The following table sets forth the costs and expenses expected to be incurred in connection with the offering described in the Registration Statement. These amounts are estimates with the exception of the Securities and Exchange Commission’s registration fees.
Colorado corporate law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Colorado corporate law also provides that to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.
Our Articles of Incorporation and By-Laws provide for the indemnification of our officers, directors, agents, fiduciaries and employees to the fullest extent permitted by the Colorado Revised Statutes. Specifically, directors of the Company will not be personally liable to the Company or any of its shareholders for monetary damages for breach of fiduciary duty, except liability for: (i) any breach of the director’s duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) voting for or assenting to a distribution in violation of Colorado Revised Statutes Section 7-106-401 or the articles of incorporation if it is established that the director did not perform his duties in compliance with Colorado Revised Statutes Section7-106-401, provided that the personal liability of a director in this circumstance shall be limited to the amount of distribution which exceeds what could have been distributed without violation of Colorado Revised Statutes Section 7-106-401 or the articles of incorporation; or (iv) any transaction from which the director directly or indirectly derives an improper personal benefit.
Disclosure of Commission’s Position on Indemnification of Securities Act Liabilities.
We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act of 1933 is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.
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Item 15. | Recent Sales of Unregistered Securities. |
Other than the transactions discussed below, we have not entered into any transaction, nor are there any proposed transactions in which our director, officer, stockholders or any member of the immediate family of the foregoing had or is to have a direct or indirect material interest.
On October 4, 2002 we issued 500,000 shares of our common stock to Great American Assets, Inc. (“GAA”) in consideration of defraying our organizational expenses of $2,800. On February 1, 2003, we issued 1,000,000 shares of our common stock to GAA in consideration of providing consulting services to us in connection with capital formation and a business plan. These services were valued at $7,500. As a result of these stock issuances, we became a wholly-owned subsidiary of GAA. Our sole director and officer served as a director of GAA at the time of these transactions.
The foregoing transactions were made to a single entity in reliance upon exemption provided in Section 4(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. The purchaser was known to the Registrant and its management through pre-existing business relationships. The purchaser was provided access to all material information, and all information necessary to verify such information and was afforded access to management of the Registrant in connection with their purchases. The holder of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Registrant. The share certificates representing such securities as were issued contained restrictive legends, prohibiting transfer of the certificates representing such shares, without such shares either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any resale or disposition.
On June 16, 2008, pursuant to a Separation and Distribution Agreement executed by GAA, all of our issued and outstanding shares of common stock held by GAA were distributed to GAA’s 24 stockholders of record, pro rata. Of GAA’s 24 stockholders, 23 were residents of the Province of British Columbia, Canada and one stockholder, Omega Financial, Inc., a Colorado corporation, controlled by the Brooks Family Trust.
The distribution of our shares to 23 residents of British Columbia, Canada, was made in reliance upon an exemption from registration provided in Regulation S under the Securities Act of 1933, as amended. These transactions were offshore. The offerees were not in the United States at the time of distribution. The shares distributed were issued and imprinted with a restrictive legend, prohibiting transfer of the certificates representing such shares, without such shares either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any resale or disposition.
The shares distributed to a corporate entity incorporated in Colorado were issued in reliance upon an exemption from registration provided in Section 4(2) of the Securities Act of 1933, as amended. The recipient of the shares was known to the Registrant and its management through pre-existing business relationships.The recipient was provided all material information, and all information necessary to verify such information and
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was afforded access to management of the registrant in connection with the distribution. The share certificates representing such shares as were issued contained a restrictive legend, prohibiting transfer of the certificates representing such shares, without such shares either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any sale or disposition.
On various dates between August 18, 2008 and September 9, 2008, pursuant to our private placement memorandum, dated August 18, 2008, we issued an aggregate of 160,000 shares of common stock to 15 investors for a total consideration of $8,000.
The foregoing sales were made in reliance upon an exemption provided in Section 4(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. The purchasers were known to the Registrant and its management through pre-existing business and or personal relationships. The purchasers were provided access to all material information, and all information necessary to verify such information and were afforded access to management of the Registrant in connection with their purchases. The holders of the unregistered shares acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Registrant. The share certificates representing such shares as were issued contained restrictive legends, prohibiting transfer of the certificates representing such shares, without such shares either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any resale or disposition.
On September 10, 2008, we distributed Class A Redeemable Common Stock Purchase Warrants (“warrants”) to all of our 39 stockholders of record, pro rata. For each share of common stock held by our stockholders, one warrant was issued. Each warrant evidenced the right to purchase one share of our common stock at an exercise price of $0.10 per share, during the period commencing on September 10, 2008 and expiring on September 10, 2010. Warrants were issued to residents or entities domiciled in the Province of British Columbia, Canada and the United States.
The warrants issued to our stockholders resident in British Columbia, Canada, were made in reliance upon an exemption from registration provided in Regulation S under the Securities Act of 1933, as amended. These transactions were offshore. The offerees were not in the United States at the time of distribution. The warrant certificates as were issued contained a restrictive legend, prohibiting transfer of the certificates representing such warrants, without such warrants either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any sale or disposition.
The warrants issued to our stockholders resident in the United States were made in reliance upon an exemption from registration provided in Section 4(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. Each person or entity to whom warrants were issued had had a prior relationship with the registrant. They were our stockholders and familiar with our business operations. The recipients were provided all material information, and all information necessary to verify such information and were afforded access to management of the registrant in connection with the distribution. The warrant certificates as were issued contained a restrictive legend, prohibiting transfer of the certificates representing such warrants, without such warrants either being first registered or otherwise exempt from registration under the Securities Act of 1933, as amended, in any sale or disposition.
The undersigned Registrant hereby undertakes:
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| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
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| (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
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| (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
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| (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) For determining liability of the undersigned under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned undertakes that in a primary offering of securities of the undersigned pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned will be a seller to the purchaser and will
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| (i) Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to; |
be considered to offer or sell such securities to such purchaser:
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| (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; |
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| (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and |
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| (iv) Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser. |
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and authorized this Registration Statement to be signed on its behalf by the undersigned, in Los Angeles, California on December 14, 2008.
CHARTER CORPORATE SERVICES, INC.
(Registrant)
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By: | /s/ Patrick C. Brooks |
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| Patrick C. Brooks |
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| Chairman of the Board of Directors, Director, |
| President, Chief Executive Officer, Chief Financial |
| Officer, Chief Accounting Officer & Secretary |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following person in the capacities and on the dates indicated.
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By: | /s/Patrick C. Brooks |
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| Patrick C. Brooks |
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| Chairman of the Board of Directors, Director, |
| President, Chief Executive Officer, Chief Financial |
| Officer, Chief Accounting Officer & Secretary |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Patrick C. Brooks and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including his capacity as a director and/or officer of Charter Corporate Services, Inc.) to sign any or all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the SEC, granting unto each said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement was signed below by the following persons in the capacities and on the dates stated.
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By: | /s/Patrick C. Brooks |
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| Patrick C. Brooks |
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| Chairman of the Board of Directors, Director, |
| President, Chief Executive Officer, Chief Financial |
| Officer, Chief Accounting Officer & Secretary |
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EXHIBIT INDEX
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Exhibit number | Description of Item |
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| 3.1* | Articles of Incorporation |
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| 3.2* | By-Laws |
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| 4.2* | Form of Class A Redeemable Common Stock Purchase Warrant |
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| 5.2** | Opinion of Counsel |
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| 10.2* | Line of Credit Agreement |
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| 23.1* | Consent of Independent Public Accountant |
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| 23.2** | Consent of Counsel, included in Exhibit 5.1 |
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| 99.1* | Form of Election to Purchase Class A Warrants |
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| 99.2 ** | Form of Subscription Agreement for private offering conducted in August-September 2008 |
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| * Previously filed |
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| **Filed herewith. |
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