Item 1. Business
Introduction of Bitcoin
Since its inception in 2009, Bitcoin as the leading virtual or digital currency has grown substantially, with many other different currencies appearing since 2011.
Bitcoin is a consensus network that enables a new payment system and a completely digital form of money. It is the first decentralized peer-to-peer
payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence
.
From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining".
There is a growing number of businesses and individuals using Bitcoin. This includes brick and mortar businesses like restaurants, apartments, law firms, and popular online services such as Expedia, Microsoft, Dell, NewEgg, WordPress, and Overstock. While Bitcoin remains a relatively new phenomenon, it is growing fast. In April 2015, the value of all bitcoins in circulation exceeded US$3 billion with tens of millions of dollars worth of bitcoins exchanged daily.
Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.
Advantages of Bitcoin
Payment freedom
- It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money.
Very low fees
- Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
Fewer risks for merchants
- Bitcoin transactions are secure, irreversible, and do not contain customers
sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.
Security and control
- Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.
Transparent and neutral
- All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
Our Products and Services
Avra is focused in providing services to both consumers and businesses in this sector, providing access to the technology in a simple way. The Company
s business model can be broken down into four distinct categories, as follows:
AvraPay
is the Company
s cryptocurrency payment solution. It plans to offer the technology in order for merchants to accept digital payments in their businesses, with AvraPay being the payment processor. The business is expected to be able to accept payments online or in person through the AvraPay technology and be paid in government declared legal tender or better known as FIAT or cryptocurrency depending on the businesses preference. Avra plans to charge a percentage of the transaction in the same way as a credit card provider.
AvraATM
is another technology solution planned by the Company is called AvraATM, which it plans to develop a software to be integrated with kiosks which will allow the kiosk to have the ability to accept payments, effectively converting the existing kiosk into a purchase point (ATM) for bitcoin and other cryptocurrencies. The planned revenue model is one where a percentage fee will be charged for the purchase of currency, which will vary depending on the expectations of the individual owners of each kiosk network.
AvraTravel
is where the Company plans on offering a tailored version of AvraPay to international holiday destinations, focused on tourism, such as hotels, casinos, airlines, restaurants, bars, and spas. These tailored solutions will enable businesses to be fully mobile and yet charge clients instantly to their digital wallets. Avra also intends to run a buy-back scheme intended for digital currency where departing tourists will be able to exchange through a partner, their remaining unused local currency and take home digital currency.
AvraSecure
delivers a full range of server security, hosting and management services that provide fully-managed and co-managed security solutions to meet the security and infrastructure needs of organizations. The company security specialists work with clients to create a secure compliant environment for critical infrastructure. Also working with customers to pass compliance audits by coordinating directly with auditors and providing comprehensive documentation.
AvraNews
in addition to Avra
s website, the Company is developing its own news portal, which will provide up to the minute news and analysis on the cryptocurrency industry. This business area will be supported by funneling business to Avra
s own business solutions, in addition to paid advertising and affiliate schemes. There will also be a section to connect investors and start-ups companies, which at some point in the future will be monetized through a subscription system.
Avra owns the following domains avraglobal.com, avraworld.com, avrainc.com, avraonline.com, avratip.com, avrapro.com, avrabit.com, avracoin.com.
AvraPay
Features
AvraPay
can be accessed through any web enabled device. Businesses and clients alike will be able to send and receive payments with only a mobile signal for their phone. Businesses will be able to send invoices directly from the
AvraPay
portal to clients via email also, with instant confirmations of payments in the portal and also via email. The
AvraPay
platform can also be accessed through SMS should the user not
have access to the internet where users and businesses can also send and receive money by simply sending text messages.
The
AvraPay
Portal will be the central point of the system, where users can see their history, balances, generate invoices, add and withdraw funds and manage their
AvraPay
account including any other wallet addresses that they may have.
AvraPay
receives commissions over payments sent and received to and from the client
s wallet when changing to local currency as well as transaction revenue
depending on the type of transaction realized by the client.
Businesses can opt for their
AvraPay
account to be linked to their bank account to enable instant conversion of digital currency to cash at the moment of transaction to remove their exposure to
the fluctuations in the digital currency exchange markets. The business will receive normally within 1 business day the funds directly to their company account.
The company owns the domains avrapay.com, avrapay.com.do, and avra.do for this business.
AvraATM
Features
AvraATM
will operate under two different models however both dedicated to provision of the same service, which is to allow clients access to digital currency through automated teller machines, simply by inserting local currency.
Our partner program will work with existing kiosk/terminal operators to provide the services in order to purchase and sell digital assets through the terminals. The terminals will work with the
Avra
API to confirm transactions and interact with the relevant digital currency wallets of the client. The client can insert cash, and on confirmation of the transaction by the terminal relevant digital currency funds will be provided to the client within a few seconds. To
withdraw
local currency from an enabled machine, the client will send funds to the terminal from their mobile device and once the transaction is confirmed, the monies will be released by the machine.
Avra
will also be purchasing, branding, installing and running
its
own kiosks. The kiosks will be branded
Avra
, and will provide all the payment services of the local market where it is installed, as well as the digital currency transactions mentioned. These machines will provide
visibility
for
Avra
, but also will provide good income streams from the ancillary transactions that the terminals are able to provide such as electric, water, gas, taxes, mobile phone recharges etc
.
These terminals will also be distributed under out
AvraTravel
strategy in key locations in hotel receptions, high traffic areas and airports.
Avra
owns the domain avraatm.com for this line of business.
AvraTravel
Features
AvraTravel
is a combination of the Payment and ATM solutions to be
introducted
into destination specific markets.
Avra
is focused initially on the primary vacation destinations in the Americas and the Caribbean, offering to hotels, casinos, tour operators, and other related businesses, the ability to transact with their clients in digital currencies.
Clients will be able to recharge their bitcoin wallet from their bank account before leaving home and travel without the need to carry large amounts of cash or credit cards. In their chosen destination they will be able to safely and securely pay with just their mobile phone, without running the risk of theft of cash or credit card cl
oning. They will also be able to withdraw local cash for any needs from hotel receptions, ATM/kiosks and other
Avra
agents in the destinations. From hotels, stores, restaurants to taxis and watersports,
AvraTravel
can turn any business into a bitcoin frien
dly enterprise.
AvraSecure
Features
AvraSecure delivers a full range of server security, hosting and management services that provide fully-managed and co-managed security solutions to meet the security and infrastructure needs of your organization. Our security specialists work with you to create a secure compliant environment for your critical infrastructure. AvraSecure works with our customers to pass compliance audits by coordinating directly with auditors and providing comprehensive documentation. The combination of our proactive security approach, our expert team of security specialists and industry leading technologies make AvraSecure the obvious choice for organizations seeking to comply with industry regulations and increase overall security.
If your business accepts credit cards on-line, major credit card companies now require you to follow the rules found in the Payment Card Industry Data Security Standard (PCI DSS). PCI-DSS was developed by several of the major credit card companies as a guideline to help organizations that process credit card payments prevent credit card fraud, hacking and various other security vulnerabilities and threats. It is regarded as an industry-established policy and requires compliance by all merchants and service providers that store, process, or transmit card holder data, regardless of size.
Distribution and Marketing
Our initial efforts will be centered in developing our brand image. In order for this to happen effectively, we expect to engage in an aggressive advertising and marketing campaign before each product
s launch. From there we will try to expand our business through several methods. These methods include:
·
Trade Shows
A highly effective medium to help promote the brand of
Avra
Inc. as well as the
Avra
suite of products. It will be important for our company to effectively distinguish its system from every other Bitcoin company that exists in the market. Our company will hire top marketers in the industry to run
its
trade show marketing campaigns.
·
Digital Currency and Technology Blogs
It will be important for our company to get attention from top technology blogs and websites in the U.S. Such large blogs include Engadget.com, Gizmodo.com and Wired.com. The reviews and attention that these weblogs provide are key to the success of a lot of technology companies in the U.S. Casual readers as well as professionals in the community read these blogs on a daily basis to be informed on the latest news. This is an effective way of getting positive attention for our company. In addition, this is a free way of getting the message out.
·
Word of Mouth
Since it is imperative for our company to build a brand image, it will rely on word of mouth to help sustain its business. This will be kick started by effective advertising in other areas, such as TV advertising and Internet advertising. Later on people will tell their friends how great the
Avra
service is.
·
Google Ads and Local Websites
We plan to advertise on the Internet on local websites, including Google Ads on popular local social and news websites. This is a highly effective method of obtaining younger and more internet-savvy customers.
·
Traditional Advertising
- Advertising, such as on billboards, magazines, newspapers, and local television stations are an effective method of gaining customers of all demographics.
·
Search Engine Optimization Marketing -
We plan on having a budget to market our brand and corporate identity on various search engines.
We plan to sell our
Avra
products through a number of distribution channels. These will include:
·
POS Operators
Most
retailers
employ a POS system in order to control the billing.
Avra
will work alongside these companies to offer both integrations within their systems to allow their clients additional payment methods in di
gital currency, as well as a generous commission schedule to motivate the POS providers to market the
AvraPay
product.
·
US ISO/MSP Distribution
Avra
intends to develop distribution strategies to leverage existing card payment distribution networks to allo
w digital currency payments to take place alongside. As ISOs and MSPs have large existing networks of retailers using their service,
Avra
offers additional revenue streams to the company and more payment options to the retailer.
·
Direct Sales
Avra
will be selling through outbound telephone campaigns directing clients to signups and dealing with paperwork through email and the web.
·
Internet Sales
We will depend largely on this method of sales as the products will be mainly targeted to Internet and technology savvy
businesses. Our website is live but the Company is looking at updating its website presence in the near future to integrate online signups and instant identity verification.
Competition
The bitcoin industry is, although new, still highly competitive. We are a new development stage company and have a weak competitive position in the industry. We compete with junior and senior
digital currency companies. Many of the companies with which we compete for financing and for the acquisition of customers
have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on product development, marketing and distribution. This advantage could enable our competitors to acquire large
r market share and develop more competitive products. Such competition could adversely impact our ability to attain the financing necessary for us to develop our business plan.
In the face of competition, we may not be successful in sufficient market share to make our business profitable. Despite this, we hope to compete successfully in the home electronics industry by:
·
keeping our costs low;
·
relying on the strength of our management
s passion and knowledge of the market; and
·
using
our size and experience to our advantage by adapting quickly to changing market conditions or responding swiftly to potential opportunities.
Government Regulations
US Federal Level
The Financial Crimes Enforcement Network (
FinCEN
) is the bureau of the US Department of the Treasury that enforces federal regulation of money services businesses in the United States.
On March 18, 2013, FinCEN
published guidance
announcing that it would make no distinction between transmitters of government (or
fiat
) currency and transmitters of bitcoin, which it now famously referred to as a
decentralized convertible virtual currency
, rather than by name itself.
Thus, businesses that transmitted, sold or exchanged bitcoin were now Money Services Businesses, specifically
money transmitters
, required to register with FinCEN and satisfy ongoing record-keeping and reporting requirements.
Because money transmission is such a heavily regulated business, classification as a money transmitter
especially unwitting classification
comes with real legal and practical consequences.
FinCEN regulates money transmitters pursuant to a legislative framework commonly referred to as the Bank Secrecy Act (
BSA
), which includes elements of the Patriot Act and other pieces of legislation. The primary consequence of this regulation is that money transmitters must put in place and enforce Anti Money Laundering (
AML
) and Know Your Customer (
KYC
) policies designed to aid FinCEN
s investigation of potential criminal activity.
The specific AML and KYC requirements of the BSA could (and do!) fill pages. But in short strokes, businesses must collect personally identifying information about their customers, in some circumstances report that information to FinCEN, and sometimes even outright deny service.
Suspicious transactions - or even ministerial transactions over a certain dollar amount - must be reported to FinCEN. In effect, the BSA deputizes financial institutions, requiring them to act as the government's foot soldiers in its war on money laundering.
US State Level
However, just because the business is considered a money transmitter by the federal government does not necessarily mean it will be classified as such.
At minimum, we know that two states do not require money transmission licensure: South Carolina and Montana. A third, New Mexico, only regulates negotiable instruments, a category which, so far, has not been applied to bitcoin. State regulatory bodies have offered little, if any, guidance to bitcoin businesses. In fact, the most helpful information they have provided is not bitcoin-specific at all. It has to do with a legal principal called
extraterritorial jurisdiction
: some state regulatory bodies have announced that any business servicing or soliciting its state
s citizens must satisfy that state
s licensing requirements, even if the business has no physical presence in that state. This is true whether the business is physically located in a different state, a foreign country, or is as a web service with no physical presence at all.
This principle has special applicability to bitcoin businesses.
Decentralized digital currency is, by design, a borderless medium of exchange. Most bitcoin businesses exist on the internet, where the state of its incorporation and the citizenship of its clientele are all but irrelevant.
Environmental Regulations
We are not aware of any material violations of environmental permits, licenses or approvals that have been issued with respect to our operations. We expect to comply with all applicable laws, rules and regulations relating to our business, and at this time, we do not anticipate incurring any material capital expenditures to comply with any environmental regulations or other requirements.
While our intended projects and business activities do not currently violate any laws, any regulatory changes that impose additional restrictions or requirements on us or on our potential customers could adversely affect us by increasin
g our operating costs or decreasing demand for our products or services, which could have a material adverse effect on our results of operations.
Intellectual Property
We have not filed for any protection of our trademark, and we do not have any other intellectual property.
We own the domains avraworld.com, avraglobal.com, avrapay.com, avrapay.com.do, avra.do, avraatm.com, avratravel.com, avratourism.com, avrasecure.com, avranews.com, avratip.com, avrapro.com, avrainc.com, avrabit.com, avracoin.com, avraonline.com.
Employees
We do not have any employees. Our CEO & Director is devoting approximately 50 hours per week to our affairs. We also engage a number of consultants.
Recent Development
Change of Control
On November 26, 2014, David Bailey, the former majority shareholder of the Company, sold 35,333,333 shares of the Company to Stephen Shepherd, the Chief Executive Officer and Director of the Company, pursuant to a share purchase agreement. In lieu of payment, Mr. Bailey was granted the rights to market the Company
s intellectual properties in the Country of Jamaica within the next 12 months of the signing of the agreement. Mr. Bailey also agreed to waive all amounts owed to him as officer advances. In connection with the share purchase agreement, Stephen Shepherd also entered into an assignment agreement with the Company to assign all his proprietary information related to bitcoin and cryptocurrencies to the Company.
As a result, Stephen Shepherd now owns an aggregate of 79,500,000 pre-reverse stock split shares of common stock, or 56.27% of our total voting power of all of our outstanding voting securities.
Reverse Stock Split
On November 17, 2014, the Company filed a Certificate of Amendment to amend its Articles of Incorporation so that each two point two five (2.25) shares of common stock issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of common stock (the "Reverse Stock Split"). The Reverse Stock Split was approved by the majority shareholder holding 58.39% of then issued and outstanding common stock of the Company and by the board of directors through unanimous written consent on November 11, 2014. No fractional shares shall be issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares of common stock shall be rounded up to the next whole share of common stock. We have obtained approval from Financial Industry Regulatory Authority regarding the Reverse Stock Split and the corporation action took effect on December 11, 2014.
Financing
On December 5, 2014, we closed a financing transaction by entering into a subscription agreement dated with a non-U.S. investor (the
Purchaser
) for aggregate investment proceeds of $150,000. Pursuant to the subscription agreement, we issued the following to the Purchaser: (i) 600,000 shares of the Company
s common stock at a purchase price of $0.25 per share, and (ii) a warrant to purchase an aggregate of 600,000 shares of the Company
s common stock, for an exercise price of $0.50 per share for a period of one year from the closing date. The securities were offered and sold without registration under the Securities Act of 1933 (the
Securities Act
) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation S promulgated thereunder and in reliance on similar exemptions under applicable state laws.
Subsidiary
On January 4, 2015, the Company established a subsidiary AvraPay SRL under the laws of Dominican Republic, where Avra Inc. owns 99%, and Steve Shepherd owns 1% of the shares of AvraPay SRL.