U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KESSER, INC.
(Name of Small Business Issuer in its charter)
Nevada 6770 88-0456577
(State or Jurisdiction (Primary Standard Industrial (IRS Employer
of Classifcation Code Number) Identifcation No)
Incorporation or
Organization)
3360 West Sahara Avenue, Suite 200, Las Vegas, Nevada 89102; (702) 732
2253.
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Shawn F. Hackman, Esq., 3360 West Sahara Avenue, Suite 200, Las Vegas,
Nevada 89102; (702) 732-2253, fax: (702) 732-2253
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to
register additional
securities for an offering
pursuant to Rule 462(b)
under the Securities Act,
please check the following
box and list the
Securities Act
registration 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 this Form is a post-
effective amendment filed
pursuant to Rule 462(d)
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 the delivery of the
prospectus is expected to
be made pursuant to Rule
434, check the following
box.
?
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered Common Shares
Amount to be registered 2,000,000
Proposed maximum offering
price per unit $0.05
Proposed maximum
aggregate offering price $100,000
Amount of registration
fee $26.40
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states
that 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.
Initial Public Offering
Prospectus
KESSER, Inc.
2,000,000 shares of Common Stock
$0.05 per share
Registrant
Kesser
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
Registrant's Attorney
Shawn F. Hackman
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
_________________________
The Offering
Per Share Maximum Total Minimum Total
Public Price $0.05 $100,000 $20,000
Proceeds to
Kesser, Inc $0.05 $100,000 $20,000
This offering is according to Rule 415, Delayed or Continuous Offering and
Sale of Securities.
This is our initial public offering, and no public market currently
exists for our shares. The offering price may not reflect the market
price of our shares after the offering.
________________________
The title of each class of securities to be registered is Common
Shares.
The amount to be registered is 2,000,000 shares.
Not traded on any national securities exchange or the Nasdaq Stock
Market.
This investment involves a high degree of Risk. You should purchase
shares only if you can afford a complete loss. Please consider carefully the
risk factors contained in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Information contained herein is subject to completion or
amendment. The registration statement relating to the
securities has been filed with the Securities and Exchange
Commission. The securities may not be sold nor may offers
to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in
any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.
Subject to Completion, Dated _______________, 2000.
The shares being offered by Kesser, Inc. are subject to
prior sale, acceptance of the subscriptions by Kesser, Inc.
and approval of certain legal matters by counsel to
Kesser, Inc.
This is our initial public offering of common stock.
The initial offering price per share is .05. We will apply
to list our common stock on the OTC:BB. No public market
currently exists for the shares of common stock.
Kesser, Inc.. has the right to accept or reject any
subscriptions, in whole or in part, for any reason. Until
______ 2000, all dealers effecting transactions in
registered securities may be required to deliver a
prospectus This is true whether or not the dealer is
participating in this distribution. Dealers also have an
obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
Kesser is conducting a "Blank Check" offering subject
to Rule 419 of Regulation C as promulgated by the U.S. Securities and
Exchange Commission (the "S.E.C.") under the securities act of 1933, as
amended (the "Securities Act").The net offering proceeds, after
deduction for offering expenses (estimated at $20,000) and sales commissions,
and the securities to be issued to investors must be deposited in an escrow
account (the "deposited funds" and "deposited securities," respectively). While
held in the escrow account, the deposited securities may not be traded or
transferred. Except for an amount up to 10% of the deposited funds
otherwise releasable under rule 419, the deposited funds and the deposited
securities may not be released until an acquisition meeting certain specified
criteria has been consummated and a sufficient number of investors reconfirm
their investment in accordance with the procedures set forth in rule 419.
It is anticipated that Kesser will request the release of the 10% of
the deposited funds in accordance with Rule 419 to pay for expenses, should
they arise.
Pursuant to these procedures, a new prospectus, which describes an
acquisition candidate and its business and includes audited financial
statements, will be delivered to all investors. Kesser must return the pro
rata portion of the deposited funds to any investor who does not elect to
remain an investor.
Unless a sufficient number of investors elect to remain investors, all
investors will be entitled to the return of a pro rata portion of the
deposited funds (plus interest) and none of the deposited
securities will be issued to investors. In the event an acquisition is
not consummated within 7 months of the effective date of this prospectus,
the deposited funds will be returned on a pro rata basis to all investors.
See "risk factors" and "release of deposited securities and deposited
funds."
Until 90 days after the date funds and securities are
released from the escrow or trust account pursuant to Rule
419, all dealers effecting transactions in the registered
securities, whether or not participating in this
distribution, may be required to deliver a prospectus.
This prospectus is not an offer to sell or a solicitation to buy the
securities offered. It is unlawful to make such an offer or
solicitation.
The delivery of this prospectus, nor a sale of the mentioned securities
shall create an implication that there has been no change in the information
in this prospectus. If a material change does occur, however, this
prospectus will be amended or supplemented accordingly for all existing
shareholders and prospective investors.
This prospectus does not intentionally contain a false statement or
material fact, nor does it intentionally omit a material fact. No person or
entity has been authorized by Kesser, Inc. to give any information or
make a representation, warranty, covenant, or agreement
which is not expressly provided for or continued in this
prospectus. Any such information that is given should not
be relied upon as having been authorized.
Kesser is not a Reporting Company. Upon written
or oral request, any person who receives a prospectus will
have an opportunity to meet with representatives of
Kesser, Inc. to verify any of the information included
in the prospectus and to obtain additional information.
Such a person shall also, upon written or oral request,
receive a copy of any information that is incorporated by
reference in the prospectus and the address (including title
or department) and telephone number. Such information shall
be provided without charge.
All offerees and subscribers will be asked to
acknowledge in the subscription agreement that they have
read this prospectus carefully and thoroughly, they were
given the opportunity to obtain additional information;
and they did so to their satisfaction.
A maximum of 2,000,000 shares may be sold on a direct participation
offering basis. All of the proceeds from the sale of shares will be
placed in an interest-bearing escrow account by 12 o'clock noon of the
fifth business day after receipt thereof, until the sum of the minimum
offering, is received. If less than $20,000, is received from the sale
of the shares within 240 days of the date of this prospectus, all
proceeds will be refunded promptly to purchasers with interest and
without deduction for commission or other expenses. Subscribers will
not be able to obtain return of their funds while in escrow. No
commissions are anticipated. There will be a minimum purchase of 5000
shares at $250.00.
No commissions are anticipated. No sales commission will be paid in
connection with the sales of these shares. The net proceeds to Kesser
are after the payment of certain expenses in connection with this
offering. See "Use of Proceeds."
TABLE OF CONTENTS PAGE
PROSPECTUS SUMMARY 1
RISK FACTORS 2
INVESTORS RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419 3
USE OF PROCEEDS 4
DETERMINATION OF OFFERING PRICE 5
DILUTION 6
PLAN OF DISTRIBUTION 7
LEGAL PROCEEDINGS 8
DIRECTOR, EXECUTIVE OFFICER, PROMOTERS
AND CONTROL PERSONS 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 10
DESCRIPTION OF SECURITIES 11
INTEREST OF NAMED EXPERTS AND COUNSEL 12
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES 13
ORGANIZATION WITHIN LAST FIVE YEARS 14
DESCRIPTION OF BUSINESS 15
PLAN OF OPERATION 16
DESCRIPTION OF PROPERTY 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 17
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 19
EXECUTIVE COMPENSATION 20
FINANCIAL STATEMENTS 21
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 22
Prospectus Summary
The following summary is qualified in its entirety by
detailed information appearing elsewhere in this prospectus
("Prospectus"). Each prospective investor is urged to read
this Prospectus, and the attached Exhibits, in their
entirety.
Kesser
Kesser, Inc., was incorporated on
March 31st, 2000, under the laws of the State of Nevada,
to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to
its original shareholders, Kesser never commenced any
operational activities.
Kesser was formed by Adam U. Shaikh, the initial director,
for the purpose of creating a corporation which could be
used to consummate a merger or acquisition. Mr. Shaikh is
an associate attorney with the firm of Shawn F. Hackman, a
P.C. Mr. Shaikh approached by Mr. Weiss for his services
in incorporating and administrating an SB-2 filing for
Kesser, Inc. Mr. Shaikh holds no position with Kesser,
Inc.
Immediately upon incorporation, Mr. Shaikh was replaced by
Howard Weiss. Mr. Weiss serves as President, secretary,
treasurer, and director. Mr. Weiss determined next to
proceed with filing a Form SB-2.
Mr. Weiss, the President, Secretary, Treasurer, and Director, elected
to commence implementation of Kesser's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, Kesser can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify Kesser as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale securities of "blank check" companies in their
prospective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as Kesser has
successfully implemented its business plan described herein.
Accordingly, each shareholder of Kesser will execute
and deliver a "lock-up" letter agreement, affirming that
his/her respective shares of Kesser's common stock
until such time as Kesser has successfully consummated
a merger or acquisition and Kesser is no longer
classified as a "blank check" company. In order to provide
further assurances that no trading will occur in the
Kesser's securities until a merger or acquisition has been
consummated, each shareholder will place his/her
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated. However, while management believes that the
procedures established to preclude any sale of Kesser's
securities prior to closing of a merger or acquisition will
be sufficient, there can be no assurances that the
procedures established herein will unequivocally limit any
shareholder's Kesser to sell their respective securities
before such closing.
The Offering.
Shares of Kesser will be offered at $.05 per Share. See
"Plan of Distribution, page. The minimum purchase required
of an investor is $250.00. If all the Shares offered are
sold the net proceeds to Kesser will be $100,000
less certain costs associated with this offering. See "Use
of Proceeds." This balance will be used as working capital
for Kesser.
Liquidity of Investment.
Although the Shares will be "free trading," there is no
established market for the Shares and there may not be in
the future. Therefore, an investor should consider his
investment to be long-term. See "Risk Factors, page 6."
RISK FACTORS
The securities offered are highly speculative in nature and
involve a high degree of risk. They should be purchased only by persons
who can afford to lose their entire investment. Therefore, each
prospective investor should, prior to purchase, consider very carefully
the following risk factors among other things, as well as all other
information set forth in this prospectus.
Rule 419 contains restrictive provisions on the sale of shares.
Rule 419 generally requires that the securities to be issued
and the funds received in a blank check offering be deposited and held
in an escrow account until an acquisition meeting specified criteria is
completed.
Before the acquisition can be completed and before the funds and
securities can be released, the issuer in a blank check offering is required
to update its registration statement with a post-effective amendment.
After the effective date of any such post-effective
amendment, Kesser is required to furnish investors with the
prospectus produced thereby containing information, including
audited financial statements, regarding the proposed acquisition
candidate and its business. Investors must be given no fewer than
20 and no more than 45 business days from the effective date of
the post-effective amendment to decide to remain investors or
require the return of their investment funds. Any investor not
making a decision within said period is automatically to receive
a return of his investment funds.
Although investors may request the return of their investment
funds in connection with the reconfirmation offering required by Rule 419,
Kesser's shareholders will not be afforded an opportunity specifically to
approve or disapprove any particular transaction involving the purchase
of shares from management.
Investors are prohibited from selling or offering to sell shares held
in escrow.
According to Rule15g-8 as promulgated by the S.E.C. under the amended
Securities Exchange Act of 1934, it shall be unlawful for any person to
sell or offer to sell shares or any interest in or related to the shares held
in the Rule 419 escrow account other than pursuant to a qualified domestic
relations order or by will or the laws of descent and distribution. As a
result, contracts for sale to be satisfied by delivery of the deposited
securities are prohibited, for example contracts for sale on a when, as, and
if issued basis.
Because this is a blank check offering, investors will not be able to
evaluate the specific merits or risks of business combinations.
As a result of management's broad discretion with respect to the
specific application of the net proceeds of this offering, this offering can be
characterized as a blank check offering. Although substantially all of the net
proceeds of this offering are intended generally to be applied toward
effecting a business combination, such proceeds are not otherwise being
designated for any more specific purposes.
Accordingly, prospective investors will invest in Kesser without an
opportunity to evaluate the specific merits or risks of any one or more
business combinations. Determinations ultimately made by Kesser relating to the
specific allocation of the net proceeds of this offering do not
guarantee Kesser will achieve its business objectives.
The ability to register shares is limited.
The ability to register or qualify for sale the shares for both initial
sale and secondary trading is limited because a number of states have
enacted regulations pursuant to their securities or "blue sky" laws
restricting or, in some instances, prohibiting, the sale of
securities of blank check issuers, such as Kesser, within that state.
In addition, many states, while not specifically prohibiting or
restricting blank check companies, may not register the shares for sale in
their states. Because of such regulations and other restrictions, Kesser's
selling efforts, and any secondary market which may develop, may only be
conducted in those jurisdictions where an applicable exemption is available
or a blue sky application has been filed and accepted or where the shares
have been registered.
Kesser has had no operating revenue to date and may not become
profitable.
Kesser has had no operating history nor any revenues or earnings from
operations. Kesser has no significant assets or financial resources.
Kesser will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in Kesser incurring a net operating loss
which will increase continuously until Kesser can consummate a business
combination with a profitable business opportunity. Kesser may not be
able to identify such a business opportunity and consummate such a
business combination. Additionally, because
Success of Kesser's business operations may depend on management
outside of Kesser's control.
The success of Kesser's proposed plan of operation will depend to a
great extent on the operations, financial condition and management of
the identified business opportunity. While management intends to seek
business combinations with entities having established operating
histories, there can be no assurance that Kesser will be successful in
locating candidates meeting such criteria. In the event Kesser
completes a business combination, the success of Kesser's operations
may be dependent upon management of the successor firm or venture
partner firm and numerous other factors beyond Kesser's control.
Kesser is at a competitive disadvantage and in a highly competitive
market searching for business combinations and opportunities.
Kesser is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions
of small private entities. A large number of established and well-
financed entities, including venture capital firms, are active in
mergers and acquisitions of companies which may be desirable target
candidates for Kesser. Nearly all such entities have significantly
greater financial resources, technical expertise and managerial
capabilities than Kesser and, consequently, Kesser will be at a
competitive disadvantage in identifying possible business opportunities
and successfully completing a business combination. Moreover, Kesser
will compete in seeking merger or acquisition candidates with numerous
other small public companies.
Kesser has no agreement for a merger nor any standards set for
acceptable candidates for merger.
Kesser has no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a
private entity. Kesser may not be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluations. Kesser has been
in the developmental stage since inception and has no operations to
date. Other than issuing shares to its original shareholders, Kesser
never commenced any operational activities. Kesser may not be able to
negotiate a business combination on terms favorable to Kesser.
Kesser has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which
it will require a target business opportunity to have achieved, and
without which Kesser would not consider a business combination in any
form with such business opportunity. Accordingly, Kesser may enter
into a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for
earnings, limited assets, negative net worth or other negative
characteristics.
Kesser's management lack certain business skills and will be devoting
only part-time work hours.
Kesser's Officer and Director is a not professional business analysts.
Lack of experience will be a detriment to Kesser's efforts.
Furthermore, while seeking a business combination, management
anticipates devoting up to twenty hours per month to the business of
Kesser. Kesser's Officer has not entered into written employment
agreements with Kesser and is not expected to do so in the foreseeable
future. Kesser has not obtained key man life insurance of its
Officer/Director. Notwithstanding the combined limited experience and
time commitment of management, loss of the services of this individual
would adversely affect development of Kesser's business and its
likelihood of continuing operations.
Kesser may, on occasion, enter into business agreements that have a
conflict of interest.
Currently, Kesser's Officer and Director has no conflict of interest.
However, changes in Officer and Director or business agreements entered
into could potentially show conflicts of interest. In such instance
that Kesser's Officer or Director is involved in the management of any
firm with which Kesser transacts business. Kesser's board of Director
will adopt a resolution which prohibits Kesser from completing a merger
with, or acquisition of, any entity in which management serve as
Officer, Director or partners, or in which they or their family members
own or hold any ownership interest.
Management is not aware of any circumstances under which this policy
could be changed while current management is in control of Kesser.
Potential merger or acquisition candidates must meet SEC requirements
that may delay or preclude Kesser's business plan.
Section 13 of the Securities Exchange Act of 1934, requires companies
falling under Section 13 of the Securities Exchange Act of 1934 to
provide certain information about significant acquisitions, including
certified financial statements for Kesser acquired, covering one or two
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by Kesser.
Acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition so
long as the reporting requirements of the 1934 Act are applicable.
Kesser is at a competitive disadvantage because it lacks any market
research or marketing organization.
Kesser has neither conducted, nor have others made available to it,
results of market research indicating that market demand exists for the
transactions contemplated by Kesser. Moreover, Kesser does not have,
and does not plan to establish, a marketing organization. Even in the
event demand is identified for a merger or acquisition contemplated by
Kesser, there is no assurance Kesser will be successful in completing
any such business combination.
Kesser will be limited to the business opportunities of any company
Kesser's proposed operations, even if successful, will in all
likelihood result in Kesser engaging in a business combination with
only one business opportunity. Consequently, Kesser's activities will
be limited to those engaged in by the business opportunity which Kesser
merges with or acquires. Kesser's inability to diversify its
activities into a number of areas may subject Kesser to economic
fluctuations within a particular business or industry and therefore
increase the risks associated with Kesser's operations.
Potential determination by the SEC that Kesser is an investment company
could cause material adverse consequences.
Although Kesser will be regulated under the Securities Exchange Act of
1933, management believes Kesser will not be regulated under the
Investment Company Act of 1940, insofar as Kesser will not be engaged
in the business of investing or trading in securities. In the event
Kesser engages in business combinations which result in Kesser holding
passive investment interests in a number of entities, the Kesser could
be under regulation of the Investment Company Act of 1940. In such
event, Kesser would be required to register as an investment company
and could be expected to incur significant registration and compliance
costs Kesser has obtained no formal determination from the Securities
and Exchange Commission as to the status of Kesser under the Investment
Company Act of 1940 and, consequently, any violation of such Act would
subject Kesser to material adverse consequences.
Any business combination will probably result loss of management and
control by Kesser shareholders.
A business combination involving the issuance of Kesser's common stock
will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in Kesser. Any such business
combination may require management of Kesser to sell or transfer all or
a portion of Kesser's common stock held by them, or resign as members
of the board of Director of Kesser. The resulting change in control
Kesser could result in removal of one or more present Officer and
Director of Kesser and a corresponding reduction in or elimination of
their participation in the future affairs of Kesser.
Should Kesser meet its business plan of merging, shareholders in Kesser
will most likely suffer a reduction in percentage share ownership of
the newly formed company.
Kesser's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in Kesser
issuing securities to shareholders of such private company. The
issuance of previously authorized and unissued common stock of Kesser
would result in reduction in percentage of shares owned by present and
prospective shareholders of Kesser and would most likely result in a
change in control or management of Kesser.
Potential acquisition or merger candidates may wish to avoid potential
adverse consequences of merging with Kesser.
Kesser may enter into a business combination with an entity that
desires to establish a public trading market for its shares. A
business opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with Kesser.
Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state
securities laws enacted for the protection of investors. These
securities laws primarily relate to provisions regarding the
registration of securities which require full disclosure of Kesser's
business, management and financial statements.
Many business decisions made by Kesser can have major tax consequences
and many associated risks.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination Kesser may undertake.
Currently, such transactions may be structured so as to result in tax-
free treatment to both companies, pursuant to various federal and state
tax provisions. Kesser intends to structure any business combination
so as to minimize the federal and state tax consequences to both Kesser
and the target entity; however, there can be no assurance that such
business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state
taxes which may have an adverse effect on both parties to the
transaction.
The requirement of audited financial statements of potential merging
entities may cause some potential merger candidates to forego merging
with Kesser.
Management of Kesser believes that any potential business opportunity
must provide audited financial statements for review, and for the
protection of all parties to the business combination. One or more
attractive business opportunities may choose to forego the possibility
of a business combination with Kesser, rather than incur the expenses
associated with preparing audited financial statements.
Certain Officer, Director, principal shareholders or affiliates may
purchase shares, thereby increasing their percentage share.
Certain Officer, Director, principal shareholders and affiliates may
purchase, for investment purposes, a portion of the shares offered
hereby, which could, upon conversion, increase the percentage of the
shares owned by such persons. The purchases by these control persons
may make it possible for the offering to meet the escrow amount.
Kesser may not be able to sale enough shares to follow through with the
business plan.
The 2,000,000 common shares are to be offered directly by Kesser, and
no individual, firm, or corporation has agreed to purchase or take down
any of the shares. It is not know whether Kesser will be able to sell
any shares.
Kesser's offering price is arbitrary and the value of Kesser securities
may never actually reach the offering price.
The offering price of the shares bears no relation to book value,
assets, earnings, or any other objective criteria of value. They have
been arbitrarily determined by Kesser. There can be no assurance that,
even if a public trading market develops for Kesser's securities, the
shares will attain market values commensurate with the offering price.
Kesser shares are to be offered based on a direct participation
offering basis.
The shares are offered by Kesser on a direct participation offering
basis, and no individual, firm or corporation has agreed to purchase or
take down any of the offered shares. Kesser cannot and does not make
any statement guaranteeing that shares will be sold. Provisions have
been made to deposit in escrow the funds received from the purchase of
shares sold by Kesser.
Kesser's shares may never actually be traded and therefore purchasers
may never be able to resale.
Prior to the offering, there has been no public market for the shares
being offered. An active trading market may not develop.
Consequently, purchasers of the shares may not be able to resell their
securities at prices equal to or greater than the respective initial
public offering prices. The market price of the shares may be affected
significantly by factors such as announcements by Kesser or its
competitors, variations in Kesser's results of operations, and market
conditions in the retail, electron commerce, and internet industries in
general. Movements in prices of stock may also affect the market price
in general. As a result of these factors, purchasers of the shares
offered hereby may not be able to liquidate an investment in the shares
readily or at all.
Shares sold in the future may have to comply with Rule 144.
All of the 3,000,000 shares, which are held by management, have been
issued in reliance on the private placement exemption under the amended
Securities Act of 1933. Such shares will not be available for sale in
the open market without separate registration except in reliance upon
Rule 144 under the Act.
In general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be deemed
affiliates of Kesser (as that term is defined under the Act) would be
entitled to sell within any three-month period a number of shares that
does not exceed the greater of 1% of the then outstanding shares of
common stock, or the average weekly reported trading volume on all
national securities exchanges and through NASDAQ during the four
calendar weeks preceding such sale, provided that certain current
public information is then available. If a substantial number of the
shares owned by management were sold pursuant to Rule 144 or a
registered offering, the market price of the common stock could be
adversely affected.
Kesser faces uncertainty with regard to the Y2K issue.
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may
recognise the year 2000 as 1900 or some other date, resulting in errors
when information using the year 2000 date is processed. The effects of
the Year 2000 issue may be experienced before, on, or after January 1,
2000, and if not addressed, the impact on operations and financial
reporting may range from minor errors to significant system failure
which could affect Kesser's ability to conduct normal business
operations. This creates potential risk for all companies, even if
their own computer systems are Year 2000 compliant. It is not possible
to be certain that all aspects of the Year 2000 issue affecting Kesser,
including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
Kesser's Year 2000 plans are based on management's best estimates.
Based on currently available information, management does not believe
that the Year 2000 issues will have a material adverse impact on
Kesser's financial condition or results of operations; however, because
of the uncertainties in this area, assurance cannot be given in this
regard.
Investors' rights and substantive protection under rule 419.
Deposit of offering proceeds and securities.
Rule 419 requires that the net offering proceeds, after
deduction for underwriting compensation and offering costs, and all
securities to be issued be deposited into an escrow or trust account
(the "Deposited Funds" and "Deposited Securities," respectively)
governed by an agreement which contains certain terms and provisions
specified by the rule. Under Rule 419, the Deposited Funds and Deposited
Securities will be released to Kesser and to investors, respectively, only
after the Company has met the following three conditions:
First, Kesser must execute an agreement for an acquisition(s) meeting
certain prescribed criteria; second, Kesser must successfully complete
a reconfirmation offering which includes certain prescribed terms and
conditions; and third, the acquisition(s) meeting the prescribed criteria
must be consummated.
Prescribed acquisition criteria.
Rule 419 requires that before the Deposited Funds and the
Deposited Securities can be released, Kesser must first execute an
agreement(s) to acquire an acquisition candidate(s) meeting certain
specified criteria. The agreement must provide for the acquisition of a
business(es) or assets valued at not less than 80% of the maximum offering
proceeds, but excluding underwriting commissions, underwriting expenses and
dealer allowances payable to non-affiliates. Once the acquisition agreements
meeting the above criteria have been executed, Kesser must successfully
complete the mandated reconfirmation offering and consummate the
acquisitions(s).
Post-effective amendment.
Once the agreement(s) governing the acquisition(s) of a business(es)
meeting the above criteria has (have) been executed, Rule 419 requires
Kesser to update the registration statement of which this prospectus is
a part with a post-effective amendment. The post-effective amendment must
contain information about: the proposed acquisition candidate(s) and
its business(es), including audited financial statements; the results of
this offering; and the use of the funds disbursed from the escrow account.
The post-effective amendment must also include the terms of the
reconfirmation offer mandated by Rule 419. The offer must include certain
prescribed conditions which must be satisfied before the Deposited Funds and
Deposited Securities can be released from escrow.
Reconfirmation offering.
The reconfirmation offer must commence within five business
days after the effective date of the post-effective amendment. Pursuant
to Rule 419, the terms of the reconfirmation offer must include the
following conditions:
(1) The prospectus contained in the post-effective amendment will be
sent to each investor whose securities are held in the escrow account within
five business days after the effective date of the post-effective amendment;
2) Each investor will have no fewer than 20, and no more than 45,
business days from the effective date of the post-effective amendment to notify
the Company in writing that the investor elects to remain an investor;
(3) If Kesser does not receive written notification from any investor
within 45 business days following the effective date, the pro rata
portion of the Deposited Funds (and any related interest or dividends) held
in the escrow account on such investor's behalf will be returned to the
investor within five business days by first class mail or other equally
prompt means;
(4) The acquisition(s) will be consummated only if investors having
contributed 80% of the maximum offering proceeds elect to reconfirm their
investments; and
(5) If a consummated acquisition(s) has not occurred within 7
months from the date of this prospectus, the Deposited Funds
held in the escrow account shall be returned to all investors on a pro
rata basis within five business days by first class mail or other equally
prompt means.
Release of deposited securities and deposited funds.
The Deposited Funds and Deposited Securities may be released to Kesser
and the investors, respectively, after:
(1) The Escrow Agent has received written certification from Kesser
and any other evidence acceptable by the Escrow Agent that Kesser has
executed an agreement for the acquisition(s) of a business(es) the
value of which represents at least 80% of the maximum offering proceeds and has
filed the required post-effective amendment, the post-effective amendment has
been declared effective, the mandated reconfirmation offer having the
conditions prescribed by Rule 419 has been completed, and Kesser has
satisfied all of the prescribed conditions of the reconfirmation offer; and
(2) The acquisition(s) of the business(es) the value of which
represents at least 80% of the maximum offering proceeds is (are) consummated.
Escrowed funds not to be used for salaries or reimbursable expenses.
No funds (including any interest earned thereon) will be
disbursed from the escrow account for the payment of salaries or
reimbursement of expenses incurred on Kesser's behalf by Kesser's Officer and
Director. Other than the foregoing, there is no limit on the amount of
such reimbursable expenses, and there will be no review of the
reasonableness of such expenses by anyone other than Kesser's board of Director,
who is an Officer. In no event will the escrowed funds (including any
interest earned thereon) be used for any purpose other than implementation of
a business combination.
See "Risk Factors," "Use Of Proceeds" and "Certain Transactions."
Use of Proceeds.
Following the sale of the 2,000,000 Shares Offered by
Kesser, there will be net proceeds of $100,000. The net proceeds are
calculated as $100,000 minus sales commission costs, which are zero.
Net proceeds do not include any legal or accounting fees. These
proceeds will be used to provide start-up and working capital for the
Company.
The following table sets forth the use of proceeds from
this offering (based on the minimum and maximum offering
amounts):
Use of Proceeds Minimum Offering Maximum Offering
Amount Percent Amount Percent
Working Capital $20,000 100% $100,000 100%
Total $20,000 100% $100,000 100%
Management anticipates expending these funds for the
purposes indicated above. To the extent that expenditures
are less than projected, the resulting balances will be
retained and used for general working capital purposes or
allocated according to the discretion of the Board of
Director. Conversely, to the extent that such expenditures
require the utilization of funds in excess of the amounts
anticipated, supplemental amounts may be drawn from other
sources, including, but not limited to, general working
capital and/or external financing. The net proceeds of
this offering that are not expended immediately may be
deposited in interest or non-interest bearing accounts, or
invested in government obligations, certificates of
deposit, commercial paper, money market mutual funds, or
similar investments.
Management may advance money to the Company or on behalf of
the Company. There are no set limits to the maximum amount
that management will advance or loan to the Company.
However, the amount is obviously limited by the resources
of the Officer and Director. Management anticipates that
repayment would come from the acquisition of a target
company. Repayment would be expected in the form of cash or
stock or a combination of the two. Repayment by the target
company would be a criteria, but not the major criteria.
The advances would be expected to be in an amount well
below the minimum expected from any viable operating
business target.
Determination of offering price.
The offering price is not based upon Kesser's net
worth, total asset value, or any other objective measure of
value based upon accounting measurements. The offering
price is determined by the Board of Director of Kesser
and was determined arbitrarily based upon the amount of
funds needed by Kesser to start-up the business, and
the number of shares that the initial shareholders were
willing to allow to be sold.
Dilution.
"Net tangible book value" is the amount that results
from subtracting the total liabilities and intangible assets
of an entity from its total assets. "Dilution" is the
difference between the public offering price of a security
and its net tangible book value per Share immediately after
the Offering, giving effect to the receipt of net proceeds
in the Offering. As of March 31, 2000, the net tangible
book value of Kesser was $3000 or $.001 per Share.
Giving effect to the sale by Kesser of all offered
Shares at the public offering price, the pro forma net
tangible book value of Kesser would be $100,000 or $.02
per Share, which would represent an immediate increase of
$.02 in net tangible book value per Share and $.03 per Share
dilution per share to new investors. Dilution of the book
value of the Shares may result from future share offerings
by Kesser.
The following table illustrates the pro forma per Share
dilution:
Assuming Maximum Assuming Minimum
Shares Sold Shares Sold
Offering Price (1) $.05 $0.05
Net tangible book value per
share before Offering (2) $.001 $0.001
Net tangible book value per
Share after offering (3) $.03 $0.007
Increase Attributable to purchase
of stock by new investors (4) $.029 $0.006
Dilution to new investors (5) $.02 $0.043
Percent Dilution to new investors (6) 40% 86%
(1) Offering price before deduction of offering expenses,
calculated on a "Common Share Equivalent" basis.
(2) The net tangible book value per share before the
offering ($0.001) is determined by dividing the number of
Shares outstanding prior to this offering into the net
tangible book value of Kesser.
(3) The net tangible book value after the offering is
determined by adding the net tangible book value before the
offering to the estimated proceeds to the Corporation from
the current offering (assuming all the Shares are
subscribed), and dividing by the number of common shares
outstanding.
(4) The Increase Attributable to purchase of stock by new
investors is derived by taking the net tangible book value
per share after the offering ($.02) and subtracting from it
the net tangible book value per share before the offering
($.001) for an increase of $.02.
(5) The dilution to new investors is determined by
subtracting the net tangible book value per share after the
offering ($.02) from the offering price of the Shares in
this offering ($.05), giving a dilution value of ($.03).
(6) The Percent Dilution to new investors is determined by
dividing the Dilution to new investors ($.03) by the
offering price per Share ($.05) giving a dilution to new
investors of 60%.
Plan of distribution.
Kesser will sell a maximum of 2,000,000 shares of its
common stock, par value $.001 per Share to the public on a
direct participation basis. The minimum number of shares
sold will be 400,000 shares of common stock. In the event
that the minimum number of shares are not sold, then all
funds will be immediately returned to the purchaser.
The minimum purchase required of an investor is $250.00.
There can be no assurance that any of these shares will be
sold.
The net proceeds to Kesser will be $100,000, if all the
shares offered are sold. No commissions or other fees will
be paid, directly or indirectly, by Kesser, or any of its
principals, to any person or firm in connection with
solicitation of sales of the shares, certain costs are to
be paid in connection with the offering (see "Use of
Proceeds").
The public offering price of the shares will be modified,
from time to time, by amendment to this prospectus, in
accordance with changes in the market price of Kesser's common stock. These
securities are offered by Kesser subject to prior sale and
to approval of certain legal matters by counsel.
The Officer and Director of Kesser will be offering and
selling shares on behalf of Kesser. President, treasurer,
secretary, and director Howard Weiss will be offering and
selling shares on behalf of Kesser.
In offering the securities on behalf of Kesser, Mr. Weiss
will be relying on the safe harbor from broker-dealer
registration rule set out in Rule 3a4-1.
We have been informed by the Officer and Director, Mr. Weiss that:
- he is not subject to statutory disqualification as defined in
Section 3(a)(39) of the Securities Exchange Act of 1934,
- as Officer and Director, Mr. Weiss is not compensated in
connection with his participation by the payment of commissions
or other remuneration based either directly or indirectly on
transactions in securities,
and,
- Mr. Weiss, as Officer and Director, is not an associated
person of a broker or dealer.
Additionally, the Officer and Director, Mr. Weiss, is offering and
selling securities in Kesser meet the conditions of part (a)(4)(iii)
where participation will be restricted to:
(A) Preparing any written communication or delivering such
communication through the mails or other means that does
not involve oral solicitation by the associated person of a
potential purchaser; provided, however, that the content of
such communication is approved by a partner, officer or
director of the issuer;
(B) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser;
provided, however, that the content of such responses are
limited to information contained in a registration
statement filed under the Securities Act of 1933 or other
offering document; or
(C) Performing ministerial and clerical work involved in
effecting any transaction.
Limited State Registration.
Kesser anticipates that there will be no State registration of its
securities. Any sale of its securities will depend on exemptions under
the Blue Sky laws of states in which the securities are sold.
The securities will be sold under the Nevada state exemption and
therefore will not be registered even in Nevada. The exemption used is
Section 90.530 (11).
The Nevada exemption that Kesser will be relying on states:
Except as otherwise provided in this subsection, a transaction pursuant
to offer to sell securities of an issuer if:
a) The transaction is part of an issue in which there are no more than
25 purchasers in this state, other than those designated in
subsection 10, during any 12 consecutive months;
b) No general solicitation or general advertising is used in connection
with the offer to sell or sale of the securities;
c) No commission or other similar compensation is paid or given,
directly or indirectly, to a person, other than a broker-dealer
licensed or not required to be purchased under this chapter, for
soliciting a prospective purchaser in this state; and
d) One of the following conditions is satisfied:
1) The seller reasonably believes that all the purchasers in this
state, other than those designated in subsection 10, are
purchasing for investment; or
2) Immediately before an immediately after the transaction, the
issuer reasonably believes that the securities of the issuer are
held by 50 or fewer beneficial owners, other than those
designated in subsection 10, and the transaction is part of an
aggregate offering that does not exceed $500,000 during any 12
consecutive months.
The administrator by rule or order as to a security or
transaction or a type of security or transaction, may withdraw or
further condition the exemption set forth in this subsection or
waive one or more of the conditions of the exemption.
Kesser, Inc. does not make any guarantee that shares will be sold.
Even if shares are sold, the amount raised must meet the minimum
offering levels set in this filing. Should the minimum offering levels
not be met, all proceeds will be returned.
Opportunity To Make Inquires.
Kesser will make available to each Offeree, prior to
any sale of the Shares, the opportunity to ask questions and
receive answers from Kesser concerning any aspect of
the investment and to obtain any additional information
contained in this Memorandum, to the extent that Kesser
possesses such information or can acquire it without
unreasonable effort or expense.
Execution of Documents.
Each person desiring to subscribe to the Shares must
complete, execute, acknowledge, and delivered to Kesser
a Subscription Agreement, which will contain, among other
provisions, representations as to the investor's
qualifications to purchase the common stock and his ability
to evaluate and bear the risk of an investment in the
Company.
By executing the subscription agreement, the
subscriber is agreeing that if the Subscription Agreement it
is excepted by Kesser, such a subscriber will be, a
shareholder in Kesser and will be otherwise bound by
the articles of incorporation and the bylaws of Kesser
in the form attached to this Prospectus.
Promptly, upon receipt of subscription documents by the
Company, it will make a determination as to whether a
prospective investor will be accepted as a shareholder in
Kesser. Kesser may reject a subscriber's
Subscription Agreement for any reason. Subscriptions will be
rejected for failure to conform to the requirements of this
Prospectus (such as failure to follow the proper
subscription procedure), insufficient documentation, over
subscription to Kesser, or such other reasons other as
Kesser determines to be in the best interest of the
Company.
If a subscription is rejected, in whole or in
part, the subscription funds, or portion thereof, will be
promptly returned to the prospective investor without
interest by depositing a check (payable to said investor) in
the amount of said funds in the United States mail,
certified returned-receipt requested. Subscriptions may not
be revoked, cancelled, or terminated by the subscriber,
except as provided herein.
Legal Proceedings
Kesser is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such
action by or against Kesser has been threatened.
Director, Executive Officer, Promoters,
and Control Persons
The names, ages, and respective positions of the
Director, Officer, and significant employees of the
Company are set forth below. All these persons have held
their positions since March 2000. Each director and officer shall serve
for a term ending on the date of the third Annual Meeting. There are
no other persons which can be classified as a promoter or controlling
person of Kesser.
Howard Weiss. Age 40.
In 1982, Mr. Weiss founded Imperial Medical Supply, Inc. Imperial
Medical specializes in Power wheelchair sales. Mr. Weiss remains as
President of Imperial Medical Supply.
After receiving his post graduate rabbinic degree in 1987, Mr. Weiss
entered the real estate business until 1989. In October of 1989 Mr.
Weiss founded Nissim Institutional providers.
Nissim is a medical supply company providing durable and disposable
medical goods to the geriatric population at home and in nursing
facilities. Mr. Weiss continues as president of Nissim.
Neither Imperial Medical Supply, Inc. nor Nissim Institutional are
public reporting companies.
Mr. Weiss has not been involved in legal proceedings that would impair
his ability to perform his duties as Officer and Director.
Currently, Mr. Weiss is not involved in any other blank check entities,
nor has Mr. Weiss had any previous experience with blank check
entities.
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth, as of the date of this
Prospectus, the outstanding Shares of common stock of the
Company owned of record or beneficially by each person who
owned of record, or was known by Kesser to own
beneficially, more than 5% of Kesser's Common Stock,
and the name and share holdings of each officer and director
and all Officer and Director as a group.
Title of Class Name of Beneficial Amount and Nature Percent
Owner (1) of Beneficial Of Class
Owner(2)
Common Stock Howard Weiss 3,000,000 100%
None of the Officer, Director or existing shareholders have
the right to acquire any amount of the Shares
within sixty days from options, warrants, rights, conversion
privilege, or similar obligations.
Principal Shareholder(s).
The addresses for the principal shareholders are as follows:
9612 Van Nuys Blvd., Suite 108 Panorama City, CA 91402
President, secretary, treasurer, and director Howard Weiss
Mr. Weiss has sole voting and investment power.
Description of securities.
General description.
The securities being offered are shares of common stock.
The Articles of Incorporation authorize the issuance of
25,000,000 shares of common stock, with a par value of
$.001. The holders of the Shares: (a) have equal ratable
rights to dividends from funds legally available therefore,
when, as, and if declared by the Board of Director of the
Company; (b) are entitled to share ratably in all of the
assets of Kesser available for distribution upon
winding up of the affairs of Kesser; (c) do not have
preemptive subscription or conversion rights and there are
no redemption or sinking fund applicable thereto; and (d)
are entitled to one non-cumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders. These securities do not have any of the
following rights: (a) cumulative or special voting rights;
(b) preemptive rights to purchase in new issues of Shares;
(c) preference as to dividends or interest; (d) preference
upon liquidation; or (e) any other special rights or
preferences. In addition, the Shares are not convertible
into any other security. There are no restrictions on
dividends under any loan other financing arrangements or
otherwise. See a copy of the Articles of Incorporation, and
amendments thereto, and Bylaws of Kesser, attached as
Exhibit 3.1 and Exhibit 3.2, respectively, to this Form SB-
2. As of the date of this Form SB-2, Kesser has
3,000,000 Shares of common stock outstanding.
Non-cumulative voting.
The holders of Shares of Common Stock of Kesser do not
have cumulative voting rights, which means that the holders
of more than 50% of such outstanding Shares, voting for the
election of Director, can elect all of the Director to be
elected, if they so choose. In such event, the holders of
the remaining Shares will not be able to elect any of the
Company's Director.
Dividends.
Kesser does not currently intend to pay cash dividends.
Kesser's proposed dividend policy is to make
distributions of its revenues to its stockholders when the
Company's Board of Director deems such distributions
appropriate. Because Kesser does not intend to make
cash distributions, potential shareholders would need to
sell their shares to realize a return on their investment.
There can be no assurances of the projected values of the
shares, nor can there be any guarantees of the success of
Kesser.
A distribution of revenues will be made only when, in the
judgment of Kesser's Board of Director, it is in the
best interest of Kesser's stockholders to do so. The
Board of Director will review, among other things, the
investment quality and marketability of the securities
considered for distribution; the impact of a distribution of
the investee's securities on its customers, joint venture
associates, management contracts, other investors, financial
institutions, and Kesser's internal management, plus
the tax consequences and the market effects of an initial or
broader distribution of such securities.
Possible anti-takeover effects of authorized but unissued stock.
Upon the completion of this Offering, Kesser's
authorized but unissued capital stock will consist of
20,000,000 shares (assuming the entire offering is sold) of
common stock. One effect of the existence of authorized but
unissued capital stock may be to enable the Board of
Director to render more difficult or to discourage an
attempt to obtain control of Kesser by means of a
merger, tender offer, proxy contest, or otherwise, and
thereby to protect the continuity of Kesser's
management.
If, in the due exercise of its fiduciary obligations, for example,
the Board of Director were to determine that a takeover
proposal was not in Kesser's best interests, such shares could be
issued by the Board of Director without stockholder approval in
one or more private placements or other transactions that might
prevent, or render more difficult or costly, completion of the
takeover transaction by diluting the voting or other rights
of the proposed acquirer or insurgent stockholder or
stockholder group, by creating a substantial voting block in
institutional or other hands that might undertake to support
the position of the incumbent Board of Director, by
effecting an acquisition that might complicate or preclude
the takeover, or otherwise.
Transfer Agent
Kesser intends to engage the services of Pacific Stock
Transfer Company, P.O. Box 93385 Las Vegas, Nevada 89193
(702) 361-3033 Fax (702) 732-7890.
Interest of named experts and counsel.
No named expert or counsel was hired on a contingent
basis. No named expert or counsel will receive a direct
or indirect interest in the small business issuer. No named
expert or counsel was a promoter, underwriter,
voting trustee, director, officer, or employee of the small
business issuer.
Disclosure of commission position on indemnification for securities act
liabilities.
No director of Kesser will have personal liability to
Kesser or any of its stockholders for monetary damages
for breach of fiduciary duty as a director involving any act
or omission of any such director since provisions have been
made in the Articles of Incorporation limiting such
liability.
The foregoing provisions shall not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to Kesser or its
stockholders, (ii) for acts or omissions not in good faith
or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the
Nevada Revised Statutes, (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes
or, (v) for any transaction from which the director derived
an improper personal benefit.
The By-laws provide for indemnification of the Director,
Officer, and employees of Kesser in most cases for any
liability suffered by them or arising out of their
activities as Director, Officer, and employees of the
Company if they were not engaged in willful misfeasance or
malfeasance in the performance of his or her duties;
provided that in the event of a settlement the
indemnification will apply only when the Board of Director
approves such settlement and reimbursement as being for the
best interests of the Corporation. The Bylaws, therefore,
limit the liability of Director to the maximum extent
permitted by Nevada law (Section 78.751).
The Officer and Director of Kesser are accountable to
Kesser as fiduciaries, which means they are required to
exercise good faith and fairness in all dealings affecting
Kesser. In the event that a shareholder believes the
Officer and/or Director have violated their fiduciary
duties to Kesser, the shareholder may, subject to
applicable rules of civil procedure, be able to bring a
class action or derivative suit to enforce the shareholder's
rights, including rights under certain federal and state
securities laws and regulations to recover damages from and
require an accounting by management..
Shareholders who have suffered losses in connection
with the purchase or sale of their interest in
Kesser in connection with such sale
or purchase, including the misapplication by any such
officer or director of the proceeds from the sale of these
securities, may be able to recover such losses from the
Company.
The registrant undertakes the following:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act") may be
permitted to Director, Officer and controlling persons of
the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
Organization within last five years.
The names of the promoters of the registrant are the
Officer and Director as disclosed elsewhere in this Form
SB-2/A. None of the promoters have received anything of value
from the registrant.
Description of Business.
1. Company/Business Summary.
Kesser, Inc.. was incorporated on
March 31st, 2000, under the laws of the State of Nevada, to
engage in any lawful corporate undertaking, including, but
not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations date. Other than issuing shares to
its original shareholders, Kesser never commenced any
operational activities.
Kesser was formed by Adam U. Shaikh, the initial director,
for the purpose of creating a corporation which could be
used to consummate a merger or acquisition. Mr. Shaikh is
an associate attorney with the firm of Shawn F. Hackman, a
P.C. Mr. Shaikh approached by Mr. Weiss for his services
in incorporating and administrating an SB-2 filing for
Kesser, Inc. Mr. Shaikh, nor anyone associated with Shawn
F. Hackman, a P.C. hold a position with Kesser, Inc. and
have no involvement with the day to day activities of
Kesser, Inc.
Mr. Shaikh is neither the promoter nor the founder of
Kesser, Inc. Mr. Shaikh simply provided the administrative
assistance to file for incorporation with the State of
Nevada.
Immediately upon incorporation, Mr. Shaikh was replaced by
Howard Weiss. Mr. Weiss serves as President, secretary,
treasurer, and director. Mr. Weiss determined next to
proceed with filing a Form SB-2.
Mr. Weiss, the President and Director, elected to
commence implementation of Kesser's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, Kesser can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify Kesser as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as Kesser has
successfully implemented its business plan described herein.
Accordingly, each shareholder of Kesser has executed
and delivered a "lock-up" letter agreement, affirming that
he/she will not sell his/her respective shares of the
Company's common stock until such time as Kesser has
successfully consummated a merger or acquisition and the
Company is no longer classified as a "blank check" company.
In order to provide further assurances that no trading will
occur in Kesser's securities until a merger or
acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with
Kesser's legal counsel, who will not release these
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated.
However, while management believes that the procedures
established to preclude any sale of Kesser's securities prior
to closing of a merger or acquisition will be sufficient, there can be
no assurances that the procedures established herein will unequivocally
limit any shareholder's ability to sell their respective securities before
such closing.
Item 2. Plan of Operation.
The Registrant intends to seek to acquire assets or
shares of an entity actively engaged in business which
generates revenues, in exchange for its securities. The
Registrant has no particular acquisitions in mind and has
not entered into any negotiations regarding such an
acquisition. None of Kesser's Officer, Director,
promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other
company regarding the possibility of an acquisition or
merger between Kesser and such other company as of the
date of this registration statement.
While Kesser will attempt to obtain audited
financial statements of a target entity, there is no
assurance that such audited financial statements will be
available. The Board of Director does intend to obtain
certain assurances of value of the target entity's assets
prior to consummating such a transaction, with further
assurances that an audited statement would be
provided within seventy-five days after closing of such a
transaction. Closing documents relative thereto will
include representations that the value of the assets
conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing
documents.
The Registrant has no full time employees. The
Registrant's two Officer have agreed to allocate a portion
of their time to the activities of the Registrant, without
compensation. Management anticipates that the business plan
of Kesser can be implemented by each officer devoting
approximately 10 hours per month to the business affairs of
Kesser and, consequently, conflicts of interest may
arise with respect to the limited time commitment by
such Officer. See "Item 5. Director, Executive Officer, Promoters,
and Control Persons."
Kesser is filing this registration statement on a
voluntary basis because the primary attraction of the
Registrant as a merger partner or acquisition vehicle will
be its status as an SEC reporting company. Any business
combination or transaction will likely result in a
significant issuance of shares and substantial dilution to
present stockholders of the Registrant.
The Articles of Incorporation of Kesser
provides that Kesser may indemnify Officer and/or
Director of Kesser for liabilities, which can include
liabilities arising under the securities laws. Therefore,
assets of Kesser could be used or attached to satisfy
any liabilities subject to such indemnification. See "Item 12,
Indemnification of Director and Officer."
General Business Plan.
Kesser's purpose is to seek, investigate and,
if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms
who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. Kesser will not
restrict its search to any specific business, industry, or
geographical location and Kesser may participate in a business
venture of virtually any kind or nature.
This discussion of the proposed business is purposefully
general and is not meant to be restrictive of
Kesser's virtually unlimited discretion to search for
and enter into potential business opportunities. Management
anticipates that it will be able to participate in only one
potential business venture because Kesser has nominal assets and
limited financial resources. See Item F/S, "Financial Statements." This lack
of diversification should be considered a substantial risk
to shareholders of Kesser because it will not permit
Kesser to offset potential losses from one venture
against gains from another.
Kesser may seek a business opportunity with
entities which have recently commenced operations, or which
wish to utilize the public marketplace in order to raise
additional capital in order to expand into new products or
markets, to develop a new product or service, or for other
corporate purposes. Kesser may acquire assets and
establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The primary method Kesser will use to find
potential merger or acquisition candidates will be to run
classified ads in the Wall Street Journal periodically
seeking companies which are looking to merge with a public
shell.
Kesser anticipates that the selection of a
business opportunity in which to participate will be complex
and extremely risky. Due to general economic conditions,
rapid technological advances being made in some industries
and shortages of available capital, management believes that
there are numerous firms seeking the perceived benefits of a
publicly registered corporation. Such perceived benefits may
include facilitating or improving the terms on which
additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to
key employees, providing liquidity (subject to restrictions
of applicable statutes) for all shareholders and other
factors. Business opportunities may be available in many
different industries and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex.
Kesser has, and will continue to have, no capital with
which to provide the owners of business opportunities with
any significant cash or other assets. However, management
believes Kesser will be able to offer owners of
acquisition candidates the opportunity to acquire a
controlling ownership interest in a publicly registered
company without incurring the cost and time required to
conduct an initial public offering.
The owners of the business opportunities will, however,
incur significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs
of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and
related reports and documents. The Securities Exchange Act
of 1934 (the "34 Act"), specifically requires that any
merger or acquisition candidate comply with all
applicable reporting requirements, which include providing
audited financial statements to be included within the
numerous filings relevant to complying with the 34 Act.
Nevertheless, the Officer and Director of Kesser have
not conducted market research and are not aware of
statistical data which would support the perceived benefits
of a merger or acquisition transaction
for the owners of a business opportunity.
The analysis of new business opportunities will be
undertaken by, or under the supervision of, the Officer and
Director of Kesser, none of whom is a professional
business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities
which may be brought to its attention through present
associations of Kesser's Officer, or by the
Company's shareholders.
In analyzing prospective business opportunities, management
will consider such matters as:
- the available technical, financial and managerial resources,
- working capital and other financial requirements,
- history of operations, if any,
- prospects for the future,
- nature of present and expected competition;,
- the quality and experience of management services which may be
available and the depth of that management,
- the potential for further research, development, or
exploration,
- specific risk factors not now foreseeable but which may be
anticipated to impact the proposed activities of Kesser;
- the potential for growth or expansion; the potential for
profit;
- the perceived public, recognition or acceptance of products,
services, or trades;
- name identification; and other relevant factors.
Management will meet personally with management and key
personnel of the business opportunity as part of their investigation.
To the extent possible, Kesser intends to utilize written
reports and personal investigation to evaluate the above
factors. Kesser will not acquire or merger with any
company for which audited financial statements cannot be
obtained within a reasonable period of time after closing of
the proposed transaction.
Management of Kesser, while not especially
experienced in matters relating to the new business of the
Company, will rely upon their own efforts and, to a much
lesser extent, the efforts of Kesser's shareholders, in
accomplishing the business purposes of Kesser. It is
not anticipated that any outside consultants or advisors will be
utilized by Kesser to effectuate its business purposes described
herein.
However, if Kesser does retain such an outside consultant or
advisor, any cash fee earned by such party will need to be paid by the
prospective merger/acquisition candidate, as Kesser has no cash assets
with which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside consultants
and none are anticipated in the future. In the past, the
Company's management has never used outside consultants or
advisors in connection with a merger or acquisition.
Kesser will not restrict its search for any
specific kind of firms, but may acquire a venture which is
in its preliminary or development stage, which is already in
operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status
of any business in which Kesser may become engaged, in
that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived
advantages which Kesser may offer.
However, Kesser does not intend to
obtain funds in one or more private placements to finance
the operation of any acquired business opportunity until
such time as Kesser has successfully consummated such a
merger or acquisition. Kesser also has no plans to
conduct any offerings under Regulation S.
Mr. Weiss may advance money to the Company or on behalf of
the Company. There are no set limits to the maximum amount
that Mr. Weiss will advance or loan to the Company.
However, the amount is obviously limited by the resources
of Mr. Weiss. Mr. Weiss anticipates that repayment would
come from the acquisition of a target company. The advances
would be expected to be in an amount well below the minimum
expected from any viable operating business target.
Acquisition of opportunities.
In implementing a structure for a particular
business acquisition, Kesser may become a party to a
merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It
may also acquire stock or assets of an existing business.
On the consummation of a transaction, it is probable that
the present management and shareholders of Kesser will
no longer be in control of Kesser. In addition, the
Company's Director may, as part of the terms of the
acquisition transaction, resign and be replaced by new
Director without a vote of Kesser's shareholders.
It is anticipated that Kesser's principal
shareholders may actively negotiate or otherwise consent to
the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or
acquisition transaction. Any terms of sale of the shares
presently held by Officer and/or Director of Kesser
will be also afforded to all other shareholders of the
Company on similar terms and conditions.
The policy set forth in the preceding sentence is based on an
Understanding between the two members of management, and these
two persons are not aware of any circumstances under which this policy
would change while they are still Officer and Director of
Kesser. Any and all such sales will only be made in
compliance with the securities laws of the United States and
any applicable state.
It is anticipated that any securities issued in
any such reorganization would be issued in reliance upon
exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a
negotiated element of its transaction, Kesser may agree
to register all or a part of such securities immediately
after the transaction is consummated or at specified times thereafter.
If such registration occurs, of which there can be no assurance, it
will be undertaken by the surviving entity after Kesser has
successfully consummated a merger or acquisition and the
Company is no longer considered a "shell" company. Until
such time as this occurs, Kesser will not attempt to
register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading
market which may develop in Kesser's securities may have a depressive
effect on the value of Kesser's securities in the future, if such a
market develops, of which there is no assurance.
While the actual terms of a transaction to which
Kesser may be a party cannot be predicted, it may be
expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so-called "tax-
free" reorganization under Sections 368a or 351 of the
Internal Revenue Code (the "Code").
With respect to any merger or acquisition,
negotiations with target company management is expected to
focus on the percentage of Kesser which target company
shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities,
Kesser's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the
Company following any merger or acquisition.
The percentage ownership may be subject to significant reduction in the
event Kesser acquires a target company with substantial
assets. Any merger or acquisition effected by Kesser
can be expected to have a significant dilutive effect on the
percentage of shares held by Kesser's then shareholders.
Kesser will participate in a business
opportunity only after the negotiation and execution of
appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require some specific representations
and warranties by all of the parties thereto.
Also, they will specify certain events of default, will detail the
terms of closing and the conditions which must be satisfied by each
of the parties prior to and after such closing, will outline the manner
of bearing costs, including costs associated with Kesser's
attorneys and accountants, will set forth remedies on
default and will include miscellaneous other terms.
As stated here-in-above, Kesser will not
acquire or merge with any entity which cannot provide
independent audited financial statements within a reasonable
period of time after closing of the proposed transaction.
Kesser is subject to all of the reporting requirements
included in the 34 Act. Included in these requirements is
the affirmative duty of Kesser to file independent audited
financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as Kesser's audited financial statements included
in its annual report on Form 10-K (or 10-KSB, as applicable).
If such audited financial statements are not available at closing, or
within time parameters necessary to insure Kesser's compliance with
the requirements of the 34 Act, or if the audited financial
statements provided do not conform to the representations
made by the candidate to be acquired in the closing
documents, the closing documents may provide that the
proposed transaction will be voidable, at the discretion of
the present management of Kesser.
Kesser's Officer and shareholders have
verbally agreed that they will advance to Kesser any
additional funds which Kesser needs for operating
capital and for costs in connection with searching for or
completing an acquisition or merger. These persons have
further agreed that such advances will be made in proportion
to each person's percentage ownership of Kesser. These
persons have also agreed that such advances will be made
interest free without expectation of repayment unless the
owners of the business which Kesser acquires or merges
with agree to repay all or a portion of such advances.
There is no dollar cap on the amount of money which such
persons will advance to Kesser. Kesser will not
borrow any funds from anyone other than its current
shareholders for the purpose of repaying advances made by
the shareholders, and Kesser will not borrow
any funds to make any payments to Kesser's promoters,
management or their affiliates or associates.
The Board of Director has passed a resolution
which prohibits Kesser from completing an acquisition
or merger with any entity in which any of Kesser's
Officer, Director, principal shareholders or their
affiliates or associates serve as officer or director or
hold any ownership interest. Management is not aware of any
circumstances under which this policy, through their own initiative may
be changed.
There are no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management management of the
Company's affairs. There is no agreement that non-
management shareholders will exercise their voting rights to
continue to re-elect the current Director, however, it is
expected that they will do so based on the existing friendship among
such persons.
Competition.
Kesser will remain an insignificant participant among
the firms which engage in the acquisition
of business opportunities. There are many established
venture capital and financial concerns which have
significantly greater financial and personnel resources and
technical expertise than Kesser. In view of the
Company's combined extremely limited financial resources and
limited management availability, Kesser will continue
to be at a significant competitive disadvantage compared to the
Company's competitors.
Year 2000 compliance.
Kesser is aware of the issues associated with
the programming code in existing computer systems through the
year 2000. Kesser has assessed these issues
as they relate to Kesser, and since Kesser
currently has no operating business and does not use any
computers, and since it has no customers, suppliers or other
constituents, it does not believe that there are any
material year 2000 issues to disclose in this SB/2A.
Description of property.
Kesser has retained Shawn F. Hackman, a P.C., as a resident agent. The
address is 3360 W. Sahara, Suite 200 Las Vegas, NV 89102. Shawn F.
Hackman, a P.C. has no involvement with the day to day activities of
Kesser. A copy of the resident agent agreement is attached.
Kesser currently owns no property. President Howard Weiss shall provide
the space for the Company's meetings at 9612 Van Nuys Blvd., Suite
108 Panorama City, CA 91402
Shawn F. Hackman, a P.C. does provide as address as resident agent for
the following blank check companies: Blimah, Inc., Kesser, Inc.,
Harbor Group.Net, Inc., Y2Komp.com, Modern.com, Ability.com, and
Computech.com. However, Shawn F. Hackman, a P.C., nor any of its
employees are an officer or director of these blank check companies and
have no connection with the day to day activities of them.
Additionally, Shawn F. Hackman, a P.C. does provide an address as
resident agent and office space for the following blank check
companies: Silver Stream, Inc., Western Sky, Inc., Horizon Prime,
Inc., and Red Bluff, Inc.. Shawn F. Hackman is an officer and director
with these blank check companies. However, these blank check companies
have no relation to Kesser, Inc.
Certain relationships and related transactions.
There are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a
party, in which any of the named persons set forth in Item
404 of Regulation SB had or is to have a direct or indirect
material interest.
Shawn F. Hackman, Esq., the Company's resident agent, incorporated the
Company in an administrative capacity. Mr. Hackman currently hold no
position in the Company.
Market for common equity and related stockholder matters.
The Shares have not previously been traded on any
securities exchange. At the present time, there are no
assets available for the payment of dividends on the Shares.
Executive compensation.
(a) No officer or director of Kesser is receiving any
remuneration at this time.
(b) There are no annuity, pension or retirement benefits
proposed to be paid to Officer, Director, or employees of
the corporation in the event of retirement at normal
retirement date pursuant to any presently existing plan
provided or contributed to by the corporation or any of its
subsidiaries.
(c) No remuneration is proposed to be in the future
directly or indirectly by the corporation to any officer or
director under any plan which is presently existing.
Financial statements.
KESSER, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
April 4, 2000
TABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-9
INDEPENDENT AUDITORS' REPORT
Board of Directors April 5, 2000
KESSER, INC.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of KESSER, INC. (A
Development Stage Company), as of April 4, 2000 and the related
statements of operations, stockholders' equity and cash flows for the
period March 31, 2000 (inception) to April 4, 2000. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements
based on my audit.
I conducted my 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. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of KESSER,
INC. (A Development Stage Company), as of April 4, 2000, and the
results of its operations and cash flows for the period March 31, 2000
(inception) to April 4, 2000, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note #5
to the financial statements, the Company has suffered recurring losses
from operations and has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is described in Note #5.
These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
___________________________
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
KESSER, INC.
(A Development Stage Company)
April 4, 2000
<TABLE>
BALANCE SHEET
<CAPTION>
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 0
TOTAL CURRENT ASSETS $ 0
OTHER ASSETS $ 0
TOTAL OTHER ASSETS $ 0
TOTAL ASSETS $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 0
TOTAL CURRENT LIABILITIES $ 0
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.001
Authorized 25,000,000 shares
Issued and outstanding at
April 4, 2000 -
3,000,000 shares 3,000
Additional Paid-In Capital 0
Deficit accumulated during
The Development stage -3,000
TOTAL STOCKHOLDERS' EQUITY $ 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
The accompanying notes are an integral part of these financial statements
</TABLE>
- 2 -
KESSER, INC.
(A Development Stage Company)
March 31, 2000(inception), to April 4, 2000
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
<S> <C>
INCOME
Revenue $ 0
EXPENSES
General and
Administrative $ 3,000
TOTAL EXPENSES $ 3,000
NET PROFIT/LOSS (-) $ -3,000
Net Profit/Loss(-)
per weighted share
(Note #1) $ -.0010
Weighted average
Number of common
shares outstanding 3,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements
- 3
KESSER, INC.
(A Development Stage Company)
<TABLE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
Additional Accumu- Common Stock
paid-in lated Shares Amount
Capital Deficit
<S> <C> <C> <C> <C>
March 31, 2000
Issued for Services $0 3,000,000 $ 3,000
Net loss March 31,
2000 (inception) to
April 4, 2000 -3,000
Balance,
April 4, 2000 $0 -3,000 3,000,000 $ 3,000
</TABLE>
The accompanying notes are an integral part of these financial statements
- 4
KESSER, INC.
(A Development Stage Company)
March 31, 2000 (inception), to April 4, 2000
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
<S> <C>
Cash Flows from
Operating Activities
Net Loss $ -3,000
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services +3,000
Changes in assets and
Liabilities 0
Net cash used in
Operating activities $ 0
Cash Flows from
Investing Activities 0
Cash Flows from
Financing Activities 0
Net Increase (decrease) $ 0
Cash,
Beginning of period 0
Cash, End of Period $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
- 5 -
KESSER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 4, 2000
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized March 31, 2000, under the laws of the
State of Nevada as KESSER, INC. The Company currently has no
operations and in accordance with SFAS #7, is considered a
development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual
method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and equivalents
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less
are considered to be cash equivalents.
There are no cash equivalents as of April 4, 2000 .
- 6
KESSER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 4, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is
recorded for all temporary difference between financial and
tax reporting. Deferred tax expense (benefit) results from
the net change during the year of deferred tax assets and
liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities" which provides guidance on
the financial reporting of start-up costs and organization
costs. It requires most costs of start-up activities and
organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15,
1998. With the adoption of SOP 98-5, there has been little
or no effect on the company's financial statements.
Loss Per Share
Net loss per share is provided in accordance with Statement
of Financial Accounting Standards No. 128 (SFAS #128)
"Earnings Per Share". Basic loss per share is computed by
dividing losses available to common stockholders by the
weighted average number of common shares outstanding during
the period. Diluted loss per share reflects per share
amounts that would have resulted if dilative common stock
equivalents had been converted to common stock. As of April
4, 2000, the Company had no dilative common stock
equivalents such as stock options.
Year End
The Company has selected December 31st as its fiscal year-
end.
- 7 -
KESSER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 4, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Policy in Regards to Issuance of Common Stock in a Non-Cash
Transaction
The Company's accounting policy for issuing shares in a
non-cash transaction is to issue the equivalent amount of
stock equal to the fair market value of the assets or
services received.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended April
4, 2000 , due to the net loss and no state income tax in Nevada,
the state of the Company's domicile and operations. The Company's
total deferred tax asset as of April 4, 2000 is as follows:
Net operation loss carry forward $ 0
Valuation allowance $ 0
Net deferred tax asset $ 0
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
25,000,000 shares with a par value $.001 per share.
Preferred Stock
The corporation has no preferred stock.
On March 31, 2000, the Company issued 3,000,000 shares of its
$0.001 par value common stock to its directors for services of
$3,000.00.
- 8 -
KESSER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 4, 2000
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of asets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an established
source of revenues sufficient to cover its operating costs and to allow
it to continue as a going concern. The stockholders/officers and or
directors have committed to advancing the operating costs of the Company
interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not
been reflected therein. The officers and directors of the Company are
involved in other business activities and may in the future, become involved
in other business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between the Company
and their other business interests. The Company has not formulated a policy
for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 8 - OFFERING COSTS
All future costs related to the proposed offering will be classified as
deferred offering costs on the balance sheet. These costs will be netted
against the gross proceeds after the offering close. There have been no
such costs incurred to date. Any reporting costs after effectiveness will
be reported as current expense in the period incurred.
Part II. Information not required in prospectus.
Indemnification of Officer and Director.
Information on this item is set forth in Prospectus under
the heading "Disclosure of Commission Position on
Indemnification for Securities Act Liabilities."
Other expenses of issuance and distribution.
Information on this item is set forth in the Prospectus
under the heading "Use of Proceeds."
Recent sales of unregistered securities.
On March 31st, 2000, 3,000,000 shares were issued to
Howard Weiss under Rule 4(2).
Mr. Weiss is an accredited holder of securities because he is an
officer and director.
Exhibits.
The Exhibits required by Item 601 of Regulation S-B, and an
index thereto, are attached.
Undertakings.
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or
sells securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement; and
Notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end of
the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to Rule
424.
(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(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.
Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations
and registered in such names as required by the underwriter
to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the pursuant to the
foregoing provisions, or otherwise, the small business
issuer has been advised "Act") may be permitted to
Director, Officer and controlling persons of the small
business issuer that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the
small business issuer 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 small business issuer 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 whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
EXHIBIT LIST
3.1 Articles of Incorporation
3.2 By-Laws
27.1 Acceptance of Resident Agent
27.2 Lock-up agreement
SIGNATURE
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that is meets
all of the requirements for filing on Form SB-2A and authorized this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorize, in the City of Las Vegas, State of Nevada.
Kesser, Inc.
By:/s/ _______________
Howard Weiss, President
Kesser, Inc.
