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, 2010





[ ]
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)











VGTEL,
INC.







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.    Yeso   
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.    Yesx
   Noo








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.    Yesx
 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 filero
            
            Accelerated
      fileroNon-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 x No o





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates was $45,000 based on the current bid  price of
$.03 per share as quoted on the OTC Bulletin Board as of April 29,
2010 , 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 2
            PROPERTIES
            6ITEM 3
            LEGAL
      PROCEEDINGS
            6ITEM 4
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
            6PART IIITEM 5
            MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS
            7ITEM 6
            SELECTED
      FINANCIAL DATA
            7ITEM 7
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            7ITEM 7A
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            11ITEM 8
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
            F-1ITEM 9
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
            13ITEM 9A(T)
            CONTROLS
      AND PROCEDURES
            13ITEM 9B
            OTHER
      INFORMATION
            14PART IIIITEM 10
            DIRECTORS
      AND EXECUTIVE OFFICERS
            16ITEM 11
            EXECUTIVE
      COMPENSATION
            17ITEM 12
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
            19ITEM 13
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS,
            20ITEM 14
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
            20PART IVITEM 15
            EXHIBITS
            21SIGNATURES
            22








1












Item
1: Description of Business
 
 
 We are
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.
 
 
 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.
 
 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.
 
 2
 
 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.
 
 
 
 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 2010-2011.
 
 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.
   3
 
 
 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.
 
 
 
 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 2010, 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.
   4
 
 
 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
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.
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.
 
 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 2010, when we will slowly start adding a few additional
customers. We believe that by December 2010 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.
 
  5
 
 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.


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.








6





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, 2010 and has  approximately 43 shareholders.













VGTel,
      Inc.Period
              High
              LowQtr.
      Ended March 31, 2010
              $.25
              $.25Qtr.
      Ended December 31, 2009
              $.25
              $.25Qtr.
      Ended  September 30, 2009
              $.25
              $.25Qtr.
      Ended June 30, 2009
              $.25
              $.25Qtr.
      Ended  March 31, 2009
              $.25
              $.25Qtr.
      Ended  December 31, 2008
              $.25
              $.25Qtr.
      Ended September 30, 2008
              $.25
              $.25Qtr.
      Ended June 30, 2008
              $.25
              $.25














em
6:  Selected Financial Data





As a
small reporting company, we are not required to provide Selected Financial
Data.





Item
2.  Management Discussion & Analysis
 
 We are
currently testing a newly developed telemarketing campaign product called Global
Messaging Gateway (GMG). The GMG system is designed to enable the User of the
system to set up telemarketing campaigns to distribute messages to bulk lists of
recipients. Messages can be delivered in the medium of text, voice, Fax or
multimedia. Messages can be delivered from one control center to thousands of
clients anywhere in the world simultaneously. The GMG System uses the internet
instead of traditional telephone equipment.
 
 The
Global Messaging Gateway (GMG) is currently the first and only product of the
Company. We currently have only one User that is using our system.  Since
inception, we generated an aggregate of $82,543.   Platin pays a
monthly fee for the lines and a per call fee for each successful call
placed.    Platin Ltd., is a related party.  Israel Hason is
the Chief Marketing Officer of our Company and a Director. Mr. Hason is also the
managing partner and principal shareholder of Platin Ltd.
Israel.   Mr. Hason has agreed to recuse himself from any
corporate decision relating to Platin Ltd business relationship with VGTel,
Inc.
 
 7
 
 Ongoing
Development of our GMG Systems.
 
 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.  During the next 12 months we will
require  further development costs of $15,000.    
However, we do not have the funds available for additional development
costs.   Further development of the GMG system and other products is
dependent on our ability to raise additional funds.
 
 The
Company plans to raise additional funds in order to expand its business and
fully execute its Plan of Operations.  To date, the company has been
unsuccessful in raising additional funds.   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 first quarter of 2010, 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.
 
 On
January 2009 the Israeli Parliament passed an anti spam law which allows
telemarketing campaign to call only customers who agreed to receive calls
(OPT-IN), while assessing a high fine for any violation. This change affected
the entire telemarketing activity and as a result, our services to Platin
diminished.  Together with Platin we are looking for ways to overcome
this issue, but so far without any success. We are currently in need of
immediate cash to continue our business. However, the current status of the
global market leave us with less hope to obtain the required 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.
 
 At the
current level of revenues and expenses, in conjunction with the committed loan
from our President, we anticipate we will  not  have sufficient
funding to operate for the next 12 months. Additionally, we will need to raise
substantial funds in order to launch a broad marketing campaign to attract
clients for our product in order to become a viable business. We cannot offer
assurances that any additional funds will be raised when we require them or that
we will be able to raise funds on suitable terms. Failure to obtain such
financing when needed could delay or prevent our planned development and our
marketing effort which is necessary for our business to become
viable.
 
 The
Company intends to meet its long-term liquidity needs through available cash and
cash flow as well as through additional financing from outside sources. The
Company anticipates raising additional funds from the possible exercise of
Warrants or equity financing with private investors following effectiveness of
the Registration Statement. As of the date of this Prospectus no agreements have
been undertaken to obtain any funding. The Warrants are exercisable at an
exercise price of $0.25 per share. The Company does not expect that warrants
will be exercised if the prevailing price of the Common Stock at such time of
exercise is below or at the exercise price.
 
 Additional
issuances of equity or convertible debt securities will result in dilution to
the current shareholders. Further, such securities might have rights,
preferences or privileges senior to our common stock. Additional financing may
not be available upon acceptable terms, or at all. If adequate funds are not
available or are not available on acceptable terms, we may not be able to fully
execute our Plan of Operations to expand our business, which could significantly
and materially restrict our business operations. If additional capital is raised
through the sale of additional equity or convertible securities, substantial
dilution to our stockholders is likely to occur which may result in a partial or
substantial loss to your investment in our common stock.
 
 If the
Company fails to raise additional funds to execute its expansion plan, it is
likely that the Company will not be able to operate as a viable entity and may
be forced to go out of business.
 
 
                     
  Results
of Operations:
 
 Fiscal
Year  Ended  March 31, 2010 and March 31, 2009
 Revenues:
 
 Revenues
for the fiscal year ending March 31, 2010 were $15,100 compared to $25,896 for
the fiscal year ended March 31, 2009.  Revenues decreased by 42%.  The
decrease of revenues was offset by a decrease in expenses  and resulted
from  the Company no longer providing hosting services thereby not
incurring both the income and expense for those services.
 
 
 We
continued to provide the services to Platin Ltd. during the twelve month period
ended March 31, 2010.
 
 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.
 
 Expenses:
 
 Total
operating expenses for the fiscal year ended March 31, 2010 were $92,047 as
compared to  $125,144 for the fiscal year ended March 31, 2009,
a  decrease of approximately 26
%.     Expenses included General and Administrative
expense of $16,067 as compared to $30,434 for fiscal year ending March 31,
2009.  Additionally, the company incurred no stock compensation for
services rendered in the fiscal year ended March 31, 2010 as compared to $16,850
in stock based compensation for services rendered to the Company during the
period ending March 31, 2009.    Officers Compensation &
Rent amounted to $56,000 during the fiscal year ended March 31, 2010 as compared
to from $56,000 during the fiscal year ended March 31, 2009. 
Additional Paid in Capital has been credited for these
amounts.  Depreciation and Amortization was $5,800 for the fiscal year
ended March 31, 2010 compared to $5,800 for the period ending March 31,
2009.  The decrease  in expenses in the fiscal year
ended March 31, 2010 was offset by a decrease in revenues resulted
from  the Company no longer providing hosting services thereby not
incurring both the income and expense for those services.
 
 Research
and development expenses for the fiscal year ended December 31,
2010  decreased to $14,180 as compared to $16,060 for the fiscal year
ended March 31, 2009.
 
 Net loss
 
 The
Company reported a net loss for the twelve month period ending March 31,
2010 of $78,281 as compared to  of $100,260  for the fiscal
year period ending March 31, 2009.
 
 The
Company had a  cumulative net losses since its inception
of $420,083 in the fiscal year ended March 31, 2010 as compared
to   $341,802 for the period ending March 31,
2009.    The increase  in net loss  is
 attributable to the additional losses we incurred during the period
ending March 31, 2010.
 
 
 Liquidity
and Capital Resources:
 For
the Fiscal Year  Ended March 31, 2010 and March 31,
2009.
 
 As
of  March 31, 2010 the Company had  $1,331 as compared
to $3,063 in cash,  as at March 31, 2009.
 
 Net cash
used by operating activities for the fiscal year period ended March 31,
2010 was $8,732 as compared to  $41,063  for the fiscal
year  ended March 31, 2009.
 
 Net cash
provided by financing activities during fiscal year ending March 31, 2010
 was $7,000 as compared to $24,000 for sales of Units and  $15,000
loaned to the Company by Ron Kallus the previous twelve months period ended
March 31, 2009.  A related party provided short term interest
free loans to the company for $7,000 for the period ending March 31,
2010.
 
 Various
funds had been advanced by the CEO, Mr. Ron Kallus to the
company.  As of March 31, 2010 and 2009 Mr. Kallus has advanced an
aggregate of $31,323.  The advances are non-interest bearing and due
on March 31, 2011.  Interest has been imputed on these advances at
4.25% and charged to additional paid-in capital. During fiscal 2010 and 2009,
Mr. Kallus loaned $0 and $15,000 to the Company.
 
 At the
current level of revenues and expenses, in conjunction with the committed loan
from our President, we anticipate we will  not  have sufficient
funding to operate for the next 12 months. Additionally, we will need to raise
substantial funds in order to launch a broad marketing campaign to attract
clients for our product in order to become a viable business. We cannot offer
assurances that any additional funds will be raised when we require them or that
we will be able to raise funds on suitable terms. Failure to obtain such
financing when needed could delay or prevent our planned development and our
marketing effort which is necessary for our business to become
viable.
 
 The
Company intends to meet its long-term liquidity needs through available cash and
cash flow as well as through additional financing from outside sources. The
Company anticipates raising additional funds from the possible exercise of
Warrants or equity financing with private investors following effectiveness of
the Registration Statement. As of the date of this Prospectus no agreements have
been undertaken to obtain any funding. The Warrants are exercisable at an
exercise price of $0.25 per share. The Company does not expect that warrants
will be exercised if the prevailing price of the Common Stock at such time of
exercise is below or at the exercise price.
 
 Additional
issuances of equity or convertible debt securities will result in dilution to
the current shareholders. Further, such securities might have rights,
preferences or privileges senior to our common stock. Additional financing may
not be available upon acceptable terms, or at all. If adequate funds are not
available or are not available on acceptable terms, we may not be able to fully
execute our Plan of Operations to expand our business, which could significantly
and materially restrict our business operations. If additional capital is raised
through the sale of additional equity or convertible securities, substantial
dilution to our stockholders is likely to occur which may result in a partial or
substantial loss to your investment in our common stock.
 
 If the
Company fails to raise additional funds to execute its expansion plan, it is
likely that the Company will not be able to operate as a viable entity and may
be forced to go out of business.


Results
of Operations:
 
 Fiscal
Year  Ended  March 31, 2010 and March 31, 2009
 Revenues:
 
 Revenues
for the fiscal year ending March 31, 2010   was $15,100 compared to $25,896
for the fiscal year ended March 31, 2009.  Revenues decreased by 42%. 
The decrease of revenues was offset by a decrease in expenses  and resulted
from  the Company no longer providing hosting services thereby not
incurring both the income and expense for those services.
 
 We
continued to provide the services to Platin Ltd. during the twelve month period
ended March 31, 2010.
 
 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.
  
 Expenses:
 
 Total
operating expenses for the fiscal year ended March 31, 1010 was 72,281 as
compared to  $125,144 for the fiscal year ended March 31, 2010,
a  decrease of approximately 42
%.     Expenses included General and Administrative
expense of $16,067 as compared to $30,434 for fiscal year ending March 31,
2009.  Additionally, the company incurred no stock compensation for
services rendered in the fiscal year ended March 31, 2010 as compared to $16,850
in stock based compensation for services rendered to the Company during the
period ending March 31, 2009.    Officers Compensation &
Rent amounted to $56,000 during the fiscal year ended March 31, 2010 as compared
to from $56,000 during the fiscal year ended March 31, 2009. 
Additional Paid in Capital has been credited for these
amounts.  Depreciation and Amortization was $5,800 for the fiscal year
ended March 31, 2010 compared to $5,800 for the period ending March 31,
2009.  The decrease  in expenses in the fiscal year
ended March 31, 2010 was offset by a decrease in revenues resulted
from  the Company no longer providing hosting services thereby not
incurring both the income and expense for those services.
  Research
and development expenses for the fiscal year ended December 31,
2010  decreased to $14,180 as compared to $16,060 for the fiscal year
ended March 31, 2009.
 
  
 Net
loss
 
 The
Company reported a net loss for the twelve month period ending March 31,
2010 of $72,281 as compared to  of $100,260  for the fiscal
year period ending March 31, 2009.
 
 The
Company had a  cumulative net losses since its inception
of $420,083 in the fiscal year ended March 31, 2010 as compared
to   $341,802 for the period ending March 31,
2009.    The increase  in net loss  is
 attributable to the additional losses we incurred during the period
ending March 31, 2010.
 
 10
 
 Liquidity
and Capital Resources:
 For
the Fiscal Year  Ended March 31, 2010 and March 31,
2009.
 
 As
of  March 31, 2010 the Company had  $1,331 as compared
to $3,063 in cash,  as at March 31, 2009.
 
 Net cash
used by operating activities for the fiscal year period ended March 31,
2010 was (8,732) as compared to (41,063)  for the fiscal
year  ended March 31, 2009.
 
 Net cash
provided by investing activities during the fiscal year ending March 31,
2010   was  0  for the period ended March 31, 2010  and
2009 respectively.
 Net cash
provided by financing activities during fiscal year ending March 31, 2010
 was 0 as compared to $24,000 for sales of Units and  $15,000 loaned
to the Company by Ron Kallus the previous twelve months period ended March
31, 2009.  Additionally a related party provided short term interest
free loans to the company for $7,000 for the period ending March 31, 2010
as compared to 0 for the corresponding period ending March 31,
2009,
  Various
funds had been advanced by the CEO, Mr. Ron Kallus to the
company.  As of March 31, 2010 and 2009 Mr. Kallus has advanced an
aggregate of $31,323.  The advances are non-interest bearing and due
on March 31, 2011.  Interest has been imputed on these advances at
4.25% and charged to additional paid-in capital. During fiscal 2010 and 2009,
Mr. Kallus loaned $0 and $15,000 to the Company.










The
Company intends to meet its long-term liquidity needs through available cash and
cash flow as well as through additional financing from outside sources. The
Company anticipates raising additional funds from the possible exercise of
Warrants or equity financing with private investors following effectiveness of
the Registration Statement. As of the date of this Prospectus no agreements have
been undertaken to obtain any funding. The Warrants are exercisable at an
exercise price of $0.25 per share. The Company does not expect that warrants
will be exercised if the prevailing price of the Common Stock at such time of
exercise is below or at the exercise price.





Additional
issuances of equity or convertible debt securities will result in dilution to
the current shareholders. Further, such securities might have rights,
preferences or privileges senior to our common stock. Additional financing may
not be available upon acceptable terms, or at all. If adequate funds are not
available or are not available on acceptable terms, we may not be able to fully
execute our Plan of Operations to expand our business, which could significantly
and materially restrict our business operations. If additional capital is raised
through the sale of additional equity or convertible securities, substantial
dilution to our stockholders is likely to occur which may result in a partial or
substantial loss to your investment in our common stock.





If the
Company fails to raise additional funds to execute its expansion plan, it is
likely that the Company will not be able to operate as a viable entity and may
be forced to go out of business.








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.










11














ITEM
8.  FINANCIAL STATEMENTS & SUPPLEMENTARY DATA





Pages
F-1  -  F-11


ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
 On
January 19, 2010, VGTel, Inc. (the “Company”) was notified that the audit
practice of Kempisty & Company Certified Public Accountants, P.C., the
Company’s independent registered public accounting firm (“K&Co”), was
assumed by MaloneBailey, LLP (“MB”) effective as of January 1, 2010. On January
19, 2010, K&Co resigned as the independent registered public accounting firm
of the Company and, with the approval of the Company’s Board of Directors, MB
was engaged as the Company’s independent registered public accounting
firm.
 
 K&Co
performed audit of the Company’s financial statements for the fiscal year ended
March 31, 2009. K&Co’s report did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope, or accounting principles.
 
 During
the fiscal years ended March 31, 2009 and the subsequent interim period up
through the January 19, 2010, there were no (i) disagreements between the
Company and K&Co on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to its satisfaction, would have caused K&Co
to make reference to the subject matter of such disagreements in connection with
its report, or (ii) “reportable events,” as described in Item 304(a)(1)(v) of
Regulation S-K.
 
 On
January 19, 2010, the Company furnished K&Co with a copy of this report
prior to filing with the Securities and Exchange Commission (“SEC”) and
requested that K&Co furnish it with a letter addressed to the SEC stating
whether or not it agreed with the statements made by the Company in this report
insofar as they relate to K&Co’s audit services and engagement as the
Company’s independent registered public accounting firm. K& Co has furnished
a letter addressed to the SEC dated January 19, 2010, a copy of which is
attached hereto as Exhibit 16.
 
 As
noted above, on January 19, 2010, the Company engaged the services of MB as the
independent registered public accounting firm of the Company. During the fiscal
years ended March 31, 2009 and 2008 and from March 31, 2009 through the
engagement of MB as the Company’s independent registered public accounting firm,
neither the Company nor anyone on its behalf consulted MB with respect to any
accounting or auditing issues involving the Company. In particular, there was no
discussion with the Company regarding the application of accounting principles
to a specified transaction, the type of audit opinion that might be rendered on
the financial statements, or any matter that was either the subject of a
disagreement, as described in Item 304 of Regulation S-K, with K&Co, or a
“reportable event” as described in Item 304(a)(1)(v) of Regulation
S-K.
 
  12
 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 our controls are not effective and 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.
 
 
 
 
 
  13
  
 
 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.
 
 
 
 
 
 
  14
  
 
 
 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)
 
 15
 
 
 
 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
                  2010
                  $56,000
                    
                    (4)
                  0
                  0
                  0
      (1)
                  0
                  0
                  0Israel
      Hason
                    
                    (2)
                  VP
                    Director
                  2010
                  0
                  0
                  0
                  0
                  0
                  0
                  0Niva
      Kallus
                    
                    (3)
                  Secretary
                    Director
                  2010
                  0
                  0
                  0
                  0
                  0
                  0
                  0Ron
      Kallus
                    
                    (1)
                  President
                    CEO
                    Chairman
                    Director
                  2010
                  $56,000
                    
                    (4)
                  0
                  0
                  0
                  0
                  0
                  0Israel
      Hason
                    
                    (2)
                  VP
                    Director
                  2010
                  0
                  0
                  0
                  0
                  0
                  0
                  0Niva
      Kallus
                    
                    (3)
                  Secretary
                    Director
                  2010
                  0
                  0
                  0
                  0
                  0
                  0
                  0
 
 
 
 
  16
  
 
 (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.)
 
 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;
   
 17
 
 
 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
                  %
 
 
 
 
 
 
  18
  
 (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 $82,543 since inception from Platin of which $15,100
was generated during the fiscal year ended March 31, 2010.  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, 2010 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.
 
 Yoav
Kallus, the son of Ron Kallus provided Research & Develpment services for
the Company aggregating $6,250 which expense is part of accrued expenses. 
Yoav Kallus has agreed to waive payment of his outstanding fees until the
company has sufficient financial resources available.
 
 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 year ended March 31, 2010 fees billed by the Company's
auditors, MaloneBailey LLP  for services rendered for the audit of our
annual financial statements and estimated fees for the audit of our financial
statements was $7,500.
 
 (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.
 
 (b)
Audit-Related Fees. During years ended March 31, 2010 and 2009, 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 2010-2009.
  20
  
 
 PART
IV
 
 
 Item
15:  Exhibits and Financial Statement Schedules
 
 
 (a)  
Exhibits on Form 8K
  On
January 19, 2010, VGTel, Inc. (the “Company”) was notified that the audit
practice of Kempisty & Company Certified Public Accountants, P.C., the
Company’s independent registered public accounting firm (“K&Co”), was
combined with MaloneBailey, LLP (“MB”) effective as of January 1, 2010. On
January 19, 2010, K&Co resigned as the independent registered public
accounting firm of the Company and, with the approval of the Company’s Board of
Directors, MB was engaged as the Company’s independent registered public
accounting firm.
   K&Co
performed audit of the Company’s financial statements for the fiscal year ended
March 31, 2009. K&Co’s report did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope, or accounting principles.
   During
the fiscal years ended March 31, 2009 and the subsequent interim period up
through the January 19, 2010, there were no (i) disagreements between the
Company and K&Co on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to its satisfaction, would have caused K&Co
to make reference to the subject matter of such disagreements in connection with
its report, or (ii) “reportable events,” as described in Item 304(a)(1)(v) of
Regulation S-K.
   On
January 19, 2010, the Company furnished K&Co with a copy of this report
prior to filing with the Securities and Exchange Commission (“SEC”) and
requested that K&Co furnish it with a letter addressed to the SEC stating
whether or not it agreed with the statements made by the Company in this report
insofar as they relate to K&Co’s audit services and engagement as the
Company’s independent registered public accounting firm. K& Co has furnished
a letter addressed to the SEC dated January 19, 2010, a copy of which is
attached hereto as Exhibit 16.
   As noted
above, on January 19, 2010, the Company engaged the services of MB as the
independent registered public accounting firm of the Company. During the fiscal
years ended March 31, 2009 and 2008 and from March 31, 2009 through the
engagement of MB as the Company’s independent registered public accounting firm,
neither the Company nor anyone on its behalf consulted MB with respect to any
accounting or auditing issues involving the Company. In particular, there was no
discussion with the Company regarding the application of accounting principles
to a specified transaction, the type of audit opinion that might be rendered on
the financial statements, or any matter that was either the subject of a
disagreement, as described in Item 304 of Regulation S-K, with K&Co, or a
“reportable event” as described in Item 304(a)(1)(v) of Regulation
S-K.
  (b) Financial Statements Schedules
and Notes
 
  Exhibits
(b) Filed with this Form 10K
 
 Exhibit
31-1
 Exhibit
32-1
 
  21
   
 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: 
      May 5, 2010
                  By:
                  /s/ Ron
      KallusTitle: 
      President and Principal Executive
Officer
 
 Ron
      Kallus
                  
                  VGTel,
      Inc.Principal
      Accounting OfficerDate:  May
      5, 2010
                  By:
                  /s/ Ron
      KallusTitle,
      Principal Accounting Officer
 
  22















VGTEL,
      INC.INDEX











PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            2
      – 4BALANCE
      SHEETS
            5STATEMENTS
      OF OPERATIONS
            6STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
            7STATEMENTS
      OF CASH FLOWS
            8NOTES
      TO FINANCIAL STATEMENTS
            9
      – 14




































F-1








REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard
      of DirectorsVGTel,
      Inc.Setauket,
      NY 11733





We have
audited the accompanying balance sheet of VGTel, Inc. as of March 31, 2010 and
the related statements of operations, stockholders' deficit and cash flows for
the year then ended. 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.





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. as of March 31, 2010
and the results of its operations and cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.




The
accompanying 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 had recurring net losses and has working capital
deficit as of March 31, 2010.  These factors raise 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.
 
 
 
 MaloneBailey
LLP
 Certified
Public Accounting Firm
 New York,
New York
 www.malonebailey.com
 May 4,
2010








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.





We have
audited the accompanying balance sheet of VGTel, Inc. as of March 31, 2009 and
the related statements of operations, stockholders' deficit and cash flows for
the year then ended. 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.





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.  as of March
31, 2009 and the results of its operations and cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.





The
accompanying 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 had recurring net losses and has working capital
deficit as of March 31, 2009.  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.


Kempisty
      & CompanyCertified
      Public Accountants PCNew
      York, New YorkJune
      2, 2009














F-2




















VGTel,
Inc.





Balance
Sheets





March
      31,ASSETS
            
            2010
            
            
            2009CURRENT
      ASSETSCash
      and cash equivalents
            
            $
            1,331
            
            
            $
            3,063Accounts
      receivable
            
            
            1,030
            
            
            
            900Total
      Current Assets
            
            
            2,361
            
            
            
            3,963Intellectual
      property, net
            
            
            4,350
            
            
            
            10,150Total
      Assets
            
            $
            6,711
            
            
            $
            14,113LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESAccounts
      payable
            
            $
            7,045
            
            
            $
            500Due
      to shareholders/others
            
            
            19,730
            
            
            
            12,730Due
      to shareholder/officer
            
            
            31,323
            
            
            
            31,323Total
      Current Liabilities
            
            
            58,098
            
            
            
            44,553COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      DEFICITPreferred
      stock, $.001 par value,authorized
      10,000,000 shares; none issued
            
            
            -
            
            
            
            -Common
      stock, $.0001 par value,200,000,000
      shares authorized; 6,433,900 issuedand
      outstanding
            
            
            643
            
            
            
            643Additional
      paid in capital
            
            
            368,053
            
            
            
            310,719Accumulated
      deficit
            
            
            (420,083
            )
            
            
            (341,802
            )Total
      Stockholders' Deficit
            
            
            (51,387
            )
            
            
            (30,440
            )Total
      Liabilities and Stockholders' Deficit
            
            $
            6,711
            
            
            $
            14,113












































The
accompanying notes are an integral part of these financial
statements.


F-3





VGTel,
Inc.





Statements
of Operations





For
      the Year EndedMarch
      31,2010
            
            
            2009REVENUES-
      related party
            
            $
            15,100
            
            
            $
            25,896OPERATING
      EXPENSESGeneral
      and administrative
            
            
            16,067
            
            
            
            30,434Research
      and development
            
            
            14,180
            
            
            
            16,060Officers'
      compensation and rent
            
            
            56,000
            
            
            
            56,000Depreciation
      and amortization
            
            
            5,800
            
            
            
            5,800Professional
      Services- Consulting
            
            
            -
            
            
            
            16,850Total
      operating expenses
            
            
            92,047
            
            
            
            125,144Interest
      expense
            
            
            1,334
            
            
            
            1,012NET
      LOSS
            
            $
            (78,281
            )
            
            $
            (100,260
            )NET
      LOSS PER COMMON SHARE-Basic
      and Diluted
            
            $
            (0.01
            )
            
            $
            (0.02
            )Weighted
      average number of shares outstanding
            
            
            6,434,000
            
            
            
            6,279,833








































The
accompanying notes are an integral part of these financial
statements.


F-4








VGTel,
Inc.
 
 Statements
of Changes in Stockholder’s Deficit
 For the
years ended March 31, 2010 and 2009
 
 
 
 Common
      Stock
              
              Paid-in
              
              AccumulatedShares
              
              Amount
              
              Capital
              
              Deficit
              
              TotalBalances
      March 31, 2008
              
              4,800,000
              $
              480
              $
              213,020
              $
              (241,542)
              $
              (28,042)Contributed
      officers' compensation & rent
              
              -
              
              -
              
              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 shareholder loan
              
              -
              
              -
              
              1,012
              
              -
              
              1,012Net
      loss
              
              -
              
              -
              
              -
              
              (100,260)
              
              (100,260)Balances
      March 31, 2009
              
              6,433,900
              
              643
              
              310,719
              
              (341,802)
              
              (30,440)Contributed
      officers' compensation & rent
              
              -
              
              -
              
              56,000
              
              -
              
              56,000Imputed
      interest for shareholder loan
              
              -
              
              -
              
              1,334
              
              -
              
              1,334Net
      loss
              
              -
              
              -
              
              -
              
              (78,281)
              
              (78,281)Balances
      March 31, 2010
              
              6,433,900
              $
              643
              $
              368,053
              $
              (420,083)
              $
              (51,387)




















The
accompanying notes are an integral part of these financial
statements.


F-5





VGTel,
Inc.





Statements
of Cash Flows





For
      the Year EndedMarch
      31,2010
            
            2009Cash
      flows from operating activitiesNet
      Loss
            $
            (78,281)
            $
            (100,260)Adjustments
      to reconcile net loss to netcash
      used in operating activities:Imputed
      officer's compensation and rent
            
            56,000
            
            56,000Depreciation
      and amortization
            
            5,800
            
            5,800Imputed
      interest for due to Ron Kallus
            
            1,334
            
            1,012Issuance
      for common stock for services rendered
            
            -
            
            16,850Changes
      in assets and liabilities:Accounts
      receivable
            
            (130)
            
            332Accounts
      payable
            
            6,545
            
            (14,467)Due
      to related shareholders
            
            -
            
            (6,330)Net
      cash used in operating activities
            
            (8,732)
            
            (41,063)Cash
      flows from financing activitiesSale
      of units
            
            -
            
            24,000Officer
      loans
            
            7,000
            
            15,000Net
      cash provided by financing activities
            
            7,000
            
            39,000Net
      increase (decrease ) in cash
            
            (1,732)
            
            (2,063)Cash
      and cash equivalents, beginning of period
            
            3,063
            
            5,126Cash
      and cash equivalents, end of period
            $
            1,331
            $
            3,063Supplemental
      disclosures of cash flow information:Cash
      paid for interest
            $
            -
            $
            -Cash
      paid for income taxes
            $
            -
            $
            -


























The
accompanying notes are an integral part of these financial
statements.


F-6


VGTel,
Inc.
 
 Notes to
Financial Statements
 March 31,
2010
 
 
 NOTE
1 – GENERAL ORGANIZATION AND BUSINESS
 
 VGTel
Inc. (Company) was organized on February 5, 2002 in New York. On January 18,
2006, the Company purchased the GMG System, a telemarketing campaigning product
and 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 had recurring net
losses and a working capital deficit as of March 31, 2010 and
2009.  These factors raise 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 and
shareholder loans.   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
 
 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.
 
 Stock Based
Compensation
 
 Under ASC
718 (formerly SFAS No. 123(R)), the Company measures 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 respective vesting
periods of the option grant.
 
 Income
Taxes
 
 The
Company provides for income taxes under ASC 740 “Accounting for Income
Taxes”.   ASC 740 requires the use of an asset and liability
approach in accounting for income taxes.
 
 ASC 740
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 financial 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.
 
 Revenue and Cost
Recognition
 
 The
Company recognizes revenue on arrangements in accordance with ASC
605.  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.
 
 Intellectual
Properties
 
 The
Company has adopted the provisions of ASC 356-50 (formerly Emerging Issues Task
Force 00-2), “Accounting for Web Site Development Costs.” Costs incurred in the
planning stage of a website are expensed as research and development while costs
incurred in the development stage are capitalized and amortized over the life of
the asset, estimated to be five years. Expenses subsequent to the launch will be
expensed as research and development expenses. The Company will expense upgrades
and revisions to its websites as incurred.
 
 Impairment of Long-Lived
Assets
 
 In
accordance with ASC 350-10 (formerly 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.
 
 Recent Accounting
Pronouncements
 
 The
Company does not expect any recent account pronouncements to have a significant
impact on its financial position or results of operations.
 
 NOTE
4 – INTANGIBLE ASSETS
 
 The
Company developed the intellectual properties known as Group Messaging
Gateway.   As of March 31, 2010, total costs associated with the
development of the GMG System was $95,500.   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 60-month period.


March
      31,2010
            
            
            2009GMG
      System
            
            $
            29,000
            
            
            $
            29,000Less:
      Accumulated amortization
            
            
            (24,650
            )
            
            
            (18,850
            )Total
            
            $
            4,350
            
            
            $
            10,150





Intangible
assets consist of GMG System which are recorded at cost and amortized over a
straight-line basis. The amortization expenses for the years ended March 31,
2010 and 2009 are $5,800 respectively.










F-8








NOTE
5 – OFFICERS’ COMPENSATION





The
officer has taken no actual compensation since inception. Officer's compensation
has been charged $50,000 during the years ended March 31, 2010 and 2009 and
credited to additional paid in capital.





NOTE
6 – DUE TO SHAREHOLDER/OFFICER





Various
funds had been advanced by the CEO, Mr. Ron Kallus to the
company.  As of March 31, 2010 and 2009 Mr. Kallus has advanced an
aggregate of $31,323.  The advances are non-interest bearing and due
on March 31, 2011.  Interest has been imputed on these advances at
4.25% and charged to additional paid-in capital. During fiscal 2010 and 2009,
Mr. Kallus loaned $0 and $15,000 to the Company.





NOTE
7 – 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, 2010 and 2009, no payment has been
made to Yoav Kallus, and the amount is 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, 2010 and 2009, NYN International LLC is owed
$6,480.





On July
6, 2009, The Hyett Group, Ltd., a related shareholder loaned the company
$4,000.  The loan has a term of 90 days and can be extended by mutual
consent of both parties.   The loan is interest
free.





On
October 18, 2009, The Hyett Group, Ltd., a related shareholder loaned
the company $1,500.  The loan has a term of 90 days and can be
extended by mutual consent of both parties.   The loan is
interest free.





On
January 12, 2010 The Hyett Group, Ltd., a related shareholder loaned the
company $1,500.  The loan is payable on demand and can be
extended by mutual consent of both parties.   The loan is
interest free.





On
January 19, 2010 the company entered into an addendum to loan agreements dated
July 6, 2009 and October 18, 2009 to amend the terms of repayment to payable on
demand.









F-9





NOTE
8 – COMMITMENTS AND CONTINGENCIES





The
Company is occupying the premises of its President rent free. The Company
has charged $6,000 to paid-in capital for rent for the years ended March 31,
2010 and 2009.





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.





NOTE
9 – STOCKHOLDERS' DEFICIT





Additional
paid in capital has been credited $56,000 in each of the periods ended March 31,
2010 and 2009 respectively for officer's compensation and
rent.





Additional
paid in capital has been credited $1,334 and $1,012 respectively for the years
ended March 31, 2010 and 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.





On May
28, 2008    the Registrant sold in a private
placement transaction,  an aggregate of $24,000 of Series A Units of
its securities, at a price of $.025 per unit.    Each Series A unit
consists of one common share, 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 common share at
$0.25 per Share.  The Company evaluated the warrants above to
determine if they were derivatives pursuant to “Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock,” codified within ASC 815 and determined that equity classification was
appropriate.





On May
28, 2008 the Registrant issued 674,000 shares for services rendered valued at
$16,850 in lieu of cash.
 
 The
summary of the status of the Company’s outstanding warrant for the year ended
March 31, 2010 and 2009 is as follows:
  
 AverageIssuance
      Date
              
              Warrants
              
              Exercise
      Price2/1/2006
              
              3,200,000.00
              
              $            0.255/28/2008
              
              3,840,000.00
              
              $            0.25Total
      Outstanding at March 31, 2010 and 2009
              
              7,040,000.00On
      October 19, 2009, the Board of Directors voted to  extend the
      exercise expiration for all of the Company's Series A, Series
      B,
                Series
      C and Series D Warrants. The Warrants exercises have been extended until
      December 4, 2012. None of the warrants have
                been
      exercised from inception to as of March 31, 2010
 
 NOTE
10 – RELATED PARTY TRANSACTIONS
 
 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 Hason has agreed to recuse himself from any
corporate decision relating to Platin Ltd business relationship with VGTel,
Inc.
 
 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.
 
 NOTE
11 – INCOME TAXES
  Below is
a chart showing the estimated corporate federal net operating loss (NOL) and the
year in which it will expire.
  F-10
 
 
 Year
              
              Amount
              
              
              Expiration2006
              
              $
              56,426
              
              
              
              20262007
              
              
              99,595
              
              
              
              20272008
              
              
              85,521
              
              
              
              20282009
              
              
              100,260
              
              
              
              20292010
              
              
              78,282
              
              
              
              2030Total
      NOL
              
              $
              420,084
 
 
 The total
deferred tax asset due to net operating losses was $92,418 and $75,196 at March
31, 2010 and 2009.   The Company has recorded a full valuation
allowance for its deferred tax assets as of March 31, 2010 and
2009
 
 NOTE
12 – SUBSEQUENT EVENTS
 
 On April
13, 2010, the Hyett Group Ltd., a related shareholder loaned the company
$3,000.  The loan is payable on demand and  is interest
free.