Interim Agreement dated for reference June 29, 2009 between the Company and Smartlinx VOIP Networks Private Limited

EX-10.2 2 exhibit10-2.htm INTERIM AGREEMENT Filed by sedaredgar.com - Cignus Ventures Inc. - Exhibit 10.2

CIGNUS VENTURES INC.
Suite 410 – 103 East Holly Street, National Bank Building
Bellingham, WA 98225

June 29, 2009

TO: SMARTLINX VOIP NETWORKS PRIVATE LIMITED,
  Attention: Dr. Manohar Loka Reddy and
    Chandra Sekhar Pogula
    (collectively, the “Principal Shareholders”)

Dear Sirs:

Re:

Acquisition by Cignus Ventures Inc. (“Cignus”) of
Smartlinx VOIP Networks Private Limited (“Smartlinx”)

The interim agreement confirms that Cignus wishes to acquire Smartlinx. The purpose of this interim agreement is to set forth basic terms and conditions of such a transaction, not to cover all of the issues related to the transaction. Completion of Cignus’ acquisition of Smartlinx is subject to Cignus completing due diligence of Smartlinx to its satisfaction.

1.

Representations of Smartlinx and the Principal Shareholders. Smartlinx and the Principal Shareholders have represented to Cignus as follows:

     
(a)

Smartlinx is a company incorporated under the laws of India and is in good standing under the laws of its jurisdiction of incorporation;

     
(b)

Smartlinx’s authorized capital consists of 1,500,000 equity shares, with a par value of Rs 10, of which 10,000 equity shares are issued and outstanding. There are no other classes of shares or other securities of Smartlinx outstanding and no person has any option or right to acquire any unissued shares of Smartlinx;

     
(c)

The Principal Shareholders hold 10,000 equity shares representing 100% of the issued and outstanding equity shares of Smartlinx;

     
(d)

All shares of Smartlinx issued and outstanding have been duly and properly issued in compliance with all applicable corporate and securities laws;

     
(e)

Smartlinx’s financial statements for the years ended December 31, 2008 and 2007 and the period from January 1, 2009 to May 31, 2009, as set out under Schedule “A”, present fairly the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of Smartlinx




Cignus Ventures Inc.
June 29, 2009
 

 

as at the date thereof and there has been no material change in the assets and liabilities since that date;

     
  (f)

Smartlinx is engaged in the business of providing Voice-Over Internet Protocol (“VoIP”) services and live, on-line tutoring services through its “Live Tutor” website (the “Business”); and

     
  (g)

Smartlinx owns the technology required for the conduct of the Business, including the “Smartlinx” and “Live Tutor” websites and all trademarks associated with the “Live Tutor” brand names as set out in Schedule “B”.


2.

Representations of Cignus. Cignus represents as follows:

     
(a)

Cignus is a company incorporated under the laws of Nevada and is in good standing under the laws of its jurisdiction of incorporation;

     
(b)

Cignus is a reporting company under the United States Securities Exchange Act of 1934 (the “Act”) and is in good standing with respect to its filings under the Act;

     
(c)

Cignus’ authorized capital consists of 100,000,000 shares of common stock, with a par value of $0.001 per share, of which 16,000,000 shares of common stock are issued and outstanding, and 100,000,000 shares of preferred stock, with a par value of $0.001 per share, of which none are issued and outstanding;

     
(d)

The shares of common stock of Cignus are quoted on the FINRA OTC Bulletin Board; and

     
(e)

There has been no material change in the affairs of Cignus since its most recent filings in Form 10-K and Form 10-Q under the Act, except as may be disclosed in any Form 8-K filed under the Act.

     
3.

Stock Split. Cignus agrees to complete a 2.7-for-1 forward split of its common stock (the “Stock Split”). Upon completion of the Stock Split, it is anticipated Cignus’ authorized capital of common stock will be increased from 100,000,000 shares, with a par value of $0.001 per share, to 270,000,000 shares of common stock, with a par value of $0.001 per share, and the issued and outstanding shares of common stock will be correspondingly increased from 16,000,000 shares to 43,200,000 shares of common stock.

     
4.

Purchase of Smartlinx. We have agreed that Cignus will acquire all of the issued and outstanding shares of Smartlinx (the “Acquisition”). In consideration of Cignus’ acquisition of Smartlinx, the principal stockholder of Cignus, David K.

2



Cignus Ventures Inc.
June 29, 2009
 

Ryan, will transfer all of his shares, being 27,000,000 post-split shares (10,000,000 pre-split shares) of Cignus’ common stock, to the Principal Shareholders.

     
5.

Loan. Cignus agrees to advance $200,000 to Smartlinx upon closing of the acquisition (the “Loan”). Smartlinx agrees that the Loan will be due on demand. If the formal agreement is not entered into as contemplated under paragraph 7 of this Interim Agreement, Smartlinx agrees that the Loan will bear interest at a rate of 6% per annum.

     
6.

Conditions. The obligations of the parties to complete the Acquisition shall be subject to customary conditions including:

     
(a)

All the representatives of the parties shall be true and accurate at closing as if they were made immediately prior to closing;

     
(b)

Smartlinx shall have provided to Cignus prior to or on closing such financial statements as are required by Article 8.01 of Regulation S-X of the United States Securities and Exchange Commission in order to permit Cignus to make the United States Securities and Exchange Commission filings required in respect of the Acquisition; and

     
(c)

Smartlinx shall have provided to Cignus such information as is necessary to satisfy Cignus and its counsel that the Acquisition may be completed in reliance of exemptions from applicable federal and state or foreign securities laws.

     
7.

Formal Agreement. The parties shall take such steps as may be necessary and use their best efforts to prepare and execute a formal agreement as soon as possible, but in any event not later than August 15, 2009. During this period, the parties will cooperate with each other and provide such documentation or information as may be necessary to permit the parties to complete reasonable due diligence with respect to the proposed Acquisition.

     
8.

Full Disclosure. Smartlinx shall disclose to Cignus any and all material adverse conditions or potential adverse conditions currently known about that could affect the business in a negative matter.

     
9.

Exclusivity. In consideration of the undertaking by Cignus of the costs and expenses in conducting due diligence and continuing negotiations, Smartlinx agrees that, during the term of this interim agreement, it will not seek or solicit, or engage anyone to seek or solicit, other suitors for a merger or purchase of Smartlinx, will not make available to other potential suitors information concerning itself, and will maintain confidentiality about the transaction

3



Cignus Ventures Inc.
June 29, 2009
 

contemplated by this interim agreement, except to the extent the disclosure is required by applicable law or is made to advisors on a “need to know” basis.

   
10.

Counterparts. This interim agreement may be executed in one or more counter- parts, each of which so executed shall constitute an original and all of which together shall constitute one and the same interim agreement.

If the foregoing is in accordance with your understanding of the Acquisition, please sign where indicated below and this will serve as an interim agreement to govern our relationship pending completion of a formal agreement.

Yours truly,

CIGNUS VENTURES INC.

Per:     /s/ David K. Ryan

            David K. Ryan, 
            President

Agreed and accepted as of the 10th day of July, 2009.

Smartlinx VOIP Networks Private Limited

Per:    /s/ Dr. Manohar Loka Reddy /s/ Chandra Sekhar Pogula
     
  Dr. Manohar Loka Reddy, Chandra Sekhar Pogula,
  Director Director

\4416\12-Acq of Live Tutor\Interim Agreement.v4.doc

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SCHEDULE “A”

Financial Statements for the years ended December 31, 2008 and 2007
and for the period from January 1, 2009 to May 31, 2009

of

Smartlinx VOIP Networks Private Limited

 

 

1


SMARTLINX VOIPNETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

BALANCE SHEET (FROM JANUARY 2008 TO DEC-2008) - US GAAP

            2008     2007  
      SCHEDULE     Jan08 to Dec08     Jan07 to Dec07  
            Rupees     Rupees  
A SOURCE OF FUNDS                  
  Shareholder's Funds                  
  a) Share Capital   1     100000     100000  
  a) Share Application Money Account         6087000     0  
                     
2 Loan Funds                  
  a) Secured Loans   2     0     0  
  b) Unsecured Loans   3     0     0  
                     
      TOTAL     6187000     100000  
B APPLICATION OF FUNDS                  
                     
1 Fixed Assets                  
  a) Gross Block   4     512575     512575  
  b) Less: Depreciation         105999     27457  
  c) Net Block         406576     485118  
                     
2 Current Asset, Loans and Advances                  
  Cash and Bank Balance   5     283818     267431  
  Loans & Advances   6     378729     204289  
            662547     471720  
  Less: Current Liabilities & Provisions                  
  Current Liabilities   7     5902     4509894  
  Provisions   8     14378     55723  
            20280     4565617  
Net Current Assets         642267     (4093896 )
                     
3 a) Miscellaneous Expenditure   9     844420     16920  
     (to the extent not written off or adjusted)                  
  Profit & Loss Account         4293737     3691858  
                     
      TOTAL     6187000     100000  
                     


SMARTLINX VOIPNETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM JAN-2008 TO DEC-2008 (US GAAP)



2008
Jan08 to Dec08
Rupees
2007
Jan07 to Dec07
Rupees
Sales Accounts        
     Sales & Services   713930   537504
         
Indirect Expenses        
     Advertisement & Publicity Exp 0   207085  
     Audit Fee 11236   0  
     Bank Charges 1520   1105  
     Business Promotions Exp. 0   10000  
     Bandwidth Expenses 0   124189  
     Commission on Voip Resellers 0   83138  
     Computer Maintenance Exp-A/c 2450   7336  
     Deferred Revenue Exp.Written Off 39940   0  
     Depreciation 78542   27457  
     Discount - Voip 200   99933  
     Electrical Maintenance Exp 0   11536  
     FBT Account 11701   1452  
     General Expencess A/c 110   100  
     Inaguration Expenses 0   58117  
     Insurance A/c 3503   0  
     Internet Expenses A/c 10038   14665  
     Legal & Professional Charges 15000   44854  
     Local Conveyance Exp 61436   99537  
     Marketing Expenses 1800   1120  
     Miscellaneous Exp.Written Off 4230   4230  
     Networking Maintenance Expenses 11869   28459  
     P.F.Adminstrative Exp. 5565   8640  
     Postage & Courier A/c 1645   391  
     Professional Tax 2500   5000  
     Printing & Stationery 0   62663  
     Provident Fund 43996   73060  
     Rates & Taxes Fee 12475   14168  
     Salaries 929597   2987741  
     Staff Recruitment & Training Exp A/c 0   17500  
     Staffwelfare Expenses 0   4526  
     Telehpone Expenses 3100.00   22166.00  
     Telephone Expenses (Cell Phone) 59153.00   71813.00  
     Travelling Expenses 4203   42521  
     Voip Talktime Expense 0      
  1315809   4134501
Profit & (Loss) A/c -601879 -3596997


SMARTLINX VOIP NETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

SCHEDULES TO THE BALANCE SHEET

             
    As at     As at  
    2008     2007  
    Rs     Rs  
SCHEDULE - 1            
AUTHORIZED CAPITAL:            
(15,00,000 Equity shares of Rs. 10/- each)   100000     100000  
             
SHARE CAPITAL:            
Issued, subscribed and paid-up Capital            
(10,000 Equity Shares of Rs. 10/- each)   100000     100000  
             
SHARE APPLICATION MONEY :            
Nettlinx Limited   0     0  
             
SCHEDULE - 2            
SECURED LOANS            
    0     0  
SCHEDULE - 3            
UNSECURED LOANS   0     0  
             
    0     0  
             
SCHEDULE - 5            
CASH AND BANK BALANCES            
Cash in Hand   125332     100525  
Bank balance   158486     166906  
    2,83,818     2,67,431  
             
SCHEDULE - 6            
LOANS AND ADVANCES            
Loans & Advances   132230     124897  
Sundry Debtors   243995.52     79392  
Prepaid Insurance   2503     0  
    378729     204289  
             
SCHEDULE - 7            
CURRENT LIABILITIES            
Sundry Creditors & Other payables   57669     1312686  
Nettlinx Limited   4247928     3197208  
    4305597     4509894  
SCHEDULE - 8            
PROVISIONS   14378     55723  
             
             
             
             
    0     0  
             
SCHEDULE - 9            
MISC. EXPENSES            
Deferred Revenue Expenditure            
    831730        
Preliminary Expenses            
    12690     16920  
             
    844420     16920  

For SMARTLINX VOIP NETWORKS PRIVATE LIMITED
   
   
   
(MANOHAR LOKA REDDY) (POGULA CHANDRA SEKHAR)
Director  
Place: Hyderabad  
Date :  


SMARTLINX VOIPNETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

BALANCE SHEET (FROM JANUARY 2009 TO MAY 2009) - US GAAP

            2009     2008  
      SCHEDULE     Jan09 to May 09     Jan08 to Dec08  
            Rupees     Rupees  
A SOURCE OF FUNDS                  
1 Shareholder's Funds                  
  a) Share Capital   1     100000     100000  
  a) Share Application Money Account         7179000     6087000  
                     
2 Loan Funds                  
  a) Secured Loans   2     0     0  
  b) Unsecured Loans   3     0     0  
                     
      TOTAL     7279000     6187000  
B APPLICATION OF FUNDS                  
                     
1 Fixed Assets                  
  a) Gross Block   4     687511     512575  
  b) Less: Depreciation         146680     105999  
  c) Net Block         540831     406576  
                     
2 Current Asset, Loans and Advances                  
  Cash and Bank Balance   5     220535     283818  
  Loans & Advances   6     1863374     378729  
            2083908     662547  
Less: Current Liabilities & Provisions                  
  Current Liabilities   7     721586     5902  
  Provisions   8     16196     14378  
            737782     20280  
  Net Current Assets         1346126     642267  
                     
3 a) Miscellaneous Expenditure   9     1248045     844420  
     (to the extent not written off or adjusted)                  
  Profit & Loss Account         4143998     4293737  
                     
      TOTAL     7279000     6187000  
                     
                     
                     
                     
            0     0  


SMARTLINX VOIPNETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM JAN-2009 TO MAY-2009 (US GAAP) SEGMENT WISE

   VOIP SERVICES LIVE TUTOR SERVICES  


2009
Jan09 to May 09
Rupees
2009
Jan09 to May 09
Rupees


Sales Accounts          
       Sales & Services 1185684 0  
           
Indirect Expenses          
       Advertisement & Publicity Exp 0.00   3062    
       Bank Charges 33388.17        
       Business Promotions Exp. 0.00   19000    
       Computer Maintenance Exp-A/c 0.00   170    
       Deferred Revenue Exp.Written Off 93335.00        
       Depreciation 40681.00        
       General Expencess A/c 850.00   22834    
       Internet Expenses A/c 1923.00        
       Legal & Professional Charges 5000.00   35946    
       Local Conveyance Exp 57727.00   1000    
       Miscellaneous Exp.Written Off 2115.00        
       Office Maintenance 0.00   10203    
       P.F.Adminstrative Exp. 2359.00        
       Pooja Expenses 0.00   501    
       Postage & Courier A/c 255.00        
       Printing & Stationery 0.00   197109    
       Provident Fund 11709.35   5879    
       Rates & Taxes Fee 644.00   9900    
       Salaries 646263.81   194093    
       Staffwelfare Expenses 7001.00   592    
       Telehpone Expenses 3598.00   9985    
       Telephone Expenses (Cell Phone) 9477.00   16216    
       Travelling Expenses 19803.00   68620.00    
       Tutors Fess 0.00   3780.00    
           
    936129    
       Deferred Revenue Expenditure Total     598890  
           
       Deferred Revenue Exp.Written Off     99815   
           
Profit & (Loss) A/c 249555 -99815 149740


SMARTLINX VOIPNETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM JAN-2009 TO MAY-2009 (US GAAP)



2009
Jan09 to May 09
Rupees
2008
Jan08 to Dec08
Rupees
Sales Accounts        
     Sales & Services   1185684   713930
         
Indirect Expenses        
     Audit Fee 0.00   11236  
     Bank Charges 33388.17   1520  
     Computer Maintenance Exp-A/c 0.00   2450  
     Deferred Revenue Exp.Written Off 193150.00   39940  
     Depreciation 40681.00   78542  
     Discount - Voip 0.00   200  
     FBT Account 0.00   11701  
     General Expencess A/c 850.00   110  
     Insurance A/c 0.00   3503  
     Internet Expenses A/c 1923.00   10038  
     Legal & Professional Charges 5000.00   15000  
     Local Conveyance Exp 57727.00   61436  
     Marketing Expenses 0.00   1800  
     Miscellaneous Exp.Written Off 2115.00   4230  
     Networking Maintenance Expenses 0.00   11869  
     P.F.Adminstrative Exp. 2359.00   5565  
     Postage & Courier A/c 255.00   1645  
     Professional Tax 0.00   2500  
     Provident Fund 11709.35   43996  
     Rates & Taxes Fee 644.00   12475  
     Salaries 646263.81   929597  
     Staffwelfare Expenses 7001.00   0  
     Telehpone Expenses 3598.00   3100.00  
     Telephone Expenses (Cell Phone) 9477.00   59153.00  
     Travelling Expenses 19803.00 1035944 4203 1315809
         
Profit & (Loss) A/c   149740   -601879


SMARTLINX VOIP NETWORKS PRIVATE LIMITED
5-9-22, 3rd Floor, My Home Sarovar Plaza, Secretariat Road, Saifabad
Hyderabad - 500 063

SCHEDULES TO THE BALANCE SHEET

                   
          As at     As at  
          31st March 2009     31st March 2008  
          Rs     Rs  
SCHEDULE - 1                  
AUTHORIZED CAPITAL:                  
(15,00,000 Equity shares of Rs. 10/- each)         15000000     100000  
                   
SHARE CAPITAL:                  
Issued, subscribed and paid-up Capital                  
(10,000 Equity Shares of Rs. 10/- each)         100000     100000  
                   
SHARE APPLICATION MONEY :                  
Nettlinx Limited         7179000     0  
                   
SCHEDULE - 2                  
SECURED LOANS                  
          0     0  
SCHEDULE - 3                  
UNSECURED LOANS         0     0  
                   
          0     0  
                   
SCHEDULE - 5                  
CASH AND BANK BALANCES                  
Cash in Hand         120730     125332  
Bank balance         99805     158486  
          2,20,535     2,83,818  
                   
SCHEDULE - 6                  
LOANS AND ADVANCES                  
Loans & Advances         638564     132230  
Sundry Debtors         1222307     243995.52  
Prepaid Insurance         2503     2503  
          1863374     378729  
                   
SCHEDULE - 7                  
CURRENT LIABILITIES                  
Sundry Creditors & Other payables         107153     57669  
Sundry debtors Cr balances         0     0  
Nettlinx Limited         614433     4247928  
          721586     4305597  
SCHEDULE - 8                  
PROVISIONS         16196     14378  
                   
                   
                   
                   
          0     0  
                   
SCHEDULE - 9                  
MISC. EXPENSES                  
Deferred Revenue Expenditure   12690.00              
Less: Deferred Revenue Exp.Written Off   -2115.00     10575.00     831730  
Preliminary Expenses   1430620.00              
Less: Written off   -193150.00     1237470.00     12690  
                   
          1248045     844420  

For SMARTLINX VOIP NETWORKS PRIVATE LIMITED
   
   
   
(MANOHAR LOKA REDDY) (POGULA CHANDRA SEKHAR)
Director  
Place: Hyderabad  
Date :  


SCHEDULE “B”

Trademark Applications of Smartlinx

Trade Mark Application Jurisdiction(s) Application Number
Live Tutor India 1745989

 

Websites of Smartlinx

Website Address
http://smartlinx.co.in
http://bsnl.livetutor.in

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