As filed with the Securities and Exchange Commission on October 14, 1999
File No. 333-80429
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ASSET SERVICING CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 522200 75-2823489
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(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
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(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
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(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
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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
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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
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Common Stock,
$0.001 par value
Minimum 50,000 $1.00 $ 50,000 $278
Maximum 1,000,000 $1.00 $1,000,000 $278
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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.
Initial Public Offering
Prospectus
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Asset Servicing Corporation
Minimum of 50,000 shares, and a
Maximum of 1,000,000 shares
$1.00 per share
Asset Servicing Corporation
The Offering:
Per Share Minimum Maximum
Public Price . . . $1.00 $ 50,000 $1,000,000
Underwriting
discounts . . 0.06 3,000 60,000
Proceeds to
Issuer $0.94 $ 47,000 $ 940,000
Underwriting discounts/commissions are only payable if registered broker-dealers
participate in the offering. Charles Smith is the sole officer and director and
he is offering the securities to investors. The funds will be held in escrow by
an attorney until the minimum amount is sold and the offering will end 180 days
after the effective date of this registration statement.
There is currently no market for our securities.
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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 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------
This Prospectus is dated October 14, 1999
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PROSPECTUS SUMMARY
OUR COMPANY
We were incorporated in Nevada on May 27, 1998. 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 $500 cash and $2,000
of his services.
We are engaged in the leasing of equipment and vehicles to businesses.
We plan to focus on businesses who are financially sound but might have a
difficult time getting financing at a bank or other traditional sources. We will
lease to these type of businesses since we will be able to charge a higher lease
rate than to businesses with unblemished credit histories. We will concentrate
on equipment and vehicles that are an integral part of the business which will
help further to secure our financial position and secure our payment stream.
THE OFFERING
Minimum Maximum
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Common stock offered 50,000 1,000,000
Total shares outstanding after this offering 250,000 1,200,000
USE OF PROCEEDS:
Most of the money you invest will represent proceeds to the company. We will use
the proceeds from this offering to:
o pay expenses of this offering
o purchase equipment or vehicles to lease out, and for
o marketing and general working capital
In order to ensure we use our capital efficiently, we will not purchase
equipment without a lease contract in place.
DILUTION: You will suffer substantial dilution if you invest in this offering.
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After After
Actual Minimum Maximum
Sept. 30, 1999 Offering Offering
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* Net tangible book value per share
before/after this offering (0.02) ( 0.11) ( 0.67)
* Per share dilution to new stockholders ($0.89) ( 0.33)
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If you invest in this offering:
o assuming the minimum is sold, you will suffer a dilution of $0.89 for
every dollar you invest. In other words, a one dollar investment will
have a book value of $0.11 (eleven cents) after the offering;
o assuming the maximum is sold, you will suffer a dilution of $0.33 for
every dollar you invest. In other words, a one dollar investment will
have a book value of $0.67 (sixty-seven cents) after the offering.
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RISK FACTORS
1. Reliance on sole officer and director, lack of experience, and no
history of operations: As manager, I have no previous experience in
starting a leasing company and if you invest in this offering with no
history of operations you will be relying upon me to originate,
underwrite, close and service leases through leveraging my personal and
professional relationships.
2. Untested management procedures: I intend to implement procedures for
the underwriting and servicing of leases which have not been formally
written or proved in an operating company.
3. Lessee's Misrepresentation: When originating leases there is the risk
of a company misrepresenting their financial condition, management
ability or principal's character which could result in the loss of
income or collateral on that lease.
4. Collection Risks: When servicing leases we have the risk of the company
not being punctual in their payments due on the leases. The payment
history of the lessee is a key factor in 'seasoning' the leases prior
to sale/financing.
5. Economic or Market Risk: When selling leases in the secondary market,
we have the risk that market interest rates may rise therefore making
the interest rates factored into our leases low compared with
prevailing interest rates - the effective interest rate on our leases
will determine the price we can sell the lease contract for because the
prevailing market interest rates will determine what kind of return an
investor or company is looking for.
6. Loss of Collateral: Once a lease is made, there is the risk that the
collateral is transported to an unknown location which could make our
lease worthless.
PLAN OF DISTRIBUTION
This is a direct participation offering of the common stock of the
Company and is being sold on behalf of the Company by the sole officer and
director of our Company, who will receive no commission on such sales.
Funds raised in this offering before the minimum amount is raised will
be held under an escrow agreement with T. Alan Owen & Associates, P.C.,
Attorneys at Law. Such funds will be refunded immediately if the minimum amount
is not sold within 180 days.
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 a 6%
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. Since we have no underwriting
agreement with a licensed broker-dealer, the success of this offering is based
on the efforts of the sole officer and director of the Company at this time. We
anticipate selling our common stock to investors in the United
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States, Canada and in some foreign countries.
Mr. Smith or his associates/affiliates may not purchase securities in
this offering in order to reach the minimum. They may purchase shares after the
minimum has been met but that amount is limited to ten percent (10%) of the
total number of shares sold.
Certificates for shares of common stock sold in this offering will be
delivered to the purchasers by Signature Transfer Company the stock transfer
company chosen by the company as soon as the Minimum subscription amount is
raised. See the section titled "TRANSFER AGENT".
USE OF PROCEEDS
The total cost of the minimum offering, exclusive of any sales
commissions paid to participating broker dealers, is estimated to be $14,128
($31,128 if the maximum is sold) consisting primarily of legal, accounting and
blue sky fees. There are no agreements or arrangements in place as of the date
of this Prospectus for participation of any broker dealers in this offering.
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:
$50,000 $500,000 $1,000,000
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Minimum Midpoint Maximum
Legal, Accounting & Printing Expenses 8,000 12,000 25,000
Other Offering Expenses 6,128 6,128 6,128
Marketing Expenses & Due Diligence 3,000 30,000 60,000
Net Proceeds to Company 32,872 402,872 804,872
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TOTAL $ 50,000 $500,000 $1,000,000
The following describes each of the expense categories:
o legal, accounting and printing expense amount is the estimated costs
associated with this offering;
o other offering expenses includes SEC registration fee, Blue Sky fees
and miscellaneous expenses with regards to this offering.
o marketing expenses & due diligence is the amount we will pay to
registered broker-dealers who might help us raise money in this
offering. This represents a commission of six percent (6%) of the
offering amount ($3,000 if brokers raise the minimum amount for us and
$60,000 if brokers raise the maximum amount for us). If registered
broker dealers do not help us raise funds, this amount will represent
additional proceeds to the company.
The following table sets forth how we anticipate using the net proceeds
to the company:
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$50,000 $500,000 $1,000,000
Minimum Midpoint Maximum
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Purchase of equipment $ 2,500 $ 20,000 $ 45,000
Purchase of software -0- 30,000 60,000
General corporate overhead 5,372 40,000 80,000
Funding of lease contracts 25,000 312,872 619,872
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Proceeds to company $ 32,872 $402,872 $ 804,872
The company may raise an amount between the minimum and midpoint which
would allow it to purchase software and some equipment, but put most of the
funds, approximately $155,000 into funding of lease contracts, with the
additional amount being used for general corporate overhead. Should the company
raise an amount between the midpoint and the maximum, approximately $450,000
would be used to finance lease contracts with the balance for software,
equipment and general corporate overhead.
Discussion of the proceeds and the business is included in the following
section.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
We are in the business of originating, underwriting, documenting,
closing, funding, and servicing leases. As the company has just been organized,
there exists no historical operating performance.
The vehicle and equipment leasing industry is a non-regulated industry
(except for the general issue of usury) and has become much more widely accepted
in the recent past as more and more individuals and businesses have turned to
leasing as an alternative financing method. There are a tremendous number of
companies in the equipment leasing business performing some function, whether it
be of lender, broker, marketer or leasing company.
The vehicle and equipment leasing industry is very fragmented because
there are a large number of companies, both big and small, who service different
segments of the market and many specialize in particular products, for example,
automobiles or computers. In general, the key to the building of a business is
in the marketing and obtaining of loans. Any company with funds can set up an
operation to lend those funds out but the keys are:
o being able to attract the type of leases you want to finance and
qualify them;
o servicing those leases; and
o if the company should sell those lease contracts - their portfolio -
to sell them at a favorable rate so that a profit is made.
There are two types of leases: capital leases and operating leases.
Generally, companies who market lease financing will have a higher interest rate
than a bank will charge. However, one of the biggest advantages of lease
financing is that a borrower does not have to tie up his credit line at the bank
and in if it is an operating lease, it is not reflected as a liability on a
company's
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balance sheet. A capital lease is a lease where the buyer pays a certain amount
for a defined number of months and then has the option to buy the equipment for
some nominal amount, like ten dollars. An operating lease is similar to a
capital lease except that at the end of the term of the lease, the buyout is at
a higher amount - for example, ten percent or fair market value.
Consolidation in the financial services industry allows for low
barriers of entry. In addition, due to consolidation, many B and C tier credits
are being neglected in favor of larger, more established companies as financial
institutions lean more toward "asset growth" than to individual transactions.
This is a positive for the company as a market for selling lease portfolios is
enhanced as those same financial institutions become buyers rather than
originators.
Principally, the market for leases is broad, defined more by industry
and need rather than by "type" of lease. Consequently, to narrow the focus of
the company, secured transactions targeting B and C credit rated customers is
contemplated. B and C rated customers means they are of sound credit risk but
are not considered "bankable". Such ratings are typically applied based on the
company's net worth in conjunction with their credit pay history.
It is this company's intention to lend to businesses that meet the following
criteria:
o have at least a one to one current ratio (the ratio of current assets
to current liabilities);
o have at least a two to one asset to debt ratio;
o have a debt coverage ratio of at least 120%; and
o have been in business for at least two full years.
The issuers plan of operation for the twelve months following the
commencement of the proposed offering will be to market and originate leases
while setting up a set of procedures to fund and service the leases, although
those procedures have not been formally formulated. We will use the funds raised
in this offering to cash flow through leases, take those leases with the other
capital of the company and leverage them to obtain additional funding for more
lease contracts. This will be a continuing cycle. Even so, the company will not
outstrip its capital requirements regardless of the amount raised as the company
plans to either leverage funded leases for collateral borrowing purposes or to
bundle and sell performing leases to raise required capital.
We have an immediate advantage in starting our marketing or
distribution because we will be operated by our President, Charles Smith, who is
a certified public accountant and, as a statement of fact, receives requests for
leases from customers and associates on a regular basis. Certainly then, the
company will be highly dependent on his ability to leverage personal and
professional relationships that then translate into lease business for the
company. Given such personal referrals, the probability of the original deal
flow is anticipated to come from existing relationships. However, it is
anticipated the lease portfolio will grow rapidly and will not be dominated by a
few customers. As for availability of product, the economy is strong and
competition fierce, that equipment availability shall remain strong for the
foreseeable future.
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As our company grows, our marketing and method of distribution is
planned to be through a centralized management team that will market, document,
police and service the leases. Through centralization, efficiencies, consistency
in product and credit underwriting, and uniformity, integrity in the lease
portfolio is achieved.
Generally, equipment loses value or depreciates over time. When a
equipment is leased for two years, one is paying for two years of depreciation
in monthly payments plus interest. At the end of the lease term, the vehicle can
either be sold to you or someone else for its value at that time.
For the lessee, leasing allows them to enjoy the use of a high priced
product without paying the retail price. Thus, the benefits of leasing are:
o lower monthly payments with no down payment in most cases, allowing a
lessee to afford equipment that otherwise might not be affordable;
o the termination of the lease is pre-negotiated so there is no hassle
at the end of the lease term; and
o for most business purposes, lease payments are tax deductible.
Servicing the lease contracts involves setting up a payment schedule
for the leases and collecting the payments. The main objective in this area is
to ensure the payments are collected on time. Servicing loans and leases are
software driven. The primary costs are borne on the front end. Once documented
and funded, the administrative costs are simply posting monthly payments unless
the lessee becomes delinquent. It is at this point the company will become
active and intimate with the lessee to ensure the lease does not become "past
due". Such activities will include daily conversations with the lessee,
requesting additional collateral to secure the lease, even renegotiating the
lease in some form so that it remains performing.
When we have received timely payments on a lease contract for six
months or twelve months, depending on the buyer, it is then categorized as
"seasoned" to a buyer, this means the lease contract can reasonably be ensured
to pay timely in the future. This is why it is so important to qualify a
potential borrower in the first phase of the process.
Once a company has seasoned lease contracts, they may keep the lease
contracts in their own portfolio or sell them to someone else. A company may
keep the lease contracts in their own portfolio (not sell them) if it has a
large amount of funds available or designated for that purpose and they are
satisfied with the return on their funds. A company may sell the lease contracts
in order to make a profit and turn the funds over into new lease contracts and
repeat that cycle over and over again.
Brokering lease financing is another aspect of the leasing business
which small companies fill who don't have a large pool of capital of their own.
They are basically marketers who obtain customers who need and wish lease
financing and enter into relationships with large finance companies and put
together the financing and the lessee. Essentially they are putting together the
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buyer (lessee) and the seller (finance company). For this they build in a fee
and can "fund" loans without concern about running out of capital.
We will transact business in the Dallas/Fort Worth Metroplex in North
Central Texas. The 1990's have been a period of consolidation and steady
employment growth for the area. The Metroplex is the third largest hub for
corporate headquarters and high tech companies in the country. For further
information reference is made to a report by the Texas Comptroller of Public
Accounts titled Dallas/Fort Worth Metropolitan Area Profile and can be found in
its entirety at the following web site:
http://www.window.texas.gov/ecodata/regional/northcen/nctdfwmsa.
According to information derived from the US Census by the Texas State
Data Center at Texas A&M University (see web site
http://www.txsdc.tamu.edu/tenfgs.html) Texas ranks as the fastest growing state
(numerically) in the nation, it's population increasing 12.6% from 1990 to 1996.
In addition, it is the second most populous state in the nation with 19.1
million people, second only to California's 31.9 million. In fact, in a Wall
Street Journal article published earlier this year, the Dallas/Fort Worth
Metroplex was identified as the third fastest growing area in the country for
the next five years. This will give the Metroplex area an approximate population
of 5.6 million people. This area then provides a significant base of businesses
from which to solicit business for our company and provides an economic base
conducive to growth because of the number of potential lessees.
We, as a company, will market our lease financing to small sized
companies that are available from existing relationships through our President.
The potential for these contracts are expected to total more in value than the
proceeds from this offering if the maximum amount were raised. We know from our
relationships with other businesses that there are a large number of businesses
that need financing that cannot get it through traditional sources, but have
good cash flow, integrity in management and that we can achieve a higher
interest rate and therefore a higher return through lease financing to these
businesses. We will choose to specialize in leasing vehicles and/or equipment to
this segment of the business population. After we have exhausted all the
opportunities from our contacts, we will then move to some sort of advertising
campaign to generate new business.
After securing lease contracts, we will season the loans and then make
a decision whether or not to sell them. After we have used all the funds
available for leasing, we anticipate being able to secure a line of credit with
a bank or other institution that will provide us additional capital to create
lease contracts with where we will then make a "spread" ; "spread" is the
difference between what interest rate we charge in our lease contracts and the
rate we will pay to the bank.
If we are unable to secure a loan with a bank or other institution, we
will continue to service our current portfolio while looking for some
alternative capital sources. We will also broker loans if our funds run out
before we can arrange for some alternate financing arrangement within our
company. However, we believe that when we can show a track record, that many
financial institutions will want to partake of our success.
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One way to enhance 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.
Assuming we raise the minimum amount in this offering, we will not have
a large surplus of cash. However, we will be able to finance a few contracts
with the $32,872 proceeds to the company as well as using some for general
working capital of the company. We will not pay salaries until such time as the
company is generating revenue from contracts and/or fees; our overhead will be
minimal because we will be using the resources of our President, Mr. Smith. We
will then use those contracts and any other capital we have to leverage our
financial position in order to attract additional funds to satisfy our cash
requirements and give us funds to secure more lease contracts. This cycle of
using our available capital from this offering and or lines of credit to secure
lease contracts and leveraging those to secure access to additional capital will
continue as a cycle so that we can build our portfolio base and finance the
growth of the company.
Assuming we raise $500,000 in this offering, a midpoint between the
minimum and maximum, we will be able to secure a good number of lease contracts
and have a more diversified portfolio. With the $402,872 cash proceeds to the
company from this midpoint offering, we will purchase some software unique to
servicing the contracts, start some marketing through professional organizations
but put most of the funds into funding lease contracts. We will then use those
contracts and our remaining capital we have to leverage our financial position
in order to attract additional funds to give us funds to secure more lease
contracts. This cycle of using our available capital from this offering and or
lines of credit to secure lease contracts and leveraging those to secure access
to additional capital will continue as a cycle so that we can build our
portfolio base and satisfy the cash requirements to finance the growth of the
company. Additionally, at that time, there should be the start of a trend of the
seasoning of the contracts and this should give us some foundation to go into a
financial institution and arrange additional lines of credit. If we are unable
to secure one in the first year or two, we may sell our contracts as a package
and take our profit and start the funding process all over again. At some point,
our track record and seasoning of the contracts will be sufficient to obtain a
line of credit.
Assuming we raise the maximum offering which would result in proceeds
to the company of $804,872, we believe we will have sufficient funds to fund
contracts while we season the initial contracts. We will always be able to take
our existing contracts and remaining capital and leverage them to satisfy the
cash requirements to finance the growth of the company. We will purchase
software unique to this industry to enable us to service the contracts, but the
major portion of all funds will be used to fund lease contracts since that is
the way we will build up our
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revenue and asset base (portfolio). Of course, if we raise the maximum amount in
this offering, we will have plenty funds to create a diversified portfolio where
credit problems with any one contract will not cause a material problem with our
company as a whole. The real key is marketing and obtaining good lease contracts
and after that infrastructure is in place, to obtain some sort of additional
financing like a line of credit to continue our growth.
We have made no public announcements to date and have no additional or
new products or services. In addition:
o no monies are anticipated to be spent in the field of research and
development;
o no money has been spent or is contemplated to be spent on customer
sponsored research activities relating to the development of new
products, services or techniques; and
o no money are anticipated to be spent on improvement of existing
products, services or techniques.
As of the filing date, the company has no employees. Subsequent to the
filing, the company will employ one employee, the President and Principal,
Charles E. Smith. As necessary due to lease volume, work load, and the like,
employees will be brought on board.
The company does not expect nor has it encountered any material effect
from the discharge of materials, environmental agencies, capital expenditures
for environmental control facilities, nor does it anticipate having to deal with
any such issue in the future.
No segmented data is required for this offering.
In summary then, the lease financing business is a non-regulated
business where we will market for lease contracts, obtain them, service them and
possibly sell them. If we can obtain lines of credit, we will be able to grow as
fast as our marketing efforts can bring good lease contracts to us.
The foregoing discussion 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 in this section and elsewhere in this prospectus.
DESCRIPTION OF PROPERTY
We lease our corporate facilities from our sole officer and director
which includes the use of telephones and equipment for $50.00 per month. This
arrangement started in April 1999 when the business plan outline was written.
This arrangement will continue until such time as the Company needs and can
afford to lease its own office facilities.
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MANAGEMENT OF THE COMPANY
The directors and officers of the Company, their ages and principal
positions are as follows:
Name Age Position
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Charles Smith 42 President; Secretary and Director
Background of Directors and Executive Officers:
Charles Smith. Mr. Smith formed the Company and at this time is its only officer
and director. His term as a director expires in May 2000. 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.
Mr. Smith's business affiliations during the last five years follow:
Chairman - Dynacap Group, Ltd. - a consulting and management firm - 1992 to the
present.
Sole proprietor as a Certified Public Accountant - 1983 to the present.
Sole officer and Director - MC Cambridge, Inc. - a financial consulting firm -
1997 to present.
In the risk factor section, reference was made to the risk that Mr.
Smith would not initially spend full time on the activities of the company and
that his current activities would take up some of his time. These activities
include the financial and management consulting responsibilities and the
accounting services he performs at this time. He can devote more and more time
to the activities of the company as time goes on since the financial and
management consulting can be cut back and even dropped at any time. Initially,
he expects to spend ten to fifteen hours per week and increase that weekly time
as the activities of the company require. Mr. Smith fully expects that the
company will raise sufficient funds in this offering so that he will devote
himself full time to the success of the company's plan of business.
DIRECTOR AND EXECUTIVE COMPENSATION
Our sole officer and director has received no compensation other than
the 160,000 shares of common stock he received for services in May 1998 and has
no employment contract with the company.
Name of Person Capacity in which he served Aggregate
Receiving compensation to receive remuneration remuneration
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Charles Smith President, Secretary 160,000 shares
and Treasurer of common stock
The common stock was issued soon after formation of the company and it
is impracticable to determine the cash value. The stock was issued over one year
ago for services performed
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which we cannot estimate the value since that work continues through the filing
and effectiveness of this registration statement, with no other compensation to
be granted for the work done on this filing.
As of the date of this offering, there are no plans to pay any
remuneration to anyone in or associated with the company. When the company has
funds and/or revenue, the Board of Directors will determine any remuneration at
that time.
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.
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PRINCIPAL SHAREHOLDERS
The following table lists the persons who, at the date hereof, own of
record or beneficially, directly or indirectly, more than 10% of the outstanding
Common Stock, and all officers and directors of the Company:
Name and Address Amount owned
Title of Owner before offering Percent
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President, Secretary Charles Smith 200,000 100.00%
And Director 709 B West Rusk
Suite 580
Rockwall, Texas 75087
After offering: Minimum 200,000 80.00%
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Maximum 200,000 16.67%
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INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
In May 1998, the President of the company received 200,000 shares of
common stock which we issued to him for $2,500, composed of $500 cash and $2,000
of his services.
As of the date of this filing, there are no agreements or proposed
transactions, whether direct or indirect, with anyone, but more particularly
with any of the following:
o a director or officer of the issuer;
o any principal security holder;
o any promoter of the issuer;
o any relative or spouse, or relative of such spouse, of the above
referenced persons.
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
12
<PAGE>
appearing elsewhere in this prospectus. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
<TABLE>
Unaudited Audited Audited
Balance Sheet: Sept 30, 1999 April 30, 1999 Dec 31, 1998
--------------------- ------------- -------------- ------------
<S> <C> <C> <C>
Working Capital $ 116 $ 116 $ 177
Total Assets $ 116 $ 116 $ 177
Total Liabilities $ 4,648 $ -0- $ -0-
Stockholders' Equity $(4,532) $ 116 $ 116
May 27,1998
(date of
inception)
Statement of Operations: Sept 30, 1999 April 30, 1999 Dec 31, 1998
------------------------ ------------- ---------------- ------------
Revenue $ -0- $ -0- $ -0-
Operating Expense $ 4,709 $ 61 $ 2,323
Operating Income (Loss) $(4,709) $ ( 61) $ (2,323)
Other Expenses $ -0- $ -0- $ -0-
Net Income (Loss) $(4,709) $ ( 61) $ (2,323)
</TABLE>
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 September 30,
1999. Our capitalization is presented on:
o an actual basis;
o 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
o 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.
13
<PAGE>
After After
Actual Minimum Maximum
Sept 30, 1999 Offering Offering
------------- -------- --------
Stockholders' equity
Common Stock, $0.001 par value;
50,000,000 shares authorized; 200 250 1,200
Additional Paid In Capital 2,300 35,122 806,172
Retained deficit (7,032) (7,032) (7,032)
Total Stockholders' Equity (4,532) 28,340 800,340
Total Capitalization (4,532) 28,340 800,340
Number of shares outstanding 200,000 250,000 1,200,000
The company has only one class of stock outstanding. The common stock
sold in this offering will be fully paid and non assessable, having voting
rights of one vote per share, have no preemptive or conversion rights, and
liquidation rights as is common to a sole class of common stock. The company has
no sinking fund or redemption provisions on any of the currently outstanding
stock and will have none on the stock sold in this offering.
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
September 30, 1999 was $(4,532) or $(0.02) per share. Pro forma net tangible
book value per share is equal to our total tangible 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 September 30, 1999 would have been
approximately $28,340 or $0.11 per share, if the minimum is sold, and $800,340
or $0.67 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. The decrease in net
tangible book value is:
o $21,660 or $0.89 per share if we sell the minimum number of shares
(50,000) in this offering; and
o $199,660 or $0.33 per share if we sell the maximum number of shares
(1,000,000) in this offering.
The following table illustrates this per share dilution:
14
<PAGE>
Minimum Maximum
------- -------
Assumed initial public offering price $1.00 $1.00
Pro forma net tangible book value as of July 31, 1999 ($0.02) ($0.02)
Pro forma net tangible book value after this offering $0.11 $0.67
Increase attributable to new stockholders: $0.13 $0.69
Pro forma net tangible book value
as of September 30, 1999 after this offering $0.11 $0.67
Decrease to new stockholders ($0.89) ($0.33)
The following table summarizes on a pro forma basis as of September 30,
1999, shows 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:
After After
Actual Minimum Maximum
Sept 30, 1999 Offering Offering
------------- -------- --------
Existing stockholders:
Consideration paid per share 0.0125
New stockholders:
Consideration paid per share 1.00
Dilution to new stockholders ($0.89) (0.33)
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 September 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.
LEGAL PROCEEDINGS
We are not involved in any legal proceedings at this time.
15
<PAGE>
YEAR 2000 ISSUE
At this time the company has no systems and the Year 2000 issues
associated with them do not apply.
However, 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. When we purchase this hardware
and software, we will be one hundred percent (100%) Year 2000 compliant. As part
of our purchase, we will require proof that the hardware and software is Year
2000 compliant so we will be one hundred percent ready. The costs associated
with this will be minimal because we will be purchasing new hardware and
software and therefore have no cost of conversion or cost to be in a state of
readiness.
The above also causes the company to have a zero risk for problems at
the Year 2000 and consequently the company has no contingency plans. The company
will not be interfacing with any other company or service to process and service
its leases so no Year 2000 problems will arise with respect to interfacing with
service providers or others.
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.
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.
The financial statements dated September 30, 1999 included in this
offering were prepared by management, are unaudited and have not been audited by
Mark L. Cleland.
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.
16
<PAGE>
MARK L. CLELAND
CERTIFIED PUBLIC ACCOUNTANT
17430 CAMPBELL ROAD, SUITE 114
DALLAS, TEXAS 75252
972-735-0033 FAX 972-735-0035
------------------------------
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
1
<PAGE>
<TABLE>
<CAPTION>
ASSET SERVICING CORPORATION
(A Development Stage Enterprise)
BALANCE SHEETS
April 30, 1999 and December 31, 1998
ASSETS
------
April 30, 1999 Dec 31, 1998
-------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 116 $ 177
-------------- -------------
TOTAL ASSETS $ 116 $ 177
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Accounts payable $ 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>
2
<PAGE>
<TABLE>
<CAPTION>
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
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
3
<PAGE>
<TABLE>
<CAPTION>
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
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 2000
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
4
<PAGE>
<TABLE>
<CAPTION>
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
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
5
<PAGE>
<TABLE>
<CAPTION>
ASSET SERVICING CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
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
SUPPLEMENTAL DISCLOSURE OF
--------------------------
CASH FLOW AND NON-CASH INVESTING ACTIVITIES
-------------------------------------------
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.
6
<PAGE>
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.
7
<PAGE>
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:
Year 2013 $2,323
Year 2119 61
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.
8
<PAGE>
<TABLE>
<CAPTION>
ASSET SERVICING CORPORATION
BALANCE SHEETS
September 30, 1999 and December 31, 1998
ASSETS
------
Sept 30, 1999 Dec 31, 1998
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 116 $ 177
------------- ------------
TOTAL ASSETS $ 116 $ 177
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Accounts payable $ 2,730 $ -0-
Advances from shareholder 1918
------------- ------------
Total Current Liabilities 4648 -0-
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value 200 200
Additional paid-in-capital 2300 2300
Accumulated Deficit (7032) (2,323)
------------- ------------
Total Stockholders' Equity (4532) 177
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 116 $ 177
============= ============
</TABLE>
9
<PAGE>
ASSET SERVICING CORPORATION
STATEMENT OF OPERATTIONS
Period from inception (May 27, 1998) to December 31, 1998, and
Nine months ended September 30, 1999
Nine months Period thru
Sept 30, 1999 Dec 31, 1998
------------- ------------
REVENUE: $ -0- $ -0-
OPERATING EXPENSE:
Labor 0 2,000
Licenses and fees 2,956 290
Office expense 153
Professional fees 1,000
Rent 600 33
-------- ----------
Total Operating Expense 4,709 2323
-------- ----------
NET LOSS $ (4,709) $ (2,323)
======== ==========
Weighted average shares outstanding 200,000 200,000
======== ==========
LOSS PER SHARE ($ 0.02) $ (0.01)
======== ==========
10
<PAGE>
<TABLE>
<CAPTION>
ASSET SERVICING CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from inception (May 27, 1998) to December 31, 1998, and
Nine months ended September 30, 1999
Common Paid In Accumulated
Shares Amount Capital Deficit 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 160,000 160 1,840 2,000
Cash 40,000 40 460 500
Net Loss (2,323) (2,323)
---------------------------------------------- ---------
Balance
December 31, 1998 200,000 200 2,300 (2323) 177
============================================== =========
Net Loss (4,709) (4,709)
Balance
September 30, 1999 200,000 200 2,300 (7,032) (4,532)
============================================== =========
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
ASSET SERVICING CORPORATION
STATEMENT OF CASH FLOWS
Period frominception (May 27, 1998) to December 31, 1998
Nine months ended Sept 30, 1999
Nine months Period thru
Sept 30, 1999 Dec 31, 1998
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (4,709) (2,323)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Increase in accounts payable 2,730
Advances from shareholder 1,918
Stock issued for services 2,000
-------- --------
NET CASH (USED) BY OPERATING ACTIVITIES: (61) (323)
CASH FLOWS FROM INVESTING ACTIVITIES: -0- -0-
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock -0- 500
-------- --------
NET INCREASE IN CASH (61) 177
CASH, BEGINNING OF PERIOD 177 -0-
-------- --------
CASH, END OF PERIOD $ 116 $ 177
======== ========
</TABLE>
12
<PAGE>
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
Prospectus Summary 2
Corporate Information 2
Risk Factors 3
Plan of Distribution 3
Use of Proceeds 4
Management's Discussion and Analysis of Financial Condition 5
Description of Property 10
Management of the Company 11
Director and Executive Compensation 11
Director's and Officers' Indemnification and Insurance 12
Principal Shareholders 12
Interest of Management and Others in Certain Transactions 12
Summary Financial Data 12
Dividend Policy 13
Capitalization 13
Dilution 14
Description of Common Stock 15
Legal Proceedings 15
Year 2000 Issue 16
Certain Federal Income Tax Considerations 16
Legal Matters 16
Experts 16
Transfer Agent 16
Financial Statements F-1
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>
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.
Minimum Maximum
-------- ----------
SEC Registration Fee $ 278 $ 278
Printing and Engraving Expenses 2,000 19,000
Legal Fees and Expenses 5,000 5,000
Edgar Fees 1,800 1,800
Marketing and Due Diligence Expenses 3,000 60,000
Accounting Fees and Expenses 1,000 1,000
Blue Sky Fees and Expenses 3,850 3,850
Miscellaneous 200 200
-------- ----------
TOTAL $ 17,128 $ 95,128
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 $500 cash and $2,000 of his services. This
stock was issued under the exemption under the Securities Act of 1933, section
4(2); this section states that transactions by an issuer not involving any
public offering is an exempted transaction. The company relied upon this
exemption because in a private transaction during May 1998, the founder, sole
officer and director purchased stock for a combination of $500 cash and $2,000
of services.
11.1
<PAGE>
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
23.1 - Consent of French & Hamilton, Attorneys at Law
23.2 - Consent of Mark L. Cleland, Certified Public Accountant
* Filed previously
** 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.
11.2
<PAGE>
SIGNATURES
Pursuant to the requirements of the 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 13th day of October, 1999.
ASSET SERVICING CORPORATION
By: /s/ Charles Smith, President
----------------------------
Charles Smith, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity and on
the date indicated:
Signature Title Date
- ------------------ -------
President, Secretary,
Treasurer; Director October 13, 1999
- ------------------
11.3
ASSET SERVICING CORPORATION
SUBSCRIPTION AGREEMENT
October __, 1999
ASSET SERVICING CORPORATION
709 B West Rusk, Suite 580
Rockwall, Texas75087
Ladies and Gentlemen:
1. PURCHASE OF COMMON STOCK. Intending to be legally bound , I hereby agree
to purchase ________ shares of voting, no par value common stock (the "Shares")
of Asset Servicing Corporation (the "Corporation") for ______________ U.S.
Dollars (number of Shares to be purchased multiplied by $1.00). This offer to
purchase is submitted in accordance with and subject to the terms and conditions
described in this Subscription Agreement (the "Agreement"). I acknowledge that
the Corporation reserves the right, in its sole and absolute discretion, to
accept or reject this subscription and the subscription will not be binding
until accepted by the Corporation in writing.
2. PAYMENT. I agree to deliver to the Corporation immediately available
funds in the full amount due under this Agreement, by certified or cashier's
check payable to the "ASC 1999 Public Offering Escrow Account." The Corporation
shall promptly deposit the funds into the Escrow Account.
3. ISSUANCE OF SHARES. The Shares subscribed for herein will only be issued
upon acceptance by the Corporation as evidenced by the Corporation returning to
the investor an executed Agreement acknowledging acceptance and upon
satisfaction of the terms and conditions of the Escrow Agreement.
4. REPRESENTATION AND WARRANTIES.
A. I understand that the offering and sale of the Shares is registered
under (i) the Securities Act of 1933, as amended (the "Securities Act"), and
(ii) various States' Divisions of Securities in compliance with their
administration and enforcement of the respective States' Blue Sky Laws and
Regulations. In accordance therewith and in furtherance thereof, I represent and
warrant to and agree with the Corporation as follows:
[1] I am a resident of the State of ________________ as of the date of
this Agreement and I have no present intention of becoming a resident of any
other state or jurisdiction;
[2] I have received and have reviewed the Corporation's Prospectus
dated _________________, 1999;
<PAGE>
[3] I have had a reasonable opportunity to ask questions of and receive
answers from a person or persons acting on behalf of the Corporation concerning
this investment, including the terms and conditions of this offering, and all
such questions have been answered to my full satisfaction;
B. The foregoing representations, warranties and agreements, together
with all other representations and warranties made or given by me to the
Corporation in any other written statement or document delivered in connection
with the transaction contemplated hereby shall be true and correct in all
respects on and as of the date of the Closing as if made on and as of such date
and shall survive the date of the Closing.
5. INDEMNIFICATION. I agree to indemnify and hold harmless the Corporation,
the officers, directors, agents, employees and affiliates of any thereof against
any and all loss, liability, claim or damage, (including attorney's fees and
disbursements) together with all costs and expense whatsoever arising out of or
based upon any false representation or warranty or breach or failure by me to
comply with any representation, warranty, covenant or agreement made by me
herein or in any other document furnished by me of the foregoing in connection
with this transaction.
6. IRREVOCABILITY; BINDING EFFECT. I hereby acknowledge and agree that the
purchase hereunder is irrevocable, that I am not entitled to cancel, terminate
or revoke this Agreement or any agreements of the undersigned hereunder and that
this Agreement and such other agreements shall survive my death or disability
and shall be binding upon and inure to the benefit of the parties and their
heirs, executor, administrators, successors, legal representatives and assigns.
If the undersigned is more than one person, the obligations of the undersigned
hereunder shall be joint and several, and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and are binding upon each such person and his heirs, executors, administrators,
successors, legal representatives and assigns.
7. MODIFICATION. Neither this Agreement not any provisions hereof shall be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any such waiver, modification, discharge or
termination is sought.
8. NOTICES. Any notice, demand or other communication which any party hereto
may require, or may elect to give to anyone interested hereunder shall be
sufficiently given if [a] deposited, postage prepaid, in a United States mail
box, stamped registered or certified mail, return receipt requested addressed to
such address as may be listed on the books of the Corporation, [b] delivered
personally at such address, or [c] delivered (in person, or by a facsimile
transmission, telex or similar telecommunications equipment) against receipt.
9. COUNTERPARTS. This Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
<PAGE>
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof, and there are no
representations, covenants or other agreements except as stated or referred to
herein.
11. SEVERABILITY. Each provision of the Agreement is intended to be
severable from every other provision, and the invalidity or illegality of any
portion hereof shall not affect the validity or legality of the remainder
hereof.
12. ASSIGNABILITY. This Agreement is not transferable or assignable by the
undersigned except as may be provided herein.
13. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas as applied to residents of that
state executing contracts wholly to be performed in that state.
INDIVIDUAL(S) SUBSCRIBER
IN WITNESS WHEREOF, I have executed this Agreement as of the ____ day of ______,
1999.
- ---------------------------------------------
Signature of Purchaser
- ---------------------------------------------
Name(s) of Purchaser (Please print or type)
- -----------------------------------
Purchaser(s) Social Security Number
STATE OF ________________)
) SS
COUNTY OF _______________)
On the ________day of _____________, 1999, before me personally appeared
___________________________________________, known to me to be the individual(s)
described herein and who acknowledged the foregoing instruments and swore and
acknowledged that (he)(she)(they) executed the same as (his)(her)(their) free
act and deed.
------------------------------------
Notary Public, State of
------------
My commission expires:
------------
<PAGE>
ENTITY SUBSCRIBER
IN WITNESS WHEREOF, I have executed this Agreement as of the ______ day of
_________________, 1999.
- ----------------------------
Entity
- ------------------------------
Signed By
Its:
--------------------------
- ------------------------------
Date
STATE OF _______________)
) SS
COUNTY OF ______________)
On the _____day of _______________, 1999, before me personally appeared
___________________________________________, known to me to be the individual
described herein and who acknowledged the foregoing instruments and swore and
acknowledged that (he)(she) executed the same as (his)(her) free act and deed.
--------------------------------------
Notary Public, State of
--------------
My commission expires:
--------------
PURCHASE ACCEPTED FOR _________ SHARES:
ASSET SERVICING CORPORATION
By: ________________________________
Charles Smith, President
Date: _______________________________
FRENCH & HAMILTON
Attorneys at Law
14651 Dallas Parkway, Suite 434
Dallas, Texas 75240
(972)404-1414 (972)404-1808 Fax
H. Dawson French Charles m. Hamilton
October 8, 1999
Mr. Charles E. Smith
Asset Servicing Corporation
709 B West Rusk, Suite 580
Rockwall, Texas 75087
RE: Asset Servicing Corporation
Form SB-1; 8/23/99
File No. 333-80429
Dear Mr. Smith:
This letter shall serve to evidence my consent to being named in the
Prospectus for the Corporation's captioned registration statement as the
attorney for the Corporation in connection with the offering described therein
and to the inclusion of my opinion with regard to the Corporation and its
capital stock as an exhibit to the registration statement.
Please advise me if I may be of any further service in this respect.
Yours Truly,
/s/ H. Dawson French
--------------------
H. Dawson French
MARK L. CLELAND
CERTIFIED PUBLIC ACCOUNTANT
17430 CAMPBELL ROAD, SUITE 114
DALLAS, TEXAS 75252
972-735-0033 FAX 972-735-0035
------------------------------------
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
October 6, 1999
