UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange Act of 1934
AXIS COM, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0469539
(State of organization) (I.R.S. Employer Identification No.)
3360 West Sahara Avenue, Suite 200, Las Vegas, NV 89102
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 732-2253
Registrant's facsimile number, including area code (702) 940-4006
Registrant's Attorney: Adam U. Shaikh, Esq., 3360 W. Sahara Ave.,
Suite 200, Las Vegas, NV 89102,
Telephone (702) 732-2253
Fax (702) 940-4006
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act: Common Stock
[1]
Item 1. Description of business
Axis.com, Inc. is a Nevada corporation formed under the laws of the State of
Nevada on August 4, 2000. Its principal place of business is located at 3360
West Sahara Avenue, Suite 200, Las Vegas, NV 89102. Axis was organized to
engage in any lawful corporate business.
The primary activity of Axis is to locate and consummate a merger or
acquisition with a private entity.
Axis has been in the developmental stage since inception and has no operating
history other than organizational matters. Axis has no operations and in
accordance with SFAS #7, is considered a development stage company.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas, Axis's sole officers and directors,
have elected to begin implementing Axis's principal business purpose,
described below under "Item 2, Plan of Operation". As such, Axis 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 Axis 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 A xis's securities until such time as Axis has successfully
implemented its business plan.
Axis is filing this registration statement on a voluntary basis, pursuant to
section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"), in
order to ensure that public information is readily accessible to all
shareholders and potential investors, and to increase Axis's access to
financial markets. Axis plans to increase its access to financial markets by
gaining reporting status on the over-the-counter bulletin board. In the event
Axis's obligation to file periodic reports is suspended pursuant to the
Exchange Act, Axis anticipates that it will continue to voluntarily file such
reports.
Risk factors
Axis's business is subject to numerous risk factors, including the following:
Axis has no operating history, has received no revenue and has minimal assets.
Axis has had no operating history and has received no revenues or earnings from
operations. Axis has no significant assets or financial resources. Axis will,
in all likelihood, sustain operating expenses without corresponding revenues,
at least until it completes a business combination. This may result in Axis
incurring a net operating loss, which will increase continuously until Axis
completes a business combination with a profitable business opportunity. There
is no assurance that Axis will identify a business opportunity or complete a
business combination.
[2]
Axis's proposed operations are speculative and may not succeed
The success of Axis's proposed plan of operation will depend to a great extent
on the operations, financial condition, and management of any potential
business opportunity. While management intends to seek business combinations
with entities having established operating histories, it cannot assure that
Axis will successfully locate candidates meeting such criteria. In the event
Axis completes a business combination, the success of Axis's operations may be
dependent upon management of the successor firm or venture partner firm
together with numerous other factors beyond Axis's control.
There is a scarcity of companies that may wish to merge or acquire with Axis
and the competition for such business opportunities and combinations is great
Axis is, and will continue to be, an insignificant participant in the business
of seeking mergers and 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 that
may also be desirable target candidates for Axis.
Nearly all such entities have significantly greater financial resources,
technical expertise, and managerial capabilities than Axis, and is,
consequently, at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Additionally, Axis has no way to distinguish itself from other blank check
companies.
Axis will also compete with numerous other small public companies in seeking
merger or acquisition candidates. Axis's competition will include operating
companies that are likewise looking for acquisition and merger candidates.
Axis currently has no agreements for business combinations or other
transactions and has no standards for approving business combinations.
Axis has no arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be no assurance
that Axis will successfully identify and evaluate suitable business
opportunities or conclude a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluations. Axis has been in the developmental stage since inception and has
no operations to date. Other than issuing shares to its original shareholders,
Axis never commenced any operational activities. There is no assurance that
Axis will be able to negotiate a business combination on terms favorable to
Axis. Axis has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria that it will
require a target business opportunity to have achieved, and without which Axis
would not consider a business combination in any form with such business
opportunity. Accordingly, Axis 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.
[3]
Axis is dependent on management that has limited or no business experience and
only a partial time commitment to Axis.
While seeking a business combination, management anticipates devoting ten to
twenty hours per month to the business of Axis. Axis's sole officer has not
entered into written employment agreement with Axis and does not expect to do
so in the foreseeable future.
Axis has no key man insurance despite the dependence on management.
Notwithstanding the combined limited experience and time commitment of
management, loss of the services of any of these individuals would adversely
affect development of Axis's business and its likelihood of continuing
operations. Despite this, Axis has not obtained key man life insurance on its
officer or director. See "Management."
Reporting requirements may delay or preclude acquisition.
Companies subject to Section 13 of the Securities Exchange Act of 1934 (the
"Exchange Act") must provide certain information about significant
acquisitions, including certified financial statements for Axis 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 even preclude Axis from
completing an otherwise desirable acquisition. 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.
Lack of market research of marketing organization.
Axis has conducted minimal market research indicating that market demand exists
for the transactions contemplated by Axis.
Moreover, Axis has limited marketing organization. If there is demand for a
business combination as contemplated by Axis, there is no assurance Axis will
successfully complete such transaction.
Lack of diversification
In all likelihood, Axis's proposed operations, even if successful, will result
in a business combination with only one entity. Consequently, the resulting
activities will be limited to that entity's business. Axis's inability to
diversify its activities into a number of areas may subject Axis to economic
fluctuations within a particular business or industry, thereby increasing the
risks associated with Axis's operations.
Axis may, in the future, be subject to the Investment Company Act of 1940.
Although Axis will be subject to regulation under the Securities Exchange Act
of 1934; management believes Axis will not be subject to regulation under the
Investment Company Act of 1940, insofar as Axis will not be engaged in the
business of investing or trading in securities. In the event Axis engages in
business combinations, which result in Axis holding passive investment
interests in a number of entities, Axis could be subject to regulation under
the Investment Company Act of 1940. In such event, Axis would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. Axis has obtained no formal determination
from the Securities and Exchange Commission as to the status of Axis under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject Axis to material adverse consequences.
[4]
Axis will probably be subject to a change in control of management.
A business combination involving the issuance of Axis's common stock will, in
all likelihood, result in shareholders of a private company obtaining a
controlling interest in Axis Any such business combination may require
management of Axis to sell or transfer all or portions of Axis's common stock
held by them, or resign as members of the Board of Director of Axis The
resulting change in control of Axis could result in removal of one or more
present officer and director of Axis and a corresponding reduction in or
elimination of their participation in the future affairs of Axis.
A reduction of the percentage of share ownership of Axis may follow a business
combination.
Axis's primary plan of operation is based upon a business combination with a
private concern which, in all likelihood, would result in Axis issuing
securities to shareholders of such private companies. Issuing previously
authorized and unissued common stock of Axis will reduce the percentage of
shares owned by present and prospective shareholders, and a change in Axis's
control and/or management.
Requirement of audited financial statements may disqualify business
opportunities.
Management believes that any potential target company 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 forego
a business combination with Axis, rather than incur the expenses associated
with preparing audited financial statements.
Blue sky considerations.
Because the securities registered hereunder have not been registered for resale
under the blue sky laws of any state, and Axis has no current plans to register
or qualify its shares in any state, holders of these shares and persons who
desire to purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue sky restrictions upon
the ability of new investors to purchase the securities. These restrictions
could reduce the size of any potential market.
Non - issuer trading or resales of Axis securities are exempt from state
registration or qualification requirements in most states. However, some states
may continue to restrict the trading or resale of blind- pool or "blank-check"
securities. Accordingly, investors should consider any potential secondary
market for Axis securities to be a limited one.
[5]
Item 2. Management's discussion and analysis or plan of operation note
regarding projections and forward looking statements.
Although Management believes that the expectations reflected in these forward-
looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the expectations are disclosed
in this Statement, including, without limitation, in conjunction with those
forward-looking statements contained in this Statement.
Plan of operation - general
Axis plans to seek, investigate, and if such investigation warrants, acquire an
interest in one or more business opportunities presented to it by persons or
firms desiring the perceived advantages of a publicly held corporation. At this
time, Axis has no plan, proposal, agreement, understanding, or arrangement to
acquire or merge with any specific business or company and Axis has not
identified any specific business or a company for investigation and evaluation.
No member of Management or any promoter of Axis, or an affiliate of either, has
had any material discussions with any other company with respect to any
acquisition of Axis
Axis will not restrict its search to any specific business, industry, or
geographical location, and may participate in business ventures of virtually
any kind or nature.
Discussion of the proposed business under this caption and throughout this
Registration Statement is purposefully general and is not meant to restrict
Axis's virtually unlimited discretion to search for and enter into a business
combination. Axis may seek a combination with a firm which only recently
commenced operations, or a developing company in need of additional funds to
expand into new products or markets or seeking to develop a new product or
service, or an established business which may be experiencing financial or
operating difficulties and needs additional capital which is perceived to be
easier to raise by a public company.
In some instances, a business opportunity may involve acquiring or merging
with a corporation which does not need substantial additional cash but which
desires to establish a public trading market for its common stock. Axis may
purchase assets and establish wholly owned subsidiaries in various businesses
or purchase existing businesses as subsidiaries. Selecting a business
opportunity will be complex and extremely risky. Because of 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 benefits of a publicly- traded corporation. Such perceived
benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statues) for all
shareholders, and other items.
[6]
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Management believes that Axis may be able to
benefit from the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring significant
indebtedness for a large percentage of the purchase price of that business.
Through leveraged transactions, Axis would be required to use less of its
available funds to acquire a target company and, therefore, could commit those
funds to the operations of the business, to combinations with other target
companies, or to other activities.
The assets of the acquired business will ordinarily secure the borrowing
involved in a leveraged transaction. If that business were not able to generate
sufficient revenues to make payments on the debt incurred by Axis to acquire
that business, the lender would be able to exercise the remedies provided by
law or by contract. These leveraging techniques, while reducing the amount of
funds that Axis must commit to acquire a business, may correspondingly
increase the risk of loss to Axis
Axis can give no assurance as to the terms or availability of financing for any
acquisition. During periods when interest rates are relatively high, the
benefits of leveraging are not as great as during periods of lower interest
rates, because the investment in the business held on a leveraged basis will
only be profitable if it generates sufficient revenues to cover the related
debt and other costs of the financing. Lenders from which Axis may obtain
funds for purposes of a leveraged buy - out may impose restrictions on the
future borrowing, distribution, and operating policies of Axis It is not
possible at this time to predict the restrictions, if any, which lenders may
impose, or the impact thereof on Axis.
Axis has insufficient capital with which to provide the owners of businesses
significant cash or other assets. Management believes Axis will offer owners
of businesses the opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to conduct an
initial public offering. However, a business that conducts a public will raise
capital, but will not raise capital as a result of merging with Axis. The
owners of the businesses will, however, incur significant post-merger or
acquisition registration costs in the event they wish to register a portion of
their shares for subsequent sale. Axis will also incur significant legal and
accounting costs in connection with the acquisition of a business opportunity,
including the costs of preparing Forms 8-K, agreements, and related reports
and documents. At a minimum, It will be necessary to file a Form 8K.
Additionally, 10Qs and 10Ks will need to be filed as necessary.
Nevertheless, the officers and directors of Axis have not conducted market
research and are not aware of statistical data that would support the perceived
benefits of a merger or acquisition transaction for the owners of a business.
Axis does not intend to make any loans to any prospective merger or acquisition
candidates or to unaffiliated third parties. Axis 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 Axis 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 Axis may
offer. However, Axis 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 Axis has successfully consummated such a merger or acquisition.
Axis also has no plans to conduct any offerings under Regulation S.
[7]
Currently, Axis has minimal cash. Additional funds will have to be raised via
securities issues or will need to be borrowed from management in order to
properly pursue its business plan.Should Axis be unable to raise the necessary
funds in the next 12 months, Axis would be unable to fully implement its
business plan and may be unable to implement its business plan at all. In such
an event, all active operations of Axis would cease.
Sources of opportunities
Axis will seek a potential business opportunity from all known sources, but
will rely principally on personal contacts of its officer and director as well
as indirect associations between them and other business and professional
people. It is not presently anticipated that Axis will engage professional
firms specializing in business acquisitions or reorganizations. Management,
while not especially experienced in matters relating to the new business of
Axis, will rely upon their own efforts and, to a much lesser extent, the
efforts of Axis's shareholders, in accomplishing the business purposes of Axis
It is not anticipated that any outside consultants or advisors, other than
Axis's legal counsel and accountants, will be utilized by Axis to effectuate
its business purposes described herein. However, if Axis 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 Axis 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, Axis's management has never used outside consultants or advisors
in connection with a merger or acquisition. As is customary in the industry,
a finder's fee for locating an acquisition prospect may be necessary. If any
such fee is paid, it will have to be approved and paid for by the target
candidate because Axis has no cash. Any such payment would be done in
accordance with industry standards.
Such fees are customarily between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved. Such fees are typically in
the range of 5% on a $1,000,000 transaction ratably down to 1% in a $4,000,000
transaction. Management has adopted a policy that such a finder's fee or real
estate brokerage fee could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of Axis, if such person plays a material
role in bringing a transaction to Axis.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas do have general business experience as
disclosed in the resume.
[8]
Evaluation of opportunities
The analysis of new business opportunities will be undertaken by or under the
supervision of the officer and director of Axis (see "Management"). Management
intends to concentrate on identifying prospective business opportunities, which
may be brought to its attention through present associations with management.
In analyzing prospective business opportunities, management will consider,
among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be available and
the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be anticipated
to impact the proposed activities of Axis
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products, services or
trades
12. name identification
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, Axis intends to utilize written reports and personal
investigation to evaluate the above factors. Axis will not acquire or merge
with any company for which audited financial statements cannot be obtained.
Opportunities in which Axis participates will present certain risks, many of
which cannot be identified adequately prior to selecting a specific
opportunity. Axis's shareholders must, therefore, depend on Management to
identify and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business in its
development stage (in that it has not generated significant revenues from its
principal business activities prior to Axis's participation.) Even after
Axis's participation, there is a risk that the combined enterprise may not
become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies, which may not succeed. Axis and, therefore, its shareholders will
assume such risks.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements,disclosure documents, and other
instruments will require substantial management time and attention as well as
substantial costs for accountants, attorneys, and others. If a decision were
made not to participate in a specific business opportunity the costs incurred
in the related investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the loss by Axis of
the related costs incurred. There is the additional risk that Axis will not
find a suitable target. Management does not believe Axis will generate revenue
without finding and completing a transaction with a suitable target company.
If no such target is found, therefore, no return on an investment in Axis will
be realized, and there will not, most likely, be a market for Axis's stock.
[9]
Acquisition of opportunities
In implementing a structure for a particular business acquisition, Axis may
become a party to a merger, consolidation, reorganization, joint venture,
franchise, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a transaction is
complete, it is possible that the present management and shareholders of Axis
will not be in control of Axis. In addition, a majority or all of Axis's
officer and director may, as part of the terms of the transaction, resign and
be replaced by new officer and director without a vote of Axis's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, Axis may agree to register such securities either at the
time the transaction is consummated, under certain conditions, or at specified
time thereafter. The issuance of substantial additional securities and their
potential sale into any trading market, which may develop in Axis's Common
Stock, may have a depressive effect on such market. While the actual terms of
a transaction to which Axis 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 368 (a) (1) or 351 of
the Internal Revenue Code of 1986, as amended (the "Code").
In order to obtain tax-free treatment under the Code, it may be necessary for
the owners of the acquired business to own 80% or more of the voting stock of
the surviving entity. In such event, the shareholders of Axis, including
investors in this offering, would retain less than 20% of the issued and
outstanding shares of the surviving entity, which could result in significant
dilution in the equity of such shareholders.
As part of Axis's investigation, officers and directors of Axis will meet
personally with management and key personnel, may visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures, to the extent of Axis's limited financial
resources and management expertise. The manner in which Axis participates in
an opportunity with a target company will depend on the nature of the
opportunity, the respective needs and desires of Axis and other parties, the
management of the opportunity, and the relative negotiating strength of Axis
and such other management. With respect to any mergers or acquisitions,
negotiations with Target Company, management will be expected to focus on the
percentage of Axis, which the target company's shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, Axis's
shareholders will, in all likelihood, hold a lesser percentage ownership
interest in Axis following any merger or acquisition. The percentage ownership
may be subject to significant reduction in the event Axis acquires a target
company with substantial assets. Any merger or acquisition effected by Axis
can be expected to have a significant dilutive effect on the percentage of
shares held by Axis then shareholders, including purchasers in this offering.
Management has advanced, and will continue to advance, funds, which shall be
used by Axis in identifying and pursuing agreements with target companies.
Management anticipates that these funds will be repaid from the proceeds of
any agreement with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds.
[10]
It is expected that amounts to conduct investigations will be less than $10,000
and that such amount will come from Mr. Lovell, Mr. Shaikh, and Mr. Thomas.
Additional funds may need to be raised if the amount exceeds this or Mr.
Lovell, Mr. Shaikh, and Mr. Thomas are short on funds.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas may contribute up to $10,000 for
acquisition investigations. However, Mr. Lovell, Mr. Shaikh, and Mr. Thomas
are not obligated to advance any additional amount to Axis. Axis may be
required to issue stock to raise additional funds if Mr. Lovell, Mr. Shaikh,
and Mr. Thomas cannot provide said funds.
Competition
Axis is an insignificant participant among firms, which engage in business
combinations with, or financing of, development-stage enterprises. There are
many established management and financial consulting companies and venture
capital firms, which have significantly greater financial and personal
resources, technical expertise and experience than Axis. In view of Axis's
limited financial resources and management availability, Axis will continue to
be at significant competitive disadvantage vis-a-vis the Axis competitors. Axis
will be at a disadvantage with other companies having larger technical staffs,
established market shares and greater financial backing.
Regulation and taxation
The Investment Company Act of 1940 defines an "investment company." as an
issuer, which is or holds it out as being engaged primarily in the business of
investing, reinvesting or trading securities. While Axis does not intend to
engage in such activities, Axis may obtain and hold a minority interest in a
number of development stage enterprises. Axis could be expected to incur
significant registration and compliance costs if required to register under the
Investment Company Act of 1940. Accordingly, management will continue to review
Axis's activities from time to time with a view toward reducing the likelihood
Axis could be classified as an "investment company." Axis intends to structure
a merger or acquisition in such manner as to minimize Federal and state tax
consequences to Axis, and to any target company.
Employees
Axis's only employees at the present time are its officer and director, who
will devote, as much time as the Board of Director determine is necessary to
carry out the affairs of Axis. (See "Management").
Mr. Lovell, Mr. Shaikh, and Mr. Thomas's time devotion to Axis would be
estimated at 10 hours a month until further fundraising or a merger/
acquisition.
[11]
Item 3. Description of property
Axis neither owns nor leases any real property at this time. Axis conducts its
business from 3360 West Sahara Avenue, Suite 200, Las Vegas, NV 89102.
Item 4. Security ownership of certain beneficial owners and management.
As of August 4, 2000, Mr. Lovell, Mr. Shaikh, and Mr.Thomas are the beneficial
owners of thirty-three and thirty-three hundredths percent (33.33%) each of
Axis's common stock. The management of Axis does own stock in Axis.
Title of Class Name of Beneficial Amount and Nature Percent
Owner (1) of Beneficial Of Class
Owner(2)
<TABLE>
<S> <C> <C> <C>
Common Stock Adam U. Shaikh 1,000,000 33%
Common Stock Danny J. Lovell 1,000,000 33%
Common Stock Eliot J. Thomas 1,000,000 33%
Common Stock Officers and Directors 3,000,000 100%
</TABLE>
Item 5. Directors, executive officers, promoters, and control persons.
The members of the Board of Director of Axis serve until the next annual
meeting of the stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Director. There are no
agreements for any officer or director to resign at the request of any other
person, and none of the officers or directors named below are acting on behalf
of, or at the direction of, any other person. Axis's officer and director will
devote their time to the business on an "as-needed" basis, which is expected
to require 5-10 hours per month.
Information as to the directors and executive officers of the Axis are as
follows:
[12]
<TABLE>
<S> <C> <C>
Name Age Position
Danny Lovell 27 President, Director
Adam U. Shaikh 27 Secretary, Director
Eliot Thomas 30 Treasurer, Director
</TABLE>
Danny J. Lovell. President/Director, Age 27.
Mr. Lovell graduated with B.A. in Education from Illinois State University in
1998. Mr. Lovell was an educator in the Peoria, Illinois School System during
the 1999-2000 school year. Mr. Lovell is currently an office manager in a Las
Vegas law firm.
Eliot J. Thomas. Treasurer/Director, Age 30.
Mr. Thomas graduated with B.S. in Accounting from the University of Nebraska
at Omaha in 1996. Mr. Thomas received his J.D. from Drake University Law
School in 1999 and is currently employed as a law clerk in a Las Vegas law
firm.
Adam U. Shaikh. Secretary/Director, Age 27.
Mr. Shaikh graduated with a B.A. in Political Science/History from Iowa State
University in 1996. Mr. Shaikh received a J.D. from Drake University Law
School in 1999 and received his license to practice law in 1999 in Nevada. He
is currently employed as an attorney in a Las Vegas law firm.
Blank check experience
Currently, President Danny Lovell, Secretary Adam Shaikh, and Treasurer Eliot
Thomas are officers and directors for two other blank check companies,
Loanspaid.com, Inc., Freelance.com, Inc., and Divia.com, Inc. Currently,
Loanspaid.com, Freelance.com and Divia.com, Inc. have not been cleared by the
SEC. Therefore, there has been no public offering as of yet.
Other blank check companies
<TABLE>
<S> <C> <C> <C>
Name of Company Registration Form Date Filed Status
Loanspaid.com, Inc. SB-2 7/10/2000 Pending
Freelance.com, Inc. SB-2 7/10/2000 Pending
Divia.com, Inc. SB-2 8/2/2000 Will be
effective
October 4th
There is no family relationship between any of the officer and director of the
Axis. The Axis Board of Director has not established any committees.
[13]
Conflicts of interest
Management anticipates it will devote only a minor amount of time to Axis 's
affairs. Currently, Mr. Lovell, Mr. Shaikh, and Mr. Thomas work fulltime at
their respective employers. Mr. Lovell, Mr. Shaikh, and Mr. Thomas may in the
future become a shareholders, officers or directors of other companies which
may be formed for the purpose of engaging in business activities similar to
those conducted by Axis. Axis does not currently have a formal right of first
refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to Axis's proposed business operations.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas, so long as they are an officer of Axis.
are subject to the restriction that all opportunities contemplated by Axis's
plan of operation which come to their attention, either in the performance of
their duties or in any other manner, will be considered opportunities of, and
be made available to Axis and the companies that they are affiliated with on an
equal basis. A breach of this requirement will be a breach of the fiduciary
duties of the officer or director. If a situation arises in which more than
one company desires to merge with or acquire that target company and the
principals of the proposed target company have no preference as to which
company will merge or acquire such target company, Axis of which the President
first became an officer and director will be entitled to proceed with the
transaction. Except as set forth above, Axis has not adopted any other
conflict of interest policy with respect to such transactions.
Investment company act of 1940
Although Axis will be subject to regulation under the Securities Act of 1933
and the Securities Exchange Act of 1934, management believes Axis will not be
subject to regulation under the Investment Company Act of 1940 insofar as Axis
will not be engaged in the business of investing or trading in securities. In
the event Axis engages in business combinations, which result in Axis holding
passive investment interests in a number of entities, Axis could be subject to
regulation under the Investment Company Act of 1940. In such event, Axis would
be required to register as an investment company and could be expected to
incur significant registration and compliance costs. Axis has obtained no
formal determination from the Securities and Exchange Commission as to the
status of Axis under the Investment Company Corp. Act of 1940 and,consequently,
any violation of such Act would subject Axis to material adverse consequences.
Item 6. Executive compensation
There is no executive compensation given to Mr. Lovell, Mr. Shaikh, and Mr.
Thomas. It is possible that, after Axis successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of Axis's management for the purposes of providing
services to the surviving entity, or otherwise provide other compensation to
such persons. It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to Axis. In the event Axis
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral
in the form of a finder's fee. It is anticipated that this fee will be either
in the form of restricted common stock issued by Axis as part of the terms of
the proposed transaction, or will be in the form of cash consideration.However,
if such compensation is in the form of cash, the acquisition or merger
candidate will tender such payment, because Axis has insufficient cash
available. The amount of such finder's fee cannot be determined as of the date
of this registration statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of management of
Axis will receive any finder's fee, either directly or indirectly, as a result
of his or her respective efforts to implement Axis's business plan outlined
herein. Persons "associated" with management are meant to refer to persons
with whom management may have had other business dealings, but who are not
affiliated with or relatives of management. The Registrant for the benefit of
its employees has adopted no retirement, pension, profit sharing, stock option
or insurance programs or other similar programs.
[14]
Item 7. 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.
Adam U. Shaikh, Axis's Secretary and Director, also serves as the Company's
general counsel.
Item 8. Legal proceedings.
Axis is not a party to any material pending legal proceedings and, to the best
of its knowledge, no such action by or against Axis has been threatened.
Item 9. Market for common equity and related stockholder matters.
Axis's common stock is not traded on any exchange or OTC market.Management has
not undertaken any discussions, preliminary or otherwise, with any prospective
market maker concerning the participation of such market maker in the after-
market for Axis's securities and management does not intend to initiate any
such discussions until such time as Axis has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue. After a merger or
acquisition has been completed, Axis's officer and director will most likely
be the person to contact prospective market makers. It is also possible that
persons associated with the entity that merges with or is acquired by Axis will
contact prospective market makers. Axis does not intend to use consultants to
contact market makers.
[15]
Market price
The Registrant's Common Stock is not quoted at the present time. Effective
August 11, 1993, the Securities and Exchange Commission adopted Rule 15g-9,
which established the definition of a "penny stock," for purposes relevant to
Axis, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless exempt,
the rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to
be made about the risks of investing in penny stocks in both public offerings
and in secondary trading, and about commissions payable to both the broker-
dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The National Association
of Securities Dealers, Inc. (the "NASD"), which administers NASDAQ, has
recently made changes in the criteria for initial listing on the NASDAQ Small
Cap market and for continued listing. For initial listing, a company must have
net tangible assets of $4 million, market capitalization of $50 million or net
income of $750,000 in the most recently completed fiscal year or in two of the
last three fiscal years. For initial listing, the common stock must also have
a minimum bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets and a
$1,000,000 market value of its publicly traded securities. In addition,
continued inclusion requires two market makers and a minimum bid price of
$1.00 per share.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate, which will allow Axis securities to be traded
without the aforesaid limitations. However, there can be no assurances that,
upon a successful merger or acquisition, that Axis will qualify its securities
for listing on NASDAQ or some other national exchange, or be able to maintain
the maintenance criteria necessary to insure continued listing. The failure of
Axis to qualify its securities or to meet the relevant maintenance criteria
after such qualification in the future may result in the discontinuance of the
inclusion of Axis securities on a national exchange. In such events, trading,
if any, in Axis securities may then continue in the non-NASDAQ over-the-
counter market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, Axis
securities.
[16]
Holders
As of August 4, 2000, there are 3 holders of Axis's common shares.All of these
shareholders hold restricted stock pursuant to, Section 4(2) exemption. All
shareholders hold restricted stock pursuant to Rule 144.
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 Axis (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.
Dividends
The Registrant has not paid any dividends to date and has no plans to do so in
the immediate future.
Item 10. Recent sales of unregistered securities.
On August 4, 2000, 1,000,000 shares were issued to Adam U. Shaikh, 1,000,000
to Danny Lovell and 1,000,000 to Eliot Thomas under Rule 4(2).
Item 11. Description of securities.
Common stock
Axis was incorporated on August 4, 2000, as Axis.com, Inc., with an authorized
share capital of Twenty-Five Million (25,000,000) shares of Common Stock. Upon
incorporation, Axis initially issued Three Million (3,000,000) Common Shares
with par value of $.001. These shares were restricted under Rule 144 of the
Securities Act of 1933, as amended.
The Axis Articles of Incorporation authorizes the issuance of 25,000,000 shares
of Common stock, of which 3,000,000 are issued and outstanding. The shares are
non-assessable, without pre-emptive rights, and do not carry cumulative voting
rights. Holders of common shares are entitled to one vote for each share on all
matters to be voted on by the stockholders. The shares are without pre-emptive
rights and do not carry cumulative voting rights. Holders of common shares are
entitled to share ratably in dividends, if any, as may be declared by Axis from
time- to- time, from funds legally available. In the event of a liquidation,
dissolution, or winding up of Axis, the holders of shares of common stock are
entitled to share on a pro-rata basis all assets remaining after payment in
full of all liabilities. Management is not aware of any circumstances in which
additional shares of any class or series of Axis's stock are to be issued to
management or promoters, or affiliates or associates of either.
[17]
Future tradability of shares.
On January 21, 2000, Mr. Richard K. Wulff, Chief of Office of Small Business
for the SEC, issued an interpretative letter to Mr. Ken Worm, Assistant
Director of the OTC Compliance Unit of the NASD Regulation, concerning the
tradability of stock issued in limited operation companies. Mr. Wulff's
interpretation was that stock issued or gifted under an exemption under the
1933 Act would not be considered free trading.
Item 12. Indemnification of directors and officers.
Axis and its affiliates may not be liable to its shareholders for errors in
judgment or other acts or omissions not amounting to intentional misconduct,
fraud, or a knowing violation of the law, since provisions have been made in
the Articles of incorporation and By-laws limiting such liability. The
Articles of Incorporation and By-laws also provide for indemnification of the
officer and director of Axis in most cases for any liability suffered by them
or arising from their activities as officer and director of Axis if they were
not engaged in intentional misconduct, fraud, or a knowing violation of the
law. Therefore, purchasers of these securities may have a more limited right
of action than they would have except for this limitation in the Articles of
Incorporation and By-laws. The officer and director of Axis are accountable
to Axis as fiduciaries, which means such officer and director are required to
exercise good faith and integrity in handling Axis's affairs. A shareholder
may be able to institute legal action on behalf of himself and all others
similarly stated shareholders to recover damages where Axis has failed or
refused to observe the law. Shareholders may, subject to applicable rules of
civil procedure, be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state securities laws
and regulations. Shareholders who have suffered losses in connection with the
purchase or sale of their interest in Axis 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 Axis.
Item 13. Financial statements
The financial statements and supplemental data required by this Item 13 follow
the index of financial statements appearing at Item 15 of this Form 10-SB.
[18]
Item 14. Changes in and disclosure with accountants on accounting and
financial disclosure.
The Registrant has not changed accountants since its formation, and Management
has had no disagreements with the findings of its accountants.
Item 15. Financial statements and exhibits.
Exhibits
3.1 Articles of Incorporation
3.2 By-Laws
Signatures
In accordance with Section 12 of the Securities Act of 1934, the Registrant
caused this registration to be signed on its behalf by the undersigned,
thereunto duly authorized.
Axis, Inc.
By:/S/__________________
Danny Lovell
President.
By:/S/__________________
Eliot Thomas
Treasurer.
By:/S/__________________
Adam Shaikh
Secretary.
Merdinger, Fruchter, Rosen & Corso, P.C.
Certified Public Accountants
888 Seventh Avenue
New York, NY 10106
Tel: (212) 757-8400
Fax: (212) 757-6124
Axis.Com, Inc.
(A Development Stage Company)
Financial Statements
August 4, 2000
Axis.Com, Inc.
(A Development Stage Company)
Financial Statements
Contents Page
Independent Auditor's Report 1
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Deficiency 4
Statement of Cash Flows 5
Notes to Financial Statements 6-8
Merdinger, Fruchter, Rosen & Corso, P.C.
Certified Public Accountant
888 Seventh Avenue
New York, NY 10106
Tel: (212) 757- 8400
Fax: (212) 757- 6124
Independent Auditor's Report
TO THE BOARD OF DIRECTORS OF AXIS.COM, INC.:
We have audited the accompanying balance sheet of AXIS.COM, INC. (A Developement
Stage Company) as of August 4, 2000 and the related statements of operations,
stockholder's equity and cash flows. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXIS.COM, INC. as of August
4, 2000 and the results of its operations and its cash flows in conformity with
generally accepted accounting principles.
Merdinger, Fruchter, Rosen & Corso, P.C.
Certified Public Accountants
New York, NY
August 4, 2000
</TABLE>
<TABLE>
<CAPTION>
AXIS.COM, INC.
(A Developement Stage Company)
Balance Sheet
July 31, 2000
<S> <C>
Assets $ 0
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities $ 0
STOCKHOLDER'S EQUITY
Common stock, $0.001 par value;
25,000,000 shares authorized,
3,000,000 shares issued and outstanding 3,000
Deficit accumulated during
The developement stage (-3,000)
Total stockholder's equity -
Total liabilities and stockholder's equity $ -
---------
The accompanying notes are an integral part of these consolidated financial
statments.
</TABLE>
<TABLE>
<CAPTION>
AXIS.COM, INC.
(A Developement Stage Company)
Statements of Operations
August 4, 2000
<S> <C>
Revenue $ -
Legal expenses 3000
-------
Loss from operations before provision for income taxes (3000)
Provision for income taxes -
-------
Net loss $ (3,000)
---------
Net loss per share - basic and diluted $ -
---------
Weighted average number of common shares
Outstanding 3,000,000
=========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
<CAPTION>
AXIS.COM, INC.
(A Developement Stage Company)
Statement of Stockholder's Equity
August 4, 2000
Deficit
Accumulated
During the
Common Stock Developement
------------------ Stage Total
Shares Amount ------------- -------
-------- --------
<S> <C> <C> <C> <C>
Balance, August 4, 2000 - $ - $ - $ -
Issuance of shares for services
- August 4, 2000 3,000,000 3,000 - 3,000
Net Loss - - (3,000) (3,000)
--------- -------- ------------ --------
Balance, August 4, 2000 3,000,000 $ 3,000 $(3,000) $ -
========= ======== ============ ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
AXIS.COM, INC.
(A Developement Stage Company)
Statements of Cash Flows
August 4, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C>
Net loss $ (3,000)
Stock issued for services 3,000
------------
NET CASH USED IN OPERATING ACTIVITIES -
------------
CASH AND CASH EQUIVALENTS - August 4, 2000 $ -
============
SUPPELEMENTAL INFORMATION:
During the initial period, the Company paid no cash for interest or income
taxes.
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
AXIS.COM, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
AUGUST 4, 2000
NOTE - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Axis.com, Inc. (the "Company") is currently a development-stage company under
the provisions of the Financial Accounting Standards Boards ("FASB")Statement
of Financial Accounting Standards ("SFAS") NO. 7.The Company was incorporated
under the laws of the state of Nevada on August 4, 2000.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported 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 Cash Equivalents
The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.
Income Taxes
Income taxes are provided for based on the liability method accounting
pursuant to SFAS No.109, "Accounting for Income Taxes". Deferred income taxes,
if any, are recorded to reflect the tax consequenses on future years of
differences between the tax bases of assets and liabilities and their
financials reporting amounts at each year-end.
Earnings Per Share
The Company calculates earnings per share in accordance with SFAS No. 128,
"Earnings Per Share", which requires presentation of basic earnings per share
("BEPS") and diluted earnings per share ("DEPS"). The computation of BEPS is
computed by dividing income available to common stockholder by the weighted
average number of outstanding common shares during the period. DEPS gives
effect to all dilutive potential common shares outstanding during the period.
The computation of DEPS does not assume conversion, exercise or contingent
exercise of securities that would have an antidilutive effect on earnings.
As of August 4, 2000, the Company has no securities that would effect loss
per share if they were to be dilutive.
Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income", establish standards for the
reporting and display of comprehensive income and its components in the
financial statements. The Company had no items of other comprehensive income
and therefore has not presented a statement of comprehensive income.
AXIS.COM, INC.
(A Development sStage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 4, 2000
NOTE 2 - INCOME TAXES
The components of the provision for income taxes as of August 4, 2000, are as
follows:
<TABLE>
<S> <C>
Current Tax Expense $ -
U.S. Federal -
State and Local -
Total Current
Deferred Tax Expense -
U.S. Federal -
State and Local -
Total Deferred
Total Tax Provision (Benefit) from
Continuing Operations $ -
</TABLE>
The reconsiliation of the effective income tax rate to the Federal statutory
rate is as follows:
<TABLE>
<S> <C>
Federal Income Tax Rate 34.0%
Effect of Valuation Allowance ( 34.0)%
Effective Income Tax Rate 0.0%
</TABLE>
At August 4, 2000, the Company had net carryforward losses of $3,000. Because
of the current uncertainty of realizing the benefits of the tax carryforward,
a valuation allowance equal to the tax benefits for deferred taxes has been
established. The full realization of the tax benefit associated with the
carryforward depends predominantly upon the Company's ability to generate
taxable income during the carryforward period.
Deferred tax assets and liabilities reflect the net tax effect of temporary
differences between the carrying amount and liabilities for financial reporting
purposes and amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of August 4, 2000 are as
follows:
<TABLE>
<S> <C>
Deferred Tax Assets $ 1,000
Loss Carryforwards
Less: Valuation Allowances (1,000)
Net Deferred Tax Assets $ -
Net operating loss carryforwards expire in 2000.
</TABLE>
NOTE 3 - COMMON STOCK
On August 4, 2000, the Company issued 3,000,000 shares of common stock for
services valued at $3,000.
