UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Transport Recovery Services Corporation
(Name of small business issuer in its charter)
Nevada 91-1962995
---------------------------- -------------------------- ------------------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
11011 King Street, Suite 260, Overland Park, Kansas 66210
-----------------------------------------------------------
(Address and telephone number of principal executive offices)
11011 King Street, Suite 260, Overland Park, Kansas 66210
- --------------------------------------------------------------------------------
(Address of principal place of business or intended principal place of business)
John R. Dixon, 11011 King Street, Suite 260, Overland Park, Kansas 66210
(913) 469-5614
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: February, 2000
Copies of communications to:
Allen G. Reeves, P.C.
900 Equitable Building, 730 17th Street
Denver, Colorado 80202
(303) 534-6278
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate offering Amount of
to be registered registered per unit price(1) registration fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.001 par value 200,000. $1.00 $200,000 $55.60
</TABLE>
(1) Calculated pursuant to Rule 457(o) under the Securities Act.
The registrant hereby arnends 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 this registration statement
shall thereafter 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>
PROSPECTUS
For the initial public offering for sale of:
200,000 Shares of Common Stock
of
Transport Recovery Services Corporation
Per
Share Total
This offering is being
conducted by us on a best
efforts basis without
assistance of an underwriter.
There is no minimum number of
shares we must sell and no
minimum investment required of
an investor. A trust, escrow
or similar account will not be
established pending the sale
of all shares and all proceeds
from this offering will become
immediately available for our
use.
Initial Offering Price
to the Public $1.00 $200,000
Offering Expenses $ .20 $ 40,000
Net Proceeds to Our $1.00 $200,000
Company
This offering will terminate six months from the date of this prospectus
unless all shares are sold prior to that date.
Investing in our common stock involves a high degree of risk. You should
purchase shares only if you can afford a complete loss. See "Risk Factors"
beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined that this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
January __, 2000
<PAGE>
Table of Contents
Page
Summary of Our Offering .......................................
Risk Factors ..................................................
Forward Looking Statements ....................................
Use of Proceeds ...............................................
Dividend Policy ...............................................
Dilution ......................................................
Our Business ..................................................
Our Management ................................................
Principal Stockholders ........................................
Certain Transactions ..........................................
Description of Common Stock ...................................
Terms of the Offering .........................................
Shares Eligible for Future Sale ..............................
Litigation ....................................................
Legal Matters .................................................
Experts .......................................................
Additional Information ........................................
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than contained in this
prospectus in connection with the offering described here. If given or made,
such information or representations must not be relied upon as having been
authorized by us. This prospectus does not constitute an offer to sell, or the
solicitation of an offer to buy, the securities offered by this prospectus to
any person in any state or other jurisdiction in which the offer or solicitation
is unlawful. Neither the delivery of this prospectus nor any sale under this
prospectus shall, under any circumstances, create any implication that there has
been no change in our affairs since this date.
Until _____________, 2000 (25 days after the date of this prospectus), all
dealers effecting transactions in the registered securities may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
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<PAGE>
SUMMARY OF OUR OFFERING
This summary highlights important information about our business and about
this offering. Because it's a summary, it doesn't contain all the information
you may wish to consider before investing in the common stock. So please read
the entire prospectus.
Our company, Transport Recovery Services Corporation, was incorporated in
the State of Nevada on April 15, 1999. Before this acquisition, we were not
engaged in any business activities. Our principal executive offices are at 11011
King Street, Suite 260,Overland Park, Kansas 66210. Our telephone number is
(913) 469-5615. Our fiscal year is a calendar year and ends on December 31.
Our Business and Proposed Plan of Operations
We are a small company that is engaged in identifying opportunities to
supply electrical power and natural gas to potential customers, including
businesses, governmental agencies and cooperatives. We would like to be in the
position to arrange purchase agreements with natural gas exploration firms and
to use the natural gas to power natural gas combustion turbine and micro-turbine
generating equipment. Initially, we will focus on markets that are near natural
gas fields and sell to either local businesses and/or to the existing local
power grid. If we are in the financial position to do so, we would also
eventually intend to build natural gas pipelines from well-head to points of
concentration of electrical load where we can install natural gas combustion
turbine and micro-turbine generating equipment to produce and sell electrical
power and steam. Typical markets for these products are hospitals, office
complexes, resorts, hotels as well as food processing and other industrial
plants. We expect that a large portion of our revenues will come from the sale
of our proposed power products to these markets.
Lack of Current Operations
We've been in business only since April 1999 and our activities thus far
have been limited to organizational and related matters. As such, we have no
operating history. From the time we started business through September 30, 1999,
we have had no revenues and had general and administrative expenses of $1,253.
Our total net loss was also $2,792.
The Offering
(A) Common stock offered 200,000 shares. We will attempt to sell
these shares to the public ourselves
without the assistance of an
underwriter. There is no minimum amount
which must be sold in order for the
offering to proceed and no minimum
investment is required. All funds
invested may be used by us immediately.
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(B) Proposed symbol
and trading market We would like to establish a trading
market for the common stock on the
Nasdaq Electronic Bulletin Board. We
have not applied for a trading symbol
and do not expect to before this public
offering takes place. Nor have we
recruited a market maker to make a
market in our stock. Without a market
maker, we will not be able to have our
stock traded on the bulletin board.
(C) Use of proceeds We will use the proceeds of this
offering first to pay the offering
expenses. Assuming we have sold the
entire offering, after expenses we will
have approximately $160,000 in net
proceeds. We plan to use the proceeds to
pay for consulting services, marketing
and the general expenses of operating
our business.
RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of these risks occur, our business, results of operations and financial
condition could be adversely affected. This could cause the trading price of our
common stock to decline, and you might lose part or all of your investment.
Risks Associated with How This Offering is Being Conducted.
We are attempting to sell the shares of common stock ourselves and there is
a risk that we will not be able to complete the offering as planned. We have not
hired an underwriter to assist us in selling the common stock. Only our
officers, directors and employees will assist us in selling the common stock.
They will not be paid any commission. Because none of these individuals has any
prior experience in selling stock to the public, it will be more difficult for
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them to sell all of the common stock than it would have been had we employed an
underwriter. There can be no assurance that they will be able to sell all of the
common stock or even enough of the common stock to be able to fully implement
our proposed plan of operations. If that happens, an investor is at increased
risk that his investment will not provide us with enough funds to make
profitable operations more likely.
There is no minimum investment required. Because of this, there is a risk
that only a small portion of the funds we need to fully implement our proposed
plan of operation will be raised. There is no minimum number of shares of common
stock that must be sold in this offering and no minimum investment is required
of any investor. Furthermore, there is no escrow, trust or similar account into
which the proceeds of this offering will be deposited pending sale of all of the
common stock. All proceeds of this offering will be deposited directly into our
operating account. If less than all the shares of common stock offered by this
prospectus are sold, an investor may sustain a loss of his or her entire
investment. An investment in our common stock is therefore immediately at risk.
No review of offering price by underwriter will mean that there is an
increased possibility that our common stock might not be priced fairly based
upon our assets and level of operations. In most public offerings that use the
services of an underwriter, the underwriter has the opportunity to review the
terms of the public offering and decide whether the offering price of the common
stock is fair and reasonable. Because we are attempting to sell the common stock
ourselves without using an underwriter, this review is not present in this
offering. We arbitrarily determined the offering price of the common stock
taking into consideration the following factors:
* the amount of proceeds required to initiate our business plan and marketing
strategy
* our lack of revenues
* estimates of future revenues
* our management capability
* our plans for future growth
* the general condition of the securities markets
* the amount of retained equity to the present shareholders.
Prospective investors should not assume that the offering price of the
common stock necessarily reflects the actual value of the common stock. Further,
the price does not bear any relationship to assets, earnings, book value or any
other objective criteria of value. There is a risk that our arbitrary offering
price does not fairly value the common stock based upon the factors we took into
consideration.
Other Factors that May Adversely Affect Our Common Stock.
No prior public market will subject the investor to the risk of an illiquid
investment. Before this offering, there has not been any public market for the
common stock. Furthermore, it is possible that an active public market for the
common stock may never develop or be sustained. We do not intend to list the
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common stock on any national securities exchange or to apply for listing on
either the Nasdaq Stock Market or the Nasdaq Small Cap Stock Market. Any trading
in the common stock will take place in the over-the-counter market in the
so-called "pink sheets" or the "OTC Bulletin Board" service. If a public market
does not develop or is not sustained, there is a risk that an investor might
find it difficult to sell the common stock at a time when he needs or desires to
do so.
Possibility of volatile price swings and inaccurate pricing information
would create a risk that an investor would not be able to accurately assess the
market value of his common stock. If our stock is traded on the OTC bulletin
board, a relative lack of liquidity or volume and the participation of only a
few market makers would make it more likely that wide fluctuations in the quoted
price of the common stock would occur. As a result, there is a risk that an
investor will not be able to obtain accurate price quotes or be able to
correctly assess the market price of his stock. Increases in volatility could
also make it more difficult to pledge the common stock as collateral if an
investor sought to do so because a lender might also be unable to accurately
value the common stock.
You will experience substantial dilution that will lower the per share
tangible book value of your common stock immediately. The public offering price
of the common stock is much higher than the net book value of the common stock
that we have already issued. As a result, purchasers of the common stock who
paid $1.00 per share will experience immediate and substantial dilution. The net
tangible book value of the common stock immediately after the offering will be
approximately $.126. Our existing shareholders paid an average of $.001 per
share of common stock and, accordingly, new investors will bear most of the
risks inherent in an investment in us.
One million fifty thousand, or 84%, of our total outstanding shares are
restricted from immediate resale but may be sold into the market in the near
future. This could cause the market price of our common stock to drop
significantly, even if our business is doing well. After this offering, we will
have outstanding 1,250,000 shares of common stock. This assumes we will be
successful in selling the 200,000 shares we are selling in this offering. The
200,000 shares in this offering may be resold in the public market immediately
if a market develops. The remaining 84%, or 1,050,000 shares, of our total
outstanding shares will become available for resale in the public market as
shown in the chart below.
As restrictions on resale end, the market price could drop significantly if the
holders of these restricted shares sell them or are perceived by the market as
intending to sell them.
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Number of shares / % of total Date of availability for resale
1,050,000 / 84% into public market
Between 90 and 365 days after
the date of this prospectus
due to the requirements of the
federal securities laws.
For a more detailed description, see "Shares Eligible for Future Sale" on page
28.
We don't plan to pay dividends and, therefore, anyone in need of dividend
income should not invest in our stock. We don't expect to pay dividends on
common stock anytime soon. We expect to use all earnings, and the proceeds from
this offering, to develop our business. Our board of directors will decide on
any future payment of dividends, depending on our results of operations,
financial condition, capital requirements, and any other relevant factors.
One small group of shareholders able to affect changes in control and win
approval of all other matters requiring shareholder approval. This means that
our other shareholders are at risk that all matters requiring shareholder
approval could be adopted without their support. After the offering, about 76%
of our common stock will be owned by two shareholders, Peterson and Sons Holding
Company and Owen Enterprises, LLC and its affiliates. Because our articles of
incorporation and the Nevada corporate laws require only a simple majority vote
in favor of any acquisition or merger, these two shareholders could prevent
approval of these actions or any other actions requiring shareholder approval
even if these actions might be beneficial to the other shareholders. They could
also approve these actions or any other actions requiring approval of
shareholders without any support from any other shareholder.
Business Factors that May Adversely Affect Our Operations.
We have an unproven marketing concept that has not been thoroughly tested.
This could make it more difficult for us to market our services and operate
profitably. Our proposed plan of operations will use an unproven marketing
concept that may have limited appeal. Further, while we believe that a demand
exists for our services, we have not undertaken any marketing or similar studies
that would confirm that such a demand exists, especially given the costs
associated with procuring gas supplies and generating both electricity and
steam. Even if a demand exists, we cannot assure you that we will be able to
sell power for a price which would be competitive with existing sources of power
and still profitable. Nor can we assure you that we will have profitable
operations.
We currently lack the financial resources necessary to purchase the natural
gas turbines and micro-turbine generating equipment necessary to generate energy
in sufficient amounts to be profitable. The kinds of natural gas turbines and
micro-generating equipment we will need in the field in order to generate
electrical power and steam are expensive. Even after completion of this
offering, we will not have the financial resources necessary to purchase this
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equipment and will therefore need to raise additional funds, either through an
additional offering of our equity securities or through debt from an as yet
unidentified lender. If we are unable to purchase this equipment, we will be
severely limited in implementing our proposed plan of operations and may need to
rely more heavily on identifying and brokering prospective energy generating
arrangements in order to generate revenues and conduct our operations. There can
be no assurance that we will be successful in raising additional funds. If we
cannot raise additional funds, an investment in our common stock will be even
more at risk than it would otherwise be and there is a likelihood that an
investor could lose his entire investment.
We have not obtained any contracts and, without contracts, we will be
unable to operate profitably. We have not obtained any contracts of any nature.
Generally, the two types of contracts we need to obtain in order to implement
our proposed plan of operation are gas purchase contracts that will assure us a
supply of natural gas in order to use our natural gas turbines and
micro-generating equipment in the field and contracts to purchase the energy we
are able to generate using our gas turbines and micro-generating equipment. We
have no way of determining whether we will be successful in obtaining either
type of contract and, accordingly, there can be no assurance that we will be
able to procure any contracts. The absence of these kinds of contracts will make
it more difficult to operate profitably and increase the risk that an investor
may lose his entire investment.
We lack working capital and will be unable to carry out our proposed plan
of operations without additional working capital. We are a newly formed venture
without significant assets or cash. We have not brought in any revenues from
operations. Our lack of cash makes it difficult for us to expand our business.
As of September 30, 1999, we had an accumulated deficit of $1,253. Continuing
losses are likely before our business might become profitable. There is no
assurance that our business will ever become profitable.
If we are unsuccessful in selling all of the common stock, we will not
realize the maximum cash proceeds necessary to fully implement our initial plan
of operation. This could significantly reduce the likelihood that we will be
able to operate profitably. In order to fully implement our initial plan of
operations, we need to sell all 200,000 shares of the common stock that we are
offering for sale. If we are not successful in selling all of the stock, we will
raise less capital than we anticipated. The resulting cash shortfall would, in
all likelihood, impair our ability to reach profitability because we would be
forced to cut back in planned expenditures which are designed to expand our
business.
Because we are significantly smaller than the majority of our national or
even local competitors, we may lack the financial resources needed to capture
market share in an amount sufficient for us to be profitable. Based on total
assets and revenues, we are significantly smaller than our potential
competitors. If we compete with them for the same geographic markets, their
financial strength could prevent us from capturing even a small portion of those
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markets. If a potential competitor decides to enter this market, their financial
resources would likely make it difficult to compete, either because of their
ability to generate power more efficiently and cost effectively, because of
their ability to procure sources of natural gas or because they can spend more
for advertising and marketing.
Our management has not previously operated a business similar to our and
may, therefore, lack sufficient experience to manage our business profitably.
Our management is not experienced in marketing and promoting our line of
products and services. For the last several years, our president, John R. Dixon
has acted as a business consultant to a wide range of companies engaged in a
diverse assortment of businesses. However, none of these businesses is engaged
in the same type of business as ours. While he has a background as a
professional engineer and has significant experience in public utilities
(electric power) distribution systems design, he has never managed a company
that is engaged in the kind of business that we intend to pursue.
FORWARD LOOKING STATEMENTS
This prospectus contains certain forward-looking statements that are based
on beliefs and assumptions of our management. Often, you can recognize these
statements because we use words such as "believe", "anticipate", "intend",
"estimate" and "expect" in the statements. Our actual performance in 1999 and
beyond could differ materially from the forward-looking statements contained in
this prospectus. However, we are not obligated to release publicly any revisions
to the forward-looking statements contained in this prospectus.
USE OF PROCEEDS
The following table describes the intended use of proceeds of this
offering. Because it is difficult to predict how many shares of this offering
may be sold given the fact that we are attempting to sell the shares ourselves
rather than using the services of an underwriter, the table presents information
that assumes that approximately one-third, two thirds and all of the shares are
sold. The categories of expenditures are also listed in the order of priority,
with purchase of merchandise being the most important category and working
capital the least important category. Accordingly, anywhere between
approximately $70,000 and $200,000 in gross proceeds would be allocated among
the intended uses as follows:
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Approximate
Percentage of
Shares Sold
In This Offering
----------------
33% 66% 100%
---------------------------------------
Description Amount
- ----------- ------
Consulting Fees:
Geologist: 0 2,500 5,000
Electrical Engineering: 2,500 10,000 25,000
Structural Engineering: 2,500 10,000 20,000
Mechanical Engineering: 5,000 10,000 20,000
Sales and Marketing 10,000 15,000 15,000
General and Administrative (1) 10,000 20,000 35,000
Offering Expenses (2) 40,000 40,000 40,000
Working Capital 0 25,000 40,000
-------------------------------------
Total $70,000 $132,500 $200,000
(1) Includes officers' salaries, rent, other fixed overhead expenses and other
costs associated with office space we anticipate leasing. Also includes
travel expenses. All of these expenses are associated with the development
and implementation of our proposed plan of operations.
(2) The expenses of the offering are estimated to be $40,000 and include filing
fees, transfer agent fees and expenses, legal fees and expenses and
accounting fees and expenses
If we are successful in raising only a minimal amount of money, the
resulting lack of proceeds will make it unlikely that we will be able to fully
implement our initial plan of operations. The projected expenditures above are
estimates and approximations only and may change due to changes in our business.
For example, we may determine that funds earmarked for one particular type of
allocation may be more productively spent in another allocated use, based upon
the experience of our management in evaluating our needs over the next twelve
months. Proceeds not immediately used will be invested in bank certificates of
deposit, insured bank deposit accounts or similar investments.
DIVIDEND POLICY
We currently plan to retain any earnings and use them to finance the growth
and development of our business. We also intend to use earnings for working
capital and general corporate purposes. We do not anticipate paying cash
dividends on the common stock for at least the next three years. Any payment of
dividends will be at the discretion of the board of directors and will depend
upon the following factors:
* earnings
* financial condition
* capital requirements
* level of indebtedness
* contractual provisions that might restrict the payment of dividends
* other factors that we cannot currently predict
Persons who desire or need dividend income should not invest in the common
stock.
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DILUTION
The net tangible book value deficiency of our outstanding shares of common
stock as of September 30, 1999 was approximately $(2,273) or $(.002) per share.
"Net tangible book value" per share represents the total amount of our tangible
assets, less the total amount of our liabilities, divided by the number of
shares of common stock outstanding. After giving effect to the sale of 200,000
shares offered at an initial public offering price of $1.00 per share less
estimated costs of the offering, our net tangible book value at September 30,
1999 would have been $157,727 or approximately $0.126 per share. This represents
an immediate increase in net tangible book value of $0.128 per share to existing
shareholders and an immediate dilution of approximately $.874 per share of
common stock to new investors.
The following table illustrates this per share dilution:
Initial public offering price per share $ 1.00
Net tangible book value per share
before the offering $(.002)
Increase per share attributable to new investors
purchasing this offering $ .128
Net tangible book value per share
after this offering $ .126
Dilution per share to new investors $ .874
The following table sets forth the number of shares of common stock
purchased, the total consideration paid and the average price per share paid by
our existing stockholders as of September 30, 1999 and new investors purchasing
the shares of common stock offered:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
---------------- ------------------- Average Price
Number Percent Amount Percent Per Share
<S> <C> <C> <C> <C> <C>
Existing shareholders......... 1,050,000 84% $ 1,050 0.5% $0.001
New investors................. 200,000 16% $200,000 99.5% $1.00
Total................ 1,250,000 100.0% $201,050 100.00%
</TABLE>
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The above discussion assumes that all 200,000 shares that we are offering
to the public at $1.00 will be sold. However, given the fact that we are
attempting to sell the shares ourselves rather than using the services of an
underwriter, it is possible that less than 200,000 shares will be sold. If less
than $200,000 in gross proceeds are received by us from the offering, dilution
to new investors who invest in the common sock will be greater than described
above. By way of example, if only 133,000 shares of common stock is sold
(approximately 2/3 of the amount offered), the tangible book value per share
would be $.077 and investors will suffer immediate dilution of $.923 per share.
If only 66,000 shares of common stock are sold (approximately 1/3 of the amount
offered), book value per share would be $.021 and investors will suffer dilution
of $.979 per share.
OUR BUSINESS
Introduction
We are a small company that was incorporated in April 1999 to engage in
identifying opportunities to supply electrical power, natural gas and steam to
potential customers, including businesses, governmental agencies and
cooperatives. We would like to be in the position to arrange purchase agreements
with natural gas exploration firms and to use the natural gas to power natural
gas combustion turbine and micro-turbine generating equipment. Initially, we
will focus on markets that are near natural gas fields and sell to either local
business and/or to the existing local power grid. If we are in the financial
position to do so, we would also eventually intend to build natural gas
pipelines from well-head to points of concentration of electrical load where we
can install natural gas combustion turbine and micro-turbine generating
equipment to produce and sell electrical power and steam. Typical markets for
these products are hospitals, office complexes, resorts, hotels as well as food
processing and other industrial plants. We expect that a large portion of our
revenues will come from the sale of our proposed power products to these
markets.
Our proposed plan of operations is based upon the ongoing deregulation of
the utility industry. This deregulation will allow the customer to choose from
whom they wish to purchase their energy. Due to the deregulation and subsequent
privatization of the utility industry, customers have signed long-term
outsourcing contracts with firms to take care of their energy needs. This
divergence from the traditional process of purchasing energy from the regional
utility will allow independent firms to exploit this market. An estimated 70
countries are currently privatizing or restructuring their electricity or gas
sectors, providing opportunities for companies to establish a presence in power
generation, especially in areas or countries where firms have control of or
access to gas fields.
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Proposed Plan of Operations
In our first year of operation, our efforts will be focussed entirely on
development of our operational infrastructure. We do not plan to conduct any
sales and/or generate any revenues during this period. Our development
activities will include:
* identifying natural gas fields
* establishing gas purchase contracts with the firms that are presently
operating from those fields
* locating existing natural gas pipeline routes
* identifying and evaluating manufacturing facilities within these areas
preparation of cost proposals for potential customers and
* engineering evaluation and design of electrical generation equipment
packages
We will use in-house staff as well as specific industry experts
(consultants) to assist with these efforts.
Our plan is to contract for the purchase of natural gas and, where
necessary, deliver the gas from its source and then convert that gas into useful
energy for the customer. It is our intention to purchase gas from various
exploration firms that are currently producing natural gas from fields in the
Appalachian region. Then we intend to either sell the gas directly or convert to
either electricity or steam. We will provide for sale or lease various types of
energy conversion equipment, ie: gas combustion turbines or micro-turbine
generating equipment. The equipment will reside at the customer facility and
will be metered to facilitate flow-through for billing purposes.
We will initially assess markets for both gas and electric power in the
Tennessee, Kentucky and TVA power distribution area. The assessments will
include:
* evaluation of existing electrical infrastructure
* identification of natural resources (gas)
* feasibility of strategic alliance with industry partners
* analysis of competition
* forecast of market performance
* development of regional economic development models
* identification of a customer base.
In our first year of operation, it is our intention to implement the
following operating plan: Our primary focus will be in the Appalachian area of
the United States. This area encompasses central to eastern Tennessee, southern
Kentucky and western Virginia. Several firms have experienced success recently
in locating extensive natural gas fields in this area and gathering systems and
pipeline are constructed and in place. We expect to pursue purchase contracts
with these firms to purchase natural gas from these fields. Current prices being
paid in this region range from $1.80 to $2.20 per 10,000 cubic feet. Initially,
this effort may be enhanced through Empire Energy Corporation. Two of the
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largest shareholders of our company are also large shareholders of Empire
Energy. Empire Energy is a small energy company that has achieved some success
in drilling for oil and gas. Preliminary discussions indicate that as it
expands, Empire may provide us with an opportunity to buy gas from its
production and to sell gas or to generate and sell electric power and steam.
However, we have not signed any gas purchase or similar contracts with Empire
and there is no assurance that such contracts will be entered into in the
future. If we are successful in obtaining a gas purchase contract from Empire,
it is our expectation that the initial contract would commit us to purchase
approximately 5 million cubic feet of natural gas per day at a rate of
approximately $1.50 to $2.00 per 10,000 cubic feet.
In addition, we anticipate that we will then use existing natural gas
pipeline maps to determine locations where gas fields are located in proximity
to the pipelines. Once localized areas have been identified where natural gas
reserves are located in proximity to natural gas pipelines, we would conduct a
search for manufacturing facilities that heavily rely on power to operate their
facility. There are a number of sources to facilitate the search of such
facilities including state and federal permitting databases, utility records and
Department of Energy records.
Our plan would then be to conduct a survey to assess the current types of
power being used, the prices being paid, the current suppliers of the power and
the feasibility of converting the power to natural gas, electricity or steam.
Once an assessment has been made of each facility, a cost proposal will be
prepared and presented to the facility. The bulk of this activity will be
performed by our President, John Dixon, who is familiar with the regional
utility market. Additional consulting resources that would be needed will
include geologists, electrical engineering, structural engineering, mechanical
engineering, sales and marketing and administrative. We have not identified any
individuals that may assist us in the consulting that would be necessary to
achieve our objectives but we believe that these technical personnel are readily
available.
At the point in time that we have secured purchase orders sufficient to
justify the purchase of power conversion generating equipment and installation
of pipelines, we intend to conduct a secondary equity offering to raise
sufficient funds to purchase the equipment. We anticipate that the secondary
offering would be in the $2,000,000 to $4,000,000 range. Once the funding is in
place, of which there can be no assurance, we will then purchase and/or lease
equipment, contract with a regional electrical firm to install the equipment,
set up software billing systems, procure insurance and begin producing and
selling power.
We expect to procure purchase contracts with a duration of at least two
years. The equipment will either be sold or leased to the customer. We will
attempt to get a volume discount from the micro-turbine equipment vendors for
the purchase of the equipment or we will negotiate lease terms reflective of a
volume leasing program and lease arrangements with the customers will be such
that we will retain a profit, ie: lease it more expensive than we pay for it.
Micro turbine generating equipment is readily available and can be purchased in
various configurations. An engineering evaluation will be conducted to assess
the ideal set-up and the objective will be to use a similar configuration at
multiple facilities.
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It is our objective to establish ourself as a local energy provider through
our relationship with independent gas producers and then, as funding allows,
ultimately expand into a regional company by exploiting our early position in
the market and gaining market share through name branding, alternative fuel
source availability and competitive pricing. In years two through four, our
target customers would be limited to manufacturing facilities in a localized
area.
If our cash flow permits, we would plan to expand our search for additional
opportunities, expand our customer base, and consider the acquisition of other
assets.
We also see an opportunity to supply reliable power to clients who can
afford on-site hybrid power plants incorporating mechanical generation in
combined cycle with fuel cell technology.
Fuel cells generate electricity by combining hydrogen and oxygen
electrochemically. Although the concept is over 100 years old, it is only
recently that technology brought fuel cells within economic practicality. The
combination of mechanical generation combined with electrochemical generation of
electricity offers an additional opportunity for us. We also forsee a market
opportunity arising from the movement of multi-national companies into Central
America. This trend, inspired by a low cost labor market, will add to the
already burdened ability to deliver quality electrical power and will afford
additional opportunities for Transport.
Another important segment of our business is the proposed acquisition and
resale of equipment designed to convert fuels into work . This includes the
broad category of transportation equipment including turbines and
micro-turbines, generators and combustors.
Investors are cautioned that even if all stock offered by this prospectus
is sold, we will have insufficient funds to purchase equipment necessary to
generate electrical power or steam or provide for on-site natural gas usage. If
we are successful in identifying potential gas fields from which we may purchase
natural gas in sufficient quantities to initiate the generation and ultimate
sale of electrical power and steam, we intend to raise additional funds by
another offering of our common stock. These additional funds would be necessary
to implement our business plan in a manner reasonably calculated to lead to
revenue generation and the possibility of profitable operations. There can be no
assurance that we would be successful in raising additional equity funds. If we
fail to raise additional funds, investors in this offering could lose their
entire investment.
Competition
All generators, distributors and purveyors of electricity, natural gas and
steam are our competitors. While the market is still dominated by the large
utilities that have controlled the market for decades, deregulation has allowed
small companies to compete in local environments using the approach that we
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intend to follow. Deregulation has also meant that a highly fragmented market
for spot production of energy, including electrical power, steam and natural gas
has emerged. There are essentially no barriers to entry into this market and we
expect that many new companies (as well as existing companies) will seek to take
advantage of the deregulated environment to provide energy in the manner
envisioned by our proposed plan of operations. Many if not most of these
competitors will have significantly greater financial resources, management
experience and established business relationships which will make it difficult
for us to compete.
Facilities
Our offices are presently located at 11011 King Street, Suite 260, Overland
Park, Kansas 66210 in approximately 800 square feet of office space subleased
from one of our shareholders, Owen Enterprises, LLC. Owen Enterprises, LLC
charges us $300 per month rent on a month to month basis pursuant to an oral
agreement. If we determine that new office space is desirable in the future
because of an increased need for expanded office space, we do not anticipate any
difficulties in obtaining new office space.
Employees
We presently have one employee, John R. Dixon. Other than the possibility
of hiring a part time administrative assistant, we have no present plans to hire
additional personnel following completion of the offering.
Legal Proceedings
It is possible that we may be subject, from time to time, to various legal
proceedings concerning claims stemming from our business. We are not a party to
any pending or threatened legal proceedings, nor have we been advised that any
such proceedings are contemplated.
Year 2000 Issue
We are aware of the issues associated with the programming code in existing
computer systems as the year 2000 approaches. The "Year 2000" problem is
concerned with whether computer systems will properly recognize date sensitive
information when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or cause a system to
fail. The Year 2000 problem is pervasive and complex since virtually every
company's computer operation will be affected in some way. We have not incurred
any costs in solving Year 2000 problems nor do we anticipate significant future
costs associated with "Year 2000" compliance.
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<PAGE>
We depend on information contained primarily is electronic format in
databases and computer systems maintained by us and third parties with whom we
deal. The disruption of third-party systems or our systems interacting with
these third-party systems could prevent us from processing transactions and
ordering products and could materially adversely affect our business and results
of operations.
We have completed an audit of our internal systems and believe these
systems are Year 2000 compliant. We do not rely on any non-compliant third party
software and therefore third party non-compliance will not materially adversely
affect our business operations. We have upgraded our software and hardware to
the latest year 2000 compliant platform and tested our software in the new
platform. In case our computerized information system fails, we will rely on our
manual information system, which is comprised of original hand written or typed
records, to process our transactions such as accounts receivable, accounts
payable and invoicing. The manual system will be very time consuming and labor
intensive, therefore, additional staff might be required if we have to use the
manual system in the worst case scenario. We believe that additional staff can
be hired and trained within a reasonable time frame to meet our requirements in
case our information system failed.
OUR MANAGEMENT
Officers and Directors
Information concerning each of our executive officers and directors is set
forth below:
Name Age Position
---- --- --------
John R. Dixon 67 Chief Executive Officer,
President, Director
Norman L. Peterson 58 Secretary, Treasurer,
Director
John C. Garrison 48 Director
Our directors are elected to hold office until the next annual meeting of
shareholders and until their respective successors have been elected and
qualified. Our officers are elected by the Board of Directors and hold office
until their successors are elected and qualified.
We have no audit or compensation committee.
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John R. Dixon has been Chief Executive Officer, President and a Director of
our company since it was formed in April 1999. He received a degree from the
University of Kentucky in 1958 in electrical engineering and did graduate work
there in physics. He has worked in the public utility industry and as a
consultant to private industry regarding rate analysis, service-contract
negotiations and related functions. He brings a marketing and general management
background to Transport. A registered professional engineer, licensed by boards
of twenty-eight states, Mr. Dixon has over thirty years experience in
engineering design and management. He founded two successful consulting firms
and served as director on several publicly traded companies. His experience
includes public utilities energy distribution system design, microwave radio
relay communications system operations, aerospace systems, missile and facility
simulation, airborne/fixed-base communications and navigation systems, and
aviation related process and infrastructure design and support consulting. He
has extensive international experience including the countries of Libya, Saudi
Arabia, Philippines, Belize, Japan, Lebanon and Mexico. Mr. Dixon served as
President of Synergy, Inc. from 1978 to 1982 and from 1982 to 1988 he served as
CEO of HSD, Inc. Since 1988, Mr. Dixon has acted as a private consultant to
three private clients of HSD, Inc. and as a consultant to the public corporation
to whom HSD was sold.
Norman L. Peterson has been Secretary, Treasurer and a Director of our
company since it was formed in April 1999. From 1974 to 1979, he was a senior
officer, director and stockholder of the holding company that owned Platte
Valley Bank and Trust Company as well as a director and shareholder of the bank.
From 1988 to 1996, he was chairman and chief executive officer of Advanced
Financial, Inc. a publicly held mortgage lending financial institution located
in Shawnee, Kansas. Since 1984, he has also been president of Peterson and Sons
Holding Company, a privately held investment and financial consulting company.
Also, since 1998 he has been President and a Director of Empire Energy
Corporation, a publicly held oil and gas exploration and development company
located in Overland Park, Kansas.
John C. Garrison has been a director of our company since April 1999. Mr.
Garrison is a certified public accountant with over twenty-five years of
experience in accounting, auditing and financial management. He served as
corporate secretary, director and chief accounting officer of Infinity, Inc., a
publicly traded oilfield service and oil and gas exploration and development
company from April 1995 to August 1999. He is also a director of two other
public traded energy companies. He is licensed to practice public accountancy in
Kansas and Missouri and has been involved in an active practice since 1976. Mr.
Garrison received a degree in business administration and accounting from Kansas
State University.
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Executive Compensation
We have not paid any compensation, either by way of salary or in the
form of stock options, stock purchase warrants, grants of stock or any other
form of remuneration to any of our officers or directors since our company was
founded in April 1999.
Employment Agreements
There are no employment agreements with any of our officers or directors.
Mr. Dixon intends to receive an annual salary of $15,000 upon completion of this
offering if we are successful in selling all shares.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the
ownership of the our common stock by (a) each of our directors, (b) all of our
executive officers and directors as a group, and (c) all persons known by us to
own more than 5% of our common stock. The percentage owned after the offering
assumes that all of the offered common stock will be sold.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
----------------- --------------
Name and Address Shares Percentage Shares Percentage (1)
- ----------------- ------ ---------- ------ --------------
<S> <C> <C> <C> <C>
John R. Dixon 50,000 4.8% 50,000 4%
11011 King Street
Suite 260
Overland Park, KS 66210
John C. Garrison 15,000 1.4% 15,000 1.2%
9875 Widmer Road
Lenexa, Kansas 66215
Owen Enterprises, LLC (2) 500,000 47.6% 500,000 40%
11011 King Street
Suite 260
Overland Park, Kansas 66210
Peterson and Sons Holding Company (3) 450,000 42.9% 450,000 36%
4001 W. 104th Terrace
Overland Park, Kansas 66207
All directors and executive officers
as a Group (3) persons 515,000 49% 515,000 41.2%
</TABLE>
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- -----------------------------
(1) Assumes the sale of all 200,000 shares offered by this prospectus.
(2) Includes 50,000 shares owned by Laura E. Owen, the wife of David C.
Owen. David C. Owen controls Owen Enterprises, LLC.
(3) Peterson & Sons Holding Company is controlled by Mark Peterson and
Steve Peterson, the adult sons of Norman L. Peterson.
CERTAIN TRANSACTIONS INVOLVING OUR
OFFICERS, DIRECTORS AND AFFILIATES
Our corporate offices are located at the offices of Owen Enterprises, LLC.
Owen Enterprises, LLC is a shareholder of our company and is controlled by David
C. Owen. Under an oral agreement we have with Owen Enterprises, LLC, we are
charged rent in the amount of $300 per month on a month to month basis for use
of approximately 800 square feet of office space. We believe that the rental
rate is fair and reasonable considering the prevailing rent rates for prime
commercial office space in the Overland Park, Kansas geographic area.
On April 21, 1999, we issued shares of our restricted common stock to our
affiliates as follows:
Name Consideration Number of Shares
---- ------------- ----------------
Peterson and Sons
Holding Company $150.00 150,000
Owen Enterprises, LLC 150.00 150,000
On June 3, 1999, we issued shares of our restricted common stock to our
officers, directors or affiliates as follows:
Name Consideration Number of Shares
---- ------------- ----------------
Peterson and Sons
Holding Company $300.00 300,000
Owen Enterprises, LLC 300.00 300,000
John R. Dixon 50.00 50,000
Laura E. Owen 50.00 50,000
John C. Garrison 15.00 15,000
Bryan S. Ferguson 20.00 20,000
Karen E. Taylor 15.00 15,000
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<PAGE>
DESCRIPTION OF COMMON STOCK
General
We are authorized to issue 50,000,000 shares of $0.001 par value common
stock and 5,000,000 shares of $0.001 par value preferred stock.
Common Stock
As of the date of this prospectus, there were 1,050,000 shares of common
stock outstanding held by seven (7) shareholders.
Holders of common stock are entitled to one vote per share in all matters
to be voted on by the shareholders. Except for any priority in the payment of
dividends which may be granted to the holders of preferred stock, holders of
common stock are entitled to receive on a per share basis any dividends that may
be legally declared from time to time by our board of directors. If we were to
liquidate, dissolve or wind up our affairs, holders of common stock would be
entitled to share ratably in all assets remaining after payment of our
liabilities and the liquidation preference, if any, of any outstanding preferred
stock. All of our issued and outstanding shares of common stock are fully paid
and non-assessable. The rights, preferences and privileges of common stock
holders are subject to the rights of the holders of preferred stock even if the
preferred stock is issued after your common stock.
Preferred Stock
The board of directors has the authority, without any further vote or
action by the shareholders, to issue up to 5,000,000 shares of preferred stock
from time on terms that the board of directors may determine. Although it is not
possible to state what effect, if any, issuance of preferred stock might have on
the rights of common stockholders, the issuance of preferred stock may have one
or more of the following effects:
* to restrict common stock dividends if preferred stock dividends have
not been paid
* to dilute the voting power and equity interest of holders of common
stock to the extent that any preferred stock has voting rights or is
convertible into common stock
* to prevent current holders of common stock from participating in our
assets if we were to liquidate until the preferred stockholders have
been paid.
The issuance of any shares of preferred stock having rights superior to
those of common stock may result in a decrease of the value or market price of
the common stock. The issuance of preferred stock could also be used by the
board of directors as a device to prevent a change in our control. There are no
shares of preferred stock presently outstanding and the board of directors does
not presently intend to issue any shares of preferred stock.
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No Preemptive Rights
Holders of common stock do not have any preemptive right to subscribe for
or purchase any class of our securities nor do they have any redemption or
conversion rights.
No Cumulative Voting
Common stock shareholders do not have the right to cumulate votes in an
election of directors or for any other matter or matters to be voted upon by our
shareholders.
Certain Provisions of the Nevada General Corporation Law
As a Nevada corporation, we are subject to the Nevada General Corporation
Law. Under certain circumstances, the following provisions of the Nevada law may
delay or make more difficult acquisitions or changes in our control. These
provisions may make it more difficult to accomplish transactions that our
shareholders may believe to be in their best interests. These provisions may
also have the effect of preventing changes in our management.
Control Share Acquisitions.
Under Sections 78.378 to 78.3793 of Nevada law, an acquiring person who
acquires a controlling interest in our shares may not exercise voting rights on
any of these shares unless these voting rights are granted by a majority vote of
the our disinterested shareholders at a special meeting of the our shareholders
held upon the request and at the expense of the acquiring person. If the control
shares have full voting rights and the acquiring person acquires control shares
with a majority or more of all the voting power, any shareholder, other than the
acquiring person, who does not vote for authorizing voting rights for the
control shares, is entitled to demand payment for the fair value of their
shares, and we must comply with the demand. An "acquiring person" means any
person who, individually or acting with others, acquires or offers to acquire,
directly or indirectly, a controlling interest in our shares. "Controlling
interest" means the ownership of our outstanding voting shares sufficient to
enable the acquiring person, individually or acting with others, directly or
indirectly, to exercise
* one-fifth or more but less than one-third
* one-third or more but less than a majority, or
* a majority or more of the voting power of our shares in the election
of our directors.
Voting rights must be given by a majority of our disinterested shareholders
as each threshold is reached or exceeded. "Control shares" means our outstanding
voting shares that an acquiring person acquires or offers to acquire in an
acquisition or within 90 days immediately preceding the date when the acquiring
person becomes an acquiring person. The Nevada law applies to any corporation
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that is organized in Nevada, has 200 or more shareholders (at least 100 of whom
are shareholders of record and residents of Nevada) and does business in Nevada
directly or through an affiliated corporation. It does not apply if our articles
of incorporation or by-laws in effect on the 10th day following the acquisition
of a controlling interest by an acquiring person provide that these provisions
do not apply. Our amended articles of incorporation and bylaws do not exclude us
from the restrictions imposed by these provisions.
Certain Business Combinations.
Sections 78.411 to 78.444 of the Nevada law restrict our ability to engage
in any combination with an "interested shareholder" for three years after the
interested shareholder acquired the shares that cause him to become an
interested shareholder unless he had prior approval of our board of directors.
If the combination did not have prior approval, the interested shareholder may
proceed after the three-year period only if the shareholder receives approval
from a majority of our disinterested shares or the offer is fairly priced. For
the above provisions, "resident domestic corporation" means a Nevada corporation
that has 200 or more shareholders. An "interested shareholder" is someone who
is:
* the beneficial owner, directly or indirectly, of 10% or more of the
voting power of our outstanding voting shares, or
* our affiliate or associate and who within three years immediately
before the date in question, was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of our outstanding
shares at that time.
This does not apply to corporations that so elect in a charter amendment
approved by a majority of the disinterested shares. This type of charter
amendment, however, would not become effective for 18 months after its passage
and would apply only to stock acquisitions occurring after its effective date.
Our amended articles of incorporation do not exclude us from the restrictions
imposed by these provisions.
Directors' Duties.
Section 78.138 of the Nevada law allows our directors and officers, in
exercising their powers to further our interests, to consider the interests of
our employees, suppliers, creditors and customers. They can also consider the
following:
* the economy of the state and the nation;
* the interests of the community and of society
* our long-term and short-term interests and shareholders, including the
possibility that these interests may be best served by our continued
independence
Our directors may resist a change or potential change in control if they, by a
majority vote of a quorum, determine that the change or potential change is
opposed to or not in our best interest. Our board of directors may consider
these interests or have reasonable grounds to believe that, within a reasonable
time, any debt which might be created as a result of the change in control
would:
* cause our assets to be less than our liabilities
* render us insolvent
* cause us to file for bankruptcy protection
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<PAGE>
Advance Notice for Raising Business or Making Nominations at Meetings.
Our amended articles of incorporation establish an advance notice procedure
for shareholder proposals to be brought before a meeting of our shareholders and
for nominations by shareholders of candidates for election as directors at an
annual meeting or a special meeting at which directors are to be elected. This
type of business may only be conducted at a meeting of shareholders when it has
been brought before the meeting by either our board of directors or by a
shareholder who has given our secretary timely notice, in proper form, of the
shareholder's intention to bring the business before the meeting. The presiding
officer at the meeting has the authority to make a determination concerning
whether proper procedures have been followed. Only persons who are nominated by
our board of directors, or who are nominated by a shareholder who has given
timely written notice, in proper form, to the secretary prior to a meeting at
which directors are to be elected will be eligible for election as our director.
To be timely, notice of nominations before an annual meeting must be
received by our secretary no less than 90 days prior to the meeting. Notice of
other business before an annual meeting must be received by our secretary not
less than 20 days nor more than 50 days prior to the meeting. Similarly, notice
of nominations or other business to be brought before a special meeting must be
delivered to our secretary at our principal executive office no later than the
close of business on the 10th day following the day on which notice of the date
of a special meeting of shareholders was given.
The notice of any nomination for election as a director must set forth
* the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated
* a representation that the shareholder is a holder of our record stock
entitled to vote at the meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in
the notice
* a description of all arrangements or understandings between the
shareholder and each nominee and
* any other person or persons (naming the person or persons) by which
the nomination or nominations are to be made by the shareholder any
other information regarding each nominee proposed by the shareholder
that would be required to be included in a proxy statement filed under
the proxy rules of the SEC, if the nominee had been nominated, or
intended to be nominated, by the board of directors; and
* the consent of each nominee to serve as our director if so elected.
The notice of other business to be brought before the annual meeting must
state:
* a brief description of the business proposed to be brought before the
annual meeting and the reasons for conducting the business at the
annual meeting
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<PAGE>
* the name and address, as they appear on our books, of the shareholder
proposing the business
* the number of our shares which are beneficially owned by the
shareholder; and
* any material interest of the shareholder in the business.
Amendments to Bylaws.
Our amended articles of incorporation provide that the power to adopt,
alter, amend, or repeal our bylaws is vested exclusively with the board of
directors.
Limitation of Liability and Indemnification
Our amended articles of incorporation contain a provision permitted under
the Nevada law concerning the liability of directors. This provision eliminates
a director's personal liability for monetary damages resulting from a breach of
fiduciary duty, except when a breach of a director's duty of loyalty or acts or
omissions that involve intentional misconduct or a knowing violation of law are
involved. This provision does not limit or eliminate our rights or the rights of
any shareholder to seek non-monetary relief, such as an injunction or
rescission, if there is a breach of a director's fiduciary duty. This provision
will not change a director's liability under federal securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
is permitted to our directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that in the opinion of the SEC
this kind of indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Transfer Agent and Registrar
Before the effective date of this offering, we intend to engage Interwest
Transfer Company, Inc. of Salt Lake City, Utah, as the transfer agent and
registrar of the common stock.
TERMS OF THE OFFERING
Plan of Distribution
We are offering to sell up to 200,000 shares of our common stock at a
purchase price of $1.00 per share. The common stock is being offered by our
officers and directors on a "direct participation" basis. This means that no
underwriter will be involved to assist us in our sales efforts. The employees,
officers and directors who will sell the offering on our behalf are John R.
Dixon, John C. Garrison and Norman L. Peterson. These individuals will be
relying on the safe harbor in Rule 3a4-1 under the Securities Exchange Act of
1934 to sell our securities. The principal shareholders will supply names of
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<PAGE>
prospective investors to our management, none of whom shall have been offered
shares of common stock prior to the date of this prospectus. We do not intend to
offer the shares of common stock by means of general advertising or
solicitation. No sales commission, finder's fee or other compensation (other
than the normal salaries paid to our management) will be paid for common stock
that we sell. We reserve the right to withdraw, cancel or reject any offer to
purchase our stock. The common stock will not be sold to our insiders, control
persons, or affiliates. There are no plans, proposals, arrangements or
understandings with any potential sales agent with respect to participating in
the distribution of our securities. If at some point in the future participation
with a sales agent develops, the registration statement will be amended to
identify those persons.
Lack of a Public Market.
Before the offering, there has been no established trading market for the
common stock. Even if a public market were to be created or maintained, brokers
or dealers who make a market in or otherwise trade in the common stock would be
subject to additional requirements when trading our stock because our stock
would be considered to be a "penny stock". For example, Rule 15g-9 under the
Securities Exchange Act of 1934 imposes additional sales practice requirements
upon brokers-dealers who sell "penny stocks" to persons other than established
customers and institutional accredited investors. For transactions under this
rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to the sale. The SEC usually defines a "penny stock" to be any non-Nasdaq
stock market equity security that has a market price of less than $5.00 per
share. For any transaction by broker-dealers involving a penny stock, the rules
of the SEC require delivery, prior to a transaction in penny stock, of a risk
disclosure document relating to the penny stock market. As a result of these
requirements, the market liquidity of our stock could be severely and adversely
affected.
In addition, the National Association of Securities Dealers, Inc. has
adopted a series of changes pertaining to the OTC bulletin board and the OTC
market. Generally stated, these changes:
* allow only those companies that report their current financial
information to the SEC, banking, or insurance regulators to be quoted
on the OTC bulletin board;
* require brokers, before they recommend a transaction involving an OTC
security, to review current financial statements on the company they
are recommending; and,
* prior to the initial purchase of an OTC security, require that every
investor receive a standard disclosure statement (prepared by the
NASD) emphasizing the differences between OTC securities and other
market-listed securities.
The NASD is also considering the adoption of additional changes, such as
seeking the authority for the NASD to halt trading of securities on the OTC
bulletin board when the safety of the investment public warrants a halt in
trading. We cannot predict the likelihood of these proposed changes being
approved by the SEC in their current form or the adoption of any additional
changes by the NASD.
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In addition, in order to create a market in our common stock that would
trade on the OTC bulletin board, we would need to recruit an NASD member
broker-dealer to act as a market maker. Although we have identified some
potential market makers, we have not entered into any negotiations or
arrangements with any broker-dealer to act as a market maker. Even if such a
public market were to develop, the vagaries of the stock market might impose
significant price and volume fluctuations that may or may not be related to our
operating performance.
We have not applied for a trading symbol under which our stock would trade.
It is anticipated that we would apply for a trading symbol once we have
identified a market maker who would make a market in our stock.
Determination of Offering Price.
We arbitrarily determined the offering price and other terms of the common
stock after considering the following factors:
* the amount of proceeds required to initiate our business plan and
marketing strategy
* our lack of revenues
* estimates of future revenues
* our management capability
* our plans for future growth
* the general condition of the securities markets
* the amount of retained equity to the present shareholders.
Prospective investors should not assume that the offering price of the
common stock necessarily reflects the actual value of the common stock.
No Minimum Investment
There is no minimum investment that any investor must make in this
offering. Further, there is no minimum amount of stock that must be sold in
order for this offering to go forward. All funds received by us from the sale of
the common stock offered by this prospectus will be deposited immediately into
our operating account and used in our operations.
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Term of the Offering.
This offering will terminate six months from the date of this prospectus
unless all shares offered by this prospectus are sold prior to that date.
SHARES ELIGIBLE FOR FUTURE SALE
In General
Once the offering is complete, we will have a total of 1,250,000 shares of
common stock outstanding, assuming we are able to sell all shares of common
stock offered by this prospectus. Of these shares of common stock, all shares
from the offering will be freely tradable without restriction or further
registration under the Securities Act, except that any shares held by our
"affiliates," as that term is defined in Rule 144 of the Act, may generally be
sold only in compliance with the limitations of Rule 144 described below.
Sales of Restricted Shares
In general. The remaining 1,050,000 shares of common stock are "restricted
securities" as defined in Rule 144. Restricted securities may be sold in the
public market only if they are registered or if they qualify for an exemption
from registration under the Securities Act. Subject to the volume limitations
described below, all of these restricted shares may be sold beginning 90 days
from the date of this prospectus.
Who can sell.
In general. Under Rule 144 a person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for at
least one year can sell, within any three-month period beginning 90 days after
the date of this prospectus, a number of shares of common stock that does not
exceed the greater of:
(a) 1% of the then outstanding shares of common stock (about 12,500 shares
immediately after the offering); or
(b) the average weekly trading volume in the common stock during the four
calendar weeks before notice of the Rule 144 sale is filed, subject to
a few restrictions described in Rule 144.
No volume limits. In addition, any person who has not been our affiliate at
any time during the 90 days before a sale and who has beneficially owned the
shares he or she desires to sell for at least two years may sell those shares
under Rule 144(k) and not be concerned with the volume limits described above.
28
<PAGE>
Effect of Sales of Shares. Before the offering, there has been no public
market for the common stock. No precise prediction can be made as to whether a
market will be created or sustained after the offering. Therefore, we cannot
predict what precise effect sales of restricted stock may have on the market
price of the common stock. Nevertheless, sale of substantial amounts of common
stock in the public market could adversely affect market prices. Sales of
restricted stock could also impair our future ability to raise capital through
the sale of our equity securities.
LITIGATION
We are not a party to any pending or threatened legal proceedings.
LEGAL MATTERS
We are being advised on the legality of issuing the common stock offered by
this prospectus by Allen G. Reeves, P.C., Denver, Colorado.
EXPERTS
Our financial statements as of September 30, 1999, and for the period from
April 15, 1999 (inception) through September 30, 1999, included in this
prospectus have been included in reliance on the report of Sartain Fischbein &
Company, our independent certified public accountants, appearing on page F-2,
and upon the authority of that firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed our Form SB-2 registration statement with the SEC. This
prospectus does not contain all of the information set forth in the registration
statement. You'll find additional information about us and our common stock in
the registration statement. For example, in this prospectus we've summarized or
referred to some contracts, agreements, and other documents that have been filed
as exhibits to the registration statement. The registration statement, including
its exhibits and schedules, may be inspected without charge at the SEC's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
may be obtained from that office, if you pay the applicable fees. The
registration statement, including its exhibits and schedules, are also available
on the SEC's website at www.sec.gov.
We have to comply with the information requirements of the Securities
Exchange Act of 1934, and will file reports, proxy statements, and other
information with the SEC. These materials can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth Street, N.W.
Washington, D.C. 20549, or at its regional offices at 500 West Madison Street,
29
<PAGE>
Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of these materials can be obtained from the SEC's
Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Some information about us is also available on the SEC's
website at www.sec.gov.
We intend to furnish our shareholders, after the close of each calendar
year, with an annual report that describes our business and contains audited
financial statements that have been examined and reported upon by an independent
certified public accountant. In addition, we may from time to time furnish our
shareholders with other reports that we believe will help keep them informed
about our business.
30
<PAGE>
TRANSPORT RECOVERY
SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
================================================================================
FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITORS' REPORT
For the Period From April 15, 1999 (Inception) to September 30, 1999
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
================================================================================
CONTENTS
- --------------------------------------------------------------------------------
Page
----
Independent Auditors' Report F-2
Financial Statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Deficit F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7 to F-8
F-1
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders
Transport Recovery Services Corporation
Overland Park, Kansas
We have audited the accompanying balance sheet of Transport Recovery Services
Corporation (a development stage company) as of September 30, 1999, and the
related statements of operations, stockholders' deficit, and cash flows for the
period from April 15, 1999 (inception) to September 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Transport Recovery Services
Corporation as of September 30, 1999 and the results of its operations and its
cash flows for the period from April 15, 1999 (inception) to September 30, 1999,
in conformity with generally accepted accounting principles.
December 8, 1999 /s/ Sartain Fischbein & Co.
F-2
================================================================================
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
================================================================================
September 30, 1999
- --------------------------------------------------------------------------------
ASSETS
Current Asset:
Cash $ 757
-------
Deferred Offering Costs 2,070
-------
$ 2,827
=======
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable $ 530
Notes payable 2,500
-------
3,030
-------
Stockholders' Deficit
Preferred stock, $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding --
Common stock, $.001 par value, 50,000,000 shares
authorized, 1,050,000 shares issued and outstanding 1,050
Deficit accumulated during development stage (1,253)
-------
(203)
-------
$ 2,827
=======
F-3
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
================================================================================
Period from April 15, 1999 (inception) to September 30, 1999
- --------------------------------------------------------------------------------
Revenue $ --
General and Administrative Expenses 1,253
-----------
Net Loss $ (1,253)
===========
Basic Loss Per Share $ *
===========
Basic Weighted Average Shares Outstanding 1,050,000
===========
* Less than $.01 per share
F-4
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
========================================================================================
Period from April 15, 1999 (inception) to September 30, 1999
- ----------------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock During
------------------------ Development
Shares Amount Stage
------ ------ -----------
<S> <C> <C> <C>
Balance, April 15, 1999 (inception) -- $ -- $ --
Common stock issued for cash 1,050,000 1,050 --
Net loss -- -- (1,253)
--------- --------- ---------
Balance, September 30, 1999 1,050,000 $ 1,050 $ (1,253)
========= ========= =========
F-5
========================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
================================================================================
Period from April 15, 1999 (inception) to September 30, 1999
- --------------------------------------------------------------------------------
Cash Flows From Operating Activities:
Net loss $ (1,253)
Adjustment to reconcile net loss to net cash used in
operating activities:
Change in accounts payable 530
--------
Net Cash Used in Operating Activities (723)
--------
Cash Flows From Financing Activities:
Borrowing on notes payable 45,000
Repayments on notes payable (42,500)
Deferred offering costs (2,070)
Proceeds from the sale of common stock 1,050
--------
Net Cash Provided By Financing Activities 1,480
--------
Net Increase in Cash 757
Cash, beginning of period --
--------
Cash, end of period $ 757
========
F-6
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM APRIL 15, 1999 (INCEPTION) TO SEPTEMBER 30, 1999
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations: Transport Recovery Services Corporation (the
"Company") was incorporated in April 1999 to recognize business
opportunities throughout the Western Hemisphere.
Deferred Offering Costs: Deferred offering costs represent costs incurred
in connection with the Company's proposed public offering. Deferred
offering costs will be offset against net proceeds, if successful, or
expensed in operations if the offering is unsuccessful.
Per Share Information: The computation of earnings per share is based on
the income applicable to common stockholders, divided by the weighted
average number of common shares outstanding during the period.
Income Taxes: The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable
to difference between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
F-7
================================================================================
<PAGE>
TRANSPORT RECOVERY SERVICES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
================================================================================
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM APRIL 15, 1999 (INCEPTION) TO SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
2. DEVELOPMENT STAGE OPERATIONS
The Company was incorporated on April 15, 1999. The operations to date have
consisted primarily of raising the initial capital and developing a
business plan. The Company intends to install combustion turbine and
microturbine generating equipment to produce and sell electrical power and
steam to hospitals, office complexes, resorts, hotels, food processing and
other industrial plants.
The Company anticipates raising additional capital and/or obtaining debt
financing in order to facilitate its business plan.
There can be no assurances the Company will be successful in raising
additional capital, obtaining financing or in its initial business plan.
3. NOTES PAYABLE
The Company borrowed $5,000 from stockholders with interest at 10%. The
notes are due on demand. The Company made a $2,500 payment to one of the
lenders and at September 30, 1999, the balance outstanding on the notes is
$2,500.
Subsequent to September 30, 1999, the Company borrowed an additional
$25,000 from an unrelated individual and used a portion of the proceeds to
payoff the existing $2,500 of notes. The note bears interest at 10% and is
due on October 4, 2000.
4. INCOME TAXES
Components of the net deferred tax asset at September 30, 1999 are as
follows:
Net operating loss carryforwards $ 200
Valuation allowance (200)
-----
Net deferred tax asset $ --
=====
At September 30, 1999, the Company has a net operating loss of
approximately $1,300 which expires in 2014. Due to uncertainty of
realization, a deferred tax asset valuation allowance has been provided.
F-8
================================================================================
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Section 78.037 of the Nevada Revised Statutes ("NRS") provides that a
corporation, in its Articles of Incorporation, may provide for the limitation of
personal liability of directors or officers to the corporation or its
stockholders for breach of fiduciary duty except for acts or omissions involving
intentional misconduct, fraud or knowing violation of law or unlawful payment of
distributions. The Company's Articles of Incorporation contains such a
provision.
The Company's Articles of Incorporation, pursuant to the authority granted
by Section 78.037 NRS, state that no director or officer shall be personally
liable to the Corporation for monetary damages for any breach of fiduciary duty
by such person as a director or officer. Notwithstanding the foregoing sentence,
a director or officer shall be liable to the extent provided by applicable law,
(i) for acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or (ii) for the payment of dividends in violation of
NRS 78.300.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities offered hereby.
SEC Registration Fee............................... $ 55.60
Printing........................................... 500.00
Blue Sky Fees and Expenses......................... 500.00
Transfer Agent Fees................................ 500.00
Accounting Fees and Expenses....................... 8,000.00
Legal Fees and Expenses............................ 30,000.00
Miscellaneous Fees and Expenses.................... 450.00
----------
Total $40,005.60
Item 26. Recent Sales of Unregistered Securities.
Since inception in 1999, sales of unregistered common stock (the only
issued and outstanding securities of the Company) were made by the small
business issuer as follows:
<PAGE>
On April 21, 1999, the small business issuer sold shares of its restricted
common stock as follows:
Name Consideration Number of Shares
---- ------------- ----------------
Peterson and Sons
Holding Company $150.00 150,000
Owen Enterprises LLC 150.00 150,000
On June 3, 1999, the small business issuer sold shares of its restricted common
stock as follows:
Name Consideration Number of Shares
---- ------------- ----------------
Peterson and Sons
Holding Company $300.00 300,000
Owen Enterprises, LLC 300.00 300,000
John R. Dixon 50.00 50,000
Laura E. Owen 50.00 50,000
John C. Garrison 15.00 15,000
Bryan S. Ferguson 20.00 20,000
Karen Taylor 15.00 15,000
With respect to the sale of all unregistered securities as described above,
this small business issuer relied upon the exemptions afforded by Sections 4 (2)
or 4 (6) of the Securities Act of 1933 or Rule 506 promulgated under such Act.
All recipients were either officers or directors of the Company or were
independent, non-affiliated, accredited investors. Each of the certificates
evidencing the respective securities contained a restrictive Rule 144 legend. No
transfer will be permitted without opinion of counsel that such transfer is in
compliance with the rules and regulations of the SEC.
Item 27. Exhibits.
See Index to Exhibits.
Item 28. Undertakings.
(a) The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities
under Rule 415 of the Securities Act, a post-effect amendment to
this registration statement to:
<PAGE>
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the registration statement; and
(iii) Include any additional or changed material information on
the plan of distribution.
(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.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
controlling persons of the registrant pursuant to the provisions
described in Item 24, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding), is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(f) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance on Rule
430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under
the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements of filing on Form SB-2 and authorized this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Overland Park, Kansas on December _, 1999.
Transport Recovery Services Corporation
By: /s/ John R. Dixon
----------------------------------
John R. Dixon
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December _, 1999.
Signature Title Date
/s/ John R. Dixon Chief Executive Officer December _ 1999
- ------------------------ President, Director
John R.Dixon
/s/ Norman L. Peterson Treasurer, Secretary, December _ 1999
- ------------------------ Director, Principal
Norman L. Peterson Accounting Officer,
Principal Financial Officer
/s/ John C. Garrison Director December _ 1999
------------------------
John C. Garrison
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM SB-2
TRANSPORT RECOVERY SERVICES CORPORATION
3.1 Articles of Incorporation of Registrant
3.2 By-laws of Registrant
5.1 Opinion of counsel Regarding Legality
24.1 Consent of counsel
24.2 Consent of Sartain Fischbein & Company, certified public accountants
27 Financial Data Schedule
Exhibit 3.1
ARTICLES OF INCORPORATION
(Pursuant to NRS 78)
STATE OF NEVADA
Secretary of State
1. Name of Corporation:
Transport Recovery Services Corporation
2. Resident Agent:
Name of Resident Agent: Corporation Trust Company of Nevada
Street Address: One East 1st Street, Reno, Nevada 89501
3. Shares:
The corporation is authorized to issue 50,000,000 shares of $.001 par value
common stock and 5,000,000 shares of $.001 par value preferred stock.
4. Governing Board:
The governing board shall be directors:
The initial board of directors shall consist of one director: Norman L.
Peterson, 11011 King Street, Suite 260, Overland Park, KS 66210.
5. Signature of Incorporator:
/s/ Allen G. Reeves
-------------------
Allen G. Reeves
900 Equitable Building, 730 Seventeenth Street
Denver, Colorado 80202
State of Colorado, City and County of Denver
This instrument was acknowledged before me on
April 15, 1999 by
Allen G. Reeves as incorporator
/s/ Pamela L. Langing
------------------------------------------------------------
Pamela L. Langing Notary Public State of Colorado
My commission expires 06/29/2002
6. Certificate of acceptance of appointment of resident agent:
Corporation Trust Company of Nevada hereby accepts appointment as resident
agent for the above named corporation.
Corporation Trust Company of Nevada
By: _________________________ April _, 1999.
Exhibit 3.2
BYLAWS
OF
TRANSPORT RECOVERY SYSTEMS CORPORATION
ARTICLE I
Meetings of Stockholders
------------------------
SECTION 1. Place of Meetings: Meetings of the Stockholders of the
Corporation shall be held at the registered office of the Corporation, or at
such other place as specified from time to time by the Board of Directors of the
Corporation. If the Board of Directors shall specify another location, such
change in location shall be recorded on the notice calling such meeting.
SECTION 2. Annual Meeting of Stockholders: The annual meeting of the
Stockholders shall be held within one hundred fifty (150) days following the end
of each fiscal year, the specific date of such annual meeting to be set each
year by the Board of Directors. If that day should be a legal holiday, then the
meeting shall be held on the next following business day. At this meeting the
Stockholders shall elect a Board of Directors for the ensuing year and transact
other business as shall properly come before such meeting.
SECTION 3. Special Meetings: Special meetings of the Stockholders may be
called by the President, the Board of Directors or by the holders of not less
than one-tenth of the shares entitled to vote at the meeting.
SECTION 4. Notice of Meetings: Notice of meetings of the Stockholders shall
be delivered not less than ten nor more than fifty days before the date of the
meeting to be called. Notice need not be given to any Stockholder who shall
waive notice of any meeting in writing, whether before, at, or after the
meeting.
SECTION 5. Quorum and Adjournment: At any meeting of the Stockholders, the
presence, in person or by proxy of the holders of more than one-half of the
shares outstanding and entitled to vote shall constitute a quorum. In the
absence of a quorum, the meeting may be adjourned by any Officer entitled to
preside at, or act as Secretary of such meeting, or by a majority in interest of
those Stockholders present in person or by proxy.
<PAGE>
SECTION 6. Voting: At each meeting of the Stockholders each Stockholder of
the Corporation shall be entitled to one vote in person or by proxy for each
share of the capital stock of the Corporation held by him and registered in his
name on the books of the Corporation as of the record date. The record date for
the determination of the Stockholders shall be the date upon which notice of the
meeting was sent to the Stockholders.
A proxy, to be valid, must be executed in writing by the Stockholder or by
his duly authorized attorney-in-fact. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.
At all meetings of the Stockholders, a quorum being present, all matters
shall be decided by a simple majority vote of the then eligible shares, except
as otherwise provided by statute or by these Bylaws. The Vote on any matter need
not be by ballot unless required by statute or requested by a Stockholder, in
person or by proxy, who is entitled to vote at the meeting.
SECTION 7. Conduct of Meetings: Each meeting of the Stockholders shall be
presided over by the President, or if the President shall not be present, by the
Vice President. If both the President and Vice President are absent, a Chairman
shall be chosen by a majority in voting interest of those Stockholders present
or represented by proxy. The Secretary of the Corporation shall act as Secretary
of each meeting of the Stockholders. If he shall not be present, the Chairman of
the meeting shall appoint a Secretary.
SECTION 8. Informal Action: Any action of the stockholders may be taken
without a meeting if consent in writing setting forth the action shall be signed
by a majority of the stockholders entitled to vote on the action. Such consent
shall have the same force and effect as a majority vote of the stockholders, and
may be stated as such in any document filed with the Secretary of State of
Nevada, or in the corporate minutes.
ARTICLE II
Board of Directors
------------------
SECTION 1. Over-all Power: The business of the Corporation shall be managed
by its Board of Directors which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the Articles
of Incorporation or by these Bylaws directed or required to be exercised or done
by the Stockholders.
-2-
<PAGE>
SECTION 2. Number, Term, and Election: The Board of Directors shall consist
of at least one (1) Director or up to seven (7) as may be fixed from time to
time by these Bylaws. The Directors shall be elected at the annual meeting of
the Stockholders, and shall hold office for one year, or until their successors
are elected and qualified.
SECTION 3. Additional Powers: The Directors shall elect the Officers of the
Corporation and pass upon any and all bills or claims of such Officers for
salaries or other compensation, and if deemed advisable, shall contract with
such officers, employees, attorneys, Directors, and other persons rendering
service for their salaries or other compensation.
SECTION 4. Organization: The President of the Corporation, or in his
absence, the Vice President, shall preside at each meeting of the Board of
Directors. The Secretary, or in his absence, any person appointed by the
Chairman of the meeting, shall act as Secretary of the meeting.
SECTION 5. Resignations: A Director of the Corporation may resign at any
time by giving written notice to the Board of Directors, President or Secretary
of the Corporation. The resignation shall take effect upon the date of receipt
of such notice, or at any later period of time specified therein. The acceptance
of such resignation shall not be necessary to make it effective, unless the
resignation requires it to be effective as such.
SECTION 6. Removal: At any Stockholders meeting called expressly for that
purpose, the entire Board of Directors or any lesser number may be removed, with
or without cause, by a vote of the holders of the majority of the shares then
entitled to vote at any election of Directors.
SECTION 7. Vacancies: Any vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining Directors of
the Board of Directors. A Director elected to fill a vacancy shall be elected
for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
Directors shall be filled by the affirmative vote of a majority of the Directors
then in office, by election at an annual meeting of the Stockholders, or at a
special meeting of the Stockholders called for that purpose.
-3-
<PAGE>
A Director chosen to fill a position resulting from an increase in the
number of Directors shall hold office until the next annual meeting of
Stockholders or until his successor shall have been elected and qualified.
SECTION 8. Place of Meeting. The Board of Directors may hold its meetings
at any place within or without the State of Nevada that it may from time to time
appoint by resolution. The place of meeting may also be specified in the notices
thereof sent to Board members.
SECTION 9. Annual Meetings: The annual meeting of the Board of Directors
shall immediately follow the annual meeting of the Stockholders and be held at
the same place as said annual Stockholders meeting.
SECTION 10. Special Meetings: Special meetings of the Board of Directors
may be called at any time by the President or by any two members of the Board.
Written notice of each special meeting, setting forth the time and place of the
meeting shall be given to each Director at least twenty-four hours before the
meeting. This notice may be given either personally, or by sending a copy of the
notice through the United States mail or by telegram (charges prepaid), to the
address of each Director appearing on the books of the Corporation. Any meeting
of the Board of Directors, whether regular or special, shall be a legal meeting
if all of the Directors shall be present or shall sign the minutes, whether or
not notice was sent.
SECTION 11. Meetings in General: Attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting except where a Director
attends a meeting for the express purpose of objecting to the transaction of
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of any annual, regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
SECTION 12. Quorum and Manner of Acting: A majority of the Directors shall
constitute a quorum of the Board at any annual, regular or special meeting, but
in the absence of a quorum of the Board, a minority shall have the power of
adjournment. The act of a majority of the Directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
-4-
<PAGE>
SECTION 13. Compensation: The Board of Directors may provide by resolution
that the Corporation shall allow a fixed sum and reimbursement of expenses for
attendance at Board meetings. A Director may serve the Corporation in a capacity
other than that of a Director and receive compensation for the services rendered
in that capacity.
ARTICLE III
Officers
--------
SECTION 1. Number of Officers: The Officers of the Corporation shall be
elected by the Board of Directors and shall consist of a President, Vice
President, Secretary and Treasurer. Assistant Secretaries, Assistant Treasurers
and other Vice Presidents may be appointed as the Board of Directors may from
time to time deem necessary. Any two or more offices may be held by the same
person. All Officers shall hold office until their successors have been duly
elected and qualified, or until their death or resignation.
SECTION 2. When Chosen: Such Officers shall be chosen at the first meeting
of the Board of Directors and thereafter at the first Directors meeting
following the annual meeting of the Stockholders in each year, which first
meeting shall follow said annual meeting or shall be held as soon as a quorum of
Directors can be assembled.
SECTION 3. Time in Office: Said Officers shall hold their respective
offices until their successors are elected and enter upon the duties of their
offices. Any Officer shall at all times be subject to removal by the Board of
Directors with or without cause.
SECTION 4. Resignation: Any Officer may resign at any time be giving
written notice to the Board of Directors, or to the President. Such resignation
shall take effect at the date of the receipt of the notice, or at a later time
if specified in such notice of resignation. Unless the notice of resignation
specifies, the acceptance of the resignation shall not be necessary to make it
effective. When a vacancy occurs in one of the executive offices by reason of
death, resignation or otherwise, it shall be filled by the Board of Directors
for the unexpired period of time remaining for such office.
-5-
<PAGE>
ARTICLE IV
Duties of Officers
------------------
SECTION 1. The President: The President shall be the Chief Executive
Officer of the Corporation, shall preside at all meetings of the Stockholders
and the Board of Directors, shall have general and active management of the
business of the Corporation and shall see that all orders and resolutions of the
Board of Directors are carried into effect. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other Officer or agent of the Corporation.
SECTION 2. The Secretary and Assistant Secretaries: The Secretary shall
attend all meetings of the Board of Directors and all meetings of the
Stockholders and shall record all the proceedings of the meetings of the
Corporation and of the Board of Directors in the book to be kept for that
purpose. He shall perform like duties for any standing committees when required.
The Secretary shall give, or cause to be given, notice of all meetings of
the Stockholders and special meeting of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he shall be. He shall keep in safe custody
the seal of the Corporation, and when authorized by the Board of Directors,
affix the same to any instrument requiring it, and when so affixed, it shall be
attested by his signature or by the signature of an Assistant Secretary.
The Assistant Secretary, or if there be more that one, the Assistant
Secretaries in the order determined by the Board of Directors, shall, in the
absence or disability of the Secretary, perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
SECTION 4. The Treasurer and Assistant Treasurer: It shall be the duty of
the Treasurer to receive and have custody of all funds and monies realized by
the Corporation, and deposit the same in a bank to be designated by the
Directors, in the Corporation's name. He shall perform such other duties as may
from time to time be delegated to him by the Board of Directors.
-6-
<PAGE>
If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors. Such bond shall be for the faithful
performance of the duties of his office and for restoration to the Corporation,
in case of his death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the Corporation.
In the absence or inability of the Treasurer to act, an Assistant Treasurer
named by the Board of Directors, shall possess all the powers and perform all
the duties of the Treasurer.
ARTICLE V
Notices
-------
SECTION 1. Manner of Notices: In addition to, but not in contradiction of,
any other specific notice provision, of these Bylaws, notices to Directors and
Stockholders shall be in writing and delivered personally or mailed to the
Directors at their addresses appearing on the books of the Corporation. Notice
by mail shall be deemed to be given at the time when the same shall be mailed.
Notice to Directors may also be given by telefax.
SECTION 2. Waiver of Notice: In addition to, but not in contradiction of,
any other specific notice provision of these Bylaws, whenever any notice is
required to be given under the provisions of the statutes or of the Certificate
of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before, at or after the time
stated therein shall be deemed equivalent thereto.
ARTICLE VI
Shares of Stock
---------------
SECTION 1. Manner of Issuance: The Directors shall have the power to issue
the authorized common stock at such prices as they deem proper. Every
Stockholder shall be entitled to a certificate in such form as shall be approved
by the Board of Directors. The certificates shall be numbered in the order of
their issue and shall be signed by the President or Vice President and by the
Secretary. The stock certificates shall bear the name of the person owning said
stock, the number of shares represented by such certificates, and the date of
issue.
-7-
<PAGE>
SECTION 2. Replacement of Certificates: The Board of Directors may direct
that a new certificate or certificates be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an Affidavit of the fact by the person claiming
the certificate of stock to be lost or destroyed.
When authorizing such issue of a new certificate or certificates, the Board
of Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the Corporation a bond in such sums as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost or destroyed.
SECTION 3. Surrender of Certificates: Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
SECTION 4. Recognition of Shareholder: The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner. The Corporation shall
be entitled to hold liable for calls and assessments a person registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claims to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Nevada.
-8-
<PAGE>
ARTICLE VII
Contracts, Loans and Checks
---------------------------
SECTION 1. Execution of Contracts: Except as otherwise provided by statute
or by these Bylaws, the Board of Directors may authorize any Officer or agent of
the Corporation to enter into any contract, or execute and deliver any
instrument in the name of, and on behalf of the Corporation. Such authority may
be general or confined to specific instances, and unless so authorized, no
officer, agent or employee shall have any power to bind the Corporation for any
purpose, except as may be necessary to enable the Corporation to carry on its
normal and ordinary course of business.
SECTION 2. Loans: No loans shall be contracted on behalf of the Corporation
and no negotiable paper shall be issued in its name unless authorized by the
Board of Directors. When so authorized, any Officer or agent of the Corporation
may effect loans and advances at any time for the Corporation from any bank,
trust company or institution, firm, corporation or individual. An agent so
authorized may make and deliver promissory notes or other evidence of
indebtedness of the Corporation and may mortgage, pledge, hypothecate or
transfer any real or personal property held by the Corporation as security for
the payment of such loans. Such authority, in the Board of Directors'
discretion, may be general or confined to specific instances.
SECTION 3. Checks: Checks, notes, drafts and demands for money issued in
the name of the Corporation shall be signed by such person or persons as
designated by the Board of Directors, and in the manner the Board prescribes.
ARTICLE VIII
Dividends
---------
Subject to the provisions of the Articles of Incorporation and the laws of
the State of Nevada, the Board of Directors may declare dividends whenever, and
in such amounts, as in the Board's opinion the condition of the affairs of the
Corporation shall render such advisable. The Board of Directors, in its
discretion, may use and apply any of the surplus or new profits to meet
contingencies, or for any other purposes that it may determine to be in the best
interest of the Corporation.
-9-
<PAGE>
ARTICLE IX
Seal and Fiscal Year of Corporation
-----------------------------------
SECTION 1. Seal: The Board of Directors shall provide a seal for the
Corporation by its resolution.
SECTION 2. Fiscal Year: The Board of Directors, in its sole discretion,
shall fix a fiscal year for the Corporation.
ARTICLE X
Amendments and Other Corporate Documents
----------------------------------------
SECTION 1. Amendments To Bylaws: Except as otherwise provided by the
Articles of Incorporation, these Bylaws, or the statutes of the State of
Colorado, the Board of Directors shall have the power to alter, amend or repeal
these Bylaws. The Board of Directors shall have the power to adopt new Bylaws.
The Board of Directors shall adopt new Bylaws by a vote of the majority of the
Directors then in office at any annual or special meeting of the Board of
Directors.
SECTION 2. Other Corporate Documents: The Board of Directors is expressly
authorized to enter into such other agreements as the Board of Directors deems
necessary to regulate the Corporation's internal operations. Such agreements may
include, but not be limited to, employment contracts and buy-sell agreements
between its key Stockholders, Officers, and employees.
The above and foregoing bylaws were adopted and approved by the Board of
Directors on the 24th day ofApril, 1999.
Secretary:
----------------------------
-10-
Exhibit 5.1
Allen G. Reeves, P.C.
Attorney and Counselor at Law
900 Equitable Building
730 Seventeenth Street
Denver, Colorado 80202
(303) 534-6278 FAX (303) 825-9147
December 1, 1999
Transport Recovery Services Corporation
11011 King Street, Suite 260
Overland Park, KS 66210
Ladies and Gentlemen:
I have acted as counsel for Transport Recovery Services Corporation (the
"Company") in connection with the preparation and filing of the Registration
Statement and Prospectus with the Securities and Exchange Commission relating to
the issuance of up to 200,000 shares of Common Stock (the "Common Stock").
I have examined copies of the Company's Articles of Incorporation, Bylaws
and certain other corporate documents, including copies of resolutions adopted
by the Board of Directors of the Company and certificates of officers of the
Company, and I have reviewed such other documents and made such investigations
as I have deemed necessary or appropriate in order to express my opinion on the
matters set forth below.
Based upon and subject to the foregoing, I am of the opinion that:
The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Nevada, with full
corporate power and authority to own and operate its properties and to carry on
its business as set forth in the Registration Statement and Prospectus.
The Company is duly qualified and registered to transact the business in
which the Company is engaged and is qualified and in good standing in each and
every jurisdiction in which its ownership of property or its conduct of business
requires such qualification or registration.
<PAGE>
Transport Recovery Services Corporation
Page 2
December 1, 1999
The Company has an authorized and outstanding capitalization as set forth
in the Registration Statement and Prospectus; the Common Stock offered thereby
of the Company conforms to the statements concerning it in the Registration
Statement and Prospectus; the outstanding Common Stock of the company has been
duly and validly issued and is fully paid and non-assessable and no Common Stock
is subject to any pre-emptive rights.
The holders of the issued and outstanding shares of Common Stock are, and
the holders of the securities to be sold under the Registration Statement,
namely, the Common Stock offered pursuant to the Prospectus will be entitled to
the rights, and preferences set forth in the certificates representing the same.
No consents, approvals, authorizations or orders of agencies or other
regulatory authorities are necessary for the valid authorization, issuance or
sale of the Common Stock except as required under the Securities Act of 1933 or
state Blue Sky or other securities laws.
The issuance and sale of the Common Stock will not conflict with or result
in a breach of any of the terms, conditions or provisions of, or constitute a
default under, the Articles of Incorporation or Bylaws of the Company or any
note, indenture, mortgage, Deed of Trust or other Agreement or instrument
(however characterized or described) known to me as to which the Company is a
party or any of its property is bound or any existing laws, order, rule,
regulation, writ, injunction or decree known to me of any government,
governmental instrumentality, agency, body, arbitration tribunal or court,
domestic or foreign, having jurisdiction over the Company or its property.
The undersigned hereby consents to the use of his name under the heading
"Legal Matters" in the Company's registration statement on Form SB-2 and to all
references thereto as contained in said registration statement.
Very truly yours,
Allen G. Reeves, P.C.
By: /s/ Allen G. Reeves
---------------------------------
Allen G. Reeves
AGR/rga
Exhibit 24.1
Consent of Counsel
The consent of Allen G. Reeves, P.C. of all references made to it in the
Prospectus included as a part of this Registration Statement on Form SB-2 of
Transport Recovery Services Corporation, and in all amendments thereto are
included in its opinion filed as Exhibit 5.1 to the Registration statement.
Allen G. Reeves. P.C.
By: /s/ Allen G. Reeves
----------------------------
Allen G. Reeves
Denver, Colorado
December 1, 1999
Exhibit 24.2
Independent Auditors' Consent
We consent to the use in this Registration Statement of Transport Recovery
Services Corporation on Form SB-2 of our report dated December 8, 1999,
appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Sartain Fischbein & Co.
------------------------------------
December 15, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT SEPTEMBER 30, 1999 AND THE STATEMENT OF OPERATIONS AND CASH FLOWS FOR
THE PERIOD FROM APRIL 15, 1999 (INCEPTION) TO SEPTEMBER 30, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 757
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 757
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,827
<CURRENT-LIABILITIES> 3,030
<BONDS> 0
0
0
<COMMON> 1,050
<OTHER-SE> (1,253)
<TOTAL-LIABILITY-AND-EQUITY> 2,827
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,253
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,253)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,253)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,253)
<EPS-BASIC> 0
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</TABLE>
