U. S. Securities and Exchange Commission
Washington, D.C. 20549
AMENDMENT NO. 1 to FORM 10-SB
JS Business Works, Inc.
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(Name of Small Business Issuer in its charter)
Florida 65-0790758
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
219 Almeria
West Palm Beach, Florida 33405
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 804-9744
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value
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(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
<PAGE>
Item 1: Description of Business:
(a) Business Development
JS Business Work, Inc. (hereinafter referred to as the "Company" or
"JSBW") was organized under the laws of the State of Florida on October 20,
1997. The Company was organized by Mr. Charles Adams, an executive officer and
director of the Company for the purpose of engaging in the business of providing
human resource services in the flexible industrial staffing market. In this
regard, the Company retained the services of Ms. Lyn Garrett as Executive Vice
President. The Company intends to deploy temporary industrial personnel to its
clients. It is anticipated that the Company will benefit from the synergy
expected to result from the combination of the general business experience and
expertise of Mr. Adams with Ms Garrett's fourteen (14) plus years experience in
the placement of temporary and permanent personnel. The Company's executive
offices are presently located at 219 Almeria, West Palm Beach, Florida 33405 and
its telephone number is (561) 804-9744.
The Company is filing this Form 10-SB on a voluntary basis so
that the public will have access to the required periodic reports on the
Company's current status and financial condition. The Company will file periodic
reports in the event its obligation to file such reports is suspended under the
Securities and Exchange Act of 1934 (the "Exchange Act".)
The Company generally has been inactive, having conducted no business
operations except organizational and fund raising activities since its
inception. JSBW received gross proceeds in the amount of $20,200 from the sale
of a total of 646,000 shares of common stock, $.0001 per value per share (the
"Common Stock"), in two (2) offerings conducted pursuant to Section 3(b) of the
Securities Act of 1933, as amended (the "Act"), and Rule 504 of Regulation D
promulgated thereunder ("Rule 504"). These offering were made in the State of
Georgia and the State of Florida. The Company undertook its first offering of
302,500 shares of Common Stock pursuant to Rule 504 on April 3, 1998 and its
second offering of 343,500 shares of Common Stock pursuant to Rule 504 on April
20, 1998. While no offering memorandum was used in connections with these
offerings, the business plan of the Company, which was disclosed to each
prospective investor, was for the provision of human resource services in the
flexible industrial staffing market. Neither Georgia nor Florida required a
disclosure document under the terms of the exemption under which these offering
were made. (See Part III, Item 4. "Recent Sales of Unregistered Securities.")
There are no preliminary agreements or understandings between the
Company and its officers and directors or affiliates or lending institutions
with respect to any loan agreements or arrangements.
The Company intends to offer additional securities under Rule 506 of
Regulation D under the Act ("Rule 506) to fund its short and medium term
expansion plans. (See Part I, Item 1. "Description of Business - (b) Business of
Issuer.")
See (b) "Business of Issuer" immediately below for a description of the
Company's proposed business of deploying temporary industrial help to its
clients. As of the date hereof, the Company has no temporary staff or clients
for placement of such staff.
(b) Business of Issuer.
General
Since its inception, the Company has conducted no business operations
except for organizational activities and an offering of Common Stock pursuant to
which it has received gross offering proceeds in the amount of $20,200. Further,
the Company has had no employees since its organization. It is anticipated that
the Company's executive officers and directors who, except for one lump-sum
consulting fee received by two such persons, have served in those positions
without compensation through the date hereof, will receive reasonable salaries
for services as executive officers at such time as the Company commences
business operations. (See Part I, Item 6. "Executive Compensation.") The
Company's executive officers and/or directors will devote such time and effort
as may be necessary to participate in the day-to-day management of the Company.
(See Part I, Item 5. "Directors, Executive Officers, Promoters and Control
Persons - Executive Officers and Directors.") The Company has no plans to employ
any individuals except its executive officers on a part-time basis for the
foreseeable future. The Company proposes to engage in business as the provider
of human resource services in the flexible industrial staffing market. As of the
date hereof, JSBW has no temporary staff available for placement with any
clients nor any client base with whom to place such staff.
<PAGE>
The following discussion of the flexible industrial staffing market, as
it relates to the Company's medium and long term business objectives, is of
course pertinent only if the Company is successful in obtaining sufficient debt
and/or equity financing to commence operations as a staffing agency and, in
addition thereto, is able to generate significant profits from operations (which
are not expected in the foreseeable future) and/or additional financing to
continue in business and/or fund the anticipated growth, assuming JSBW's
proposed business is successful. There can be no assurance such financing can be
obtained or that the Company's proposed business will be successful. While Mr.
Adams, executive officer, director and owner of approximately 69.71% of the
outstanding common stock of JSBW has over ten (10) years experience as a
financial consultant and leasing financier in the rolling stock, large
commercial machinery, aviation, commercial marine, automobile and limousine
leasing business, he does not have any specific experience or expertise in the
temporary staffing business. (See Part I, Item 1. "Description of Business", (b)
"Business of Issuer - Risk Factors.")
Mr. Adams decided to pursue the temporary staffing business via the
Company because of the belief that his prior business experience and expertise,
when combined with Ms. Garrett's fourteen (14) plus years in the placement of
temporary and permanent personnel, will enable them to develop a successful
temporary staffing company which will have the advantages of, among other
things, greater availability of capital and potential for growth through the
vehicle of a public company as compared to a privately-held company. The time
required to be devoted by each executive officer, including Mr. Adams and Ms.
Garrett, to manage the day-to-day affairs of the Company is presently estimated
to be approximately five to ten hours per week. This time commitment on the part
of the Company's executive officers is expected to increase at such time, if
ever, as JSBW obtains sufficient funding with which to commence the search for
suitable temporary staffing personnel and the establishment of a suitable client
base with whom such staff can be placed. (See Part I, Item 1. "Description of
Business," (b) "Business of Issuer - Risk Factors.")
The Company will be dependent upon its Executive Vice President, Ms.
Garrett to develop the client base with whom to place the temporary staff and to
screen and train potential candidates for temporary placement. Ms. Garrett has
approximately fourteen (14) years experience in the temporary staffing and
permanent placement business and has managed her own employment agency for
approximately the last three (3) years, one and one-half year as a sole
proprietor and one and one-half year as a corporation. The Company plans to use
to its advantage Ms. Garrett's reputation in the staffing industry.
Nevertheless, while Ms. Garrett has been successful in the past, there can be no
assurance that she will be successful in building the client base and temporary
staff necessary for the successful operation of the Company. (See Part I, Item
1. "Description of Business" (b) "Business of Issuer - Risk Factors.")
Although Ms. Garrett places temporary employees currently in the areas
of finance and mortgage banking, Ms. Garrett may be subject to direct conflicts
of interest because of her position as an executive officer of JSBW and her
management position with her own employment agency, with regard to opportunities
in the staffing industry which come to her attention and concerning any possible
business dealings between JSBW and her employment agency. In any instance where
such a conflict may arise, the Company intends to employ certain safeguards,
such as ensuring that any agreement between the Company and Ms. Garrett's
employment agency conforms with standard industry practice, if any, in the
southeastern United States and is fair and reasonable to the Company. For
example, if JSBW were to use staff of Ms. Garrett's employment agency, or place
JSBW staff with current clients of Ms. Garrett, the Board of Directors of the
Company would take action to ensure that any fees or commissions paid to Ms.
Garrett's employment agency would not exceed the fees or commissions, if any,
customarily paid to staffing agencies in the southeastern United States.
Further, Ms. Garrett has agreed, should she be elected to the Board of Directors
of JSBW at any time in the future, that she will abstain from voting as a member
of the Board of Directors on any such agreement in which her employment agency
is a party or has an interest or with regard to any business opportunity which
may be attractive to both companies. The Company's Amended Articles of
Incorporation provide that any such related party contract or transaction must
be authorized, approved or ratified at a meeting of the Board of Directors by
sufficient vote thereon by directors not interested therein or the contract or
transaction must be fair and reasonable to the Company. Accordingly, it is
possible for the Company's Board of Directors, by vote of a sufficient number of
disinterested members thereof, to authorize, approve or ratify a related party
contract or transaction or business opportunity involving Ms. Garrett's
employment agency which is unfair and/or unreasonable to the Company, even
though Ms. Garrett abstains from voting thereon. Neither the Company nor Ms.
Garrett has any current plans for related party transactions. (See Part I, Item
1. "Description of Business," (b) "Business of Issuer - Risk Factors.")
<PAGE>
The Company intends to become a full-service flexible staffing service,
and to recruit, train and deploy temporary industrial personnel to companies in
a wide range of industries, initially in the Palm Beach County area, then
enlarging to the State of Florida and thereafter in selected areas nationwide.
The Company plans to be able to provide a full spectrum of staffing services for
its clients from a temporary employee of one day to comprehensive outsourcing of
human resource functions.
In its initial phase, the Company will operate out of the facility
provided by Mr. Adams. Ms. Garrett will begin by finding client employers and
client employees for the Company and instructing Mr. Adams in the operation of a
temporary staffing agency. To attract client employers, Ms. Garrett and Mr.
Adams will visit potential clients in order to determine their overall needs. In
order to attract client employees which match the needs of the potential client
employers, the Company will place advertising in local area newspapers in Palm
Beach County. In the event the Company requires additional capital during this
phase, Mr. Adams has committed to fund the operation until such time as
additional capital is available. The Company believes that it will require three
(3) to six (6) months in order to determine the market demand potential and the
availability of qualified employees.
Due to the limited capital available to the Company, the principal
risks during this phase are that the Company is dependent upon Ms. Garrett, that
Mr. Adams lacks experience, that the Company will not be able to establish a
client employer base and or that the Company will not be able to find qualified
client employees to fill the needs of the employers at such time as the request
for placement is made and that Ms. Garrett may have a conflict of interest in
dividing her time between her current business and the Company's business. (See
Part I, Item 1. "Description of Business," (b) "Business of Issuer - Risk
Factors.")
The Company believes that in order to be able to expand its initial
operations, it must rent offices in Palm Beach County, hire clerical staff and
acquire through purchase or lease equipment for client employee testing,
scheduling and accounting purposes. The Company believes that there is adequate
and affordable rental space available in Palm Beach County and sufficiently
trained personnel to provide such clerical services at affordable rates.
Further, the Company believes that the type of equipment necessary for the
operation is readily accessible at competitive rates.
To implement such plan, also during this initial phase, the Company
intends to initiate a self- directed private placement under Rule 506 in order
to raise an additional $100,000. In the event such placement is successful, the
Company believes that it will have sufficient operating capital to meet the
initial expansion goals and operating costs for a period of one (1) year. In the
event the Company is not successful in raising such funds, the Company believes
that it will not be able to continue operations past a period of three (3) to
nine (9) months.
Even if the Company is successful at raising this additional money,
there can be no assurance that the implementation of the expansion of the
initial plan will increase the number of potential client employers or attract
sufficient client employees to fill the needs of such employers at the time a
request for placement is made. By expanding, the Company may face unforeseen
costs associated with entry into the flexible staffing market. The Company still
will be largely dependent upon Ms. Garrett and to a limited extent upon Mr.
Adams to find suitable client employees on a profitable and timely basis.
Additionally, Ms. Garrett may have a conflict between the time demands of an
expanding business and the time requirements of her existing business. Further,
additional client employees can increase the risk of increased employer costs
and potentially higher Workers' Compensation and employment related claims. The
Company believes that it will be adequately covered by insurance against such
risks; however, there can be no assurance that claims will not be made directly
against the Company. If such claims were to be made, they could have an adverse
effect upon the Company's financial well being. Also, due to the lack of a
working capital funding source, the Company may not have sufficient operating
capital since most client employees pay 30 to 45 days after billing. Although
the Company believes the $100,000 is sufficient to cover operations for
approximately an additional twelve (12) months, there can be no assurance that
such funding can cover the additional risks associated with expansion. (See Part
I, Item 1. "Description of Business," (b) "Business of Issuer - Risk Factors.")
<PAGE>
If the Company is able to generate enough revenue during the initial
phase to support the first location, in the medium term, the Company plans to
open one (1) additional office each quarter until such time as it has four (4)
offices operating. The Company intends to open the first expansion office
outside of Palm Beach County in Orlando since Ms. Garrett already has an
operation in that area and is familiar with the employment environment there.
The Company anticipates that it will require an additional $100,000 to fund one
(1) year of operations at this second location, acquisition of offices space and
equipment and wages for clerical staff. The Company also believes that Mr. Adams
will be capable of managing the Palm Beach County operation at this time, while
Ms. Garrett will oversee Orlando and generally oversee the Palm Beach County
operation. As with Palm Beach County, the Company believes that there is
adequate and affordable rental space and clerical support staff available. To
fund this additional expansion, the Company intends to initiate another
selfdirected Rule 506 offering to raise $100,000. If the Company is not
successful in raising such additional funds, the Company believes that it will
not be able to operate the second location without creating a financial drain on
the first location. Even if it is successful, there can be no assurance that the
Company will achieve any acceptance in the Orlando marketplace and may find
neither sufficient client employers nor qualified client employees to make the
venture viable.
During the first quarter in which Orlando office is operating, the
Company intends to seek funding through an additional Rule 506 offering, seeking
an additional $300,000. Such funds will be utilized to open the third and fourth
office during the next two quarters. While office space, clerical help,
equipment costs and operations for a one (1) year period are not anticipated to
exceed $100,000 for each office, the Company believes that both Mr. Adams and
Ms. Garrett should be placed on an annual salary and that advertising and
promotional costs must be increased in order to increase the accessability to a
broader range of potential client employers and an increased selection of client
employees. Also, in order to be competitive with other temporary staffing
agencies, the Company must implement an employee benefit program. The Company
believes that the additional $100,000 of the planned offering should be
sufficient to cover these increased costs. The Company plans to open its third
office in Broward County since that is immediately contiguous to Palm Beach
County and its fourth office in Dade County. The Company feels that by covering
these three (3) contiguous counties in South Florida that it will have access to
a broader range of potential client employers and a larger pool of potential
client employees. Further, it believes that operations in the three (3)
contiguous counties will lead to economies of scale which will increase the
potential profitability of the Company. Areas in which the Company believes it
will have the benefit of the greatest economies of scale are advertising and
availability of a larger labor pool which can cover each of the three (3)
counties. Rental space, clerical staff and equipment is readily available in
each of these areas.
The principal risks of these expanded operations would be unforeseen
costs associated with entry into the expanded market, increased costs associated
with a larger employee base, liability from Workers' Compensation and employee
related claims associated with a larger work force, inability to find a presence
in the expanded market place, increased competition and increased risk
associated with the lapse between billing and payment by client employers.
Should the Company incur any large liabilities because of its operations, which
risk increases as the employee pool increases, such liabilities could have a
substantially detrimental affect upon the Company's financial condition.
Further, should the Company be unable to secure the financing required for the
additional expansion, the anticipated revenues from a reduced operation, while
potentially able to meet the operating needs of the Company, would impede the
likelihood of incremental revenue increases necessary for the long term
financial success of the Company. (See Part I, Item 1. "Description of Business
- - (b) Business of Issuer - Risk Factors.")
The Company plans to monitor closely its medium term operations for
approximately two (2) years. At this time the Company intends to expand into the
PEO market by adding such services to its existing facilities. At such time, the
Company will be required to comply with the PEO requirements of the State of
Florida. (See Part I, Item 1. "Description of Business - (b) Business of Issuer
- - Industry Regulation - PEO Licensing Requirements.") If it has been successful
in securing the necessary financing and if each of the operations is capable of
sustaining itself, the Company intends to seek additional financing in the form
of Rule 506, conventional bank financing, small business administration
financing, venture capital or the private placement of corporate debt for a
total of approximately $1,000,000. There can be no assurance that any of these
financing sources will be available to the Company. If the Company's plan to
seek additional financing is successful, the Company intends to open additional
offices which compliment the Orlando operation, beginning in Tampa, then
expanding into Sarasota and Fort Meyers and to add a regional manager to oversee
these operations. The Company believes that such expansion will achieve similar
economies of scale as those which are anticipated by the Palm Beach, Broward and
<PAGE>
Dade County expansion. Further, the Company believes that such expansion will
place the Company in a position to be a major force in the temporary industrial
staffing industry in the State of Florida. If such expansion is implemented, Mr.
Adams and Ms. Garrett believe that they will be able to oversee the operation
with the addition of the manager.
The Company has not sought as of yet any debt financing since it
believes that any qualified venture capital firm will not loan any funds to the
Company until such time as it is fully reporting and has completed at least two
years of profitable operations. Once it has met those criteria, the Company
intends to seek out funds from licensed venture capital firms and to negotiate
terms which will fit the financial capabilities of the Company. Since the
Company does not intend to seek debt financing until such time as it has several
locations operating successfully, it believes that it can negotiate appropriate
placement and repayment terms for such borrowings. However, there can be no
assurance that such funds will be available to it or that suitable terms which
are most advantageous to the Company can be negotiated. In addition, the Company
does not, at this time, anticipate that it will require substantial leverage to
fund the expanded operations. However, in the event the Company did receive debt
financing and in the event the Company were not successful in sustaining
operations or meeting such debt and defaulted in its payments on the debt, then
such debt financing could foreclose upon the Company's interests to the
detriment of its shareholders.
Although the Company is authorized to borrow funds, as discussed, it
does not intend to do so until such time as it has been operating for a given
period of time. At such time as the Company seeks borrowed funds, it does not
intend to use the proceeds to make payments to the Company's promoters,
management (except as reasonable salaries, benefits and out of pocket expenses)
or their respective affiliates or associates. Except for the $100 paid to Mr.
Adams each month, the Company does not intend to pay any money to any officer or
director until such time as it secures financing. The Company has no present
intention of acquiring any assets or other property owned by any promoter,
management or their respective affiliates or associates or acquiring or merging
with a business or company in which the Company's promoters, management or their
respective affiliates or associates directly or indirectly have an ownership
interest. Existing conflict of interest provisions are set forth in the Amended
Articles of Incorporation for the Company. Management is not aware of any
circumstances under which this policy, through their own initiative, may be
changed. Although there is no present potential for a related party transaction,
in the event that any payments are to be made to promoters and management such
will be disclosed to the security holders and no such payments will be made in
breach of the fiduciary duty such related persons have to the Company.
There are no arrangements, agreements or understandings between
non-management shareholders and management under which non-management
shareholders may directly or indirectly participate in or influence the
management of the Company's affairs. There are no arrangements, agreements or
understandings under which non-management shareholders will exercise their
voting rights to continue to elect the current directors to the Company's Board
of Directors.
In the event the Company is successful in securing the additional
financing for its long term expansion, it plans to seek acquisitions and grant
franchises to qualified companies which the Company believes will compliment its
overall strategy inside and outside of the State of Florida. The Company will
seek acquisitions of flexible industrial staffing companies and expand its
operations into the area of PEO's. At such time as the Company enters the PEO
market outside the State of Florida, the Company will be required to comply with
applicable state regulations regarding PEO's. (See Part I, Item 1. "Description
of Business," (b) "Business of Issuer - Industry Regulations - PEO Licensing
Requirements; and (b) "Business of Issuer - Risk Factors.")
Such increased expansion may increase greatly the risks associated with
the Company's operations. The Company will continue to be dependent upon
recruiting qualified client employees and establishing a sufficient client
employer base. Increased operations and expansion into the areas of PEO's expose
the Company to the potential of unfavorable interpretation of government
regulations. The larger the work force, the greater the chance of increased
employee costs, liability for Workers' Compensation and employer related claims.
Expansion will expose the Company to competition from larger and more
established flexible industrial staffing firms, many of whom have greater
resources than the Company. The Company anticipates that revenues from such
expanded operations may result in greater fluctuation in revenues as a result of
seasonal variations in staffing needs. Also, the Company will be required to pay
wages to a larger staff while still experiencing a 30 to 45 day delays in
payments received from client employers. Once the Company expands into the PEO
market, there is a risk that termination of a portion of the PEO contracts could
occur at the same time, thereby causing an adverse impact upon the Company. In
addition, with expansion and implementation of an employee benefit plan which is
<PAGE>
necessary in order to be competitive for qualified client employees, in the
event such plan were to be disallowed, loss of qualified status could have an
adverse effect upon the Company. Finally, as a larger Company, it could face
possible adverse affects from fluctuations in the general economy and business
of its client employers. (See Part I, Item 1. "Description of Business," (b)
"Business of Issuer - Risk Factors.")
Another avenue available to the Company to aid its ability to expand is
to seek a reverse merger with a larger, public company. While the Company has no
present intention to seek such a merger, in the event that an appropriate
vehicle were to become known to the Company, the Board of JSBW would evaluate
the relative risks and merits of such a merger to the overall plans for the
Company. The Company may also seek to expand by acquisitions of unrelated
companies which engage in related services such as temporary clerical staffing
and full employment agencies.
As a reporting company, the Company will be required to file quarterly
on Form 10-QSB and annually on Form 10-KSB and in each case, will be required to
provide the financial and other information specified in such forms. In
addition, the Company would be required to file on Form 8-K in the event there
was a change of control, if the Company acquires or disposes of assets, if there
is a bankruptcy or receivership, if the Company changes its certified
accountants, upon the occurrence of other events which may be pertinent to the
security holders, and after certain resignations of directors. Being subject to
such reporting requirements reduces the pool of potential acquisitions or merger
candidates for the Company since such transactions require that certified
financials must be provided for the acquiring, acquired or merging candidate
within a specified period of time. That is why the Company intends to expand
through internal operations through the short and medium term. At such time as
the Company will seek acquisitions or mergers, it will limit itself to companies
which either already have certified financial statements or companies whose
operations lend themselves to review for a certified audit within the required
time.
The staffing industry consists of companies which provide four basic
services to clients: flexible staffing, professional employer organization
("PEO"), placement and search and out- placement. Based on information provided
by the National Association of Temporary and Staffing Services ("NATSS"), the
National Association of Professional Employers Organizations ("NAPEO"), and the
Staffing Industry Analysts, Inc. ("SIAI"), 1997 staffing industry revenues were
approximately $50.3 billion. According to industry sources, approximately 7,000
flexible staffing firms and 2,000 PEO firms employed approximately 2.5 million
people per day, or approximately 4% of the entire United States work force in
1997. Over the last five years, the staffing industry has experienced
significant growth due largely to the utilization of temporary help across a
broader range of industries as well as the emergence of the PEO sector.
According to NATSS, flexible industrial staffing currently represents
34.4% of the estimated $50.3 billion in 1997 flexible staffing revenues. The
Company believes that the flexible staffing market is highly fragmented and that
in excess of 75% of flexible industrial staffing industry revenues are generated
by small local and regional companies. According to NATSS, the flexible
industrial staffing sector grew from $5.6 billion in 1991 to $17.3 billion in
1997, representing a compound annual growth rate of approximately 16%. The
Company's goal is to target opportunity in this fragmented, rapidly growing
market which has to date been under-served by full service staffing companies.
Business Strategy
The Company's business strategy, which is dependent upon its obtaining
sufficient financing with which to implement its business plan (of which there
is no assurance), is to provide human resource services focusing on the flexible
industry staffing market. The Company's revenues will be based upon the salaries
and wages of employees assigned to work at client company locations (sometimes
referred to as " worksite employees"). The Company's fee structure will be based
on the gross payroll of each employee, the estimated costs of employment related
taxes, health benefits, Workers' Compensation benefits, insurance and other
services to be offered by the Company plus a negotiated mark-up. The Company's
revenues are dependent on the number of clients enrolled, the resulting number
of employees and the gross payroll of such employees.
<PAGE>
The Company's primary direct costs will be (i) salaries and wages of
worksite employees (payroll cost), (ii) employment related taxes, (iii) health
benefits and (iv) Workers' Compensation benefits and insurance. (See Part I,
Item 1, "Description of Business," (b) "Business of Issuer - Risk Management
Program - Workers' Compensation.") Employment related taxes consist of the
employer's portion of payroll taxes required under the Federal Income
Contribution Act ("FICA"), which includes Social Security and Medicare, and
federal and state unemployment taxes. The federal tax rates are defined by the
appropriate federal regulations. State of Florida unemployment tax rates are
affected by claims experience, of which the Company has none at this time.
Health benefits are comprised primarily of medical insurance costs, but also
include costs of other employee benefits such as prescription coverage, vision
care, disability insurance and employee assistance plans.
Flexible staffing and related costs of wages, salaries, employment
taxes and benefits related to worksite employees will be recognized in the
period in which those employees perform the flexible staffing services. Because
the Company will be at risk for all of its direct costs, independently of
whether payment is received from its clients, and consistent with industry
practice, all amounts billed to clients for gross salaries and wages, related
employment taxes, health benefits and Workers' Compensation coverage will be
recognized by the Company, net of credits and allowances.
The Company's gross profit margin will be determined in part by its
ability to estimate and control direct costs and its ability to incorporate such
costs in the service fees charged to clients. The Company will attempt to
reflect changes in primary direct costs through adjustments in service fees
charged to clients, subject to contractual arrangements.
The Company's objective is to become a dominant provider of industrial
flexible staffing services in select geographic areas, beginning in Palm Beach
County, Florida, expanding to contiguous counties in South Florida then
throughout the State of Florida and thereafter into selected areas nationwide.
To achieve this objective, and assuming that sufficient operating capital
becomes available, the Company intends to: (i) provide a comprehensive package
of single-source human resource services; (ii) focus on Palm Beach County which
has been under-served although it has high grow opportunities; (iii) at the time
of expansion, cluster offices to achieve regional market leadership; (iv)
maximize operating efficiencies through integrated technology and back office
support; and (v) commit to the permanent employment over time of its flexible
industrial staffing so as to become their "guardian employer".
Management expects, in the event JSBW achieves commercial success
initially, to increase the Company's market penetration through internal
expansion and thereafter through selected acquisitions. Such acquisitions could
include both flexible industrial staffing providers and PEO providers.
Management believes that in the current flexible staffing market, expansion into
markets beyond the State of Florida could be especially attractive because it is
believed that the internal structuring of a successful operation in Florida can
be replicated in other selected geographic areas with high grow opportunities.
However, such expansion beyond Florida presents certain challenges and risks and
there could be no assurance that JSBW, even if it were successful in
establishing markets in other states, could be expected to be successful in
profitably penetrating these potential markets.
Proposed Company Staffing and Client Services
Ms. Garrett, the Executive Vice President of the Company, has been
employed in the temporary staffing and permanent placement industry for
approximately fourteen (14) years and has managed her own employment agency for
the last three (3) years, one and one-half (1.5) years as a sole proprietor and
one and one-half years as a corporation. Under her direction, the Company plans
to offer clients a full array of staffing services; to serve as the employer of
record with respect to flexible staffing services; and to operate a recruiting
and training center which will initially be staffed by the executive officers.
It is anticipated, and subject to the availability of additional funding, that
the Company will employ a manager, recruiting coordinators, staffing
consultants, an office administrator and clerical assistants. The number of
people employed in each position will vary by the size of the recruiting and
training center and the degree of penetration into the initial and subsequent
territories.
The Company believes that its initial success will be due in part to
the familiarity of Ms. Garrett with the businesses of its potential clients. She
will visit client jobs regularly to become familiar with the skills required by
the client's business, conduct job site safety inspections and insure that
employees are properly equipped for the job. To insure client satisfaction, Ms.
Garrett will play an active role in the daily work assignments. Ms. Garrett also
will attempt to become familiar with the Company's pool of industrial employees.
The Company intends to subject each employee to a two-day screening process that
evaluates skills, abilities, and attitudes. This not only will permit the
Company to institute appropriate training programs and assign its workers, but
also help the Company retain desirable employees.
<PAGE>
Management is unable at this time to forecast with any degree of
certainty the acceptance of the Company's services or the salaries of its
employees; however, JSBW intends to market its services and recruit its staff so
that its pricing policies are considered competitive in the Company's target
markets.
Sales and Marketing
The Company plans to market its flexible industrial staffing through a
combination of marketing channels including direct sales, franchising and
strategic alliances. The Company believes that this multi-channel approach will
allow the Company quickly to access a pool of skilled employees, develop
regional awareness and ultimately become a market leader. Of the three marketing
channels intended to be employed by the Company, direct sales and franchising
are common in the flexible industrial staffing business, while strategic
alliances have most commonly been used in the PEO business. There can be no
assurance that any of these techniques will be successful. The Company intends
to compete, assuming that it is successful in obtaining sufficient financing,
with other companies in its target markets who are currently providing flexible
staffing services.
The Company anticipates that its initial marketing efforts will be in
the area of direct sales. Good quality staff and professional follow-up with the
clients will be essential to the Company's success. Initially, Ms. Garrett will
secure the Company's client base. However, the Company anticipates that it will
employ qualified sales personnel to establish new customer accounts. The Company
believes that by employing its own sales personnel it will be able to penetrate
additional markets at a minimal cost since sales associates receive compensation
in the form of commissions based upon a client's use of the Company's services.
This commission based compensation program will reduce the overhead costs for
the Company.
The Company's ability to develop markets through the services of its
Executive Vice President and eventually a sales force is, of course dependent
upon managements ability to obtain necessary financing, of which there can be no
assurance. Assuming the availability of adequate funding, JSBW intends to stay
abreast of changes in the marketplace by ensuring that its staff experience and
pricing policies are competitive. JSBW does not anticipate obtaining long-term
contracts with clients since such contracts are not common in the flexible
staffing industry; however, management believes that the loyalty of such clients
can be maintained through good staffing and good servicing of the accounts.
The Company will attempt to maintain diversity within its client base
in order to decrease its exposure to downturns or volatility in any particular
industry. As part of this client selection strategy, the Company intends to
offer its services only to those businesses which operate in certain industries,
eliminating industries that it believes present a higher risk of employee
injury. Where feasible, the Company intends to evaluate each client's Workers'
Compensation risk, credit worthiness, unemployment history and operating
stability.
Risk Management Program - Workers' Compensation
The Company believes that careful client selection, pro-active
prevention programs and aggressive control of claims will result in reduced
Workers' Compensation costs. JSBW will seek to prevent workplace injuries by
implementing a variety of training, safety and mandatory drug-free workplace
programs (including pre-employment screening, random testing and post-accident
drug monitoring) to ensure that safety awareness is heightened at the sites to
which the Company sends its workers. Further, the Company will insist that
clients adhere to ongoing safety practices at the clients' worksites as a
necessary condition to a continued business relationship.
The Company believes that it can secure adequate Workers' Compensation
insurance at sufficient deductible per accident levels so as to cover the
intended risk management objectives.
Competition
The staffing market is highly fragmented, characterized by many small
providers, in addition to several large public companies. There are limited
barriers to entry and new competitors frequently enter the market. Although a
large percentage of flexible staffing providers are locally operated with fewer
than five offices, many of the large public companies have significantly greater
marketing, financial and other resources than the Company. However, unlike the
Company, a majority of these companies do not focus primarily on the supply of
temporary industrial personnel. The Company believes that by focusing primarily
on the placement of temporary industrial personnel, it will enjoy a competitive
advantage over many of its competitors who attempt to provide a broader base of
temporary employees.
<PAGE>
The Company also believes that by targeting emerging companies, rather
than larger companies that are generally being pursued by its competitors, it
can also gain certain competitive advantages. The Company believes that there
are several factors that must be met in order to obtain and retain clients in
the flexible staffing market. These factors include an adequate number of well
located offices, an understanding of clients' specific job requirements, the
ability to reliably provide the correct number of employees on time, the ability
to monitor job performance, and the ability to offer competitive prices.
To attract qualified industrial candidates for flexible employment
assignments, companies must offer competitive wages, vacations and holiday pay,
positive work environments, flexibility of work schedules and an adequate number
of available work hours. Initially, the Company intends to establish one office
in the Palm Beach County area; however, the Company believes that it can be
highly competitive in the other areas and, subject to the availability of
additional funding which cannot be assured, will be in a position to open
additional offices in a relatively short period of time.
Industry Regulation
Overview
As an employer, the Company is subject to all federal, state and local
statutes and regulations governing its relationship with its employees and
affecting businesses generally, including its client employees.
Uncertainty as to the Employer Relationship
By entering into the co-employment relationship with client employees,
the Company will be assuming certain obligations and responsibilities of an
employer under federal and state laws. Many of these federal and state laws were
enacted prior to the development of nontraditional employment relationships such
as temporary employment. Whether certain laws apply to the Company depends in
many cases upon whether the Company is deemed to be an "employer" for purposes
of the law. The definition of "employer" under these laws is not uniform and,
therefore, the application of these laws to the Company's intended business is
not always certain. In many cases, a person's status as an "employer" is
determined by application of a common law test involving the examination of
several factors to determine an employer/employee relationship. Uncertainty as
to the application of certain laws governing "employer" relationships will be
particularly important to the Company in federal tax and employee benefit
matters.
Federal and State Employment Taxes. The Company will assume the sole
responsibility and liability for the payment of federal and state employment
taxes with respect to wages and salaries to be paid to its employees, including
client employees. To date, the Internal Revenue Service ("IRS") has relied
extensively on the common law test of employment in determining employer status
and the resulting liability for failure to withhold.
The Company intends to expand its operations into the PEO market. The
IRS has formed an examination division market segment specialization program for
the purpose of examining selected PEO's. If the Company enters the PEO market
and if it were to be examined, it is possible that the IRS may determine that a
PEO is not an employer of the client employees under the Internal Revenue Code
of 1986, as amended (the "Code"), provisions applicable to federal employment
taxes and, consequently, that the client companies are exclusively responsible
for payment of employment taxes on wages and salaries paid to such employees.
A determination by the IRS that the Company is not an employer of the
client employees may impact the Company's ability to report employment taxes on
its own account rather than for the accounts of its clients and would increase
administrative burdens on the Company's payroll service function. In addition,
while the Company believes that it can contractually assume the client company's
withholding obligations, in the event the Company fails to meet these
obligations, the client company may be held jointly and severally liable
therefore. Assuming that proper funding is available, the Company's management
believes that the economic strength and reputation of the Company will prevent
this potential liability from discouraging prospective clients.
Employee Benefit Plans. The Company intends to offer various benefit
plans to its client employees. It is intended that the Company will offer a
retirement plan, a group health insurance plan, a group life insurance plan, a
group disability insurance plan and an employee assistance plan. Generally,
employee benefit plans are subject to provisions of both the Code and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In order
to qualify for favorable tax treatment under the Code, the plans must be
established and maintained by the employer for the exclusive benefit of the
Company's employees. An IRS examination of the Company and/or a client company
may determine that the Company is not an employer of client employees under Code
<PAGE>
provisions applicable to employee benefit plans. Consequently, the Company may
not be able to offer client employees benefit plans that qualify for favorable
tax treatment. If the IRS were to conclude that the Company is not an employer
of its client employees for plan purposes, client employees would not be able to
continue to make tax favored contributions to the Company's intended retirement
plan. The Company believes that, although unfavorable to the Company, a
prospective application by the IRS of an adverse conclusion would not have a
material adverse effect on its financial position and results of operations. If
such conclusion were applied retroactively, employees' vested account balances
may become taxable immediately, the Company would then lose its tax deduction to
the extent the contributions were not vested, the plan trust would become a
taxable trust and penalties could be assessed. In such a scenario, the Company
would face the risk of client dissatisfaction, as well as potential litigation.
A retroactive application by the IRS of an adverse conclusion could have a
material adverse effect on the Company's financial position, results of
operations and liquidity. While the Company believes that a retroactive
disqualification is unlikely, there can be no assurance as to the ultimate
resolution of these issues.
Employee pension and welfare plans also are governed by ERISA. The
United States Supreme Court has held that the common law test of employment must
be applied to determine whether an individual is an employee or an independent
contractor under ERISA. A definitive judicial interpretation of employer in the
context of a PEO arrangement has not been established. If there were an adverse
finding against the Company as a PEO employer, the result of such finding would
be that the Company and its plans would not enjoy the preemption of state law
provided by ERISA and could be subject to varying state laws and regulations, as
well as to claims based upon state common laws.
Workers' Compensation
Workers' Compensation is a state mandated, comprehensive insurance
program that requires employers to fund medical expenses, lost wages and other
costs resulting from work-related injuries and illnesses. In exchange for
providing Workers' Compensation coverage for employees, employers are generally
immune from any liability for benefits in excess of those provided by the
relevant state statutes. In most states, the extensive benefits coverage for
both medical costs and lost wages is provided through the purchase of commercial
insurance from private insurance companies, participation in state-run insurance
funds, self insurance funds or, if permitted by the state, employer
self-insurance. Workers' compensation benefits and arrangements vary on a
state-by-state basis and are often highly complex.
PEO Licensing Requirements
Approximately one-third of the states, including Florida, have passed
laws that have licensing or registration requirements for PEO's and several
additional states are considering regulation. Such laws vary from state to state
but generally provide for monitoring the fiscal responsibility of PEO's. State
regulation assists in screening insufficiently capitalized PEO operations and,
in the Company's view, has the effect of legitimizing the PEO industry generally
by resolving interpretative issues concerning employee status for specific
purposes under applicable state law. Existing regulations are relatively new
and, therefore, limited interpretive or enforcement guidance is available.
Assuming funding is available, the Company plans to establish an
initial PEO operation in Florida. Under Florida law, the Company's intended PEO
operation will require licensing under the Florida Employee Leasing Licensing
Act of 1991 (the "Florida Licensing Act"). Among other things, the Florida
Licensing Act requires PEO's and their controlling persons to be licensed,
mandates reporting requirements, allocates several employer responsibilities and
requires the payment of an annual licensing fee based upon gross payroll
amounts. The Florida Licensing Act also requires licensed PEO's to: (i) reserve
the right of direction and control over leased employees, (ii) enter into
written agreements with their clients, (iii) pay wages to leased employees, (iv)
pay and collect payroll taxes, (v) maintain authority to hire, terminate,
discipline and reassign employees, and (vi) reserve the right to direct and
control the management of safety, risk and hazard control at the worksite,
including the right to perform safety inspections, to promulgate and administer
employment and safety policies, and to manage Workers' Compensation claims,
claims filings, and related procedures.
<PAGE>
Seasonality
The Company believes that its results of operations will reflect the
seasonality of higher client demand for flexible industrial staffing services in
the last two quarters of the year, compared to the first two quarters. Even
though there may be a seasonal reduction of flexible industrial staffing
revenues in the first quarter of a year as compared to the fourth quarter of a
prior year, the Company intends not to reduce the related core personnel and
other operating expenses since the infrastructure, once established, is needed
to support anticipated increased revenues in subsequent quarters. The Company
further believes that once it establishes the PEO operation, that the reduction
in flexible industrial staffing revenues in the first quarter of the year will
be substantially offset by increased PEO revenues which are generally not
subject to seasonality.
Employees and Consultants
The Company has had no employees since its organization. Except for
lump sum consulting fees received by Mr. Adams and Ms. Garrett, JSBW's executive
officers and directors, have served in those positions without compensation
through the date hereof. Mr. Adams was compensated for specialized services,
including the preparation of a business plan and the performance of certain
financial consulting services, commonly performed by outside consultants,
despite his position as executive officer and director of JSBW, because the
Company does not presently have the financial capability to pay management
salaries or retain outside consultants on an ongoing basis. Ms. Garrett was
compensated for management consulting services relating to the operations of an
employment agency, despite her position as an executive officer of JSBW, because
the Company does not presently have the financial capability to pay management
salaries or retain outside consultants on an ongoing basis. It is anticipated
that at such time, if ever, as the Company's financial position permits,
assuming that JSBW is successful in raising adequate funding through equity
and/or debt financing and/or generating a sufficient level of revenue from
operations, Mr. Adams and Ms. Garrett and any other executive officers the
Company may employ, will receive appropriate compensation, in addition to
salaries, which may include bonuses, coverage under medical and life insurance
benefit plans and participation in stock option and/or other profit sharing or
pension plans, for services as executive officers of the Company.
Facilities
The Company maintains its office rent free at the home of Mr. Adams at
219 Almeria, West Palm Beach, Florida 33405. Its telephone number is (561)
804-9744. The Company anticipates that it will have continued use of this office
on a rent-free basis for the foreseeable future and that this arrangement will
be adequate for the Company's needs while it is in the development stage.
Assuming that JSBW obtains the necessary additional financing and is successful
in implementing its business plan, no assurance of which can be made, the
Company will require its own commercial facility for the first flexible staffing
office location in Palm Beach County, including sufficient space to establish
the intended training program. In such event, management believes that JSBW
would be able to locate adequate facilities at reasonable rental rates in Palm
Beach County, suitable for its future needs.
Risk Factors
Before making an investment decision, prospective investors in the
Company's Common Stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. Development Stage Company. JSBW was only recently organized on
October 20, 1997, and accordingly, is in the early form of development stage and
must be considered promotional. Management's efforts, since inception, have been
allocated primarily to organizational and fund raising activities and the
ability of the Company to establish itself as a going concern is dependent upon
the receipt of additional funds from operations or other sources to continue
those activities. Potential investors should be aware of the difficulties
normally encountered by a new enterprise in its development stage, including
under-capitalization, cash shortages, limitations with respect to personnel,
technological, financial and other resources and lack of a client base and
market recognition, most of which are beyond the Company's control. The
likelihood that the Company will succeed must be considered in light of the
problems, expenses and delays frequently encountered in connection with the
competitive environment in which the Company will operate. The Company's success
depends to a large extent on establishing a strong client base and hiring,
training and placing client employees for placement with its clients. There is
no guarantee that the Company's proposed activities will attain the level of
recognition and acceptance necessary for the Company to find a niche in the
<PAGE>
flexible staffing market. There are numerous flexible staffing firms in Palm
Beach County, the State of Florida and nationwide, several of which are large
public companies, which are already positioned in the business and which are
better financed than the Company. There can be no assurance that the Company,
with its very limited capitalization, will be able to compete with these
companies and achieve profitability. (See Part I, Item 1. "Description of
Business.")
2. No Operating History, Revenues or Earnings. As of the date hereof,
the Company has not yet commenced operations and, accordingly, has received no
operating revenues or earnings. Since its inception, most of the time and
resources of JSBW's management have been spent in organizing the Company,
obtaining interim financing and developing a business plan. The Company's
success is dependent upon its obtaining additional financing from intended
operations, from placement of its equity or debt or from third party funding
sources. The Company's success in the business of flexible staffing is dependent
upon the receipt of profits from operations, which are not expected for the
foreseeable future, and/or additional financing to enable the Company to
continue in operation. There is no assurance that JSBW will be able to obtain
additional debt or equity financing from any source. The Company, during the
development stage of its operations, can be expected to sustain substantial
operating expenses without generating any operating revenues or the operating
revenues generated can be expected to be insufficient to cover expenses. Thus,
for the foreseeable future, unless the Company attains profitable operations,
which is not anticipated, the Company's financial statements will show an
increasing net operating loss. (See Part I, Item 1. "Description of Business.")
3. Minimal Assets, Working Capital and Net Worth. As of May 31, 1998,
the Company's total assets in the amount of $12,431, consisted , principally, of
the sum of $12,431 in cash. As a result of its have minimal assets and a net
loss from operations, in the amount of $7,724, as of May 31, 1998, the Company
has very minimal net worth presently. Further, JSBW's working capital is
presently minimal and there can be no assurance that the Company's financial
condition will improve. The Company is expected to continue to have minimal
working capital or a working capital deficit as a result of current liabilities.
Mr. Adams, executive officer and director of JSBW contributed services valued by
him at $160.10 in consideration for 1,601,000 shares of the Company's Common
Stock received by him. Ms. Garret, Executive Vice President, contributed
services valued by her at $495.00 in consideration for 49,500 shares of the
Company's Common Stock received by her. Even though management believes, without
assurance, that it will obtain sufficient capital with which to implement its
business plan on a limited scale, the Company is not expected to continue in
operation without an infusion of capital. In order to obtain additional equity
financing, management may be required to dilute the interest of existing
shareholders or forego a substantial interest of its revenues, if any. (See Part
I, Item 1. "Description of Business")
4. Need for Additional Capital: Going Concern Qualification Expressed
by Auditor. Without an infusion of capital or profits from operations, the
Company is not expected to continue in operation after the expiration of the
period of three to nine months from the date hereof. Accordingly, the Company is
not expected to become a viable business entity unless additional equity and/or
debt financing is obtained. JSBW's independent certified public accountant has
expressed this as a "going concern" qualification to the opinion of Durland and
Company, CPA's P.A. on the Company's financial statements. The Company does not
anticipate the receipt of operating revenues until management successfully
implements its business plan, which is not assured. Further, JSBW may incur
significant unanticipated expenditures which deplete its capital at a more rapid
rate because of among other things, the development stage of its business, its
limited personnel and other resources and its lack of a client base and market
recognition. Because of these and other factors, management is presently unable
to predict what additional costs might be incurred by the Company beyond those
currently contemplated to obtain additional financing and achieve market
penetration on a commercial scale in its proposed line of business, i.e.
flexible temporary staffing. JSBW has no identified sources of funds, and there
can be no assurance that resources will be available to the Company when needed.
(See - 10. " Conflict of Interest.")
5.Dependence on Management: Director's Lack of Experience in Flexible
Staffing Business. The possible success of the Company is expected to be largely
dependent on the continued services of its Executive Vice President, Ms.
Garrett, because neither Mr. Adams, a director and executive officer of JSBW nor
the other director and executive officer have any experience or expertise in the
flexible temporary staffing business. Virtually all decisions concerning the
recruitment, training and placement of client employees and the establishment of
a client base with whom to place the client employees by the Company will be
made or significantly influenced by Ms. Garrett. She is presently serving as
manager of her own employment agency and she is required to devote a significant
amount of her time to the conduct of that company's business. Ms. Garrett and
<PAGE>
Mr. Adams are expected to devote only such time and effort to the business and
affairs of the Company as may be necessary to perform their responsibilities as
executive officers and director of JSBW. The loss of the services of Ms. Garrett
would adversely affect the conduct of the Company's business and its prospects
for the future. The Company presently holds no key- man life insurance on the
lives of, and has no employment contract or other agreement with Ms. Garrett or
Mr. Adams. (See - 10. "Conflict of Interest.")
6. No Qualified Client Employees or Client Base. The Company was only
recently organized. While JSBW intends to engage in the flexible temporary
staffing business, the Company currently has no qualified client employees to
place with clients and no clients with whom to place such qualified employees.
Further, the very limited funding currently available to the Company will not
permit it to commence business operations in the flexible temporary staffing
industry except on a very limited scale. There can be no assurance that the debt
and/or equity financing, which is expected to be required by the Company in
order for JSBW to continue in business after the expiration of the next three to
nine months, will be available. The Company has no clients presently and there
can be no assurance that it will be successful in obtaining clients in its
initial prospective marketing area encompassing Palm Beach County. JSBW does not
expect to have long-term contracts with any clients; thus, management believes
that the Company must, in order to survive, ultimately obtain the loyalty of a
large volume of clients. The Company expects to be limited in the number of
client employees and training and support personnel it is capable of employing
as a result of its limited operating capital. Thus, the Company could be
expected to experience substantial difficulty in attracting the high volume of
clients in the prospective target market which would enable JSBW to achieve
commercial viability. The Company will be dependent upon its Executive Vice
President Ms. Garrett, who has approximately fourteen (14) years of experience
in employment agency business. (See Part I, Item 1. "Description of Business,"
(b) "Business of Issuer - Business Strategy; - Proposed Company Staffing and
Client Services; and - Sales and Marketing.")
7. No Placement Organization: Limited Placement Capability. The
Company's success depends in large part upon its ability to identify and
adequately penetrate the markets for its potential staffing services and its
ability to recruit qualified client employees for temporary placement. As
compared to JSBW, which lacks the financial, personnel and other resources
required to compete with its larger, better-financed competitors, virtually all
of the Company's competitors have much larger budgets for securing clients,
recruiting client employees and training. Except for its Executive Vice
President, JSBW presently has no temporary staffing or client enrollment
personnel whatsoever and, accordingly, management expects that the Company's
services will be marketed initially, for the most part, through contacts and
previous clients of Ms. Garrett. Depending upon the level of funding obtained by
the Company, management believes, without assurance, that it will be possible
for JSBW to attract qualified client employees, staff personnel and clients.
However, in the event that only limited funds are obtained, the Company
anticipates that its limited finances and other resources may be a determinative
factor in the decision of any prospective employee as to whether to become
employed by JSBW. Until such time, if ever, as the Company is successful in
attracting and employing capable sales staff to secure and service a larger
client base and capable training and recruitment staff to qualify potential
client employee candidates, it intends to rely upon the judgment and conclusions
of its Executive Vice President, based upon her knowledge and experience gained
in managing her own employment agency, relative to the Company's needs for
securing clients and recruiting and training client employees. However, the fact
that Mr. Adams, executive officer and director of JSBW has no specific
experience in the flexible temporary staffing industry may adversely impact the
Company's chances for success. (See Part I, Item 1. "Description of Business,"
(b) "Business of Issuer - Sales and Marketing.")
8. High Risks and Unforeseen Costs Associated with JSBW's Entry into
the Flexible Temporary Staffing Industry. There can be no assurance that the
costs for the establishment of a client base or for the recruiting and training
of qualified client employees incurred by JSBW will not be significantly greater
than those estimated by Company management. Therefore, the Company may expend
significant unanticipated funds or significant funds may be expended by JSBW
without development of a commercially viable flexible temporary staffing
business. There can be no assurance that cost overruns will not occur or that
such cost overruns will not adversely affect the Company. Further, unfavorable
general economic conditions and/or a downturn in client confidence has in the
past had, and could be expected in the future to have, an adverse affect on
client placements which could, in turn, adversely affect the Company's business.
Additionally, competitive pressures and changes in client mix, among other
things, which management expects the Company to experience in the uncertain
event that it achieves commercial viability, could reduce the Company's gross
profit margin from time to time. Accordingly, there can be no assurance that
JSBW will be capable of establishing itself in a commercially viable position in
local, state and nationwide temporary placement markets. (See Part I, Item 1.
"Description of Business," (b) "Business of Issuer.")
<PAGE>
9. Dependency on Recruiting Qualified Client Employees and Establishing
a Sufficient Client Base. The Company's ability to provide qualified client
employees on a profitable and timely basis depends, at least initially, upon the
availability of qualified candidates and the ability to quickly train them to
the level of competency necessary for placement. Further, the Company's ability
to establish a sufficient client base with whom qualified client employees may
be placed depends, at least initially, upon vacancies in the temporary staffing
market. There can be no assurance that qualified candidates or sufficient
vacancies will exist at the levels which management believes are possible.
Further, even if the Company receives sufficient proceeds from equity and/or
debt financing or third party funding sources, thus enabling it to employ sales
and staff personnel, to actively recruit qualified candidates and to establish a
sufficient client base needed to implement its business plan, it will
nevertheless be dependent upon the availability of qualified candidates and
vacancies in the temporary staffing market Although management believes that
initially Palm Beach County and thereafter the State of Florida and nationwide
have available adequate qualified candidates and sufficient client employers
with temporary vacancy positions, there can be no assurance that this will be
so. The insufficiency of qualified candidates and/or the insufficiency of client
employers may adversely affect JSBW's ability to be profitable in the flexible
temporary staffing market. The Company does not anticipate that it will have
long-term contracts with its prospective client employers. (See Part I, Item 1.
"Description of Business," (b) Business of Issuer - Sales and Marketing.")
10. Conflict of Interest. There are existing and potential conflicts of
interest, including time, effort and corporate opportunity, involved in the
participation by the Company's executive officers and director in other business
entities and transactions. Ms. Garrett, the Company's Executive Vice President
and manager of her own employment agency, which by virtue of her relation to the
Company is an affiliate of the Company, will divide her time and effort between
the Company, her existing employment agency and her other business obligations.
Accordingly, Ms. Garrett and/or other members of management of the Company may
be subject to direct conflicts of interest and the corporate opportunities
doctrine with respect to business opportunities in the temporary staffing
business which come to their attention. The Company's Amended Articles of
Incorporation provide that any related party contract or transaction must be
authorized, approved or ratified at a meeting of the Board of Directors by
sufficient vote thereon by directors not interested therein or the transaction
must be fair and reasonable to the Company. Ms. Garrett, who is not presently a
director of JSBW, has agreed, in the event that she is elected to serve as a
director of the Company in the future, that she would abstain from voting on any
related party contract or transaction involving her existing employment agency.
Nevertheless, assuming Ms. Garrett's future election to JSBW's Board of
Directors and her abstention from voting on any related party contract or
transaction in accordance with her agreement, it would still be possible for the
Board of Directors of the Company, by a vote of a sufficient number of
disinterested directors, to authorize, approve or ratify such a contract or
transaction with Ms. Garrett's existing employment agency or any other affiliate
even if the terms were unfair to the Company and unreasonable.
Because of the existing and/or potential future associations of the
Company's executive officers and directors in various capacities with other
firms involved in a range of business activities and because of the limited or
minimal amount of time and effort which is expected to be devoted to the Company
by such persons, there are existing and potential conflicts of interest in their
acting as executive officers and directors of the Company. None of the executive
officers or the directors of the Company will be able to devote a significant
amount of time or effort to the business and affairs of the Company because of
their simultaneous participation in, employment by and/or commitments to other
firms involved in a range of business activities. In addition, all of such
persons are or may become, in their individual capacities, officers, directors,
controlling shareholders and/or partners of other entities (in addition to Ms.
Garrett's existing employment agency) involved in a variety of businesses which
are engaged, or may in the future engage, in various transactions, or compete
directly, with the Company. Conflicts of interest and transactions which are not
at arm's-length may arise in the future because the Company's executive officers
and/or directors are involved in the management of any company which transacts
business, or competes directly with, the Company. (See Part I, Item 1.
"Description of Business," (b) Business of Issuer - General.")
11. Potential for Unfavorable Interpretation of Government Regulation.
As an employer, the Company is subject to all federal, state and local statutes
and regulations governing its relationships with its employees and affecting
business generally, including its worksite employees. Although the Company will
not be subject to additional regulation by virtue of its flexible staffing
operations, as a result of its potential PEO operations, the Company will be
affected by specifically applicable licensing and other regulatory requirements
<PAGE>
and by the uncertainty of the application of numerous federal and state laws
relating to labor, tax and employment matters. Because many such laws were
enacted prior to the development of alternative employment arrangements, such as
those provided by PEO's and other staffing business, many of these laws do not
specifically address the obligations and responsibilities of non-traditional
employers. Interpretive issues concerning such relationships have arisen and
remain unsettled. Uncertainties arising under the Code include, but are not
limited to, the qualified tax status and favorable tax status of certain benefit
plans intended to be provided by the Company and provided by other alternative
employers. The unfavorable resolution of these unsettled issued could have a
material adverse effect on the Company's results of operations, financial
condition and liquidity. In addition, the IRS is conducting an examination
division market segment specialization program to examine PEO's throughout the
United States. (See - 15. "Potential Legal Liability" and - 20. " Risk of Loss
of Qualified Status for Certain Tax Purposes.")
While many states do not explicitly regulate PEO's, approximately
one-third of the states (including Florida) have passed laws that mandate
licensing or registration requirements for PEO's and several additional states
are considering such regulation. Such laws vary from state to state but
generally provide, among other things, for monitoring the fiscal responsibility
of PEO's and specify some of the employer responsibilities assumed by PEO's. The
length of time required to obtain regulatory approval to begin such operations
will vary from state to state, and there can be no assurance that the Company
will be able to satisfy the licensing requirements or other applicable
regulations of any particular state in which it intends to operate, that it will
be able to provide the full range of services currently anticipated to be
offered, or that it will be able to operate profitably within the regulatory
environment of any state in which it does obtain regulatory approval. The
Company is not presently licensed in any state, has not submitted applications
to any state and does not intend to apply in any state at the current time.
However, should the Company wish to operate in any state which requires
licensing, the absence of the required license in such state would prohibit the
Company from providing PEO services in such state, until such time as such
license is acquired, if ever. (See Part I, Item 1. "Description of Business,"
(b) "Business of Issuer - Industry Regulation.")
12. Increased Employee Costs. The Company will be required to pay a
number of federal, state and local payroll taxes and related payroll costs,
including unemployment taxes, Workers' Compensation insurance premiums and
claims, Social Security and Medicare, among others, for its employees (including
its worksite employees) and will incur certain costs related to the provision of
such benefits, such as insurance premiums for health care. Health insurance
premiums, unemployment taxes and Workers' Compensation insurance premiums and
costs can be significant to the Company's operating results, and will be
determined in part by the Company's claims experience, of which it has none at
this time. Accordingly, the Company plans to employ extensive procedures in an
attempt to control such costs. The Company's projected costs could increase as a
result of proposed health care reforms. Recent federal and certain state
legislative proposals have included provisions extending health insurance
benefits to employees who do not presently receive such benefits. There can be
no assurance that the Company will be able to increase the fees charged to its
clients in a timely manner and sufficient amount to cover increased costs
related to Workers' Compensation, unemployment insurance or health insurance
benefits which may be extended to worksite employees.
13. Liability for Workers' Compensation Claims. The Company has not yet
acquired Workers' Compensation insurance, however, initial estimates, and
subject to the availability of additional funding, indicate that the Company
expects to provide for a $250,000 deductible per accident or industrial illness
with an aggregate annual dollar limit on the Company's potential liability for
deductible payments of 2.2% of aggregate annual payroll. Subject to the
availability of additional funding, the Company may be required to acquire such
insurance without an aggregate maximum dollar limit, or in exchange for a lower
excess insurance premium rate, or the Company may be required to accept the
responsibility for losses exceeding the $250,000 policy deductible per accident
or industrial illness on a dollar-for-dollar basis, but only to the extent such
losses cumulatively exceed 85% of the excess insurance premium (excluding the
profit and administration component), subject to a maximum additional premium
amount. If this last option were to be elected, the Company would pay
substantially all of the Workers' Compensation claims of its employees. To the
extent the Company is not successful in managing the severity of Workers'
Compensation claims, the costs incurred by the Company could have a material
adverse effect on the Company's financial condition, results of operations and
liquidity. In addition, if the Company's aggregate liability for deductible
payments are not limited, the adverse development of any claims involving
significant dollar amounts also could have a material adverse effect on the
Company's financial condition and results of operations (See Part I, Item 1.
"Description of Business," (b) "Business of Issuer - Risk Management Program -
Workers' Compensation".)
<PAGE>
14. Ability to Grow. The Company expects to grow through acquisitions,
internal growth and by granting franchises. The Company plans to expand its
business from its current location and by entry into other markets. There can be
no assurance that the Company will be able to create a market presence, or if
such market is created, to expand its market presence or successfully enter
other markets. The ability of the Company to grow will depend on a number of
factors, including the availability of working capital to support such growth,
existing and emerging competition and the Company's ability to maintain
sufficient profit margins in the face of pricing pressures. The Company must
also manage costs in a changing regulatory environment, adapt its infrastructure
and systems to accommodate growth and recruit and train qualified personnel.
The Company also plans to expand its business, in part, through
acquisitions primarily of flexible industrial staffing companies and PEO's.
Although the Company will continuously review potential acquisition candidates,
it has not entered into any agreement, understanding or commitment with respect
to any acquisitions at this time. There can be no assurance that the Company
will be able to successfully identify suitable acquisition candidates, complete
acquisitions on favorable terms, or at all, or integrate acquired businesses
into its operations. Moreover, there can be no assurance that acquisitions will
not have a material adverse effect on the Company's operating results,
particularly in the fiscal quarters immediately following the consummation of
such transactions, while the operations of the acquired business are being
integrated into the Company's operations. Once integrated, acquisitions may not
achieve comparable levels of revenues, profitability or productivity as at then
existing Company-owned locations or otherwise perform as expected. The Company
is unable to predict whether or when any prospective acquisition candidate will
become available or the likelihood that any acquisitions will be completed. The
Company will be competing for acquisition and expansion opportunities with
entities that have substantially greater resources than the Company. In
addition, acquisitions involve a number of special risks, such as diversion of
management's attention, difficulties in the integration of acquired operations
and retention of personnel, unanticipated problems or legal liabilities, and tax
and accounting issues, some of all of which could have a material adverse effect
on the Company's results of operations and financial condition.
Franchise growth poses the additional risk of the inability of the
Company to control the quality of services provided by its franchise associates.
Moreover, the failure of any franchise associate to pay royalties due to the
Company could have a material adverse effect on the Company's financial
condition and results of operations (See Part I, Item 1. "Description of
Business (b) "Business Strategy.")
15. Potential Legal Liability. Providers of staffing services may be
subject to claims relating to the actions of their employees (including their
worksite employees), including possible claims of discrimination and harassment,
theft of client property, misuse of client proprietary information, other
criminal actions or torts and other claims. Management intends to adopt and
implement policies and guidelines to reduce its exposure to these risks.
However, the failure of any Company employee to follow these policies and
guidelines may result in negative publicity, injunctive relief and the payment
by the Company of money damages or fines. There can be no assurance that the
Company will not experience such problems.
As an employer, the Company may be subject to a wide variety of
employment-related claims such as claims for injuries, wrongful death,
harassment, discrimination, wage and hour violations and other matters. In
addition, a number of legal issues remain unresolved with respect to
co-employment arrangements among PEO's, their clients and worksite employees,
including questions concerning ultimate liability for violations of employment
and discrimination laws. At such time as the Company enters the PEO sector, the
Company plans to have a standard PEO client service agreement which establishes
a contractual division of responsibilities between the Company and each client
for various human resource matters, including compliance with and liability
under various governmental regulations. However, as a result of the Company's
status as co-employer, the Company may be subject to liability for violations of
these and other laws despite these contractual provisions and even if it does
not participate in such violations. Although such client service agreements are
expected to provide that the client is to indemnify the Company for any
liability attributable to the client's failure to comply with its contractual
obligations and the requirements imposed by law, the Company may not be able to
collect on such contractual obligation claims and thus may be responsible for
satisfying such liabilities. Subject to the availability of additional
financing, the Company intends to carry liability insurance, but there can be no
assurance that any such insurance will be sufficient to cover any judgments,
settlements or costs relating to any future claims, suits or complaints or that
sufficient insurance will be available to the Company or such providers in the
future on satisfactory terms, if at all. If insurance is not sufficient to cover
any judgements, settlements or costs relating to any claims, suits or
complaints, the Company's business, financial condition, results of operations
and liquidity could be materially adversely affected. (See - 11. "Potential for
Unfavorable Interpretation of Government Regulations" and Part I, Item 1.
"Description of Business" (b) "Business of Issuer-Industry Regulation.")
<PAGE>
At such time as the Company enters into franchise agreements, the
Company may be subject to claims asserting that it is vicariously liable for the
damages allegedly caused by the franchisees. Generally, franchisor liability for
the acts or inactions of its franchisees are based on agency concepts. The
Company intends for its franchise agreements to state that the parties are not
agents and that the franchisees control the day-to-day operations of their
businesses. Furthermore, it is intended that the franchise agreements will
require the franchisees to undertake certain efforts to inform the public that
they are not agents of the Company and that they are independently owned and
operated. Moreover, the Company will take certain additional steps to insulate
its potential liability based on claims from the franchisee's conduct including
requiring the franchisees to indemnify the franchisor for such claims and
mandating that the franchisees carry certain insurance coverage naming the
Company as an additional insured. Despite these efforts to minimize the risk of
vicarious liability, there can be no assurance that a claim will not be made
against the Company, nor that the indemnification requirements and insurance
coverage will be sufficient to cover any judgments, settlements or costs
relating to such a claim.
16. Competition. The staffing industry is highly competitive, with
approximately 7,000 companies providing flexible staffing services through
approximately 17,000 locations and approximately 2,000 companies providing PEO
services. The Company will be competing with larger full-service and specialized
flexible staffing and PEO competitors in national, regional and local markets.
In addition, the Company may encounter substantial competition from new market
entrants. Many of the Company's competitors have significantly greater name
recognition and have greater marketing, financial and other resources than the
Company. The Company expects that there will be significant consolidation in the
staffing industry in the future, resulting in increased competition from larger
national and regional companies. There can be no assurance that the Company will
be able to complete effectively against such competitors in the future. (See
Part I. Item 1. "Description of Business," (b) "Business of
Issuer-Competition.")
17. Seasonal Variations in Results. The Company expects to experience
higher revenues in its third and fourth quarters because of increased demand for
temporary industrial personnel during this time. Demand is high during these two
quarters because most flexible staffing clients are increasing production in
preparation for the end of the year holiday season. The Company expects that its
quarterly operating results also will fluctuate as a result of a number of
timing factors, including the effect of employment tax limits. In addition, the
Company expects to experience lower revenues in the first quarter due to
unfavorable weather conditions and lower overall economic activity. (See Part I,
Item 1. "Description of Business", (b) "Business of Issuer - Seasonality.")
18. Financial Conditions of Clients. The Company will be obligated to
pay the wages and salaries of its worksite employees regardless of whether the
Company's clients pay the Company on a timely basis or at all. The Company also
may be required to make advances to certain flexible staffing franchise
associates to fund payroll for temporary personnel provided by franchise
associates to their clients. To the extent that a client or flexible staffing
franchise associate experiences financial difficulty, or is otherwise unable to
meet its obligations as they become due, the Company's financial condition,
results of operations and liquidity could be materially adversely affected.
19. Duration of PEO Services Agreement. The Company intends to have a
standard PEO service agreement and that such will be subject to termination by
the Company or the client at any time upon 30 to 45 days' prior written notice.
At such time as such agreements are completed, a significant number of
terminations could have a material adverse effect on the Company's financial
condition, results of operations and liquidity. (See Part I, Item 1.
"Description of Business," (b) "Business of Issuer - Sales and Marketing.")
20. Risk of Loss of Qualified Status for Certain Tax Purposes. The
Company intends to treat worksite employees as the employees of the Company. It
is possible that in connection with an examination by the IRS of a client
company and/or the Company, the IRS may determine that the Company is not the
employer of the worksite employees. The IRS is conducting an examination
division market segment specialization program, coordinated through its Houston,
Texas district office, to examine PEO'S throughout the United States. If the
Company is determined to not be the employer of the worksite employees, the
qualified tax status of the Company may be revoked and the Company may lose its
ability to assume a client company's federal employment tax withholding
obligations.
<PAGE>
At such time as the Company has sufficient funds (of which there is no
assurance), the Company intends to adopt an employer retirement plan (the
"Plan"). If the loss of qualified tax status for the Company's Plan is applied
retroactively, employees' vested account balances may become taxable immediately
to the employees, the Company would lose its tax deduction to the extent the
contributions were not vested, the Plan trust would lose its status and become a
taxable trust and penalties could be assessed. A retroactive application by the
IRS of an adverse conclusion could have a material effect on the Company's
financial position, results of operations and liquidity. In such a scenario, the
Company also would face the risk of client dissatisfaction as well as potential
litigation. In addition, if the Company were to be required to report and pay
employment taxes for the separate accounts of its clients rather than for its
own account as a single employer, the Company could incur increased
administrative burdens. The Company is unable to predict the timing or nature of
the findings of an IRS examination. (See Part I, Item 1. "Description of
Business," (b) "Business of Issuer - Industry Regulation.")
21. Possible Adverse Affect of Fluctuations in the General Economy and
Business of Clients. Historically, the general level of economic activity has
significantly affected the demand for temporary personnel. As economic activity
has slowed, the use of temporary employees often has been curtailed before core
employees have been laid off. There can be no assurance that an economic
downturn would not adversely affect the demand for temporary personnel. During
periods of increased economic activity and generally higher levels of
employment, the competition among flexible staffing firms for qualified
temporary personnel is intense. There can be no assurance, however, that the
Company's intended operations will not be adversely affected by decreases in
economic activity. Staffing providers also are affected by fluctuations and
interruptions in the business of their clients.
22. Lack of Working Capital Funding Source. Flexible industrial
staffing employees will be paid by the Company on a daily or weekly basis and
PEO employees will be paid by the Company on a weekly, bi-weekly, semi-monthly
or monthly basis. The Company, however, expects to receive payment for these
services from all its flexible industrial staffing customers and its PEO
customers, on average, 35 to 45 days from the date of invoice. As new offices
are established or acquired, or as the existing office is expanded, there will
be increasing requirements for cash to fund these payroll obligations. The
Company has no current source of working capital funds, and should the Company
be unable to secure additional financing on acceptable terms, its business,
financial condition, results of operations and liquidity would be materially
adversely affected.
23. Absence of Public Market for Shares. The Company's shares of Common
Stock are not registered with the U.S. Securities and Exchange Commission under
the Act. There is no public market for the shares of Common Stock and no
assurance that one will develop. Of such shares, 646,000 thereof are
"free-trading" because of their issuance to persons unaffiliated with JSBW
pursuant to an exemption from registration provided by Rule 504 of Regulation D
promulgated under Section 3(b) of the Act, and the balance of 1,650,500 of such
shares are "restricted securities." Rule 144 of the Act provides, in essence,
that holders of restricted securities, for a period of one year after the
acquisition thereof from the Company or an affiliate of the Company, may, every
three months, sell to a market maker or in ordinary brokerage transactions an
amount equal to one percent of the Company's then outstanding securities.
Non-affiliates of the Company who hold restricted securities for a period of two
years may sell their securities without regard to volume limitations or other
restrictions. Resales of the free-trading shares of Common Stock by "affiliates,
control persons and/or underwriters" of JSBW, as those terms are defined in the
Act, will be subject to the volume limitations, described in paragraph (e) of
Rule 144. Any transfer or resale of the shares of JSBW's Common Stock will be
subject, in addition to the Federal securities laws, to the "blue sky" laws of
each state in which such transfer or resale occurs. A total of 1,601,000 shares
and 49,500 shares of the Company's Common Stock will be available for resale
under Rule 144 commencing on October 20, 1998 and April 29, 1999 respectively.
Sales of shares of Common Stock under Rule 144 may have a depressive effect on
the market price of the Company's Common Stock, should a public market develop
for such stock. Such sales also might impede future financing by the Company.
(See Part I, Item 4. "Security Ownership of Certain Beneficial Owners and
Management.")
24. No Dividends. While payments of dividends on the Common Stock rests
with the discretion of the Board of Directors, there can be no assurance that
dividends can or will ever be paid. Payment of dividends is contingent upon,
among other things, future earnings, if any, and the financial condition of the
Company, capital requirements, general business conditions and other factors
which cannot now be predicted. It is highly unlikely that cash dividends on the
Common Stock will be paid by the Company in the foreseeable future. (See Part I,
Item 8. "Description of Securities - Description of Common Stock - Dividend
Policy.")
<PAGE>
25. No Cumulative Voting. The election of directors and other questions
will be decided by a majority vote. Since cumulative voting is not permitted and
one-third of the Company's outstanding Common Stock constitute a quorum,
investors who purchase shares of the Company's Common Stock may not have the
power to elect even a single director and, as a practical matter, the current
management will continue to effectively control the Company. (See Part I, Item
8. "Description of Securities - Description of Common Stock.")
26. Control by Present Shareholders. The present shareholders of the
Company's Common Stock will, by virtue of their percentage share ownership and
the lack of cumulative voting, be able to elect the entire Board of Directors,
establish the Company's policies and generally direct its affairs. Accordingly,
persons investing in the Company's Common Stock will have no significant voice
in Company management, and cannot be assured of ever having representation on
the Board of Directors. (See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management.")
27. Potential Anti-Takeover and Other Effects of Issuance of Preferred
Stock May Be Detrimental to Common Shareholders. Potential Anti-Takeover and
Other Effects of Issuance of Preferred Stock May Be Detrimental to Common
Shareholders. The Company is authorized to issue up to 10,000,000 shares of
preferred stock. $.0001 par value per share (hereinafter referred to as the
"Preferred Stock"); none of which shares has been issued. The issuance of
Preferred Stock does not require approval by the shareholders of the Company's
Common Stock. The Board of Directors, in its sole discretion, has the power to
issue shares of Preferred Stock in one or more series and to establish the
dividend rates and preferences, liquidation preferences, voting rights,
redemption and conversion terms and conditions and any other relative rights and
preferences with respect to any series of Preferred Stock. Holders of Preferred
Stock may have the right to receive dividends, certain preferences in
liquidation and conversion and other rights; any of which rights and preferences
may operate to the detriment of the shareholders of the Company's Common Stock.
Further, the issuance of any shares of Preferred Stock having rights superior to
those of the Company's Common Stock may result in a decrease in the value of
market price of the Common Stock provided a market exists, and additionally,
could be used by the Board of Directors as an anti-takeover measure or device to
prevent a change in control of the Company. (See Part I, Item 1. "Description of
Securities Description of Preferred Stock.")
28. No Secondary Trading Exemption. In the event a market develops in
the Company's shares, of which there can be no assurance, secondary trading in
the Common Stock will not be possible in each state until the shares of Common
Stock are qualified for sale under the applicable securities laws of the state
or the Company verifies that an exemption, such as listing in certain recognized
securities manuals, is available for secondary trading in the state. There can
be no assurance that the Company will be successful in registering or qualifying
the Common Stock for secondary trading, or availing itself of an exemption for
secondary trading in the Common Stock, in any state. If the Company fails to
register or qualify, or obtain or verify an exemption for the secondary trading
of, the Common Stock in any particular state, the shares of Common Stock could
not be offered or sold to, or purchased by, a resident of that state. In the
event that a significant number of states refuse to permit secondary trading in
the Company's Common Stock, a public market for the Common Stock will fail to
develop and the shares could be deprived of any value.
29. Possible Adverse Effect of Penny Stock Regulations on Liquidity of
Common Stock in any Secondary Market. In the event a market develops in the
Company's shares, of which there can be no assurance, then if a secondary
trading market develops in the shares of Common Stock of the Company, of which
there can be no assurance, the Common Stock is expected to come within the
meaning of the term "penny stock" under 17 CAR 240.3a51-1 because such shares
are issued by a small company; are low-priced (under five dollars); and are not
traded on NASDAQ or on a national stock exchange. The Securities and Exchange
Commission has established risk disclosure requirements for broker-dealers
participating in penny stock transactions as part of a system of disclosure and
regulatory oversight for the operation of the penny stock market. Rule 15g-9
under the Securities Exchange Act of 1934, as amended, obligates a broker-dealer
to satisfy special sales practice requirements, including a requirement that it
make an individualized written suitability determination of the purchaser and
receive the purchaser's written consent prior to the transaction. Further, the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990 require a
broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure instrument that provides information about penny
stocks and the risks in the penny stock market. Additionally, the customer must
be provided by the broker-dealer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and the salesperson in the
transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. For so long as the Company's Common
Stock is considered penny stock, the penny stock regulations can be expected to
have an adverse effect on the liquidity of the Common Stock in the secondary
market, if any, which develops.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operations
Since its inception, the Company has conducted no business operations
except for organizational and capital raising activities. For the period from
inception (October 20, 1997) through May 31, 1998, the Company had no income
from operations and operating expenses aggregating $7,724. The Company proposes
to engage in the business of providing human resource services in the flexible
industrial staffing market.
Ms. Garrett, Executive Vice President of JSBW, agreed to develop the
flexible staffing business for the Company for the following, among other,
reasons: (i) because of her belief that a public company could exploit its
talents, services and business reputation to commercial advantage and (ii) to
observe directly whether the perceived advantages of a public company,
including, among others, greater ease in raising capital, liquidity of
securities holdings and availability of current public information, would
translate into greater profitability for a public, as compared to a
locally-owned employment service company.
If the Company is unable to generate sufficient revenue from operations
to implement its expansion plans, management intends to explore all available
alternatives for debt and/or equity financing, including but not limited to
private and public securities offerings. Depending upon the amount of revenue,
if any, generated by the Company, management anticipates that it will be able to
satisfy its cash requirements for the next approximately three (3) to nine (9)
months without raising funds via debt and/or equity financing or from third
party funding sources. Accordingly, management expects that it will be necessary
for JSBW to raise additional funds in the next twelve (12) months, commencing
approximately three (3) months form the date hereof, in the event that the
Company is unable to generate any revenue from operations and commencing six (6)
to nine (9) months from the date hereof, if only a minimal level of revenue is
generated in accordance with management's expectations. Ms. Garrett, at least
initially, will be solely responsible for developing JSBW's flexible staffing
business. However, at such time, if ever, as sufficient operating capital
becomes available, management expects to employ additional staffing and
marketing personnel. In addition, the Company expects to continuously engage in
market research in order to monitor new market trends, seasonality factors and
other critical information deemed relevant to JSBW's business through the
development of a sophisticated computerized system.
At least initially, the Company intends to operate out of the home of
Mr. Adams. Thus, it is not anticipated that JSBW will lease or purchase office
space or computer equipment in the foreseeable future. JSBW may in the future
establish its own facilities and/or acquire computer equipment if the necessary
capital becomes available; however, the Company's financial condition does not
permit management to consider the acquisition of office space or equipment at
this time.
Financial Condition, Capital Resources and Liquidity
At May 31, 1998, the Company had assets totaling $12,431 and
liabilities of $4,000 attributable to accrued accounting fees. Since the
Company's inception, it has received $20,200 in cash contributed as
consideration for the issuance of shares of Common Stock. In May 1998, the
Company paid a lump sum consulting fee in the amount of $1,000 to Mr. Adams,
executive officer and director of JSBW in consideration for certain specialized
services performed for the Company by him. These services included the
preparation of a business plan for the Company and the performance of certain
financial consulting services. In May 1998, the Company paid Mintmire &
Associates, a law firm of which Donald F. Mintmire, Esq. is the sole proprietor,
the sum of $5,000.00 in consideration for the performance of certain legal
services, including but not limited to passing upon the legality of the Common
Stock and certain other matters in connection with this Registration Statement
on Form 10-SB. Commencing May 1, 1998, the Company has agreed to pay a fee in
the amount of $100.00 per month to Adams, Inc., a company owned by Mr. Adams in
consideration for certain administrative services to be performed and costs to
be incurred by said firm on behalf of JSBW. In May 1998, the Company paid a lump
sum consulting fee in the amount of $1,000 to Ms. Garrett, Executive Vice
President of JSBW in consideration of certain specialized services performed and
to be performed for the Company by her through December 31, 1998. Mr. Adams and
Ms. Garrett own of record and beneficially 1,601,000 and 49,500 shares
respectively, representing approximately 69.71% and 2.16% respectively, of the
outstanding shares of the Company's Common Stock. (See Part I, Item 4. "Security
Ownership of Certain Beneficial Owners and Management" and Part I, Item 7.
"Certain Relationships and Related Transactions.")
<PAGE>
The Company has no potential capital resources from any outside sources
at the current time. In its initial phase, the Company will operate out of the
facility provided by Mr. Adams. Ms. Garrett will begin by finding client
employers and client employees for the Company and instructing Mr. Adams in the
operation of a temporary industrial staffing agency. To attract client
employers, Ms. Garrett and Mr. Adams will visit potential clients in order to
determine their overall needs. In order to attract client employees which match
the needs of the potential client employers, the Company will place advertising
in local area newspapers in Palm Beach County. In the event the Company requires
additional capital during this phase, Mr. Adams has committed to fund the
operation until such time as additional capital is available. The Company
believes that it will require three (3) to six (6) months in order to determine
the market demand potential and the availability of qualified employees.
The ability of the Company to continue as a going concern is dependent
upon increasing placements and obtaining additional capital and financing. The
Company believes that in order to be able to expand its initial operations, it
must rent offices in Palm Beach County, hire clerical staff and acquire through
purchase or lease equipment for client employee testing, scheduling and
accounting purposes. The Company believes that there is adequate and affordable
rental space available in Palm Beach County and sufficiently trained personnel
to provide such clerical services at affordable rates. Further, the Company
believes that the type of equipment necessary for the operation is readily
accessible at competitive rates.
To implement such plan, also during this initial phase, the Company
intends to initiate a self- directed private placement under Rule 506 in order
to raise an additional $100,000. In the event such placement is successful, the
Company believes that it will have sufficient operating capital to meet the
initial expansion goals and operating costs for a period of one (1) year. In the
event the Company is not successful in raising such funds, the Company believes
that it will not be able to continue operations past a period of three (3) to
nine (9) months.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
The Company determined that the Year 2000 impact is not material to
JSBW and that it will not impact its business, operations or financial condition
since the Company has not yet acquired any computer equipment for the
operations, and any equipment acquired will only be acquired if it addresses the
Year 2000 issues.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems may rely also will be timely converted or that any such
failure to convert by another company would not have an adverse affect on the
Company's systems.
Item 3. Description of Property:
The Company's executive offices are located at 219 Almeria, West Palm
Beach, Florida 33405. Its telephone number is (561) 804-9744. The Company pays
no rent for this space. The Company owns no real or personal property.
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management:
The following table sets forth information as of May 31, 1998,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.
Name and Address of Amount Beneficially Percent of
Beneficial Owner Owned Class
Charles Adams 1,601,000 69.71%
219 Almeria
West Palm Beach, Florida 33405
Lyn Garrett 49,500 2.16%
835 Flamingo Drive
West Palm Beach, Florida 33401
Mercedes Travis 0 0%
219 B Chilian Avenue
Palm Beach, Florida 33480
All Executive Officers and Directors 1,650,500 71.87%
as a Group (three persons)
Item 5. Directors, Executive Officers, Promoters and Control Persons:
Executive Officers and Directors
Set forth below are the names, ages, positions, with the Company and
business experiences of the executive officers and directors of the Company (1):
Name Age Position(s) with Company
Charles Adams 33 President, Treasurer
and Director (2)
Lyn Garrett 46 Executive Vice President
Mercedes Travis 55 Secretary and Director
(1) Except for Ms. Garrett and Ms. Travis; who had no role in founding
or organizing the Company, the above-named persons may be deemed to
be "promoters" and "parents" of the Company, as those terms are
defined under the Rules and Regulations promulgated under the Act.
(2) As such Mr. Adams acts as the CEO, CFO and Principal Accounting
Officer of the Company.
All directors hold office until the next annual meeting of the Company's
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the Board of Director. Mr. Adams, Ms. Garrett and Ms.
Travis will devote such time and effort to the business and affairs of the
Company as may be necessary to perform their responsibilities as executive
officers and/or directors of the Company.
Aside from the above officers and directors, there are no other persons
whose activities will be material to the operations of the Company at this time.
Mr. Adams is the sole "promoter" of the Company as such term is defined under
the Act.
Family Relationships
There are no family relationships between or among the executive
officers and director of the Company.
Business Experience
Charles Adams has served as the President, Treasurer and a Director of
the Company since its inception on October 21, 1997. As such he acts as the CEO,
CFO and Principal Accounting Officer.
<PAGE>
Since October 1988, Mr. Adams has engaged in private business ventures,
mostly in the area of finance. Through his company, Adams Inc., which was formed
in October, 1997, he is currently providing consulting services and commercial
equipment leasing. Mr. Adams specializes in financing equipment which is placed
with end users. From October 1997 until the present, Mr. Adams has been employed
by Carcorp, Inc. which is one of only two lenders who provide commercial paper
for Bombardier, Inc., under operating leases for lear jets and other major
aviation equipment. Mr. Adams is the Director of Finance of Carcorp, Inc. and
has a staff of eight (8) working under him. In this capacity, Mr. Adams arranges
the operating leases for rolling stock, large commercial equipment, aviation and
commercial marine end users. From 1995 through October 1997, Mr. Adams was
independently engaged in commercial leasing of limousines and limousine fleets.
From 1996 through October 1997, he also was employed by Ed Morse as the Fleet
Manager for the Jeep operations. From 1993 through 1995, Mr. Adams was employed
by Palm Beach Lincoln Mercury in sales. Prior to relocating to Florida, from
1991 through 1993 Mr. Adams was employed by Alpha Zeta Trust in California,
where he was responsible for the acquisition of commercial real estate,
including negotiations of sale and arrangement of bridge financing. During Mr.
Adams employment, Alpha Zeta Trust acquired two large loan pools from the Real
Estate Investment Trust. The profitable part of these pools were sold at a
substantial profit, while the non performing loans were foreclosed. From 1988
through 1991, Mr. Adams independently engaged in the acquisition of real estate.
During the same period he was employed by Porsche, Audi, Ferrari in Woodland
Hills, California as a salesman. In this capacity, Mr. Adams was responsible for
all aspects of the automobile acquisition, including arranging the purchase
financing. Mr. Adams attended Los Angeles Valley College for two (2) years and
took marketing and sales extension courses at the University of California Los
Angeles.
Lyn Garrett has served as the Executive Vice President of the Company
since April 30, 1998.
Since February 1997, Ms. Garrett has operated her own employment agency
under the Lyn Garrett & Associates, Inc. For the one and one-half years (1.5)
prior to that, Ms. Garrett operated the agency as a sole proprietorship. At the
current time, Ms. Garrett operates two (2) offices, one in West Palm Beach,
Florida and the other in Orlando, Florida. This agency principally engages in
the placement of temporary and permanent staff to the financial and mortgage
banking community. Its major client is Ocwen Federal Bank, an institution which
is involved primarily in mortgage banking and manages a extensive mortgage
portfolio. Ms. Garrett's agency fills approximately half of all of Ocwen's
temporary and permanent staffing positions. The West Palm Beach office has two
(2) employees in addition to Ms. Garrett, while the Orlando office has a staff
of two (2). From 1994 until the beginning of 1998, Ms. Garrett served on the
Board of Florida Staffing Association. She is certified by Personnel Decisions,
Inc. as a trainer in behavior description interviewing. From 1992 until 1994,
Ms. Garret was employed by Office Specialists as a placement representative.
From 1988 through 1991, Ms. Garrett was employed by Drake International in the
United States in temporary staffing placement and had previously been employed
by the same company in Toronto, Canada from 1970 through 1976. From 1976 through
1988, Ms. Garrett was employed as an accounting comptroller for J.P. Morgan,
originally in New York and then in West Palm Beach. Ms. Garrett holds a
Bachelors of Science in Accounting from the University of Toronto, Canada.
Mercedes Travis has served as Secretary and a Director of the Company
since June 4, 1998.
Since December 1980, Ms. Travis has been engaged in the private
practice of law and is licensed to practice in the State of New York and the
State of New Jersey. She is Of Counsel to the firm of Mintmire & Associates,
which acts as counsel to the Company. During her period of practice, Ms. Travis
has advised numerous companies in matters relating to securities and finance.
She has structured and authored public and private offerings involving real
estate, technology, pharmaceuticals, oil and gas and equipment leasing. She has
structured and implemented secured and unsecured financing arrangements with
major international insurance companies and banks for individual and corporate
borrowers and participated in the acquisition and going private of an American
Stock Exchange company. From 1983 to 1991, Ms. Travis was an NASD Registered
Representative with a Series 7 and 63 license. From 1981 to 1992, Ms. Travis
held a New York State license as a Real Estate Broker. During the 1980's, Ms.
Travis lectured several NASD firms on Regulation D offerings and private
offering marketing issues. Ms. Travis holds a Bachelors of Arts in English from
Temple University, Philadelphia, Pennsylvania; a Masters of Business
Administration (with honors) from Widener University, Chester, Pennsylvania; and
a Juris Doctorate (with honors) from Delaware Law School, now known as Widener
University School of Law, Wilmington, Delaware.
<PAGE>
Item 6. Executive Compensation:
Executive Compensation
Except for certain shares of the Company's Common Stock issued and sold
to two (2) executive officers and/or directors of the Company in consideration
for various services performed for the Company by each of them, a lump-sum
consulting fee in the amount of $1,000.00 paid to Mr. Adams and a fee in the
amount of $100.00 per month paid by the Company to Adams, Inc. for
administrative services performed and costs incurred by Mr. Adams on behalf of
JSBW and a lump sum consulting fee in the amount of $1,000.00 paid to Ms.
Garrett, no cash or non-cash compensation was awarded to, earned by or paid to
any executive officer or director of the Company for all services rendered in
all capacities to the Company since its inception on October 20, 1997. On
October 21, 1997, the Company issued and sold 1,601,000 shares of Common Stock,
representing approximately 69.71% of the total number of shares of Common Stock
of the Company outstanding on the date hereof, to Mr. Adams, for services in
connection with the organization of the Corporation. Ms. Garrett, on April 30,
1998 received a total of 49,500 shares of Common Stock, representing
approximately 2.16% of the total number of outstanding shares of the Company's
Common Stock as of the date hereof, in consideration for certain business
consulting services related to employment agency operations performed by her for
the Company. Except for the above-described compensation, it is not anticipated
that any executive officer of the Company will receive any cash or non-cash
compensation for his or her services in all capacities to the Company until such
time as the Company commences business operations. At such time as JSBW
commences operations, it is expected that the Board of Directors will approve
the payment of salaries in a reasonable amount to each of its officers for their
services in the positions of President//Treasurer, Executive Vice President and
Secretary respectively, of the Company. At such time, the Board of Directors
may, in its discretion, approve the payment of additional cash or non-cash
compensation to the foregoing for their services to the Company.
The Company does not provide officers with pension, stock appreciation
rights, long-term incentive or other plans but has the intention of implementing
such plans in the future.
Compensation of Directors
The Company has no standard arrangements for compensating the directors
of the Company for their attendance at meetings of the Board of Directors.
Item 7. Certain Relationships and Related Transactions:
On October 21, 1997, the Company issued and sold 1,601,000 shares of
the Common Stock to Mr. Adams, the President and Treasurer of the Company and
record and beneficial owner of approximately 69.71% of the Company's outstanding
Common Stock, in consideration and exchange therefore for services in connection
with the organization of JSBW valued at $106.10 performed for the Company by
him.
On April 30, 1998, the Company issued and sold a total of 49,500 shares
of Common Stock to Ms. Garrett, the Executive Vice President of the Company, and
the record and beneficial owner of approximately 2.16% of the Company's
outstanding Common Stock, as consideration for certain business consulting
services performed for the Company relating to, among other things, the flexible
staffing business and marketing, valued at $495.00.
Commencing May 1, 1998 the Company's has agreed to pay a monthly fee in
the amount of $100.00 to Adams, Inc. in consideration for administrative
services to be performed and costs to be incurred by such company on behalf of
JSBW. Management believes that the administrative fees to be paid by the Company
to Mr. Adams' company are comparable to those fees which would be payable by the
Company to unaffiliated third parties for comparable services in the Palm Beach,
Florida area.
At the current time, the Company has no provision to issue any
additional securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although the Company has a very large amount of
authorized but unissued Common Stock and Preferred Stock which may be issued
without further shareholder approval or notice, the Company intends to reserve
such stock for the Rule 506 offerings contemplated to implement continued
expansion, for acquisitions and for properly approved employee compensation at
such time as such plan is adopted. (See Part I, Item 1. "Description of Business
- - (b) Business of Issuer.")
<PAGE>
Item 8. Description of Securities:
Description of Capital Stock
The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, $.0001 par value per share, and 10,000,000 shares of Preferred
Stock, $.0001 par value per share.
The Company has requested Primex which is located at 150 N. Michigan
Avenue, Suite 690, Chicago, IL 60601, a broker-dealer to act as a market maker
for the Company's securities. Thus far, the Company has requested Primex to
submit the Company's Form 10-SB to the National Association of Securities
Dealers and to serve as a market maker for the Company's Common Stock. The
Company anticipates that other market makers may be requested to participate at
a later date. The Company will not use consultants to obtain market makers. (See
Part II, Item 1. "Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters - Market Information".)
If a market or secondary trading market develops in the shares of
Common Stock of the Company, of which there can be no assurance, the Common
Stock is expected to come within the meaning of the term "penny stock" under 17
CAR 240.3a51-1 because such shares are issued by a small company; are low-priced
(under five dollars); and are not traded on NASDAQ or on a national stock
exchange. The Securities and Exchange Commission has established risk disclosure
requirements for broker-dealers participating in penny stock transactions as
part of a system of disclosure and regulatory oversight for the operation of the
penny stock market. Rule 15g-9 under the Securities Exchange Act of 1934, as
amended, obligates a broker-dealer to satisfy special sales practice
requirements, including a requirement that it make an individualized written
suitability determination of the purchaser and receive the purchaser's written
consent prior to the transaction. Further, the Securities Enforcement Remedies
and Penny Stock Reform Act of 1990 require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure
instrument that provides information about penny stocks and the risks in the
penny stock market. Additionally, the customer must be provided by the
broker-dealer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and the salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. For so long as the Company's Common Stock is considered
penny stock, the penny stock regulations can be expected to have an adverse
effect on the liquidity of the Common Stock in the secondary market, if any,
which develops. (See Part I, Item. 1. "Description of Business - (b) Business of
Issuer - Risk Factors.")
Description of Common Stock
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted; which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any, to be distributed to holders of the Preferred Stock. All shares of the
Company's Common Stock issued and outstanding are fully-paid and nonassessable.
Dividend Policy
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distribution with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefore,
after requirements with respect to preferential dividends on, and other matters
relating to, the Preferred Stock, if any, have been met. The Company has not
paid any dividends on its Common Stock and intends to retain earnings, if any,
to finance the development and expansion of its business. Future dividend policy
is subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, capital requirements and the
financial condition of the Company.
<PAGE>
Rights of Dissenting Shareholders
In accordance with Florida Statute Section 607.1103, the Company
intends to provide its shareholders with any plan or merger, and as soon as
available, audited financial statements, concerning a target company and its
business prior to any merger or acquisition. Dissenters have rights as defined
and set forth in Florida Statute Sections 607.1301, 607.1302, the procedure of
which is set forth in Florida Section 607.1320. Essentially such statutes
provide that a dissenting shareholder has the right to receive payment of the
fair market value of his shares.
None of the Company's officers, directors, promoters, their affiliates
or associates have had any preliminary contract or discussions with and there
are no present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction contemplated at this time.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Company's Common Stock is
Interwest Transfer Co., Inc. which is located at 1981 E. Murray Holiday Road,
Suite 100, Salt Lake City, Utah 84117.
Description of Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or
more series as may be determined by the Board of Directors. The voting powers
and preferences, the relative rights of each such series and the qualifications,
limitations and restrictions thereof shall be established by the Board of
Directors, except that no holder of Preferred Stock shall have preemptive
rights. The Company has no shares of Preferred Stock outstanding, and the Board
of Directors has no plan to issue any shares of Preferred Stock for the
foreseeable future unless the issuance thereof shall be in the best interests of
the Company.
Certain Provision of Florida Law.
Section 607.0902 of the Florida Business Corporation Act prohibits the
voting of shares in a publicly-held Florida corporation that are acquired in a
"control share acquisition" unless the holders of a majority of the
corporation's voting shares (exclusive of shares held by officers of the
corporation, inside directors or the acquiring party) approve the granting of
voting rights as to the shares acquired in the control share acquisition or
unless the acquisition is approved by the corporation's board of directors,
unless the corporation's articles of incorporation or bylaws specifically state
that this section does not apply. A "control share acquisition" is defined as an
acquisition that immediately thereafter entitles the acquiring party to vote in
the election of directors within each of the following ranges of voting power:
(i) one-fifth or more, but less than one-third of such voting power: (ii)
one-third or more, but less than a majority of such voting power; and, (iii)
more than a majority of such voting power. The Amended Articles of Incorporation
of the Company specifically state that Section 607.0902 does not apply to
control-share acquisitions of shares of the Company.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
(a) Market Information.
There has been no established public trading market for the
Common Stock since the Company's inception on October 20, 1997. There are no
plans, proposals, arrangements or undertakings with any person with regard to
the development of a trading market in any of the Company's securities other
than the request to PrimeX to submit the Company's business to the NASD and to
act as a market maker. (See Part I, Item 8. "Description of Securities -
Description of Capital Stock.".)
(b) Holders.
As of May 31, 1998, the Company has twenty one (21)
shareholders of record of its 2,296,500 outstanding shares of Common Stock.
(c) Dividends.
The Company has never paid or declared any dividends on its
Common Stock and does not anticipate paying cash dividends in the foreseeable
future.
<PAGE>
Item 2. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 3. Changes in and Disagreements with Accountants:
Because the Company has been generally inactive since its inception, it
has had no independent accountant until the retention in March 1998 of Durland
and Company, CPA's, P.A. 340 Royal Palm Way, Suite 204, Palm Beach, Florida
33480. There has been no change in the Company's independent accountant during
the period commencing with the Company's retention of Durland and Company,
CPA's, P.A. through the date hereof.
Item 4. Recent Sales of Unregistered Securities:
On October 21, 1998, the Company issued and sold to Mr. Adams, the
President, Treasurer and a Director of the Company 1,601,000 shares of the
Company's common stock in consideration, for services rendered in connection
with the organization of the Company valued at $160.10. On April 30, 1998, the
Company issued and sold to its Executive Vice President, Ms. Garrett, for
certain business consulting services performed by her for the Company valued at
$495.00. No underwriter was used in connection with the offering and sale of the
shares of Common Stock to the aforementioned persons. The Company relied, in
connection with each of the transaction described in this Item 4, whereby the
Company issued and sold shares of its Common Stock in consideration and exchange
for various types of services, upon the exemption from registration afforded by
Section 4(2) of the Act. The basis for reliance upon the Section 4(2) exemption
in connection with each of these transactions is the following: (i) the sale of
the shares of Common Stock did not constitute a public offering and (ii)Mr.
Adams and Ms. Garrett are sophisticated purchasers and had access to information
on the Company necessary to make an informed investment decision, by virtue of
their positions as executive officers and/or directors of the Company. (See Part
I, Item 7. "Certain Relationships and Related Transactions.")
During April 1998, the Company issued and sold an aggregate of 646,000
shares of Common Stock to Georgia and Florida residents for cash consideration
totaling $20,200 (302,500 shares to fourteen (14) Georgia residents and one (1)
Florida resident at $.01 per share and 343,500 shares to four (4) Florida
residents at $.05 per share). No underwriter was employed in connection with the
offering and sale of the shares. The Company claimed the exemption from
registration in connection with each of the offerings provided under Section
3(b) of the Act and Rule 504 of Regulation D promulgated thereunder, Section
10-5-9(13) of the Georgia Code and Section 517.061(11) of the Florida Code.
The facts relied upon the by the Company to make the federal exemption
available include the following: (i) the aggregate offering price for the
offering of the shares of Common Stock did not exceed $1,000,000, less the
aggregate offering price for all securities sold within the twelve months before
the start of and during the offering of the shares in reliance on any exemption
under Section 3(b) of, or in violation of Section 5(a) of, the Act; (ii) no
general solicitation or advertising was conducted by the Company in connection
with the offering of any of the shares; (iii) the fact that the Company has not
been since its inception (a) subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended; (b) an "investment
Company" within the meaning of the Investment Company Act of 1940, as amended;
or (c) a development stage Company that either has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other entity or
person; and (iv) the required number of manually executed originals and true
copies of Form D were duly and timely filed with the U.S. Securities and
Exchange Commission.
The facts relied upon to make the Georgia Exemption available include
the following: (i) the aggregate number of persons purchasing the Company's
stock during the 12 month period ending on the date of issuance did not exceed
fifteen (15) persons; (ii) neither the offer nor the sale of any of the shares
was accomplished by a public solicitation or advertisement; (iii) each
certificate contains a legend stating "These securities have been issued or sold
in reliance of paragraph (13) of Code Section 10-5-9 of the Georgia Securities
Act of 1973 and may not be sold or transferred except in a transaction which is
exempt under such act or pursuant to an effective registration under such act";
and (iv) each purchaser executed a statement to the effect that the securities
purchased have been purchased for investment purposes. Offerings made pursuant
to this section of the Georgia Securities Act have no requirement for an
offering memorandum or disclosure document.
<PAGE>
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of JSBW or, by reason of their business or financial
experience, could be reasonably assumed to have the capacity to protect their
own interests in connection with the transaction; (iv) each purchaser
represented that he was purchasing for his own account and not with a view to or
for sale in connection with any distribution of the shares; and (v) prior to
sale, each purchaser had reasonable access to or was furnished all material
books and records of the Company, all material contracts and documents relating
to the proposed transaction, and had an opportunity to question the executive
officers of the Company. Pursuant to Rule 3E-500.005, in offerings made under
Section 517.061(11) of the Florida Statutes, an offering memorandum is not
required; however each purchaser (or his representative) must be provided with
or given reasonable access to full and fair disclosure of material information.
An issuer is deemed to be satisfied if such purchaser or his representative has
been given access to all material books and records of the issuer; all material
contracts and documents relating to the propsoed transaction; and an opportunity
to question the appropriate executive officer. In the regard, Mr. Adams supplied
such information and was available for such questioning.
Item 5. Indemnification of Directors and Officers.
Article X of the Company's Amended Articles of Incorporation contains
provisions providing for the indemnification of directors and officers of the
Company as follows:
(a) The corporation shall indemnify any person who was or is a party,
or is threatened to be made a party, of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is otherwise serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The corporation shall indemnify any person who was or is a party,
or is threatened to be made a party, to any threatened, pending or completed
action or suit by or in the right of the corporation, to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted in
good faith and in a manner he reasonably believed to be in, or not, opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation, unless, and only to the extent that, the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability, but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnification for such
expenses which such court deems proper.
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
<PAGE>
(d) Any indemnification under Section (a) or (b) of this Article
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the officer,
director and employee or agent is proper in the circumstances, because he has
met the applicable standard of conduct set forth in Section (a) or (b) of this
Article. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in advance
of the final disposition or such action, suit or proceeding, as authorized in
Section (d) of this Article, upon receipt of an understanding by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
The Company has no agreements with any of its directors or executive
offices providing for indemnification of any such persons with respect to
liability arising out of their capacity or status as officers and directors.
At present, there is no pending litigation or proceeding involving a
director or executive officer of the Company as to which indemnification is
being sought.
PART F/S
The Financial Statements of JSBW required by Regulation S-X commence on
page F-1 hereof in response to Part F/S of this Registration Statement on Form
10-SB and are incorporated herein by this reference.
PART III
Item 1. Index to Exhibits
Item No. Description
2.1 Articles of Incorporation of JS Business Works, Inc. filed October
20, 1997 (filed electronically as Exhibit 3(i).1)
2.2 Articles of Amendment to the Articles of Incorporation of JS
Business Works, Inc. filed May 4, 1998 (filed electronically as
Exhibit 3(i).2)
2.3 Bylaws of JS Business Works, Inc. (filed electronically as Exhibit
3(ii))
Item 2. Description of Exhibits
The documents required to be filed as Exhibit Number 2 in Part III of
Form 1-A filed as part of this Registration Statement on From 10-SB are listed
in Item 1 of this Part III above. No documents are required to be filed as
Exhibit Numbers 3, 5, 6 or 7 in Part III of Form 1-A and the reference to such
Exhibit Numbers is therefore omitted. The following additional exhibits are
filed hereto:
Item No. Description
27 Financial Data Schedule for interim financial statements not
previously filed with the Commission (filed electronically as
Exhibit 27)
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditor's Report.................................................F-2
Balance Sheet................................................................F-3
Statement of Loss............................................................F-4
Statement of Changes in Stockholders' Equity.................................F-5
Statement of Cash Flows......................................................F-6
Notes to Financial Statements................................................F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
TO: The Board of Directors
JS Business Works, Inc.
West Palm Beach, Florida
We have audited the accompanying balance sheet of JS Business Works, Inc., a
development stage enterprise, as of May 31, 1998 and the related statements of
loss, changes in stockholders' equity and cash flows from October 20, 1997
(Inception) through May 31, 1998. 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 the Company as of May 31, 1998
and the results of its operations and its cash flows from October 20, 1997
(Inception) through May 31, 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has experienced operating losses since
inception. The Company's financial position and operating results raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 4. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/Durland & Company, CPAs, P.A.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
June 2, 1998
F-2
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Balance Sheet
ASSETS May 31, 1998
---------------------
CURRENT ASSETS
Cash $ 12,431
---------------------
Total current assets 12,431
---------------------
Total Assets $ 12,431
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 4,000
---------------------
Total current liabilities 4,000
---------------------
Total Liabilities 4,000
---------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized
10,000,000 shares, 0 issued and outstanding 0
Common stock, $0.0001 par value, authorized 50,000,000
shares, 2,296,500 issued and outstanding 230
Additional paid-in capital 16,125
Stock subscription receivable (200)
Deficit accumulated during the development stage (7,724)
---------------------
Total Stockholders' Equity 8,431
---------------------
Total Liabilities and Stockholders' Equity $ 12,431
=====================
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Loss
From October 20, 1997 (Inception) through May 31, 1998
May 31, 1998
------------------
Revenues $ 0
------------------
Bank charges 8
Professional fees 7,255
Taxes, licenses and fees 19
Miscellaneous expenses 442
------------------
Total expenses 7,724
------------------
Loss before income taxes (7,724)
Income taxes 0
------------------
Net loss $ (7,724)
==================
Basic net loss per weighted average share $ (0.004)
==================
Weighted average number of shares 1,746,808
==================
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Equity
From October 20, 1997 (Inception) through May 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Deficit
Accumulated
Number Additional Stock During the Total
of Common Paid-in Subscription Development Stockholders'
Shares Stock Capital Receivable Stage Equity
----------- ----------- ------------ -------------- --------------- ---------------
BEGINNING BALANCE,
October 20, 1997 0 $ 0 $ 0 $ 0 $ 0 $ 0
October 21, 1997: services 1,601,000 160 0 0 0 160
April 19, 1998: cash 302,500 30 2,995 0 0 3,025
April 29, 1998: cash 343,500 35 17,140 0 0 17,175
April 30, 1998: services 49,500 5 490 0 0 495
May 15, 1998: offering costs 0 0 (4,500) 0 0 (4,500)
May 22, 1998: cash 0 0 0 (200) 0 (200)
Net loss 0 0 0 0 (7,724) (7,724)
----------- ----------- ------------ -------------- --------------- ---------------
BALANCE, May 31, 1998 2,296,500 $ 230 $ 16,125 $ (200)$ (7,724)$ 8,431
=========== =========== ============ ============== =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
From October 20, 1997 (Inception) through May 31, 1998
May 31, 1998
-------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,724)
Adjustments to reconcile net loss to net
cash used for operating activities:
Increase in accrued liabilities 4,000
-------------------
Net cash used for operating activities (3,724)
-------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 16,155
-------------------
Net cash provided by financing activities 16,155
-------------------
Net increase in cash and equivalents 12,431
CASH and equivalents, beginning of period 0
-------------------
CASH and equivalents, end of period $ 12,431
===================
The accompanying notes are an integral part of the financial statements
F-6
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(1) Summary of Significant Accounting Principles
The Company JS Business Works, Inc., is a Florida chartered development
stage corporation which conducts business from its headquarters in West
Palm Beach, Florida. The Company was incorporated on October 20, 1997,
and has selected September 30 as its fiscal year end.
The Company has not yet engaged in its expected operations. Current
activities include raising additional equity and negotiating with
potential key personnel and facilities.
The Company is in the development stage and has not yet acquired the
necessary operating assets, nor has it begun any part of its proposed
business. While the Company is negotiating with prospective personnel
and potential customer distribution channels, there is no assurance
that any benefit will result from such activities. The Company will not
receive any operating revenues until the commencement of operations,
but will nevertheless continue to incur expenses until then.
The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
date of the statements of financial condition and revenues and expenses
for the year then ended. Actual results may differ significantly from
those estimates.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a)Operating facilities The Company is seeking to lease office space in
the Palm Beach area. It is not expected that the Company will purchase
facilities in the near future.
b)Cash equivalents The Company considers all highly liquid debt
instruments with an original maturity of three months or less to be
cash equivalents.
c)Start-Up costs Costs of start-up activities, including organization
costs, should be expensed as incurred , as stated, in Statement of
Position (SOP) 98-5, which has been cleared by the Financial Accounting
Standards Board (FASB). This SOP sets forth the generally accepted
accounting principles for costs of start-up activities as it applies to
development stage entities. Accordingly, the Company expects to expense
any organizational costs.
d)Net loss per share Basic is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
e) Compensation for services rendered with stock The Company exchanges
shares of common stock, in lieu of cash, for the fair market value of
services rendered by key personnel.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par
value preferred stock. The Company had 2,296,500 shares of common stock
issued and outstanding at May 31, 1998. On October 21, 1997 the Company
issued 1,601,000 shares to its President for the fair market value of
services rendered at $160. The Board of Directors approved an offering
of 302,500 shares at $0.01 for $3,025 in cash on April 19, 1998. The
Board of Directors also approved an offering of 343,500 shares at $0.05
for $17,175 in cash on April 29, 1998. On April 30, 1998, the Company
issued 49,500 shares, to its Executive Vice President for the fair
market value of services rendered at $495. The Company had $4,500 of
legal expenses for offering costs that were paid on May 15, 1998. A
stock subscription receivable was incurred on May 22, 1998 for $200 for
a non-sufficient funds item from one of the shareholders.
F-7
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(3) Income Taxes Deferred income taxes are provided on elements of income
which are recognized for financial accounting purposes in periods
different than such items are recognized for income tax purposes.
Deferred income tax benefits are provided on elements of expense which
are recognized for financial accounting purposes in periods different
than such items are recognized for income tax purposes. The Company had
net operating loss carry-forwards for income tax purposes of
approximately $7,724 expiring at May 31, 2013.
The amount recorded as deferred tax assets as of May 31, 1998 is
$3,128, which represents the amounts of tax benefits of loss
carry-forwards. The Company has established a valuation allowance
against this deferred tax asset, as the Company has no history of
profitable operations.
(4) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $7,724 from October 20, 1997 (Inception)
through May 31, 1998. The ability of the Company to continue as a going
concern is dependent upon increasing sales and obtaining additional
capital and financing. The financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern. The Company is currently seeking financing
to allow it to begin its planned operations.
F-8
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
JS Business Works, Inc.
(Registrant)
Date: October 16, 1998 By: /s/ Charles Adams
Charles Adams, President
<PAGE>
Exhibit 2.1
ARTICLES OF INCORPORATION
OF
JS BUSINESS WORKS, INC.
The undersigned subscriber to these Articles of Incorporation,
a natural person competent to contract, hereby forms a corporation under the
laws of the State of Florida.
ARTICLE I. NAME
The name of the corporation shall be: JS BUSINESS WORKS, INC.
The principal place of business of this corporation shall be 265 Sunrise Avenue,
Suite 204, Palm Beach, FL 33480.
ARTICLE II. NATURE OF BUSINESS
This corporation may engage or transact in any or all lawful
activities or business permitted under the laws of the United States, the State
of Florida or any other state, country, territory or nation.
ARTICLE III. CAPITAL STOCK
The maximum number of shares of stock that this corporation is
authorized to have outstanding at any one time is 50,000,000 shares of common
stock having $.0001 par value per share and 10,000,000 shares of preferred stock
having $.0001 par value per share.
ARTICLE IV. ADDRESS
The street address of the initial registered office of the
corporation shall be 265 Sunrise Avenue, Suite 204, Palm Beach, FL 33480, and
the name of the registered agent of the corporation at that address is Donald F.
Mintmire.
ARTICLE V. TERM OF EXISTENCE
This corporation is to exist perpetually.
ARTICLE VI. DIRECTORS
This corporation shall have no Directors, initially. The
affairs of the Corporation will be managed by the shareholders until such time
Directors are designated as provided by the Bylaws.
ARTICLE VII. INCORPORATOR
The name and street address of the incorporator to these
Articles of Incorporation is:
Donald F. Mintmire, Esq.
Mintmire & Associates
265 Sunrise Avenue
Suite 204
Palm Beach, Florida 33480.
ARTICLE VIII. EFFECTIVE DATE
The corporation shall commence its existence on October 20, 1997.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal on this 20th day of October, 1997.
/s/Donald F. Mintmire
------------------------------
Donald F. Mintmire
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this 20th
day of October, 1997 by Donald F. Mintmire, who is personally known to me and
who (did/did not) take an oath.
/s/Lisa Coppa
------------------------------
Notary Public
Donald F. Mintmire, having been designated to act as
Registered Agent, hereby agrees to act in this capacity.
/s/Donald F. Mintmire
------------------------------
Donald F. Mintmire
<PAGE>
Exhibit 2.2
ARTICLES OF AMENDMENT
Article I. Name
The name of this Florida corporation is JS Business Works, Inc.
Article II. Amendments
The Articles of Incorporation of the Corporation are amended so that the
following provisions are added:
1. Article IX. Conflict of Interest.
Any related party contract or transaction must be authorized, approved or
ratified at a meeting of the Board of Directors by sufficient vote thereon by
directors not interested therein or the transaction must be fair and reasonable
to the Corporation.
2. Article X. Indemnification.
The Corporation shall indemnify its Officers, Directors, Employees and Agents in
accordance with the following:
(a) The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, of any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is otherwise serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action or
suit by or in the right of the Corporation, to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in, or not, opposed to, the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation, unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses
which such court deems proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
<PAGE>
(d) Any indemnification under Section (a) or (b) of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the officer, director
and employee or agent is proper in the circumstances, because he has met the
applicable standard of conduct set forth in Section (a) or (b) of this Article.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition or such action, suit or proceeding, as authorized in
Section (d) of this Article, upon receipt of an understanding by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article.
(f) The Board of Directors may exercise the Corporation's power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
3. Article XI. Law Applicable to Control-Share Voting Rights.
The provisions set forth in Fl. Stat. 607.0902 do not apply to control-share
acquisitions of shares of the Corporation.
Article III. Date Amendment Adopted
The amendments set forth in these Articles of Amendment were adopted on April
29, 1998.
Article IV. Shareholder Approval of Amendment
The amendments set forth in these Articles of Amendment were proposed by the
Corporations's Board of Directors and approved by the shareholders by a vote
sufficient for approval of the amendments.
The undersigned executed this document on the date shown below.
JS Business Works, Inc.
By: /s/Charles Adams
Name: Charles Adams
Title: President
Date: April 29, 1998
Donald F. Mintmire: Florida Bar Member 402435
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
561-832-5696
Exhibit 2.3
BY-LAWS
OF
JS BUSINESS WORKS, INC.
ARTICLE I
OFFICES
The principal office of the Corporation in the State of Florida shall
be located in the City of Palm Beach. The Corporation may have such other
offices, either within or without the State of Florida, as the business of the
Corporation may require from time to time.
The Registered Office of the Corporation may be, but need not be,
identical with its principal office in the State of Florida and the address of
the Registered Office may be changed from time to time by the Board of
Directors.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of shareholders shall be
held in the month of July of each year, beginning with the year 1998 on such
date, at such time and place as the Board of Directors shall determine for the
purpose of electing directors and for the transaction of such other business as
may come before the meeting. If the election of directors shall not be held on
the day designated for any annual meeting, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the shareholders to be held as soon thereafter as may be convenient.
SECTION 2. SPECIAL MEETING. Special meetings of the shareholders may be
called by the President, by the Board of Directors or any member thereof, or by
the holders of not less than one-fifth (1/5) of the voting power of all
shareholders of the Corporation.
SECTION 3. PLACE OF MEETING. The Board of Directors may designate any
place within or without the State of Florida as the place of meeting for any
annual meeting, or any place either within or without the State of Florida as
the place of meeting for any special meeting called by the Board of Directors.
A waiver of notice signed before or after the meeting by all
shareholders may designate any place, either within or without the State of
Florida as the place for the holding of such meeting. If no such designation is
made, or if a special meeting is called by any person other than the Board of
Directors, the place of meeting shall be the principal office of the Corporation
in the State of Florida, except as otherwise provided in Section 5 of this
Article.
SECTION 4. NOTICE OF MEETINGS AND WAIVER. Written or printed notice
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, or the Secretary, or the officer or
persons calling the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail in a sealed envelope
addressed to the shareholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid. Notice of any shareholders' meeting
may be waived in writing by any shareholder at any time before or after the
meeting.
SECTION 5. MEETING OF ALL SHAREHOLDERS. If all of the shareholders
shall meet at any time and place, either within or without the State of Florida,
and consent to the holding of a meeting, such meeting shall be valid without
call or notice, and at such meeting any corporate action may be taken.
SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
The Board of Directors of the Corporation may close its stock transfer books for
a period not exceeding sixty (60) (but, if closed, for not less than ten (10))
days prior to the date of any meeting of shareholders, or the date for the
payment of any dividend or for the allotment of rights, or the date when any
exchange or reclassification of shares shall be effective; or in lieu thereof,
may fix in advance a date, not exceeding sixty (60) and not less than ten (10)
days prior to the date of any meeting of shareholders, or to the date for the
payment of any dividend or for the allotment of rights, or to the date when any
exchange or reclassification of shares shall be effective, as the record date
<PAGE>
for the determination of shareholders entitled to receive payment of any such
dividend or to receive any such allotment of rights, or to exercise rights in
respect of any exchange or reclassification of shares; and the shareholders of
record on such date shall be the shareholders entitled to notice of and to vote
at, such meeting, or to receive payment of such dividend or to receive such
allotment of rights, or to exercise such rights, in the event of an exchange or
reclassification of shares, as the case may be. If the transfer books are not
closed and no record date is fixed by the Board of Directors, the date on which
notice of the meeting is mailed shall be deemed to be the record date for the
determination of shareholders entitled to vote at such meeting. Transferees of
shares which are transferred after the record date shall not be entitled to
notice of or to vote at such meeting.
SECTION 7. VOTING LISTS. The officer or agent having charge of the
transfer book for shares of the Corporation shall make, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order, with the
address and the number of shares held by each shareholder, which list, for a
period of ten (10) days prior to such meeting, shall be kept on file at the
office of the Corporation and shall be subject to inspection by any shareholder
at any time during usual business hours. Such list shall be produced and kept
open at the time and place of the meeting and shall be subject to the inspection
of any shareholder during the whole time of the meeting. The original share
ledger or stock transfer book, or a duplicate thereof kept in this State, shall
be prima facie evidence as to who are the shareholders entitled to examine such
list or share ledger or stock transfer book or to vote at any meeting of
shareholders.
SECTION 8. QUORUM. A majority of the outstanding shares of the
Corporation, represented in person or by proxy, shall constitute a quorum at any
meeting of shareholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy, and such proxy may be withdrawn at any time.
SECTION 10. VOTING OF SHARES. Each outstanding share of Common Stock
shall be entitled to one vote upon each matter submitted to a vote at a meeting
of shareholders.
SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the By-Laws of such corporation may prescribe, or, in the
absence of such provision, as the Board of Directors of such corporation may
determine.
Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Shares standing in the
name of a guardian, conservator, or trustee may be voted by such fiduciary,
either in person or by proxy.
Shares standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name.
Shares standing in the joint names of four (4) or more fiduciaries
shall be voted in the manner determined by the majority of such fiduciaries,
unless the instrument or order appointing such fiduciaries otherwise directs.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
is contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares (except that if the right to vote be expressly given in writing to the
pledgee and notice thereof delivered to the Corporation in writing by the
pledgee, the shareholder shall not have the right to vote the shares so pledged)
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
<PAGE>
SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
SECTION 13. ADJOURNMENTS. If a meeting is adjourned to another time or
place, notice of the adjourned meeting need not be given if the time and place
thereof are announced at the meeting at which the adjournment is taken. The
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty (30) days or a new
record is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each shareholder of record entitled to vote at the meeting.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS AND EXECUTIVE COMMITTEE. The business and
affairs of the Corporation shall be managed by its Board of Directors. The Board
of Directors may, by resolution passed by a majority of the whole Board,
designate two (2) or more of its number to constitute an Executive Committee,
who, to the extent provided in the resolution, shall have and exercise the
authority of the Board of Directors in the management of the Corporation.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
which shall constitute the whole Board of Directors shall be fixed from time to
time by resolution passed by the Board or by the shareholders (any such
resolution of either the Board of Directors or shareholders being subject to any
later resolution by either of them) but in no event shall such number be less
than one. No resolution shall have the effect of shortening the term of any
incumbent director. Directors shall be elected at the annual meeting of
shareholders and shall continue in office until their successors shall have been
elected and qualified. Directors need not be residents of Florida nor need they
be the holder of any shares of the capital stock of the Corporation.
SECTION 3. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held without other notice than this By-Law, immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Florida, for holding of additional regular meetings without other
notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, the President
or any two (2) directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the State of Florida, as the place for holding any special meeting of the Board
of Directors called by them.
SECTION 5. NOTICE. Written notice of any special meeting shall be given
to each director at least two (2) days before the meeting, either by personal
delivery or by mail, telegram or cablegram. Any director may waive notice of any
meeting. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, and a waiver of any and all objections to the place
of meeting, the time of meeting, or the manner in which it was called or
convened, except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need be specified
in the notice or waiver or notice of such a meeting.
SECTION 6. QUORUM. A majority of the number of directors fixed by or in
the manner prescribed in the By-Laws of the Board of Directors shall constitute
a quorum for the transaction of business at any meeting of the Board of
Directors, provided, that if less than a majority of the directors are present
at that meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice.
SECTION 7. MANNER OF ACTING. The act of majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 8. INFORMAL ACTION BY DIRECTORS. Any action required to be
taken at a meeting of the Directors of a corporation or any action which may be
taken at such meeting may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all directors and such
consent shall have the same effect as a unanimous vote.
<PAGE>
SECTION 9. VACANCIES. Any vacancy occurring in the Board of Directors
or in a directorship to be filled by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office or until the next succeeding annual meeting of
shareholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the Board of Directors for a
term of office continuing only until the next election of the directors by the
shareholders.
SECTION 10. COMPENSATION. Directors, as such, shall not receive any
stated salaries for their services, but by resolution of the Board of Directors,
a fixed sum and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board of Directors; provided, that
nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.
SECTION 11. REMOVAL. At a meeting or shareholders called expressly for
that purpose, directors may be removed, with or without cause, by a vote of the
majority of the shares then entitled to vote at an election of directors.
ARTICLE IV
OFFICERS
SECTION 1. CLASSES. The officers of the Corporation shall be a
President, a Treasurer, and a Secretary, and such other officers and assistant
officers as from time to time may be deemed necessary by the Board of Directors
and elected in accordance with the provisions of this Article. Any two (2) or
more offices may be held by the same person, except that the offices of
President and Secretary may not be held by the same person if there is more than
one shareholder. The failure to elect a President, Secretary or Treasurer shall
not affect the existence of this Corporation.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation
shall be elected annually by the Board of Directors at the first meeting of the
Board of Directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as convenient. Vacancies may be filled or new offices
created and filled at any meeting of the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death, his resignation or his removal from office in the
manner hereinafter provided.
SECTION 3. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever, in its
judgment, the best interests of the Corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. PRESIDENT. The President shall be the principal executive
officer of the Corporation and shall in general supervise and control all of the
business and affairs of the Corporation. He shall preside at all meetings of the
shareholders and of the Board of Directors. He may sign, with the Secretary or
any other proper officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors have
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
By-Laws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 6. VICE PRESIDENT. In the absence of the President or in the
event of his inability or refusal to act, the Vice President shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The Vice President shall
perform such other duties as from time to time may be assigned to him by the
President or by the Board of Directors.
SECTION 7. TREASURER. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors shall determine. He
shall: (a) have charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, and deposit all such
monies in the name of the Corporation in such banks, trust companies, or other
depositories as shall be selected in accordance with the provisions of Article V
of these By-Laws; and (c) in general perform all the duties as from time to time
may be assigned to him by the President or the Board of Directors.
<PAGE>
SECTION 8. SECRETARY. The Secretary shall: (a) keep the minutes of the
shareholders' and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these ByLaws or as required by law; (c) be custodian of
the corporate records and of the seal of the Corporation and see that the seal
of the Corporation is affixed to all certificates for shares prior to the issue
thereof and to all documents, the execution of which on behalf of the
Corporation under this seal is duly authorized in accordance with the provisions
of these By-Laws; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, or Vice President, certificates for shares of the
Corporation, the issue of which shall have been authorized by resolution of the
Board of Directors; (f) sign with the President, or Vice President, certificates
for shares for the Corporation, the issue of which shall have been authorized by
resolution of the Board of Directors; (g) have personal charge of the stock
transfer books of the Corporation; and (h) in general perform all duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him by the President or the Board of Directors.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
Assistant Treasurers shall respectively, if required by the Board of Directors,
give bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The Assistant Secretaries,
as and if authorized by the Board of Directors, may sign with the President or
Vice President certificates for shares of the Corporation, the issue of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Treasurers and Assistant Secretaries in general shall perform such
duties as shall be assigned to them by the Treasurer or Secretary, respectively,
or by the President or the Board of Directors.
SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECK AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instruments in the name of and on behalf of the Corporation and such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the Corp-
oration and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or officers, agent or agents, of
the Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
the Corporation shall be in such form as may be determined by the Board of
Directors. Such certificates shall be signed by the President and shall be
sealed with the seal of the Corporation. All certificates for shares shall be
consecutively numbered. The name of the persons owning the shares represented
thereby with the number of shares and date of issue shall be entered on the
books of the Corporation. All certificates surrendered to the Corporation for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, except that in the case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may prescribe.
<PAGE>
SECTION 2. TRANSFER OF SHARES. Transfer of shares of the Corporation
shall be made only by the registered holder thereof or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate for such
share. The person in whose name shares stand on the books of the Corporation
shall be deemed the owner thereof for all purposes as regards the Corporation.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall be determined by the
resolution of the Board of Directors.
ARTICLE VIII
DIVIDENDS
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Articles of Incorporation.
ARTICLE IX
SEAL
The Board of Directors shall provide a corporate seal which shall be in
the form of a circle and shall have inscribed thereon appropriate wording.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these ByLaws, or under the provisions of the Articles of
Incorporation, or under the provisions of the corporation laws of the State of
Florida, waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI
AMENDMENTS
The Board of Directors shall have the power and authority to alter,
amend or rescind the By-Laws of the Corporation at any regular or special
meeting at which a quorum is present by a vote of a majority or the whole Board
of Directors, subject to the power of the shareholders to change or repeal such
By-Laws at any annual or special meeting of shareholders at which a quorum is
present, by a vote of a majority of the stock represented at such meeting,
provided, that the notice of such meeting shall have included notice of any
proposed alteration, amendment or rescission.
I certify that these are the By-Laws adopted by the Board of Directors
of the Corporation.
/s/ Charles Adams
Secretary
Date Signed:April 29, 1998
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS OF JS BUSINESS WORKS, INC FOR MAY 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 1061822
<NAME> JS Business Works, Inc.
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<PERIOD-END> MAY-31-1998
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