<PAGE> 1
As filed with the Securities and Exchange Commission on June 9, 1999
Registration No.
-------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ASSET SERVICING CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 522200 75-2823489
- ------------------------------ ------------------------ ------------------
(State or jurisdiction of (Primary Industrial I.R.S. Employer
incorporation or organization) Classification Code No.) Identification No.
709 B West Rusk, Suite 580, Rockwall, Texas 75087 (214) 212-2307
(Address, including the ZIP code & telephone number, including area code of
Registrant's principal executive office)
Charles E. Smith
709 B West Rusk, Suite 580, Rockwall, Texas 75087 (214) 212-2307
(Name, address, including zip code, and telephone number, including area code
of agent for service)
Copies to:
French & Hamilton
Attorneys at Law
14651 Dallas Parkway, Suite 434
Dallas, Texas 75248
(972) 404-1414
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Title of Each Amount Proposed Maximum Proposed Amount of
Class of Securities To be Offering Price Maximum Aggregate Registration
to be Registered Registered Per Unit Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value
Minimum 50,000 $1.00 $ 50,000 $278
Maximum 1,000,000 $1.00 $1,000,000 $278
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that the registration statement
shall hereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
INITIAL PUBLIC OFFERING
PROSPECTUS
ASSET SERVICING CORPORATION
Minimum of 50,000 shares for a total of $50,000, and a
Maximum of 1,000,000 shares for a total of $1,000,000
$1.00 per share
Asset Servicing Corporation
709 B West Rusk, Suite 580
Rockwall, Texas 75087
The Offering:
<TABLE>
<CAPTION>
Per Share Minimum Maximum
-------- ---------- ----------
<S> <C> <C> <C>
Public Price .................. $ 1.00 $ 50,000 $1,000,000
Underwriting discounts ........ 0.06 3,000 60,000
Proceeds to ASC ............... $ 0.94 $ 47,000 $ 940,000
</TABLE>
We lease vehicles and equipment to businesses with a class B or class C credit
rating to achieve a higher return on capital.
This is our initial public offering, and no public market currently exists for
our shares. The offering price may not reflect the market price of our shares
after the offering.
We intend to list the Company for trading on the NASDAQ Bulletin Board. There
can be no assurance that we will be able to accomplish this.
----------------------------
This Investment Involves a High Degree of Risk. You should Purchase Shares Only
If You Can Afford A Complete Loss. See "Risk Factors" Beginning on Page 6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-----------------------------
OFFERED BY THE OFFICERS AND DIRECTORS OF THE COMPANY, AND LICENSED BROKER
DEALERS BELONGING TO THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AT
THIS TIME, THERE IS NO UNDERWRITING AGREEMENT WITH ANY LICENSED BROKER DEALER.
This Prospectus is dated June 9, 1999
<PAGE> 3
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information and financial statements and the notes to these statements appearing
elsewhere in this prospectus.
OUR COMPANY
We are a new company engaged in the leasing of equipment and vehicles
to businesses with a class B or class C credit rating who would have a difficult
time getting financing at a bank or other traditional sources. We will
concentrate on equipment and vehicles that are and integral part of the business
to secure our position and our revenue stream as much as possible. Our marketing
will be done through word of mouth and referrals from banks and other financial
institutions that have contact with businesses seeking financing.
History shows that there is always a market for this type of financing
because borrowers with marginal or bad credit still have to work for a living
and many are trying to borrow to make their businesses grow. We will also
concentrate on businesses that have been in operation for a couple of years so
that we will be able to have a good sense of how that business will grow if they
get additional equipment. Of course, this will help ensure the return on our
money that we lend/lease out. In addition, history shows that if the economy is
going strong or if the economy is in a downturn, the market for these type of
loans is always strong.
We are also developing a web site to market our financing over the
internet.
THE OFFERING
<TABLE>
<CAPTION>
Minimum Maximum
------- -------
<S> <C> <C>
Common stock offered 50,000 1,000,000
Total shares outstanding after this offering 250,000 1,200,000
</TABLE>
Use of proceeds: We have significant discretion on how to use the
money you invest. A portion of the money will be used
for expenses of this offering, part will be used to
buy equipment to lease out, and part will be used for
marketing and general working capital.
CORPORATE INFORMATION
We were incorporated in Nevada on May 27, 1998. Our executive offices
are located at 709 B West Rusk, Suite 580, Rockwall, Texas 75087, and our
telephone number is 214-212- 2307. (When our web site is completed, the
information on that web site is not included as part of
2
<PAGE> 4
this prospectus). The founder, Charles Smith is our sole director, officer and
employee and holds 200,000 shares of common stock which we issued to him for
$2,500, composed of $1,000 cash and $1,500 of his services.
USE OF PROCEEDS
The total expense payable by the Company for the costs of the offering
are limited to 6% of the total proceeds. The costs of the offering of $50,000
which are in excess of the $3,000 maximum expense payable by the Company will be
paid by the founder and his associates. The total cost of the minimum offering,
exclusive of any sales commissions paid to participating broker dealers, is
estimated to be $6,000, consisting primarily of legal and accounting expense.
There are no agreements or arrangements in place as of the date of this
Prospectus for participation of any broker dealers in this offering and it is
not anticipated at this time that any of the common stock offered hereby will be
sold by participating broker dealers.
The following table sets forth how we anticipate using the proceeds
from selling common stock in this offering, reflecting the Minimum and Maximum
subscription amounts:
<TABLE>
<CAPTION>
$50,000 $1,000,000
Minimum Maximum
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Purchase of equipment $ 2,500 $ 45,000
Purchase of software -0- 60,000
Legal, Accounting & Printing Expenses (1)(2) 6,000 25,000
Other Offering Expenses (3) 4,100 4,100
Marketing Expenses & Due Diligence (4) 4,000 80,000
Net Proceeds to Company 33,400 785,900
---------- ----------
TOTAL $ 50,000 $1,000,000
</TABLE>
(1) This amount will be reimbursed to our Company after the offering.
(2) If we raise the minimum subscription amount, only $6,000 will be reimbursed
our Company. If we raise the maximum subscription amount, we anticipate that a
portion of the 6% reimbursement will represent profit to out Company.
(3) This amount includes SEC registration fee, Blue Sky fees and miscellaneous
expenses.
(4) We anticipate paying this amount to registered broker-dealers who might help
us raise money in this offering. $400 if the minimum subscription is sold (or
$8,000 if maximum is sold) of such amount represents due diligence fees, and
$400 if the minimum subscription is sold (or $8,000 if the maximum is sold) of
such amount represents a non-accountable expense reimbursement.
3
<PAGE> 5
SUMMARY FINANCIAL DATA
The following table sets forth certain of our summary financial
information. This information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this prospectus. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
Balance Sheet: April 30, 1999 December 31, 1998
----------------------------------------- -----------------
<S> <C> <C>
Working Capital $ 116 $ 177
Total Assets $ 116 $ 177
Total Liabilities $ -0- $ -0-
Stockholders' Equity $ 116 $ 116
</TABLE>
<TABLE>
<CAPTION>
May 27,1998 (date of
inception)
Statement of Operations: April 30, 1999 December 31, 1998
----------------------------------------- -----------------
<S> <C> <C>
Revenue $ -0- $ -0-
Operating Expense $ 61 $ 2,323
Operating Income (Loss) $ (61) $ (2,323)
Other Expenses $ -0- $ -0-
Net Income (Loss) $ (61) $ (2,323)
</TABLE>
RISK FACTORS
Investing in the common stock in this offering is highly speculative
and presents you with a high degree of risk. If you purchase the common stock
you should carefully consider the following risks before you decide to buy our
common stock. The risks and uncertainties described below are not the only ones
facing our company. Additional risks and uncertainties may also adversely impair
our business operations. If any of the following risks actually occur, our
business, financial condition or results of operations would likely suffer. In
such case, the trading price of our common stock could decline, and you may lose
all or part of the money you paid to buy our common stock.
This prospectus also contains forward looking statements that involve
risks and uncertainties. These statements refer to our future plans, goals,
objectives, expectations and intentions. These statements may be identified by
the use of words such as "plans", "expects", "intends", and "anticipates", as
well as similar expressions. Our actual results may vary materially from those
indicated in such forward looking statements. Factors that could contribute to
these differences include, but are not limited to, those discussed below and
elsewhere in this prospectus.
1. Start up business: We are a start up business and as such our business
is subject to all of the risks associated with a start up enterprise
which has no previous operations.
2. No history or operations: We have had no history of operating, we have
no contracts or leases to start off with, and generally it is uncertain
whether any can be made. There is no
4
<PAGE> 6
assurance that our plan of business is viable and/or we as managers
will be successful in implementing our business plan.
3. Capital needs: The minimum offering of $50,000 may not provide
sufficient capital to meet our initial goal of financing enough leases
to the point of seasoning the loans to the point where we can sell them
for a profit and generate new leases and cash flow to finance continued
growth. There is no assurance that we will be able to attract
sufficient funds to finance more leases to continue our growth, or if
capital were available, it may not be advantageous to us and could
require us to sell our common stock on a basis which would further
dilute the common stock you purchase in this offering.
4. Lack of experience: We as managers have no previous experience in
starting this particular kind of business and there can be no guarantee
that we will be successful.
5. Competition: We have many competitors in this industry composed of many
enterprises that have greater resources and operating history than we
do. There is no assurance that we can overcome these factors.
6. Possible loss of entire investment: If you purchase common stock in
this offering, you should be aware that, if we are not successful in
our business enterprise, that your investment may be entirely lost.
7. "Best Efforts" offering: We are offering common stock for sale for 90
days from the date of the effective date of this prospectus in which to
sell at least the minimum number of 50,000 shares for $50,000. If we
sell at least the minimum by that time, we can extend the offering at
our election for an additional 90 day term. If you subscribe in this
offering and the offering is not consummated, your funds could be tied
up for this time period (up to 180 days) with no interest being due or
payable to you.
8. Part time management: The founder of our company will be its sole
director, officer and employee during the course of this offering.
During the start up of our operations, he will be engaged in other
businesses and other business activities which could present conflicts
of interest with our company. If our business is successful, he plans
to devote as much time as necessary to develop our company's business.
PLAN OF DISTRIBUTION
We are selling the common stock on a "best efforts" basis on behalf of
the Company by the sole officer and director of our Company, who will receive no
commission on such sales. We will also invite licensed soliciting broker-dealers
that are members of the National Association of Securities Dealers, Inc. to
participate, who may hereafter be engaged by us to sell the common stock since
at this time we have no underwriting agreement with any licensed broker-dealer.
We will pay an 8% commission to the registered broker dealers. In addition, the
shares may be offered and sold by Our offering will continue for a maximum of
180 days from the effective date of this registration statement, unless we (i)
terminate it sooner, or (ii) extend it in our sole discretion, with the consent
of the subscribers at that time. Since we have no underwriting agreement with a
licensed broker-dealer, the success of this offering is based on the Company at
this time. We anticipate selling our common stock to investors in the United
States, Canada and in some foreign countries. Our offering will terminate with
the delivery of stock certificates by the transfer agent without legends or
restrictions.
5
<PAGE> 7
Certificates for shares of common stock sold in this offering will be
delivered to the purchasers by Signature Transfer Company as soon as the Minimum
subscription amount is raised.
DIVIDEND POLICY
To date, we have not declared or paid any dividends on our common
stock. We do not intend to declare or pay any dividends on our common stock in
the foreseeable future, but rather to retain any earnings to finance the growth
of our business. Any future determination to pay dividends will be at the
discretion of our Board of Directors and will depend on our results of
operations, financial condition, contractual and legal restrictions and other
factors it deems relevant.
CAPITALIZATION
The following table sets forth our capitalization as of April 30, 1999.
Our capitalization is presented on: (i) an actual basis; (ii) a pro forma basis
to give effect to net proceeds from the sale of the minimum number of shares
(50,000) we plan to sell in this offering; and (iii) a pro forma basis to give
effect to the net proceeds from the sale of the maximum number of shares
(1,000,000) we plan to sell in this offering.
<TABLE>
<CAPTION>
After After
Actual Minimum Maximum
April 30, 1999 Offering Offering
-------------- -------------- --------------
<S> <C> <C> <C>
Stockholders' equity
Common Stock, $0.001 par value;
50,000,000 shares authorized; 200 250 1,200
Number of shares outstanding 200,000 250,000 1,200,000
Additional Paid In Capital 2,300 48,250 921,300
Retained deficit (2,384) (2,384) (2,384)
Total Stockholders' Equity 116 46,116 920,116
Total Capitalization 116 46,116 920,116
Number of shares outstanding 200,000 250,000 1,200,000
</TABLE>
DILUTION
If you purchase the common stock, you will experience an immediate and
substantial dilution in the pro forma net tangible book value of the common
stock from the initial offering price. The pro forma net tangible book value
(deficit) of the common stock as of April 30, 1999 was $116 or $0.0006 per
share. Pro forma net tangible book value per share is equal to our total
tangible
6
<PAGE> 8
assets, less total liabilities, divided by the number of shares of common stock
outstanding. After giving effect to the sale of common stock offered by us in
this offering, and the receipt and application of the estimated net proceeds
therefrom (at an assumed initial public offering price of $1.00 per share, after
deducting the underwriting discounts and commissions, and estimated offering
expenses), our pro forma tangible book value as of April 30, 1999 would have
been approximately $46,116 or $0.18 per share, if the minimum is sold, and
$920,116 or $0.77 per share, if the maximum is sold. This represents an
immediate increase in net tangible book value per common share to our current
stockholders and an immediate and substantial dilution to new stockholders
purchasing shares in this offering of (i) $46,000 or $0.72 per share if we sell
the minimum number of shares (50,000) in this offering; and (ii) $920,000 or
$0.18 per share if we sell the maximum number of shares (1,000,000) in this
offering. The following table illustrates this per share dilution:
<TABLE>
<CAPTION>
Minimum Maximum
<S> <C> <C>
Assumed initial public offering price $1.00 $1.00
Pro forma net tangible book value as of April 30, 1999 $0.00 $0.00
Pro forma net tangible book value after this offering $0.18 $0.72
Increase attributable to new stockholders: $0.18 $0.72
Pro forma net tangible book value
as of April 30, 1999 after this offering $0.18 $0.72
Decrease to new stockholders ($0.72) ($0.18)
</TABLE>
The following table summarizes on a pro forma basis as of April 30,
1999, the differences between the number of shares of common stock purchased,
the total consideration paid and the total average price per share paid by the
existing stockholders and the new investors purchasing shares of common stock in
this offering:
<TABLE>
<CAPTION>
After After
Actual Minimum Maximum
April 30, 1999 Offering Offering
-------------- -------------- --------------
<S> <C> <C> <C>
Existing stockholders:
Total consideration paid
Consideration paid per share 0.0125
New stockholders:
Total consideration paid
Consideration paid per share 1.00
Dilution to new stockholders $0.72) (0.18)
</TABLE>
7
<PAGE> 9
SELECTED FINANCIAL DATA
The following TABLE SETS FORTH SELECTED FINANCIAL DATA OF OUR BUSINESS
FOR THE PERIODS INDICATED. The statements of operations data set forth below
with respect to the four months ended April 30, 1999 and the period ended
December 31, 1998, and the balance sheet data as of those dates, are derived
from our audited financial statements and the notes thereto appearing elsewhere
in this prospectus. The following data should be read in conjunction with our
financial statements and related notes thereto and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appearing
elsewhere in this prospectus.
<TABLE>
<CAPTION>
Balance Sheet: April 30, 1999 December 31, 1998
------------------------------------------ -----------------
<S> <C> <C>
Working Capital $ 116 $ 177
Total Assets $ 116 $ 177
Total Liabilities $ -0- $ -0-
Stockholders' Equity $ 116 $ 116
</TABLE>
<TABLE>
<CAPTION>
May 27,1998 (date of
inception) to
Statement of Operations: April 30, 1999 December 31, 1998
------------------------------------------ -----------------
<S> <C> <C>
Revenue $ -0- $ -0-
Operating Expense $ 61 $ 2,323
Operating Income (Loss) $ (61) $ (2,323)
Other Expenses $ -0- $ -0-
Net Income (Loss) $ (61) $ (2,323)
</TABLE>
DESCRIPTION OF COMMON STOCK
We have authorized capital in our Company consisting of 50,000,000
shares of Common Stock, $0.001 par value per share. As of April 30, 1999, there
were 200,000 shares of Common Stock issued and outstanding.
Every investor who purchases common stock is entitled to one vote at
meetings of the shareholders of the Company and to participate equally and
ratably in any dividends declared by us and in any property or assets that may
be distributed by us to the holders of Common Stock in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the Company.
The existing stockholders have no preemptive rights to purchase common
stock offered for sale by us, and no right to cumulative voting in the election
of our directors.
8
<PAGE> 10
LEGAL PROCEEDINGS
We are not involved in any legal proceedings at this time.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
We are a development stage service company which intends to commence
marketing operations upon raising of the minimum amount in this offering. It is
anticipated that such marketing should cause us to start buying equipment and
leasing it out. Once we have a start to this leasing of equipment, we will show
the type of lease we can make and the rate of return we can expect. As we raise
the funds in this offering, we will make leases and establish a pattern that
will show our ability to generate good leases with high rates of return.
One of the keys to our success is to buy the equipment we lease at
wholesale prices and lease it based upon the retail value. This enhances our
rate of return.
As an example of a lease we might make, a Company A may come to us and
say we want to lease a shuttle bus, it doesn't have to be new, but has to have
low miles and be in good condition. We would buy a used, but relatively new
shuttle bus say for $20,000 and lease it to Company A for $650 per month with a
10% buyout at the end of the lease. This will give us an effective yield of over
thirty percent (30%). The lease in this case is based upon us being able to buy
the vehicle at a lower price because we have cash in hand.
. After we have a portfolio of leases and after we have gone through the
seasoning of the loans i.e. showing over a six to twelve month period that they
pay timely, we should be able to go to a bank or other funding source and obtain
a line of credit to make additional leases. Assuming we are able to do this, our
profit will be the rate of return we get from leasing to businesses and the rate
we pay on our line of credit, and we will be able to grow very quickly.
YEAR 2000 ISSUE
We plan to purchase computer hardware and software with the proceeds of
this offering, and when evaluating software to purchase we will purchase
software that is year 2000 compliant.
MANAGEMENT OF THE COMPANY
The directors and officers of the Company, their ages and principal
positions are as follows:
<TABLE>
<CAPTION>
Name Age Position
- -------------------------------------------------------------------------------
<S> <C> <C>
Charles Smith 41 President; Secretary and Director
</TABLE>
9
<PAGE> 11
Background of Directors and Executive Officers:
Charles Smith. Mr. Smith formed the Company and at this time is its only officer
and director. He graduated from Boston University, Boston, Massachusetts in 1979
and since that time has been a Certified Public Accountant involved in all
phases of business including the audit of companies and tax matters. He is a
consultant to various companies ranging from an art distribution company to a
junior resource company which is developing a gold property in Sinaloa State,
Mexico. He also has been an officer of Dynacap Group, Ltd., Dallas, Texas, a
consulting and management firm, since 1992.
DIRECTOR AND EXECUTIVE COMPENSATION
Our sole officer and director has received no compensation other than
the stock received for services and has no employment contract with the Company.
DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE
Our Articles of Incorporation and our Bylaws limit the liability of
directors to the maximum extent permitted by Nevada law. We carry no director or
executive liability insurance.
PRINCIPAL SHAREHOLDERS
The following table lists the persons who, at the date hereof, own of
record or beneficially, directly or indirectly, more than 5% of the outstanding
Common Stock, and all officers and directors of the Company:
<TABLE>
<CAPTION>
Name of Shareholder Shares Owned Percent
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles Smith 200,000 100.00%
After offering: Minimum 200,000 80.00%
Maximum 200,000 16.67%
</TABLE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
There are no special federal tax implications associated with this
business enterprise.
LEGAL MATTERS
Certain matters relating to the legality of the Common Stock offered
hereby will be passed upon for the Company by French & Hamilton, Attorneys at
Law, 14651 Dallas Parkway, Suite 434, Dallas, Texas 75248.
10
<PAGE> 12
EXPERTS
The financial statements as of April 30, 1999 and December 31, 1998,
and for the four months ended April 30, 1999 and for the fiscal period from
inception (May 27, 1998) to December 31, 1998, of the Company included in this
Prospectus have been audited by Mark L. Cleland, independent certified public
accountant, as set forth in his report. The financial statements have been
included in reliance upon the authority of him as an expert in accounting and
auditing.
TRANSFER AGENT
We will serve as out own transfer agent and registrar for the common
stock until such time as our registration on Form SB-1 is effective and then we
intend to retain Signature Transfer Company, 14675 Midway Road, Suite 221,
Dallas, Texas 75244.
11
<PAGE> 13
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
April 30, 1999 and
May 27, 1998 (date of inception) to December 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditor's Report F-1
Balance Sheets F-2
Statements of Operations and Accumulated Deficit
Accumulated During the Development Stage F-3
Statements of Stockholders' Equity and Accumulated Deficit F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-7-8
</TABLE>
<PAGE> 14
[MARK L. CLELAND LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Asset Servicing Corporation
Rockwall, Texas
I have audited the accompanying balance sheets of Asset Servicing Corporation (a
Nevada corporation in the development stage) as of April 30, 1999 and December
31, 1998 and the related statements of operations and accumulated deficit
accumulated during the development stage, stockholders' equity and accumulated
deficit, and cash flows for the four month period ending April 30, 1999, and the
period May 27, 1998 (date of inception) to December 31, 1998. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, based on my audit, the financial statements referred to above
present fairly, in all material respects, the financial position of Asset
Servicing Corporation as of April 30,1999 and December 31, 1998, and the results
of their operations and their cash flows for the four month period ended April
30, 1999, and the period May 27, 1998 (date of inception) to December 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 described in Note D to the
financial statements, the Company has incurred net losses since its inception
which raises substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
/s/ MARK L. CLELAND
Dallas, Texas
May 28, 1999
F-1
<PAGE> 15
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
April 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
ASSETS
April 30, 1999 Dec 31, 1998
-------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 116 $ 177
-------------- --------------
TOTAL ASSETS $ 116 $ 177
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $ 0 $ 0
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value 200 200
Additional paid-in-capital 2,300 2,300
Deficit accumulated during the development stage (2,384) (2,323)
-------------- --------------
Total Stockholders' Equity 116 177
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 116 $ 177
============== ==============
</TABLE>
See accompanying notes.
F-2
<PAGE> 16
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS AND ACCUMULATED
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE
For The Four Month Period Ended April 30, 1999, The Period from May 27, 1998
(date of inception) to December 31, 1998, and The Period from May 27
(date of inception) to April 30, 1999
<TABLE>
<CAPTION>
Accumulated
May 27, 1998 Since
Four Months Through Inception
APRIL 30, 1999 Dec 31, 1998 May 27, 1998
-------------- -------------- --------------
<S> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0
OPERATING EXPENSE:
Labor 0 2,000 2,000
Licenses and fees 0 290 290
Office expense 61 33 94
-------------- -------------- --------------
Total Operating Expense 61 2,323 2,384
-------------- -------------- --------------
NET LOSS $ (61) $ (2,323) $ (2,384)
============== ============== ==============
Weighted average shares outstanding 200,000 200,000 200,000
============== ============== ==============
LOSS PER SHARE: $ (0.00) $ (0.01) $ (0.01)
============== ============== ==============
</TABLE>
See accompanying notes.
F-3
<PAGE> 17
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from May 27, 1998 (date of inception) to December 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
during
Common Paid In Development
Shares Amount Capital Stage Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance,
May 27, 1998
(date of inception) 0 $ 0 $ 0 $ 0 $ 0
Shares issued on
May 29, 1998 for:
Services $0.0125 per share 160,000 160 1,840 2,000
Cash $0.0125 per share 40,000 40 460 500
Net Loss (2,323) (2,323)
--------- --------- --------- --------- ---------
Balance
December 31, 1998 200,000 $ 200 $ 2,300 $ (2,323) $ 177
========= ========= ========= ========= =========
NET LOSS (61) (61)
--------- --------- --------- --------- ---------
BALANCE
APRIL 30, 1999 200,000 $ 200 $ 2,300 $ (2,384) $ 116
========= ========= ========= ========= =========
</TABLE>
See accompanying notes.
F-4
<PAGE> 18
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
For The Four Month Period Ended April 30, 1999, The Period from May 27, 1998
(date of inception) to December 31, 1998, and The Period from May 27
(date of inception) to April 30, 1999
<TABLE>
<CAPTION>
Accumulated
May 27, 1998 Since
FOUR MONTHS Through Inception
APRIL 30, 1999 Dec 31, 1998 May 27, 1998
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (61) $ (2,323) $ (2,384)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Stock issued for services -- 2,000 2,000
-------------- -------------- --------------
NET CASH (USED) BY OPERATING ACTIVITIES: (61) (323) (384)
CASH FLOWS FROM INVESTING ACTIVITIES: 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 0 500 500
-------------- -------------- --------------
NET (DECREASE) INCREASE IN CASH: (61) 177 116
CASH AT BEGINNING OF PERIOD 177 0 0
-------------- -------------- --------------
CASH AT END OF PERIOD $ 116 $ 177 $ 116
============== ============== ==============
</TABLE>
See accompanying notes.
F-5
<PAGE> 19
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
For The Four Month Period Ended April 30, 1999, The Period from May 27, 1998
(date of inception) to December 31, 1998, and The Period from May 27
(date of inception) to April 30, 1999
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW AND NON-CASH INVESTING ACTIVITIES
<TABLE>
<CAPTION>
Accumulated
May 27, 1998 Since
FOUR MONTHS Through Inception
APRIL 30, 1999 Dec 31, 1998 May 27, 1998
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOW INFORMATION:
Interest Paid $ 0 $ 0 $ 0
Income Taxes Paid 0 0 0
NON-CASH FINANCING ACTIVITIES:
Common Stock Issued For:
Services $ 0 $ 2,000 $ 2,000
</TABLE>
See accompanying notes.
F-6
<PAGE> 20
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 and December 31, 1998
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
History:
The Company was organized May 27, 1998 under the name of Asset Servicing
Corporation to engage in any lawful act or activity under the general
corporation law of the state of Nevada. The Company's business plan outlines its
plan of operations, which is to lease vehicles and equipment to businesses with
a class B or class C credit rating. The Company is in the development stage and
has had no income.
Basis of Accounting:
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with generally accepted accounting principles.
Sales are recorded as income in the period in which they are earned and expenses
are recognized in the period in which the related liability is incurred.
Revenue Recognition:
Revenue is recognized when service is performed and amounts invoiced.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Loss per Common Share:
Loss applicable to common share is based on the weighted average number of
shares of common stock outstanding during the year.
Accounting Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Income Tax:
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax (AMT) system.
The Company uses an asset and liability approach for the accounting and
financial reporting of income tax. Under this method, deferred tax assets and
liabilities are determined based on temporary differences between the financial
carrying amounts and the tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the temporary differences are expected to
reverse.
F-7
<PAGE> 21
ASSET SERVICING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 and December 31, 1998
NOTE B - STOCKHOLDERS' EQUITY:
Common Stock:
The Company is authorized to issue 50,000,000 common shares of stock at a par
value of $0.001 per share. These shares have full voting rights. At April 30,
1999 and December 31, 1998, there were 200,000 shares outstanding.
The Company has not paid a dividend to its shareholders.
NOTE C - INCOME TAXES:
The Company has net tax operating loss carryforward of approximately $2,384 that
is available to offset its future income tax liability. The net operating loss
carryforward expire as follows:
<TABLE>
<S> <C>
Year 2013 $2,323
Year 2119 61
</TABLE>
No deferred tax asset has been recognized for the operating loss, as any
valuation allowance would reduce the benefit to zero.
NOTE D - GOING CONCERN:
The Company has minimal capital resources available to meet obligations expected
to be incurred given that it is a start up enterprise. Accordingly, the
Company's continued existence is dependent upon the successful operation of the
Company's business plan of operations, selling common stock in the Company, or
obtaining financing. Unless these conditions among others are met, the Company
may be unable to continue as a going concern.
F-8
<PAGE> 22
No dealer, salesman or any other person has been authorized to give any
quotation or to make any representations in connection with the offering
described herein, other than those contained in this Prospectus. If given or
made, such other information or representation'; must not he relied upon as
having been authorized by the Company or by any Underwriter. This Prospectus
does not constitute an offer to sell, or a solicitation of an otter to buy any
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such an offer or solicitation in such jurisdiction.
The delivery of this Prospectus at any time does not imply that the
information herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Prospectus Summary 3
Corporate Information 3
Use of Proceeds 4
Summary Financial Data 4
Risk Factors 4
Plan of Distribution 5
Dividend Policy 6
Capitalization 6
Dilution 6
Selected Financial Data 8
Description of Common Stock 8
Legal Proceedings 9
Management's Discussion and Analysis of Financial Condition 9
Year 2000 Issue 9
Management of the Company 9
Director and Executive Compensation 10
Director's and Officers' Indemnification and Insurance 10
Principal Shareholders 10
Certain Federal Income Tax Considerations 10
Legal Matters 10
Experts 11
Transfer Agent 11
Financial Statements F-1
</TABLE>
Until termination of this offering, all dealers effecting transactions
in the registered securities, whether or not participating in this distribution,
may be required to deliver a prospectus.
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Indemnification of Directors and Officers
If applicable, the Broker-Dealer Selling Agreement will provide for
indemnification of the Company, and its officers, directors and employees
against certain liabilities. **If applicable.
Item 14. Other Expenses of Issuance and Distribution
All expenses. including all allocated general administrative and overhead
expenses. related to the offering or the organization of the Company will be
borne by the Company. The following table sets forth a reasonable itemized
statement of all anticipated out-of-pocket and overhead expenses (subject to
future contingencies) to be incurred in connection with the distribution of the
securities being registered, reflecting the minimum and maximum subscription
amounts.
<TABLE>
<CAPTION>
Minimum Maximum
---------- ----------
<S> <C> <C>
SEC Registration Fee $ 278 $ 278
Printing and Engraving Expenses 5,000 21,000
Legal Fees and Expenses 5,000 21,000
Escrow Fees -0- -0-
Marketing and Due Diligence Expenses 4,000 80,000
Accounting Fees and Expenses 1,000 1,000
Blue Sky Fees and Expenses 3,850 3,850
Miscellaneous -0- -0-
--------- ----------
TOTAL $ 14,128 $ 109,128
</TABLE>
Item 15. Recent Sales of Unregistered Securities
The Company sold to its founder 200,000 shares of common stock which was
issued to him for $2,500, composed of $1,000 cash and $1,500 of his services.
Item 16. Exhibits
The following Exhibits are filed as part of the Registration
Statement:
Exhibit No. Identification of Exhibit
3.1 - Articles of Incorporation
3.2 - By Laws
4.2* - Specimen Stock Certificate
10.4* - Subscription Escrow Agreement
10.5** - Form of Broker-Dealer Selling Agreement
10.6* - Form of Subscription Agreement
II-1
<PAGE> 24
23.1* - Consent of French & Hamilton, Attorneys at Law
23 2 - Consent of Mark L. Cleland, Certified Public Accountant
* To be filed by amendment by Registrant
** To be filed by amendment by Registrant if broker dealers are engaged to sell
Item 17. Undertakings
The Registrant hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act; and
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
II-2
<PAGE> 25
SIGNATURES
Pursuant to the requirements of die Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form SB-1 and authorizes this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Rockwall, State of Texas, on the 9th day of June, 1999.
ASSET SERVICING CORPORATION
By:/s/ CHARLES SMITH
------------------------------
Charles Smith, President
Pursuant to the requirements of die Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity and on
the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------- ---------------------------- ---------------
<S> <C> <C>
President, Secretary,
/s/ CHARLES SMITH Treasurer; Director June 9, 1999
- ----------------------------
</TABLE>
II-3
<PAGE> 26
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 - Articles of Incorporation
3.2 - By Laws
4.2* - Specimen Stock Certificate
10.4* - Subscription Escrow Agreement
10.5** - Form of Broker-Dealer Selling Agreement
10.6* - Form of Subscription Agreement
23.1* - Consent of French & Hamilton, Attorneys at Law
23 2 - Consent of Mark L. Cleland, Certified Public Accountant
* To be filed by amendment by Registrant
** To be filed by amendment by Registrant if broker dealers are engaged to sell
</TABLE>
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
ASSET SERVICING CORPORATION
I, the undersigned natural person of the age eighteen (18) years or
more, acting as incorporator of a corporation under the General Corporation Law
of the State of Nevada, do hereby adopt the following Articles of Incorporation:
ARTICLE I
The name of this corporation is Asset Servicing Corporation.
ARTICLE II
Its registered office in the State of Nevada is to be located at 2533 North
Carson Street, Carson City, Nevada 89706. The registered agent in charge thereof
is Laughlin Associates at 2533 North Carson Street, Carson City, Nevada 89706.
ARTICLE III
The nature of the business and, the objects and purposes proposed to be
transacted, promoted and carried on, are to do any or all the things herein
mentioned as fully and to the same extent as natural persons might or could do
and in any part of the world, viz:
"The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the
General Corporation Law of the State of Nevada."
ARTICLE IV
The amount of the total authorized capital stock of this corporation is Fifty
Million (50,000,000) shares with a par value of $0.001 each, amounting to Fifty
Thousand Dollars ($50,000.00).
ARTICLE V
The name and address of the incorporator signing the articles of incorporation
is as follows:
Charles Smith
709 B West Rusk, Suite 580
Rockwall, Texas 75087
<PAGE> 2
ARTICLE VI
The governing board of this corporation shall be known as directors, and the
number of directors may from time to time be increased or decreased in such
manner as shall be provided in the bylaws of this corporation, provided that the
number of directors shall not be reduced less than one or be more than ten.
The name and address of the first director, which is one in number, is as
follows:
Charles Smith
709 B W. Rusk, Suite 580
Rockwall, Texas 75087
ARTICLE VII
Meetings of stockholders may be held outside of the State of Nevada at such
place or places as may be designated from time to time by the board of directors
or in the bylaws of the corporation.
ARTICLE VII
This corporation reserves the right to amend, alter, change or repeal any
provision contained in the articles of incorporation, in the manner now or
hereafter prescribed, and all rights conferred upon stockholders herein are
granted subject to this reservation.
ARTICLE VII Elimination or Limitation of Liability of Directors
No director shall be liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director: provided, however, that
nothing contained herein shall eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for any transaction
from which the director derived an improper personal benefit, or (iv) for any
act or omission occurring prior to their directorship.
ARTICLE VIII Indemnification of Directors and Officers
The corporation shall indemnify the directors and officers of the corporation,
and of any subsidiary of the corporation, to the full extent provided by the
laws of the State of Nevada. Expenses incurred by a director or officer in
defending a civil or criminal action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit
<PAGE> 3
or proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation. In addition, the corporation may
advance expenses of such nature on any other terms and/or in any other manner
authorized by law.
ARTICLE IX Amendment of Bylaws
In furtherance and not in limitation of the powers conferred by statute, the
Board of Directors is authorized, subject to the bylaws, if any, adopted by the
shareholders, to adopt, alter or amend the bylaws of the corporation.
I, THE UNDERSIGNED, being the sole incorporator herein before named for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Nevada, do make, file and record these articles of incorporation,
hereby declaring and certifying that the facts stated herein are true, and
accordingly have hereunto set my hand.
Dated this 12th day of May 1998.
/s/ CHARLES SMITH
------------------------------------
Charles Smith, Incorporator
State of Texas )
)
County of Dallas )
Before me, a notary public, on this day personally appeared Charles
Smith, known to me to be the person whose name is subscribed to the foregoing
document and, being by me first duly sworn, declared that the statements therein
contained are true and correct.
Given under my hand and official seal of office on the 12th day of May,
1998.
/s/ JUDY BRACKIN
-------------------------------
Notary Public
in and for the State of Texas
[SEAL]
My commission expires: 12-21-99
--------
<PAGE> 1
EXHIBIT 3.2
ASSET SERVICING CORPORATION
BY-LAWS
ARTICLE I
STOCKHOLDERS
1. ANNUAL MEETING. An annual meeting of the stockholders, for the election
of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the
meeting, shall be held at such place on such date, and at such time as
the Board of Directors shall each year fix, which date shall be within
thirteen months subsequent to the later of the date of incorporation or
the last annual meeting of stockholders.
2. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose
or purposes prescribed in the notice of the meeting, may be called by
the Board of Directors for the chief executive officer and shall be
held at such place, on such date, and at such time as they or he shall
fix.
3. NOTICE OF MEETINGS. Written notice of the place, date and time of all
meetings of the stockholders shall be given, not less than ten days nor
more than sixty days before date on which the meeting shall be held, to
each stockholder entitled to vote at such meeting, except as otherwise
provided herein or required by the Business Corporation Act of the
State of Nevada or the Articles of Corporation.
When a meeting is adjourned to another place, date or time written
notice need not be given of the adjourned meeting if the place, date
and time thereof are announce at the meeting at which the adjournment
is taken; provided, however, that if the date of any adjourned meeting
is more that thirty days after the date for which the meeting as
originally noticed, or if a new record date is fixed for the adjourned
meeting, written notice of the place, date and time of the adjourned
meeting shall be given in conformity herewith. At any adjourned meeting
any, business may be transacted which might have been transacted at the
original meeting.
4. QUORUM. At any meeting of the stockholders, the holders of a majority
of all of the shares of the stock entitled to vote at the meeting, in
person or by proxy, shall constitute a quorum for purposes, unless or
except to the extent that the presence of a larger number may be
required by law.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shared of the stock
entitled to vote who are present, in person or by proxy, may adjourn
the meeting to another place, date or time.
If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held
with those present constituting a quorum, than except as otherwise
requires by law, those present at such adjourned meeting shall
constitute a quorum, and all matters shall be determined by a majority
of the votes cast as at such meeting.
5. ORGANIZATION. Such person as the Board of Directors may have designated
or in the absence
<PAGE> 2
of such a person, the highest ranking officer of the Corporation who is
present shall call to order any meeting of the stockholders and act as
chairman of the meeting. In the absence of the Secretary of the
Corporation, the secretary of the meeting shall be such person as the
chairman appoints.
6. CONDUCT OF BUSINESS. The chairman of any meeting of stockholders shall
determine the order of business and the procedure at the meeting,
including such regulation of the manner of voting and the conduct of
discussion as seem to him in order.
7. PROXIES AND VOTING. At any meeting of the stockholders, every
stockholder entitled to vote any vote in person or by proxy authorized
by an instrument in writing filed in accordance with the procedure
established for the meeting.
Each stockholder shall have one vote for every share of stock entitled
to vote which is registered in his name on the record date for the
meeting except as otherwise provided herein or required by law.
All voting, except on the election of director and where otherwise
required by law, shall be held by a voice vote; provided, however, that
upon demand thereof by a stockholder entitled to vote or his proxy, a
stock vote shall be taken. Every stock vote shall be taken by ballots,
each of which shall state the name of the stockholder or proxy voting
and such other information as may be required under the procedure
established for the meeting. Every vote taken by ballots shall be
counted by an inspector appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be
determined by a majority.
8. STOCK LIST. A complete list of stockholders entitled to vote at any
meeting of stockholders, arranged in alphabetical order for each class
of stock and showing the address of each such stockholder and the
number of shares registered in his name, shall be open to the
examination of any such stockholder, for any purpose germane to the
meeting, during ordinary business hours for a period of at least ten
(10) days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice
of the meeting, or if not specified, at the place where the meeting is
to be held.
The stock list shall be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the
identity of the stockholders entitled to vote at the meeting and the
number of shares held by each of them.
ARTICLE II
BOARD OF DIRECTORS
1. NUMBER AND TERM OF OFFICE. The number of directors who shall constitute
the whole board shall not be less than one nor more than twenty. Each
director shall be elected for a term of one year and until his
successor is elected and qualified, except as otherwise provided herein
or required by law. Any decrease in the authorized number of directors
shall not become effective until the expiration of the term of the
directors then in office unless, at the time of such decrease, there
shall be vacancies on the board which are being eliminated by the
decrease.
<PAGE> 3
2. VACANCIES. If the office of any director becomes vacant by reason of
death, resignation, disqualification, removal or other cause, a
majority of the directors remaining in office, although less than a
quorum, may elect a successor for the unexpired term and until his
successor is elected and qualified.
3. REGULAR MEETINGS. Regular meetings of the Board of Director shall be
held at such place or places, on such date or dates, and at such time
or times as shall have been established by the Board of Directors and
publicized among all directors. A notice of each regular meeting shall
not be required.
4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by one-third of the directors then in office if by the chief
executive officer and shall be held at such place, on such date and at
such time as they or he shall fix. Notice of the place, date and time
of each such special meeting shall be given to each director by whom it
is not waived by mailing written notice no;t less than three days
before the meeting of by telegraphing the same not less than 18 hours
before the meeting. Unless otherwise indicated in the notice thereof,
any and all business may be transferred at a special meeting.
5. QUORUM. At any of meeting of the Board of Directors, one-third of the
total number of the whole board, but never less than two, shall
constitute a quorum for all purposes. If a quorum shall fail to attend
any meeting, a majority of those present may adjourn the meeting to
another place, date, or time without further notice or waiver thereof.
6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the Board
of Directors, or any committee thereof may participate in a meeting of
such board or committee by means of conference telephone or similar
communications equipment that enables all persons participating in the
meeting to hear each other. Such participation shall constitute
presence in person at such meeting.
7. CONDUCT OF BUSINESS. At any meeting of the Board of Directors, business
shall be transacted in such order and manner as the board may from time
to time determine, and all matters shall be determine by the vote of a
majority of the director present, except as otherwise provided herein
or required by law. Action may be taken by the Board of Directors
without a meeting if all members thereof consent thereto in writing and
the writing or writings are filed with the minutes of the proceedings
of the Board of Directors.
8. POWERS. The Board of Directors may, except as otherwise required by
law, exercise all such powers and so all such things as may be
exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power.
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or other acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form
as it may determine of written obligations of every kind,
negotiable or non-negotiable, secured, or unsecured, and to do
all things necessary in connection therewith;
<PAGE> 4
(4) To remove any officer of the Corporation with or without
cause, and from time to time to devolve the powers and duties
of any officer upon any other person for the being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers and agents;
(6) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers and
agents of the Corporation and its subsidiaries as it may
determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers and agents of the
Corporation and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, nor inconsistent with
these by-laws, for the management of the Corporation's
business and affairs.
ARTICLE III
COMMITTEES
1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors, by a vote
of a majority of the whole board, may from time to time designate
committees of the board, with such lawfully delegatable powers and
duties as it thereby confers, to serve at the pleasure of the board and
shall, for those committees and any others provided for herein, elect a
director or directors to serve as the member or members, designating,
if it desires, other directors as alternative members who may replace
any absent or disqualified member at any meeting of the committee. Any
committee so designated may exercise the power and authority of the
Board of Directors to declare a dividend or to authorize the issuance
of stock of the resolution which designated the committee or a
supplemental resolution of the Board of Directors shall so provide. In
the absence or disqualification of any member of any of any committee
and any alternate member in his place, the member or members of the
committee present at the meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may by unanimous vote
appoint another member of the Board of directors to act at the meeting
in the place of the absent or disqualified member.
2. CONDUCT OF BUSINESS. Each Committee may determine the procedural rules
for meeting and conducting its business and shall act in accordance
therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to manners of all meetings;
one-third of the members shall constitute a quorum unless the committee
shall consist of one or two members, in which event one member shall
constitute a quorum; and all matters shall be determined by a majority
vote of the members present. Action may be taken by any committee
without a meeting if all members thereof consent thereto in writing,
and the writing or writings are filed with the minutes of the
proceedings of such committee.
ARTICLE IV
OFFICERS
1. GENERALLY. The officers of the Corporation shall consist of a
president, one or more vice-presidents, a secretary, a treasurer and
such other subordinate officers as may from time to time be appointed
by the Board of Directors. Officers shall be elected by the Board of
Directors, which
<PAGE> 5
shall consider that subject at its first meeting after every annual
meeting of stockholders. Each officer shall hold his office until his
successor is elected and qualified or until his earlier resignation or
removal. The President shall be a member of the Board of Directors. Any
number of offices may be held by the same person.
2. PRESIDENT. The president shall be the chief executive officer of the
Corporation. Subject to the provisions of these by-laws and to the
direction of the Board of directors, he shall have the responsibility
for the general management and control of the affairs and business of
the Corporation and shall perform all the duties and have all the
powers which are delegated to him by the Board of Directors. He shall
have power to sign all stock certificates, contracts and other
instruments of the Corporation which are authorized. He shall have
general supervision and direction of all of the other officers and
agents of the Corporation.
3. VICE PRESIDENTS. Each Vice-President shall perform such duties as the
Board of Directors shall prescribe. In the absence or disabilities of
the President, the Vice-President who has served in such capacity for
the longest time shall perform the duties and exercise the powers of
the President.
4. TREASURER. The Treasurer shall have the custody of all monies and
securities of the Corporation and shall keep regular books of account.
He shall make such disbursements of the funds of the Corporation as are
proper and shall render from time to time an account of all such
transactions and of the financial condition of the Corporation.
5. SECRETARY. The Secretary shall issue all authorized notices for, and
shall deep minutes of all meetings of the stockholders and the Board of
Directors. He shall have charge of the corporate books.
6. DELEGATION OF AUTHORITY. The Board of Directors may from time to time
delegate the powers or duties of any officer to any other officer or
agents, notwithstanding any provision hereof.
7. REMOVAL. Any officer of the Corporation may be removed at any time with
or without cause by the Board of Directors.
8. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS. Unless
otherwise directed by the Board of directors, the President shall have
power to vote and otherwise act on behalf of the Corporation, in person
or by proxy, at any meeting of the stockholders of or with respect to
any action of stockholders of any other corporation in which this
Corporation may hold securities and otherwise to exercise any and all
rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
ARTICLE V
RIGHT OF INDEMNIFICATION OF DIRECTOR, OFFICERS AND OTHERS
1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is
threatened to be a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she or a person for
whom he or she is the legal representative is or was a director or
officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director or officer, employee or
agent
<PAGE> 6
of another corporation, or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Nevada Business Corporation Act,
as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent such amendment permits the
Corporation to provide broader indemnification right than said law
permitted the Corporation to provide broader indemnification fight than
said law permitted the Corporation to provide prior to such amendment)
against all expenses, liability and loss (including attorney's fees,
judgments, fines, FRISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith. Such right shall be a contract right
and shall include the right to be paid by the Corporation for expenses
incurred in defending any such proceeding in advance of its final
disposition; provided, however, that the payment of such expenses
incurred by a director or officer of the Corporation in his or her
capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director of
officer, including, without limitation, service to an employee benefit
plan) in advance of the final disposition of such proceeding, shall be
made only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if
it should be determined ultimately that such director or offices is not
entitled to be indemnified under this section or otherwise.
2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1 is not paid
in full by the Corporation within 90 days after a written claim has
been received by the Corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim, and if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the
Texas Business Corporation Act for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or it
stockholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of
conduct set forth in the Texas Business Corporation Act, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had
not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that claimant had not met the applicable
standard of conduct.
3. NON-EXCLUSIVITY OF RIGHTS. The rights conferred by Sections 1 and 2
shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of the stockholders or
disinterested directors or otherwise.
4. INSURANCE. The Corporation may maintain insurance, at its expense, to
protect itself and any such director, officer, employee or agent of the
Corporation or any other corporation, partnership, joint venture, trust
or other enterprise against any such expense, liability oil loss,
whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Texas Business
Corporation Act.
<PAGE> 7
ARTICLE VI
STOCK
1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to a
certificate signed by, or in the name if the Corporation by, the
President or a vice-president, and by the Secretary or and assistant
secretary, or the Treasurer or an assistant treasurer, certifying the
number of shares owned by him. Any of or all the signatures on the
certificate may be facsimile.
2. TRANSFERS OF STOCK. Transfers of stock shall be made only upon the
transfer books of the Corporation kept at an office of the Corporation
or by transfer agents designated to transfer shares of the stock of the
corporation. Except where a certificate is issued in accordance with
Section 4 of Article VI of these by-laws, an outstanding certificate
for the number of shares involved shall be surrendered for cancellation
before a new certificate is issued therefor.
3. RECORD DATE. The Board of Directors may fix a record date, which shall
not be more than 60 nor less than 10 days before the date of any
meeting of stockholders, nor more than 60 days prior to the time for
the other action hereinafter described, as of which there shall be
determined the stockholders who are entitled: to notice of or to vote
at any meeting of stockholders or any adjournment thereof; to express
consent to corporate action in writing without a meeting; to receive
payment of any dividend or other distribution or allotment of any
rights; or the exercise any rights with respect to any change,
conversion or exchange of stock or with respect to any other lawful
action.
4. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event of the loss, theft
or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of directors may
establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
5. REGULATIONS. The issue, transfer, conversion and registration of
certificates of stock shall be governed by such other regulations as
the Board of Directors may establish.
6. CAPITAL STOCK - AUTHORIZATION AND ISSUANCE. The total number of shares
of all classes of stock which the Corporation shall have the authority
to issue is FIFTY MILLION (50,000,000) shares of which all FIFTY
MILLION (50,000,000) shares, designated as Common Stock, shall have a
par value of One Millicent ($0.001) per share.
A statement of the preferences, limitations and relative rights with
respect to the shares of Common Stock is as follows:
B. COMMON STOCK:
Subject to limitations set forth herein, the holders of the
shares of the Common Stock shall be entitled to receive
dividends when and as declared by the Board of Directors out
of any funds legally available therefor. In the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment in full of the
amounts which the holders of the shares of the Series
Preferred Stock are entitled to receive in such event, the
remaining assets of the Corporation shall be distributed
ratably
<PAGE> 8
to the holders of the shares of the Common Stock. Each holder
of record of Common Stock shall be entitled to one vote for
each share held.
1. CUMULATIVE VOTING RESTRICTION. The share holders of the
Corporation shall not have cumulative voting rights in the
election of directors.
2. PREEMPTIVE RIGHTS RESTRICTION. The Stockholders of the
Corporation shall not have any preemptive rights. No holder of
any of the shares of any class of stock of this Corporation
shall be entitled to the right to subscribe for, purchase, or
otherwise acquire any shares of any class of the Stock of this
Corporation which the Corporation proposes to issue or any
rights or options which the Corporation proposes to grant for
the purchase of shares of any class of the Corporation or for
the purchase of any shares, bonds, securities, or obligations
of the Corporation which are convertible into or exchangeable
for, or which carry any rights, to subscribe for, purchase, or
otherwise acquire shares of any class of the Corporation; and
any and all of such shares, bonds, securities, or obligations
of the Corporation, whether now or hereafter authorized or
created, may be issued, or may be reissued or transferred if
the same have been re-acquired and have treasury status, and
any and all of such rights and options may be granted by the
Board of Directors to such persons, firms, corporations, and
associations, and for such lawful consideration, and on such
terms, as the Board of Directors in its discretion may
determine, without first offering the same, or any thereof, to
any said holder.
7. CAPITAL DISTRIBUTIONS TO STOCKHOLDERS.
(a) The Board of Directors may from time to time
distribute to the stockholders in partial
liquidation, out of the stated capital surplus of the
Corporation, a portion of its assets, in cash or
property, subject to the limitations contained in the
statutes of Texas.
(b) Whenever the Corporation shall be engaged in the
business of exploiting natural resources, dividends
may be declared and paid in cash and/or kind out of
the depletion reserves at the discretion of the Board
of Directors and in conformity with the statutes of
Texas.
ARTICLE VII
NOTICES
1. NOTICES. Whenever notice is required to be given to any stockholder,
director, officer, employee or agent, such requirement shall not be
construed to mean personal notice. Such notice may in every instance be
effectively given by depositing a writing in a post office or letter
box, in a postpaid, sealed wrapper, or by dispatching a prepaid
telegram, addressed to such stockholder, director, officer, employee or
agent at his or her address as the same appears on the books of the
Corporation. The time when such notice is dispatched shall be the time
of the giving of the notice.
2. WAIVERS. A written waiver of any notice, signed by a stockholder
director, officer, employee or agent, whether before or after the time
of the event for which notice is to be given, shall be deemed
equivalent to the notice required to be given to such stockholder,
director, officer, employee or agent. Neither the business nor the
purpose of any meeting need be specified in such a waiver.
<PAGE> 9
ARTICLE VIII
MISCELLANEOUS
1. FACSIMILE SIGNATURE. In addition to the provisions for the use of
facsimile signatures elsewhere specifically authorized in these
by-laws, facsimile signatures of any director or officer of the
Corporation may be used whenever and as authorized by the Board of
Directors or a committee thereof.
2. CORPORATE SEAL. The Board of Directors may provide a suitable seal,
containing the name of the Corporation, which seal shall be in charge
of the secretary. If and when so directed by the Board of Directors or
a committee thereof, a duplicate of the seal may be kept and used by
the treasurer or by the assistant secretary of assistant treasurer.
3. RELIANCE UPON BOOKS, REPORTS, AND RECORDS. Each director, each member
of any committee designated by the Board of Directors, and each officer
of the Corporation shall, in performance of his duties, be fully
protected in relying in good faith upon the books of account or records
of the corporation, including reports made to Corporation by any of its
officers, by an independent certified public accountant, or by an
appraiser selected with reasonable care.
4. FISCAL YEAR. The fiscal year of the Corporation shall be as fixed by
the Board of Directors.
5. TIME PERIODS. In applying any provision of these by-laws which require
that an act be done during a period of specified number of days prior
to an event, calendar days shall be used of the doing of the act shall
be excluded, and the day of the event shall be included.
6. BANK ACCOUNT AND LOAN AUTHORIZATION. Resolutions required by the banks
and/or other depository and lending institutions which refer to Board
of Directors resolutions may be signed by two officers of the
Corporation one of which shall be the President or Vice-President or
assistant Vice-President and the other endorsement shall be the
Secretary-Treasurer, Secretary or Assistant Secretary. This section
shall confirm the Board of Directors Agreement to the signing if such
resolutions which ar legally required by such bank and/or deposit or
loan institution. A copy of such resolution shall be immediately filled
in the records in and the minute books of the corporation.
ARTICLE IX
AMENDMENTS
These by-laws may be amended or repealed by the Board of Directors at any
meeting or by stockholders.
Certificate: The undersigned, being the duly elected and acting Secretary of
Asset Servicing Corporation, a Nevada corporation, hereby certifies the
foregoing By-laws of such corporation duly adopted by its Board of Directors.
Asset Servicing Corporation
/s/ CHARLES SMITH
--------------------------------------
Secretary
<PAGE> 1
EXHIBIT 23.2
[MARK L. CLELAND LETTERHEAD]
To the Board of Directors and Stockholders
of Asset Servicing Corporation
I consent to incorporation by reference in the registration statement on Form
SB-1 of Asset Servicing Corporation (a Nevada corporation in the development
stage) of my report dated May 28, 1999, relating to the balance sheets of Asset
Servicing Corporation as of April 30, 1999 and December 31, 1998 and the related
statements of operations and accumulated deficit accumulated during the
development stage, stockholders' equity and accumulated deficit, and cash flows
for the four month period ending April 30, 1999, and the period May 27, 1998
(date of inception) to December 31, 1998.
/s/ MARK L. CLELAND
Dallas, Texas
May 28, 1999
