UNITED
STATES
   SECURITIES
AND EXCHANGE COMMISSION
  Washington,
D.C. 20549
   FORM
10-K
 
      [X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
   For the
fiscal year ended: March 31, 2009
  [ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) F THE SECURITIES EXCHANGE
ACT
   For the
transition period from __________ to ___________
 
  Commission
file number: 000-52983
     (Name of
small business issuer as specified in its charter)
    
   New
      York
              4814
              01-0671426State
      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
  
 Securities
registered pursuant to Section 12(b) of the Exchange Act:
 None
 
 Securities
registered pursuant to Section 12(g) of the Exchange Act:
 Common
Shares par value  $.0001 per share
 
   Common
Stock, $0.0001 par value per share
  Title
      of class
              
              Name
      of each exchange on which registeredCommon
      Stock. $0.001 par value per share
              
              None
  Securities
registered pursuant to Section 12(g) of the Act:
 None
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
405 of the Securities Act.    Yes o  
No x
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange
Act.    Yes x   No o
 
  Indicate
by check mark whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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 o
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.    o
 
 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 o
              
              Accelerated
      filer oNon-accelerated
      filer o
                (Do
      not check if smaller reporting company)
              
              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 xNo o
  The
aggregate market value of the voting and non-voting common equity held by
non-affiliates was $16,000 based on the current bid price of $0.02 per share as
quoted on the OTC Bulletin Board as of June 10, 2009
 As of
June 10, 2009, the Registrant had outstanding 6,433,900 shares of Common Stock
with a par value of $0.0001 per share.
  
 
 INDEX
 PAGE
      NOPART IITEM 1
                BUSINESS
                2ITEM 1A
                RISK
      FACTORS
                7ITEM 2
                PROPERTIES
                12ITEM 3
                LEGAL
      PROCEEDINGS
                12ITEM 4
                SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                12PART IIITEM 5
                MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS
                12ITEM 6
                SELECTED
      FINANCIAL DATA
                13ITEM 7
                MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                13ITEM 7A
                QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                18ITEM 8
                FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                F-1ITEM 9
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                18ITEM 9A(T)
                CONTROLS
      AND PROCEDURES
                18ITEM 9B
                OTHER
      INFORMATION
                18PART IIIITEM 10
                DIRECTORS
      AND EXECUTIVE OFFICERS
                19ITEM 11
                EXECUTIVE
      COMPENSATION
                20ITEM 12
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                21ITEM 13
                CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS,
                22ITEM 14
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                22PART IVITEM 15
                EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
                23SIGNATURES
                24
  
  PART
I
   Item
1: Description of Business
   We are a
development stage company currently testing a newly developed telemarketing
campaign product called Global Messaging Gateway (GMG). This product is designed
to enable a single User of the System to set up a telemarketing campaign to
distribute messages to bulk lists of recipients in the medium of text, voice,
Fax or multimedia. Messages can be delivered from one control center (one
location) to thousands of clients anywhere in the world simultaneously using the
internet instead of traditional telephone equipment.
  The GMG
system is a cost effective alternative to the current traditional telemarketing
campaign products that distinguishes itself in several ways, including, fixed
equipment costs, per message usage costs, and personnel costs to drive the
campaign. The current traditional telemarketing tools functions on actual
special call-center equipment, with human agents behind each call, which sets
the cost per call to a significantly higher level than the cost associated with
the same call using the GMG product. The GMG product utilizes the internet
instead of physical phone lines and several concurrent campaigns can be
administered by a single user.
  In order
to send the Voice messages to the destinations over the internet, we use the
Voice Over Internet Protocol (VOIP) technology, which allows us to stream the
voice message on the internet, in a similar way it is done over the regular
phone line. The main difference is that the voice is being converted from analog
signal to digital, and compressed in order to use as little space as possible on
the internet. We don’t provide VOIP services; we are using VOIP technology to
transmit the voice messages on the internet network.
  The GMG
System's cost structure allows a User to initiate and control such a campaign
from the Company's website at www.vgtel.com  in which we charge the
customer only for completed calls at a very attractive rate. As an example, we
plan to charge for a US domestic call $0.03 this charge includes the dialing and
delivering the message. We do not charge for line or equipment
charges.
   The
actual dialing servers are located in different parts of the country, allowing
off-loading the physical phone infrastructure preventing possible congestion, or
power interruption which can interfere with any running telemarketing
campaign.
  The chart
below illustrates the cost comparisons between (1) Call Centers using
traditional telemarketing equipment based on report published by Beagle Research
Group, LLC March 2006 (2) Call Centers using first generation VOIP products,
based on report published in Business Communications Review November 2006. and
(3) Our GMG product. See footnotes below:
  500
      lines system
              Traditional
                Call
      Center1
              Existing
      VOIP
                Telemarketing
      Tools
                Cisco
      Enterprise2
              GMG
      (5)
                SystemEquipment
              Call
      Center System,
                Client
      License
              $1500
      per Agent
                $750,000
              $865
      per Agent
                $432,500
              NoneBase
                Contact
                Center
              One
      time cost for CRM licensing for
                concurrent
      operation
              $600
      per Line
                $300,000
              $1,100
      per Line
                $550,000
              NoneMonthly
                Fixed
      Costs
              Leased
      from Service providers
              $500
      per T1
                $10,000
              $100
      per Mb
                $1,700
              NoneCalls
              Charge
      per Min.
              $0.05
              $0.05
              $0.03
  1Zachary A. Barnes, Bowie State
University Maryland In Europe May 2005 in article entitled: Is Implemetation Of
Voice Over Internet Protocol (Voip) More Economical For Businesses With Large
Call Centers. Verizon Cost of each line is $26.00. Toll free number is $5.00.
According to  www.vonage.com  for small businesses the
following is a break down of monthly recurring costs. First line is $49.99. Each
additional line is $44.99. Toll free number is $5.00.
  2 Small Footprint, Big
Results, The advantages
of on-demand call centers — things your on-premise call center supplier never
told you, and probably won’t, Published by Beagle Research Group, LLC March
2006, Table 6 Page 11 “200 user premises based call center cost
breakdown”
  3 IP Contact Centers Go Beyond
The Basics: Published in Business Communications Review November 2006. Article
authored by Michael B. Hommer, Robert Smithers. Table 2 Page 6 "Pricing of key
components".
  4 Zachary A. Barnes Bowie State
University Maryland In Europe May 2005 in article entitled Is Implemetation Of
Voice Over Internet Protocol (Voip) More Economical For Businesses With Large
Call Centers? Barnes states VoIP service can save a significant amount of money
by reducing infrastructure and monthly maintenance expenses as well as providing
telephone service at significantly lower rates. From the data analyzed a company
could save 76.2% on their outbound calling expenses by using VoIP
technology.
  5 The
only charge that we plan to charge direct users of our system is $0.03 per
successful US domestic call which includes placing the call and delivering the
message. No additional fees will be charged. Since Platin, our only customer
presently, is currently testing our system for their clients and providing us
with helpful feedback to improve our system, we have agreed to a special
arrangement during the testing and feedback phase in which we charge Platin a
monthly per line cost of $3.0 plus a usage fee of $0.012 per min for each
successful call delivered.
  The
Global Messaging Gateway (GMG) is currently the first and only product of the
Company. The Company launched its website in January 2006 at its domain
location, www.vgtel.com and currently has one client who is using the GMG system
for telemarketing campaigns. We have not recognized any significant revenues
from this product to date and we are negotiating additional contracts for our
services with other clients.
   2
 
  
 
 Our Products and Services:
 GMG
Commercial Telemarketing Services:
  In June
2008 our website was upgraded to allow Multilanguage support, currently it
support English and Hebrew, while Russian will be the next language to be
supported.    During this testing phase, our development
team continues to add features, fix problems and integrate new customers
driven ideas. Each new feature is being integrated into the commercial operating
environment and gets tested immediately under real commercial
conditions.
  Our only
current customer is Platin Ltd. located in Israel. Platin is a Public Relations
(PR) company which handles many clients, from various market segments mostly
located in the State of Israel. Their largest clients that make use of our
telemarketing services are supermarkets, Credit cards providers, Non-Profit
Charity organizations, and Pets’ food suppliers. We provide our services to
Platin, and although the campaigns are being conducted for Platin's clients, we
only have a direct relationship with Platin who subcontracts our services for
use by their clients. We do not have any relationship with their clients who are
using our system. Therefore Platin is our only client to date and Platin and
their clients are located in the State of Israel. Consequently, we are currently
only doing business in Israel.
  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.
  The
telemarketing activity generated from Platin's clients is administered by Platin
on behalf of their clientele, consisting of providers of products and services
and is used for the purpose of announcing, exposing, alerting and informing
prospective consumers to their products and services including discounts, sales,
promotions and special deals. Platin is also using our GMG system on behalf of
their political clients to conduct campaigns for political candidates in the
State of Israel.
  We
currently depend on Platin, Israel for our total revenues.   We
believe they will remain our only client until the GMG product is further
developed and refined and ready to serve many clients.   We started
negotiating with other companies in Kazakhstan, Turkey and
Romania.
 
 .GMG Alert Notification
Services.
   We identified
four possible types of alert notification areas that our GMG system will be
capable of accommodating:
  a.
                Weather:
      The service can be used by counties and other local organizations to alert
      residents on evacuation requirement and traffic
  directions.
   b.
                Terror:
      This service can be used by Homeland security and similar organizations to
      address residents in specific areas to stay away from a suspected terror
      threat.
   c.
                Industrial:
      Any large processing plant (Chemical, Nuclear, and Refinery) can use the
      service to alert residents around the plant of any event which might cause
      harm to their life or property.
   In
parallel with the on going testing and development effort for our GMG
telemarketing campaign product, which is currently being used by Platin, we
recently undertook the initiative to begin developing a set of Web Services
API’s (Application Processing Interface) allowing CRM (Customer Relations
Management) systems to use the GMG services without any manual intervention.
This will open our services to many clients who currently have limited
communications with their customers because the need to manually make the actual
calls and follow-ups.
  GMG
Global Franchise Partners:
  We plan
to establish global partners to operate franchises of our GMG system. The global
target market consists of many countries each has its own regulations and local
methods of operating their businesses. Our goal is to establish 4 franchises
within 18 months, and thereafter slowly build additional franchises. Using our
personal and commercial network we have identified and contacted specific
entities in the following countries:   Kazakhstan, Turkey, Romania ,
Israel, and Russia.   Each one of them expressed an interest in using
the GMG system for their clients. All of these are small to medium companies
which currently use traditional PSTN which stands for Public Switched Telephone
Network. It is the same thing as POTS (Plain Old Telephone System) and is simply
the worldwide telephone network referring to the old phone system which uses
analog data. In contrast, VoIP uses digital data. Due to competition, most of
them cannot raise the price for the services, and looking to lower the cost to
stay in business. The GMG system provides this opportunity with no upfront
investment.
  The
Company plans to have the domestic market handled directly through its own
office, while each of the foreign operations will be run by a local franchiser
under its general framework.
  Although
we are in discussions with certain entities regarding our franchise opportunity,
to date we have not entered into any franchising contracts with any of these
entities. Nor have we decided on the terms of each contract which will be
determined in accordance with the demand of our GMG system.   We
expect that it will take one year for each franchise to get itself
established.
    
 3
  Phase
II
  VGTel’s
Products & Services:
  Depending
on our ability to raise additional funds, we anticipate our Phase II of our
Products and Services will be implemented in 2009-2010.
  Having
built the VOIP based server, and the application builder tool, the Company will
offer a variety of additional services such as:
  1.Tele-Shir
  The
service enables customers to select a greetings occasion, and choose, from a
list of played tunes, the one he would like to be sent. Then the system allows
the customer to record his own greetings, set time+date and a phone number to
dial. All the information is stored in a data base, and retrieved on time to be
routed to the desired destination.The system support tunes for the following
occasions:
 ·
                General
      Salutations Get well
 ·
                Greeting
      to a loved one (Male or Female)
 ·
                Holiday
      greetings
 ·
                Birthday
 ·
                Wedding
 ·
                Popular
      Songs
 ·
                Patriotic
      Songs
  2.Dating Service
  This is a
platform for single people to find a matching date. Each subscriber will receive
a mailbox in which he describes himself, indicating his preferences, and get
permission to listen to other mail-boxes according to his specific interest.
Once he finds an interesting match, he can contact this person directly to
schedule a date.  There are many options for subscribing to the service,
and all rendered services are prepaid using credit cards.
  3. 
 Fund
Raising
  This is a
complete telemarketing support tool, to help candidates who are running for any
elective position, to gather public awareness and support for their
candidacy.
   The
Market for our Products & Services:
  Our
target market consists of businesses, non-profit organizations, and political
organizations which employ call centers, including telemarketing firms, and any
person or entity who seeks to reach out to sizable audiences, quickly,
efficiently utilizing the most cost effective approach via voice or
fax.
  The VGTel
system is configured to achieve global coverage using the internet as its core
infrastructure facility which is easy to reach from almost any place, and free
from most regulatory agencies that regulate the use of the standard telephone
facilities. The primary products sold by VGTel consist of the capability to
disseminate Voice, Text, Fax, Multimedia, messages to a vast number of clients
simultaneously at a fraction of the cost of traditional mass marketing
campaigns.
  In
today’s information driven society, where most people don’t have to be at home
or in their office to be reached, and have less and less time to devote for any
one interesting issue, the short, direct to the point marketing message, will be
the best way to attract the attention of any potential global customer. The
immediate and direct way to convey commercial information to the end user via
telecommunications means dramatically increases the use of telemarketing as the
main tool to raise the awareness and promoting products and
services.
  This is a
significant market which will dramatically grow when the Chinese and Indian
economies start targeting their domestic market with middle class consumer
products.
  The
growing numbers of communities which are threatened by natural or man-made
disasters, along with the availability of more sophisticated early warning
sensors, create a significant demand for a method to convey warnings and alert
notices to the affected neighborhoods in a timely manner in order to enable an
orderly, and safe evacuation.
  Many
Governments, States, Counties, Cities, and commercial plants spend millions of
dollars to maintain early-warning calling systems to support their
constituencies. The VGTel system provides an efficient and cost effective
alternative over new and existing systems in which a substantial portion of the
costs associated with maintaining the system capabilities is currently
being spent on leasing/renting phone lines from the local telecom
providers.
  Additional
market segments which we plan to target, are businesses or organizations having
a need to provide information to their respective group members as
follows:
   Business
Non-Profit Education
  Business
                Non-Profit
                EducationCorporate
                Church
                CampsUtilities
                Clubs
                ScoutsTemp
      Help
                Synagogues
                UniversitiesRetail
                Home
      Owner's Assoc.
                SchoolsService
      Providers
                Neighborhood
                Day-CareHospitals
                Political-Elections
  
   4
  2.
Distribution Methods of the Products or Services.
  Our only
current customer is Platin Ltd. located in Israel. Platin is a Public Relations
(PR) company which handles many clients, from various market segments mostly
located in the State of Israel. Their largest clients that make use of our
telemarketing services are supermarkets, Credit cards providers, Non-Profit
Charity organizations, and Pets’ food suppliers.
  Our
objective is to develop multiple markets for our products and services. We plan
to implement a marketing plan to enable us to attract Users to our GMG
System.
   Our
Marketing Plan:
  Our
target market consists of supermarkets, discount chains, vendors of services,
real estate brokers, political candidates, organizations, social planners,
schools, municipalities, and other providers of alerts, messages, telemarketing,
warnings, etc.
  We
plan to compile lists of targets consisting of:
 ·
                Political
      parties for national, and local offices of
  government
 ·
                Schools
      Charity collecting organizations
 ·
                Providers
      of products such as supermarkets, chain
stores,
 ·
                Public
      Relations Companies on behalf of their clients Companies currently using
      telemarketing campaign products
 ·
                Companies
      currently providing telemarketing campaign
  products.
 
  Beginning
in December 2009, we plan to announce our services using our GMG system to the
aforementioned targets in the US, Canada and Israel. We plan to target customers
that will use our system to support their already established clients who will
provide us with a quicker market penetration. Additionally we plan to target
direct users of our system to use the system for their own
purposes.
  In
General, we plan to charge a lower rate for our services to wholesale providers
who will use our system for their clients. We plan to charge a higher rate for
direct clients who are direct users of our system. As of this date, we have not
yet determined the actual fee structure that we will charge, as we believe it
will determined in accordance with the market and what our clients will be
willing to pay.
  In
February 2009 we started negotiating contracts with principals of
the few franchised locations as detailed above under the sub-heading
"Global Franchise Partners", which represent different market opportunities,
providing the best learning ground for future expansion of the business. 
We have not signed any definitive agreements to date.
 
  3.
Status of any publicly announced new Product or Service.
  No new
product has recently been publicly announced.
   4.
Competition: business conditions, competitors, and methods of
competition.
  Management
is not aware of any other internet based call-center with similar technology. We
believe the uniqueness of this service positions VGTel to an excellent starting
point in becoming a leading global service provider of a powerful Web-based
marketing tool. We anticipate that the cost effectiveness, ease of use, coupled
with unlimited capacity will make GMG a popular tool within a short period of
time.
  We have
applied for a provisional patent on the core software engine which runs the
business process of the VGTel System and platform, and plan to embark on a PR
offensive to establish our name in the minds of entities operating in our target
industry. We anticipate that being first to present this concept will give us an
advantage over competitors who have not yet begun to exploit this market. We do
anticipate that we will nonetheless face extensive competition from a variety of
internet providers and from traditional telemarketing organizations as well. In
addition, nearly all established firms that choose to compete with us will have
greater brand recognition, longer operating histories, larger customer bases and
significantly greater financial, marketing and other resources than we will
have. New technologies and the continued enhancement of existing technologies
may also increase competitive pressures upon us.
    5
 
 5.
Sources and Availability of raw materials and the names of principal
suppliers.
  The
Company does not use raw materials in its products and services.
  The
Company has entered into various relationships with third party vendors. (See
Management Discussion & Analysis, under the sub heading Contracts,
Agreements and Relationships).
  6.
Dependence on one or a few customers.
  Our only
current customer is Platin Ltd. located in Israel. Platin is a Public Relations
(PR) company which handles many clients, from various market segments mostly
located in the State of Israel. Their largest clients that make use of our
telemarketing services are supermarkets, Credit cards providers, Non-Profit
Charity organizations, and Pets’ food suppliers. The telemarketing activity
generated from Platin's clients is administered by Platin on behalf of their
clientele, consisting of providers of products and services and is used for the
purpose of announcing, exposing, alerting and informing prospective consumers to
their products and services including discounts, sales, promotions and special
deals. Platin is also using our GMG system on behalf of their political clients
to conduct campaigns for political candidates in the State of Israel. We provide
our services to Platin, and although the campaigns are being conducted for
Platin's clients, we only have a direct relationship with Platin who
subcontracts our services for use by their clients. We do not have any
relationship with their clients who are using our system. Therefore Platin is
our only client to date. On January 15, 2006, Platin engaged our services for
the upcoming election in Israel which was scheduled for March 28, 2006. Platin
has been using our System for both political campaigns and for commercial
telemarketing services they provide to a variety of their clients every
since.
  We
currently depend on Platin, Israel for our total revenues. We believe they will
remain our only client until the GMG product is further developed and refined
and ready to serve many clients. We anticipate that we will reach this stage
in September 2009, when we will slowly start adding a few additional
customers. We believe that by December 2009 our product will be well enough
refined and developed with many additional features and capabilities and will be
ready to serve unlimited number of customers requiring telemarketing
services.
  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.
  The
Company budgeted $5,000 for marketing in the next 12 months which will be used
primarily to purchase mailing list of entities in various industries which the
Company plans to target. The Company plans to use its GMG System to broadcast to
selected target lists information about our services in hope of attracting users
to the GMG System.
  The
Company objective is to have a diversified clientele in many sectors across a
broad range of industries and in various geographical locations. We will need to
raise substantial funds to enable us to aggressively market our product through
public relations firms and massive advertising. There is no assurance we will be
successful in raising additional funds.
   7.
Patents, trademarks, licenses, franchises, concessions, royalty agreements, or
labor contracts, including their duration.
   The
Company has applied for a Provisional Patent on its core technology
process.
  Provisional
Patent preserves the rights to apply for a regular patent within 12 months,
while recognizing the application’s date to the date in which the provisional
patent application was submitted. Thus, we will get a priority on any one who
will apply for a similar patent during this year. Failure to file for the full
patent protection within the one year period terminates the priority rights
acquired through the provisional patent application. The cost of applying for a
full patent is approximately $3,500. Filing for a full patent does not insure
that a patent will be granted.  The Company has not filed for a full
patent; consequently the provisional patent has expired.   The Company
plans to file for a full patent when it is successful in raising additional
funds.
   8.
The need for government approval of principal products or services.
  Our
business is subject, to privacy laws and regulations enacted in the United
States and other jurisdictions around the world that govern the collection and
use of personal data of our customers and our ability to contact our customers
and prospective customers, including through telephone or facsimile. We are
subject to U.S. federal privacy regulation, including the federal Telemarketing
Sales Rule with its “do not call” and “do not fax” provisions, and state privacy
regulations. Many states have laws and regulations regarding telemarketing laws,
telephone solicitation laws, including “do not call” and “do not fax”
regulations. Our Service Agreements with our clients require our clients to
comply with all relevant privacy and telemarketing sales rules and further
require they indemnify us against any regulatory actions caused by their breach
of these laws. Additionally we require for our clients using our GMG product for
telemarketing campaigns to provide us the recipient list for pre-screening to
identify prospective recipients whose name appear on the "do not call" and "do
not fax" list which we automatically delete. Violations of certain provisions of
these laws by our clients will also limit our ability to accept certain clients
for our services. Additionally, the United States and other jurisdictions are in
the process of considering passing additional laws and regulations to protect
the privacy of customers and prospective customers. In light of these and any
future laws and regulations, there can be no assurance that we will be able to
continue to market our services efficiently.
   6
  9.Technology:
  We use
commercially available software, as well as our own developed proprietary
software. Our systems combine our proprietary technologies and commercially
available, licensed technologies. Our current strategy is to license
commercially available technology to augment internally developed solutions. Our
Internet content delivery will be provided by a variety of servers.
  10.Employees:
  The
business of VGTel, Inc. is managed by Mr. Kallus, our CEO. Our future success
depends in large part upon our ability to attract and retain highly qualified
employees. Competition for such personnel is intense, and there can be no
assurance that we will be able to retain our senior management or other key
employees or that we will be able to attract and retain additional qualified
personnel in the future.
 
 Risk
Factors
  An
investment in our common stock involves a number of very significant risks. You
should carefully consider the following risks and uncertainties in addition to
other information in this prospectus in evaluating our Company and its business
before purchasing shares of our Common Stock. Our business, operating results
and financial condition could be seriously harmed due to any of the following
risks. The risks described below are all of the material risks that we are
currently aware of that are facing our Company. You could lose all or part of
your investment due to any of these risks. You should therefore not invest in
our securities unless you are prepared to lose your entire
investment.
   RISKS
RELATED TO OUR BUSINESS
  1.
WE HAVE A LIMITED OPERATING HISTORY ON WHICH YOU CAN BASE YOUR EVALUATION OF OUR
PEFORMANCE. WE ARE CURRENTLY TESTING OUR ONLY PRODUCT WITH ONE COMMERCIAL CLIENT
WHO IS USING OUR SYSTEM ON A MINIMAL BASIS GENERATING MINIMAL REVENUES. THERE IS
NO SUFFICIENT VOLUME OF MESSAGES BEING PROCESSED TO DETERMINE THE FULL
FUCTIONALITY OF THE SYSTEM. WE CURRENTLY HAVE NO CONTRACTS FOR OUR
SERVICES. IT IS HIGHLY LIKELY THAT OUR GMG SYSTEM MAY FAIL TO BE A VIABLE
SOLUTION TO TRADITIONAL TELEMARKETING PRODUCTS AND MAY FAIL TO ATTRACT
CUSTOMERS, IN WHICH CASE OUR BUSINESS WILL FAIL.
  We are a
development stage company with minimal operating history. On January 18, 2006
the Company purchased a newly developed telemarketing campaign product called
"Group Messaging Gateway" (GMG) which the Company is currently testing with one
commercial client who is using our system minimally. This client is Platin Ltd.,
and 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. There is insufficient volume of messages
currently being processed to enable us to determine the systems functionability
with a normal commercial load. The Global Messaging Gateway (GMG) is currently
the first and only product of the Company. We have not yet recognized any
significant revenues from this product. We have not entered into any contracts
for our services with clients. As a result, the product has not yet undergone
rigorous testing by many clients. There is no assurance that the GMG product
will become a viable alternative to replace the traditional telemarketing
campaign products.
  Furthermore,
the product is new to the market and the likelihood of our success must be
considered in light of the problems, expenses, difficulties, complications and
delays frequently encountered by a small developing company starting a new
business enterprise and the highly competitive environment in which we will
operate. Since we have a very limited operating history of marketing our
services to the public over the Internet, we cannot assure you that our business
will be profitable or that we will ever generate sufficient revenues to meet our
expenses and support our anticipated activities.
  If we do
not effectively manage these risks, we will go out of business. To address these
risks, we must, among other things:
  ·
                  Increase
      the number of messages being tested by expanding the messages of our only
      customer Platin, or by attracting additional customers willing to test our
      system with their clients.
  ·
                  Continue
      to develop the GMG in accordance to feedback we receive from testing
      customer.
   ·
                  Provide
      superior customer service;
   ·
                  Maintaining
      competitive pricing
   ·
                  Continue
      to develop the products in accordance to our customers
    needs.
   Develop
      a clientele for our products
  There are
many challenges we will face in addressing these risks which highlights the high
degree or risk for investors who purchase our securities in this offering. If
our GMG product does not gain market acceptance by many clients, or overall we
are unsuccessful in implementing our business, or in becoming profitable, our
business will fail and you will lose your investment.
   7
  2. OUR AUDITORS HAVE EXPRESSED
SUBSTANTIAL DOUBT ABOUT OUR ABILIITY TO CONTINUE AS A GOINGCONCERN .
  Following
review of our financial statements, our auditors have determined that we do not
have sufficient working capital necessary to be successful and to grow our
business. As a result, our auditors have raised substantial doubt about our
ability to continue as a going concern. According to our auditors, continuation
of our Company as a going concern is dependent upon raising funds and generating
ongoing revenues from our operations. If we a fail to accomplish both, we will
most likely fail and you will lose your investment. We will require a minimum of
$35,000 for the next twelve  months. At the current level of
revenues and expenses, in conjunction with the committed loan from our President
we anticipate we will have sufficient funding to operate for the next six
months. However, 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. If we fail to raise additional funds, if we fail as a business, and you
would lose your investment.
  3.
WE NEED SUBSTANTIAL FINANCING TO EXECUTE OUR BUSINESS PLAN, AND THERE IS NO
ASSURANCE FINANCING WILL BE AVAILABLE. IF WE ARE UNABLE TO RAISE ADDITIONAL
CAPITAL, WE MAY NOT BE ABLE TO CONTINUE OPERATIONS WHICH MAY CAUSE US TO GO OUT
OF BUSINESS.
  We need
substantial additional capital to expand our marketing and sales efforts. Our
current level of income and expenses along with a loan commitment from our CEO
are expected to fund operations for the next six months. However we will need to
raise substantial funds to further develop and market our product to potential
clients which is essential for us 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
expansion, which could result in less revenue and less cash to fund 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..
  4.
WE HAVE NOT DEVELOPED ANY EFFECTIVE DISTRIBUTION CHANNELS FOR OUR SERVICES WHICH
ARE NECESSARY TO SELL OUR SERVICES AND GENERATE REVENUES. IF WE DO NOT ATTRACT
SUFFICIENT CLIENTS FOR OUR PRODUCT WE WILL NOT HAVE SUFFICIENT REVENUES TO
SUCCEED WHICH MAY CAUSE US TO GO OUT OF BUSINESS AND YOU MAY LOSE YOUR
INVESTMENT.
  We
currently plan to market our services through personal contacts. In most
instances, we plan to utilize performance demonstrations as part of our sales
process. In addition, our future marketing plans include:
  ·
                  Establishing
      service brand recognition through customers with extensive use of the
      Internet.
  ·
                  Active
      participation in industry trade
shows.
  ·
                  Extensive
      public relations efforts directed at target market trade
      press.
  Our
success will depend, in part, upon our marketing efforts to effectively
establish distribution channels and we may not have the resources or ability to
sustain these efforts or generate any meaningful sales. If we do not generate
sales sufficient to cover our expenses and generate a profit, you may lose your
investment.
 
   5.
WE DEPEND ON THIRD PARTIES FOR MANY FUNCTIONS. IF THE SERVICES OF THOSE THIRD
PARTIES BECOME UNAVAILABLE TO US, AND WE ARE UNABLE TO REACH SUITABLE
ALTERNATIVE ARRANGEMENTS ON A TIMELY BASIS, WE MAY LOSE CUSTOMERS AS A RESULT OF
THE LAPSE IN OUR SERVICES CAUSED BY THE DELAY IN REACHING A CONTRACT WITH
ALTERNATE PROVIDERS.
   Our
business is materially dependent on third parties supporting the following
operational points: (See also section on "Business" under the subheading" (Our
Current Infrastructure and Setup").
  1.
                    Internet
      Service: Our servers are hosted by Internet Service Providers (ISP). We
      currently use two such providers:GoDaddy (California)
      and
                      ESP
      (Israel)
   2.
                    Interconnect
      - To carry the messages from the internet into the local
      telecommunications network, onto which the end client is
      connected.
   The
number of companies providing the above mentioned services is growing, and we
anticipate that alternative vendors to provide these services will be easily
obtainable. We cannot provide any assurances that the third parties will perform
their contractual obligations adequately. Furthermore, if any of our current
relationships are terminated suddenly and we are unable to reach suitable
alternative arrangements on a timely basis, we may lose customers as a result of
the lapse in our services caused by the delay in reaching a contract with
alternate providers.
   8
   6.
THE COMMUNICATIONS SERVICES INDUSTRY IS HIGHLY COMPETITIVE AND WE MAY BE UNABLE
TO COMPETE EFFECTIVELY WHICH MAY CAUSE US TO GO OUT OF BUSINESS AND FOR YOU TO
LOSE YOUR INVESTMENT.
  The
communications industry, including Internet and data services, is highly
competitive, rapidly evolving, and subject to constant technological change and
intense marketing by providers with similar products and services. We expect
that new competitors are likely to join existing competitors in the
communications industry, including the market for Voice over Internet Protocol
(VOIP), Internet and data services. Many of our current and future competitors
are significantly larger and have substantially greater market presence as well
as greater financial, technical, operational, marketing and other resources and
experience than we have. In the event that such a competitor expends significant
sales and marketing resources in one or several markets we may not be able
to compete successfully in such markets. We believe that competition will
continue to increase, placing downward pressure on prices. Such pressure could
adversely affect our gross margins if we are not able to reduce costs
commensurate with such price reductions. In addition, the pace of technological
change makes it impossible for us to predict whether we will face new
competitors using different technologies to provide the same or similar services
offered or proposed to be offered by us. If our competitors were to provide
better and more cost effective services, our business initiatives could be
materially and adversely affected resulting in our business failing in which
case you may lose your investment.
  7.
FAILURE FOR OUR COMPANY TO PERFORM FOR OUR CLIENTS MAY RESULT IN REDUCED
REVENUES OR CLAIMS FOR DAMAGES WHICH MAY CAUSE US TO LOSE CLIENTS AND MAY RESULT
IN OUR GOING OUT OF BUSINESS.
  Failures
to meet service requirements of a client could disrupt the client's business and
result in a reduction in revenues or a claim for substantial damages against us.
For example, some of our agreements may have standards for service that, if not
met by us, may result in reduced payments. In addition, because many of our
projects will likely be business-critical projects for our clients, a failure or
inability to meet a client's expectations would seriously damage our reputation
and affect our ability to attract new business. To the extent that our contracts
contain limitations on liability, such contracts may be unenforceable or
otherwise may not protect us from liability for damages. If this would occur it
may devastate our business, and you could lose your investment.
  8.
WE ARE DEPENDENT UPON OUR CHIEF EXECUTIVE OFFICER, RON KALLUS, TO DEVELOP OUR
BUSINESS. IF WE LOSE MR. KALLUS OR IF HE DOES NOT ADEQUATELY DEVELOP OUR
BUSINESS, THEN WE WILL GO OUT OF BUSINESS AND YOU MAY LOSE YOUR
INVESTMENT.
  At the
outset, our success will depend entirely on the ability of Ron Kallus to launch
our business. We do not carry a “key person” life insurance policy on any of our
officers and directors. The loss of Mr. Kallus would devastate our business. At
the present time there are three officers in the company: Ron Kallus our
President and Chief Executive Officer is devoting his full time to operate the
company business while Mr. Hason, our Chief Marketing Officer, is devoting 20%
of his time to develop the marketing strategy and Niva Kallus, Corporate
Secretary is devoting 5% of her time to look over the company operations
ensuring it is done according with the relevant regulations. Ron Kallus is the
only officer devoting his full time to the operations of the Company. Mr. Kallus
will be responsible for all business matters of the Company. In the event that
Mr. Kallus ceases to devote his full time to our business, it will adversely
affect our ability to conduct business and may cause a total loss of your
investment..
  9.
OUR PROMOTIONAL AND MARKETING EFFORTS MAY NOT RESULT IN GENERATION OF ANY
REVENUE WHICH MAY CAUSE OUR BUSINESS TO FAIL AND FOR YOU TO LOSE YOUR
INVESTMENT
  If our
promotional and marketing efforts do not attract customers, then we will not
generate any revenue. We intend to target customers that will need our services.
If we do not attract customers through our promotional and marketing efforts,
then it is likely that our business will fail and cause you to lose your
investment.
  10. THE FAILURE OF OUR BUSINESS AND
OUR CUSTOMER SERVICE SUPPORT SYSTEMS TO PERFORM ASWE EXPECT, COULD CAUSE US TO LOSE
CUSTOMERS AND/OR MAKE IT DIFFICULT TO OBTAIN NEW CUSTOMERS, WHICH COULD RESULT
IN REDUCED REVENUES, POSSIBLY CAUSING US TO GO OUT OF BUSINESS
..
  Our
operations support systems are an important factor in our success. Critical
information systems used in daily operations will be used to perform sales and
order entry, provisioning, billing and accounts receivable functions, and cost
of service verification and payment functions. If any of these systems fail or
do not perform as expected, it would reduce our ability to process orders and
provision services, and to bill for services efficiently and accurately, all of
which could cause us to suffer customer dissatisfaction, loss of business, loss
of revenue or the inability to add customers on a timely basis, any of which
could reduce revenues. In addition, system failure or performance issues could
increase our operating costs by limiting our ability to review and dispute
invoicing and provisioning data provided by our service providers. These are all
critical issues which may devastate our business and may cause you to lose your
investment.
    RISKS
RELATED TO OUR INDUSTRY.
  11. OUR RIGHTS TO THE USE OF
TELECOMMUNICATIONS FACILITIES AND TELECOMMUNICATIONSBANDWIDTH THAT MAKE UP OUR NETWORK
MAY BE AFFECTED BY THE FINANCIAL HEALTH OF THE TELECOMMUNICATIONS FACILITY AND
BANDWIDTH PROVIDERS WHICH COULD RESTRICT OUR ACCESS TO ESSENTIAL SERVICES AND
COULD REDUCE OUR REVENUE OR INCREASE OUR OPERATING COSTS WHICHMAY CAUSE US TO GO OUT OF BUSINESS
AND YOU MAY LOSE YOUR INVESTMENT .
  The
majority of our planned network will be held by us through short-term and
long-term service agreements and/or irrevocable right of use agreements with
various unrelated third-party providers who provide us with access to internet
and telecommunications facilities and bandwidth owned by them. If one of these
providers has a bankruptcy or financial collapse, we could lose our access to
telecommunication services from the provider, which in turn could impact the
integrity of our network resulting in a loss of revenues or leading to an
increase in operating costs. Should this occur, we may be unable to continue our
business, and you could lose your investment.
   9
  12. THE OPERATION, ADMINISTRATION, MAINTENANCE AND SUPPORT OF
OUR SYSTEMS ARE SUBJECT TO RISKS THAT COULD LEAD TO INTERRUPTIONS IN OUR
SERVICES AND THE FAILURE OF OUR SYSTEMS TO OPERATE AS INTENDED, WHICH COULD
RESULT IN LESS REVENUE AND/OR HIGHER OPERATING COSTS WE MAY CAUSE USTO LOSE CUSTOMERS
..
  Our
system is and will be subject to the risks inherent in large-scale, complex
telecommunications systems. The operation, administration, maintenance and
repair of our systems will require the coordination and integration of
sophisticated and highly specialized software technologies and equipment located
throughout the world. Our system may not continue to function as expected in a
cost-effective manner. The failure of the hardware or software to function as
required could render our Company unable to perform at design specifications.
Failures in our system could result in reduced revenue and/or increased
operating costs and loss of customers. If our costs exceed our revenues, we may
be unable to continue our operations, and you may lose your
investment.
  13.
THE PRICES FOR TELECOMMUNICATIONS SERVICES HAVE BEEN DECREASING, AND WE EXPECT
THAT SUCH DECREASES WILL CONTINUE OVER TIME, THUS REDUCING OUR ANTICIPATED
REVENUES AND ANY MARGIN OF PROFIT WE MAY REALIZE. WITHOUT SUFFICIENT REVENUES TO
COVER OUR EXPENSES AND GENERATE A PROFIT, WE WILL GO OUT OF BUSINESS AND YOU MAY
LOSE YOUR INVESTMENT.
  We expect
price decreases in our industry to continue as demand increases for transmission
capacity on existing and new networks. If the prices for our services decrease
for whatever reason and we are unable to increase volumes through additional
services or otherwise, it would reduce revenues and lower our operating results.
If we do not generate sales sufficient to cover our expenses and generate a
profit, you may lose your investment.
  14.
CHANGES IN REGULATORY ENVIRONMENTS MAY REQUIRE US TO OBTAIN AND MAINTAIN A
NUMBER OF GOVERNMENTAL LICENSES AND PERMITS, WHICH COULD BE AN EXPENSIVE AND
TIME-CONSUMING PROCESS, AND THERE IS NO ASSURANCE WE WILL BE ABLE TO OBTAIN OR
MAINTAIN THE LICENSES OR PERMITS, THUS WE MAY BE FORCED TO GO OUT OF BUSINESS
AND CAUSE YOU TO LOSE YOUR INVESTMENT.
  Our
business is subject, to privacy laws and regulations enacted in the United
States and other jurisdictions around the world that govern the collection and
use of personal data of our customers and our ability to contact our customers
and prospective customers, including through telephone or facsimile. We are
subject to U.S. federal privacy regulation, including the federal Telemarketing
Sales Rule with its “do not call” and “do not fax” provisions, and state privacy
regulations. Many states have laws and regulations regarding telemarketing laws,
telephone solicitation laws, including “do not call” and “do not fax”
regulations. Additionally, changing regulatory environments may require us to
obtain and maintain a number of governmental licenses and permits in the future.
If we fail to comply with those regulatory requirements or fail to obtain and
maintain those licenses and permits, we may not be able to conduct our business.
Moreover, those regulatory requirements could change in a manner that
significantly increases our costs and reduces our operating results. If we do
not generate sales sufficient to cover our expenses and generate a profit, you
may lose your investment.
  15. ATTEMPTS TO LIMIT THE BASIC
COMPETITIVE FRAMEWORK OF THE TELECOM ACT COULD INTERFERE WITH THE SUCCESSFUL
IMPLEMENTATION OF OUR BUSINESS PLAN, WHICH COULD INCREASE OUR OPERATING COSTS
AND/OR REDUCE OUR
REVENUES .
  Successful
implementation of our business plan is predicated on the assumption that the
basic framework for competition in the local exchanges services market
established by the Telecom Act will remain in place. We expect that there will
be attempts to modify, limit or eliminate this basic framework through a
combination of federal legislation, new rulemaking proceedings by the FCC and
challenges to existing and proposed regulations by the Regional Bell operating
companies ("RBOCs"). If those provisions of the Telecom Act are changed, those
changes could significantly increase our operating costs and/or reduce our
revenue. If we do not generate sales sufficient to cover our expenses and
generate a profit, you may lose your investment.
  16.
POTENTIAL REGULATION OF INTERNET SERVICE PROVIDERS COULD SUBJECT US TO UNFORSEEN
RESTRICTIONS ON OUR PROJECTED USE OF THE NETWORK WHICH COULD INCREASE OUR
OPERATING COSTS.
  The FCC
has to date treated Internet service providers as enhanced service providers.
Enhanced service providers are currently exempt from federal and state
regulations governing common carriers, including the obligation to pay access
charges and contribute to the universal service funds. The FCC is currently
examining the status of Internet service providers and the services they
provide. If the FCC were to determine those Internet service providers, or the
services they provide, are subject to FCC regulation, including the payment of
access charges and contribution to the universal service funds, it could affect
VGTel because those additional charges could be passed to us and could
significantly increase our operating costs. If we do not generate sales
sufficient to cover our expenses and generate a profit, you may lose your
investment.
  17.
UNAUTHORIZED DISCLOSURE OF SENSITIVE OR CONFIDENTIAL CLIENT AND CUSTOMER DATA,
WHETHER THROUGH BREACH OF OUR COMPUTER SYSTEMS OR OTHERWISE, COULD EXPOSE US TO
PROTRACTED AND COSTLY LITIGATION AND CAUSE US TO LOSE CLIENTS WHICH MAY RESULT
IN OUR GOING OUT OF BUSINESS AND FOR YOU TO LOSE YOUR INVESTMENT.
  We may be
required to collect and store sensitive data in connection with our services,
including names, addresses, social security numbers, credit card account
numbers, checking and savings account numbers and payment history records, such
as account closures and returned checks. If any person, including any of our
employees, penetrates our network security or otherwise misappropriates
sensitive data, we could be subject to liability for breaching contractual
confidentiality provisions and/or privacy laws. Penetration of the network
security of our data centers could have a negative impact on our reputation and
could lead our present and potential clients to choose other service providers,
which would devastate our business, and may result in the loss of your
investment.
  18.
OUR POTENTIAL CLIENTS MAY ADOPT TECHNOLOGIES THAT DECREASE THE DEMAND FOR OUR
SERVICES, WHICH COULD REDUCE OUR REVENUES AND CAUSE US TO GO OUT OF BUSINESS AND
FOR YOU TO LOSE YOUR INVESTMENT.
   10
  We plan
to target clients with a need for our services and we will depend on their
continued need of our services. However, over time, clients may adopt new
technologies that decrease the need for live customer interactions, such as
interactive voice response, web-based self-help and other technologies used to
automate interactions with customers. The adoption of such technologies could
reduce the demand for our services, pressure our pricing, cause a reduction in
any revenues we are generating at the time, and harm our business. Should that
occur, it may devastate our business, and cause you to lose your
investment.
  19.
SYSTEM FAILURES COULD PREVENT ACCESS TO OUR WEBSITE AND PREVENT OUR CLIENTS FROM
USING OUR SYSTEM THEREBY REDUCING OUR REVENUES. IF WE DO NOT GENERATE SUFFICIENT
REVENUES TO COVER OUR EXPENSES AND GENERATE A PROFIT, WE MAY GO OUT OF BUSINESS
AND YOU MAY LOSE YOUR INVESTMENT.
  Since the
success of our business will depend upon our use of the internet for VOIP
services, any network interruptions, difficulty or inability to access our
website, or other problems with our website, would result in declining revenue
and loss of potential customers. We anticipate that our systems and operations
will be vulnerable to damage or interruption from a number of sources,
including fire, flood, power loss, telecommunications failure, physical and
electronic break-ins, earthquakes and other similar events. We believe our
servers will also be vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions. Any substantial disruption of this sort could
completely impair our ability to generate revenue through our website. We do not
currently have a formal disaster recovery plan in effect and do not have
business interruption insurance to compensate us for losses that could occur.
Consequently, these risks if realized will cause us to go out of business, and
you may lose your entire investment.
   20.
OUR OPERATING RESULTS COULD BE IMPAIRED IF WE BECOME SUBJECT TO BURDENSOME
REGULATIONS, LEGAL UNCERTAINTIES, AND/OR FEES CONCERNING OPERATION OF OUR
WEBSITE WHICH MAY INCREASE OUR EXPENSES AND CAUSE US TO GO OUT OF
BUSINESS.
  Since
1998, the system for the internet has been run by a US (non governmental
organization) known as ICANN - the Internet Corporation for Assigned Names and
Numbers. It is an independent body, but is under contract to the US Department
of Commerce. Other countries have become increasingly uncomfortable with the
arrangement, countries including China and Iran wanted so-called “internet
governance” transferred to an international body linked to the UN while the EU
wanted some kind of intergovernmental “cooperative body”. An agreement was
reached November 2005 wherein the US will keep its oversight of the technology
that underpins the internet. But a new international “internet governance forum”
will be set up to discuss issues of concern. Although currently this new forum
is not envisioned to have any decision-making powers,” there is no assurance
that this forum and the international community will not at some point impose
burdensome regulations or fees to companies conducting commerce over the
internet. Should that occur, it would adversely affect our business and may
impede our ability to implement our platform and to facilitate transactions over
the internet. Consequently, it could result in our business failing, and you
losing your entire investment.
  21 WE
ARE SUBJECT TO THE POLITICAL, AND MILITARY CONDITIONS OF EACH COUNTRY IN WHICH
WE PLAN TO SELL OUR SERVICES. POLITICAL UNREST COULD INTERRUPT OUR BUSINESS
WHICH COULD CAUSE US TO LOSE REVENUES WHICH MAY LEAD TO OUR GOING OUT OF
BUSINESS.
  We plan
to expand our business globally in various parts of the world. Our only client
currently is located in the state of Israel which has recently been engaged in a
war and is still facing uncertainty. During this brief, war no business was
transacted. Furthermore, we plan to expand our operations globally to other
countries which may face political unrest or other local challenges. If that
occurs our business may be halted and we may go out of business.
  22.
AS A NEWLY REPORTING COMPANY UNDER THE EXCHANGE ACT, WE WILL BE SUBJECT TO
CERTAIN PROVISIONS OF THE SARBANES-OXLEY ACT OF 2002 AFFECTING CORPORATE
GOVERNANCE, SECURITIES DISCLOSURE, COMPLIANCE PRACTICES, INTERNAL AUDITS,
DISCLOSURE CONTROLS AND PROCEDURES AND FINANCIAL REPORTING AND ACCOUNTING
SYSTEMS. NONE OF OUR OFFICERS AND DIRECTORS HAVE BEEN ASSOCIATED WITH A PUBLIC
COMPANY PREVIOUSLY, OR HAVE EXPERIENCE OVERSEEING COMPLIANCE WITH THE SARBANES-
OXLEY ACT. FAILURE TO COMPLY WITH THE ACT MAY RESULT IN INVESTORS LOSING
CONFIDENCE IN THE RELIABILITY OF OUR FINANCIAL DISCLOSURE DOCUMENTS AND MAY ALSO
RESULT IN OUR STOCK BEING DELISTED FROM THE OTC BULLETIN BOARD. SHOULD THAT
OCCUR IT WOULD LIKELY RESULT IN A SUBSTANTIAL DECLINE IN THE PRICE OF OUR
STOCK.
  As a
reporting company under the Exchange Act, we will be subject to certain
provisions of the Sarbanes-Oxley Act of 2002 . The Sarbanes-Oxley Act affects
corporate governance, securities disclosure, compliance practices, internal
audits, disclosure controls and procedures and financial reporting and
accounting systems. Section 404 of the Sarbanes-Oxley Act, for example,
requires companies subject to the reporting requirements of the U.S. securities
laws to do a comprehensive evaluation of its and its consolidated subsidiaries’
internal control over financial reporting. The failure to comply with Section
404, when we are required to comply, may result in investors’ losing confidence
in the reliability of our financial statements, which may result in a decrease
in the market value of our common stock, prevent us from providing the required
financial information in a timely manner, which could materially and adversely
impact our business, our financial condition and the market value of our common
stock, prevent us from otherwise complying with the standards applicable to us
as a public company and subject us to adverse regulatory
consequences.
  23.
PENNY STOCK RULES MAY MAKE BUYING OR SELLING OF THE COMPANY'S SHARES DIFFICULT
WHICH MAY CAUSE YOU TO LOSE PART OR ALL OF YOUR INVESTMENT
  Broker-dealer
practices in connection with transactions in penny stock are regulated by
certain penny stock rules adopted by the Securities and Exchange Commission (the
"SEC"). Penny stocks generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
and quoted on the NASDAQ system). The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information
about the penny stocks and the nature and level of risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the 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
agreement to the transaction. These requirements may have the effect of reducing
the level of trading activity, if any, in the secondary market for a security
that becomes subject to the penny stock rules. Since the common shares will be
subject to the penny stock rules, and investors may find it more difficult to
sell their shares.
  24.
THE LIMITED MARKET FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE. AS WELL,
OUR STOCK IS HELD BY A SMALL NUMBER OF INVESTORS THUS REDUCING THE LIQUIDITY OF
OUR STOCK AND THE LIKELIHOOD THAT ANY ACTIVE TRADING MARKET WILL DEVELOP. AS A
RESULT YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.
  There is
currently no market for our Common Stock. Even if we are successful in our stock
trading on the OTC Bulletin Board, the market for our common stock is likely to
be very limited and we cannot assure you that a larger market will ever be
developed or maintained.
   11
  Currently,
our Common Stock is not listed on any established trading system. The fact that
most of our Common Stock is held by a small number of investors further reduces
the liquidity of our Common Stock and the likelihood that any active trading
market will develop. The market for our Common Stock is likely to be volatile
and many factors may affect the market. These include, for example: Our success,
or lack of success, in marketing our services and developing our customer base;
Competition; and our ability to raise sufficient capital for business
expansion.
  Additionally
the stock markets generally have experienced, and will likely continue to
experience, extreme price and volume fluctuations which have affected the market
price of the shares of many small capital companies. These fluctuations have
often been unrelated to the operating results of such companies. Such broad
market fluctuations, as well as general economic and political conditions, may
decrease the market price of our Common Stock in any market that
develops.
   2: 
Description of Properties:
  As of
June 25, 2008   our administrative office is located at:
 2 Ingrid
Road
 Setauket,
NY 11733-2218
 Tel: 
631-458-1120
  Our CEO
has agreed to provide his home office for administrative use by the Company free
of charge. The office is equipped with standard office equipment including
computers, scanners, copiers, and fax machine and office space.
  Item
3:  Legal Proceedings
  Neither
us, nor any of our officers or directors is a part’ to any material legal
proceeding or litigation and such persons know of no material legal proceeding
or contemplated or threatened litigation. There are no judgments against us or
our officers or directors. None of our officers or directors has been convicted
of a felony or misdemeanor relating to securities or performance in corporate
office.
  Item 4:  Submission of Matters
to a Vote of Security Holders:
  None.
  PART II
   Item 5:Market for Registrants Common Equity and Related Stockholder
Matters
  The
Company’s Common Stock is quoted on the Over The Counter Bulletin Board. The
table below sets forth the high and low prices for the Company’s Common Stock.
Quotations reflect inter-dealer prices, without retail mark-up, mark-down
commission, and may not represent actual transactions. Since the Company's
common stock trades sporadically, there is not an established active public
market for its common stock. No assurance can be given that an active market
will exist for the Company's common stock and the Company does not expect to
declare dividends in the foreseeable future since the Company intends to utilize
its earnings, if any, to finance its future growth, including possible
acquisitions.   The company has 6,433,900 shares outstanding as of
March 31, 2009 and has  approximately 43 shareholders.
  Vgtel,
      Inc.
                      
                      High
                      
                      
                      LowFiscal
      year ended March 31, 2008
                      
                      $
                      0
                      
                      
                      $
                      0Quarter  Ending
      June 30, 2008
                      
                      $
                      0
                      
                      
                      $
                      0Quarter
      Ending September 30, 2008
                      
                      $
                      1.00
                      
                      
                      $
                      0.20
                      *Quarter
      Ending December 31, 2008
                      
                      $
                      5.00
                      
                      
                      $
                      0.20Quarter
      ending Ending March 31, 2009
                      
                      $
                      6.55
                      
                      
                      $
                      0.02
 *Trading
on the OTC Bulletin Board commenced on July 14, 2008.
 
   12
   Item 6:Selected Financial
Data


Item 7.Management Discussion & Analysis of Financial
Condition and Results of Operations:




Forward-Looking
Statements






This
prospectus contains "forward-looking statements," about our financial condition,
results of operations and business. These statements include, among
others:




·
            Statements
      concerning the benefits that we expect will result from our business
      activities and certain transactions that we have completed, such as
      increased revenues, decreased expenses and avoided expenses and
      expenditures; and




·
            Statements
      of our expectations, beliefs, future plans and strategies, anticipated
      developments and other matters that are not historical
    facts.




These
statements may be made expressly in this document or with documents that we will
file with the SEC. You can find many of these statements by looking for words
such as "believes," "expects," "anticipates," "estimates" or similar expressions
used in this prospectus. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors" that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. We
caution you not to put undue reliance on these statements, which speak only as
of the date of this prospectus. Further, the information contained in this
prospectus is a statement of our present intention and is based on present facts
and assumptions, and may change at any time and without notice, based on changes
in such facts or assumptions.




While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual results. The
safe harbor for forward-looking statements provided in the Private Securities
Litigation Reform Act of 1995 does not apply to the offering made in this
prospectus.




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. (See
"Description of Business".)







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. For the
twelve months ending March 31, 2009, we generated $ 25,896 and during the
fiscal year ended March 31, 2008 we generated revenues of $15,840
from Platin.   Consequently, the aggregate revenues we generated
to date from our only customer, Platin Ltd. is $67,443. Platin  pays a
monthly fee for the lines and a per call fee for each successful call
placed.   Platin is a related party.    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.






During
the next 12 months, we plan to focus on three applications of the GMG
system:





(1)
            GMG
      Commercial Telemarketing Services,





(2)
            GMG
      Alert Notification System





(3)
            GMG
      Global Franchise Partners






13




Contracts
& Agreements & Relationships:







Internet
Gold:   (Smile Communications):





On Nov. 1
2006 the Company entered into a contract with Internet Gold  (on Jan
01.2008 the company changed its name to Smile Communications) to provide us with
required connection to the global VOIP network via their advanced services
capabilities. The Contract has a one year term but may be terminated by either
party for cause or convenience upon thirty days written notice. The Agreement is
a reciprocal agreement between the parties allowing each party to send traffic
to the counter party. In the future, when the company will have similar
agreements with other VOIP carriers, this option for traffic exchange may be
developed into an additional revenue stream.





The
contract provides that Internet-Gold may, at its sole discretion and at any
time, change the applicable rates due to it, and/or the destinations to which it
offers the Service, upon 7 (seven) days prior written notice to the Company. We
are being billed in 1 (one) second increments as of the 1st second, unless
stated otherwise. The Agreement does not provide volume discounts, or minimum
message requirements. We are billed only for the per call use. However, we
believe that if the volume of messages increased ten times the current volume,
we would be in a stronger position to negotiate a more favorable rate with
either Internet Gold, or alternate provider for this service. We believe that if
Internet Gold were to increase the rate or terminate the service, we would
easily be able to find an alternate source to provide this service, as the VOIP
carrier business is highly competitive.







Ongoing
Development of our GMG Systems.




From the
inception of the GMG System, Kanaga provided software development services for
an aggregate of $36,250 from inception to  March 31, 2008, and $16,060
during the fiscal year ended March 31, 2009.




During
the next 12 months we anticipate our further development costs will be $12,000.
Kanaga stopped operating as an on going concern, but we manage to acquire the
service of their chief engineer who was responsible for the development of GMG
system.  We will continue working with him during 2009 and 2010 to
support our planned pipeline of products and services.





During
the next twelve months, our development activities 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, during this period
we will continue the ongoing development of the Web Services API’s allowing more
large clients who desperately looking for help in their CRM to use our
system.









Plan
of Operations for the Next 12 Months Period.




The
current status of the global market leave us with less hope to obtain the needed
financial backup needed for executing our market plan and we will concentrate to
use our limited resources to further strengthening the system features and
improving its ruggedness.





During
the next twelve months, we expect to take the following steps in connection with
the development of our business and the implementation of our plan of
operations:





·
            Continue
      testing our system with Platin Ltd. our only client to date. During this
      testing phase, our development activities are continuing to add features,
      fix problems and integrate new customer driven
  ideas.





·
            Beginning 
      September  2009, we will be technically able to open the system for
      few customers  using the newly developed Web-Services, and
      by December  2009 we believe we will be technically in
       a position to serve unlimited number of customers. We currently have
      no agreement or understanding with any entity to become our
      client.




·
            Beginning
      in December 2009, we plan to prepare and execute a marketing plan to
      increase the number of Users to our system. (See Marketing Plan in the
      section Business under the sub heading Distribution of Products &
      Services. :)




·
            Providing
      funding will be available, beginning in December  2009, we plan
      to announce our services using our GMG system to the aforementioned
      targets in the US and Israel. We plan to target companies that will use
      our system for their established clients which will provide us with a
      quicker market penetration since we anticipate that each client that we
      contract with, will be using our GMG system for many of their clients
      which will result in many clients using our
  system.





·
            Our
      registration statement was  rendered effective by the Securities
      & Exchange Commission, and we are currently seeking private
       placement investors to invest in our securities. Additional
      financing may not be available on 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, 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.





·
            We
      plan to initiate phase two of our operations, as soon as we raise
      additional capital sufficient to support the costs of executing the second
      phase of our operations.








14


PHASE
II




Expansion
Plan:




PHASE
II




Expansion
Plan:




We plan
to initiate Phase II after we complete the activities outlined above for the
next twelve months. Executing Phase II is entirely dependent on our ability to
raise additional funds.




·
            To
      obtain additional equity financing through Private Placement investments
      after the Company's registration statement is rendered effective. Raising
      additional capital is essential to finance the company's expansion of
      services and territories as described in the Expansion Plan.·
            To
      continue to develop the multi server capability, in order to increase the
      capacity of our GMG System to satisfy any required load by the
      users.








·
            To
      increase the number of content-based products which are being offered
      through the VGTel website. (See Phase II Products & Services described
      in the Business section under "Products &
  Services")




·
            .To
      increase the number of franchises by direct marketing of franchises and
      recruiting area developers




The
Company plans to raise additional funds in order to expand its business and
fully execute its Plan of Operations including the Expansion Plan. 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 fourth quarter of 2009, 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.







Purchase
of Significant Equipment






The
Company does not plan any purchases of significant Equipment in the next 12
months.






Other:






Except
for historical information contained herein, the matters set forth above are
forward-looking statements that involve certain risks and uncertainties that
could cause actual results to differ from those in the forward-looking
statements.




Off-Balance
Sheet Arrangements:




We do not
currently have any off-balance sheet arrangements. We do not anticipate entering
into any off-balance sheet arrangements in the future.






CRITICAL
ACCOUNTING POLICIES AND ESTIMATES






The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ materially from
those estimates.






We
believe that there are several accounting policies that are critical to
understanding our historical and future performance, as these policies affect
the reported amounts of revenue and the more significant areas involving
management’s judgments and estimates. These significant accounting policies
relate to research and development costs, valuation of long-lived assets and
income taxes. These policies, and the related procedures, are described in
detail below.






15




RESEARCH
& DEVELOPMENT COSTS. Direct research and development activities consist
primarily of new product development, continuing engineering for existing
products, regulatory and clinical trial costs. Costs related to research and
development efforts on existing or potential products are expensed as incurred.
Allocated SG&A costs associated with R&D activities have not been
included in the R&D expenses; in addition, the costs associated with
building and protecting our Intellectual Property are currently included in our
SG&A and not counted as direct research and development costs.






IMPAIRMENT
OF LONG-LIVED ASSETS, In accordance with SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), our long-lived assets
to be held and used in the business are reviewed for impairment. When impairment
is noted, assets are evaluated for impairment at the lowest level for which
there is identifiable cash flows. If the sum of expected undiscounted future
cash flows is less than the carrying amount of the asset, a loss is recognized
based on the amount by which the carrying value exceeds the fair value of the
asset. Fair value is determined primarily using the anticipated cash flows
discounted at a rate commensurate with the risk involved. Losses on assets to be
disposed of are determined in a similar manner, except that the fair values are
reduced for disposal costs. Considerable management judgment and assumptions are
necessary to identify indicators of impairment and to estimate discounted future
cash flows. Accordingly, actual results could vary significantly from such
estimates. At June 30, 2008, the Company did not assign a value to its
intangible assets, as they will continue to require additional development and
it has yet to be determined the underlying value of the assets.






INCOME
TAXES. Deferred income tax assets and liabilities arise from temporary
differences associated with differences between the financial statements and tax
basis of assets and liabilities, as measured by the enacted tax rates, which are
expected to be in effect when these differences reverse. Deferred tax assets and
liabilities are classified as current or non-current, depending upon the
classification of the asset or liabilities to which they relate. Deferred tax
assets and liabilities not related to an asset or liability are classified as
current or non-current depending on the periods in which the temporary
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized.






CONTINGENCIES.
In the ordinary course of business, we have entered into various contractual
relationships with strategic corporate partners, customers, distributors,
research laboratories and universities, licensors, licensees, suppliers, vendors
and other parties. As such, we could be subject to litigation, claims or
assessments arising from any or all of these relationships. We account for
contingencies such as these in accordance with Statement of Financial Accounting
Standards No. 5, "Accounting for Contingencies" ("SFAS 5"). SFAS 5 requires us
to record an estimated loss contingency when information available prior to
issuance of our financial statements indicates that it is probable that an asset
has been impaired or a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated. Accounting
for contingencies arising from contractual or legal proceedings requires that we
use our best judgment when estimating an accrual related to such contingencies.
As additional information becomes known, our accrual for a loss contingency
could fluctuate, thereby creating variability in our results of operations from
period to period. Likewise, an actual loss arising from a loss contingency which
significantly exceeds the amount accrued for in our financial statements could
have a material adverse impact on our operating results for the period in which
such actual loss becomes known.






ACCOUNTING
FOR STOCK BASED COMPENSATION. In December 2004, the FASB issued SFAS No. 123
(revised 2004), Share-Based Payment (“SFAS 123R”), which replaces SFAS No. 123;
Accounting for Stock-Based Compensation, (“SFAS 123”) and supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, (“APB 25”). SFAS 123R requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values. Under SFAS 123R, the Company is required to measure the cost of employee
services received in exchange for stock options and similar awards based on the
grant-date fair value of the award and recognize this cost in the income
statement over the period during which an employee is required to provide
service in exchange for the award. The pro forma disclosures previously
permitted under SFAS 123 are no longer an alternative to financial statement
recognition. The Company adopted SFAS 123R on June 20, 2007 using the modified
prospective method, which did not require the recognition of any non-cash
charges, as there were no unvested stock options on that date.






The fair
value concepts were not changed significantly in FAS 123R; however, in adopting
FAS 123R, companies must choose among alternative valuation models and
amortization assumptions. After assessing alternative valuation models and
amortization assumptions, the Company will continue using the Black-Scholes
valuation model and has elected to use the ratable method to amortize
compensation expense over the vesting period of the grant.






Results
of Operations:





Fiscal
Year  Ended  March 30, 2009 and March 30, 2008


Revenues:





Revenues
for the fiscal year ending March 31, 2009  was $25,896 compared to $15,840
for the fiscal year ended March 31, 2008.




We
continued to provide the services to Platin Ltd. during the twelve month period
ended March 31, 2009.




Platin,
our only client to date is currently testing our system and providing
feedback to improve our product.  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.






16




Expenses:




Total
operating expenses for the fiscal year ended March 31, 2009 was $125,144 as
compared to $101,361  for the fiscal year ended March 31, 2008,
an  increase of approximately 23
%.     Expenses included General and Administrative
expense of $30,434 as compared to $29,061 for fiscal year ending March 31,
2008.  Additionally, the company incurred $16,850 in stock based
compensation for services rendered to the Company during the period ending
March 31, 2009.  No expenses for services rendered were incurred
during the period ending March 31, 2008.   Officers Compensation &
Rent amounted to $56,000 during the fiscal year ended March 31, 2009 as compared
to from $56,000 during the fiscal year ended March 31, 2008. 
Additional Paid in Capital has been credited for these
amounts.  Depreciation and Amortization was $5,800 for the fiscal year
ended March 31, 2009 compared to $5,800 for the period ending March 31,
2008.  The increase  in expenses in the fiscal year ended
March 31, 2009 resulted from  the increase in generated traffic,
and in the associated operational costs of $16,850 for services
rendered.


Research
and development expenses for the fiscal year ended December 31, 2009 increased
to $16,060 as compared to $10,500  for the fiscal year ended March 31,
2008. The increase in research and development cost was attributable
the fact that  Kanaga was busy fixing bugs and maintaining the system
..




The
Company developed the intellectual properties known as Group Messaging Gateway.
As of March 31, 2009 the Company and its shareholders have expended an aggregate
of  $116,560 of which $87,560 was expensed in the development of this
program  and $29,000 of the 116,560 in development costs,  incurred
after technological feasibility has been reached and is therefore being
capitalized and amortized over a sixty-month
period.





Development
costs expensed since inception to March 31, 2009 is as
follows:





Pre-Technological
              Feasibility
            Twelve
      Month
              Period
              Ending
              3-31-2006
            Expensed
            $37,500Pre-Technological
      Feasability
              (Brain
      & Power Ltd.) $10,000
              
              Post
      Operational
              Development 
      (Kanaga) $13,500
            Twelve
      Month
              Period
              Ending
              3-31-07
            Expensed
            $23,500Post
      Operational Development (Kanaga)
            For
      the 12 Month
              Period
              Ending
              3-31-08
            Expensed
            $10,500Post
      Operational Development
            For
      the 12 Month
              Period
              Ending
              3-31-09
            Expensed
            $16,060Total Development Cost Expensed since
      Inception
            
            
            $87,560








Net
loss





The
Company reported a net loss for the twelve month period ending March 31, 2009 of
$100,260 or ($0.02) per share as compared to  $85,521 or ($0.02) per
share,  for the fiscal year period ending March 31,
2008.




The
Company had a  cumulative net losses since its inception of  of
$341,802 for the period ending March 31, 2009 as compared to $241,542 for the
fiscal year ended March 31, 2008.  The increase  in net loss
 is  attributable to the
increase in expenses in the fiscal year ended March 31, 2009 resulted from the
increase in generated traffic, and in operational costs of $16,850 for services
rendered.




17




Liquidity
and Capital Resources:





For
the Fiscal Year  Ended March 31, 2009 and March 31,
2008.




As
of  March 31, 2009 the Company had  $3,063 as compared
to $ 5,126 in cash,  as at March 31, 2008.




Net cash
used by operating activities for the fiscal year period ended March 31,
2009 was (41,063) as compared to (2,054) for the fiscal year 
ended March 31, 2008.




Net cash
provided by investing activities during the fiscal year ending March 31,
2009   was  0 for 2009 and 2008 respectively.


Net cash
provided by financing activities furing fiscal year ending March 31, 2009 was
$24,000 for sales of Units and  $15,000 loaned to the Company by Ron
Kallus compared to $0 net cash provided by investing activities for the
previous twelve months period ended March 31, 2008.




Ron
Kallus, the Company Chief Executive Officer and Principal shareholder provided a
credit facility to the Company up to a maximum of $20,000 which may be drawn
down anytime from March 1, 2006 until May 18, 2007. This unsecured facility is
payable May 18, 2007 and bears an interest rate of prime plus one (1)
calculated on an annual basis payable annually in arrears with first payment due
March 1, 2007 and second payment due May 18, 2007, unless extended by mutual
consent of the parties.  On July 18, 2006, Mr. Kallus executed an amendment
to the March 1, 2006 credit facility increasing the total amount of the credit
facility from $20,000 to $50,000 and extending payable date from May 18, 2007 to
December 31, 2007 with the first interest payment due July 1, 2007 and second
payment due December 31, 2007.  During the period ending March 31,
2007,  Mr. Kallus advanced $12,100 compared to $4,223 in the corresponding
period ending March 31, 2006 for an aggregate of $16,323 from
inception.   No funds were advanced by Mr. Kallus during the
period ending March 31, 2008 and $15,000 were advanced during the period ending
March 31, 2009.  The aggregate of the loan advanced by Mr. Kallus is
$31,323.    Due to
the increase in the credit facility, for the year ended March 31, 2009, the
Company has imputed interest using an interest rate of prime plus 1% for a total
of $1,012 which was charged to interest expense and credited to additional paid
in capital.




ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   We do not
currently hold any market risk sensitive instruments entered into for hedging
transaction risks related to foreign currencies. In addition, we have not
entered into any transactions with derivative financial instruments for trading
purposes.
  ITEM 8.  FINANCIAL STATEMENTS
& SUPPLEMENTARY DATA
    ITEM 9.  CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE:
  (a)
Dismissal of Previous Independent Registered Public Accounting
Firm.
  On April
27, 2009 , N. Blumenfrucht CPA PC "NBCP" resigned as our independent registered
public accounting firm. The Board of Directors (the “Board”) of VGTel, Inc. (the
“Company”) approved such resignation on April 27, 2009.
  The
Company’s Board of Directors participated in and approved the decision to change
our independent registered public accounting firm.
  During
the two most recent fiscal two years 2008 and 2007 and through the subsequent
interim periods through April 27, 2009, the date of resignation, the Company did
not have any disagreements with "NBCP" on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to "NBCP's" satisfaction would have caused it to make
reference to the subject matter of the disagreement(s) in connection with its
report, except for the following:
  The
report on the Company’s financial statements for the fiscal year ended March 31,
2009 and March 31, 2008 contained an explanatory paragraph concluding that there
was substantial doubt as to the Company’s ability to continue as a going
concern, since the Company had no significant income since inception, and the
continuation of the Company as a going concern was dependent upon the Company’s
ability to obtain additional financing and upon future profitable
operations.
  During
the most recent two fiscal years 2008 and 2007 and the Subsequent Interim
Period, no "reportable events" (as described in Item 304(a)(1)(v) of Regulation
S-K) occurred that would be required by Item 304(a)(1)(v) to be disclosed in
this report.
  The
Company provided "NBCP" with a copy of this Current Report on this amended Form
8-K and requested that they furnish it with a letter addressed to the SEC
stating whether or not they agree with the above statements. The Company has
received the requested letter from "NBCP", and a copy of such letter is filed as
Exhibit 16.1 to this Current Report Form 8-K/A.
  (b)
Engagement of New Independent Registered Public Accounting Firm.
  On April
27, 2009, the Board appointed Kempisty & Company Certified Public
Accountants, PC, "K &Co." as the Company’s new independent registered public
accounting firm. The decision to engage "K &Co." was approved by the
Company’s Board of Directors on April 27, 2009.
  Prior to
April 27, 2009, and during the most recent fiscal years 2008 and 2007 and
through the subsequent interim periods through May 14, 2009, the Company did not
consult with "K &Co." regarding (1) the application of accounting principles
to a specified transactions, (2) the type of audit opinion that might be
rendered on the Company’s financial statements, (3) no written or oral advice
was provided that would be an important factor considered by the Company in
reaching a decision as to an accounting, auditing or financial reporting issues,
or (4) any matter that was the subject of a disagreement between the Company and
its predecessor auditor as described in Item 304(a)(1)(iv) or a reportable event
as described in Item 304(a)(1)(v) of Regulation S-K.


ITEM 9A T. CONTROLS AND PROCEDURES.





Evaluation of Disclosure Controls and
Procedures . Under the supervision of our principal executive officer who
is also the  principal financial officer, we have evaluated the
effectiveness of the design and operation of the Company's “disclosure controls
and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the
end of the period covered by this annual report (the “Evaluation
Date”).





Based on
that evaluation, our principal executive officer concluded that our disclosure
controls and procedures were not effective because of certain deficiencies
involving internal controls which constituted a material weakness as discussed
below. The material weakness identified did not result in the restatement of any
previously reported financial statements or any other related financial
disclosures, nor does management believe that it had any effect on the accuracy
of our financial statements for the current reporting period.





Management’s Annual Report on
Internal Control over Financial Reporting. Our management is responsible
for establishing and maintaining “internal control over financial reporting,” as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Because of its inherent limitations, a
system of internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can
provide only a reasonable assurance of achieving their control
objectives.





Under the
supervision and with the participation of our management, including our
principal executive officer who is also the principal financial officer, we have
evaluated the effectiveness of our internal control over financial reporting
using the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on
its evaluation, our principal executive officer who is also our principal
financial officer concluded that there is a material weakness in our internal
control over financial reporting. A material weakness is a deficiency, or a
combination of control deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented
or detected on a timely basis.





The
material weakness relates to the monitoring and review of work performed by our
limited accounting staff in the preparation of financial statements, footnotes
and financial data provided to our independent registered public accounting firm
in connection with the annual audit. More specifically, the material weakness in
our internal control over financial reporting is due to the fact
that:





• The
Company lacks proper segregation of duties. We believe that the lack of proper
segregation of duties is due to our limited resources.





• The
Company does not have a comprehensive and formalized accounting and procedures
manual.





Management
has concluded that until we have sufficient financial resources to supplement
our accounting personnel, this material weakness will continue.






18





This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our independent
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management’s report in this annual
report.





This
report shall not be deemed to be filed for purposes of Section 18 of the
Exchange Act, or otherwise subject to the liabilities of that section, and is
not incorporated by reference into any filing of the Company, whether made
before or after the date hereof, regardless of any general incorporation
language in such filing.





Changes
in Internal Control Over Financial Reporting




No change
in the Company’s internal control over financial reporting occurred during the
quarter ended June 30, 2009 that materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.







ITEM
9B  OTHER INFORMATION




None






PART
III




Directors
Officers and Promoters:





The
following table sets forth, as of  June 12, 2009 the names and ages of all
of our directors and executive officers; and all positions and offices held. The
director will hold such office until the next annual meeting of shareholders and
until his or her successor has been elected and qualified.




Item 10:Directors, Executive Officers,
  The
following sets forth our directors, executive officers, promoters and control
persons, their ages, and all offices and positions held. Directors are elected
for a period of two years and thereafter serve until their successor is duly
elected by the shareholders. Officers and other employees serve at the will of
the Board of Directors.
  
 
 Ron
      Kallus
                2
      Ingrid Road
                Setauket,
      NY 11733-2218
                Tel:
      631-458-1120
              Age-
      60
              Chairman,
      CEO,
                TreasurerIsrael
      Hason
                40
      Serlin St.,
                Holon
      58298, Israel
              Age
      - 44
              Chief
      Marketing Officer
                DirectorNiva
      Kallus,
                7
      Lafayett Ter.,
                Chelmsford,
      MA 01824
              Age
      - 25
              Corporate
      Secretaries
                Director.
  Officers
& Directors:
  Ron
Kallus, Age 60 Chairman, CEO, Treasurer
  Mr.
Kallus was appointed as Chairman, CEO and Treasurer on January 18, 2006. Mr.
Kallus is also president of NYN International LLC, since August 2004 and he is
Chief Operations Officer for Digital Power Technologies, Inc., a private R&D
company in Texas since July 2005. From  June 2003 until July 2004, he was
employed by NovoLink Communications, in Texas where he held the position of
VP-Business development. From August 2002 to May 2003 Mr. Kallus was a self
employed consultant in Berkeley CA. From January 2001 until July 2002 Mr. Kallus
was employed by IPI Ltd. in Haifa, Israel where he held the position of General
Manager In the prior period, Mr. Kallus worked at Intermetrics of Cambridge,
Massachusetts for 10 years, where he acted as the head scientist in the field of
industrial systems and was responsible for the development and sale of
computerized management systems (PMS). He later established Eurometrics, in
which he developed the first Personal Computer -based PMS system. Mr. Kallus
sold the company and established IPI, a technological consultation and Research
Company.
    19
   Educational
Background:
  Israel
Institute of Technology, Haifa, Israel
 B.Sc.
Electrical Engineering, 1975
 Massachusetts
Institute of Technology, Cambridge, Mass., USA
 Graduate
work, Artificial Intelligence, 1977
 North
Eastern University, Boston, Mass., USA
 Graduate
work, Technical Management, 1981
  Israel
Hason Age 44 Chief Marketing Officer, Director
  On
January 18, 2006, Israel Hason was appointed Chief Marketing officer and
Director. Mr. Hason has been General Manager and principal shareholder of Platin
Ltd Israel since 1989 where he is responsible for overseeing three daughter
companies Platin - Investment - owner of the Messer-Phone, and other registered
trade marks. Platin - Marketing and Advertisement (1989) Ltd., operating a
commercial advertisement office, and Style - Manages & Operates several
customers clubs for major credit cards companies like AMX and Mastercard
 each has around 500,000 members. Mr. Hason brings expertise in business
and marketing, with a strong emphasis on the Israeli markets for the VGTel
products.  Mr. Hason is a related party.
  Mr.
Hason's Educational Background:
 Technicum,
Givataim, Israel
 B.Sc.
Architecture 1983
 
 Niva
Kallus, Age 25  Corporate Secretary , Director.
  On
January 18, 2006 Niva Kallus was appointed as Corporate Secretary, and Director.
Niva is the daughter of Ron Kallus. Niva has just completed her Pre-med
Undergraduate studies (Psychology Major) at the University of Massachusetts,
From Sep. 2002 to July 2003 Niva studied, to become a registered EMS at Oakland
CA. From (August) 2001 to (August) 2002, Niva established a new Scout
organization in Kiryat-Gat, Israel From (Sep.) 1996 - -(June) 2001 She attended
Zevulun-Carmel High School, Kibbutz Yagur, Israel (Graduation June 2001.) Niva
has no prior business experience.
 
 Educational Background:
 
  ·
              University
      of Massachusetts, Lowell, MA. 2008
 
 ·
              First
      Aid, Emergency Medical Services Authority, CA
  (2002)
 
 ·
              CPR,
      American Heart Association (2002)
 
 ·
              EMT
      training program, Merritt College, Oakland, CA
  (2003)
 
 ·
              CPR
      Instructor course, Chelmsford police Department
  (2004)
    
 Item
11:  Executive Compensation:
   ANNUAL
      COMPENSATION
              LONG
      TERM COMPENSATIONNAME
              TITLE
              YEAR
              SALARY
              BONUS
              OTHER
      ANNUAL COMPENSATION
              RESTRICTED
                OPTION
      STOCKS/
                PAYOUTS
      AWARDED
              SARS
                ($)
              LTIP
                COMPENSATION
              ALL
      OTHER COMPENSATIONRon
      Kallus
                (1)
              President
                CEO
      and
                Chairman
                Director
              2009
              $56,000
                
                (4)
              0
              0
              0
      (1)
              0
              0
              0Israel
      Hason
                
                (2)
              VP
                Director
              2009
              0
              0
              0
              0
              0
              0
              0Niva
      Kallus
                
                (3)
              Secretary
                Director
              2009
              0
              0
              0
              0
              0
              0
              0Ron
      Kallus
                
                (1)
              President
                CEO
                Chairman
                Director
              2008
              $56,000
                
                (4)
              0
              0
              0
              0
              0
              0Israel
      Hason
                
                (2)
              VP
                Director
              2008
              0
              0
              0
              0
              0
              0
              0Niva
      Kallus
                
                (3)
              Secretary
                Director
              2008
              0
              0
              0
              0
              0
              0
              0
   
 20
  (1) Ron
Kallus  received 750,000  shares of our common stock
pursuant to the acquisition  agreement between  Tribeka Tek,
Inc. and NYN International LLC.   Such shares were not for
services rendered or to be rendered by
Kallus.  Additionally  each of Mr. Kallus' sons, Yoav Kallus
and Nathan Kallus respectively received 420,000 shares of stock pursuant to the
acquisition  agreement between  Tribeka Tek, Inc. and NYN
International LLC.   Such shares were not for services rendered
or to be rendered by Mr. Kallus or his sons.  Neither Yoav Kallus nor
Nathan Kallus are officers or directors of the Company.
  (2)  Israel
Hason received 750,000  shares of our common stock pursuant to the
acquisition  agreement between  Tribeka Tek, Inc. and NYN
International LLC.   Such shares were not for services rendered
or to be rendered by Mr. Hason.
 
 (3)  Niva
Kallus received 420,000 shares of our common stock pursuant to the acquisition
agreement between Tribeka Tek, Inc. our predecessor firm and NYN International
LLC.  Such shares were not for services rendered or to be rendered by
Niva Kallus.  Niva Kallus is the daughter of Ron Kallus.
 
 (4) 
The sums of $56,000 and $56,000 respectively were officers compensation and rent
expenses incurred,  but not paid out.  These sums were credited to
Additional Paid in Capital.  ( See Financial Statements Note 9
 and Note 10.)
 
 Option/SAR Grants
  We do not
currently have a stock option plan. No individual grants of stock options,
whether or not in tandem with stock appreciation rights known as SARs or
freestanding SARs have been made to any executive officer or any Director since
our inception; accordingly, no stock options have been granted or exercised by
any of the officers or Directors since we were founded.
  Long-Term
Incentive Plans and Awards
  We do not
have any long-term incentive plans that provide compensation intended to serve
as incentive for performance. No individual grants or agreements regarding
future payouts under non-stock price-based plans have been made to any executive
officer or any Director or any employee or consultant since our inception;
accordingly, no future payouts under non-stock price-based plans or agreements
have been granted or entered into or exercised by any of the officers or
Directors or employees or consultants since we were founded.
  Compensation
of Directors
  There are
no arrangements pursuant to which Directors are or will be compensated in the
future for any services provided as a Director.
 
 Employment
Contracts, Termination of Employment, Change-in-Control
Arrangements
  There are
currently no employment or other contracts or arrangements with officers or
Directors. There are no compensation plans or arrangements, including payments
to be made by us, with respect to our officers, Directors or consultants that
would result from the resignation, retirement or any other termination of such
Directors, officers or consultants from us. There are no arrangements for
Directors, officers, employees or consultants that would result from a
change-in-control.
  
 Item
12:  Security Ownership of Certain Beneficial Owners and
Management and Related Transactions:
  The
following table sets forth information regarding the beneficial ownership of
shares of the Company's Common Stock as of  June 9, 2009
by
 (1) all
directors and executive officers of the Company, individually and collectively
as a group
 (2) all
stockholders known to the Company to be beneficial owners of more than five
percent (5%) of the outstanding Common Stock;
   
 TITLE
      OR
                CLASS
      OF
                SECURITIES
              NAME 
      OF BENEFICIAL OWNER
              AMOUNT
      OF BENEFICIAL OWNERSHIP BEFORE
                STOCK
      OFFERING (2)
              AMOUNT
      OF BENEFICIAL OWNERSIP AFTER
                STOCK
      OFFERING
              PERCENT
      OF CLASS
                BEFORE
                OFFERING
              PERCENT 
      OF CLASS
                AFTER
                STOCK
                OFFERINGCommon
              Ron
      Kallus
              750,000
      (1)  (2)
              750,000
              15.625%%
              15.625%Common
              Niva
      Kallus
              420,000
      (1)  (2)
              420,000
              8.75%
              8.75%Common
              Yoav
      Kallus
              420,000
      (1)  (2)
              420,000
              8.75%
              8.75%Common
              Nathan
      Kallus
              420,000
      (1)  (2)
              420,000
              8.75%
              8.75%Common
              Israel
      Hason
              750,000
      (1)  (2)
              750,000
              15.625%
              15.625%Common
              Hyman
      & Ethel
                Schwartz
              542,510   
       (3)
              542,510
              11.30%
              11.30%Common
              Ethel
      Schwartz
              0
              674,000(3)Common
              The
      Hyett Group, Ltd.
              0
              960,000(4)Common
              National
      Theological Center
              251,878   
       (2)
              251,878
              5.2
      %
              5.2%Common
              Yeshiva
      Tov
                Vechesed
              251,878  
       (2)
              251,878
              5.2%
              5.2%Common
              Brain
      & Power Ltd.
              400,000  
      (2)
              400,000
              8.33%
              8.33%Directors
      &
                Officers
      as a
                Group
              
              2,760,000
              2,760,000
              57.5%
              57.5%
   
 21
 (1)
(2)                        Niva
Kallus is the daughter of Ron Kallus.
  (1)
(2)                        Yoav 
Kallus is the son of Ron Kallus.
 
 (1)
(2)                         Nathan
Kallus is the son of Ron Kallsu
 
 (3)  Hyman
& Ethel Schwartz owned 542,510 shares since 2002.  On May 27, 2008
the Company sold shares 960,000 to The Hyett Group Ltd.   for a
total value of $24,0000.  Hyman is the president and principal officer
of The Hyett Group, Ltd.  On May 27, 2008 the company issued 674,000
shares to Ethel Schwartz for accounting and edgarizing services
rendered.
 
 Israel
Hason is the Chief Marketing Officer. He is also a managing partner and
principal of Platin Ltd. Israel. Platin Ltd. is a telemarketing company that
is currently the only customer of VGTel Inc. Mr. Hason has agreed to
recuse himself from any corporate decision relating to Platin Ltd business
relationship with VGTel, Inc.
  Pursuant
to the rules and regulations of the Securities and Exchange Commission, shares
of Common Stock that an individual or entity has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purposes of computing the percentage ownership of such
individual or entity, but are not deemed to be outstanding for the purposes of
computing the percentage ownership of another person or entity shown in the
table.
  None of
the principals have outstanding options or warrants or other securities
convertible into the Common Stock of the Company.
  Item
13:  Certain Relationships and Related
Transactions
  Niva
Kallus is the corporate secretary and the daughter of Ron Kallus, the CEO of the
Company.
  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.
Platin Ltd. is a telemarketing company that is our only customer to date.
In March  2006 Platin Ltd. placed an order for our telemarketing
services for the  election in Israel which was scheduled for March 28,
2006. Platin has been using our System ever since for both political campaigns
and for commercial telemarketing services they provide to a variety of their
clients. We charge Platin a monthly per line cost of $3.0 plus a usage fee of
$0.012 per message while the GMG system is in the testing phase.  We
generated an aggregate of $67,443 since inception from Platin of which $25,896
was generated during the fiscal year ended March 31, 2009.  Platin
 pays a monthly fee for the lines and a per call fee for each successful
call placed.   Platin 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.
  Ron
Kallus, the Company Chief Executive Officer and Principal shareholder provided a
credit facility to the Company up to a maximum of $20,000 which may be drawn
down anytime from March 1, 2006 until May 18, 2007. This unsecured facility is
payable May 18, 2007 and bears an interest rate of prime plus one (1)
calculated on an annual basis payable annually in arrears with first payment due
March 1, 2007 and second payment due May 18, 2007, unless extended by mutual
consent of the parties.  On July 18, 2006, Mr. Kallus executed an amendment
to the March 1, 2006 credit facility increasing the total amount of the credit
facility from $20,000 to $50,000 and extending payable date from May 18, 2007 to
December 31, 2007 with the first interest payment due July 1, 2007 and second
payment due December 31, 2007.  During the period ending March 31,
2007,  Mr. Kallus advanced $12,100 compared to $4,223 in the corresponding
period ending March 31, 2006 for an aggregate of $16,323 from
inception.   No funds were advanced by Mr. Kallus during the
period ending March 31, 2008 and $15,000 were advanced during the period ending
March 31, 2009.  The aggregate of the loan advanced by Mr. Kallus is
$31,323.  The Officer has forgiven his right to the interest for the March
31, 2006 loan thus  no interest has been charged or
accrued.












NYN
International LLC provides hosting and internet services to the Company and
bills the Company for $2160 for each quarter.  Ron Kallus is the
principal of NYN International LLC.   The Accounts Payable
includes the sum of $6,480  owed for hosting and internet services
provided by NYN International LLC.





On May
28, 2008 the Registrant issued 674,000 shares for services rendered valued at
$16,850 to Ethel Schwartz for edgarizing and accounting
services  in lieu of cash.  The shares issued are restricted
shares and are subject to Rule 144.  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.  The shares
were sold to Hyett Group Ltd.  Ethel is a VP of Hyett Group
Ltd.




Ethel
Schwartz former President and Ron Kallus current CEO are both officers and
directors of a private R&D company, Digital Power Technologies, Inc. There
are no business relationships or synergies between Digital Power Technologies
and VGTel Inc.  Both of these entities operate in different industries and
sectors that have no relationship with each other. There is no plan for the
companies to have relationships in the future.




Except as
provided herein, the Company has not entered into any transactions with a
related party. Management does not know of any other transaction it will be
entering into with related parties.




The
Company has had no transactions with any promoter or promoters since its
inception. Nothing of value, including money, property, contracts, options or
rights of any kind has been received or will be received by a promoter, director
or indirectly from the Company which is not disclosed.








Item
14:  Principal Accountant Fees & Services:




(a) Audit
Fees. During the years ended March 31, 2009 fees billed by the Company's
auditors, Kempisty & Company CPA for services rendered for the audit of our
annual financial statements and estimated fees for the audit of our financial
statements was $5,000.




During
the years ended March 31, 2008 fees billed by the Company's prior auditor, N.
Blumenfrucht CPA for services rendered for the audit of our annual financial
statements for fiscal period ending March 31, 2009 and for the review
of the financial statements for quarters ending June 30, 2008 September 30, 2008
and December 31, 2008 amounted to $5,500.




(b)
Audit-Related Fees. During years ended April 30, 2009 and 2008, our auditors did
not receive any fees for any audit-related services other than as set forth in
paragraph (a) above.




(c) Tax
Fees. Our auditors received $0 in fees related to preparing and filing the Tax
returns for 2009-2008.






22











PART IV






Item
15:  Exhibits






(a)  
Exhibits on Form 8K




On May
28, 2008 we filed an 8K Form disclosing the following:




Item3.02 Unregistered Sales of Equity
Securities
  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 thereunder,
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.
    (a)  Dismissal of Previous
Independent Registered Public Accounting Firm.
 
 On April
27, 2009 , N. Blumenfrucht CPA PC  "NBCP" resigned as our independent
registered public accounting firm. The Board of Directors (the “Board”) of
VGTel, Inc. (the “Company”) approved such resignation on April  27,
2009.
 
 The
Company’s Board of Directors participated in and approved the decision to change
our independent registered public accounting firm.
  During
the two most recent fiscal two years 2008 and 2007 and through the subsequent
interim periods through April 27,  2009, the date of resignation, the
Company did not have any disagreements with "NBCP"  on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure,  which, if not resolved to "NBCP's"
satisfaction  would have caused it to make reference to the subject
matter of the disagreement(s) in connection with its report, except for the
following:
  The
report  on the Company’s financial statements for the fiscal year
ended March 31, 2009 and March 31, 2008 contained an explanatory paragraph
concluding that there was substantial doubt as to the Company’s ability to
continue as a going concern, since the  Company had no significant
income since inception, and the  continuation of the Company as a
going concern was dependent upon the Company’s ability to obtain additional
financing and upon future profitable operations.
  During
the most recent two  fiscal years  2008 and 2007
and  the Subsequent Interim Period, no "reportable events" (as
described in Item 304(a)(1)(v) of Regulation S-K) occurred that would be
required by Item 304(a)(1)(v) to be disclosed in this report.
  The
Company provided "NBCP" with a copy of this Current Report on this
amended  Form 8-K and requested that they furnish it with a letter
addressed to the SEC stating whether or not they agree with the above
statements. The Company has received the requested letter from "NBCP", and a
copy of such letter is filed as Exhibit 16.1 to this Current Report Form
8-K/A.
 
 (b)
Engagement of New Independent Registered Public Accounting Firm.
 
 On April
27, 2009, the Board appointed  Kempisty & Company Certified Public
Accountants,  PC, "K &Co."  as the Company’s new
independent registered public accounting firm. The decision to engage "K
&Co."  was approved by the Company’s Board of Directors on April
27, 2009.
 
 Prior to
April 27,  2009,  and during the most recent fiscal years
2008 and 2007  and through the subsequent interim periods through May
14, 2009, the Company did not consult with "K &Co."  regarding (1)
the application of accounting principles to a specified transactions, (2) the
type of audit opinion that might be rendered on the Company’s financial
statements, (3) no written or oral advice was provided that would be an
important factor considered by the Company in reaching a decision as to an
accounting, auditing or financial reporting issues, or (4) any matter that was
the subject of a disagreement between the Company and its predecessor auditor as
described in Item 304(a)(1)(iv) or a reportable event as described in Item
304(a)(1)(v) of Regulation S-K.


Exhibits (b) Filed with this Form
10K




Exhibit 23-1   Consent of N. Blumenfrucht
CPA PC
 Exhibit 31-1
 Exhibit 32-1









VGTEL,
      INC.(A
      DEVELOPMENT STAGE COMPANY)INDEX
 
 
 
 PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              F2
      -F 3BALANCE
      SHEETS
              F4STATEMENTS
      OF OPERATIONS
              F5STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
              F6STATEMENTS
      OF CASH FLOWS
              F7NOTES
      TO FINANCIAL STATEMENTS
              F8
      - 17
 
 
 
      
 
 F-1
 KEMPISTY
      & COMPANYCERTIFIED
      PUBLIC ACCOUNTANTS, P.C.15
      MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX
      (212) 513-1930REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard
      of DirectorsVGTel,
      Inc.(A
      development stage company)
 
 We have
audited the accompanying balance sheet of VGTel, Inc. (a development stage
company) as of March 31, 2009 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the year then ended and for
the period July 27, 2004 (inception) through March 31, 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 audit. The cumulative statements of operations, cash flows, and changes in
stockholders' deficit for the period July 27, 2004 (inception) through March 31,
2008, which were audited by another auditor whose report have been furnished to
us, and our opinion, insofar as it relates to the amounts included for the
period July 27, 2004 (inception) through March 31, 2008 is based solely on the
reports of the other auditor.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required at this time, to have, nor were we engaged to perform,
an audit of its internal control over financial reporting.  Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting.  Accordingly, we
express no such opinion.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of VGTel, Inc. (a development stage
company) as of March 31, 2009 and the results of its operations and cash flows
for the year then ended and for the period July 24, 2004 (inception) through
March 31, 2009, in conformity with accounting principles generally accepted in
the United States of America.
  The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no established source of revenue and has
incurred an accumulated loss of $341,802 since inception.  This raises
substantial doubt about its ability to continue as a going concern. Management’s
plans concerning this matter are also described in Note 2. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
 /S/Kempisty
      & CompanyCertified
      Public Accountants PCNew
      York, New YorkJune
      2, 2009
 
 
 
  F-2
 
 
 
 N.
Blumenfrucht CPA PC
 1040
East 22nd
Street
 Brooklyn
New York 11210
 Tel.-
718-692-2743
 Fax
-718-692-2203
 
 
 
 
 The Board
of Directors and Stockholders
 VGTel
Inc.
 
 We have
audited the accompanying balance sheet of VGTel Inc. (formerly NYN Inc.) as of
March 31, 2008, and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the year ended March 31, 2008
and for the periods July 27, 2004 (inception) through March 31, 2008 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
conducted our audits in accordance with standards of the Public Company
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. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial
reporting. 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, the financial statements referred to above present fairly, in all
material respects, the financial position of VGTel Inc. as of March 31, 2008 and
the related statements of operations and cash flows for the years ended March
31, 2008 and for the  period July 27, 2004 (inception) through March
31, 2008 in conformity with accounting principles generally accepted in the
United States.
 
 As
disclosed  in Note 2, the accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. The Company
is a development stage company and has had losses since inception, which raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty
 
 /s/ N.
Blumenfrucht CPA PC
  Brooklyn
New York
 June 26,
2008
  
 
 
 
 
 
 
 F-3
 
  VGTel,
Inc.
 (A
Development Stage Company)
 Balance
Sheets
 
 March
      31,ASSETS
                
                2009
                
                2008CURRENT
      ASSETSCash
      and cash equivalents
                $
                3,063
                $
                5,126Accounts
      receivable
                
                900
                
                1,232Total
      Current Assets
                
                3,963
                
                6,358Intellectual
      property,net (Note 4)
                
                10,150
                
                15,950Total
      Assets
                $
                14,113
                $
                22,308LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESAccounts
      payable
                $
                500
                $
                14,967Due
      to shareholders/others (Note 8)
                
                12,730
                
                19,060Due
      to shareholder/officer (Note 7
                
                31,323
                
                16,323Total
      Current Liabilities
                
                44,553
                
                50,350COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      DEFICITPreferred
      stock, $.001 par value,authorized
      10,000,000 shares; none issued
                
                -
                
                -Common
      stock, $.0001 par value,authorized
      200,000,000 shares; issued andoutstanding
      6,433,900 and 4,800,000, respectively
                
                643
                
                480Additional
      paid in capital
                
                310,719
                
                213,020Accumulated
      deficit
                
                (341,802)
                
                (241,542)Total
      Stockholders' Deficit
                
                (30,440)
                
                (28,042)Total
      Liabilities and Stockholders' Deficit
                $
                14,113
                $
                22,308
 
 
 
 
  
 
 
   F-4
  VGTel,
Inc.
 (A
Development Stage Company)
 Statements
of Operations
 
 For
      thePeriodJuly
      27, 2004(inception)For
      the Year Ended
                
                throughMarch
      31,
                
                March
      31,2009
                
                2008
                
                2009REVENUES
                $
                25,896
                $
                15,840
                $
                67,443OPERATING
      EXPENSESGeneral
      and administrative
                
                30,434
                
                29,061
                
                101,059Research & Development Expense
                
                16,060
                
                10,500
                
                87,560Officers'
      compensation and rent
                
                56,000
                
                56,000
                
                183,000Depreciation
      and amortization Expense
                
                5,800
                
                5,800
                
                19,085Professional
      services - consulting
                
                16,850
                
                -
                
                16,850Total
      operating expenses
                
                125,144
                
                101,361
                
                407,554Interest
      expense
                
                1,012
                
                -
                
                1,012NET
      LOSS FROM CONTINUING OPERATIONS
                
                (100,260)
                
                (85,521)
                
                (341,123)DISCONTINUED
      OPERATIONSLoss
      from discontinued operations
                
                -
                
                -
                
                (679)NET
      LOSS
                $
                (100,260)
                $
                (85,521)
                $
                (341,802)INCOME
      (LOSS) PER COMMON SHARE-Basic
      and diluted
                $
                (0.02)
                $
                (0.02)Weighted
      average number of shares outstanding
                
                6,279,833
                
                4,800,000
 
 
 
 
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements.
  F-5
   VGTel,
Inc.
 (A
Development Stage Company)
 Statements
of Changes in Stockholder’s Equity (Deficit)
 For the
period July 27, 2004 (Inception) to March 31, 2009
 
 Common
      Stock
                
                Paid-in
                
                AccumulatedShares
                
                Amount
                
                Capital
                
                Deficit
                
                TotalBalances,
      July 27, 2004
                
                -
                $
                -
                $
                -
                $
                -
                $
                -Intellectual
      property contributed by officers
                
                -
                
                -
                
                66,500
                
                -
                
                66,500Issuance
      of shares to incorporators and others
                
                4,000,000
                
                400
                
                (400)
                
                -
                
                -Units
      sold February 2006
                
                400,000
                
                40
                
                9,960
                
                -
                
                10,000Officers'
      compensation charged
                
                -
                
                -
                
                15,000
                
                -
                
                15,000Net
      loss
                
                -
                
                -
                
                -
                
                (56,426)
                
                (56,426)Balances,
      March 31, 2006
                
                4,400,000
                
                440
                
                91,060
                
                (56,426)
                
                35,074Issuance
      of shares for services rendered May 2006
                
                400,000
                
                40
                
                9,960
                
                -
                
                10,000Officers'
      compensation and rent charged
                
                -
                
                -
                
                56,000
                
                -
                
                56,000Net
      loss
                
                -
                
                -
                
                -
                
                (99,595)
                
                (99,595)Balances,
      March 31, 2007
                
                4,800,000
                
                480
                
                157,020
                
                (156,021)
                
                1,479Officers'  compensation
      and rent charged March 31, 2008
                
                -
                
                -
                
                56,000
                
                -
                
                56,000Net
      loss
                
                -
                
                -
                
                -
                
                (85,521)
                
                (85,521)Balances
      March 31, 2008
                
                4,800,000
                
                480
                
                213,020
                
                (241,542)
                
                (28,042)Officers'
      compensation and rent charged March 31, 2009
                
                -
                
                -
                
                56,000
                
                -
                
                56,000Units
      sold May  2008
                
                960,000
                
                96
                
                23,904
                
                -
                
                24,000Issuance
      of shares for services rendered May 2008
                
                674,000
                
                67
                
                16,783
                
                -
                
                16,850Imputed
      interest for due to Ron Kallus
                
                -
                
                -
                
                1,012
                
                -
                
                1,012Net
      loss
                
                -
                
                -
                
                -
                
                (100,260)
                
                (100,260)Balances
      March 31, 2009
                
                6,433,900
                $
                643
                $
                310,719
                $
                (341,802)
                $
                (30,440)
 
 
 
 
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements.   F-6
 VGTel,
Inc.
 (A
Development Stage Company)
 Statements
of Cash Flows
 
 For
      thePeriodJuly
      27, 2004(inception)For
      the Year Ended
                
                throughMarch
      31,
                
                March
      31,2009
                
                2008
                
                2009Cash
      flows from operating activitiesNet
      Loss
                $
                (100,260)
                $
                (85,521)
                $
                (341,802)Adjustments
      to reconcile net loss to netcash
      used by operating activities:Officer's
      compensation and rent
                
                56,000
                
                56,000
                
                183,000Intellectual
      property write down
                
                -
                
                -
                
                66,500Depreciation
      and amortization
                
                5,800
                
                5,800
                
                18,850Imputed
      interest for due to Ron Kallus
                
                1,012
                
                -
                
                1,012Issuance
      for common stock for services rendered
                
                16,850
                
                -
                
                26,850Changes
      in assets and liabilities:Accounts
      receivable
                
                332
                
                2,272
                
                (900)Accounts
      payable
                
                (14,467)
                
                -
                
                500Due
      to related shareholders
                
                (6,330)
                
                19,395
                
                12,730Net
      cash used by operating activities
                
                (41,063)
                
                (2,054)
                
                (33,260)Cash
      flows from investing activitiesPurchase
      of intellectual properties
                
                -
                
                -
                
                (29,000)Net
      cash used by investing  activities
                
                -
                
                -
                
                (29,000)Cash
      flows from financing activitiesSale
      of units
                
                24,000
                
                -
                
                34,000Officer
      loans
                
                15,000
                
                -
                
                31,323Net
      cash provided by financing activities
                
                39,000
                
                -
                
                65,323Net
      increase (decrease ) in cash
                
                (2,063)
                
                (2,054)
                
                3,063Cash
      and cash equivalents, beginning of period
                
                5,126
                
                7,180
                
                -Cash
      and cash equivalents, end of period
                $
                3,063
                $
                5,126
                $
                3,063Supplemental
      disclosures:Noncash
      investing and financing activities:Issuance
      of common stock in exchange for intellectual property
                $
                -
                $
                -
                $
                66,500Officer's
      compensation and rent credited to additional paid in
    capital
                $
                56,000
                $
                56,000
                $
                183,000Issuance
      of common stock for services rendered
                $
                16,850
                $
                -
                $
                26,850
 
 
 
 The
accompanying notes are an integral part of these financial
statements.  F-7
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
1 – GENERAL ORGANIZATION AND BUSINESS
 
 VGTel
Inc. (formerly known as Tribeka-Tek Inc.) (The “Company) was organized on
February 5, 2002 in the State of New York. Tribeka-Tek Inc. was engaged in the
business of providing Edgarizing services for publicly traded companies filing
through the Edgar system. On January 18, 2006 the Company purchased from NYN
International LLC its intellectual property assets pertaining to the GMG System,
a telemarketing campaing product. Tribeka Tek, Inc. was a minimally operating
corporation with nominal assets. Pursuant to the terms of the Acquisition
Agreement, the Company issued to NYN shareholders and designees 2,760,000 newly
issued shares of VGTel Inc. (formerly Tribeka Tek, Inc). At the time of the
acquisition, the 2,760,000 shares represented approximately 70% of the
outstanding shares of the Company, which resulted in the stockholders of NYN
obtaining control of the Company.
  The
merger has been accounted for as a reverse acquisition using the purchase method
of accounting. NYN International, Inc. has been treated as the acquiring company
for accounting purposes under Statement of Financial Accounting Standards
(“SFAS”) No. 141, “Business Combinations. As a result of the reverse
acquisition, the statements of operations presented herein include the results
of NYN International for the years ended March 31, 2006-2008, and include the
results of Tribeka Tek for the period from date of acquisition (January 18, 2006
) to March 31, 2006. Although NYN International was formed in July of 2004 there
was no activity prior to April 2005, thus the results for the fiscal
periods reflect results from inception.
 
 Because
NYN International LLC is treated as the acquirer for accounting purposes, the
equity accounts are adjusted for the share exchange and carried forward. Prior
accumulated deficits of NYN International LLC are adjusted to additional paid in
capital therefore carrying forward the accumulated deficit or earnings of NYN
International LLC. As these are the first periods with activity there was
no beginning accumulated deficit or earnings, and ending retained deficit
reflects the retained deficit for the current period.
 
 The
common stock per share information in the consolidated financial statements and
related notes have been retroactively adjusted to give effect to the reverse
acquisition on January 18, 2006 for all periods presented.
  On
January 18, 2006 the Company changed its name to VGTel Inc. As of the periods
stated the Company had generated minimal revenues and is considered a
development stage company.   As of February 2006 the Company has
ceased its Edgarizing operations and is concentrating its efforts in the
development of its intellectual properties.   As  a result of the
acquistion of the GMG System, the company is now operating in the telemarketing
sector of the telecommunications industry.
 
 NOTE
2 – GOING CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  The Company has no established
source of revenue.  This raises substantial doubt about the Company’s
ability to continue as a going concern.  Without realization of
additional capital, it would be unlikely for the Company to continue as a going
concern.  The financial statements do not include any adjustments that
might result from this uncertainty.
  The
Company’s activities to date have been supported by equity
financing.  It has sustained loss of $341,802 from inception July
27, 2004  to March 31, 2009.   Management plans to
seek funding from its shareholders and other qualified investors to
pursue its business plan.  In the alternative, the Company may be
amenable to a sale, merger or other acquisition in the event such
transaction is deemed by management to be in the best interests of the
shareholders.
 
 NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Accounting
Basis
 
 These
financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
 
 Fiscal
Year
 
 The
Company has chosen March 31, as its fiscal year end.
 
 
 
  F-8
   VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Cash and Cash
Equivalents
 
 For the
purpose of the statements of cash flows, cash equivalents include all highly
liquid investments with maturity of three months or less.
 
 Property andEquipment
 
 Depreciation
and amortization are recognized principally on the straight line method in
amounts adequate to amortize costs over the estimated useful lives of the
respective assets.  The estimated useful life of equipment is five
years.
 
 Stock Based
Compensation
  In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which
replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R),
companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements include
stock options, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans. In March 2005 the SEC
issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views
of the staff regarding the interaction between SFAS No. 123(R) and certain SEC
rules and regulations and provides the staff’s views regarding the valuation of
share-based payment arrangements for public companies. SFAS No. 123(R) permits
public companies to adopt its requirements using one of two
methods.
 
 On April
14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS
123R. Companies may elect to apply this statement either prospectively, or on a
modified version of retrospective application under which financial statements
for prior periods are adjusted on a basis consistent with the pro forma
disclosures required for those periods under SFAS 123. Effective January 1,
2006, the Company has fully adopted the provisions of SFAS No. 123R and related
interpretations as provided by SAB 107. As such, compensation cost is measured
on the date of grant at their fair value. Such compensation amounts, if any, are
amortized over the respective vesting periods of the option grant. The Company
applies this statement prospectively.
  Dividends
 
 The
Company has not adopted any policy regarding payment of dividends. No dividends
have been paid during the periods shown.
 
 Income
Taxes
 
 The
Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, “Accounting for Income Taxes;” SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.  No provision
for income taxes is included in the financials statements due to its immaterial
amount.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
 
 Net Income (Loss) per Common
Share
 
 Net
income (loss) per common share is computed based on the weighted average number
of common shares outstanding and common stock equivalents, if not
anti-dilutive.  The Company has not issued any potentially dilutive
securities.
 
  F-9
  VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Revenue and Cost
Recognition
 
 The
Company has generated no revenues to date.  The Company plans to
recognize revenue on arrangements in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial
Statements” and SAB No. 104, “Revenue Recognition”. In all cases, revenue is
recognized only when the price is fixed or determinable, persuasive evidence of
an arrangement exists, the service is performed and collectibles is reasonably
assured.   The Company will recognize revenues from the sale of
its tutorial CD’s and for its tutorial course memberships after the sale has
been made, payment has been received and the CD or access to the learning
infrastructure has been delivered to the buyer.
 
 Intellectual
Properties
 
 The
Company developed the intellectual properties known as Group Messaging
Gateway.   As of December 31, 2007 total costs associated with
the development of the GMG System was $95,500.   It has been
determined that of this amount $29,000 had been incurred after technological
feasibility has been reached. All costs prior to technological feasibility have
been expensed.   All post development costs have been expensed in the
periods incurred. The asset valued at $29,000 is being amortized over a
sixty-month period.
  The
costs, which were incurred by the Company in the development of the program,
were segregated between pre technological feasibility costs and post
technological feasibility costs. It is estimated that the useful life of this
asset should approximate five years. Under FASB No. 86, once technological
feasibility has been established, all software production costs are capitalized
and reported at the lower of unamortized cost or net realizable value. When the
product is available for general use amortization begins and all further
maintenance costs are expensed.
 
 Impairment of Long-Lived
Assets
 
 In
accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the Company
periodically reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets may not
be fully recoverable. The Company recognizes an impairment loss when the sum of
expected undiscounted future cash flows is less than the carrying amount of the
asset. The amount of impairment is measured as the difference between the
asset's estimated fair value and its book value. The Company did not record any
impairment charges during the years ended March 31, 2009 and 2008.
 
 Recently Adopted Accounting
Pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS
157"). SFAS 157 defines fair value, establishes a framework and gives guidance
regarding the methods used for measuring fair value, and expands disclosures
about fair value measurements. In February 2008, the FASB issued FASB Staff
Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13
and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13" ("FSP
157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No.
157" ("FSP 157-2"). FSP 157-1 amends SFAS 157 to remove certain leasing
transactions from its scope. FSP 157-2 delays the effective date of SFAS 157 for
all non-financial assets and non-financial liabilities, except for items that
are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually), until fiscal years beginning after November
15, 2008. SFAS 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The Company adopted SFAS 157 effective April 1st, 2008
for all financial assets and liabilities as required. The adoption of SFAS 157
was not material to the Company's financial position or results of
operations.
 
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities — Including an Amendment of FASB
Statement No. 115,” (“SFAS 159”) which is effective for fiscal years beginning
after November 15, 2007. SFAS 159 is an elective standard which permits an
entity to choose to measure many financial instruments and certain other items
at fair value at specified election dates. Subsequent unrealized gains and
losses on items for which the fair value option has been elected will be
reported in earnings. The Company has not elected the fair value option for any
assets or liabilities under SFAS 159.
 
 
  F-10
  VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 New Accounting
Pronouncements
 
 On
December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in
Consolidated Financial Statements(SFAS No. 160). SFAS No. 160 requires
all entities to report noncontrolling (minority) interests in subsidiaries as
equity in the consolidated financial statements. The statement establishes a
single method of accounting for changes in a parent’s ownership interest in a
subsidiary that do not result in deconsolidation and expands disclosures in the
consolidated financial statements. SFAS No. 160 is effective for fiscal years
beginning after December 15, 2008 and interim periods within those fiscal years.
We have not yet determined the impact of the adoption of SFAS No. 160 on our
financial statements and footnote disclosures.
 
 In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
141 (revised 2007), “Business Combinations” (SFAS No. 141(R)) as amended by
FASB staff position FSP 141(R)-1, “Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies.”
SFAS No. 141(R) generally requires an entity to recognize the assets
acquired, liabilities assumed, contingencies, and contingent consideration at
their fair value on the acquisition date. In circumstances where the
acquisition-date fair value for a contingency cannot be determined during the
measurement period and it is concluded that it is probable that an asset or
liability exists as of the acquisition date and the amount can be reasonably
estimated, a contingency is recognized as of the acquisition date based on the
estimated amount. It further requires that acquisition-related costs are
recognized separately from the acquisition and expensed as incurred,
restructuring costs generally is expensed in periods subsequent to the
acquisition date, and changes in accounting for deferred tax asset valuation
allowances and acquired income tax uncertainties after the measurement period
impact income tax expense. In addition, acquired in-process research and
development is capitalized as an intangible asset and amortized over its
estimated useful life. SFAS 141(R) is effective for financial statements issued
for fiscal years beginning on or after December 15, 2008.  The
adoption of this statement is not expected to have a material effect on the
Company's future financial position or results of operations.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities” (“SFAS 161”). This statement requires companies to
provide enhanced disclosures about (a) how and why they use derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a company’s financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The Company is currently evaluating the impact of adopting
SFAS No. 161 on its financial statements.
 
 In April
2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life
of Intangible Assets (“FSP FAS 142-3”) which amends the factors an entity should
consider in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FAS No. 142, Goodwill and
Other Intangible Assets (“FAS No. 142”). FSP FAS 142-3 applies to intangible
assets that are acquired individually or with a group of assets and intangible
assets acquired in both business combinations and asset acquisitions. It removes
a provision under FAS No. 142, requiring an entity to consider whether a
contractual renewal or extension clause can be accomplished without substantial
cost or material modifications of the existing terms and conditions associated
with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own
experience in renewing similar arrangements. An entity would consider market
participant assumptions regarding renewal if no such relevant experience exists.
FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with
early adoption prohibited. We have not yet determined the effect, if any, of the
adoption of this statement on our financial condition or results of
operations.
 
 In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles".  SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States.  It is effective 60 days following the SEC's approval
of the Public Company Accounting Oversight Board amendments to AU Section 411,
"The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles".  The adoption of this statement is not expected to have a
material effect on the Company's financial statements.
 
 
 
 F-11
 
 
 
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 New Accounting
Pronouncements (continued)
 
 In May
2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1").  FSP APB 14-1
clarifies that convertible debt instruments that may be settled in cash upon
either mandatory or optional conversion (including partial cash settlement) are
not addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants."  Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account
for the liability and equity components in a manner that will reflect the
entity's nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods.  FSP APB 14-1 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of this statement
is not expected to have a material effect on the Company's financial
statements.
 
 In June
2008, the Financial Accounting Standards Board (“FASB”) issued FSP No. EITF
03-6-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1
concludes that unvested share-based payment awards that contain rights to
receive non-forfeitable dividends or dividend equivalents are participating
securities, and thus, should be included in the two-class method of computing
earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years
beginning after December 15, 2008, and interim periods within those years. Early
application of EITF 03-6-1 is prohibited. It also requires that all prior-period
EPS data be adjusted retrospectively. We have not yet determined the effect, if
any, of the adoption of this statement on our financial condition or results of
operations.
 
 In
April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4). FSP
157-4 provides guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP 157-4
requires disclosure in interim and annual periods of the inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques. We have not yet determined the effect, if any, of the adoption of
this statement on our financial condition or results of operations.
 
 In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2). FSP
115-2/124-2 amends the requirements for the recognition and measurement of
other-than-temporary impairments for debt securities by modifying the
pre-existing “intent and ability” indicator. Under FSP 115-2/124-2,
another-than-temporary impairment is triggered when there is intent to sell the
security, it is more likely than not that the security will be required to be
sold before recovery, or the security is not expected to recover the entire
amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the
presentation of another-than-temporary impairment in the income statement for
those impairments involving credit losses. The credit loss component will be
recognized in earnings and the remainder of the impairment will be recorded in
other comprehensive income. The adoption of this statement is not expected to
have a material effect on the Company's financial statements.
 
 In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure
about Fair Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB
28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of FAS 107, “Disclosures about the Fair
Value of Financial Instruments.” Additionally, FSP 107-1/APB 28-1 requires
disclosure of the methods and significant assumptions used to estimate the fair
value of financial instruments on an interim basis as well as changes of the
methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does
not change the accounting treatment for these financial instruments. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
 
 
 
 
 F-12
 
 
 
 
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE 4 –
INTANGIBLE ASSETS
 
 Intangible
asset consists of the following:
 March
      31,2009
                
                2008GMG
      System
                $
                29,000
                $
                29,000Less:
      Accumulated amortization
                
                (18,850)
                
                (13,050)Total
                $
                10,150
                $
                15,950
 
 Intangible
assets consist of GMG System which are recorded at cost during the development
stage and amortized over a straight-line basis. The amortization expense for the
years ended March 31, 2009 and 2008.
 
 NOTE
5 – OFFICERS’ COMPENSATION
 
 The
officer has taken no actual compensation since inception. For financial
statement purposes on the Statement of Operations officer's compensation has
been charged in the amount of $50,000 in the current fiscal period ending March
31, 2009 and for the fiscal year ending March 31,
2008.   Additional Paid in Capital has been credited for the
corresponding amount in each of the years, respectively.
 
 NOTE
6 – ACCOUNTS PAYABLE
 
 Accounts
payable includes professional fees payable and monies due to
vendors.
 
 NOTE
7 – DUE TO SHAREHOLDER/OFFICER
 
 Various
funds had been advanced by the CEO, Mr. Ron Kallus  to the
company.  As of March 31, 2009 Mr. Kallus has advanced an aggregate of
$31,323.  The Officer has forgiven his right to the interest for the
March 31, 2006 loan thus no interest has been charged or
accrued.  The Addendum to the loan agreement extended the loan until
December 2008.  Notwithstanding, as of May 12, 2009, Mr. Kallus
has  not demanded the funds to be returned to him.
 
 NOTE
8 – DUE TO SHAREHOLDERS/OTHERS
 
 Yoav
Kallus, the son of Ron Kallus, the Company CEO,   provided Research
& Development services to the Company for $6,250 during the period ended
March 31, 2006.  As of March 31, 2009, no payment has been made to
Yoav Kallus, consequently said amount is being accrued.
  NYN
International provides hosting and internet services to the Company.  Ron
Kallus, the CEO of the Company is also the president of NYN International
LLC.  As of March 31, 2009, NYN International LLC is owed
$6,480.
 
 NOTE
9 – ACCOUNTING FOR WARRANTS AND DERIVATIVE INSTRUMENTS
 
 Emerging
Issues Task Force issue EITF 00-19 “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock,”
(“EITF No. 00-19”) requires freestanding contracts that are settled in a
company's own stock to be designated as an equity instrument, asset or a
liability. In accordance with EITF No. 00-19, the Company determined that the
warrants issued in connection with the Common Shares sold to its shareholders
should not be classified as a derivative liability due to the fact that the
Registration Rights Agreement specifically states that in the event the SEC
fails to declare the registration statement effective, the Company has no
liability to the warrant holders and has no obligation to pay any
penalties.  Furthermore, the Company evaluated the Class A and Class B
Warrants and Class C Warrants to determine if the embedded conversion options
were derivatives pursuant to SFAS 133 and related interpretations including EITF
00-19. At the time the Warrants were issued, the Company determined that the
embedded conversion options are not derivatives because the company was not a
publicly traded and the underlying shares are not easily convertible to cash.
The company therefore determined that the warrants have no intrinsic
value.
 
  F-13
  VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
10 – 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 $6,000 for the annual  periods ended March 31,
 2009 and 2008,  respectively.   Additional paid in
capital has been credited for the corresponding amount.
  The
company signed various contracts to build a Global Messaging Gateway (GMG) and
for hosting its servers. This is a web-hosted application, which provides
message-broadcasting facility, for business to business, personal,
telemarketing, alerting and many more applications.
  The
company has an obligation to repay the loan to Mr. Kallus pursuant to the
Officer's loan agreement. As of March 31, 2009 Mr. Kallus advanced an
aggregate of $31,323.  The Officer has forgiven his right to the interest
for the March 31, 2006 loan thus no interest has been charged or
accrued.   The Addendum to the loan agreement extended the loan
until December 2008.  Notwithstanding,  as of May 12, 2009,
Mr. Kallus has  not demanded the funds to be returned to
him.
 
 NYN
International LLC provides hosting and internet services to the Company and
bills the Company for $2,160 for each quarter.  Ron Kallus is the
principal of NYN International LLC.   The due to related
shareholders includes the sum of $6,480 owed for hosting and internet services
provided by NYN International LLC.
 
 In
addition the Company is providing its services to a telemarketing company in
Israel that is distributing the services to telemarketing clients in
Israel.  The services are being provided to Platin, which is a related
party to the Company.
  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
11 – STOCKHOLDERS' DEFICIT
 
 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.
 
 
 
 F-14
 
 
 
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
11 – STOCKHOLDERS' DEFICIT (continued)
 
 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.
  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 $56,000 in each of the periods ended March 31,
2009 and 2008 respectively for officer's compensation and
rent.
  Additional
paid in capital has been credited $1,012 in the year ended March 31, 2009 for
imputed interest for a loan from Ron Kallus.
 
 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
 
 
 
 F-15
 
 
 
 
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
12 – RELATED PARTY TRANSACTIONS
 
 Niva Kallus is the corporate secretary and the daughter of Ron
Kallus, the CEO of the Company.
  Platin
Ltd. is a telemarketing company that is our only customer to date. 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.
  On
March 1, 2006, Ron Kallus, the Company Chief Executive Officer and Principal
shareholder provided a credit facility to the Company up to a maximum of $20,000
which may be drawn down anytime from March 1, 2006 until May 18, 2007. This
unsecured loan is payable May 18,  2007 and bears an interest rate of prime
plus one (1) calculated on an annual basis payable annually in arrears with
first payment due March 1, 2007 and second payment due May 18, 2007, unless
extended by mutual consent of the parties.
  On July
18, 2006, Mr. Kallus executed an amendment to the March 1, 2006 credit facility
increasing the total amount of the credit facility from $20,000 to $50,000 and
extending payable date from May 18, 2007 to December 31, 2007 with the first
interest payment due July 1, 2007 and second payment due December 31,
2007.  On May 22, 2007 in a second addendum to the Loan Agreement Mr.
Kallus waived all interest  payments for  loan
facility,  retroactively from the  March 1,
2006  and declaring the loan facility as interest free.  The
Officer had previously forgiven his right to the interest for the March 31,
2006 loan thus no interest has been charged or accrued.
 
 Due to
the increase in the credit facility, for the year ended March 31, 2009, the
Company has imputed interest using an interest rate of prime plus 1% for a total
of $1,012 which was charged to interest expense and credited to additional paid
in capital.
  Ethel
Schwartz former President and Ron Kallus current CEO are both officers and
directors of a private R&D company, Digital Power Technologies, Inc. There
are no business relationships or synergies between Digital Power Technologies
and VGTel Inc.  Both of these entities operate in different industries and
sectors that have no relationship with each other. There is no plan for the
companies to have relationships in the future.  On May 28, 2008 the
Registrant issued 674,000 shares for services rendered valued at $16,850 to
Ethel Schwartz for edgarizing and accounting services  in lieu of
cash.  The shares issued are restricted shares and are subject to Rule
144.  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.  The shares were sold to Hyett
Group Ltd.  Ethel is a VP of Hyett Group Ltd.
 
 Except as
provided herein, the Company has not entered into any transactions with a
related party. Management does not know of any other transaction it will be
entering into with related parties.
  The
Company has had no transactions with any promoter or promoters since its
inception. Nothing of value, including money, property, contracts, options or
rights of any kind has been received or will be received by a promoter, director
or indirectly from the Company which is not disclosed.
  NYN
International LLC provides hosting and internet services to the Company and
bills the Company for $2,160 for each quarter.  Ron Kallus is the
principal of NYN International LLC.  The due to related shareholders
includes the sum of $6,480 owed for hosting and internet services provided by
NYN International LLC.
 
 
 
 
 F-16
 
 
 
 
 VGTel,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 March 31,
2009
 
 
 NOTE
13 – INCOME TAXES
 
 The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized. In the Company’s
opinion, it is uncertain whether they will generate sufficient taxable income in
the future to fully utilize the net deferred tax asset.  Accordingly,
a valuation allowance equal to the deferred tax asset has been
recorded.  The total deferred tax asset is $75,196 which is calculated
by multiplying a 22% estimated tax rate by the cumulative NOL of
$341,802.   The total valuation allowance is a comparable
$75,196.  Details for the last  four  years
follow:
 Fiscal
      Year Ended March 31,2009
                
                
                2008
                
                
                2007
                
                
                2006Deferred
      tax
                
                $
                22,057
                
                
                $
                18,815
                
                
                $
                21,911
                
                
                $
                12,414Valuation
      allowance
                
                
                (22,057
                )
                
                
                (18,815
                )
                
                
                (21,911
                )
                
                
                (12,414
                )Current
      tax payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Income
      tax expense
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
 
 Below is a
chart showing the estimated corporate federal net operating loss (NOL) and the
year in which it will expire.
 
 Year
                
                Amount
                
                Expiration2006
                $
                56,426
                
                20262007
                
                99,595
                
                20272008
                
                85,521
                
                20282009
                
                100,260
                
                2029Total
      NOL
                $
                341,802
 
 The
Company filed tax returns for the years from 2004 - 2008.
 
    NOTE
14 – SUBSEQUENT EVENTS
 
 On April
27, 2009 the Company filed an 8K Report Item 4.01 which stated:
 
 On
April 27, 2009, N. Blumenfrucht CPA PC  "NBCP" resigned as our
independent registered public accounting firm. The Board of Directors (the
“Board”) of VGTel, Inc. (the “Company”) approved such resignation on
April 27, 2009.
 
 On
April 27, 2009, the Board appointed  Kempisty &
Company Certified Public Accountants,  PC,
"K &Co."  as the Company’s new independent registered public
accounting firm. The decision to engage "K &Co."  was approved by
the Company’s Board of Directors on April 27, 2009.
  F-17


SIGNATURES
   In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, there unto duly
authorized.
  VGTel
      Inc.Registrant
    VGTel,
Inc.,
 
  Ron
      Kallus
              
              VGTel,
      Inc.President
      and Principal Executive OfficerDate: 
      June 12, 2009
              By:
              /s/ Ron
      KallusTitle: 
      President and Principal Executive
Officer
  Ron
      Kallus
              
              VGTel,
      Inc.Principal
      Accounting OfficerDate:  June
      12, 2009
              By:
              /s/ Ron
      KallusTitle,
      Principal Accounting Officer