As filed with the Securities and Exchange Commission on November 4, 2005
Reg. No. ______________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Renewable Assets, Inc.
----------------------------------------------
(Name of Small Business Issuer in its Charter)
Delaware 8741 20-0858618
- ------------------------ ----------------- ----------------
(State of Incorporation) (Primary Standard (I.R.S. Employer
Industrial Identification
Classification) Code Number)
7040 W. Palmetto Park Road, Bldg. 4, No. 572,
Boca Raton, Florida 33433 (561) 488-9938
- --------------------------------------------- ------------------
(Address of principal executive offices (Telephone Number)
and principal place of business)
Alfred M. Schiffrin
Chief Executive Officer
Renewable Assets, Inc.
7040 W. Palmetto Park Road, Bldg. 4, No. 572
Boca Raton, Florida 33433
(561) 488-9938
---------------------------------------------------------
(Name, address and telephone number of agent for service)
Copy to:
Eugene Michael Kennedy, Esq.
Law Office of Eugene Michael Kennedy, P.A.
517 Southwest First Avenue
Fort Lauderdale, Florida 33301
(954) 524-4155
Approximate date of proposed sale to the public: December 15,
2005 from time to time after the date this registration statement
becomes effective.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. [ ]
Page 1
CALCULATION OF REGISTRATION FEE
Proposed Proposed maximum
Title of each class of Shares/Warrants to be maximum aggregate offering Amount of
securities to be registered registered offering price price(1)(2) registration fee
- --------------------------- --------------------- -------------- ------------------ ----------------
Common Stock and Warrants 1,000,000 Shares $ 0.25 $ 250,000 $ 29.43
Comprising 1,000,000 Units 5,000,000 Class "A"
Warrants
Common Stock Underlying
Class "A" Warrants 5,000,000 Shares $ 0.50 $ 2,500,000 $ 294.25
- --------------------------------------------------------------------------------------------------------------
Gross Proceeds to
Issuer (6,000,000 Shares) $ 2,750,000
- --------------------------------------------------------------------------------------------------------------
Common Stock -
Selling Shareholders 3,014,350 Shares $ 1.00 (1) $ 3,014,350 $ 354.79
- --------------------------------------------------------------------------------------------------------------
Total Registration Fee 9,014,350 Shares and
5,000,000 Class "A"
Warrants $ 678.47
- --------------------------------------------------------------------------------------------------------------
(1) Estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating
the registration fee and represents the offering price of the
Units, comprised of one (1) presently unissued share of Common
Stock and five (5) Class "A" Common Stock Purchase Warrants per
Unit, the exercise price of the Class "A" Common Stock Purchase
Warrants being offered by the Company and the arbitrary estimated
selling price to be realized hypothetically by the Selling
Shareholders.
(2) 3,014,350 shares being offered by this prospectus, are
currently outstanding and are being offered for resale by selling
stockholders and 5,000,000 shares are presently unissued shares
which will be offered for resale upon their exercise by the
purchasers of the callable Unit Warrants which are being offered
by the Company. In addition to the shares set forth in the table,
the amount to be registered includes an indeterminate number of
shares issuable upon exercise of the Warrants; as such number may
be adjusted as a result of stock splits, stock dividends and
similar transactions in accordance with Rule 416.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be
changed. We shall not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where an offer or sale is not permitted.
Page 2
PROSPECTUS
RENEWABLE ASSETS, INC.
1,000,000 Units Comprised of One (1) Share of Common Stock
and Five (5) Class "A" Common Stock Purchase Warrants per Unit
and
3,014,350 Shares of Common Stock
This prospectus relates to the sale of:
a. 1,000,000 Units @$0.25 per Unit, on a "best- efforts, no
minimum basis" by management, each Unit consisting of:
i. Five (5) Class "A" Common Stock Purchase Warrants
("Warrants") - Each of which is exercisable, at any
time prior to their termination two years from the
Effective Date of the Offering, in exchange for one (1)
share of Common Stock at the Exercise Price of $0.50
per share; an aggregate of 5,000,000 Shares; and
ii. One (1) share of Common Stock; an aggregate of
1,000,000 shares.
b. 3,014,350 currently outstanding shares of Common Stock,
comprising all of the Company's issued and outstanding capital
stock, owned by International Imaging Systems, Inc., ("IIS")
which are being distributed to the beneficial shareholders of IIS
as of the effective date of this Registration Statement.
c. 5,000,000 shares of our Common Stock issuable upon the
exercise of the Class "A" Warrants in the Units being offered by
this prospectus.
For a list of the selling stockholders, please see "Selling
Stockholders." We are selling 1,000,000 shares of Common Stock
and 5,000,000 Warrants within the Units in this offering and will
receive the proceeds from the sale of the Units, if any, as well
as the exercise price of the Warrants if and when the purchasers
or subsequent holders of the Warrants exercise the Class "A"
Warrants. We will pay the expenses of registering the Warrants
and all of these shares.
As of the date of this Prospectus our Common Stock is not being
traded. The shares of Common Stock and the Warrants included in
this prospectus may be offered and sold directly by the Unit
purchasers, Warrantholders and the Selling Stockholders in the
open market, when, as and if an active market in our securities
is made by one or more registered market makers, at prevailing
prices or in individually negotiated transactions, through agents
designated from time to time or through underwriters or dealers.
We will not control or determine the price at which a
warrantholder or selling stockholder decides to sell its Warrants
or shares. Brokers or dealers effecting transactions in these
securities should confirm that they are registered under
applicable state law or that an exemption from registration is
available.
Our principal executive offices are located at 7040 W. Palmetto
Park Road,Bldg. 4, No. 572, Boca Raton, Florida 33433, and our
telephone number is (561) 488-9938.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK
You should understand the risks associated with investing in the
Units and our Common Stock. Before making an investment, read the
"Risk Factors," which begin on page 8 of this prospectus.
Page 3
The price of the Units being offered, as well as the Exercise
Price of the Class "A" Warrants, have all been arbitrarily
determined by us, without any relationship to any generally
accepted criteria of value, including but not limited to book
value.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of the
prospectus. Any representation to the contrary is a criminal
offense.
Subject to completion, dated _______________________, 2005.
Renewable Assets, Inc., 7040 W. Palmetto Park Road, Bldg. 4, No.
572, Boca Raton, FL 33433, (561) 488-9938.
TABLE OF CONTENTS
Page
Prospectus Summary.......................................... 5
Risk Factors................................................ 8
Forward-Looking Statements.................................. 12
Use of Proceeds............................................. 13
Market Price of Common Stock and Other
Shareholder Matters....................................... 14
Management's Discussion and Analysis or
Plan of Operation......................................... 14
Business.................................................... 17
Directors, Executive Officers, Promoters and
Control Persons........................................... 19
Executive Compensation...................................... 20
Security Ownership of Certain Beneficial Owners and
Management................................................ 20
Selling Stockholders........................................ 21
Plan of Distribution........................................ 24
Certain Relationships and Related Transactions.............. 25
Description of Securities................................... 26
Interests of Named Experts and Counsel...................... 28
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities................................ 28
Legal Matters............................................... 28
Where You Can Find More Information......................... 28
Index to Financial Statements............................... 30
Exhibits.................................................... 62
You may rely only on the information contained in this
prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it.
We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
Page 4
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus; it does not contain all of the information you should
consider before investing in the Units or our Common Stock. Read
the entire prospectus before making an investment decision.
Throughout this prospectus, the terms "we," "us," "our," RAI"
and "our Company" refer to Renewable Assets, Inc., a Delaware
corporation.
BACKGROUND
We are in the development stage. We were incorporated by
International Imaging Systems, Inc. ("IIS"), in the State of
Delaware on December 12, 2003, to continue to pursue the line of
business of our parent, IIS, that consists of marketing pre-
owned, brand-name photocopy machines as agent for an unaffiliated
office furniture company, Office Furniture Warehouse, Inc. On
December 22, 2003, International Imaging Systems assigned to us
that line of business and a related marketing services agreement
with Office Furniture Warehouse without consideration and without
any operations funding by IIS at the time of the contract
assignment or since other than some legal and accounting expenses.
We continue to be engaged in that enterprise albeit restricted by
our limited resources.
In order to expand our business, we have been exploring the
marketing of other products, including new and pre-owned items of
office equipment other than photocopy machines, such as office
furniture, home furnishings and appliances, and purchase and
resale of such items as principal at risk, but our limited
resources to date have proved an inhibiting factor. We are also
considering other means of expanding our business, perhaps
through acquisition, which may entail the issuance of additional
shares of our Common Stock, but we have no current plans to do
so. Any such acquisition would be made in compliance with
applicable Federal and state securities and corporate law, and,
depending upon the proposed structure of the transaction,
submission of information to shareholders regarding such an
acquisition prior to consummation, as well as shareholder
approval thereof, may not be required.
Our principal executive offices are located at 7040 W. Palmetto
Park Road, Bldg. 4, No. 572, Boca Raton, FL 33433. There is no
public trading market for our Common Stock or for the Class "A"
Common Stock Purchase Warrants comprising the Units in the
offering.
HISTORY
The Company was formed by and as a wholly-owned subsidiary of
International Imaging Systems, Inc. On April 13, 2004, the board
of directors of International Imaging Systems approved a spin-off
distribution of all 3,014,350 of our shares of Common Stock
issued, outstanding and owned by IIS, to the IIS stockholders of
record as of April 14, 2004. As part of the spin-off, each
stockholder of record of IIS will receive one-half share of our
Common Stock for each full share of IIS common stock owned on
April 14, 2004. As a result, the principal shareholders of IIS as
of April 14, 2004 will become the principal shareholders of our
Company. On the record date, there were 6,028,700 shares of IIS
common stock outstanding. The spin-off has not been undertaken
nor completed because of our inability, as well as that of IIS,
to comply with applicable laws, rules and regulations. We believe
that the delay has impeded our ability to access the capital
markets as an independent company. There can be no assurance,
however, even if the spin-off had been effected, that we would
have been able to raise additional capital on acceptable terms,
or at all, or that the spin-off will ever be consummated. In that
circumstance, we have had to consider our alternatives to raise
capital and otherwise continue our business.
Our business was the only line of business of IIS prior to its
acquisition of Advanced Imaging Systems, LLC, a Delaware limited
liability company. Before the acquisition, IIS operated under the
name "A.M.S. Marketing, Inc." The background to the acquisition
is as follows:
Page 5
On July 31, 2003, A.M.S. Marketing, Inc., Advanced Imaging
Systems, LLC and the members of Advanced Imaging Systems, LLC
effected a change of control of AMS Marketing, Inc. pursuant to
an Agreement and Plan of Exchange, dated July 28, 2003 (the
"Exchange Agreement"). As provided in the Exchange Agreement,
A.M.S. Marketing, Inc. issued to the then members of Advanced
Imaging Systems, LLC an aggregate of 1,200,000 shares (the
"Shares") of A.M.S. Marketing's Common Stock, par value $.001 per
share, in exchange for all of the limited liability company
interests of Advanced Imaging Systems, LLC issued and outstanding
on that date.
Immediately prior to the share exchange, the then members of
Advanced Imaging Systems, LLC each purchased 900,000 shares of
A.M.S. Marketing, Inc.'s Common Stock (3,600,000 shares in the
aggregate) from Alfred M. Schiffrin, A.M.S. Marketing, Inc.'s
former president and sole director, and our current president and
sole director, for $.05 per share, payable partly in cash and the
balance by recourse promissory notes secured by the purchased
shares. Each note is payable in monthly installments of varying
amounts commencing on August 1, 2003 and ending on May 1, 2006.
To date, all installments due under the notes have been paid. The
shares of A.M.S. Marketing, Inc. issued in the exchange, together
with the shares purchased by the members from Mr. Schiffrin,
represented approximately 82% of the total then issued and
outstanding shares of the A.M.S. Marketing, Inc.'s common stock
and approximately 72% of the issued and outstanding shares of IIS
at October 15, 2005.
SERVICES/PRODUCTS
We are currently marketing pre-owned, refurbished Canon and
Minolta photocopy machines for Office Furniture Warehouse in
Pompano Beach, Florida, where Office Furniture Warehouse
maintains a 12,000 square foot showroom and a nearby 30,000
square foot warehouse. Office Furniture Warehouse is a retail
seller of new and used office furniture and systems. The
photocopy machines we market range from simple desk-top models to
stand-alone, multi-function business machines.
Under the marketing services agreement, (the "Agreement") dated
December 1, 2003 with Office Furniture Warehouse and its
affiliate, Sun Coast Imaging Systems, Inc., revenues generated
from our sale of pre-owned photocopiers are shared equally with
Office Furniture Warehouse, after deducting from such revenues
the cost of each photocopier. The Agreement has an initial
term of three years and automatically renews for successive
one year terms unless terminated by mutual agreement or upon
the happening of certain events, such as bankruptcy.
We are one of two, co-exclusive marketers of pre-owned
photocopiers for Office Furniture Warehouse. In that capacity, we
select and arrange for the purchase by Office Furniture Warehouse
of the pre-owned photocopiers to be marketed. Under the
Agreement, Office Furniture Warehouse and Sun Coast are obligated
to provide us with the number and the models of pre-owned
photocopiers for sale as we may reasonably request. Our president
is responsible for, and effects sales of, those photocopiers on
behalf of Office Furniture Warehouse and schedules delivery and
installation of sold machines by Office Furniture Warehouse
trucks and personnel.
We are highly dependent upon Office Furniture Warehouse.
Termination by Office Furniture Warehouse of the Agreement would
have a material adverse effect upon us, since we currently lack
the financial resources to operate our own retail outlets as
principal and may be unable to locate another party for whom we
could provide our marketing services on the same terms and
conditions as agreed with Office Furniture Warehouse.
We are accordingly exploring other marketing opportunities,
including sales of new and pre-owned office equipment, office
furniture, home furnishings and appliances, as well as the
purchase and sale of such items to the extent our resources
Page 6
permit. In each case, we will attempt to favor in our product mix
pre-owned items, since we believe we can realize greater profit
margins on pre-owned items. Our belief is based on the general
ability to acquire pre-owned merchandise at distressed or even
liquidation prices and still resell the merchandise profitably at
a significant discount to new product pricing. Our parent also
explored some other marketing opportunities but was unable to
identify any appropriate situation. No assurance can be given
that we in turn will be able to identify or secure any such
opportunities.
DISTRIBUTION
We have previously marketed the brand name pre-owned photocopiers
by means of advertisements in local newspapers, facsimile
transmissions to local businesses, periodic advertisements in
business periodicals and direct mail solicitations that were
created and paid for by us. In addition, we prepared
advertisements that were run as adjuncts to Office Furniture
Warehouse's furniture advertisements for which the costs were
borne by Office Furniture Warehouse. We are currently
formulating a new plan of distribution with the view to
increasing our exposure to potential buyers but no assurance
can be given that we will be successful, or that a new plan will
be effective.
COMPETITION
Until the execution of the Agreement, we had the exclusive right
to market pre-owned photocopy machines for Office Furniture
Warehouse under an oral agreement with them. Under the written
Agreement, Sun Coast Imaging Systems, an affiliate of Office
Furniture Warehouse, was also granted the right co-exclusive with
us to market pre-owned photocopy machines for Office Furniture
Warehouse. While the Agreement provides that both Office
Furniture Warehouse and Sun Cost Imaging Systems will make
available for marketing by us the number and the models of pre-
owned photocopy machines we request, the increased competition
from Sun Coast could harm our business. Sun Coast has greater
resources than we have and, accordingly can employ more
salespersons and expend greater amounts on advertising than we
can.
Additionally, the pre-owned photocopier industry in the
geographic area in which we operate is highly competitive and
consists of numerous small companies. We also compete with
sellers of new photocopy machines, principally Ikon Office
Solutions, Copyco and Danka Business Systems. Competition in the
industry is generally based on price, service and availability of
varied models of equipment.
We also anticipate that we will encounter substantial competition
attempting to secure clients for our marketing services with
respect to products other than pre-owned photocopiers. Virtually
all of our competitors and potential competitors possess greater
resources than we have and generally have longer operating
histories.
PRINCIPAL SUPPLIERS
All of the pre-owned photocopier machines we currently market are
purchased by Office Furniture Warehouse from Intercom Copier
Market, an unaffiliated party located in Pompano Beach, Florida.
Intercom promotes itself as the largest wholesaler of pre-owned
photocopiers in south Florida and one of the largest in the
United States. There are other suppliers from whom Office
Furniture Warehouse could purchase pre- owned photocopiers. We
believe, however, that because of favorable logistics and pricing
and the high quality of the equipment sold by Intercom, the loss
of Intercom as the primary supplier beneath our Agreement would
have a significant adverse effect upon us in both quantity and
quality. In addition, even minor interruptions in supply would
adversely affect our ability and that of Office Furniture
Warehouse to meet customer demand in a timely manner.
Page 7
GOVERNMENTAL REGULATION
We are not subject to any particular governmental regulations
other than those generally applicable to all businesses.
EMPLOYEES
We have no current employees other than our sole officer and
director, Mr. Alfred M. Schiffrin. Our prospects for success are
heavily dependent upon the decisions made by Mr. Schiffrin, who
currently devotes approximately 50% of his business time to the
Company's affairs.
We operate from the facilities of Office Furniture Warehouse in
Pompano Beach, Florida. We do not pay any rent for the use of
these facilities.
Our principal executive offices are located at 7040 W. Palmetto
Park Road, Bldg. 4, No. 572, Boca Raton, Florida 33433 where our
telephone number is (561) 488-9938.
THE OFFERING
- ------------
* One Million (1,000,000) Units offered by management on a
"best-efforts, no minimum" basis at $0.25 per Unit; Each Unit
consists of one (1) share of previously unissued Common Stock
and five (5) Class "A" Common Stock Purchase Warrants, each
Warrant exercisable to acquire one (1) additional share of
Common Stock at the exercise price of $0.50 per share.
* Common Stock to be registered by the Selling Stockholders:
3,014,350 shares
* Common Stock currently outstanding: 3,014,350 shares
* Common Stock to be outstanding after the maximum offering,
assuming none of the Class "A" Warrants are exercised:
4,014,350 shares
* Common Stock to be outstanding after the offering, assuming
the sale of all of the Units offered and exercise of all of
the Class "A" Warrants: 9,014,350 shares
* Proceeds: Maximum gross proceeds from the sale of Units:
$250,000
* Use of Proceeds: Expenses of this Offering and general
working capital
Risk Factors. Any investment in our Common Stock involves
significant risks. See "Risk Factors".
RISK FACTORS
An investment in our Common Stock involves a high degree of risk.
You should carefully consider the risks described below and the
other information contained in this prospectus and in the
documents incorporated by reference before deciding to invest in
our Company. If any of the following risks actually occur, our
business, financial condition or operating results, and the
future trading price or value of our securities could be
materially adversely affected.
RISKS RELATED TO OUR COMPANY
Our Company has limited operating history on which to base an
investment decision. We were originally organized as A.M.S.
Marketing, Inc. on July 23, 1998, but have not yet been able to
emerge from the development stage due to a chronic lack of
adequate funding. Our limited operating history and slow
development is a factor for investors to consider in evaluating
an investment in the Units and our Common Stock.
Page 8
From inception in July, 1998 we have had only minimal revenues.
We have experienced losses of $141,266 since our inception; with
net loss totaling $3,568 for the fiscal year ended December 31,
2003, net profit of $2,698 for the fiscal year ended December 31,
2004 and net loss of $47,414 for the nine months ended September
30, 2005. In each of our fiscal years ended December 31, 2004
and 2003, our Independent Auditor has raised substantial doubt as
to our ability to continue as a going concern. Factors that
have contributed to that substantial concern include our
cumulative loss since inception and our lack of assets at all
times material.
We do not plan to pay any cash dividends on our Common Stock in
the foreseeable future. Any decision to pay dividends is within
the discretion of the board of directors and will depend upon our
profitability at the time, cash available and other factors.
Therefore, no assurance can be given that there will ever be any
such cash dividends or distributions in the future.
We compete against many larger, more established competitors in
our business. We compete with other sellers of previously owned
photocopiers in a relatively narrow geographic region, with
minimal sales coverage capability. Although we believe that our
competitors do not offer the quality of product at our price
point, competition from these companies is intense. Because we
are a very small company with historically limited working
capital, our ability to compete effectively will depend on our
ability to obtain additional working capital and the benefits
offered by diversifying our previously offered product lines.
There can be no assurance that potential customers will select
our offerings over that of a competitor, or that a competitor
will not market a competing product with operating
characteristics similar to those offered by us. There are
numerous individuals, companies and organizations throughout
the United States that offer the same equipment that we are
offering to the general business community in South Florida.
Most, if not all of our competitors have substantially
greater capital resources, including experienced personnel, and
established reputations.
There can be no assurance that we will be able to compete
successfully against current or future competitors. We have no
experience in marketing and sales of previously owned equipment
other than brand name photocopiers. We currently have only one
person engaged in part-time marketing and sales, and anticipate
developing a marketing organization as our working capital is
enhanced through future private and or public financing efforts.
If we cannot establish or maintain an effective marketing and
sales organization, our business will be adversely affected.
We are dependent on the efforts of Alfred Schiffrin, our Chief
Executive Officer and sole director, to make the Company a viable
business. The loss of the services of Mr. Schiffrin could delay
or prevent us from achieving our objectives.
Any additional financing that we successfully conclude might
cause significant dilution, and may, if involving debt, create
risks associated with the use of leverage. While we currently
have minimal working capital, we believe it to be insufficient to
continue any increased level of development efforts, and will be
insufficient to create and operate the marketing organization
needed to market and sell more product. We will be required to
seek additional private and or public equity or debt financing in
the future. Any equity financing, including proceeds from
exercise of the Class "A" Warrants, will involve substantial
dilution of those purchasing common shares from the Selling
Shareholders pursuant to this Prospectus. Debt financings would
subject us to the risks associated with leverage, including
increased interest expense and the possible risk of default and
ultimately becoming insolvent.
Various government regulations generally affect our business
operations. We are subject to the myriad of local, state and
federal government regulations which generally affect all U.S.
based operating business entities; but presently there are no
specific regulations which require us to obtain licenses or which
could limit our ability to sell previously owned products and
Page 9
appliances in the United States.
RISKS RELATED TO OUR SUPPLY
We are operating with a sole source of previously owned photocopy
machines. We are completely reliant on Office Furniture Warehouse
and its affiliate, Sun Coast Imaging Systems for marketing
product.
At this stage in our corporate development, we have no
intellectual property. We do not own any intellectual property
rights.
We presently have marketing rights from our only source of pre-
owned photocopiers; Office Furniture Warehouse, Inc. ("OFWI").
Our marketing rights are co-exclusive with its affiliate, Sun
Coast Imaging Systems, Inc. In the event that we are unfavored by
OFWI at any point, under the co-exclusive arrangement, we would
be adversely affected in our operations. We intend to develop
other sources and other pre-owned product sales, but there is no
commitment or agreement regarding the Company and the marketing
of any other sources or products. We have not targeted any other
supply sources to acquire additional pre-owned merchandise,
although we now intend to do so on an active basis.
Our present business plan is dependent upon our ability to secure
and market pre-owned merchandise. Under our current business plan
our future growth and potential profitability, if any, will
depend on our ability to both successfully market pre-owned
merchandise and to secure additional product lines and multiple
supply sources.
RISKS RELATED TO OUR COMMON STOCK
Our officers are conducting a "best-efforts, no minimum" offering
without the services of an underwriter. Our sole officer, without
the participation of registered securities broker dealers, is
conducting the sale of the Units. We are offering the Units on a
"best-efforts, no minimum" basis; there is no escrow or trust
account for the proceeds, and there is no assurance that any or
all of the Units will be sold.
The price of the Units being offered and the Exercise Price of
the Class "A" Common Stock Purchase Warrants were arbitrarily
determined. We established the price of the Units and the price
for Warrant exercise without any relationship to their intrinsic
or actual book value. Our determination was arbitrary and totally
unrelated to any recognized criteria of value usually adhered to
by issuers.
The Shares and Warrants comprising the Units are detachable and
will be tradeable upon issuance. Despite that fact, there is no
assurance that a liquid public market for our securities will
ever develop. As of the date of this prospectus there has been no
established public trading market for our Common Stock, and there
can be no assurance that a regular and established market will be
developed upon the completion of this offering; nor that if
initially developed, any such trading market would be maintained
for any particular duration. There can also be no assurance as to
the depth or liquidity of any market for the Common Stock or the
prices at which holders may be able to sell shares. Our Common
Stock currently is not being traded in the public market place.
There presently is no public trading market for our securities.
Upon completion of this Offering, while we have not yet tried to
identify potential market makers for our securities, we
nevertheless anticipate that a registered securities market maker
will submit the appropriate Form 211 (Rule 15C2-11) to the NASD
for trading privileges of our Common Stock and Warrants on the
Pink Sheets and or on the Over-the-Counter (OTC) Bulletin Board,
both being electronic trading systems. There is and cannot be any
assurance that such trading privileges will be granted.
Page 10
Companies that have their shares listed on the Pink Sheets
electronic system normally are not followed by market analysts,
and many institutional investors are prohibited from, or do not
invest in securities of such companies. As a result, trading on
the Pink Sheets electronic trading system is characterized by a
lack of liquidity, sporadic trading, larger spreads between bid
and ask quotations, and other conditions that may affect an
investor's ability to sell shares.
The OTC Bulletin Board, which lists only companies obligated to
file periodic reports with the U.S. Securities and Exchange
Commission, is generally considered to be a more viable market
place than that represented by the Pink Sheets; but no assurance
can be given that our securities will be admitted to trading on
the OTC Bulletin Board. Since we are a small company and
virtually unknown to investors and securities brokers, our
securities will most likely be thinly traded, meaning that the
number of persons interested in purchasing our securities at or
near ask prices at any given time may be relatively small or even
non-existent, so you may be unable to sell at or near ask prices,
or at all, if you need to sell your securities to raise money or
otherwise desire to liquidate your holdings.
Most investment advisors and brokers, as well as many investors,
will not consider making investments in an early development
stage company such as ours or purchase or recommend the purchase
of our securities until such time as we become more seasoned and
commercially viable. As a consequence, assuming that a market is
established, there may be periods of several days or more when
trading activity in our securities is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume
of trading activity that will generally support continuous sales
without an adverse effect on trading price. Due to these
conditions, we can give you no assurance that you will be able to
sell your securities at or near ask prices, or at all, if you
need money or otherwise desire to liquidate your securities.
Investors may have difficulty selling our shares because they
will be deemed "Penny Stocks". Assuming that a public trading
market is made, since our Common Stock will not be listed on the
Nasdaq Stock Market, at any time that the trading price of our
Common Stock is below $5.00 per share, trading in our shares will
be subject to the requirements of certain rules promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which require additional disclosure by broker-dealers in
connection with any trades involving a stock defined as a penny
stock (generally, any non- Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain
exceptions). Those rules require the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny
stock market, and the risks associated therewith, and impose
various sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and
accredited investors (generally defined as an investor with a net
worth in excess of $1,000,000 or annual income exceeding $200,000
individually or $300,000 together with a spouse). For these types
of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the
purchaser's written consent to the transaction prior to the sale.
The broker- dealer also must disclose the commissions payable to
the broker- dealer, current bid and offer quotations for the
penny stock and, if the broker-dealer is the sole market maker,
the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market. That information must be
provided to the customer orally or in writing before or with the
written confirmation of trade sent to the customer. Monthly
statements must be sent disclosing recent price information for
the penny stock held in the customer's account and generally
negative information on the limited market in penny stocks. The
additional burdens imposed upon broker-dealers by those
requirements could discourage broker-dealers from effecting
transactions in our Common Stock, which could severely limit the
market liquidity of the Common Stock and the ability of holders
of the Common Stock to sell their shares.
The current majority shareholders and management of the Company
will continue to exercise control over the Company after
completion of this offering even if the maximum number of Units
is sold. Anti-takeover provisions in our Certificate of
Page 11
Incorporation could affect the value of our stock. Our
Certificate of Incorporation contains certain provisions that
could impede a non-negotiated change in control. In particular,
without shareholder approval we can issue up to 1,000,000 shares
of preferred stock with rights and preferences determined by the
board of directors. These provisions could make a hostile
takeover or other non-negotiated change in control difficult,
while a takeover/change of control could be at a premium to the
then current stock price.
Future issuance of additional Common and or Preferred Stock, if
any, would dilute existing shareholders. We are authorized to
issue up to 29,000,000 shares of Common Stock. To the extent of
that authorization, our board of directors has the ability,
without seeking or securing shareholder approval, to issue
additional shares of Common Stock in the future for any
consideration that the board of directors may consider
sufficient. The issuance of additional Common Stock in the future
will reduce the proportionate ownership and voting power of the
Common Stock and the Common Stock underlying Warrants offered
hereby. We are also authorized to issue up to 1,000,000 shares of
Preferred Stock, with one or more designated series setting forth
the rights and preferences, and the remaining undesignated
preferred shares may also be designated by the board of
directors. Such designation of new series of preferred stock may
be made without shareholder approval, and could create additional
securities which would have dividend and liquidation preferences
over the Common Stock and the Common Stock underlying the
Warrants comprising the Units offered hereby. Preferred
shareholders could adversely affect the rights of holders of
Common Stock by:
* exercising voting, redemption and conversion rights to the
detriment of the holders of Common Stock;
* receiving preferences over the holders of Common Stock
regarding our surplus funds in the event of our dissolution
or liquidation;
* delaying, deferring or preventing a change in control of
our Company; and
* discouraging bids for our Common Stock.
Substantial share overhang could have a material effect on our
stock price. As of October 15, 2005, we had outstanding 3,014,350
shares of Common Stock, all of which were "restricted securities"
(as that term is defined under Rule 144 promulgated under the
Securities Act of 1933, as amended). Excluding the issuance of
shares on the exercise of Warrants upon completion of this
offering at the maximum number of Units sold, upon effectiveness
of the Registration Statement of which this Prospectus is a part,
there will be 4,014,350 freely tradable shares. There will be no
remaining presently restricted shares. No prediction can be made
if or when such shares will be offered for sale in the public
market, or what the effect that the availability of all of such
newly registered shares for sale will have on the market prices
prevailing from time to time. The possibility that substantial
amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for our Common Stock.
We have not issued any Common Stock purchase options pursuant to
our 2005 Stock Plan. The exercise of outstanding stock options
may affect the market value at the time of their exercise and
sale. At October 15, 2005 no such options have been granted.
These options, if granted, entitle the holders to purchase one
(1) common share for each option at the exercise price
established at the time of grant, if any. All options, if
granted, will expire on December 21, 2007. A number of these
Options, if granted, will be exercised and the common shares
might be sold when the stock price exceeds their exercise price,
and if this occurs, it may have a negative effect on the market
price at the time of sale.
FORWARD-LOOKING STATEMENTS
While the Private Securities Litigation Reform Act of 1995
provides a "safe harbor" for forward-looking statements, the safe
harbor provided others, does not apply to companies that issue
"Penny Stocks". Our shares will be deemed penny stocks.
Nevertheless, this document contains forward-looking statements,
Page 12
which reflect the views of our management with respect to future
events and financial performance. These forward-looking
statements are subject to a number of uncertainties and other
factors that could cause actual results to differ materially from
such statements. Forward- looking statements are identified by
words such as "anticipates," "believes," "estimates," "expects,"
"plans," "projects," "targets" and similar expressions. Readers
are cautioned not to place undue reliance on these forward-
looking statements, which are based on the information available
to management at this time and which speak only as of this date.
We undertake no obligation to update or revise any forward-
looking statements, whether as a result of new information,
future events or otherwise. For a discussion of some of the
factors that may cause actual results to differ materially from
those suggested by the forward-looking statements, please read
carefully the information under "Risk Factors". The
identification in this document of factors that may affect future
performance and the accuracy of our forward-looking statements is
meant to be illustrative and by no means exhaustive. All forward-
looking statements should be evaluated with the understanding of
their inherent uncertainty.
THE PROSPECTUS
You may rely only on the information contained in this
prospectus. We have not authorized anyone to provide information
different from that stated in this prospectus. Neither the
delivery of this prospectus nor the sale of Common Stock means
that information contained in this prospectus is correct after
the date of this prospectus. This prospectus is not an offer to
sell or solicitation of an offer to buy these securities in any
circumstances under which the offer or solicitation is unlawful.
USE OF PROCEEDS
Assuming the sale of all of the 1,000,000 Units offered, we will
receive the $250,000 maximum proceeds of the sale. We will not
receive any proceeds from the sale of common shares by the
Selling Stockholders pursuant to this Prospectus. If any or all
of the 5,000,000 Class "A" Common Stock Purchase Warrants
comprising of the Units are sold and subsequently exercised, we
will receive the aggregate exercise price of the Class "A"
Warrants. We expect to use the proceeds received from the sale
and from the exercise of Warrants, for general working capital
purposes, including establishing a proper marketing organization
to market and sell pre-owned merchandise, and for other general
and administrative expenses, including salaries of future
employees, and management. We will pay the expenses of
registration of all these shares, including legal and accounting
fees.
The following table sets forth, for illustrative purposes only,
the anticipated proceeds in the event that we sell all of the
Units, or if we only sell 25%, 50% or 75% of the Units and if the
corresponding Class "A" Warrants are fully exercised; or, in the
event that we sell less than all of the Units, the anticipated
proceeds in the same proportions:
25% 50% 75% 100%
---------- ---------- ---------- ----------
Initial Sale-
Units $ 62,500 $ 125,000 $ 187,500 $ 250,000
Class "A" Warrant
Exercise @ $0.50 $ 625,000 $1,250,000 $1,875,000 $2,500,000
---------- ---------- ---------- ----------
Gross Proceeds $ 687,500 $1,375,000 $2,062,500 $2,750,000
========== ========== ========== ==========
[Each Class "A" Common Stock Purchase Warrant is exercisable
to purchase one (1) share of Common Stock]
Page 13
MARKET PRICE OF COMMON STOCK AND OTHER SHAREHOLDER MATTERS
Market Information. There is no established public trading market
- ------------------
for our Common Stock or Warrants. Assuming the existence after
this offering of a public trading market, the securities may be
detached and sold directly by the Selling Stockholders and
Warrantholders in the open market, at prevailing prices or in
individually negotiated transactions, through agents,
underwriters, or dealers. We will not control or determine the
price at which the securities are sold.
Shareholders. Giving effect to the shares being registered hereby
- ------------
for distribution to the beneficial shareholders of International
Imaging Systems, Inc., there will be approximately 126 holders of
record of our Common Stock upon completion of the spin-off
distribution.
Dividends. We have not paid any dividends on our Common Stock to
- ---------
date and do not anticipate that we will be paying dividends in
the foreseeable future. Any payment of cash dividends on our
Common Stock in the future will be dependent upon the amount of
funds legally available; earnings, financial condition, capital
requirements and other factors that the Board of Directors may
think are relevant. We intend for the foreseeable future to
follow a policy of retaining all of our earnings, if any, to
finance the development and expansion of our business and,
therefore we have no current intention to pay cash dividends on
our Common Stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview
While we commenced operations December 12, 2003, we are still in
an early development stage. We were formed by, and as a wholly
owned subsidiary of, our parent, International Imaging Systems,
Inc., to pursue the pre-owned photocopier marketing services line
of business of our parent that commenced its operations in the
Fall of 1998.
We are currently engaged in agency marketing activities for a
single unrelated entity and have no employees other than our
President, Alfred M. Schiffrin, who is unsalaried. Pursuant to an
amended oral agreement among International Imaging Systems, Inc.,
Mr. Schiffrin and us, Mr. Schiffrin received 160,000 shares of
our parent's common stock in lieu of any other form of
compensation for services rendered to the Company from January 1,
2005 through completion of the spin-off of our Common Stock to
the shareholders of our parent, International Imaging Systems,
Inc. We do not anticipate hiring any employees, purchasing any
plant or significant equipment or conducting any product research
and development during the next 12 months. As sales and marketing
agent operating from rent free facilities, we essentially have
no overhead relating to our sales and marketing activities. We do
not anticipate initiating any sales activities for our own
account (acting as a principal) until such time as our resources
permit.
During the next 12 months, we intend to continue marketing pre-
owned photocopiers. We will also continue to explore our
prospects for the marketing of other products, including new and
pre-owned items of office equipment other than photocopiers,
office furniture, home furnishings and appliances, as well as the
purchase and resale of such items to the extent that our
resources permit. We are also considering other means of
expanding our business, such as through acquisition, merger or
other form of business combination involving one or more entities
engaged in the same or similar business as us. Any such
transaction may entail the issuance of additional shares of our
Common Stock, but there are no current plans to engage in any
acquisition, merger or other form of business combination. Any
such transaction will be made in compliance with applicable
Federal and state securities and corporate law, and, depending
Page 14
upon the structure of the transaction, submission of information
to shareholders regarding any such transaction prior to
consummation, as well shareholder approval, may not be required.
Our President has run the business for more than five years for
our parent. Prior to that he had experience as an investment
banker in locating potential acquisitions, but we may employ the
services of a broker or finder who would be entitled to
compensation to assist in identifying suitable opportunities.
While we only began operations in December 2003, we are the
successor to the pre-owned photocopier marketing services line of
business of International Imaging Systems, Inc. As discussed
below, fiscal year 2003 and fiscal 2004 was characterized by
nominal revenues. Neither we nor our parent has been able to
generate significant revenues from the sale of pre-owned
photocopiers due principally to a lack of financial resources. We
continue to believe that the pre-owned photocopier business and
other complementary business segments that also focus on the sale
of pre-owned merchandise, like office furniture, are attractive
markets for us to exploit. Our belief is based on the knowledge
that pre-owned merchandise can be purchased at deep discounts to
retail prices for merchandise, usually in new or very near new
condition, often at as much as a 95% discount, and may be resold
to end users for as much as a 50% discount to retail, thereby
providing the end users with substantial savings while at the
same time allowing us to realize significant gross profit
margins. We intend to raise working capital to facilitate the
expansion of our business model from that of agent to a blend of
agent and principal.
The perceived demand for pre-owned office equipment may be
dependent on, among other things, general economic conditions,
which are cyclical in nature. Inasmuch as a major portion of our
activities will be the receipt of revenues from the sale of such
equipment, our competitors, as well as the general economic
conditions, including prolonged recessionary periods, may
adversely affect our future business operations. We intend to
remain flexible in our planned business operations and will
continually review our plans, including the plan to engage in the
marketing and sale of other product lines. We expect that
implementation of our current and future business plans will be
adopted and or implemented only if such plans are deemed to be in
the best interests of the shareholders. Management will use its
discretion to take advantage of future business opportunities
believed to be beneficial to the Company and to the shareholders'
interests.
Capital and Source of Liquidity. As of December 31, 2004 and
- ---------------------------------
September 30, 2005, we had cash of $5,288 and $9,124,
respectively, and accounts receivable of $1,200 and $4,400,
respectively. The September 30, 2005 figures are unaudited and
were compiled by management. We are proposing, through
registration and sale of the Units, to raise cash to finance and
expand our operations for the foreseeable future. In addition, we
may consider expansion through acquisition(s). No specific
targets are currently under consideration. If we are not
successful in raising cash, we may be forced to borrow funds.
There is and can be no assurance that funds will be available to
borrow, or if available, that they will be available on terms
favorable or acceptable to us. On a long-term basis, liquidity
is dependent on significant expansion of operations, receipt of
consequent revenues, and perhaps additional infusions of capital
and debt financing. Management believes that additional capital
and debt financing in the short term will allow the Company to
effectuate its marketing and sales efforts, resulting in
increased revenue and greater liquidity in the long term. However,
there can be no assurance that we will be able to obtain
additional equity or debt financing in the future, if at all. We
are not a party to any off-balance sheet arrangements and do not
engage in trading activities involving non-exchange traded
contracts. We have no financial guarantees, debt or lease
agreements, or other arrangements that could trigger a
requirement for an early payment or that could change the value
of our assets.
Based on the amount of working capital that we had on hand on
September 30, 2005, we believe that we have sufficient financial
resources to continue maintaining the minimal level of operations
we have thus far conducted for the next 12 months; but without
additional financing, including the possible proceeds from
exercise of Class "A" Warrants offered in the Units pursuant to
this prospectus, the Company will not be able to implement its
Page 15
expansion plan. There are, however, many conditions that could
impact our proposed business plan and could adversely impact our
ability to market and sell the pre-owned equipment. We cannot
give any assurance that we will be able to continue or obtain the
financing required for us to continue to successfully market and
sell pre-owned equipment.
Plan of Operation. We are still in the development stage and have
- -----------------
not conducted significant operations to date, nor have we
received significant operating revenues. We have experienced
problems, delays, expenses and difficulties sometimes encountered
by an enterprise in our stage of development, many of which are
beyond the Company's control. These include, but are not limited
to, costs and expenses that may exceed current estimates,
competition, product acquisition; and lack of additional supply
channels. We are of the opinion that the proceeds of the sales of
our securities and future revenues will be sufficient to pay all
of our operating expenses for the next twelve months.
You should consider the likelihood of our future success to be
highly speculative in light of our limited operating history, as
well as the limited resources, problems, expenses, risks and
complications frequently encountered by similarly situated
companies. To address these risks, we must, among other things:
* satisfy our future capital requirements for the
implementation of our business plan;
* implement and successfully execute our business and
marketing strategy to secure merchandise and develop and
maintain a diverse customer and referral base;
* seek other marketable product lines;
* respond to competitive developments; and
* attract, retain, and motivate qualified personnel.
If we are unable to successfully address these risks, our
prospects, financial condition and results of operations will be
materially adversely affected.
Critical Accounting Policies. Our financial statements have been
- ----------------------------
prepared on a continuing operations basis, which contemplates the
realization of assets and the settlement of liabilities and
commitments in the normal course of business. The preparation of
financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the period reported.
The following accounting policies involve a "critical accounting
estimate" because they are particularly dependent on estimates
and assumptions made by management about matters that are highly
uncertain at the time the accounting estimates are made. In
addition, while we have used our best estimates based on facts
and circumstances available to us at the time, different
estimates reasonably could have been used in the current period,
and changes in the accounting estimates we used are reasonably
likely to occur from period to period which may have a material
impact on the presentation of our financial condition and results
of operations. We review these estimates and assumptions
periodically and reflect the effects of revisions in the period
that they are determined to be necessary.
In March 2005, the staff of the SEC issued Staff Accounting
Bulletin No. 107 ("SAB 107"). The interpretations in SAB 107
expresses views of the staff regarding the interaction between
SFAS 123 (R) and certain SEC rules and regulations and provide
the staff's views regarding the valuation of share-based payment
arrangements for public companies. In particular SAB 107 provides
guidance related to share-based payment transactions with non-
employees, the transition from public entity status, valuation
methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financial
instruments issued under share-based payment arrangements, the
classification of compensation expense, non GAAP financial
measures, first-time adoption of SFAS 123 (R) in an interim
period, capitalization of compensation cost related to share-
based payment arrangements, the accounting for income tax effects
Page 16
of share-based payment arrangements upon adoption of SFAS 123
(R), the modification of employees share options prior to
adoption of SFAS 123 (R) and disclosures in Management's
Discussion and Analysis subsequent to adoption of SFAS 123 (R)
when applicable. We have not engaged in any Company share-based
payment arrangements.
Results of Operations. Revenues in fiscal year 2004 and 2003 from
- ---------------------
the photocopier business were $6,960 and $4,500, respectively
and expenses were $3,786 and $8,068, respectively, resulting
in a net income for fiscal 2004 of $2,698 as compared to a net
loss in fiscal 2003 of $3,568. Revenues (unaudited) for the nine
months ended September 30, 2005 were $15,870 as compared to
$5,760 for the same period in 2004; resulting in net loss of
$47,414 and net income of $2,325 respectively. The net loss from
the nine months ended September 30, 2005 was primarily
attributable to the expense incurred by the Company in connection
with the compensation arrangement with Alfred M. Schiffrin, the
Company's sole officer and director, in which he received 160,000
shares of International Imaging Systems, Inc. ("IIS") common
stock in exchange for his services to the Company, in lieu of any
other form of compensation, through completion of spin-off of the
Company's shares to the IIS Shareholders. We do not believe the
differences in results of operations are meaningful or indicative
of any trend but are primarily attributable otherwise to factors
beyond our control, such as the timing of sales.
We are currently unaware of any trends that may have negative
effects upon our results of operations, although we expect
continued and increased competition from Sun Coast Imaging, our
co-exclusive marketing agent for, and an affiliate of, Office
Furniture Warehouse.
BUSINESS
Business of Issuer. The Company is currently marketing pre-owned,
- ------------------
refurbished Canon and Minolta photocopy machines for Office
Furniture Warehouse, Inc. ("OFWI") in Pompano Beach, Florida,
where OFWI maintains a 12,000 square foot showroom and a nearby
30,000 square foot warehouse. OFWI is a retail seller of new and
used office furniture and equipment. The photocopy machines
marketed by the Company range from simple desk-top models to
stand-alone, multi-function business machines.
Pursuant to a marketing services agreement assigned to the
Company by its parent, International Imaging Systems, Inc.
("IIS"), dated December 1, 2003 (the "Agreement"), among
International Imaging Systems, Inc., Sun Coast Imaging Systems,
Inc. ("SCIS"), an affiliate of OWFI, and OFWI, revenues generated
from the Company's sale of pre-owned photocopiers are shared
equally between the Company and OFWI, after deducting the cost of
each photocopier. The agreement has an initial term of three
years, ending December 1, 2006, and automatically renews for
successive one-year terms unless terminated by mutual agreement
or upon the happening of certain events, such as bankruptcy.
The Company is one of two, co-exclusive marketers for OFWI of pre-
owned photocopiers. The other co-exclusive marketer is an
affiliate of OFWI. In that capacity, the Company selects and
arranges for the purchase by OFWI of the pre-owned photocopiers
to be marketed. Under the Agreement, OFWI and SCIS are obligated
to provide the Company with such number and the models of pre-
owned photocopiers for sale as the Company may reasonably
request. The Company's president is responsible for and effects
sales of such photocopiers on behalf of OFWI and schedules
delivery and installation thereof by OFWI trucks and personnel.
The Company is currently, completely dependent upon OFWI.
Termination by OFWI of the Marketing Agreement with the Company
would have a material adverse effect upon the Company, as the
Company currently lacks the financial resources to operate its
own retail outlets and may be unable to locate another party for
Page 17
whom it could provide its marketing services on the same terms
and conditions as agreed with OFWI.
The Company is exploring other marketing opportunities, including
new and pre-owned office equipment, office furniture, home
furnishings and appliances, as well as the purchase and sale as
principal of such items to the extent the Company's resources
permit. In each case, the Company will attempt to favor in its
product mix pre-owned items, since the Company believes it can
realize greater profit margins on pre-owned items. The Company's
parent also explored other marketing opportunities but was unable
to identify any appropriate opportunities. No assurance can be
given that the Company will be able to identify and secure any
such opportunities.
We currently have no employees, and are dependent solely upon the
efforts, abilities, business generation capabilities and project
execution of our sole executive officer, Alfred Schiffrin, to
conduct RAI's business and generate revenues; if the Company
loses the services of Mr. Schiffrin, it would severely affect our
ability to sustain operations at all. Mr. Schiffrin is currently
devoting approximately 20 hours per week to the Company's
affairs, including solicitation of potential business, creation
of appropriate marketing and business plans as well as the
preparation of appropriate funding plans and efforts.
Markets; Seasonality. This Company's target market includes a
- ---------------------
wide variety of potential customers, including business entities
and firms engaged in providing services to the general public.
Among expected purchasers are firms offering general securities
services, real estate, insurance and mortgage brokers to the
public; anyone with office and related paperwork activities and
operations. We haven't encountered any material seasonality in
the sale and marketing of previously owned photocopy equipment.
Distribution Methods of the products or services. We will employ
- ------------------------------------------------
a variety of generally accepted marketing methods for advertising
and promoting our pre-owned equipment merchandise, including
direct mail and opt-in Internet email, telephone and targeted
media advertising.
Status of publicly announced new product or services. The Company
- ----------------------------------------------------
has not made any public disclosures or announcements of any
proposed products or services. Presently there are no such
products or services other than as disclosed in this registration
statement.
Competitive business conditions. There are many individuals,
- ---------------------------------
firms, and other business entities engaged in offering
photocopiers, which RAI offers to potential customers. Based upon
available financing for advertising, marketing and promotion of
sales products, the number of persons in management and other
employees, combined with the experience of conducting a widely
diversified products, RAI is presently an insignificant entity in
the marketplace and we expect that we shall remain so for the
near future.
Dependence on one or a few major customers. Presently being in
- -------------------------------------------
the development stage, we have no dominant client or customer. We
have no reasonable criteria to predict whether or not we will
become dependent on one or but a few major customers for future
revenues.
Intellectual Property: Patents, Trademarks, Licenses, etc. We
- ------------------------------------------------------------
have no patents or trademarks at the present time. In the
unlikely event that we obtain intellectual property in the
future, we intend to protect it through appropriate state and
federal registrations and enforcement as applicable.
Government Regulation and Approval. RAI is not required to obtain
- ----------------------------------
any particular government approvals for the marketing and the
proposed marketing of pre-owned merchandise. We anticipate that
future expansion of the categories of equipment and systems which
may be offered may include aspects that require governmental
registration and licensing. RAI shall comply with such regulatory
requirements prior to offering such merchandise.
Page 18
Research and Development. We have not spent any funds on product
- ------------------------
or service research or development.
Environmental Compliance. We have no product or contemplated
- -------------------------
service that has any direct or known indirect impact on the
environment, and therefore do not anticipate any significant
costs to comply with governmental environment laws and
regulations.
Corporate Information. Our principal operations and executive
- ----------------------
office is located at 7040 W. Palmetto Park Road, Bldg. 4, No.
572, Boca Raton, Florida 33433 and our telephone number is
(561) 488-9938.
Property. The Company neither owns nor leases any real
- --------
property.
Legal Proceedings. There are no pending legal proceedings by or
- -----------------
against the Company and the Company is unaware of any threatened
litigation or of any basis upon which possible litigation against
the Company might rest.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers. The following table sets forth
- --------------------------------
the name, age and position held by each of our executive officers
and directors as of October 15, 2005. Directors are elected for a
period of one year and thereafter serve until the next annual
meeting or such time as their successors are qualified.
NAME AGE POSITION
---- --- --------
Alfred M. Schiffrin 67 President/Secretary/Treasurer
and Director
Alfred M. Schiffrin has been our President, Secretary, Treasurer
and sole director since our formation in December 2003. Prior to
that date, he was the sole officer and director of our parent,
International Imaging Systems, Inc. From December 1996, to
September 1998, he was the President of Newmarket Strategic
Development Corp., a publicly held development company.
Mr. Schiffrin also has more than twenty years of experience in
the investment banking and securities industry, having been
associated in various capacities with NASD member firms located
in New York, Colorado and Florida. Most recently he was employed
in the following positions by broker/dealers:
General Principal from August 2004 to April 2005 of Acosta
Financial Services; Director of Continuing Education from
November 2001 to July 2004 of L.H. Ross & Company, and General
Principal from June 1999 to February 2001 of First Madison
Securities.
Mr. Schiffrin holds Series 7, Series 24 and Series 63 securities
licenses and was admitted as a Member of the NASD Board of
Arbitrators in 1987.
There are no material proceedings known to us to which Mr.
Schiffrin or any of our affiliates, or any owner of record or
beneficially of more than 5% of any class of our voting
securities to be distributed, or any affiliate of such persons,
is a party adverse to us or has a material interest adverse to
our interests.
Mr. Schiffrin has not, and does not receive any compensation for
his services as a Director.
Page 19
Compliance With Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's officers and directors,
and persons who own more than ten percent of a registered class
of the Company's equity securities (collectively the "Reporting
Persons") to file reports and changes in ownership of such
securities with the Securities and Exchange Commission and the
Company. Based solely upon a search for (i) Forms 3, 4 and 5 and
amendments thereto which might have been furnished to the Company
pursuant to Rule 16a-3(e), promulgated under the Exchange Act,
and/or written representations which might have been furnished to
the Company by any Reporting Persons stating that such person was
not required to file a Form 5, since the Company's inception, it
has been determined that no one has been delinquent with respect
to the reporting obligations set forth in Section 16(a) of the
Exchange Act.
Executive Compensation
Pursuant to an oral agreement as amended on August 22, 2005, and
effective as of January 1, 2005 among the Company, IIS and Alfred
M. Schiffrin, the Company's sole officer and director, Mr.
Schiffrin has waived all other forms of compensation in exchange
for 160,000 shares of IIS common stock for his services to the
Company, prior to distribution of the spin-off of all the
Company's Common Stock by IIS to the IIS Stockholders. The
arrangement will terminate upon the consummation of the spin-off.
Prior to December 31, 2004 Mr. Schiffrin was entitled to receive
25% of the profits on any sale by the Company of a pre-owned
copier. At December 31, 2004 we had accrued commissions payable
to him of $400 which amount was paid in January 2005. The Company
expects to pay Mr. Schiffrin reasonable compensation for his
services after completion of the spin-off at such time as the
Company's business develops to such extent that it is able to do
so. The Company has an unused stock option plan and does not have
any other employment agreements.
Options/Stock Appreciation Rights (SARs). No options or stock
- -----------------------------------------
appreciation rights have been granted to the officers since
inception.
Compensation of Board of Directors. Currently, directors do not
- ----------------------------------
receive any compensation for their services. However, we
anticipate that in the future, independent directors will receive
stock options for their services. We currently reimburse all
directors for any expenses incurred by them in attending meetings
of the Board of Directors.
Key Man Insurance. We do not currently maintain life insurance
- -------------------
covering the death of our sole officer, director and key
employee.
Security Ownership of Certain Beneficial Owners and Management
All of our issued and outstanding shares of Common Stock are
currently owned by International Imaging Systems, Inc. ("IIS").
The following table sets forth information available to us, as of
October 15, 2005 with respect to the beneficial ownership of the
outstanding shares of International Imaging Systems, Inc.'s
common stock by (i) any holder of more than five percent (5%) of
the outstanding shares; (ii) our sole officer and director; and
(iii) the officers and directors of International Imaging
Systems, Inc. as a group:
Name and Address of Beneficial Owner(1) Shares of Common Percentage (%) of
(International Imaging Systems, Inc.) Stock Owned(2) Common Stock(2)
- --------------------------------------- ---------------- -----------------
Michael D'Angelo(3) 1,500,000 24.88%
Laura Palisa Mujica(4) 2,100,000 34.83%
Lara Nicole Sarafianos(5) 1,200,000 20.49%
Alicia M. LaSala(6) 425,000(7) 7.80%(7)
Alfred M. Schiffrin(8) 410,000 7.05%
Alex Sarafianos(9) 25,000(10) 0.43%(10)
C. Leo Smith(3) 0(11) 0%(11)
Susan Archer(3) 130,000 2.16%
All officers and directors as a group 155,000(11) 2.54%
(three) persons(11)
Page 20
When the Renewable Assets, Inc. spin-off distribution is
effected, the number of RAI (the Company's) shares outstanding
will be 3,014,350, and the percentage of ownership of those
shares will be unaffected from those shown in the above table;
except that 205,000 RAI shares (7.0%) will be held by the officer
and director of RAI "as a group" (2).
(1) Beneficial ownership as reported in the table above has been
determined in accordance with Instruction (1) to Item 403 (b) of
Regulation S-B of the Exchange Act.
(2) Percentages are approximate. The spin-off distribution of
3,014,350 Shares of the Company's Common Stock will be on the
basis of one (1) Share of RAI Common Stock per every two (2)
Shares of IIS common stock held of record on April 14, 2004, the
record date. The resulting Stockholder percentages of RAI Common
Stock will be approximately the same as reported in the table
above for IIS common stock ownership.
(3) The business address of the stockholder, director or officer,
as the case may be, noted above is 2419 E. Commercial Blvd., Ste.
307, Ft. Lauderdale, FL 33308.
(4) The address of the stockholder noted above is 824 S.E. 8th
Street, Ft. Lauderdale, FL 33316.
(5) The address of the stockholder noted above is 4440 N.E. 22nd
Avenue, Lighthouse Point, FL 33064.
(6) The address of the stockholder noted above is 6674 Serena
Lane, Boca Raton, FL 33433.
(7) Includes 20,000 shares of Common Stock owned of record by a
trust for the benefit of Mrs. LaSala's minor child of which her
husband is the sole trustee, and 25,000 shares of Common stock
owned of record by her husband. Mrs. LaSala disclaims beneficial
ownership of such shares.
(8) The business address of Mr. Schiffrin is 7040 W. Palmetto
Park Road, Building 4, No. 572, Boca Raton, FL 33433. Mr. Schiffrin
is the sole director and officer of Renewable Assets, Inc. (the
Company).
(9) The address of the IIS director noted above is 16008
Wilmington Place, Tampa FL 33647.
(10) Excludes all shares owned by Lara Nicole Sarafianos. Mr.
Sarafianos is the brother-in-law of Mrs. Sarafianos and disclaims
beneficial ownership of all shares owned by Mrs. Sarafianos.
(11) Excludes 2,100,000 shares owned by the mother of Mr. Smith,
Laura Palisa Mujica. Mr. Smith disclaims beneficial ownership of
such shares.
SELLING STOCKHOLDERS
The shares to be distributed to/offered by the Selling
Shareholders ("Selling Shareholders") are presently "restricted"
securities under applicable federal and state securities laws and
are being registered under the Securities Act of 1933, as amended
(the "Securities Act") for distribution on the Effective Date to
the beneficial shareholders of International Imaging Systems,
Inc. ("IIS") on the record date, April 14, 2004, and they may be
selling these shares, at their option, in public transactions.
The registration of these shares does not require that any of
their shares be offered or sold by the Selling Stockholders. The
Selling Stockholders may from time to time offer and sell all or
a portion of their shares in the over-the- counter market, in
negotiated transactions, or otherwise, at prices then prevailing
or related to the then current market price or at negotiated
prices.
The registered shares may be sold directly to members of the
Page 21
public, or through brokers or dealers; or in a distribution by
one or more underwriters on a firm commitment or best efforts
basis. To the extent required, the names of any agent or broker-
dealer, if applicable, and applicable commissions or discounts
and any other required information with respect to any particular
offer, will be set forth in a prospectus supplement. See "Plan of
Distribution." The Selling Stockholders and any agents or broker-
dealers that participate with the Selling Stockholders in the
distribution of registered shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the sale of the
registered shares may be deemed to be underwriting commissions or
discounts under the Securities Act.
No estimate can be given as to the amount or percentage of our
Common Stock that will be held by the selling stockholders after
any sales made pursuant to this prospectus because the Selling
Stockholders are not required to sell any of the shares being
registered under this prospectus. The following tables assume
that the selling stockholders will sell all of the shares listed
in this prospectus.
For purposes of the tables below, the numbers of shares
"beneficially owned" are those beneficially owned as determined
under the rules of the SEC. Such information is not necessarily
indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which
a person has sole or shared voting power or investment power and
any shares for which the person has the right to acquire such
power within 60 days through the exercise of any option, warrant
or right, through conversion of any security or pursuant to the
automatic termination of a power of attorney or revocation of a
trust, discretionary account or similar arrangement. The tables
below are based on 3,014,350 shares of our Common Stock
outstanding as of October 15, 2005.
The following named shareholders have no beneficial or record
ownership in other shares of the Company.
Name of Beneficial Owner Shares Owned and Name of Beneficial Owner Shares Owned and
of Common Stock Being Offered of Common Stock Being Offered
- ------------------------ ---------------- ------------------------ ----------------
MAXIMINO ACOSTA 600 SUSAN ARCHER 65,000
ALIA ALVAREZ 250 ANALIA ARETUO 250
SANDINO ALVAREZ 250 SANDRA ARQUIETA 250
ANA AMADO 250 ANDREW ASTROVE &
ELLEN ASTROVE 16,000
ELLEN M ASTROVE 300 ANTOINETTE HODGE 250
RITCHIE AYALA 100 FRANK S INGRASSIA 10,500
JONATHAN M BALKIN 1,000 STEVEN INGRASSIA 300
RONALD A. BALKIN 3,000 VIVIAN INGRASSIA 300
MICHAEL BANCROFT SR 500 VIVIAN INGRSSIA & LISA
BEAR STEARNS SEC CORP 100 ESKENAZI 300
MARIA BOWEN 250 PETER JACOBSEN 100
BONNIE BRENNER 200 ALMA H KEITH 1,000
BRUCE BROMBERG 500 MOHAMMED MAHID KHAN 500
JILL BROMBERG 500 ROBERT KLOSKA 750
MILDRED BROMBERG 500 ALICIA M LASALA 190,000
ALFRED BROMBERG 7,700 JOHN F LASALA 12,500
Page 22
CIRINO BRUNO 100 NICHOLAS F LASALA TRUST 10,000
JORGE CAICEDO 250 EDWARD LORCH & THERESA LORCH 1,000
VICTOR CAICEDO 250 MICHAEL MARKOWITZ 200
CEDE & CO 75 JOHN J MATTEIS 5,500
KIM CHAVATAL & GREGORY SCOTT MCMILLAN 200
DEARING 200 GARY MEDNICK 300
ENZO CIMINO 250 JAYNE MEDNICK 100
MARGARET CIMINO 250 STEVEN MEDNICK 2,000
ANN CIRILLO 200 SERGIO MENDONCA 250
LAURIE S D COHEN 2,000 FRANK R MICHELIN 200
RONALD L COHEN 5,000 FRANKLYN MICHELIN 75
SANDRA J COHEN 2,500 BRUCE MILLER 2,000
ANTHONY M COLLURA C/F 4,000 EDWARD R MILLER 500
MICHAEL D'ANGELO 750,000 JANET MILLER 500
JOHN DEXTER 100 LILLIAN MILLER 500
DONALD EGRY 350 JOEL MONTEAGUDO 250
JANICE EGRY 350 LAURA PALISA MUJICA 1,050,000
JOSEPH ELKIND 200 LUIS PABLO 250
ANYUL ESCANILLA 250 LUIS O PABLO 250
ELAINE FEDER 100 PHILIP PACE JR 100
WILLIAM FEDER 100 MILADYS PAGUADA 250
WILLIAM FEDER & ELAINE KELLY PATERNO 250
FEDER 500 1 PLATFORM INC 12,500
HOWARD FEINMEL 100 JEFFREY REUTER 200
FIRST TRANSACTION JOSEPH M REUTER 200
MANAGEMENT INC 3,000 DAVID RICH 250
FISERV CORRESPONDENT FRED D RICH 1,000
SERVICES INC 100 NANCY RICH 750
RANDALL FITTON 200 DEIRDRE RODOPOULOS 200
LONNIE GIETTER 200 VICENTE ROMAN 250
MARCI GIETTER 600 ANGELINA ROMO 250
ROBERT G GOLD C/F 500 MARTIN ROSAS 250
ALFREDO GONZALEZ 250 MARY RUIZ 250
HAROLD W GORDEN 500 JUAN CARLOS SAA 250
BERT GUSRAE 200 MARIA SALAZAR 7,500
BERT GUSRAE &
WENDY GUSRAE 100
BONNIE E HARDING 100
JAMES HARDING 300
ALEX SARAFIANOS 12,500 ADAM SIMON 200
LARA SARAFIANOS 600,000 JACK SKIDELL 200
ADAM SCHATZ 500 LISA SOOY 200
DAVID B SCHATZ 500 ALAN STERN 500
LARRY H SCHATZ 5,000 JERRY D STOKES 200
ALFRED SCHIFFRIN 205,000 ROBERT TASSELMYER 300
ALLISON SCHIFFRIN 300 SANDRA TOROS 250
CAROLE SCHIFFRIN 750 ANGEL TORRES 100
GEOFFREY SCHIFFRIN 500 SCOTT STEVEN TRACY 5,000
KERI SCHNEIDER 200 MARY VASSALLO 200
STANLEY A SCHNEIDER 200 ROBERT J VINCI 700
SUSAN SCHRETER 5,000 GEORGE WATSON 500
ROBERT SEBRING 250 HERBERT E WICKWARD 200
(1) The above listed "Selling Shareholders" have no additional
interests in the securities of Renewable Assets, Inc.
Page 23
(2) Not including shares underlying unexercised Common Stock
Warrants comprising the Units being offered hereunder.
The Selling Stockholders, include the Certain Beneficial Owners
and Management reflected in the table set out on page 20 of this
registration statement.
PLAN OF DISTRIBUTION
We are offering, without an underwriter, 1,000,000 Units on a
"best-efforts, no minimum" basis, at the price of $ 0.25 per Unit.
The sole officer of RAI will not receive any compensation for
services in effecting sales of the Units. As to the "Selling
Stockholders" whose shares are being registered pursuant to this
Prospectus, we will pay the costs and fees of registering their
shares of Common Stock, but the Selling Stockholders will pay any
brokerage commissions, discounts or other expenses relating to
the sale of these shares. The Selling Stockholders may sell the
shares of Common Stock in the over-the-counter market or
otherwise, at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated
prices. In addition, the selling stockholders may sell some or
all of their shares through:
* a block trade in which a broker-dealer may resell a portion
of the block, as principal, in order to facilitate the
transaction;
* purchases by a broker-dealer, as principal, and resale by
the broker-dealer for its account; or
* ordinary brokerage transactions and transactions in which a
broker solicits purchasers.
When selling the shares of Common Stock, and assuming the
existence of a public market, the Selling Stockholders may enter
into hedging transactions. For example, the selling stockholders
may:
* enter into transactions involving short sales of the shares
by broker-dealers;
* sell shares short themselves and deliver the shares to
close out their short positions;
* enter into option or other types of transactions that
require the selling stockholder to deliver shares to a
broker-dealer, who will then resell or transfer the common
shares under this prospectus; or
* loan or pledge the shares to a broker-dealer, who may sell
the loaned shares or, in the event of default, sell the
pledged shares.
The Selling Stockholders may pay broker-dealers commissions,
discounts or concessions for their services. The Selling
Stockholders and any broker-dealers involved in the sale or
resale of the shares of Common Stock may qualify as
"underwriters" within the meaning of Section 2(a)(11) of the
Securities Act, and may have civil liability under Section 11 and
12 of the Securities Act for any omissions or misstatements in
this prospectus and the registration statement of which it is a
part. In addition, the broker-dealers' commissions, discounts or
concession may qualify as underwriters' compensation under the
Securities Act. In addition to selling their shares under this
prospectus, the Selling Stockholders may transfer their shares in
other ways not involving market makers or established trading
markets, including directly by gift, distribution or other
transfer. To comply with the securities laws of some states, if
applicable, the shares may be sold in those states only through
brokers or dealers. In addition, in some states, the shares may
not be sold in those states unless they have been registered or
qualified for sale in those states or an exemption from
registration or qualification is available and is complied with.
If necessary, the specific Common Stock to be sold, the names of
the Selling Stockholders, the respective purchase prices and
Page 24
public offering prices, the names of any agent, dealer or
underwriter, and any applicable commissions or discounts with
respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-
effective amendment to the registration statement of which this
prospectus is a part. The rules and regulations in Regulation M
under the Exchange Act provide that during the period that any
person is engaged in the distribution (as that term is defined in
Regulation M) of our Common Stock, that person generally may not
purchase Common Stock. The Selling Stockholders are subject to
applicable provisions of the Securities Act of 1933 and
Securities Exchange Act of 1934 and the rules and regulations
thereunder, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of our
Common Stock by the Selling Stockholders. The foregoing may
affect the marketability of our Common Stock.
Future Audit committee
We intend to establish an Audit Committee upon appropriate
expansion of our board of directors. The audit committee of our
board of directors, if any, will be responsible for reviewing and
monitoring our financial statements and internal accounting
procedures, recommending the selection of independent auditors by
our board, evaluating the scope of the annual audit, reviewing
audit results, consulting with management and our independent
auditor prior to presentation of financial statements to
stockholders and, as appropriate, initiating inquiries into
aspects of our internal accounting controls and financial
affairs. To date we have not identified or sought additional
directors and we are uncertain whether any future candidate will
qualify as an "audit committee financial expert" under the
federal securities laws.
Future Compensation committee
We intend to establish a Compensation Committee upon expansion of
our board and management. All members of our compensation
committee will be independent directors. We currently expect that
the compensation committee will recommend approval to the full
board of the annual compensation budget for all employees,
bonuses, grants of stock options and any adoptions or changes to
our benefit plans. To date we have neither identified nor sought
additional director candidates.
Code of Conduct and Ethics
The company has adopted a code of business conduct and ethics
applicable to our directors, officers and employees, in
accordance with applicable federal securities laws and the NASD
Rules.
Indemnification of executive officers and directors
We have agreed to indemnify our executive officers and directors
for all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by
them in respect of any civil, criminal or administrative action
or proceeding to which they are made a party by reason of being
or having been a director or officer, if (a) they acted honestly
and in good faith with a view to our best interests, and (b) in
the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, they had reasonable
grounds for believing that their conduct was lawful.
To the extent that our directors, officers and controlling
persons are indemnified under provisions that may be contained in
our bylaws, Delaware law or contractual arrangements against
liabilities arising under the Securities Act, we have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has not entered into any transactions during the last
two fiscal years with any director, executive officer, director
nominee, 5% or more shareholder or promoter, nor has the Company
entered into transactions with any member of the immediate
families of the foregoing persons (includes spouse, parents,
children, siblings, and in-laws) nor is any such transaction
Page 25
proposed, except for the amended oral agreement between the
Company and Mr. Schiffrin described above under "Executive
Compensation". Except as set forth below, no transactions have
occurred since the beginning of the Company's last fiscal year or
are proposed with respect to which a director, executive officer,
security holder owning of record or beneficially more than 5% of
any class of the Company's securities, or any member of the
immediate families of the foregoing persons, had or will have a
direct or indirect material interest.
DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 30,000,000 shares of
capital stock, of which 29,000,000 shares are classified as
Common Stock, $0.001 par value per share, and 1,000,000 shares
are classified as undesignated Preferred Stock, $0.001 par value
per share. When the spin-off distribution is completed, our
Common Stock will beheld by approximately 126 shareholders.
Holders of shares of Common Stock are entitled to one vote per
share at all meetings of stockholders. Stockholders are not
permitted to cumulate votes in the election of directors. All
shares of Common Stock are equal to each other with respect to
liquidation rights and dividend rights. There are no preemptive
rights to purchase any additional shares of Common Stock. In the
event of liquidation, dissolution or winding up of the Company,
holders of the Common Stock will be entitled to receive on a pro
rata basis all assets of the Company remaining after satisfaction
of all liabilities. The outstanding shares of Common Stock are
duly and validly issued, fully paid and non-assessable.
We are authorized to issue up to 1,000,000 shares of previously
undesignated Preferred Stock. Our board of directors is
empowered, without stockholder approval, to issue series of
Preferred Stock with any designations, rights and preferences as
they may from time to time determine. So, Preferred Stock, if
issued, could have dividend, liquidation, conversion, voting or
other rights that could adversely affect the voting power or
other rights of the Common Stock. Preferred Stock, if issued,
could be utilized, under special circumstances, as a method of
discouraging, delaying or preventing a change in control of our
Company.
As of the date hereof, the Company has outstanding 3,014,350
shares of Common Stock and no shares of Preferred Stock.
Future issuance of shares of Preferred Stock, or the issuance of
rights to purchase such shares, could be used to discourage an
unsolicited acquisition proposal. For instance, the issuance of a
series of Preferred Stock might impede an acquisition or other
business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a
business combination by including voting rights that would
provide a required percentage vote of the stockholders. In
addition, under certain circumstances, the issuance of Preferred
Stock could adversely affect the voting power of the holders of
the Common Stock. Although the board of directors is required to
make any determination to issue such stock based on its judgment
as to the best interests of RAI's stockholders, the board of
directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a
majority, of the stockholders might believe to be in their best
interests, or in which stockholders might receive a premium for
their stock over the then market price of such stock. The board
of directors does not at present intend to seek stockholder
approval prior to any issuance of currently authorized capital
stock, unless otherwise required by law or stock exchange rules.
We have no present plans to issue any Preferred Stock.
Voting Rights Control. Each share of authorized Common Stock is
entitled to one vote. Cumulative voting in the election of
directors is not permitted and the holders of a majority of the
number of outstanding shares will be in a position to control the
election of directors, at a general shareholder meeting, and may
elect all of the directors standing for election.
Page 26
Dividend Policy. The Company has never declared or paid a cash
dividend on its Common Stock, nor does it have any present intent
to do so in the near future. It is anticipated that all earnings
will be retained to provide working capital for the
implementation of the business plan, until such time as the
directors shall, in their sole discretion, declare that the
Company's working capital requirements and cash position will
permit a cash distribution to stockholders. Stock dividends may
be declared, from time to time, in the sole discretion of the
board of directors. No such stock dividends have ever been
declared and none are anticipated in the foreseeable future.
Registration Rights. On April 13, 2004, International Imaging
Systems, Inc. approved a spin-off distribution to its beneficial
shareholders of all of the then issued and outstanding RAI common
shares, 3,014,350 shares. The spin-off shares are being
registered as "held" by the Selling Stockholders. We have agreed
to include in this registration statement and prospectus the
described 3,014,350 shares. All of the persons who will receive
the spin-off shares are included in the table contained under the
caption "Selling Stockholders" in this prospectus. The
distribution is to take effect upon the effective date of this
registration statement. None of such persons are required to
sell their shares.
Conflicts of Interest Policies
All future transactions between us and any of our officers and
directors must be on terms no less favorable than could be
obtained from independent third parties. Our bylaws require that
a majority of disinterested directors is required to approve any
proposal in which any of our officers or directors has a
principal or other interest.
Shares Eligible For Future Sale. As of October 15, 2005, we had
- --------------------------------
3,014,350 shares of Common Stock outstanding.
Freely Tradeable Shares After Offering. After the full completion
of this offering, exclusive of any of the exercise of the Class
"A" Warrants, there will be a total of 4,014,350 shares of our
Common Stock that will be tradable without restriction under the
Securities Act. None of the Company's issued and outstanding
shares will be "restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act. All of the common
shares owned by control persons will become eligible for public
sale on the Effective Date of this Registration Statement. In
general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who has beneficially owned
restricted securities shares for at least one year, including
persons who may be deemed our "affiliates," as that term is
defined under the Securities Act, would be entitled to sell their
respective stock within any three month period, if the number of
shares does not exceed the greater of 1% of the then outstanding
shares or the average weekly trading volume of shares during the
four calendar weeks preceding such sale. Sales under Rule 144 are
subject to certain manner-of-sale provisions, notice requirements
and the availability of current public information about the
Company. A person who has not been our affiliate at any time
during the three months preceding a sale, and who has
beneficially owned his shares for at least two years, would be
entitled under Rule 144(k) to sell such shares without regard to
any volume limitations under Rule 144. The sale, or availability
for sale, of substantial amounts of restricted stock issued in
the future could, in the further future, adversely affect the
market price of the Common Stock and could impair our ability to
raise additional capital through the sale of our equity
securities or through debt financing. The future availability of
Rule 144 to holders of such restricted securities would be
conditioned on, among other factors, the availability of certain
public information concerning the Company.
Transfer Agent. The transfer agent for our Common Stock is
Corporate Stock Transfer in Denver, Colorado, and their telephone
number is (303) 282-4800. Their Internet website is available to
all of our shareholders at www.corporatestock.com. While we will
act as our own transfer (Warrant Agent) for the redeemable
Warrants comprising the Units being offered, all issuance and
transfer of the common shares that may be issued on the exercise
Page 27
of the Warrants will be effected by our transfer agent.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel was hired on a contingent basis to receive a
direct or indirect interest in our business that is valued at
greater than $50,000. Thomas W. Klash, Certified Public
Accountant, has reviewed or audited the financial statements
included in this prospectus to the extent and for the periods
indicated in his reports thereon.
Changes In And Disagreements With Accountants On Accounting And
Financial Disclosure
The reports of Thomas W. Klash, CPA on Renewable Assets, Inc.'s
financial statements for the fiscal years ended December 31, 2003
and 2004 did not contain an adverse opinion or disclaimer of
opinion, nor were they modified as to uncertainty, audit scope
or accounting principles, however the report were modified
to include an explanatory paragraph in which the Auditor
expressed substantial doubt about our ability to continue as a
going concern.
During the years ended December 31, 2003 and 2004, and through
the nine months ended September 30, 2005, there were no
disagreements with Thomas W. Klash, CPA on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved
to satisfaction of Thomas W. Klash, CPA, would have caused him to
make reference to the subject matter of such disagreements in
connection with his report on our financial statements for those
years.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
We are authorized in our Certificate of Incorporation and our By-
Laws to indemnify our officers and directors to the fullest
extent allowed under the provisions of the Delaware General
Corporation Law for claims brought against such persons in their
capacity as officers and or directors. We may hold harmless each
person who serves at any time as a director or officer from and
against any and all claims, judgments and liabilities to which
such person shall become subject by reason of the fact that he is
or was a director or officer, and may reimburse such person for
all legal and other expenses reasonably incurred by him or her in
connection with any such claim or liability. We also have the
power to defend such person from all suits or claims in accord
with the Delaware Statutes. The rights accruing to any person
under our by-laws and Certificate of Incorporation do not exclude
any other right to which any such person may lawfully be
entitled, and we may indemnify or reimburse such person in any
proper case, even though not specifically provided for by the
bylaws and Certificate of Incorporation. Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
LEGAL MATTERS
Eugene Michael Kennedy, Esq. of the Law Office of Eugene Michael
Kennedy, P.A., has rendered an opinion with respect to the
validity of the shares of Common Stock covered by this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the
Commission) a registration statement on Form SB-2 under the
Securities Act for the Common Stock and the detachable Class "A"
Common Stock Purchase Warrants comprising the Units offered under
this prospectus. We are subject to the informational requirements
Page 28
of the Exchange Act, and file reports, proxy statements and other
information with the Commission. These reports, proxy statements
and other information filed by Renewable Assets, Inc. can be
inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional office at CitiCorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
these materials can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web
site that contains reports, proxy statements, information
statements and other information concerning Renewable Assets,
Inc. at the site located at www.sec.gov. This prospectus does not
contain all the information in the Registration Statement and its
exhibits, which we have filed with the Commission under the
Securities Act and to which reference is made.
Page 29
INDEX TO FINANCIAL STATEMENTS
The following financial statements required by Item 310 of
Regulation S-B are furnished below:
As of September 30, 2005:
- ------------------------ Page
REPORT ON REVIEW BY INDEPENDENT ACOUNTANT 33
FINANCIAL STATEMENTS
Unaudited Balance Sheets 34
Unaudited Statements of Operations 35
Unaudited Statements of Cash Flows 36
Notes to Financial Statements 37 - 40
As of December 31, 2004:
- -----------------------
INDEPENDENT AUDITOR'S REPORT 43
FINANCIAL STATEMENTS
Balance Sheet 44
Statement of Operations 45
Statement of Shareholder's Equity 46
Statement of Cash Flows 47
Notes to Financial Statements 48 - 50
As of December 31, 2003:
- -----------------------
INDEPENDENT AUDITOR'S REPORT 53
FINANCIAL STATEMENTS
Balance Sheet 54
Statement of Operations 55
Statement of Shareholder's Equity 56
Statement of Cash Flows 57
Notes to Financial Statements 58 - 60
Page 30
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
UNAUDITED
SEPTEMBER 30, 2005
Page 31
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
TABLE OF CONTENTS
Report on Review by Independent Accountant 1
Balance Sheet 2
Statements of Operations 3
Statements of Cash Flows 4
Notes to Financial Statements 5-8
Page 32
REPORT ON REVIEW BY INDEPENDENT ACCOUNTANT
Board of Directors
Renewable Assets, Inc.
Successor to A.M.S. Marketing, Inc. - Photocopier Division
(A Development Stage Company)
Boca Raton, Florida
I have reviewed the accompanying balance sheet of Renewable
Assets, Inc., Successor to A.M.S. Marketing, Inc. - Photocopier
Division (A Development Stage Company) as of September 30, 2005,
and the related statements of operations and cash flows for the
three month and nine month periods ended September 30, 2005 and
2004. These interim financial statements are the responsibility
of the company's management.
I conducted my review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures and making inquiries of persons responsible
for financial and accounting matters. It is substantially less
in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications
that should be made to the accompanying interim financial
statements for them to be in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note E to the financial statements, the photocopier division
of A.M.S. Marketing, Inc. has sustained recurring operating
losses and has minimal assets. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed
in Note E. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
November 2, 2005
- 1 -
Page 33
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 2005
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 9,124
Commission Receivable 4,400
---------
TOTAL CURRENT ASSETS $ 13,524
=========
LIABILITIES AND SHAREHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts Payable $ 1,526
---------
TOTAL CURRENT LIABILITIES 1,526
DUE TO PARENT 53,700
---------
TOTAL LIABILITIES 55,226
---------
SHAREHOLDER'S DEFICIENCY:
Preferred Stock, $.001 Par Value -
1,000,000 Shares Authorized -
-0- Shares Issued and Outstanding --
Common Stock, $.001 Par Value -
29,000,000 Shares Authorized -
3,014,350 Shares Issued and Outstanding 3,014
Accumulated Deficit - Development Stage (44,716)
---------
TOTAL SHAREHOLDER'S DEFICIENCY (41,702)
---------
TOTAL LIABILITIES AND SHAREHOLDER'S DEFICIENCY $ 13,524
=========
See accompanying notes to financial statements.
- 2 -
Page 34
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
CUMULATIVE
NINE MONTHS ENDED THREE MONTHS ENDED DEVELOPMENT
SEPTEMBER 30 SEPTEMBER 30 STAGE
------------------------- ---------------------------------
2005 2004 2005 2004 AMOUNTS
---------- ---------- ---------- ---------- ----------
COMMISSION REVENUES $ 15,870 $ 5,760 $ 4,400 $ 2,000 $ 69,925
GENERAL AND ADMINISTRATIVE
EXPENSES 63,284 3,025 54,268 1,120 210,715
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE
INCOME TAXES (47,414) 2,735 (49,868) 880 (140,790)
PROVISION (CREDIT) FOR
INCOME TAXES -- 410 (315) 132 476
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (47,414) $ 2,325 $ (49,553) $ 748 $ (141,266)
=========== ========== ========== ========== ==========
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE $ (.016) $ .001 $ (.016) $ .000 $ (.047)
=========== ========== =========== ========== ==========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 3,014,350 3,014,350 3,014,350 3,014,350 3,014,350
========== ========= ========= ========= =========
See accompanying notes to financial statements.
- 3 -
Page 35
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
CUMULATIVE
DEVELOPMENT
STAGE
2005 2004 AMOUNTS
---------- ---------- ----------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ (47,414) $ 2,325 $ (141,266)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
(Used In) Operating Activities:
Commission Receivable (3,200) (2,000) (4,400)
Accounts Payable 1,226 500 1,526
Income Taxes Payable (476) 410 --
Officer Compensation Paid by
Issuance of Common Stock
of Parent Company 48,000 -- 48,000
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (1,864) 1,235 (96,140)
---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Borrowings 5,700 -- 33,200
Repayment of Borrowings -- -- (27,500)
Issuance of Common Stock -- 3,014 99,564
---------- ---------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 5,700 3,014 105,264
---------- ---------- ----------
NET INCREASE IN CASH 3,836 4,249 9,124
CASH - Beginning of Period 5,288 -- --
---------- ---------- ----------
CASH - End of Period $ 9,124 $ 4,249 $ 9,124
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
- -----------------------------------
The Company made payments for income taxes of $476.
No interest payments were made.
See accompanying notes to financial statements.
- 4 -
Page 36
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Nature of Operations:
A.M.S. Marketing, Inc. ("AMS") was incorporated in
the state of Delaware on July 23, 1998.
On July 21, 2003, "AMS" acquired 100% ownership of
Advanced Imaging Systems, LLC ("AIS"), a privately
owned Delaware entity in exchange for 1,200,000
shares of its previously unissued common stock.
Prior to the execution of the exchange agreement, the
members (owners) of "AIS" purchased a controlling
interest in "AMS" from an existing "AMS" shareholder.
As a result of the foregoing transactions, the
previous owners of "AIS" became the 81.96% owners of
"AMS". For accounting purposes, "AIS" is considered
to be the acquirer and "AMS" the acquired entity.
The business combination was accounted for as a
reorganization of entities under common control. No
fair value adjustments resulted from the
reorganization.
Prior to the merger, the Company's ("AMS") principal
business was the brokerage of pre-owned name brand
copy machines from a facility located in Pompano
Beach, Florida.
In October, 2003, A.M.S. Marketing, Inc. changed its
name to International Imaging Systems, Inc. ("IIS").
On December 12, 2003, "IIS" formed Renewable Assets,
Inc., a wholly-owned subsidiary, to operate the
photocopier division.
On April 13, 2004, the Board of Directors approved a
plan to spin off the Company's photocopy division
(Renewable Assets, Inc.)
3,014,350 shares of $.001 par value common stock will
be issued to existing shareholders of International
Imaging Systems, Inc. in connection with the spin-off
upon approval of the transaction by the Securities
and Exchange Commission.
- 5 -
Page 37
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued -
Basis of Presentation:
The financial statements include the accounts of the
predecessor Company's photocopier division. The
historical accumulated deficit was eliminated as a
result of the reorganization.
Development Stage:
The Company's management is in the process of raising
working capital, developing a new business plan and
exploring various business opportunities.
Accordingly, the Company is classified as a
development stage company.
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 items included in
the financial statements. Actual results could
differ from those estimates.
Financial Instruments:
The carrying values of accounts receivable and
accounts payable approximate fair value at September
30, 2005.
Commission Receivable:
The commission receivable is considered to be fully
collectible as of September 30, 2005.
Commission Revenues:
The Company recognizes commission revenues as an
agent for a principal. As such, commissions are
recorded at a fixed rate after the machines are
accepted by the ultimate purchaser. The Company
locates buyers but does not take possession of, or
ship the machines. Selling prices of the machines
are determined by the principal, and not the Company.
Collection of the sales price and customer returns
are the responsibility of the principal.
- 6 -
Page 38
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued -
Advertising:
Advertising costs are expensed as incurred.
Earnings or (Loss) Per Common Share:
Basic and diluted earnings per common share is
calculated by dividing net income or loss by the
weighted average number of common shares outstanding
during the period. Shares issued are considered to
be outstanding for all periods presented.
NOTE B - CONCENTRATION OF RISK -
Substantially all of the division's revenues are derived
from the sale of pre-owned, refurbished photocopy
machines through a marketing arrangement with one
company. Termination of the marketing arrangement would
have a material adverse effect upon the business.
NOTE C - RELATED PARTY TRANSACTIONS -
On August 22, 2005, the Company's president received
160,000 common shares of the parent company
(International Imaging Systems, Inc.) for services
rendered. The accompanying financial statements include
$48,000 compensation expense based upon the fair value
of the shares.
The Company received a $5,700 working capital advance
from the shareholder (parent company) during 2005.
Commission expense of $940 was paid to the Company's
president during 2004.
- 7 -
Page 39
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(UNAUDITED)
NOTE D - STOCK OPTION PLAN -
The Company's 2005 Stock Option Plan (the "Plan") was
adopted by the Board of Directors and approved by
shareholders on September 15, 2005. The "Plan" provides
for the granting of stock options to employees,
directors, and consultants.
Certain awards are intended to qualify as "incentive
stock options" within the meaning of Section 422 of the
Internal Revenue Code (the "Code"). Other awards
granted under the "Plan" are not intended to qualify as
incentive stock options under the "Code".
The total number of shares of the Company's stock that
may be issued under the "Plan" may not exceed 2,000,000.
The purchase price, exercise date, and expiration date
of options to be issued will be set at the time of grant
by management.
As of September 30, 2005, no stock options were granted
under the "Plan".
NOTE E - GOING CONCERN UNCERTAINTY -
The photocopier division has sustained recurring
operating losses in prior years and has minimal assets.
These factors raise substantial doubt as to the
business's ability to continue as a going concern.
Management's plans regarding this uncertainty are to
raise additional working capital through the
implementation of a successful business plan.
- 8 -
Page 40
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 2004
Page 41
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Independent Auditor's Report 1
Balance Sheet 2
Statements of Operations 3
Statements of Shareholder's Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-8
Page 42
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Renewable Assets, Inc.
Successor to A.M.S. Marketing, Inc. - Photocopier Division
(A Development Stage Company)
Boca Raton, Florida
I have audited the accompanying balance sheet of Renewable
Assets, Inc., Successor to A.M.S. Marketing, Inc. - Photocopier
Division (A Development Stage Company) as of December 31, 2004,
and the related statements of operations, shareholder's equity
and cash flows for the years ended December 31, 2004 and 2003.
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 audits.
I conducted my audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that I plan and perform the audits 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 audits provided 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
Renewable Assets, Inc., Successor to A.M.S. Marketing, Inc. -
Photocopier Division as of December 31, 2004, and the results of
operations and its cash flows for each of the years ended
December 31, 2004 and 2003 in conformity with generally accepted
accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note D to the financial statements, the photocopy division of
A.M.S. Marketing, Inc. has sustained recurring operating losses
and has minimal assets. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described
in Note D. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
February 15, 2005
- 1 -
Page 43
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 2004
ASSETS
CURRENT ASSETS:
Cash $ 5,288
Accounts Receivable 1,200
-------
TOTAL CURRENT ASSETS $ 6,488
=======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 300
Income Taxes Payable 476
-------
TOTAL CURRENT LIABILITIES 776
-------
SHAREHOLDER'S EQUITY:
Preferred Stock, $.001 Par Value -
1,000,000 Shares Authorized -
-0- Shares Issued and Outstanding
Common Stock, $.001 Par Value -
29,000,000 Shares Authorized -
3,014,350 Shares Issued and Outstanding 3,014
Retained Earnings - Development Stage 2,698
-------
TOTAL SHAREHOLDER'S EQUITY 5,712
-------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 6,488
=======
See accompanying notes to financial statements.
- 2 -
Page 44
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2004 AND 2003
AND FROM JULY 23, 1998 (INCEPTION) TO DECEMBER 31, 2004
CUMULATIVE
DEVELOPMENT
2004 2003 STAGE AMOUNTS
--------- --------- --------------
COMMISSION REVENUES $ 6,960 $ 4,500 $ 54,055
GENERAL AND ADMINISTRATIVE
EXPENSES 3,786 8,068 147,431
--------- --------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 3,174 (3,568) (93,376)
PROVISION FOR INCOME TAXES 476 -- 476
--------- --------- ----------
NET INCOME (LOSS) $ 2,698 $ (3,568) $ (93,852)
========= ========= ==========
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE $ .001 $ (.001) $ (.003)
========= ========= ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,014,350 3,014,350 3,014,350
========= ========= ==========
See accompanying notes to financial statements.
- 3 -
Page 45
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 2004 AND 2003
RETAINED
EARNINGS
OR
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING
$.001 PAR VALUE PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
--------- ---------- ---------- ------------ ----------
BALANCE - December 31, 2002 4,656,200 $ 4,656 $ 91,894 $ (92,982) $ 3,568
ISSUANCE OF COMMON STOCK
IN CONNECTION WITH
MERGER 1,200,000 1,200 (1,200) -- --
NET (LOSS) FOR PERIOD -- -- -- (3,568) (3,568)
RECLASSIFICATION OF EQUITY
RESULTING FROM
REORGANIZATION (5,856,200) (5,856) (90,694) 96,550 --
ISSUANCE OF COMMON STOCK 3,014,350 -- -- -- --
--------- ---------- ---------- ----------- ----------
BALANCE - December 31, 2003 3,014,350 -- -- -- --
PROCEEDS FROM ISSUANCE
OF COMMON STOCK -- 3,014 -- -- 3,014
NET INCOME FOR PERIOD -- -- -- 2,698 2,698
--------- ---------- ---------- ----------- ----------
BALANCE - December 31, 2004 3,014,350 $ 3,014 $ -- $ 2,698 $ 5,712
========= ========== ========== =========== ==========
See accompanying notes to financial statements.
- 4 -
Page 46
RENEWABLE ASSETS, INC.
SUCCESSOR TOA.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004 AND 2003
AND FROM JULY 23, 1998 (INCEPTION) TO DECEMBER 31, 2004
CUMULATIVE
DEVELOPMENT
2004 2003 STAGE AMOUNTS
--------- --------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income or (Loss) $ 2,698 $ (3,568) $ (93,852)
Adjustments to Reconcile Net
Income (Loss) to Net Cash Provided
by (Used in) Operating Activities:
Accounts Receivable (1,200) -- (1,200)
Accounts Payable 300 -- 300
Income Taxes Payable 476 -- 476
--------- --------- ----------
NET CASH (USED IN) OPERATING
ACTIVITIES 2,274 (3,568) (94,276)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 3,014 -- 99,564
Proceeds from Borrowings - Shareholder -- -- 27,500
Repayment of Borrowings - Shareholder -- -- (27,500)
--------- --------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 3,014 -- 99,564
--------- --------- ----------
NET INCREASE (DECREASE) IN CASH 5,288 (3,568) 5,288
CASH - Beginning of Period -- 3,568 --
--------- --------- ----------
CASH - End of Period $ 5,288 $ -- $ 5,288
========= ========= ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
- ----------------------------------
The Company made no payments for
interest or income taxes.
See accompanying notes to financial statements.
- 5 -
Page 47
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Nature of Operations:
A.M.S. Marketing, Inc. ("AMS" or the Company) was
incorporated in the state of Delaware on July 23,
1998.
On July 21, 2003, "AMS" acquired 100% ownership of
Advanced Imaging Systems, LLC ("AIS"), a privately
owned Delaware entity in exchange for 1,200,000
shares of its previously unissued common stock.
Prior to the execution of the exchange agreement, the
members (owners) of "AIS" purchased a controlling
interest in "AMS" from an existing "AMS" shareholder.
As a result of the foregoing transactions, the
previous owners of "AIS" became the 81.96% owners of
"AMS". For accounting purposes, "AIS" is considered
to be the acquirer and "AMS" the acquired entity.
The business combination was accounted for as a
reorganization of entities under common control. No
fair value adjustments resulted from the
reorganization.
Prior to the merger, the Company's ("AMS") principal
business was the brokerage of pre-owned name brand
copy machines from a facility located in Pompano
Beach, Florida.
In October, 2003, A.M.S. Marketing, Inc. filed a
Certificate of Amendment to change its name to
International Imaging Systems, Inc. ("IIS").
On December 12, 2003, "IIS" formed Renewable Assets,
Inc., a wholly-owned subsidiary, to operate the
photocopier division.
On April 13, 2004, the Board of Directors approved a
plan to spin off the Company's photocopy division
(Renewable Assets, Inc.)
3,014,350 shares of $.001 par value common stock will
be issued to existing shareholders of International
Imaging Systems, Inc. in connection with the spin-off
upon approval of the transaction by the Securities
and Exchange Commission.
- 6 -
Page 48
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued -
Basis of Presentation:
The financial statements include the accounts of the
predecessor Company's photocopier division. The
historical accumulated deficit was eliminated as a
result of the reorganization.
Development Stage:
The Company's management is in the process of raising
working capital, developing a new business plan and
exploring various business opportunities.
Accordingly, the Company is classified as a
development stage company.
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 items included in
the financial statements. Actual results could
differ from those estimates.
Financial Instruments:
The carrying values of accounts receivable and
accounts payable approximate fair value at December
31, 2004.
Accounts Receivable:
Accounts receivable are stated at net realizable
value. All accounts are considered to be fully
collectible as of December 31, 2004.
Commission Revenues:
In connection with the Company's revenue recognition
policy, the Company recognizes commission revenues as
an agent for a principal. As such, commissions are
recorded pursuant to a predetermined fixed rate, and
after the machines are accepted by the ultimate
purchaser. The Company locates buyers and is not
obligated to take possession of, or fulfill the
shipment of the machines sold. Selling prices of the
machines sold are determined by the principal, and
not the Company. Collection of the sales price and
customer returns are the responsibility of the
principal.
- 7 -
Page 49
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued -
Advertising:
Advertising costs are expensed as incurred.
Earnings or (Loss) Per Common Share:
Basic and diluted earnings per common share is
calculated by dividing net income or loss by the
weighted average number of common shares outstanding
during the period. Shares issued are considered to
be outstanding for all periods presented.
NOTE B - CONCENTRATION OF RISK -
Substantially all of the division's revenues are derived
from the sale of pre-owned, refurbished photocopy
machines through a marketing arrangement with one
company. Termination of the marketing arrangement would
have a material adverse effect upon the business.
NOTE C - RELATED PARTY TRANSACTIONS -
Commission expense of $1,740 was paid to the Company's
president during 2004.
NOTE D - GOING CONCERN UNCERTAINTY -
The photocopier division has sustained recurring
operating losses in prior years and has minimal assets.
These factors raise substantial doubt as to the
business's ability to continue as a going concern.
Management's plans regarding this uncertainty are to
raise additional working capital through the
implementation of a successful business plan.
- 8 -
Page 50
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 2003
Page 51
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Independent Auditor's Report 1
Balance Sheet 2
Statements of Operations 3
Statement of Shareholder's Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-8
Page 52
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Renewable Assets, Inc.
Successor to A.M.S. Marketing, Inc. - Photocopier Division
(A Development Stage Company)
Boca Raton, Florida
I have audited the accompanying balance sheet of Renewable
Assets, Inc., Successor to A.M.S. Marketing, Inc. - Photocopier
Division (A Development Stage Company) as of December 31, 2003,
and the related statements of operations, shareholder's equity
and cash flows for the years ended December 31, 2003 and 2002.
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 audits.
I conducted my audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that I plan and perform the audits 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 audits provided 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
Renewable Assets, Inc., Successor to A.M.S. Marketing, Inc. -
Photocopier Division as of December 31, 2003, and the results of
operations and its cash flows for each of the years ended
December 31, 2003 and 2002 in conformity with generally accepted
accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note B to the financial statements, the photocopy division of
A.M.S. Marketing, Inc. has sustained recurring operating losses
and has no assets. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described
in Note B. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
February 15, 2005
- 1 -
Page 53
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 2003
ASSETS
CURRENT ASSETS $ --
--------
TOTAL CURRENT ASSETS $ --
========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES $ --
--------
SHAREHOLDER'S EQUITY:
Preferred Stock, $.001 Par Value -
1,000,000 Shares Authorized -
-0- Shares Issued and Outstanding
Common Stock, $.001 Par Value -
29,000,000 Shares Authorized -
3,014,350 Shares Subscribed --
Deficit Accumulated During Development Stage --
--------
TOTAL SHAREHOLDER'S EQUITY --
--------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ --
========
See accompanying notes to financial statements.
- 2 -
Page 54
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2003 AND 2002
AND FROM JULY 23, 1998 (INCEPTION) TO DECEMBER 31, 2003
CUMULATIVE
DEVELOPMENT
2003 2002 STAGE AMOUNTS
--------- --------- -------------
COMMISSION REVENUES $ 4,500 $ 9,000 $ 47,095
GENERAL AND ADMINISTRATIVE
EXPENSES 8,068 32,140 143,645
--------- --------- ---------
NET (LOSS) $ (3,568) $ (23,140) $ (96,550)
========= ========= =========
BASIC AND DILUTED (LOSS) PER SHARE $ (.001) $ (.007) $ (.032)
========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,014,350 3,014,350 3,014,350
========= ========= =========
See accompanying notes to financial statements.
- 3 -
Page 55
RENEWABLE ASSETS, INC.
SUCCESSOR TO A.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 2003 AND 2002
DEFICIT
COMMON STOCK ACCUMULATED
$.001 PAR VALUE ADDITIONAL DURING
--------------------- PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
---------- -------- ----------- ---------- ---------
BALANCE - January 1, 2002 4,613,900 $ 4,613 $ 70,787 $ (69,842) $ 5,558
SALE OF COMMON STOCK 42,300 43 21,107 -- 21,150
NET (LOSS) FOR PERIOD -- -- -- (23,140) (23,140)
--------- -------- --------- ---------- ---------
BALANCE - December 31, 2002 4,656,200 4,656 91,894 (92,982) 3,568
ISSUANCE OF COMMON STOCK
IN CONNECTION WITH MERGER 1,200,000 1,200 (1,200) -- --
NET (LOSS) FOR PERIOD -- -- -- (3,568) (3,568)
RECLASSIFICATION OF EQUITY
RESULTING FROM
REORGANIZATION (5,856,200) (5,856) (90,694) 96,550 --
ISSUANCE OF COMMON STOCK 3,014,350 -- -- -- --
--------- -------- --------- ---------- ---------
BALANCE - December 31, 2003 3,014,350 $ -- $ -- $ -- $ --
========= ======== ========= ========== =========
See accompanying notes to financial statements.
- 4 -
Page 56
RENEWABLE ASSETS, INC.
SUCCESSOR TOA.M.S. MARKETING, INC. - PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003 AND 2002
AND FROM JULY 23, 1998 (INCEPTION) TO DECEMBER 31, 2003
CUMULATIVE
DEVELOPMENT
2003 2002 STAGE AMOUNTS
--------- --------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $ (3,568) $ (23,140) $ (96,550)
Adjustments to Reconcile Net (Loss) to]
Net Cash Used in Operating Activities:
Accounts Receivable (Increase)
Decrease -- 5,884 --
Accounts Payable (Increase) Decrease -- (426) --
--------- --------- ----------
NET CASH (USED IN) OPERATING
ACTIVITIES (3,568) (17,682) (96,550)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock -- 21,150 96,550
Proceeds from Borrowings - Shareholder -- 5,000 27,500
Repayment of Borrowings - Shareholder -- (5,000) (27,500)
--------- --------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES -- 21,150 96,550
--------- --------- ----------
INCREASE (DECREASE) IN CASH (3,568) 3,468 --
CASH - Beginning of Period 3,568 100 --
--------- --------- ----------
CASH - End of Period $ -- $ 3,568 $ --
========= ========= ==========
See accompanying notes to financial statements.
- 5 -
Page 57
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Nature of Operations:
A.M.S. Marketing, Inc. ("AMS" or the Company) was
incorporated in the state of Delaware on July 23,
1998.
On July 21, 2003, "AMS" acquired 100% ownership of
Advanced Imaging Systems, LLC ("AIS"), a privately
owned Delaware entity in exchange for 1,200,000
shares of its previously unissued common stock.
Prior to the execution of the exchange agreement, the
members (owners) of "AIS" purchased a controlling
interest in "AMS" from an existing "AMS" shareholder.
As a result of the foregoing transactions, the
previous owners of "AIS" became the 81.96% owners of
"AMS". For accounting purposes, "AIS" is considered
to be the acquirer and "AMS" the acquired entity.
The business combination is was accounted for as a
reorganization of entities under common control. No
fair value adjustments resulted from the
reorganization.
Prior to the merger, the Company's ("AMS")principal
business was the brokerage of pre-owned name brand
copy machines from a facility located in Pompano
Beach, Florida.
In October, 2003, A.M.S. Marketing, Inc. filed a
Certificate of Amendment to change its name to
International Imaging Systems, Inc. ("IIS").
On December 12, 2003, "IIS" formed Renewable Assets,
Inc., a wholly-owned subsidiary, to operate the
photocopier division. Common shares subscribed to by
the parent company were paid for on June 30, 2004.
On April 13, 2004, the Board of Directors approved a
plan to spin off the Company's photocopy division.
3,014,350 shares of $.001 par value common stock will
be issued to existing "IIS" shareholders in
connection with the spin-off.
- 6 -
Page 58
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued-
Basis of Presentation:
The financial statements include the accounts of the
predecessor Company's photocopier division. The
historical accumulated deficit was eliminated as a
result of the reorganization. The Company's
photocopier division had no sales in the fourth
quarter of 2003.
Development Stage:
The Company's management is in the process of raising
working capital, developing a new business plan and
exploring various business opportunities.
Accordingly, the Company is classified as a
development stage company.
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 items included in
the financial statements. Actual results could
differ from those estimates.
Commission Revenues:
In connection with the Company's revenue recognition
policy, the Company recognizes commission revenues as
an agent for a principal. As such, commissions are
recorded pursuant to a predetermined fixed rate, and
after the machines are accepted by the ultimate
purchaser. The Company locates buyers and is not
obligated to take possession of, or fulfill the
shipment of the machines sold. Selling prices of the
machines sold are determined by the principal, and
not the Company. Collection of the sales price and
customer returns are the responsibility of the
principal.
Advertising:
Advertising costs are expensed as incurred.
(Loss) Per Common Share:
Basic and diluted (loss) per common share is
calculated by dividing net income or loss by the
weighted average number of common shares outstanding
during the period. Shares subscribed are considered
to be outstanding for all periods presented.
- 7 -
Page 59
RENEWABLE ASSETS, INC.
SUCCESSOR TO
A.M.S. MARKETING, INC. PHOTOCOPIER DIVISION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE B - GOING CONCERN UNCERTAINTY -
The photocopier division has sustained recurring
operating losses and has no assets. These factors raise
substantial doubt as to the business's ability to
continue as a going concern. Management's plans
regarding this uncertainty are to raise additional
working capital through the implementation of a
successful business plan.
NOTE C - CONCENTRATION OF RISK -
Substantially all of the division's revenues are derived
from the sale of pre-owned, refurbished photocopy
machines through a marketing arrangement with one
company. Termination of the marketing arrangement would
have a material adverse effect upon the business.
- 8 -
Page 60
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our By-Laws and Certificate of Incorporation provide that we may
indemnify and hold harmless each person who serves at any time as
a director or officer from and against any and all claims,
judgments and liabilities to which such person shall become
subject by reason of the fact that he is or was a director or
officer, and may reimburse such person for all legal and other
expenses reasonably incurred by him or her in connection with any
such claim or liability. We also have the power to defend such
person from all suits or claims in accord with the Delaware
Statutes. The rights accruing to any person under our bylaws and
Certificate of Incorporation do not exclude any other right to
which any such person may lawfully be entitled, and we may
indemnify or reimburse such person in any proper case, even
though not specifically provided for by the bylaws and Articles
of Incorporation. Insofar as indemnification for liabilities for
damages arising under the Securities Act of 1933, (the
"Securities Act") may be permitted to our directors, officers,
and controlling persons pursuant to the foregoing provision, or
otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate that expenses in connection with the distribution
described in this Registration Statement (other than brokerage
commissions, discounts or other expenses relating to the sale of
the shares by the Selling Stockholders) will be as set forth
below. We will pay all of the expenses with respect to the
distribution, and such amounts, with the exception of the U.S.
Securities and Exchange Commission registration fee, are
estimates.
SEC registration fee $ 728.54
Accounting fees and expenses 2,500.00
Legal fees and expenses 20,000.00
Printing expenses 1,200.00
Federal Taxes -0-
State Blue-Sky Registration 2,500.00
Transfer Agent Fees 1,500.00
Miscellaneous 2,500.00
--------------
Total $ 30,928.54
==============
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
From inception on December 12, 2003, as a wholly owned subsidiary
corporation, through October 15, 2005 we issued 3,014,350 shares
of our Common Stock to our parent/founder, International Imaging
Systems, Inc. ("IIS"). All of those shares were issued pursuant
to exemption available under Sections 3 and 4(2) of the
Securities Act, as non-public transactions, effected without the
use of an underwriter or the payment of any commission or fee to
anyone.
Page 61
ITEM 27. EXHIBITS
A. INDEX TO EXHIBITS
(3) Certificate of Incorporation and By-Laws
(4) Instruments defining the rights of security holders,
including indentures.
(5) Opinion of Counsel
(10) Material Contracts
(14) Code of Ethics
(23) Consent of Experts
B. DESCRIPTION OF EXHIBITS
Exhibit No. Description
- ----------- -----------
3.1 Certificate of Incorporation of Renewable Assets,
Inc. - December 12, 2003, as filed July 12, 2005
with our Form 10-KSB and incorporated herein by
reference.
3.3 Bylaws of Renewable Assets, Inc. - December 13,
2003, as filed July 12, 2005 with our Form 10-KSB
and incorporated herein by reference.
4.1 Specimen Stock Certificate - as filed July 12,
2005, with our Form 10-KSB and incorporated
herein by reference.
4.2 Specimen Agreement - Redeemable Class "A" Common
Stock Purchase Warrant - filed herewith.
5.1 Opinion of counsel as to legality of securities
being registered - filed herewith.
10.1 2005 Stock Plan - September 15, 2005 - filed
herewith.
10.2 Marketing Service Agreement - Office Furniture
Warehouse, Inc. Sun Coast Imaging Systems, Inc.
and International Imaging Systems, Inc. dated
December 1, 2003 as filed July 12, 2005 with our
Form 10-KSB and incorporated herein by reference.
10.3 Amendment to the Terms of the Oral Agreement
among Renewable Assets, Inc. and Alfred Schiffrin
- filed herewith.
14.1 Officers' Code of Ethics - filed herewith.
23.1 Independent Auditor's Consents - filed herewith.
23.2 Consent of Counsel (included in Exhibit 5.1)
- filed herewith.
Page 62
ITEM 28. UNDERTAKINGS
A. Rule 415 Offering
We hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933.
(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) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) 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) and (1)(ii)
do not apply if the registration statement is on Form S-
3 or Form S-8, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are
incorporated by reference in this 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.
B. We hereby request the acceleration of the Effective Date
hereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful
Page 63
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Company 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.
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 of filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, in Boca Raton, Florida, on November
3, 2005.
Renewable Assets, Inc.
By:/s/Alfred M. Schiffrin
-------------------------------
Alfred M. Schiffrin
Chief Executive Officer
Chief Financial Officer
Page 64