SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
As filed with the SEC on May 5,2000 SEC Registration No. 0-25625
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No 2. to
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or(g) of the Securities Exchange Act of
1934
First Business Service Group, Inc.
(Exact name of registrant as specified in its charter)
Florida Applied For
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
2503 W. Gardner Ct., Tampa, FL. 33611
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (813) 831-9348
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
Preferred Stock
(Title of class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Business.
History and Organization
We were organized under the laws of the State of Florida in March, 1999.
Since inception, our primary activity has been directed to organizational
efforts. We were formed as a vehicle to acquire or be acquired by a private
company desiring to become an SEC reporting company in order thereafter to
secure a listing on the over the counter bulletin board. This type of
acquisition is sometimes referred to as a reverse merger. Companies such as ours
are called blank check companies, meaning a company that:
o Is a development stage company that 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
o Is issuing "penny stock," as defined in Rule 3a51-1 under the
Securities Exchange Act of 1934
We have elected to file this Form 10 on a voluntary basis because we believe
that a private company desiring to become an SEC reporting company in order
thereafter to secure a listing on the over the counter bulletin board will be
more receptive to an acquisition by an SEC reporting company. We will
voluntarily file periodic reports in the event our obligation to file such
reports is suspended under the Exchange Act.
Operations
We were organized for the purposes of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, engage in business combinations
presented to us by persons or firms who or which desire to become an SEC
reporting company. We will not restrict our search to any specific business or
industry, but will limit ourselves to acquisitions located by our president.
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing business
combinations will be paid with funds contributed as a capital contribution by
our president. Management has placed no cap on the amount of funds they will
lend. This is based on a written agreement between our president and us. This
capital contribution will not be returned either by us or by the company we
acquire either before or after the merger. In addition, we have no preliminary
agreements or understandings with any other person or entity concerning loans or
capital contributions.
We may seek a business combination in the form of firms which:
o Have recently commenced operations
o Are developing companies
o Are seeking to develop a new product or service
o Are established businesses
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A business combination will most likely involve the acquisition of, or merger
with, one of these kind of companies which does not need substantial additional
capital but which desires to establish a public trading market for our shares,
while avoiding what they may deem to be adverse consequences of undertaking a
public offering itself, such as:
o Time delays
o Significant expense
o Loss of voting control
o Compliance with various federal and state securities laws
Based upon the probable desire on the part of the owners of acquisition
candidates to assume voting control over us in order to avoid tax consequences
or to have complete authority to manage the business, we will combine with just
one acquisition candidate.
Upon closing of a business combination, there will be a change in control
which will result in the resignation of our present officer and director.
There are no financial requirements for an acquisition candidate, except to
have qualified audited financial statements and the funds to make payments to us
required in an acquisition agreement. Accordingly, any acquisition candidate
that is selected may be a financially unstable company or an entity in our early
stage of development or growth, including entities without established records
of sales or earnings. Accordingly, we may become subjected to numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies. In addition, we may effect a business
combination with an entity in an industry characterized by a high level of risk.
We anticipate that the selection of a business combination will be complex
and extremely risky. Management believes that there are numerous firms seeking
the benefit of a publicly traded corporation because of:
o General economic conditions
o Rapid technological advances being made in some industries
o Shortages of available capital
Such perceived benefit of a publicly traded corporation may include:
o Facilitating or improving the terms on which additional equity financing may
be sought
o Providing liquidity for the principals of a business
o Creating a means for providing incentive stock options or similar benefit to
key employees
o Providing liquidity, subject to restrictions of applicable statutes, for all
shareholders
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Potentially available business combinations may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
Evaluation of Business Combinations
The analysis of business combinations will be undertaken by or under the
supervision of our officer and director who is not a professional business
analyst. Management intends to concentrate on identifying preliminary
prospective business combinations which may be brought to our attention through
present associations. There are only two characteristics necessary for a
prospective business combination:
o Have the ability to obtain qualified audited financial statements within the
time period required under relevant SEC regulations
o Have the funds to make payments to us required in an acquisition
agreement, if mutually agreed by us and the acquisition candidate
Because we will be subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, we will be required to furnish certain information about
significant acquisitions, including audited financial statements for the
business acquired, covering one, two or three years depending upon the relative
size of the acquisition. Consequently, acquisition prospects that do not have or
are unable to obtain the required audited statements within the required time
period will not be appropriate for acquisition.
Any business combination will present certain risks. Many of these risks
cannot be adequately identified prior to selection. In the case of some of the
potential combinations available to us, it is possible that the promoters of an
acquisition candidate have been unable to develop a going concern or that such
business is in our development stage in that it has not generated significant
revenues from its principal business activity prior to our merger or
acquisition. There is a risk, even after the closing of a business combination
and the related expenditure of our funds, that the combined enterprises will
still be unable to become a going concern or advance beyond the development
stage. The combination may involve new and untested products, processes, or
market strategies which may not succeed. Such risks will be assumed by us and,
therefore, our shareholders.
Business Combination
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also purchase
stock or assets of an existing business. The manner of the business combination
will depend on:
o The nature of the acquisition candidate
o The respective needs and desires of us and other parties
o The management of the acquisition candidate opportunity
o The relative negotiating strength of us and such other management
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On the closing of a business combination, the acquisition candidate will
have significantly more assets than us; therefore, management plans to offer a
controlling interest in us to the acquisition candidate. Although the actual
terms of a transaction to which we may be a party cannot be predicted, we may be
expected that the parties to the business transaction will find we desirable to
avoid the creation of a taxable event and thereby structure the acquisition in a
so-called tax-free reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code of 1954. In order to obtain tax-free treatment under the
code, it may be necessary for the owners of the acquired business to own 80% or
more of the voting stock of the surviving entity. In such event, our
shareholders would retain less than 20% of the issued and outstanding shares of
the surviving entity, which would be likely to result in significant dilution in
the equity of such shareholders. In addition, our director and officer will, as
part of the terms of the acquisition transaction, resign as director and
officer.
Prior to any business combination, we will effect a reverse split of our
stock such that management and our non-management principal shareholder retain
the number of shares as provided in the merger agreement upon the closing of the
merger. We will not, however, sell or issue any additional shares prior to the
location of an acquisition candidate. All necessary funding will be provided as
a non-refundable capital contribution by management.
Consistent with the position of the SEC staff in a recent letter to the
NASD concerning blank check companies, all securities issued in the acquisition
transaction will be registered at the time the transaction is closed. We may
also agree to register additional securities for resale thereafter. The issuance
of substantial additional securities and their potential sale into any trading
market which may develop in our common stock may have a depressive effect on
such market.
If at any time we enter negotiations with a possible merger candidate and
such a transaction becomes probable, then we will file all required information
on Form 8-K. As of the date of this filing, no potential acquisition candidate
has entered into any oral or written agreement to be acquired by us.
We have adopted certain acquisition policies, as follows. Management is
unaware of any circumstances under which such policy through their own
initiative may be changed. The following policies are based on a written
agreement with management, and we are aware of no circumstances under which
these policies may be changed.
o We may not borrow funds and use the loan proceeds to make payments to any
officer, director, promoter or affiliate or associate of us.
o We will not enter into a business combination with any company which is in any
way wholly or partially beneficially owned by any officer, director, promoter or
affiliate or associate of us.
o We have adopted a policy that we will not pay a finder's fee to any member of
management for locating a merger or acquisition candidate. No member of
management intends to or may seek and negotiate for the payment of finder's
fees.
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o We will not sell any securities prior to the location of an acquisition or
merger candidate.
o Other fees may be paid to our management if and only if it is agreed by the
acquisition candidate in the merger agreement. Any such fee will be funded by a
fee the acquisition candidate agrees to pay as part of the merger agreement.
There is no minimum or maximum amount of fee that can be paid. The amount will
be determined in arms'-length negotiations in the merger agreement.
o The only other pecuniary benefit to be received by management is the retention
of a to-be-agreed percent of stock after the acquisition closes. There is no
minimum or maximum amount of stock which can be retained. The amount will be
determined in arms'-length negotiations in the merger agreement.
Although we believe these procedures eliminate the potential for a claim that
management has breached or compromised its fiduciary duties, there is always a
potential that such claim could be made. If made, any remedy available under
state corporate law will most likely be prohibitively expensive and time
consuming.
We will remain an insignificant player among the firms that engage in
business combinations. There are many established venture capital and financial
concerns which have significantly greater financial and personnel resources and
technical expertise than us. In view of our combined limited financial resources
and limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors. Also, we will be competing
with a large number of other similar small public companies located throughout
the United States, including those organized and to be organized by our
non-management principal shareholder for himself and others.
We believe our most significant competition comes from persons or entities
who sell "listed, trading public shells." Our transactions differ from the
typical public shell/reverse merger transactions in that our transaction is
structured to fully comply with the registration provisions of federal
securities laws. In our transaction, our shares are transferred to shareholders
of the private company from our treasury stock under an SEC registration
statement. Many typical public shell transaction do not utilize authorized but
unissued stock but instead involve the transfer of issued and outstanding shares
from existing insider and non-insider shareholders, allegedly in compliance with
Rule 144(k) but actually in violation of the registration provisions of the 1933
Act. We continue to advise potential clients that there is no way to "instantly
go public." Registration is a must. There are no other options. Although our
process may take a little longer to accomplish, it is accomplished without
violating federal securities laws. We also believe that in the near future the
SEC will formally advise our competitors that alleged Rule 144(k) reverse
mergers violate the federal securities laws in the same way as they similarly
advised our competitors who previously tried to create trading public shell
corporations without registering their shares.
We do not intend to advertise or promote ourselves. Instead, our management
will actively search for potential acquisition candidates. In the event
management decides to advertise in the form of an ad in a publication to attract
an acquisition candidate, the cost of such advertising will be assumed by
management.
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Employees
We presently have no employees. Our officer and director is engaged in business
activities outside of us, and the aggregate amount of time he will devote to our
business and the business of all other blank check companies with which is
associated will be limited, usually involving one hour or less per week
aggregate until an acquisition candidate has agreed to be acquired.
Item 2. Financial Information.
SELECTED FINANCIAL DATA
The following information concerning our financial position and operations is as
of and for the period ended December 31, 1999.
Total assets $ 0
Total liabilities 0
Equity 0
Sales 0
Net loss 5,079
Net loss per share 0.00
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. We have no assets. Our expenses
through December 31, 1999, all funded by a capital contribution from management,
are $1,079 and $4,000 of services provided by our president.
Substantially all of our expenses that must be funded by management will be
from our efforts to identify a suitable acquisition candidate and close the
acquisition. Management has agreed in writing to fund our cash requirements
until an acquisition is closed. So long as management does so, we will have
sufficient funds to satisfy our cash requirements. This is primarily because we
anticipate incurring no significant expenditures. Before the conclusion of an
acquisition, we anticipate our expenses to be limited to accounting fees, legal
fees, telephone, mailing, filing fees, occupational license fees, and transfer
agent fees.
We do not intend to seek additional financing. At this time we believe that
the funds to be provided by management will be sufficient for funding our
operations until we find an acquisition and therefore do not expect to issue any
additional securities before the closing of a business combination.
Item 3. Properties.
We are presently using the office Mr. Williams in Tampa FL, at no cost as
our office. Such arrangement is expected to continue only until a business
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combination is closed, although there is currently no such agreement between us
and Mr. Williams, our president. We at present own no equipment, and do not
intend to own any.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information about our current shareholder. The
person named below has sole voting and investment power with respect to the
shares. The numbers in the table reflect shares of common stock held as of the
date of this Form 10:
Shares Owned Percentage
- -
- --------------------------------------------------------------------------------
Michael T. 1,000,000 100%
Williams(1)
2503 W. Gardner
Ct.
Tampa FL 33611
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
All directors and 1,000,000 100%
officers as a
group -
1 persons
- --------------------------------------------------------------------------------
1. To be owned in a blind trust with the beneficiaries of Michael T. Williams
and his wife, Donna J. Williams, Tenants by the Entireties. Mr. Williams may be
deemed our founder and promoter, as the terms are defined under the Securities
Act of 1933.
Mr. Williams' trust will retain an amount of our issued and outstanding stock
after issuance of all shares in the merger and closing of the merger transaction
as is agreed in arms'-length negotiations with the acquisition candidate. Prior
to closing the merger, we will effect a reverse stock split so that share
ownership complies with the terms of the acquisition agreement.
Item 5. Directors and Executive Officers.
Directors and Executive Officers.
--------------------------------
The following table and subsequent discussion sets forth information about
our director and executive officer, who will resign upon the closing of the
acquisition transaction. Our director and executive officer was elected to his
position in March, 1999.
Name Age Title
Michael T. Williams 51 President, Treasurer and
Director
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Michael T. Williams responsibilities will include management of our
operations as well as our administrative and financial activities. Since 1975
Mr. Williams has been in the practice of law, initially with the U.S.
Securities and Exchange Commission until 1980, and since then in private
practice. He was also chief executive officer of Florida Community Cancer
Centers, Dunedin, FL from 1991-1995. He received a BA from the University of
Kansas and a JD from the University of Pennsylvania.
Item 6. Executive Compensation.
The following table sets forth all compensation awarded to, earned by, or paid
for services rendered to us in all capacities during the year ended December 31,
1999, by our president; however, as we have no our other executive officers
whose salary and bonus for the year ended December 31, 1999 exceeded $100,000,
information is only furnished for Mr. Williams.
Summary Compensation Table
Long-Term Compensation Awards
Name and Principal Position Annual Compensation - 1998
- --------------------------- --------------------------
Salary ($) Bonus ($) Number of Shares
---------- --------- Underlying
Options (#)
Michael T. Williams, None None None
President
Fees may be paid to our management if and only if it is agreed by the
acquisition candidate in the merger agreement. These fees would be for services
including, but are not limited to, the following:
o Formation of our company
o Preparation and filing of Form 10
o Securing an accounting firm and audited financial statements
o Locating potential acquisition candidates
o Qualifying the actual acquisition candidate
o Negotiating all aspects of the acquisition
o Preparation and filing of a Form 8-K
o Closing the merger transaction
Fees may also be paid to Williams Law Group, P.A., an affiliate of our
management, for rendering legal services. Any such fees will be funded by a fee
the acquisition candidate agrees to pay as part of the merger agreement. There
is no minimum or maximum amount of fees that can be paid. The amount will be
determined in arms'-length negotiations in the merger agreement.
Except as described above and any stock retained by management as mutually
agreed in the acquisition agreement, we will not pay any of the following types
of compensation or other financial benefit to our management:
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o Consulting Fees
o Finders' Fees
o Any other methods of payments by which management or current shareholders
receive funds, stock, other assets or anything of value whether tangible or
intangible
These provisions are the subject of a written agreement between management and
us. Management is not aware of any circumstances under which this policy,
through their own initiative, may be changed.
Item 7. Certain Relationships and Related Transactions.
None of the related party transactions described below were the result of
arm's length negotiations. Accordingly, there is a potential that management's
fiduciary duties may be compromised as a result of any of these transactions.
Any remedy available under state corporate law, if management's fiduciary duties
are compromised, will most likely be prohibitively expensive and time consuming.
We have established the a policy that prohibits transactions with or payment
of anything of value to any present officers, director, promoter or affiliate or
associate or any company that is in any way or in any amount beneficially owned
by any of our officers, director, promoter or affiliate or associate, except as
follows:
o Fees may be paid to Williams Law Group, P.A., an affiliate of our
management, for rendering legal services.
o All compensation payable according to a written agreement between
management and us as described in Item 6. Management above.
Any such fees will be funded by a fee the acquisition candidate agrees to pay as
part of the merger agreement. There is no minimum or maximum amount of fees that
can be paid. The amount will be determined in arms'-length negotiations in the
merger agreement.
Our director and officer is or may become, in his individual capacity, an
officer, director, controlling shareholder and/or partner of other entities
engaged in a variety of businesses. Mr. Williams is engaged in business
activities outside of us, and the aggregate amount of time he will devote to our
business and the business of all other blank check companies with which is
associated will be limited, usually involving one hour or less per week
aggregate until an acquisition candidate has agreed to be acquired.
There exists potential conflicts of interest including allocation of time
between us and such other business entities.
Our director and officer is or may become, in his individual capacity, an
officer, director, controlling shareholder and/or partner of other entities
engaged in a variety of businesses. Michael T. Williams is engaged in business
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activities outside of us, and the aggregate amount of time he will devote to our
business and the business of all other blank check companies with which is
associated will only be between five (5) and twenty (20) hours per week until a
successful business opportunities have been acquired by all such companies.
There exists potential conflicts of interest including allocation of time
between us and such other business entities.
Conflicts with other blank check companies with which members of management are
currently and may become affiliated in the future will arise in the pursuit of
business combinations. These conflicts will involve only Michael T. Williams.
Mr. Williams has in the past formed other what would be deemed blank check
entities for himself. He intends to continue to do so in the future. Except for
4 Brandon - I, Inc., none of these entities has or will engage in any public
offering of its securities prior to entering into a business combination
agreement. None of such entities has entered into an agreement to acquire or be
acquired by any business or has acquired any business.
To aid the resolution of these conflicts, he and we have agreed to the following
procedure:
o None of the existing blank check entities except for 4 Brandon - I,
Inc. will file registration statements under the Securities Act to sell
their securities prior to entering into a business combination
agreement. No acquisition candidates will be presented to for 4 Brandon
- I, Inc. until it has sold any securities.
o Unless specifically requested by an acquisition candidate, no
acquisition candidates will be presented to the following existing
blank check companies with which Mr. Williams is associated until all
blank check companies which have not filed registration statements on
Form 10, existing or in the future, have entered into acquisition
agreements.
The following table sets forth acquisition companies which have filed
registration statements on Form 10.
Name Date of Filing of Form 10 with SEC
---- ----------------------------------
First Business Service Group, Inc. March 25, 1999
Second Business Service Group, Inc. March 25, 1999
Third Business Service Group, Inc. March 25, 1999
Fourth Business Service Group, Inc. March 25, 1999
Fifth Business Service Group, Inc. March 25, 1999
Sixth Business Service Group, Inc. March 25, 1999
Seventh Business Service Group, Inc. March 25, 1999
Eighth Business Service Group, Inc. March 25, 1999
Ninth Business Service Group, Inc. March 25, 1999
Tenth Business Service Group, Inc. March 25, 1999
Only Sixth Business Service Group, Inc. has entered into an acquisition
agreement with Telesource, Inc. A registration statement has been filed, initial
comments have been received and Amendment No. 1 is anticipated to be filed in
the near future. First, Second and Third Business Service Group are engaged in
preliminary acquisition discussions with potential acquisition candidates.
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The following table sets forth acquisition companies which have not filed
registration statements on Form 10.
Name Acquisition Agreement SEC Filing Status
Status
First Enterprise Service Merger Agreement with Registration
Group, Inc. Space Systems Statement filed.
International, Inc. Awaiting Comments.
Second Enterprise Service Merger Agreement with Registration
Group, Inc. Wiremedia.com, Inc., Statement being
Inc. drafted.
Third Enterprise Service Merger Agreement with Registration
Group, Inc. Competitive Companies, Statement filed.
Inc. Awaiting financials
to refile.
Fourth Enterprise Service Proposal being
Group, Inc. considered by
candidate.
Fifth Enterprise Service Proposal being
Group, Inc. considered by
candidate.
Sixth Enterprise Service Merger Agreement with Registration
Group, Inc. Africainternet.com, Statement being
Inc. drafted.
Seventh Enterprise Service Merger Agreement with Registration
Group, Inc. Legacy Communications, Statement being
Inc. drafted.
Eighth Enterprise Service Merger Agreement with Registration
Group, Inc. Impulse Statement being
Communications, Inc. drafted.
Ninth Enterprise Service Proposal being
Group, Inc. considered by
candidate.
Tenth Enterprise Service Merger Agreement with Registration
Group, Inc. Emailshots.com, Inc. Statement being
drafted.
Brilliant Sun Industry Co. Merger Agreement with Registration
Yi Wan Group, Inc. Statement filed.
Awaiting financials
to refile.
First Emily, Inc. Merger Agreement with Registration
Talentspot.com, Inc. Statement being
drafted.
First Hilary, Inc. Merger Agreement with Registration
Net Sales Solutions, Statement being
Inc. drafted.
First Zachery, Inc. Proposal being
considered by
candidate.
First Michelle, Inc. Proposal being
considered by
candidate.
First James, Inc. Proposal being
considered by
candidate.
First Mark, Inc.
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First Matt, Inc. Proposal being
considered by
candidate.
First Brandon, Inc. Merger Agreement with Registration
Net2speak, Inc. Statement being
drafted.
Second Brandon, Inc.
First Brad, Inc.
First Dunmore, Inc.
Second Emily, Inc.
Second Hilary, Inc.
Second Zachery, Inc.
Second Michelle, Inc.
Second James, Inc.
Second Mark, Inc.
Second Matt, Inc.
Second Brad, Inc.
Second Dunmore, Inc.
Item 8. Legal Proceedings.
We not a party to or aware of any pending or threatened lawsuits or other
legal actions.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Prior to the date hereof, there has been no trading market for our common
stock. The outstanding common stock was issued at par value upon formation of us
in reliance upon an exemption from registration contained in Section 4(2) of the
Securities Act. Management owns 100% of our stock. As a result, there is no
likelihood of an active public trading market, as that term is commonly
understood, developing for the shares. There can be no assurance that a trading
market will develop upon the closing of a business combination. To date, neither
we nor anyone acting on our behalf has taken any affirmative steps to retain or
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encourage any broker dealer to act as a market maker for our common stock.
Further, there have been no discussions or understandings, preliminary or
otherwise, between us or anyone acting on our behalf and any market maker
regarding the participation of any such market maker in the future trading
market, if any, for our common stock. Present management does not anticipate
that any such negotiations, discussions or understandings shall take place prior
to the execution of an acquisition agreement. Management expects that
discussions in this area will ultimately be initiated us.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 1,000,000 shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act. Any shares retained by Mr. Williams' trust must either be
registered for sale or may only be sold subject to Rule 144.
Item 10. Recent Sales of Unregistered Securities.
Michael T. Williams was issued 1,000,000 shares upon our formation as
founder of our business. He contributed $79.00 in non-refundable capital for
these shares.
Item 11. Description of Registrant's Securities to be Registered.
DESCRIPTION OF CAPITAL STOCK
--------------------------------------------------------------------------
Authorized Capital Stock Under Our Shares Of Capital Stock
Outstanding
Certificate of Incorporation
--------------------------------------------------------------------------
50,000,000 shares of common stock 1,000,000 shares of common
--------------------------------------------------------------------------
20,000,000 shares of preferred stock No shares of preferred stock
--------------------------------------------------------------------------
All significant provisions of our capital stock are summarized in this Form
10. However, the following description isn't complete and is governed by
applicable Florida law and our articles of incorporation and bylaws. We have
filed copies of these documents as exhibits to this Form 10.
Common Stock
You have voting rights for your shares. You and all other common stockholders
may cast one vote for each share held of record on all matters submitted to a
vote. You have cumulative voting rights in the election of directors. The effect
of cumulative voting is described below.
You have dividend rights for your shares.
You and all other common stockholders are entitled to receive dividends and
other distributions when declared by our board of directors out of the assets
and funds available, based upon your percentage ownership of us. Florida law
prohibits the payment of any dividends where, after payment of the dividend, we
would be unable to pay our debts as they come due in the usual course of
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business or our total assets would be less than the sum of our total liabilities
plus any amounts the law requires to be set aside. We will not pay dividends.
You should not expect to receive any dividends on shares in the near future,
even after a merger. This investment is inappropriate for you if you need
dividend income from an investment in shares.
You have rights if we go out of business forever.
If we go out of business forever, you and all other common stockholders
will be entitled to share in the distribution of assets remaining after payment
of all money we owe to others and any priority payment required to be made to
our preferred stockholders. Our directors, at their discretion, may borrow funds
without your prior approval, which potentially further reduces the amount you
would receive if we go out of business forever.
You have no right to acquire shares of stock based upon your percentage
ownership of our shares when we sell more shares of our stock to other people.
We do not provide our stockholders with preemptive rights to subscribe for
or to purchase any additional shares offered by us in the future. The absence of
these rights could, upon our sale of additional shares of common or preferred
stock, result in a decrease in the percentage ownership that you hold or
percentage of total votes you may cast.
Preferred Stock
Our board of directors can issue preferred stock at any time with any
legally-permitted rights and preferences without your approval.
Our board of directors, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock, with some
or all of the following rights or any other rights they think are appropriate
and that are legal:
o Voting
o Dividend
o Required or optional repurchase by us
o Conversion into common stock, with or without additional payment
o Payments preferred stockholders will receive before common stockholders if
we go out of business forever
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes. But it also could render
meaningless your right to vote your stock on a matter that you are entitled to
vote on because preferred stockholders could own shares with a majority of the
votes required on any issue. Someone interested in buying our company may not
follow through with their plans because they could find it more difficult to
acquire, or be discouraged from acquiring, a majority of our outstanding stock
because we issue preferred stock.
Dissenters' Rights
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Section 607.1303 of Florida Statutes provides the following procedure for
exercise of dissenters' rights.-- Under the act, shareholders may perfect
dissenters' rights with regard to corporate actions involving certain mergers,
consolidations, sale, lease or merger of substantially all the assets of the
corporation, under limited circumstances,, or elimination of cumulative voting.
A shareholder wishing to assert dissenters' rights under the act must follow the
specified procedures which include:
o delivering, before the vote is taken on the matter, written notice of
the holder's intent to demand payment for his shares if the matter
is approved
o not voting his shares in favor of the matter proposed.
Within 10 days after the shareholders have authorized the matter, the
corporation must give written notice of the authorization to each shareholder
who delivered written notice of his intent to demand payment and who did not
vote for the proposed action. Within 20 days after the corporation has provided
this notice, the shareholder must file with the corporation a notice of his
election to dissent and must simultaneously surrender certificates representing
his shares. The notice of election must be in the form specified under the act.
As we will have only one shareholder who is also our management and will obtain
all relevant information about an acquisition candidate during the due diligence
process, we will not furnish separate information concerning a target company
and its business prior to closing any merger or acquisition, as such information
will already be know to our shareholder. If audited financial statements are not
required to be filed with the SEC prior to closing of the merger, no such
statements will be furnished unless available.
Provisions With Possible Anti-Takeover Effects
Section 607.0902 of Florida law restricts the voting rights of certain shares
of a corporation's stock when those shares are acquired by a party who, by such
acquisition, would control at least one-fifth of all voting rights of the
corporation's issued and outstanding stock. The statute provides that the
acquired shares, the control shares, will, upon such acquisition, cease to have
any voting rights. The acquiring party may, however, petition the corporation to
have voting rights re-assigned to the control shares by way of an acquiring
person's statement submitted to the corporation in compliance with the
requirements of the statute. Upon receipt of such request, the corporation must
submit, for shareholder approval, the acquiring person's request to have voting
rights re-assigned to the control shares. Voting rights may be reassigned to the
control shares by a resolution of a majority of the corporation's shareholders
for each class and series of stock. If such a resolution is approved, and the
voting rights re-assigned to the control shares represent a majority of all
voting rights of the corporation's outstanding voting stock, then, unless the
corporation's articles of incorporation or Bylaws provide otherwise, all
shareholders of the corporation will be able to exercise dissenter's rights in
accordance with Florida law.
A corporation may, by amendment to its articles of incorporation or
bylaws, provide that, if the party acquiring the control shares does not submit
an acquiring person's statement in accordance with the statute, the corporation
may redeem the control shares at any time during the period ending 60 days after
16
<PAGE>
the acquisition of control shares. If the acquiring party files an acquiring
person's statement, the control shares are not subject to redemption by the
corporation unless the shareholders, acting on the acquiring party's request,
deny full voting rights to the control shares. The statute does not alter the
voting rights of any stock of the corporation acquired in any of the following
manners:
o Under the laws of intestate succession or under a gift or testamentary
transfer
o Under the satisfaction of a pledge or other security interest created
in good faith and not for the purpose of circumventing the statute
o Under either a share exchange or share exchange if the corporation is a
party to the agreement or plan of exchange or share exchange
o Under any savings, employee stock ownership or other benefit plan of
the corporation
o Under an acquisition of shares specifically approved by the board of
directors of the corporation.
17
<PAGE>
Investment Company Act
Although we will be subject to regulation under the Securities Act and the
Exchange Act, management believes we will not be subject to regulation under the
Investment Company Act of 1940. The regulatory scope of the Investment Company
Act of 1940 was enacted principally for the purpose of regulatory vehicles for
pooled investments in securities, extends generally to companies primarily in
the business of investing, reinvesting, owning, holding or trading securities.
The Investment Company Act may, however, also be deemed to be applicable to a
company which does not intend to be characterized as an investment company but
which, nevertheless, engages in activities which may be deemed to be within the
definition of the scope of certain provisions of the Investment Company Act. We
believe that our principal activities will not subject we to regulation under
the Investment Company Act. Nevertheless, we will might be deemed to be an
investment company. In the event we are deemed to be an investment company, we
may be subject to certain restrictions relating to our activities, including
restrictions on the nature of our investments and the issuance of securities. We
have obtained no formal determination from the Securities and Exchange
Commission as to our status under the Investment Company Act of 1940.
Penny Stock Rules
After the closing of an acquisition, our stock may be a penny stock. Penny
stocks generally are equity securities with a price of less than $5.00.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Commission. The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about penny stocks and the risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules generally require that prior to a transaction in
a penny stock, the broker-dealer make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. If our shares immediately following the closing of the merger
and listing of our stock are subject to subject to such penny stock rules, our
shareholders will in all likelihood find it more difficult to sell their
securities.
18
<PAGE>
Item 12. Indemnification of Directors and Officers.
Our director is bound by the general standards for directors provisions
in Florida law. These provisions allow him in making decisions to consider any
factors as he deems relevant, including our long-term prospects and interests
and the social, economic, legal or other effects of any proposed action on the
employees, suppliers or our customers, the community in which the we operate
and the economy. Florida law limits our director's liability.
We have agreed to indemnify our director, meaning that we will pay for
damages they incur for properly acting as director. The SEC believes that this
indemnification may not be given for violations of the Securities Act of 1933
that governs the distribution of our securities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
under the foregoing provisions, the registrant has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against the public policy as expressed in the securities Act and is therefore,
unenforceable.
Item 13. Financial Statements and Supplementary Data.
First Business Service Group, Inc.
(A Development Stage Enterprise)
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Independent Auditors' Report 20
Financial Statements as of and for the period March 15,1999
(date of incorporation) to March 17, 1999:
Balance Sheet 21
Statement of Operations 22
Statement of Stockholders' Equity 23
Statement of Cash Flows 24
Notes to Financial Statements 25
- ------------------------------------------------------------------------------
19
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of First Business Service Group, Inc:
We have audited the accompanying balance sheet of First Business Service Group,
Inc. (the "Company"), a development stage enterprise, as of March 17, 1999, and
the related statements of operations, stockholders' equity and cash flows for
the period March 15, 1999 (date of incorporation) to March 17, 1999. 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 the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe 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 March 17,
1999, and the results of its operations and its cash flows for the period March
15, 1999 (date of incorporation) to March 17, 1999 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 Notes A and B to the
financial statements, the Company is in the development stage and will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. As of the date of these financial statements, an
insignificant amount of capital has been raised, and as such there is no
assurance that the Company will be successful in its efforts to raise the
necessary capital to commence its planned principal operations and/or implement
its business plan. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Kingery Crouse & Hohl P.A.
May 3, 2000
20
<PAGE>
First Business Service Group, Inc.
(A Development Stage Enterprise)
BALANCE SHEET AS OF MARCH 17, 1999
- ------------------------------------------------------------------------------
TOTAL $ 0
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY:
Preferred stock - no par value - 20,000,000
shares authorized; 0 shares issued and outstanding $ 0
Common stock - no par value - 50,000,000 shares
Authorized; 1,000,000 shares issued and outstanding
79
Deficit accumulated during the development stage (79)
----------
Total stockholders' equity 0
----------
TOTAL $ 0
==========
- ------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
First Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the period March 15, 1999 (date of incorporation)
to March 17, 1999
- ------------------------------------------------------------------------------
EXPENSES -
Organizational costs $ 79
-------------
NET LOSS $ 79
=============
NET LOSS PER SHARE:
Basic $ 0
=============
Weighted average number of shares - basic 1,000,000
=============
- ------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
First Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS'EQUITY
For the period March 15, 1999 (date of incorporation)
to March 17, 1999
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Deficit
Accumulated
During the
Common Preferred Development
Shares Value Shares Value Stage Total
--------- -------- --------- ------- ------- -------
Balances, March 15, 0 $ 0 0 $ 0 $ 0 $ 0
1999 (date of
incorporation)
Proceeds from the issuance
of common stock 1,000,000 79 79
Net loss for the period,
March 15, 1999
(date of incorporation)
to March 17, 1999 (79) (79)
--------- ---------- --------- ------- --------- ---------
Balances March 17, 1999 1,000,000 79 0 $ 0 (79) $ 0
$ $
========= ========== ================== ========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
First Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the period March 15, 1999 (date of incorporation)
to March 17, 1999
- ------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (79)
----------
NET CASH USED IN OPERATING ACTIVITIES (79)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 79
----------
NET CASH PROVIDED BY FINANCIANG ACTIVITIES 79
----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0
----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 0
==========
Interest paid $ 0
==========
Taxes paid $ 0
==========
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
First Business Service Group, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
First Business Service Group, Inc. (the "Company") was incorporated under the
laws of the state of Florida on March 15, 1999. The Company, which is considered
to be in the development stage as defined in Financial Accounting Standards
Board Statement No. 7, intends to investigate and, if such investigation
warrants, engage in business combinations. The planned principal operations of
the Company have not commenced, therefore accounting policies and procedures
have not yet been established. The Company's fiscal year-end is December 31.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. Accordingly, the Company's ability to continue
as a going concern is dependent upon its ability to secure an adequate amount of
capital to finance its planned principal operations and/or implement its
business plan. The Company's plans include borrowings from management and
negotiating fees with an acquistion candidate, however there is no assurance
that they will be successful in their efforts to raise capital. This factor,
among others, may indicate that the Company will be unable to continue as a
going concern for a reasonable period of time.
NOTE C - INCOME TAXES
During the period March 15, 1999 (date of incorporation) to March 17, 1998, the
Company recognized losses for both financial and tax reporting purposes.
Accordingly, no deferred taxes have been provided for in the accompanying
statement of operations.
25
<PAGE>
NOTE D - RELATED PARTY TRANSACTION
During the period March 15, 1999 (date of incorporation) to March 17, 1999, the
Company's President provided various equipment, services and a portion of her
home for office space for no consideration. The value of this equipment,
services and office space are not significant for the two days ended March 17,
1999 and as such no expense has been recorded.
- ------------------------------------------------------------------------------
26
<PAGE>
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
Item 15. Financial Statements and Exhibits.
- --------------------------------------------------------------------
EXHIBIT NO. SEC REFERENCE TITLE OF DOCUMENT
NUMBER
1 3 Articles of Incorporation
- --------------------------------------------------------------------
2 3 Bylaws
- --------------------------------------------------------------------
3 10 Agreement with management
- --------------------------------------------------------------------
4 23 Consent of Kingery, Crouse &
Hohl, P.A.
- --------------------------------------------------------------------
27
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
First Business Service Group, Inc.
Date: May 5, 2000
By /s/ Michael T. Williams
Michael T. Williams, President
28
<PAGE>
Date Filed: May 5, 2000 SEC File No.0-25625
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM 10SB
UNDER
THE SECURITIES ACT OF 1934
First Business Service Group, Inc.
(Consecutively numbered pages 29 through 35 of this Registration Statement)
29
<PAGE>
INDEX TO EXHIBITS
- --------------------------------------------------------------------------------
EXHIBIT NO. SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- --------------------------------------------------------------------------------
1 3 Articles of Incorporation *
- --------------------------------------------------------------------------------
2 3 Bylaws *
- --------------------------------------------------------------------------------
3 10 Agreement with management Page 32
- --------------------------------------------------------------------------------
4 23 Consent of Kingery, Crouse & Page 35
Hohl, P.A.
- --------------------------------------------------------------------------------
*Previously filed
30
<PAGE>
.
EXHIBIT 3
Agreement with Management
31
<PAGE>
AGREEMENT
We, First Business Service Group, Inc., a Florida corporation, do agree with
you, our president, director and management, Michael T. Williams, as of May
1, 1999, as follows.
o We will not sell any securities prior to the location of an acquisition or
merger candidate.
o The costs of identifying, investigating, and analyzing business
combinations not obtained from the merger fee paid to us by the
acquisition candidate will be paid with funds contributed as a capital
contribution by our president. Management will fund our cash requirements
until an acquisition is closed. Management has placed no cap on the amount
of funds they will lend.
o We may not borrow funds and use the loan proceeds to make payments to any
officer, director, promoter or affiliate or associate of us.
o We will not enter into a business combination with any company which is in
any way wholly or partially beneficially owned by any officer, director,
promoter or affiliate or associate of us.
o We will not pay a finder's fee to any member of management for locating a
merger or acquisition candidate.
o No member of management intends to or may seek and negotiate for the
payment of finder's fees.
o Other fees may be paid to our management if and only if it is agreed by
the acquisition candidate in the merger agreement. Any such fee will be
funded by a fee the acquisition candidate agrees to pay as part of the
merger agreement. There is no minimum or maximum amount of fee that can be
paid. The amount will be determined in arms'-length negotiations in the
merger agreement.
o The only other pecuniary benefit to be received by management is the
retention of a to-be-agreed percent of stock after the acquisition closes.
There is no minimum or maximum amount of stock which can be retained. The
amount will be determined in arms'-length negotiations in the merger
agreement.
o Except as described above, we will not utilize any other methods of
payments by which management or current shareholders receive funds, stock,
other assets or anything of value whether tangible or intangible
First Business Service Group, Inc.,
a Florida corporation
32
<PAGE>
By: _____________________________
Michael T. Williams; president, director and management
- --------------
Michael T. Williams
33
<PAGE>
EXHIBIT 4
Consent of Accountants
34
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Registration Statement on Form 10 of
our report dated May 3, 2000 relating to the financial statements of First
Business Service Group, Inc., as of and for the period ended March 17, 1999,
which appear in such Registration Statement.
Tampa, Florida
May 5, 2000
KINGERY CROUSE & HOHL P.A.
35
<PAGE>
