise funds in the near future, it may be forced cease operations or seek an alternative. 
 
As reflected in the accompanying audited financial statements, we are in the development stage with a negative cash flow and an accumulated net loss from inception of ($306,082).   This raises substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 

Liquidity and Capital Resources:

 
As of September  30, 2008 the Company had $2,354 in cash, compared to $ 5,126 as of March 31, 2008.
 
Net cash used by operating activities for the Six  month period ended September  30, 2008 was ($68,364)   as compared to $95 for Six Month  ending September  30, 2007.    
 
Net cash provided by investing activities during the Six Month period ending  September 30, 2008 was $0 compared to  0 for the period ended September  30, 2007.
 
Net cash provided by financing activities for the Six month period ended  September  30, 2008 was  $24,742 as compared to $0 for the  corresponding period ending September 30, 2007.   This amount represents additional funds advanced by Ron Kallus  pursuant to a credit facility loan by Ron Kallus, the Company Chief Executive Officer and Principal shareholder.   During the three month period accrued payable declined to -0-.
 
At the current level of revenues and expenses, in conjunction with the committed loan from our President, we anticipate we will  not  have sufficient funding to operate for the next 12 months. Additionally, we will need to raise substantial funds in order to launch a broad marketing campaign to attract clients for our product in order to become a viable business. We cannot offer assurances that any additional funds will be raised when we require them or that we will be able to raise funds on suitable terms. Failure to obtain such financing when needed could delay or prevent our planned development and our marketing effort which is necessary for our business to become viable.
 
The Company intends to meet its long-term liquidity needs through available cash and cash flow as well as through additional financing from outside sources. The Company anticipates raising additional funds from the possible exercise of Warrants or equity financing with private investors following effectiveness of the Registration Statement. As of the date of this Prospectus no agreements have been undertaken to obtain any funding. The Warrants are exercisable at an exercise price of $0.25 per share. The Company does not expect that warrants will be exercised if the prevailing price of the Common Stock at such time of exercise is below or at the exercise price.
 
Additional issuances of equity or convertible debt securities will result in dilution to the current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to fully execute our Plan of Operations to expand our business, which could significantly and materially restrict our business operations. If additional capital is raised through the sale of additional equity or convertible securities, substantial dilution to our stockholders is likely to occur which may result in a partial or substantial loss to your investment in our common stock.
 
If the Company fails to raise additional funds to execute its expansion plan, it is likely that the Company will not be able to operate as a viable entity and may be forced to go out of business.

 
8
 
Material Commitments
 
All of our contracts and agreements, (See Contracts, Agreements & Relationships) have termination clauses allowing us to terminate the agreements with advance written notice. We control the pace of the development activities with Kanaga, and Brain & Power Ltd. We have the ability to curtail these activities to reduce our expenses and preserve our cash as needed.

We have an ongoing commitment to pay the costs of the offering  pursuant to this registration statement, and management believes it has the capital resources to meet administrative and accounting costs relating to this initiative.

Purchase of Significant Equipment

The Company does not plan any purchases of significant Equipment in the next 12 months.
 
Item 3.   Controls & Procedures:
 
 
(a)
 
 
Evaluation of disclosure controls and procedures.
 
 
Our Chief Executive Officer and Chief Financial Officer (collectively the “Certifying Officers”) maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management timely. Under the supervision and with the participation of management, the Certifying Officers evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)]under the Exchange Act) within 90 days prior to the filing date of this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures are effective in timely alerting them to material information relative to our company required to be disclosed in our periodic filings with the SEC.
 
 
(b)
 
Changes in internal controls.
 
 
Our Certifying Officer has indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of his evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.
 
 
9
 
 
 
PART II - OTHER INFORMATION
 
 
 
Item 1  Legal Proceedings.
 
The Company is currently not a party to any pending legal proceedings and no such action by, or to the best of its knowledge, against the Company has been threatened.
 
Item 2. Unregistered Sale of Securities
 
None

 
Item 3. Defaults Upon Senior Securities.
 
None
 
Item 4. Submission of Matters to a Vote of Security Holders.
 
No matter was submitted during the quarter   ending September  30,  2008, covered by this report to a vote of the Company’s shareholders, through the solicitation of proxies or otherwise.
 
Item 5. Other Information.
 
 
None
 
 
 
Item 6. Exhibits and Reports of Form 8-K.
 
 
Exhibit 31.1   Sarbanes Oxley Certification
Exhibit 32.1   Sarbanes Oxley Certification
 


SIGNATURES
 
In accordance with the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, in the  State of New York.
 
VGTel, Inc.
/s/ /Ron Kallus
November 12, 2008
 
VGTel, Inc.

 
 Ron Kallus
  
 VGTel, Inc.
 President and Principal Executive Officer
  
     
Date:  November 12,  2008
By:  
/s/ Ron Kallus
   
 
Title:  President and Principal Executive Officer
 
 Ron Kallus
  
 VGTel, Inc.
 Principal Accounting Officer
  
     
Date: November 12,  2008
By:  
/s/ Ron Kallus
   
 
Title, Principal Accounting Officer
 

 


 
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