UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K /A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
December 31, 2007
Date of Report
ALTERNET SYSTEMS,
INC.
(Exact name of Registrant as Specified in its Charter)
| Nevada | 000-31909 | 88-0473897 |
| (State or other jurisdiction | (Commission File Number) | (IRS Employer |
| of incorporation) | Identification No.) |
#610-815 West Hastings Street, Vancouver, BC, V6C
1B4
(Address of Principal Executive Offices)
604-608-2540
(Registrant's Telephone
Number)
Check the appropriate box below if the Form-K filing is intended
to simultaneously satisfy the filing obligations of the
registrant under any
of the following provisions ( see General Instructions A.2 below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230. 425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. 14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))
2
ITEM 1.01 Entry into a Material Definitive Agreement
ITEM 3.02 Unregistered Sale of Equity Securities
On December 31, 2007, Alternet Systems, Inc. (the “Company”) Fabio Alvino, Eduardo & Monica Bello, Henryk Dabrowski, Manfred Koroschetz, New Market Technology, Inc., John Puente, Red Hawke, Inc., Hector Rodriguez (each, a “Transferor” and collectively, the “Transferors”) and TekVoice Communications, Inc. (“TekVoice”)entered into and closed a Stock Acquisition Agreement (the “Agreement”) pursuant to which the Company acquired all of the issued and outstanding shares of capital stock of TekVoice from the Transferors in consideration for an aggregate amount of four million (4,000,000) shares of common stock of the Company (the “Acquisition Shares”). In addition to the Acquisition Shares, the Transferors, in the aggregate, shall be entitled to receive an up to an additional two million (2,000,000) shares of common stock of the Company if TekVoice’s sales for the fiscal year ended December 31, 2008 exceed sales for fiscal year ended December 31, 2007 by twenty percent (20%) (the “Additional Consideration”). In the event the Company is merged with another entity prior to December 31, 2008, the Additional Consideration shall be issued to the Transferors on the day immediately prior to the day that such merger takes place. The Transferors shall be entitled to appoint three (3) members to the Company’s board of directors, effective at the closing, provided, however, in no event shall Transferors be required to appoint a member to the Company’s Board of Directors.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
| AUDITORS OPINIONS |
| CONSOLIDATED BALANCE SHEETS |
| CONSOLIDATED STATEMENT OF OPERATIONS |
| CONSOLIDATED STATEMENT OF CHANGES OF STOCKHOLDERS’ EQUITY |
| CONSOLIDATED STATEMENT OF CASH FLOWS |
| Pollard-Kelley Auditing Services, Inc | |
| Auditing Services | 4500 Rockside Road, Suite 450, Independence, OH 44131 330-864-2265 |
Report of Independent Registered Public Accounting Firm
TekVoice Communications, Inc.
Miami, FL
We have audited the accompanying balance sheets of TekVoice Communications, Inc. as of December 31, 2006 and 2005, and the related statements of income, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conduct our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 5 the Company has not generated significant profits to date. This factor among others raises substantial doubt the Company will be able to continue as a going concern. The Company’s continuation as a going concern depends upon its ability to generate sufficient cash flow to conduct its operations and its ability to obtain additional sources of capital and financing. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans concerning this matter are also discussed in Note 5.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2006 and 2005, and the results of its operations and it cash flows for each of the two years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting standards.
Pollard-Kelley Auditing Services, Inc.
/S/ Pollard-Kelley Auditing Services, Inc.
Independence, Ohio
October 8, 2007
| TekVoice Communications, Inc. |
| BALANCE SHEET |
| December 31, 2006 and December 31, 2005 |
| 2006 | 2005 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 43,761 | $ | 43,468 | ||
| Accounts receivable - net of allowance for | ||||||
| doubtful accounts of $34,500 and 18,000 respectively | 691,534 | 896,729 | ||||
| Total Current Assets | 735,295 | 940,197 | ||||
| Fixed Assets | ||||||
| Equipment | 309,990 | 309,990 | ||||
| Furniture and fixtures | 8,609 | 8,609 | ||||
| Software and licenses | 70,375 | 70,375 | ||||
| 388,974 | 388,974 | |||||
| Less: Accumulated depreciation | (346,109 | ) | (239,614 | ) | ||
| 42,865 | 149,360 | |||||
| Other Assets | ||||||
| Deposits | 4,889 | 9,047 | ||||
| Goodwill | - | 741,000 | ||||
| 4,889 | 750,047 | |||||
| Total Assets | $ | 783,049 | $ | 1,839,604 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current Liabilities | ||||||
| Notes payable | 135,000 | 135,000 | ||||
| Accounts payable | 182,736 | 984,400 | ||||
| Related party payables | 27,215 | 381,019 | ||||
| Accrued taxes | 15,718 | 2,799 | ||||
| Seller notes payable | - | 147,000 | ||||
| Due to shareholders | 80,677 | 106,369 | ||||
| Total Current Liabilities | 441,346 | 1,756,587 | ||||
| Stockholders' Equity | ||||||
| Common stock | 9,051 | 7,248 | ||||
| Additional contributed capital | 3,818,697 | 3,008,500 | ||||
| Retained deficit | (3,486,045 | ) | (2,932,731 | ) | ||
| 341,703 | 83,017 | |||||
| Total Liabilities and Stockholders' Equity | $ | 783,049 | $ | 1,839,604 |
See accompanying notes to financial statements.
| TekVoice Communications, Inc. |
| STATEMENT OF OPERATIONS |
| For the Years Ended December 31, 2006 and 2005 |
| Year to | Year to | |||||
| Date | Date | |||||
| 2006 | 2005 | |||||
| Revenues | $ | 3,344,903 | $ | 1,461,335 | ||
| Cost of Sales | ||||||
| Direct cost of sales | 2,537,097 | 433,420 | ||||
| Gross Profit | 807,806 | 1,027,915 | ||||
| Expenses | ||||||
| Office | 30,408 | 81,489 | ||||
| Bad debts | 55,550 | 41,635 | ||||
| Consulting fees | 328,325 | 1,302,463 | ||||
| Depreciation | 106,495 | 106,495 | ||||
| Interest | 27,127 | 63,346 | ||||
| Marketing | 8,356 | 201,852 | ||||
| Professional fees | 1,434 | 27,761 | ||||
| Rent | 10,000 | 21,050 | ||||
| Salaries | 66,853 | 68,207 | ||||
| Travel | 1,684 | 5,184 | ||||
| 636,232 | 1,919,482 | |||||
| 171,574 | (891,567 | ) | ||||
| Other Income and Expenses | ||||||
| Customer fees | 4,744 | 11,514 | ||||
| Other income | 11,368 | 42,211 | ||||
| Goodwill impairment | 741,000 | - | ||||
| (724,888 | ) | 53,725 | ||||
| Income Before Taxes | (553,314 | ) | (837,842 | ) | ||
| Tax Provision | ||||||
| Tax provisions | - | - | ||||
| Net Loss | $ | (553,314 | ) | $ | (837,842 | ) |
| Loss per share | $ | (0.07 | ) | $ | (0.13 | ) |
| Average shares outstanding | 8,149,490 | 6,287,649 |
See accompanying notes to financial statements.
| TekVoice Communications, Inc. |
| CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY |
| For the Years Ending December 31, 2006 and 2005 |
| Additional | |||||||||||||||
| Common Stock | Contributed | Retained | |||||||||||||
| Shares | Amount | Capital | Deficit | Total | |||||||||||
| Balance January 1, 2005 | 5,326,990 | $ | 5,327 | $ | 2,082,621 | $ | (2,094,889 | ) | $ | (6,941 | ) | ||||
| Share sales | 357,244 | 357 | 172,243 | - | 172,600 | ||||||||||
| Shares for services | 1,138,113 | 1,138 | 548,262 | 549,400 | |||||||||||
| Shares issued in connection | - | - | - | - | - | ||||||||||
| with acquisition | 425,961 | 426 | 205,374 | 205,800 | |||||||||||
| Net Loss | - | - | - | (837,842 | ) | (837,842 | ) | ||||||||
| Balance December 31, 2005 | 7,248,308 | 7,248 | 3,008,500 | (2,932,731 | ) | 83,017 | |||||||||
| Share sales | 594,555 | 595 | 286,675 | - | 287,270 | ||||||||||
| Shares for services | 781,848 | 782 | 376,948 | - | 377,730 | ||||||||||
| Shares issued in connection | - | ||||||||||||||
| with acquisition | 425,961 | 426 | 146,574 | - | 147,000 | ||||||||||
| Net Income | - | - | - | (553,314 | ) | (553,314 | ) | ||||||||
| Balance December 31, 2006 | 9,050,672 | $ | 9,051 | $ | 3,818,697 | $ | (3,486,045 | ) | $ | 341,703 | |||||
See accompanying notes to financial statements.
| TekVoice Communications, Inc. |
| STATEMENT OF CASH FLOWS |
| For the Years Ended December 31, 2006 and 2005 |
| Year to | Year to | |||||
| Date | Date | |||||
| 2006 | 2005 | |||||
| Cash Flows from Operating Activities | ||||||
| Net Loss | $ | (553,314 | ) | $ | (837,842 | ) |
| Adjustments to reconcile net loss to net | ||||||
| cash provided by operating activities | ||||||
| Depreciation and amortization | 106,495 | 106,495 | ||||
| Stock for services | 377,730 | 549,400 | ||||
| Write-off of Goodwill impairment | 741,000 | - | ||||
| Decrease/(Increase) in Accounts receivable | 205,195 | (911,319 | ) | |||
| (Decrease)/Increase in Accounts payable | (801,664 | ) | 637,233 | |||
| (Decrease)/Increase in Related party payables | (353,804 | ) | 239,336 | |||
| Increase in Accrued taxes | 12,919 | (181 | ) | |||
| Increase in Accrued interest | - | - | ||||
| Net Cash (Used) by Operating Activities | (265,443 | ) | (216,878 | ) | ||
| Cash Flows from Investing Activities | ||||||
| Reduction in Deposits | 4,158 | 7,071 | ||||
| Net Cash (Used) by Investing Activities | 4,158 | 7,071 | ||||
| Cash Flows from Financing Activities | ||||||
| (Decrease)/Increase in net Shareholder loans | (25,692 | ) | 24,994 | |||
| Sale of Common stock | 287,270 | 172,600 | ||||
| Cash Flows Provided by Financing Activities | 261,578 | 197,594 | ||||
| Net Increase in Cash and Cash Equivalents | 293 | (12,213 | ) | |||
| Cash and Cash Equivalents - Beginning | 43,468 | 55,681 | ||||
| Cash and Cash Equivalents - Ending | $ | 43,761 | $ | 43,468 |
See accompanying notes to financial statements.
| TekVoice Communications, Inc. |
| NOTES TO FINANCIAL STATEMENTS |
| December 31, 2006 and 2005 |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History:
The Company is a Florida corporation incorporated on May 17, 2002. The Company is a Voice over IP provider primarily in Latin America.
On June 12, 2003 the Company acquired, in an asset purchase agreement, selected assets and assumed selected liabilities of American Telecom Services, Inc. (ATS, Inc) for shares of the Company’s common stock. The purchase resulted in the recognition of $735,000 of goodwill.
In June 2003, the Company acquired, in an asset purchase agreement, selected assets of Catelyst Communications, Inc. for cash. The purchase resulted in the recognition of $6,000 in goodwill.
Revenue Recognition:
Revenues are recognized when title transfers or the services are rendered. Telecommunications services are billed at the end of the month the services are provided, unless the client is prepays the services.
Cash and Cash Equivalents:
For the purposes of the Statement of Cash Flows, the Company considers all short-term debt securities to be cash equivalents.
Cash paid during the year for:
| 2006 | 2005 | |||
| Interest | $27,127 | $63,346 | ||
| Income taxes | $0 | $0 |
Income Taxes:
The Company accounts for income taxes under a method, which requires a company to recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in a company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and tax basis of assets and liabilities using enacted tax rates. The Company presently prepares its tax return on the
| TekVoice Communications, Inc. |
| NOTES TO FINANCIAL STATEMENTS |
| December 31, 2006 and 2005 |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
cash basis and its financial statements on the accrual basis. No deferred tax assets or liabilities have been recognized at this time, since the Company has shown losses for both tax and financial reporting. The Company’s net operating loss carry forward at December 31, 2006 is approximately $2,900,000.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Goodwill:
The net assets of companies acquired in purchase transactions are recorded at fair value at the date of acquisition, as such, the historical cost basis of individual assets and liabilities are adjusted to reflect their fair value. Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level. The impairment test is performed in two phases. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill of the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired; however, if the carrying amount of the reporting unit exceeds its fair value, an additional procedure must be performed. That additional procedure compares the implied fair value of the reporting units’ goodwill with the carrying amount of that goodwill. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. In 2006 management reviewed the Company’s Goodwill for impairment. Management decided that since the Company has suffered losses since inception for both book and tax purposes the Company’s Goodwill was impaired. Accordingly the Goodwill was written off at December 31, 2006.
NOTE 2 - NOTES PAYABLE
The Company has two line of credit arrangements outstanding at December 31, 2006 and 2005. One note is for $85,000 and the second note for $50,000. The terms of the notes are the same. Interest is at 2% above the banks prime rate and is payable monthly. The notes are due on demand and are renewed annually. The $85,000 note is secured by two certificates of deposit, one held by a related company, Optimized Holdings, LLC., a company owned by Mr. Henryk Dabrowski and Mr. Manfred Koroschetz, for $42,500 and one held by Henryk Dabrowski, a shareholder for $42,500. The $50,000 note is secured by a certificate of deposit held by Manfred Koroschetz, a shareholder.
TekVoice Communications, Inc.
| NOTES TO FINANCIAL STATEMENTS |
| December 31, 2006 and 2005 |
NOTE 3 – STOCKHOLDERS’ EQUITY
Common Stock
At December 31, 2006 the Company had 30,000,000 shares authorized common stock with a par value of $0.001 per share. There were 9,050,672 and 7,248,308 shares outstanding at December 31, 2006 and 2005 respectively.
NOTE 4 – RELATED PARTIES
The Company from time to time sells products and services to and purchases products and services form several related Companies. Total sales to these companies for 2006 and 2005 were $000 and $000 respectively. In addition purchases from these related Companies for 2006 and 2005 were $000 and $000 respectively. In addition total receivable from the related Companies at December 31, 2006 and 2006 were 4000 and $000 respectively. Total payable to these related Companies at December 31, 2006 and 2005 were $182,736 and $984,400 respectively.
The Company also owes two officers and shareholders $80,677 and $106,369 at December 31, 2006 and 2005 respectively. These monies represent advances to the Company made from time to time by these officers. The arrangement is non-interest bearing, and unsecured.
NOTE 5 – GOING CONCERN
The Company has only generated profits in 2006. This factor among others raises substantial doubt the Company will be able to continue as a going concern. The Company’s continuation as a going concern depends upon its ability to generate sufficient cash flow to conduct its operations and its ability to obtain additional sources of capital and financing. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.
Managements plans to relieve these problems by continuing to raise working capital either through stock sales or loans.
(b) Pro forma financial information.
| ALTERNET SYSTEMS INC. AND SUBSIDIARIES |
| Pro Forma Consolidated Balance Sheet |
| December 31, 2007 |
| Alternet | TekVoice | |||||||||||
| Systems | Communications | Adjustments | Consolidated | |||||||||
| Inc. | Inc. | |||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash | $ | 41 | $ | 18,563 | $ | - | $ | 18,604 | ||||
| Accounts receivable | - | 430,497 | - | 430,497 | ||||||||
| Prepaid expenses | 1,926 | 10,181 | - | 12,107 | ||||||||
| Total Current Assets | 1,967 | 459,241 | - | 461,208 | ||||||||
| Fixed Assets | ||||||||||||
| Computer and Equipment | 18,735 | 309,990 | - | 328,725 | ||||||||
| Furniture and fixtures | - | 8,609 | - | 8,609 | ||||||||
| Software and licenses | 4,684 | 67,875 | - | 72,559 | ||||||||
| 23,419 | 386,474 | - | 409,893 | |||||||||
| Less: Accumulated depreciation | (15,868 | ) | (386,474 | ) | - | (402,342 | ) | |||||
| 7,551 | - | - | 7,551 | |||||||||
| TOTAL ASSETS | $ | 9,518 | $ | 459,241 | $ | - | $ | 468,759 |
| ALTERNET SYSTEMS INC. AND SUBSIDIARIES |
| Pro Forma Consolidated Balance Sheet |
| December 31, 2007 |
| Alternet | TekVoice | |||||||||||
| Systems | Communications | Adjustments | Combined | |||||||||
| Inc. | Inc. | |||||||||||
| LIABILITIES | ||||||||||||
| Current Liabilities | ||||||||||||
| Note payable | $ | - | $ | 147,000 | $ | - | $ | 147,000 | ||||
| Accounts payable & accrued liabilities | 207,627 | 188,797 | - | 396,424 | ||||||||
| Sales taxes payable | - | 39,261 | - | 39,261 | ||||||||
| Due to related parties | 3,838 | 32,321 | - | 36,159 | ||||||||
| Total Current Liabilities | 211,465 | 407,379 | - | 618,844 | ||||||||
| TOTAL LIABILITIES | 211,465 | 407,379 | - | 618,844 | ||||||||
| STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY) | ||||||||||||
| Capital Stock | ||||||||||||
| Common stock, $0.00001 par value, 100,000,000 shares | 63 | 9,501 | (9,461 | ) | 103 | |||||||
| authorized 10,278,146 (2006 – 4,755,643) issued and outstanding | ||||||||||||
| Additional Paid-In Capital | 5,136,702 | 3,818,696 | (6,929,370 | ) | 2,026,028 | |||||||
| Private Placement Subscriptions | 231,487 | - | - | 231,487 | ||||||||
| Accumulated Other Comprehensive Income (Loss) | 256 | - | 1,398,053 | 1,398,309 | ||||||||
| Deferred Compensation | (29,677 | ) | - | - | (29,677 | ) | ||||||
| Deficit | (5,540,778 | ) | (3,776,335 | ) | 5,540,778 | (3,776,335 | ) | |||||
| TOTAL STOCKHOLDERS' EQUITY | (201,947 | ) | 51,862 | - | (150,085 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 9,518 | $ | 459,241 | $ | - | $ | 468,759 | ||||
| ALTERNET SYSTEMS INC. AND SUBSIDIARIES |
| Pro Forma Statement of Loss |
| For the Year ended December 31, 2007 |
| Alternet | TekVoice | |||||||||||
| Systems | Communications | Adjustments | Combined | |||||||||
| Inc. | Inc. | |||||||||||
| REVENUE | ||||||||||||
| Sales | $ | - | $ | 3,161,118 | $ | - | $ | 3,161,118 | ||||
| Cost of Sales | ||||||||||||
| Direct cost of sales | - | 2,102,176 | - | 2,102,176 | ||||||||
| GROSS PROFIT | - | 1,058,942 | - | 1,058,942 | ||||||||
| OPERATING EXPENSES | ||||||||||||
| Bad Debt | - | 51,683 | - | 51,683 | ||||||||
| Commissions | - | 535,570 | - | 535,570 | ||||||||
| Depreciation and Amortization | 3,074 | 42,250 | - | 45,324 | ||||||||
| Interest | - | 29,095 | - | 29,095 | ||||||||
| Management and Consulting | 283,233 | 746,996 | - | 1,030,229 | ||||||||
| Marketing | 717,895 | 7,419 | - | 725,314 | ||||||||
| Office and General | 35,296 | 20,264 | - | 55,560 | ||||||||
| Professional fees | 77,674 | 17,525 | - | 95,199 | ||||||||
| Rent | 40,089 | 21,600 | - | 61,689 | ||||||||
| Telephone and Utilities | 5,217 | 12,114 | - | 17,331 | ||||||||
| Travel | 4,707 | 14,007 | - | 18,714 | ||||||||
| TOTAL OPERATING EXPENSES | 1,167,185 | 1,498,523 | - | 2,665,708 | ||||||||
| NET LOSS BEFORE OTHER ITEMS | (1,167,185 | ) | (439,581 | ) | - | (1,606,766 | ) | |||||
| Customer fees | - | 4,294 | - | 4,294 | ||||||||
| Other income | - | 144,997 | - | 144,997 | ||||||||
| NET LOSS FOR THE YEAR | $ | (1,167,185 | ) | $ | (290,290 | ) | $ | - | $ | (1,457,475 | ) | |
| BASIC NET LOSS PER SHARE | $ | (0.25 | ) | |||||||||
| WEIGHTED COMMON SHARES OUTSTANDING | 5,738,328 |
Alternet Systems Inc. and Subsidiaries
Pro Forma Footnotes
These proforma consolidated financial statements are based on the unaudited financial statements of Alternet Systems Inc. (“Alternet”) for the year ended December 31, 2007 and the unaudited financial statements of Tekvoice Communications Inc. (“Tekvoice”) for the year ended December 31, 2007, as prepared by management. These proforma consolidated financial statements reflect the reverse takeover as if it had occurred effective December 31, 2007 for the purposes of the balance sheet and as of January 1, 2007 for the purposes of the statement of loss.
The pro forma financial information is not necessarily indicative of what the Registrant’s consolidated results of operations actually would have been had the acquisition been completed as of January 1, 2007. Additionally, the unaudited pro forma financial information does not attempt to project the future results of operations of the Registrant combined with the Tekvoice business. In the opinion of management, all significant adjustments necessary to reflect the effects of the acquisition have been made.
3
(c) Exhibits
| Exhibit Number |
Description |
| 10.1 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| ALTERNET SYSTEMS, INC. | ||
| Dated: March 11, 2008 | By: | /s/ Patrick Fitzsimmons |
| Patrick Fitzsimmons | ||
| Director/Secretary | ||