<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
DIVERSIFIED MARKETING SERVICES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 88-0350120
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
902 EAST 18TH STREET, NATIONAL CITY, CA 91950-4739
- - --------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619)699-1738
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
<S> <C>
________________________________ _____________________________________
________________________________ _____________________________________
</TABLE>
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
(TITLE OF CLASS)
1
<PAGE> 2
PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
General
Diversified Marketing Services, Inc. is filing this Form 10-SB on a voluntary
basis in order to make Diversified Marketing Services' financial information
equally available to any interested parties or investors and meet certain
listing requirements for publicly traded securities on the OTC Electronic
Bulletin Board which is sponsored by the National Association of Securities
Dealers (NASD). The Company anticipates filing an information statement with a
sponsoring NASD Broker-Dealer for listing of its securities on the OTC
Electronic Bulletin Board upon completion of the Company's comment period for
this Form 10-SB filing.
Business Development
Diversified Marketing Services, Inc. was incorporated in Nevada on December 12,
1995 for the purpose of developing third party motor vehicle title and
registration offices in California and throughout the Western United States.
During 1996, the Company raised capital through the sale of common stock to
investors in order to meet its obligations for timely state filings and taxes.
Subsequent negative economic conditions in California induced Management to
delay the implementation of its business plan. In December 1998 the board of
directors voted to seek additional capital and implement the Company's business
plan.
There have been no bankruptcy, receivership or similar proceedings.
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
Business of the Issuer
In December 1998, the Company determined it would complete the development of
its third party motor vehicle title and registration services business plan.
These comprehensive services involve all of the responsibilities of a typical
state motor vehicle department office, including providing the urban public
market everything from drivers licenses to the issuance of vehicle license
plates. Management based its decision to proceed with its business plan due to
three factors: favorable United States economic growth projections, growth in
motor vehicle registrations in Western states, and legislative changes in
Western states allowing more third party motor vehicle title and registration
services.
For over ten years, the state of California has issued licenses to third party
businesses to offer motor vehicle title and registration services normally
handled by the Department of Motor Vehicles. The states of Texas, New Mexico,
and Nevada have similar third party state services programs. Arizona has
expanded its third party state services program to include almost all services
previously performed solely by its Motor Vehicle Division offices, including
issuing driver's licenses,
2
<PAGE> 3
written tests, road tests, vision tests, vehicle titles, plates, tabs,
registration, and inspections. Oregon is scheduled to begin preliminary third
party motor vehicle title and registration services in the year 2000. Based on
the concept of outsourcing functions traditionally handled by state
bureaucracies in order to achieve cost savings and provide better service, this
competitive model encourages third party businesses to cut state vehicle and
licensing compliance costs and service customers more efficiently and humanely.
The Company's Management has over ten years experience in management and
administration of third party motor vehicle title and registration offices in
California catering to a target market niche of urban core customers. Over the
next twelve months the Company intends to take the following steps in order to
make its services available in the Western market: during the first six months
raise capital of $700,000 to $800,000 through the sale of securities, during the
second six months open four offices in San Diego County with a budget of
$200,000, and four offices in Los Angeles County with a budget of $300,000.
Management will use their expertise and experience to staff each office with
three employees and one manager, train all employees, and provide all required
office furniture, equipment, and supplies.
The Company has no new product or service planned or announced to the public.
The size and financial strengths of the Company's competitors, such as the
Automobile Club of Southern California are substantially greater than those of
the Company. Although Management has limited access to in-depth information
regarding the operations of the Company's competitors, Management believes that
the Company can effectively compete because of Management's extensive knowledge
of third party motor vehicle title and registration services and its niche of
targeting urban core customers. Management is not aware of any significant
barriers to the Company's entry into the third party motor vehicle title and
registration market, however, the Company at this time cannot ascertain its
exact market share of this market.
The Company will use state approved supplies, such as driver's licenses, vehicle
registration forms, license plates and tags provided under contract from each
state's motor vehicle licensing department or state licensed suppliers. While
the Company has researched requirements of the states of California, Texas, New
Mexico, Nevada, Arizona, and Oregon regarding their state approved supplies, at
this time the Company has no formal contracts with any states or state suppliers
and will not initiate negotiations with any states or their potential suppliers
until such time as the Company has sufficient funding per its business plan.
The Company intends to sell its services to a broad base of urban customers
within Southern California during the first year and throughout the Western
United States within three years and will not depend on any one or a few major
customers.
Other than common office materials, the Company will utilize only materials and
supplies designed and mandated by each state. The Company has no current or
future business plans involving patents, trademarks, franchises, concessions,
royalty agreements, or labor contracts.
The Company's business is not subject to material regulation by federal
governmental agencies. With the exception of the state of Texas, the only
governmental approval the Company requires is a license from each state in which
the Company intends to provide its third party motor vehicle title and
registration services. In Texas, the license approval process for the Company's
proposed business is granted in each county by the County Tax Assessor's Office.
The Company's Management personnel are familiar with license requirements for
each state in its business plan
3
<PAGE> 4
and believe the Company will qualify for necessary licenses in each state and
will be able to timely secure licenses in accordance with the Company's business
plan. Management has made informal inquiries and contact with the responsible
motor vehicle departments in each state in its business plan and will secure
California licensing covering each new Company office beginning in month six of
its business plan contingent upon sufficient funding from the Company's
securities sales. Management intends to secure necessary licenses in each
additional state beginning in year two of the Company's business plan.
All research and development costs since inception have been immaterial in cost
and will not be passed on to customers.
The Company's only employees are its two officers who will devote as much time
as the board of directors determines is necessary to manage the affairs of the
Company. The officers intend to work on a full time basis when the Company is
able to provide proper remuneration as discussed in Item 6, "Executive
Compensation".
While Management believes its estimates of projected occurrences and events are
within the timetable of its business plan, there can be no guarantees or
assurances that the results anticipated will occur.
Year 2000 Disclosure
Computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business activities.
The Company's Management has hands-on familiarity with all of the software that
will be utilized in its business plan and has confirmation from third party
suppliers that its proposed software is certified Year 2000 compatible for all
of its computing requirements. In addition, proposed suppliers of office
equipment for the Company's business plan have confirmed that embedded
technology systems such as micro processors in telephone systems and other
non-computer devices that will be purchased per the Company's business plan are
already Year 2000 compatible. The Company's business plan anticipates dealing
only with one state motor vehicle department in the year 2000, the State of
California's Department of Motor Vehicles. The California Department of Motor
Vehicles has confirmed its computing systems are already Year 2000 compatible.
While the Company has made what it believes to be adequate inquiries of the its
software suppliers and the State of California as to Year 2000 compliance, there
can be no guarantee that the State of California and software suppliers will be
adequately prepared for every possible contingent Year 2000 software problem,
which could have minor or material adverse effects on the Company's results of
operations. In a worst case scenario, the Company may experience minor or
material adverse cash flow effects depending on the length of the worst case
scenario. Based upon the extent of adverse cash flow, Management may decide to
reduce operations to match the adverse cash flow or seek additional equity
funding.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by December 31, 1999, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time.
4
<PAGE> 5
ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Plan of Operation
The Company maintains a cash balance sufficient to sustain corporate operations
until such time as Management can raise the funding necessary to advance its
business plan. The losses through May 1999 were due to operational expenses.
Sales of the Company's equity securities have allowed the Company to maintain a
positive cash flow balance.
During the next twelve months, Management's business plan is for the Company to
take the following steps to offer its third party motor vehicle title and
registration services in California: raise capital of $700,000 to $800,000
through the sale of equity securities during months one through twelve, open
four offices in San Diego County with a budget of $200,000 during months seven
through nine, and open four offices in Los Angeles County during months ten
through twelve with a budget of $300,000. For the next twelve months, the
Company plans to raise capital through the sale of equities, via a private
placement. The Company intends to use this capital to fund the Company's
business plan as cash flow from sales is estimated to begin near the end of the
next six months. The Company will face considerable risk in each of its business
plan steps, such as difficulty of renting adequate office facilities within its
budget, difficulty of hiring competent personnel within its budget, difficulty
in completing necessary personnel training within time limits, and a shortfall
of funding due to the Company's inability to raise capital in the equity
securities market. If no funding is received during the next twelve months, the
Company will be forced to rely on its existing cash in the bank and funds loaned
by the directors and officers. In such a restricted cash flow scenario, the
Company would be unable to complete its business plan steps, and would, instead,
delay all cash intensive activities. Without necessary cash flow, the Company
would be dormant during the next twelve months, or until such time as necessary
funds could be raised in the equity securities market.
There are no current plans for additional product research and development.
There are no current plans to purchase or sell any significant amount of fixed
assets. The Company's business plan provides for an increase of thirty two
employees during the next twelve months.
Results of Operations
There were no revenues from sales for the period ended May 31, 1999. The Company
sustained a net loss of $3,279 for the period ended May 31, 1999. Losses were
primarily attributable to professional fees and expenditures for the operations
of the corporation.
Liquidity and Capital Resources
As of May 31, 1999, the Company had $1520.60 cash on hand and in the bank. The
primary costs and operating expenses for the period ended May 31, 1999 were
operating expenses of $429 and professional fees of $2,850.
5
<PAGE> 6
ITEM 3
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 902 E. 18th Street, National
City, CA 91950. The principal executive office and telephone number are provided
by an officer of the corporation at no cost. Management considers the Company's
current principal office space arrangement adequate for current and short-term
estimated growth.
ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - May 31,1999:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
- - -------- ------- --------------- -------
<S> <C> <C> <C>
Common Fernando Carranza 4,545,000 (a) 40.4%
902 E. 18th Street
National City, CA 91950
Common Jackie L. Kruger 4,545,000 (b) 40.4%
1274 Bostonia Street
El Cajon, CA 92021
Total 9,090,000 80.8%
</TABLE>
(a) Mr. Carranza received for services 4,545,000 shares of the Company's
common stock on March 15, 1999.
(b) Ms. Kruger received for services 10,000 shares of the Company's
common stock on March 15, 1996, an additional 100 shares were issued
to her for services on March 15, 1998. 90,900 shares of the Company's
common stock were issued to her per a stock split on December 31,
1998 and an additional 4,444,000 shares were issued to her per a
stock split on February 8, 1999.
6
<PAGE> 7
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose terms will expire
4/3/00, or at such a time as their successors shall be elected and qualified are
as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected
- - -------------- --- -------- ------------------
<S> <C> <C> <C>
Fernando Carranza 49 President, 3/15/96
902 E. 18th Street Director
National City, CA 91950
Jackie L. Kruger 43 Sec/Treas 3/15/96
1274 Bostonia Street Director
El Cajon, CA 92021
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities nor has any such person been the subject of
any Order of a State authority barring or suspending for more than sixty (60)
days, the right of such a person to be engaged in such activities or to be
associated with such activities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Fernando Carranza, President & Director
1989 - Current President, Director, Carranko Group, Inc., dba
Express Registration. Company provides third party
motor vehicle title and registration services,
including Department of Motor Vehicles license
hearing representation,
7
<PAGE> 8
vehicle seizure resolution proceedings, and vehicle
code violation hearing representation for urban
clients in National City, California.
Jackie L. Kruger, Secretary, Treasurer & Director
1994 - Current Independent Contractor providing bookkeeping and tax
services to a variety of businesses clients in
California and Nevada including third party motor
vehicle title and registration services.
ITEM 6
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other
Name & annual Restricted LTIP All other
principle Salary Bonus compen- stock Options Payouts compen-
position Year ($) ($) sation ($) awards ($) SARs ($) sation ($)
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
F Carranza 1996 -0- -0- -0- -0- -0- -0- -0-
President 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
J Kruger 1996 -0- -0- -0- -0- -0- -0- -0-
Director 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
The Directors and Principal Officers have worked with no remuneration until such
time as the Company receives sufficient revenues necessary to provide proper
salaries to all Officers and compensation for Directors' participation. The
Officers and the Board of Directors have the responsibility to determine the
timing of remuneration for key personnel based upon such factors as positive
cash flow to include stock sales, product sales, estimated cash expenditures,
accounts receivable, accounts payable, notes payable, and a cash balance of not
less than $10,000 at each month end. When positive cash flow reaches $10,000 at
each month end and appears sustainable the board of directors will readdress
compensation for key personnel and enact a plan at that time which will that
benefits the Company as a whole. At this time, management cannot accurately
8
<PAGE> 9
estimate when sufficient revenues will occur to implement this compensation, or
the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors 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, if any.
ITEM 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Carranza received for services 4,545,000 shares of the Company's common
stock on March 15, 1999.
Ms. Kruger received for services 10,000 shares of the Company's common stock on
March 15, 1996, an additional 100 shares were issued to her for services on
March 15, 1998. 90,900 shares of the Company's common stock were issued to her
per a stock split on December 31, 1998 and an additional 4,444,000 shares were
issued to her per a stock split on February 8, 1999.
ITEM 8
DESCRIPTION OF SECURITIES
The Company's Certificate of Incorporation authorizes the issuance of 50,000,000
Shares of Common Stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of Common Stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of Common Stock
have cumulative voting rights. Holders of shares of Common Stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor. In
the event of a liquidation, dissolution, or winding up of the Company, the
holders of shares of Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of Common Stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares. All of the
outstanding Common Stock is, and the shares offered by the Company pursuant to
this offering will be, when issued and delivered, fully paid and non-assessable.
The Securities and Exchange Commission has adopted Rule 15g-9 which established
the definition of a "penny stock", for the purposes relevant to the Company, 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 objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks are suitable for
that person and the 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
9
<PAGE> 10
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 the 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.
PART II
ITEM 1
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company plans to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers (NASD). The OTC
Electronic Bulletin Board is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network which provides
information on current "bids" and "asks" as well as volume information.
As of the date of this filing, there is no public market for the Company's
securities. As of May 31, 1999, the Company had 48 shareholders of record. The
Company has paid no cash dividends. The Company has no outstanding options. The
Company has no plans to register any of its securities under the Securities Act
for sale by security holders. There is no public offering of equity and there is
no proposed public offering of equity.
ITEM 2
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
10
<PAGE> 11
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
On March 15, 1996, the shareholders authorized the issuance of 10,000 shares of
common stock for services to each of the officers and directors of the Company
for a total of 20,000 Rule 144 shares. The Company relied upon Section 4(2) of
Securities Act of 1993, as amended (the "Act"). The Company issued the shares in
satisfaction of management services rendered to officers and directors, which
does not constitute a public offering.
From the period of approximately August 1, 1996 until September 30, 1996, the
Company offered and sold 4,800 shares at $1.00 per share to non-affiliated
private investors. The Company relied upon Section 4(2) of the Securities Act of
1993, as amended (the "Act"). Each prospective investor was given a private
placement memorandum designed to disclose all material aspects of an investment
in the Company, including the business, management, offering details, risk
factors and financial statements. Each investor also completed a subscription
confirmation letter and private placement subscription agreement whereby the
investors certified that they were purchasing the shares for their own accounts,
with investment intent. Each investor was either accredited as defined, or were
"sophisticated" purchasers, having prior investment experience or education, and
having adequate and reasonable opportunity and access to corporate information.
This offering was not accompanied by general advertisement or general
solicitation and the shares were issued with a Rule 144 restrictive legend.
On March 15, 1998, the shareholders authorized the issuance of 100 shares of
common stock for services to each of the officers and directors of the Company
for a total of 200 Rule 144 shares. The Company relied upon Section 4(2) of
Securities Act of 1993, as amended (the "Act") for this issuance. The Company
issued the shares in satisfaction of management services rendered to officers
and directors, which does not constitute a public offering.
On December 31, 1998, the Board of Directors authorized a forward stock split of
9 to 1 resulting in a total of 250,000 shares of common stock issued and
outstanding.
On February 8, 1999, the Board of Directors authorized a forward stock split of
44 to 1 resulting in a total of 11,250,000 shares of common stock issued and
outstanding.
ITEM 5
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The
By-Laws also allow for reimbursement of certain legal defenses.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
11
<PAGE> 12
PART F/S
The audited financial statements of the Company and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
PART III
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A Financial Statements
1 Audited financial statements for the period ended
February 28, 1999
2 Unaudited financial statements for the period ended
May 31, 1999
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included
Exhibit 3(ii) Bylaws Included
Exhibit 4 Instruments defining the rights of holders None
Exhibit 7 Opinion re: liquidation preference None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material contracts None
Exhibit 11 Statement re: computation of per share earnings See Exhibit A
Exhibit 14 Material foreign patents None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included
Exhibit 24 Power of Attorney None
Exhibit 27 Financial Data Schedule Included
Exhibit 28 Reports furnished to State insurance agencies None
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Diversified Marketing Services, Inc.
Date June 3, 1999 By /s/ Fernando Carranza
---------------- ------------------------------------
Fernando Carranza,
President & Director
Date June 3, 1999 By /s/ Jackie L. Kruger
---------------- ------------------------------------
Jackie L. Kruger,
Sec/Treas & Director
12
<PAGE> 13
Exhibit A
13
<PAGE> 14
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
FEBRUARY 28, 1999
DECEMBER 31, 1998
DECEMBER 31, 1997
<PAGE> 15
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
<S> <C>
INDEPENDENT AUDITORS REPORT ........................................ 1
ASSETS ............................................................. 2
LIABILITIES AND STOCKHOLDERS EQUITY ................................ 3
STATEMENT OF OPERATIONS ............................................ 4
STATEMENT OF STOCKHOLDERS EQUITY ................................... 5
STATEMENT OF CASH FLOWS ............................................ 6
NOTES TO FINANCIAL STATEMENTS ...................................... 7 - 10
</TABLE>
<PAGE> 16
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors March 10, 1999
Diversified Marketing Services, Inc.
National City, California
I have audited the accompanying Balance Sheets of Diversified
Marketing Services, Inc., (A Development Stage Company), as of February 28,
1999, December 31, 1998, and December 31, 1997, and the related statements of
operations, stockholders' equity and cash flows for the period January 1, 1999,
to February 28, 1999, the two years ended December 31, 1998, and December 31,
1997, and the period December 12, 1995 (inception) to February 28, 1999. 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 Diversified
Marketing Services, Inc., (A Development Stage Company), as of February 28,
1999, December 31, 1998, and December 31, 1997, and the related statements of
operations, stockholders' equity and cash flows for the period January 1, 1999,
to February 28, 1999, the two years ended December 31, 1998, and December 31,
1997, and the period December 12, 1995 (inception) to February 28, 1999, 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 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 are also described in Note #5. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Barry L. Friedman
- - ---------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE> 17
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
February December December
28, 1999 31, 1998 31, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash $4,759 $4,800 $4,800
------ ------ ------
TOTAL CURRENT ASSETS $4,759 $4,800 $4,800
------ ------ ------
OTHER ASSETS: $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $4,759 $4,800 $4,800
====== ====== ======
</TABLE>
See accompanying notes to financial statements & audit report
-2-
<PAGE> 18
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
February December December
28, 1999 31, 1998 31, 1997
------- ------- -------
<S> <C> <C> <C>
CURRENT LIABILITIES: $ 0 $ 0 $ 0
------- ------- -------
TOTAL CURRENT LIABILITIES $ 0 $ 0 $ 0
------- ------- -------
STOCKHOLDERS' EQUITY:
Common stock, no par value,
authorized 25,000 shares;
issued and outstanding at
December 31, 1997-24,800 shares $ 5,000
Common stock, $0.001 par value
authorized 50,000,000 shares
issued and outstanding at
December 31, 1998-250,000 shares $ 250
February 28, 1999-11,250,000 shares $11,250
Additional paid-in capital -6,248 4,752 0
Deficit accumulated during
development stage -243 -202 -200
------- ------- -------
TOTAL STOCKHOLDER'S EQUITY $ 4,759 $ 4,800 $ 4,800
------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,759 $ 4,800 $ 4,800
======= ======= =======
</TABLE>
See accompanying notes to financial statements & audit report
-3-
<PAGE> 19
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
1-Jan Year Year 12-Dec-95
1999 to Ended Ended (inception)
28-Feb 31-Dec 31-Dec 28-Feb
1999 1998 1997 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- -----------
EXPENSES:
General, Selling
and Administrative $ 41 $ 2 $ 0 $ 243
----------- ----------- ----------- -----------
Total Expenses $ 41 $ 2 $ 0 $ 243
Net Profit/Loss ( - ) -$41 -$2 $ 0 -$243
=========== =========== =========== ===========
Net Profit/Loss ( - )
per weighted
share (Note 1) $NIL $NIL $NIL $NIL
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 11,250,000 11,250,000 11,250,000 11,250,000
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements & audit report
-4-
<PAGE> 20
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Common Stock paid-in Retained
Shares Amount capital Earnings
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 24,800 $ 5,000 $ 0 -$200
Net loss year ended
December 31, 1997 0
---------- ---------- ---------- ----------
Balance,
December 31, 1997 24,800 $ 5,000 $ 0 -$200
March 15, 1998
Stock Issued for
Services 200 +2
December 15, 1998
Changed par Value
No Par to $0.001 -4,977 +4,977
December 31, 1998
Forward Stock Split 10:1 225,000 +225 -225
Net loss year ended
December 31, 1998 -2
---------- ---------- ---------- ----------
Balance,
December 31, 1998 250,000 $ 250 $ 4,752 -$202
February 8, 1999
Forward Stock Split 45:1 11,000,000 $ 11,000 -$11,000
Net loss
January 1, 1999 to
February 28, 1999 -41
---------- ---------- ---------- ----------
Balance - February 28, 1999 11,250,000 11,250 -6,248 -243
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements & audit report
-5-
<PAGE> 21
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
1-Jan Year Year 12-Dec-95
1999 to Ended Ended (inception)
28-Feb 31-Dec 31-Dec 28-Feb
1999 1998 1997 1999
------- ------ ------ -----------
<S> <C> <C> <C> <C>
Cash Flows from
Operating Activities:
Net Loss -$41 -$2 $ 0 -$243
Adjustment to
reconcile net loss
to net cash provided
by operating activities
Issue Common Stock for Svc 0 2 0 202
Changes in assets and
liabilities: 0 0 0 0
------ ------ ------ ------
Net cash used in
operating activities -$41 $ 0 $ 0 -$41
Cash Flows from
investing activities 0 0 0 0
Cash Flows from
Financing Activities:
Issuance of common
stock for cash 0 0 0 4,800
------ ------ ------ ------
Net increase (decrease)
in cash -$41 $ 0 $ 0 4,759
Cash,
beginning of period 4,800 4,800 4,800 0
------ ------ ------ ------
Cash,
end of period $4,759 $4,800 $4,800 $4,759
====== ====== ====== ======
</TABLE>
See accompanying notes to financial statements & audit report
-6-
<PAGE> 22
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999, December 31, 1998, and December 31, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized December 12, 1995, under the laws of the State of
Nevada as Diversified Marketing Services, 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
The Company maintains a cash balance in a non-interest bearing bank that
currently does not exceed federally insured limits. 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 February 28, 1999.
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.
Organization Costs
Costs incurred to organize the Company are being amortized on a straight-line
basis over a sixty month period.
-7-
<PAGE> 23
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
February 28, 1999, December 31, 1998, and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 February 28,
1999, 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.
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.
Year 2000 Disclosure
Computer programs that have time sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business activities.
The Company's potential software suppliers have verified they will provide only
certified Year 2000 compatible software for all of the Company's computing
requirements. Because the Company's products and services are sold to the
general public, with no major customers, the Company believes the Year 2000
issue will not pose significant operational problems and will not materially
affect future financial results.
-8-
<PAGE> 24
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
February 28, 1999, December 31, 1998, and December 31, 1997
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended February 28, 1999,
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
December 31, 1998, is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $202
Valuation allowance 202
----
Net deferred tax asset $ 0
</TABLE>
The federal net operation loss carry forward will expire between 2016 and 2018.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4 - SHAREHOLDERS' EQUITY
Common Stock
The authorized common stock of Diversified Marketing Services, Inc. consists of
50,000,000 shares with a par value of $.001 per share.
Preferred Stock
Diversified Marketing Services, Inc. has no preferred stock.
On March 15, 1996, the Company issued 20,000 shares of its no par value common
stock in consideration of $200.00 to its directors.
On September 30, 1996, the Company issued 4,800 shares of its no par value
common stock for cash of $4,800.00 to investors.
On March 15, 1998, the Company issued 200 shares of its no par value common
stock for services of $2.00 to its directors.
On December 15, 1998, the State of Nevada approved the Company's restated
Articles of Incorporation, which changed the par value from no par value to
$0.001, and increased its Authorized Common Stock from 25,000 shares to
50,000,000 shares.
-9-
<PAGE> 25
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
February 28, 1999, December 31, 1998, and December 31, 1997
NOTE 4 - SHAREHOLDERS' EQUITY (Continued)
On December 31, 1998, the Company approved a forward stock split on the basis of
10:1, thus increasing the outstanding common stock from 25,000 shares to 250,000
shares.
On February 8, 1999, the Company approved a forward stock split on the basis of
45:1, thus increasing the outstanding common stock from 250,000 shares to
11,250,000 shares.
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 assets 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 or 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 of options outstanding to acquire any additional shares of
common stock.
-10-
<PAGE> 26
DIVERSIFIED MARKETING SERVICES, INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
MAY 31, 1999
MAY 31, 1998
<PAGE> 27
DIVERSIFIED MARKETING SERVICES, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MAY 31 MAY 31
1999 1998
--------- ---------
<S> <C> <C>
CURRENT ASSETS
CASH 1,520.60 4,800.00
--------------------------------
TOTAL CURRENT ASSETS 1,520.60 4,800.00
FIXED ASSETS
--------------------------------
NET FIXED ASSETS 0.00 0.00
OTHER ASSETS
ORGANIZATION COSTS
LESS AMORTIZATION
--------------------------------
TOTAL OTHER ASSETS 0.00 0.00
--------------------------------
TOTAL ASSETS 1,520.60 4,800.00
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
--------------------------------
TOTAL CURRENT LIABILITIES 0.00 0.00
LONG TERM LIABILITIES
--------------------------------
TOTAL LONG TERM LIABILITIES 0.00 0.00
--------------------------------
TOTAL LIABILITIES 0.00 0.00
STOCKHOLDERS' EQUITY
COMMON STOCK 11,250.00 250.00
PAID IN CAPITAL -6,248.00 4,752.00
BEGINNING RETAINED EARNINGS -202.00 -200.00
NET INCOME (LOSS) -3,279.40 -2.00
--------------------------------
ENDING RETAINED EARNINGS -3,481.40 -202.00
--------------------------------
TOTAL STOCKHOLDERS' EQUITY 1,520.60 4,800.00
--------------------------------
TOTAL LIAB & STOCKHOLDERS' EQUITY 1,520.60 4,800.00
================================
</TABLE>
<PAGE> 28
DIVERSIFIED MARKETING SERVICES, INC.
INCOME STATEMENTS
FOR THE FIVE MONTHS ENDED
<TABLE>
<CAPTION>
MAY 31 MAY 31
1999 1998
-------- --------
<S> <C> <C>
REVENUE
------------------------------
TOTAL REVENUE 0.00 0.00
DIRECT COSTS
------------------------------
TOTAL COST OF GOODS SOLD 0.00 0.00
------------------------------
GROSS PROFIT 0.00 0.00
OPERATING EXPENSES
LICENSES & FEES 305.00
OFFICE EXPENSE 124.40 2.00
TRANSFER AGENT 500.00
AUDIT/ACCOUNTING 2,350.00
------------------------------
TOTAL OPERATING EXPENSES 3,279.40 2.00
------------------------------
INCOME FROM OPERATIONS -3,279.40 -2.00
OTHER INCOME & EXPENSE
------------------------------
TOTAL OTHER INCOME & EXPENSE 0.00 0.00
------------------------------
INCOME BEFORE TAXES -3,279.40 -2.00
PROVISION FOR TAXES
------------------------------
NET INCOME -3,279.40 -2.00
==============================
</TABLE>
<PAGE> 29
INCOME STATEMENTS
STATEMENTS OF CASH FLOWS
FOR THE FIVE MONTHS ENDED
<TABLE>
<CAPTION>
MAY 31 MAY 31
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS -3279.40 -2.00
ADJ TO RECONCILE NET INCOME (LOSS) TO NET
CASH USED IN OPERATING ACTIVITIES
------------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES -3279.40 -2.00
------------------------------
NET INCREASE (DECREASE) -3279.40 -2.00
CASH AT BEGINNING OF PERIOD 4800.00 4800.00
CASH AT END OF PERIOD 1520.60 4800.00
</TABLE>
<PAGE> 30
DIVERSIFIED MARKETING SERVICES, INC..
NOTES TO FINANCIAL STATEMENTS
1. MANAGEMENT'S OPINION
In the opinion of management, the accompanying financial statements contain all
adjustments necessary to present fairly the financial position of the company as
of May 31, 1999 and 1998 and the results of operations for the five months ended
May 31, 1999 and 1998 and changes in cash for the five months ended May 31, 1999
and 1998.
2. INTERIM REPORTING
The results of operations for the five months ended May 31, 1999 and 1998 are
not necessarily indicative of the results to be expected for the remainder of
the year.
3. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Company was incorporated in Nevada on December 12, 1995. The Company was
organized for the purpose of developing third party motor vehicle title and
registration offices in California and throughout the Western United States. The
Company is a development stage company and has not conducted any business
activities to date.
Basis of Accounting
The Company's policy is to use the accrual method of accounting and to prepare
and present financial statements which conform to generally accepted accounting
principles. 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 reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Cash and equivalents
For purpose of the statements of cash flows, all highly liquid investments with
a maturity of three months or less are considered to be cash equivalents. There
were no cash equivalents as of May 31, 1999 and 1998.
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS (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 differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
4. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATIONS
Material changes in financial condition
As of May 31, 1999 the Company had $1520.60 of cash in the bank compared to
$4,800 of cash in the bank as of May 31, 1998. The Company had no cash receipts
for the five months ended May 31, 1999. The primary uses of cash during the five
months ended May 31, 1999 were $2,850 for professional fees, and $429 for
operating expenses.
Material changes in the results of operations
Expenses of $3,279 for the five months ended May 31, 1999 were primarily for
preparing the Company's legal documents and audit in anticipation of securing
private placement capital in 1999. Management believes it makes economic sense
for the Company to complete its business plan to raise capital through the sale
of private placement securities in order to develop its third party motor
vehicle title and registration offices.
<PAGE> 1
EXHIBIT 3(i)
FILED IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
DEC. 12, 1995
DEAN HELLER SECRETARY OF STATE
NO. 21988-95
ARTICLES OF INCORPORATION
OF
DIVERSIFIED MARKETING SERVICES, INC.
a Nevada Corporation
FIRST. The name of the corporation is:
DIVERSIFIED MARKETING SERVICES, INC.
SECOND. The resident agent for this corporation shall be:
SAGE INTERNATIONAL INC.
The address of said agent, and the principal or statutory address of this
corporation in the State of Nevada, shall be 1135 Terminal Way, Suite 209,
Reno, Nevada 89502, located in Washoe County, State of Nevada. This corporation
may maintain an office, or offices, in such other place within or without the
State of Nevada as may be from time to time designated by the Board of
Directors, or by the By-Laws of said corporation, and that this corporation may
conduct all corporation business of every kind and nature, including the
holding of all meetings of Directors and Stockholders, outside the State of
Nevada as well as within the State of Nevada.
THIRD. The objects for which this corporation is formed are as follows: to
engage in any lawful activity.
FOURTH. That the total number of voting common stock authorized that may
be issued by the corporation is TWENTY FIVE THOUSAND (25,000) shares of stock
with NO PAR VALUE, and no other class of stock shall be authorized. Said shares
may be issued by the corporation from time to time for such considerations as
may be fixed from time to time by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the bylaws of this
corporation, providing that the number of directors shall not be reduced to
less than one (1). The name and post office address of the first Board of
Directors shall be one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
---- -------------------
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
1 of 3 pages.
<PAGE> 2
SIXTH. After the amount of the subscription price, the purchase price, of
the par value of the stock of any class or series is paid into the corporation,
owners or holders of shares of any stock in the corporation may never be
assessed to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
---- -------------------
<S> <C>
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
</TABLE>
EIGHTH. The corporation is to have a perpetual existence.
NINTH. No director or officer of the corporation shall be personally
liable to the corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer or for any act or omission of any such
director or officer; however, the foregoing provision shall not eliminate or
limit the liability of a director or officer for (a) acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law; or (b) the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Any repeal or modification of this Article by the stockholders of
this corporation shall be prospective only and shall not adversely affect any
limitation on the personal liability of a director or officer of the
corporation for acts or omissions prior to such repeal or modification.
TENTH. No shareholder shall be entitled as a matter of right to subscribe
for or receive additional shares of any class of stock of the corporation,
whether now or hereafter authorized, or any bonds, debentures or securities
convertible into stock, but such additional shares of stock or other securities
convertible into stock may be issued or disposed of by the Board of Directors to
such persons and on such terms as in its discretion it shall deem advisable.
ELEVENTH. This corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation,
and all rights conferred upon Stockholders herein are granted subject to this
reservation.
2 of 3 pages.
<PAGE> 3
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a corporation pursuant to the General Corporation Laws of
the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying the facts herein stated are true, and accordingly have
hereunto set my hand December 8, 1995.
/s/ CHERI S. HILL
- - ------------------------------
CHERI S. HILL, Incorporator
STATE OF NEVADA
COUNTY OF WASHOE
On December 8, 1995, before me, the undersigned, a Notary Public in and for
said County and State, personally appeared CHERI S. HILL, personally known to
me to be the person whose name is subscribed to the foregoing document and
acknowledged to me that she executed the same.
/s/ V. R. SWEET
- - ------------------------------ [SEAL]
Notary Public
CERTIFICATE OF ACCEPTANCE OF
APPOINTMENT BY RESIDENT AGENT
SAGE INTERNATIONAL, INC., hereby accepts appointment as Resident Agent of
DIVERSIFIED MARKETING SERVICES, INC. in accordance with NRS 78.090.
SAGE INTERNATIONAL, INC.
By: /s/ CHERI S. HILL Date: December 8, 1995
---------------------------
CHERI S. HILL, Senior V.P.
3 of 3 pages.
<PAGE> 4
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
DEC 31, 1998
No. C21988-95
/s/ DEAN HELLER
DEAN HELLER, SECRETARY OF STATE
AMENDED
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(AFTER ISSUANCE OF STOCK)
DIVERSIFIED MARKETING SERVICES, INC.
- - -------------------------------------------------------------------------------
Name of Corporation
We the undersigned DUFFY R. GUERRERO
------------------------------------------------------- and
President or Vice President
JACKIE KRUGER of DIVERSIFIED MARKETING SERVICES, INC.
- - ---------------------------------- -------------------------------------------
Secretary or Assistant Secretary Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 20th day of November, 1998, adopted a resolution to amend
the original articles as follows:
Article FOURTH is hereby amended to read as follows:
That the total number of voting common stock authorized that may be issued
by the corporation is fifty million (50,000,000) shares of stock with par value
of $.001 per share and no other class of stock shall be authorized. Said shares
may be issued by the corporation from time to time for such consideration as
may be fixed from time to time by the Board of Directors.
The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 25,000; that the said
change(s) and amendment has been consented to and approved by a majority vote of
the stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
[SEAL] /s/ DUFFY R. GUERRERO
SHARON A. BOYD ----------------------------------------
Commission # 1190208 President or Vice President
Notary Public - California
San Diego County /s/ JACKIE L. KRUGER
My Comm. Expires Aug 7, 2002 ----------------------------------------
Secretary or Assistant Secretary
State of California
County of San Diego
This instrument was acknowledged before me on 12-11-98 by DUFFY R. GUERRERO
as PRESIDENT and JACKIE KRUGER as SECRETARY of DIVERSIFIED MARKETING SERVICES,
INC. a Nevada corporation.
Signature /s/ SHARON A. BOYD
------------------
<PAGE> 1
EXHIBIT 3(ii)
BY-LAWS
OF
DIVERSIFIED MARKETING SERVICES, INC.
ARTICLE 1 - OFFICES
The office of the Corporation shall be located in the City and State designated
in the Articles of Incorporation. The Corporation may also maintain offices at
such other places within or without the United States as the Board of Directors
may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the shareholders of the Corporation shall be held within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or by the
Secretary at the written request of the holders of ten per cent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise required
under the provisions of the Business Corporation Law.
Section 3 - Place of Meetings:
All meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waivers of notice of such meetings.
By-Laws - 1
<PAGE> 2
Section 4 - Notice of Meetings:
(a) Except as otherwise provided by Statute, written notice of each meeting of
shareholders, whether annual or special, stating the time when and place where
it is to be held, shall be served either personally or by mail, not less than
ten or more than fifty days before the meeting, upon each shareholder of record
entitled to vote at such meeting, and to any other shareholder to whom the
giving of notice may be required by law. Notice of a special meeting shall also
state the purpose or purposes for which the meeting is called, and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle shareholders to receive payment for their shares
pursuant to the Statute, the notice of such meeting shall include a statement
of that purpose and to that effect. If mailed, such notice shall be directed to
each such shareholder at his address, as it appears on the records of the
shareholders of the Corporation, unless he shall have previously filed with the
Secretary of the Corporation a written request that notices intended for him be
mailed to some other address, in which case, it shall be mailed to the address
designated in such request.
(b) Notice of any meeting need not be given to any person who may become a
shareholder of record after the mailing of such notice and prior to the
meeting, or to any shareholder who attends such meeting, in person or by proxy,
or to any shareholder who, in person or by proxy, submits a signed waiver of
notice either before or after such meeting. Notice of any adjourned meeting of
shareholders need not be given, unless otherwise required by statute.
Section 5 - Quorum:
(a) Except as otherwise provided herein, or by statute, or in the Certificate
of Incorporation (such Certificate and any amendments thereof being hereinafter
collectively referred to as the "Certificate of Incorporation"), at all
meetings of shareholders of the Corporation, the presence at the commencement
of such meetings in person or by proxy of shareholders holding of record a
majority of the total number of shares of the Corporation then issued and
outstanding and entitled to vote,
By-Laws - 2
<PAGE> 3
shall be necessary and sufficient to constitute a quorum for the transaction of
any business. The withdrawal of any shareholder after the commencement of a
meeting shall have no effect on the existence of a quorum, after a quorum has
been established at such meeting.
(b) Despite the absence of a quorum at any annual or special meeting of
shareholders, the shareholders, by a majority of the votes cast by the holders
of shares entitled to vote thereon, may adjourn the meeting. At any such
adjourned meeting at which a quorum is present, any business may be transacted
at the meeting as originally called if a quorum had been present.
Section 6 - Voting:
(a) Except as otherwise provided by statute or by the Certificate of
Incorporation, any corporate action, other than the election of directors, to
be taken by vote of the shareholders, shall be authorized by a majority of
votes cast at a meeting of shareholders by the holders of shares entitled to
vote thereon.
(b) Except as otherwise provided by statute or by the Certificate of
Incorporation, at each meeting of shareholders, each holder of record of stock
of the Corporation entitled to vote thereat, shall be entitled to one vote for
each share of stock registered in his name on the books of the Corporation.
(c) Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so by proxy; provided, however, that the instrument authorizing
such proxy to act shall have been executed in writing by the shareholder
himself, or by his attorney-in-fact thereunto duly authorized in writing. No
proxy shall be valid after the expiration of eleven months from the date of its
execution, unless the persons executing it shall have specified therein the
length of time it is to continue in force. Such instrument shall be exhibited to
the Secretary at the meeting and shall be filed with the records of the
Corporation.
By-Laws - 3
<PAGE> 4
(d) Any resolution in writing, signed by all of the shareholders entitled to
vote thereon, shall be and constitute action by such shareholders to the effect
therein expressed, with the same force and effect as if the dame had been duly
passed by unanimous vote at a duly called meeting of shareholders and such
resolution so signed shall be inserted in the Minute Book of the Corporation
under its proper date.
ARTICLE III-BOARD OF DIRECTORS
Section 1 - Number, Election and Term of Office:
(a) The number of the directors of the Corporation shall be at least one (1)
person, unless otherwise determined by vote of a majority of the entire Board
of Directors.
(b) Except as may otherwise be provided herein or in the Certificate of
Incorporation, the members of the Board of Directors of the corporation, who
need not be shareholders, shall be elected by a majority of the votes cast at a
meeting of shareholders, by the holders of shares, present in person or by
proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the
shareholders next succeeding his election, and until his successor is elected
and qualified, or until his prior death, resignation or removal.
Section 2 - Duties and Powers:
The Board of Directors shall be responsible for the control and management of
the affairs, property and interest of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation or
by statute expressly conferred upon or reserved to the shareholders.
Section 3 - Annual and Regular Meetings; Notice:
(a) A regular annual meeting of the Board of Directors shall be held
immediately following the annual meeting of the shareholders, at the place of
such annual meeting of shareholders.
By-Laws - 4
<PAGE> 5
(b) The Board of Directors, from time to time, may provide by resolution for the
holding of other regular meetings of the Board of Directors, and may fix the
time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be
required to be given and, if given, need not specify the purpose of the meeting;
provided, however, that in case the Board of Directors shall fix or change the
time or place of any regular meeting, notice of such action shall be given to
each director who shall not have been present at the meeting at which such
action was taken within the time limited, and in the manner set forth in
paragraph (b) Section 4 of this Article III, with respect to special meetings,
unless such notice shall be waived in the manner set forth in paragraph (c) of
such Section 4.
Section 4 - Special Meetings; Notice:
(a) Special meetings of the Board of Directors shall be held whenever called by
the President or by one of the directors, at such time and place as may be
specified in the respective notices or waivers of notice thereof.
(b) Except as otherwise required by statute, notice of special meetings shall be
mailed directly to each director, addressed to him at his residence or usual
place of business, at least two (2) days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegram, radio or cable,
or shall be delivered to him personally or given to him orally, not later than
the day before the day on which the meeting is to be held. A notice, or waiver
of notice, except as required by Section 8 of this Article III, need not specify
the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5 - Chairman:
At all meetings of the Board of Directors, the Chairman of the Board, if any and
if present, shall preside. If there shall be no Chairman, or he shall be absent,
then the President shall preside, and in his absence, a Chairman chosen by the
Directors shall preside.
By-Laws - 5
<PAGE> 6
Section 6 - Quorum and Adjournments:
(a) At all meetings of the Board of Directors, the presence of a majority of
the entire Board shall be necessary and sufficient to constitute a quorum for
the transaction of business, except as otherwise provided by law, by the
Certificate of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place of any regular
or special meeting, although less than a quorum, may adjourn the same from time
to time without notice, until a quorum shall be present.
Section 7 - Manner of Acting:
(a) At all meetings of the Board of Directors, each director present shall
have one vote, irrespective of the number of shares of stock, if any, which he
may hold.
(b) Except as otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws, the action of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors. Any action authorized, in writing, by all of the directors
entitled to vote thereon and filed with the minutes of the corporation shall be
the act of the Board of Directors with the same force and effect as if the same
had been passed by unanimous vote at a duly called meeting of the Board.
Section 8 - Vacancies:
Any vacancy in the Board of Directors occurring by reason of an increase in the
number of directors, or by reason of the death, resignation, disqualification,
removal (unless a vacancy created by the removal of a director by the
shareholders shall be filled by the shareholders at the meeting at which the
removal was effected) or inability to act of any director, or otherwise, shall
be filled for the unexpired portion of the term by a majority vote of the
remaining directors, though less than a quorum, at any regular meeting or
special meeting of the Board of Directors called for that purpose.
Section 9 - Resignation:
Any director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof by the Board of Directors or such officer, and the acceptance
of such resignation shall not be necessary to make it effective.
By-Laws - 6
<PAGE> 7
Section 10 - Removal:
Any director may be removed with or without cause at any time by the
affirmative vote of shareholders holding of record in the aggregate at least a
majority of the outstanding shares of the Corporation at a special meeting of
the shareholders called for that purpose, and may be removed for cause by
action of the Board.
Section 11 - Salary:
No stated salary shall be paid to directors, as such, for their services, but
by resolution of the Board of Directors a fixed sum and expenses of attendance,
if any, may be allowed for attendance at each regular or special meeting of the
Board; provided, however, that nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
Section 12 - Contracts:
(a) No contract or other transaction between this Corporation and any other
Corporation shall be impaired, affected or invalidated, nor shall any director
be liable in any way by reason of the fact that any one or more of the
directors of this Corporation is or are interested in, or is a director or
officer, or are directors or officers of such other Corporation, provided that
such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or may be
interested in any contract or transaction of this Corporation, and no director
shall be liable in any way by reason of such interest, provided that the fact
of such interest be disclosed or made known to the Board of Directors, and
provided that the Board of Directors shall authorize, approve or ratify such
contract or transaction by the vote (not counting the vote of any such
director) of a majority of a quorum, notwithstanding the presence of any such
director at the meeting at which such action is taken. Such director or
directors may be counted in determining the presence of a quorum at such
meeting. This Section shall not be construed to impair or invalidate or in any
way affect any contract or other transaction which would otherwise be valid
under the law (common, statutory or otherwise) applicable thereto.
By-Laws - 7
<PAGE> 8
Section 13 - Committees:
The Board of Directors, by resolution adopted by a majority of the entire Board,
may from time to time designate from among its members an executive committee
and such other committees, and alternate members thereof, as they deem
desirable, each consisting of three or more members, with such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election
and Term of Office:
(a) The officers of the Corporation shall consist of a President, a Secretary, a
Treasurer, and such other officers, including a Chairman of the Board of
Directors, and one or more Vice Presidents as the Board of Directors may from
time to time deem advisable. Any officer other than the Chairman of the Board of
Directors may be, but is not required to be, a director of the Corporation. Any
two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold officer until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such resignation
shall take effect upon receipt thereof by the Board of Directors or by such
officer, and the acceptance of such resignation shall not be necessary to make
it effective.
By-Laws - 8
<PAGE> 9
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these by-laws, or may from time to time be specifically conferred or imposed
by the Board of Directors. The President shall be the chief executive officer of
the Corporation.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or agent
of the Corporation shall execute to the Corporation a bond in such sum, and
with such surety or sureties as the Board of Directors may direct, conditioned
upon the faithful performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all property, funds or
securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other corporation, any
right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercise on behalf of
the Corporation by the President, any Vice President, or such other person as
the Board of Directors may authorize.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing shares of the Corporation shall be in such
form as shall be adopted by the Board of Directors, and shall be numbered and
registered in
By-Laws - 9
<PAGE> 10
the other issued. They shall bear the holder's name and the number of shares,
and shall be signed by (i) the Chairman of the Board or the President or a Vice
President, and (ii) the Secretary or Treasurer, or any Assistant Secretary or
Assistant Treasurer, and shall bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount of
consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the
holder to exercise voting rights, receive dividends and participate in
liquidating distributions, in proportion to the fractional holdings; or it may
authorize the payment in cash of the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined; or it
may authorize the issuance, subject to such conditions as may be permitted by
law, of scrip in registered or bearer form over the signature of an officer or
agent of the Corporation, exchangeable as therein provided for full shares, but
such scrip shall not entitle the holder to any rights of a shareholder, except
as therein provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the
certificate representing the same. The Corporation may issue a new certificate
in the place of any certificate theretofore issued by it, alleged to have been
lost or destroyed. On production of such evidence of loss or destruction as the
Board of Directors in its discretion may require, the Board of Directors may,
in its discretion, require the owner of the lost or destroyed certificate, or
his legal representatives, to give the Corporation a bond in such sum as the
Board may direct, and with such surety or sureties as may be satisfactory to
the Board, to indemnify the Corporation against any claims, loss, liability or
damage it may suffer on account of the issuance of the new certificate. A new
certificate may be issued without requiring any such evidence or bond when, in
the judgment of the Board of Directors, it is proper so to do.
By-Laws - 10
<PAGE> 11
Section 3 - Transfer of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records
of the Corporation only by the holder of record thereof, in person or by his
duly authorized attorney, upon surrender for cancellation of the certificate or
certificates representing such shares, with an assignment or power of transfer
endorsed thereon or delivered therewith, duly executed, with such proof of the
authenticity of the signature and of authority to transfer and of payment of
transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any
share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding fifty days, nor less than ten days,
as the record date for the determination of shareholders entitled to receive
notice of, or to vote at, any meeting of shareholders, or to consent to any
proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividends, or allotment of any rights, or
for the purpose of any other action. If no record date is fixed, the record
date for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
on which the meeting is held; the record date for determining shareholders for
any other purpose shall be at the close of business on the day on which the
resolution of the directors relating thereto is adopted. When a determination
of shareholders of record entitled to notice of or to vote at any meeting of
shareholders has been made as provided for herein, such determination shall
apply to any adjournment thereof, unless the directors fix a new record date
for the adjourned meeting.
By-Laws - 11
<PAGE> 12
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors
from time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All by-laws of the Corporation shall be subject to alteration or repeal, and
new by-laws may be made, by the affirmative vote of shareholders holding of
record in the aggregate at least a majority of the outstanding shares entitled
to vote in the election of directors at any annual or special meeting of
shareholders, provided that the notice or waiver of notice of such meeting
shall have summarized or set forth in full therein, the proposed amendment.
Section 2 - By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and
repeal, from time to time, by-laws of the Corporation; provided, however, that
the shareholders entitled to vote with respect thereto as in this Article IX
above-provided may alter, amend or repeal by-laws made by the Board
of Directors, except that the Board of Directors shall have no power to change
the quorum for meetings of shareholders or of the Board of Directors, or to
change any provisions of the by-laws with respect to the removal of directors
or the filling of vacancies in the Board resulting from the removal by the
shareholders. If any by-law regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the by-law so adopted, amended or repealed, together with a concise
statement of the changes made.
By-Laws - 12
<PAGE> 13
ARTICLE X - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of the
fact that he, his testator or intestate representative is or was a director,
officer of employee of the Corporation, or of any Corporation in which he
served as such at the request of the Corporation, shall be indemnified by the
Corporation against the reasonable expenses, including attorney's fees,
actually and necessarily incurred by him in connection with the defense of such
action, suit or proceedings, or in connection with any appeal therein, except
in relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer,
director or employee is liable for negligence or misconduct in the performance
of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any
other rights to which any officer or director or employee may be entitled apart
from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board of Directors, except that in any case
where there is no disinterested majority of the Board available, the amount
shall be fixed by arbitration pursuant to the then existing rules of the
American Arbitration Association.
By-Laws - 13
<PAGE> 1
EXHIBIT 23
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
To Whom It May Concern: March 10, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents
to the inclusion of their report of March 10, 1999, on the Financial Statements
of DIVERSIFIED MARKETING SERVICES, INC., as of February 28, 1999, in any
filings that are necessary now or in the near future with the U.S. Securities
and Exchange Commission.
Very truly yours,
/s/ Barry L. Friedman
- - -----------------------------
Barry L. Friedman
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR PERIOD ENDING FEBRUARY 28, 1999 AND INTERIM FINANCIAL
STATEMENTS FOR THE PERIOD ENDING MAY 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH DIVERSIFIED MARKETING SERVICES, INC.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> OTHER OTHER
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> JAN-01-1999 JAN-01-1999
<PERIOD-END> FEB-28-1999 MAY-31-1999
<CASH> 4,579 1,521
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 4,579 1,521
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 4,579 1,521
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 11,250 11,250
<OTHER-SE> (6,248) (6,248)
<TOTAL-LIABILITY-AND-EQUITY> 4,759 1,521
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 41 3,279
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (41) (3,279)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (41) (3,279)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (41) (3,279)
<EPS-BASIC> (0.00) (0.00)
<EPS-DILUTED> (0.00) (0.00)
</TABLE>
