SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Registration Statement Under the Securities Act of 1933
ASSURE DATA, INC.
(Name of Small Business Issuer in Its Charter)
Nevada 51421 06-1678089
(State of Incorporation) (Primary Standard Industrial) (I.R.S. Employer)
(Classification Code Number) (Identification Number)
2591 Dallas Pkwy Suite 102 Frisco, Texas, 75034 (972) 963-0007
(Address and Telephone Number of Issuer's Principal Executive Offices
and Place of Business)
Robert Lisle
2591 Dallas Pkwy Suite 102 Frisco, Texas, 75034
(972) 963-0007
(Name, Address and Telephone Number of Agent for Service)
Approximate date of proposed sale to the public:
As soon as this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
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,
please check the box. [_]
Calculation of registration fee
Title of class of Amount Proposed Proposed Amount of
securities to be to be registered maximum maximum Registration Fee
registered offering price per aggregate offering
unit price
Common Stock 600,000 $0.50 $300,000 $38.00
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.
Subject to Completion dated December ___, 2004
PROSPECTUS
ASSURE DATA, INC.
600,000 Shares of Common Stock
Price per share: $0.50
Total proceeds to Assure Data, Inc. if maximum sold by us: $300,000
This prospectus relates to 600,000 shares of common stock offered by Assure
Data, Inc., a Nevada corporation.
Because this is our initial public offering, there is no public market for our
shares. However, we hope to have prices for our shares quoted on the
Over-the-Counter Bulletin Board maintained by the National Association of
Securities Dealers, Inc. after we complete our offering.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF OUR SHARES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Public Underwriting Discount Proceeds to Issuer
and Commissions or other Persons
To be sold by the Company:
Per Share $0.50 None $0.50
Total Maximum $300,000 None $300,000
We will sell the shares ourselves and do not plan to use underwriters or pay any
commissions. We will be selling our shares using our best efforts and no one has
agreed to buy any of our shares. There is no minimum amount of shares we must
sell, so no money raised from the sale of our stock will go into escrow, trust
or another similar arrangement. We expect to end our offering on the earlier of
the sale of all of the shares offered by us or 90 days after the date of the
prospectus. The information in this Prospectus is not complete and may be
changed. We may not sell our shares until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell our shares and it is not soliciting an offer to buy our shares in
any state where the offer or sale is not permitted.
______________________, 2004
2
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus. This summary does not contain all of the information that you should
consider before investing in our common stock. You should read the entire
prospectus carefully, including the information under "Risk Factors" and the
financial statements, before making an investment decision.
Risk factors include:
o We are a development stage company
o We may not raise sufficient funds to develop our business
o Competition is intense and we may not be able to compete
o We offer no assurance that our stock will be sold
o We have no underwriters
o We determined the offering price of the shares arbitrarily
o Our independent auditors note that we have generated little
revenue and have an accumulated deficit
o We have no history of profits
o Our success depends greatly on our President and Vice
President
o We have no employment agreement with our President or Vice
President
o Our management will have voting control of the company
o Our two officers are also directors
o Dilution will occur to purchasers of stock
o A large amount of stock could be sold, and depress our stock
price
o We do not expect to pay dividends on our common stock in the
foreseeable future
o There is no public market for our shares and it is possible
one will not develop
The Company
Assure Data, Inc. is a development stage corporation that was formed under the
laws of Nevada, on Nov 18, 2002 and commenced operation in April 2003. Our
principal executive offices are located at 2591 Dallas Parkway, Suite 102
Frisco, Texas, 75034.
Our proposed business is to provide equipment, software and services in
connection with remote data backup of clients business data. Businesses of all
sizes store critical information on workstations and servers on both local and
wide area networks. Loss of this information can cause disruption of business
and in some circumstances force a company out of business. Our process
automatically creates a backup of customer selected computers, directories and
files and makes copies of them on a local server, connected directly to their
network. This information is then transferred, via the Internet, to our remote
location, separate and apart from where their workstations and servers are
located. No human intervention is required. No media, such as tapes, need to be
loaded for use or removed and placed into a secure location, such as a fire
proof safe. Emails are automatically sent to company-selected individuals, as
well as to our personnel, to notify them that the backup process has completed
successfully or failed.
Some of the types of data types that can be backed up are:
o Data Base files such as DB2, Access, SQL and Multi Valued
based systems
o Word processing documents, Microsoft Word and Word Perfect
o Computer Aided Drawings (CAD)
o Image files of any format including jpg, tiff, gif and PDF
o Spread sheet files, such as Excel
o Text files
Our primary activities to date have consisted of organizing our company, and
conducting an initial round of private financing to obtain "seed" capital to
develop the remote backup service. We have purchased and installed the remote
server in a secure facility, monitored twenty-four hours a day. We have
installed our process for six customers.
Through the proceeds raised from this offering and our prior private placement
of stock, we expect to be able to expand our development and marketing
endeavors. See "Use of Proceeds"
Additionally a web site www.assuredata.com has been created and is currently on
line. The information contained on our web site does not constitute a part of
this prospectus and is not incorporated by reference into this prospectus.
3
Securities Offered
We are offering up to a maximum of 600,000 shares of common stock, at $0.50 per
share, for total gross offering proceeds of $300,000, assuming the maximum
amount is sold.
Shares of common stock outstanding
As of the date of this prospectus:
1,000,000 shares
Shares of common stock outstanding
After offering, assuming maximum
Amount sold:
1,600,000 shares
Terms of the offering:
There is no minimum offering. Accordingly, as shares are sold, we will use the
money raised from the sales of shares by Assure Data, Inc. for our activities.
We expect that the offering will remain open until the earlier of the sale of
all of the shares offered by us or 90 days after the date of the prospectus,
unless we decide to cease selling efforts prior to this date.
Use of proceeds:
If we sell all 600,000 shares we are offering, we will receive gross proceeds of
$300,000. We expect to use the net proceeds from the sale of the shares we are
offering, after offering expenses estimated to be $50,000, to continue our
marketing and development of our remote backup software and related services.
Additional monies will be spent on upgrading our current web site.
Plan of distribution:
This is a best efforts offering, with no commitment by anyone to purchase any
shares. The shares offered by us will be offered and sold by our principal
executive officers and directors, who will be considered to be underwriters. The
offering will be made only to accredited investors and only in states in which
there is an exemption for sales to accredited investors.
Shares that may be issued after our initial offering:
You should be aware that we are permitted to issue shares of our common stock in
addition to the common stock to be outstanding after our initial public
offering. If and when we issue these shares the percentage of our common stock
that you own will be diluted. At this time no other issuance has been
authorized.
4
RISK FACTORS
An investment in the shares involves a high degree of risk, including a risk of
loss of an investor's entire investment in Assure Data, Inc. Prospective
investors should consider carefully, in addition to the other information
contained in this prospectus, the following risk factors before purchasing any
shares.
RISKS RELATED TO OUR INDUSTRY
- -----------------------------
A number of other companies in the data backup service industry have failed
because of competition.
Competition in the remote data backup services business is intense, and we may
not be able to compete and survive. New or different technologies may come into
existence and be brought to market by companies larger and more able to market
their services. We expect the competition in this business to increase. If we
fail to attract and retain a customer base, we will not develop significant
revenues or market share. Companies that already have a large customer base for
some other computer based products or services would have a very large advantage
over us should they decide to enter this market.
There is a lack of awareness by potential clients that these types of services
are available.
This is a new market, and so most potential customers do not know that these
types of services exist. Marketing will be a large factor in our success, and so
a large company with greater resources would have an advantage.
Rapid technology changes could occur, and with our limited resources we may not
be able to adapt.
Backup products, services, and technologies are constantly changing. We are
bringing a new remote backup concept to the market. If the technologies that we
use in providing our remote backup services should suddenly change, we could
find ourselves unable to adapt. If a totally new concept were to be brought to
market by some other company, our process may be viewed as "old technology," and
we could lose our customer base, as well as be unable to attract new customers.
Our process uses technologies that are considered in the public domain.
Our process uses technologies that are used by the general public. These
technologies are, to our best knowledge, considered in the public domain. But it
is possible that an individual or company could decide to claim a specific
concept, or process as their intellectual property. They could demand
compensation of some type or amount for the use of that intellectual property.
We have no agreements with any one or any company that give us specific rights
to use any specific technology or intellectual property.
There could be changes in the regulation of the Internet.
In general, existing laws and regulations apply to transactions and other
activity on the Internet; however, the precise applicability of these laws and
regulations to the Internet is sometimes uncertain. The vast majority of such
laws were adopted prior to the advent of the Internet and, as a result; do not
deal with the unique issues of the Internet or electronic commerce.
Nevertheless, numerous federal and state government agencies have already
demonstrated significant activity in promoting consumer protection and enforcing
other regulatory and disclosure statutes on the Internet.
Due to the increasing use of the Internet as a medium for commerce and
communication, it is possible that new laws and regulations may be enacted with
respect to the Internet and electronic commerce covering issues such as user
privacy, freedom of expression, advertising, pricing, content and quality of
products and services, taxation, intellectual property rights and information
security. The adoption of such laws or regulations and the applicability of
existing laws and regulations to the Internet may impair the growth of Internet
use and result in a decline in our sales.
A number of legislative proposals have been made at the federal, state and local
level, and by foreign governments, that would impose additional taxes on the
sale of goods and services over the Internet, and certain states have taken
measures to tax Internet-related activities. Although Congress recently placed a
three- year moratorium on new state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state or local laws were
expressly exempted from this moratorium. Further, once this moratorium is
lifted, some type of federal and/or state taxes may be imposed upon Internet
commerce. Such legislation or other attempts at regulating commerce over the
Internet may substantially impair the growth of commerce on the Internet and, as
a result, adversely affect the opportunity of Assure Data, Inc. to derive
financial benefit from such activities.
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RISKS RELATED TO OUR BUSINESS
- -----------------------------
Because we have a limited operating history, our business is unproven.
We are a development stage company, with no significant history of operations.
Our accumulated deficit though September 30, 2004 is $89,254. We were
incorporated on Nov 18, 2002, commenced operations in April of 2003 and are,
therefore, a start up company with very little operating history or revenues. We
need to receive substantially all of the maximum proceeds of the shares offered
by us in this offering to proceed with our business plan. Should we fail to
raise the required funds, the business will need to expand more slowly, using
its current small cash flow, from its current six customers.
Limited capital reserves could cause us to fail.
Even if we sell all of the shares offered, we may not have significant funds to
conduct business. We are only seeking to raise $300,000. As a result, we will
still be considered an extremely small company, even if we sell all of the stock
we are trying to sell. Because we will have so little money, any negative
financial event could totally deplete any reserve we had hoped to have.
We may not become a going concern.
Our independent certified public accountants have included a going concern
paragraph in their opinion that notes that we have generated little revenue,
have an accumulated deficit and have limited working capital such that our
ability to continue as a going concern is dependent upon obtaining additional
capital and financing for our business plan. We are conducting this offering to
generate the capital necessary to finance at least our next year's operations.
As a result, our ability to continue as a going concern is dependent upon us
receiving the maximum proceeds of this offering and operating profitably or
raising additional funds.
We have experienced losses since inception.
We have no history of profits and no assurances of profits ever developing. If
only limited funds are raised in this offering, the risk of our financial
failure is high. We have produced limited revenues. We have been primarily
dependent on a private placement of shares of our common stock to sustain our
development activities to date.
Our process could fail due to a software defect, and we might be held liable for
a customer's loss.
Our process is running live on seven customer sites, and has been tested for
over eighteen months. Tests are run daily to make sure that the process is
working correctly. But even with a high level of testing and continued
monitoring our system could fail, and a customer could bring action against us.
Our contract does not guarantee that a customer will never lose their data, but
that may not stop a customer who has incurred a loss from trying to recover the
costs related to the loss of their data.
We face a likely business failure if we lose the services of our key personnel.
Our success will depend greatly upon our President and Vice-President. Robert
Lisle serves as President, Treasurer and Director. Max Kipness serves as
Vice-President, Secretary and Director. The loss of either of their services may
hamper our ability to implement our business plan, and could cause our stock to
become worthless. We will be heavily dependent upon Mr. Lisle's entrepreneurial
skills and experience to implement our business plan and Mr. Kipness' technical
expertise to continue the development of the services we provide. Their
inability to devote full time and attention to the affairs of Assure Data, Inc.
could hinder our growth. We do not have an employment agreement with either
Robert Lisle or Max Kipness and there is no assurance that either will continue
to manage our affairs in the future. We could lose the services of both parties,
or they could decide to join a competitor or otherwise compete with us directly
or indirectly, having a negative affect on our business and potentially causing
the price of our stock to be worthless. The services of either Bob Lisle or Max
Kipness would be difficult to replace.
Control of the company will continue to be held by two officers who are also
directors.
Our management will have voting control of us, even if all of the shares offered
are sold. Our management, inclusive of our board of directors, own 533,334
shares of our outstanding common stock. After completion of this offering,
assuming all of the shares offered hereby are sold, our management will continue
to beneficially own at least 33% of our voting securities, without giving effect
to (i) any stock option plan that could be adopted by our board of directors or
(ii) any additional issuances of our common stock or other securities to
management and/or others, in our board's sole discretion. As a result, our
management will effectively control our affairs, including the election of all
of our board of directors, the issuance of additional shares of common stock for
a stock option plan or otherwise, the distribution and timing of dividends, if
any, and all other matters.
6
The compensation of our officers will be determined at the discretion of the
board of directors.
The two officers Robert Lisle and Max Kipness are also directors. As a result,
as directors they will be entitled to establish the amount of their
compensation, including the amount of any bonuses paid to them. In addition,
because we do not have any independent directors, there will be no oversight of
the reasonableness of any bonuses paid to Robert Lisle, Max Kipness or other
officers, if added.
Three shareholders effectively control the board of directors and the company.
Robert Lisle and Max Kipness, our principal executive officers, hold 533,334
restricted shares for which the one year holding period expired on May 30 2004,
and which will be available for resale under Rule 144 90 days after we become a
reporting company. Patrica Gunter currently holds 266,666 shares of restricted
shares for which the one year holding period expired on May 30 2004. These three
individuals control the board of directors and the company. An additional
200,000 restricted shares have a one year holding period expiring by September
30 2004. In addition, all of our other Shareholder shares of common stock will
also be eligible to use Rule 144 after expiration of their respective holding
periods. A sale of shares by such security holders, whether pursuant to Rule 144
or otherwise, may have a depressing effect upon the price of our common stock in
any market that might develop.
Shareholders may have no way to recoup any if their investment.
We do not expect to pay dividends on our common stock in the foreseeable future.
We intend for the foreseeable future to retain earnings, if any, for the future
operation and expansion of our business and do not anticipate paying dividends
on our shares of common stock for the foreseeable future.
We expect additional losses.
Our current income is insufficient to allow us to rapidly expand the business
without additional funding. Because we need to add full time staff and start a
full time marketing program we will continue to have additional losses for the
next 12 to 18 months.
We need to grow our customer base.
We must expand our customer base. Our marketing must reach our potential
customer base in large numbers and educate the people responsible for the safety
and recoverability of the customers' data. If we fail to attract a significant
number of customers, we will not be able to grow the company as planned.
We lack staff
We currently lack full time staff. We need both marketing and technology staff
to move forward with our business plan. In addition, we need administrative
staff to handle the day to day office work, and allow the marketing and
technical to focus on their respective areas of responsibility.
RISKS RELATED TO OUR STOCK
- --------------------------
Received funds are not being placed in escrow, and can be used immediately.
Because this is a "best efforts" offering, we offer no assurances that any of
our stock will be sold. This offering is being conducted on a "best efforts"
basis and as such, no assurances are given as to what level of proceeds, if any,
will be obtained from the sale of shares offered by us. In the event we fail to
obtain all or substantially all of the proceeds sought from the sales of shares
by us in this offering, our ability to implement our business plan will be
materially and adversely affected, and investors may lose all or substantially
all of their investment. We can provide no assurances that the subscription
proceeds that may be received by us will be sufficient to sustain our operations
prior to our anticipated receipt of revenues from customers. Because this is a
"best efforts", no minimum offering and because we are not using an escrow
agent, we will be able to use any funds received in this offering as soon as we
receive the funds. Accordingly, even if we sell only a nominal amount of shares
in this offering, we will be able to use those funds and the funds will not be
returned to the investor or investors. In this event, and if we are unable to
raise funds from another source the investor or investors who purchased the
nominal amount of shares would likely lose their entire investment because we
would have insufficient funds to generate sustainable cash flow from operations.
If we receive less than the maximum amount of the offer we will have fewer funds
to meet our business objectives and fewer shares will be available for the
trading market and float.
No underwriters are involved in this offering.
We have no underwriters so no other party with a financial interest has reviewed
this offering for fairness. We are offering these shares through our directors
and officers and are not using an underwriter. As a result, no other person
sophisticated in financial affairs has reviewed this offering to determine if it
is fair or if our business plan makes financial sense.
7
The offering price was established arbitrarily.
We determined the offering price for these shares arbitrarily, so the market
price may be much lower. We chose the offering price for these shares without
basing the price on our assets, book value, net worth or any other recognized
criteria of value. If a public market for our common stock ever does develop,
the value of our securities could be substantially less than the $0.50 per share
offering price. This could result in an immediate and significant per-share
reduction in the value of your investment.
Shareholders will face inevitable dilution.
Because the price at which the shares are offered is higher than our current per
share value, immediate dilution of value of our stock will occur. We are
authorized to issue a substantial number of shares of common stock in addition
to the shares comprising the shares offered hereby. This offering itself
involves immediate and substantial dilution to investors. Any securities issued
in the future, including issuances to management, could reduce the proportionate
ownership, economic interests and voting rights of any holders of shares of our
common stock purchased in this offering.
Stock prices could be depressed if a large amount of stock is sold.
Because we have issued shares that may become eligible for resale under Rule
144, a large amount of our stock could be sold, potentially depressing our stock
price. Presently 1,000,000 outstanding shares of common stock are "restricted
securities" as defined under Rule 144 promulgated under the Securities Act and
may only be sold pursuant thereto or otherwise pursuant to an effective
registration statement or an exemption from registration, if available. Rule
144, as amended, generally provides that a person who has satisfied a one year
holding period for such restricted securities may sell, within any three-month
period (provided we are current in our reporting obligations under the Exchange
Act) subject to certain manner of resale provisions, an amount of restricted
securities which does not exceed the greater of 1% of a company's outstanding
common stock.
Selling shares of the stock could be difficult.
There is no public market for our shares and should be considered an illiquid
investment. There is currently no market for any of our shares and no assurances
are given that a public market for such securities will develop or be sustained
if developed. While we plan, in connection with this offering, to take
affirmative steps to request or encourage one or more broker/dealers to act as a
market maker for our securities, no such efforts have yet been undertaken and no
assurances are given that any such efforts will prove successful. As such,
investors may not be able to readily dispose of any shares purchased hereby.
We may not remain a reporting company.
If we fail to develop a customer base that will sustain the growth of the
company, we may choose to not remain a reporting company after one year.
Our stock will be subject to the penny stock regulations.
Because our stock will be subject to the penny stock regulations and may be more
difficult to sell than other registered stock. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by certain penny
stock rules adopted by the Securities and Exchange Commission. Penny stocks
generally are equity securities with a price of less than $5.00. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a risk disclosure document that
provides information about penny stocks and the risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules generally require that prior to a transaction in a penny
stock, the broker-dealer make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
stock that becomes subject to the penny stock rules. As our shares immediately
following this offering will be subject to these penny stock rules, investors in
this offering will in all likelihood find it more difficult to sell their
securities.
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SPECIAL NOTE REGUARDING FORWARD-LOOKING STATEMENTS
--------------------------------------------------
Some of the statements under "Prospectus Summary", "Risk Factors", "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
"Business", and elsewhere in this prospectus constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties, and
other factors that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential", "continue" or the negative of these terms or other comparable
terminology. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
USE OF PROCEEDS
---------------
Our net proceeds from this offering will vary depending upon the total number of
shares sold by us. Regardless of the number of shares sold, we expect to incur
offering expenses estimated at approximately $50,000 for legal, accounting,
printing and other costs in connection with the offering. In order to have funds
available to move forward with our business plan, we have to complete a minimum
of 50% of the offering, or $150,000. We wish to remind investors that there is
no guarantee that we will fully complete this offering or obtain this minimum
amount, and that the actual proceeds we receive from the offering could be
substantially less than $300,000. Our receipt of no or nominal proceeds will
have a material adverse effect upon our investors and us.
The table below shows how proceeds from this offering would be used for
scenarios where we sell various amounts of the shares and the priority of the
use of net proceeds in the event actual proceeds are not sufficient to
accomplish the uses set forth. While management has developed the following
estimates to the best of its ability, there can be no assurance that we will
spend the use of proceeds exactly as laid out in the table.
Total shares offered by us 600,000 600,000 600,000
Percent of total shares offered 50% 75% 100%
Shares sold 300,000 450,000 600,000
Gross proceeds from offering $150,000 $225,000 $300,000
Less: offering expenses 50,000 50,000 50,000
-------- -------- --------
Net proceeds from offering 100,000 175,000 250,000
Use of net proceeds
Marketing expenses 7,500 10,000 12,500
Upgrade of website 10,000 10,000 10,000
Operating expenses &
working capital 82,500 155,000 227,500
Because we are selling the shares strictly through the efforts of our officers,
the above numbers do not include any deductions for selling commissions. In the
event we receive the maximum proceeds of $300,000, our management believes that
the net proceeds, together with proceeds from our prior private placement and
current revenue stream, will provide us with sufficient funds to meet our cash
requirements for approximately eighteen (18) months following the receipt of
this maximum amount.
We have not yet determined the amount of net proceeds to be used specifically
for any of the foregoing purposes. Accordingly, management will have significant
flexibility in applying the net proceeds of the offering. Proceeds not
immediately required for the foregoing purposes will be invested principally in
federal and/or state government securities, short-term certificates of deposit,
money market funds or other short term interest-bearing investments.
9
DETERMINATION OF OFFERING PRICE
-------------------------------
Prior to this offering, there has been no established public market for the
shares of our common stock. As a result, the offering price and other terms and
conditions relative to the shares of common stock offered hereby have been
arbitrarily determined by us and do not bear any relationship to assets,
earnings, book value, net worth, actual results of operations, or any other
established objective investment criteria. There is no relationship between the
offering price of the common stock and our assets, earnings, book value or any
other objective criteria of value. In addition, no investment banker, appraiser
or other independent, third party has been consulted concerning the offering
price for the shares or the fairness of the price for the shares.
DILUTION
At September 30, 2004, we had a net tangible book value of $11,546. The
following table sets forth the dilution to persons purchasing shares in this
offering without taking into account any changes in our net tangible book value,
except the sale of 600,000 shares at the offering price and receipt of $300,000,
less offering expenses estimated to be $50,000. The net tangible book value per
share is determined by subtracting total liabilities from our tangible assets,
then dividing by the total number of shares of common stock outstanding.
September 30, 2004 600,000 shares sold
----------------- -------------------
Public offering price per share n/a $0.50
Net tangible book value per $.012 n/a
share of common stock
before the offering
Pro forma net tangible book n/a $0.163
value per share of common
stock after the offering
Increase to net tangible book n/a $0.151
value per share
attributable to purchase of
common stock by new investors
Dilution to new investors n/a $0.337
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DESCRIPTION OF BUSINESS
-----------------------
GENERAL
Assure Data, Inc. was incorporated under the laws of Nevada, on Nov 18, 2002,
commenced operations in April of 2003 and we are in our early developmental and
promotional stages. Our general plan is to provide comprehensive automated data
backup and retrieval services for small to medium sized businesses, up to $250
million in annual sales, both in the United States as well as foreign countries.
Our service is unique in that we maintain two separate data backup up
repositories, one local to the customer and the second in a secure off-site
facility. The updates from the local server are transferred from the local
backup server to the off-site facility via high speed internet connectivity. We
also provide customers with multi-level email virus protection, and `SPAM'
filtering.
ASSURE DATA REMOTE BACKUP SERVICE
Customers choose what data on their servers and workstations that they wish to
have backed up. This is accomplished using a web-browser based `client' provided
by Assure Data. This `client' provides a secure connection to both the local
Assure Data Remote Backup Server, and the off-site secure server. The automated
backup runs at the specified time and creates a copy any newly created files,
and changes to any old files. This backup data is then transmitted via the
Internet to the off-site secure facility. Thus companies have two full data
backups available in case of an equipment failure or a disaster to their
facilities. The retrieval of the data is also accomplished via the web-based
browser `client'. End user companies are assured of having all data available to
be reviewed buy just opening the web-based browser and following the data
hierarchy and selecting what data is to be restored.
ASSURE DATA VIRUS AND SPAM PROTECTION SERVICES
Virus protection services are provided using the latest available virus
detection processes. Assure Data tracks no less than three separate virus
checking processes. All in-coming emails and attachments are checked prior to
them being routed to the customers systems. The `SPAM' filtering service uses
the latest heuristic algorithms of three internationally recognized `SPAM
KILLERS' to stop up to 98% of `SPAM' while allowing users to regulate specific
email servers as `Accept' or `Decline'. Assure data charges setup fees, based on
the services required by the customer, including helping with the data
selection, and any special security required by the customer. Once the setup is
complete the backup service runs with no human intervention required. Assure
Data then changes a monthly fee based on the total amount of data the customer
backs up, the amount of data transferred each night, plus a standard base
minimum. This creates a continuing revenue stream that does not require direct
or daily attention from the Assure Data staff.
The data is backed up and email reports are automatically sent to the customer
as well as Assure Data staff. If a service fails, additional notification to
Assure Data staff via cell phone text messages are sent to alert the Assure Data
staff prior to receiving a call from the customer. When a failure does occur,
for what ever reason, including the loss of internet connectivity, Assure Data
makes calls to the customer to notify them of the failure.
All backed up data is maintained on computer hard disk. This is more reliable
than tape or other linear processes. In addition, the retrieving of a single
file or small number of files becomes almost effortless. If a file or series of
files requires restoring, the data is normally retrieved from the Assure Data
Remote Backup Server. This is the server that is directly attached to the
customer's network, and the data is transferred at higher network data transfer
rates. The only time the off-site facility is used for data retrieval, is when
the Assure Data Remote Backup Server is not available. The most likely situation
for this is when a system wide disaster has occurred such as a fire or natural
disaster.
THE PRIMARY MANNER IN WHICH WE EXPECT TO CONDUCT BUSINESS
Assure Data has obtained the rights to a select email listing of information
technology employees and consultants. This email list will be used to contact
people who are directly responsible or involved in the maintaining of business
data. These are people who have the responsibility of making sure that the
critical business data they have been entrusted with is safe and available in
case of disaster including server and workstation failures, as well as equipment
or facility losses. These individuals will receive emails describing our
services and a link to the Assure Data Inc. web site.
WEB SITE
We currently have one domain name registered, www.assuredata.com. This site
describes our services and provides contact information. The web site will be
updated on a continuing basis to better inform potential customers of our
services. We will post all of our SB2 filings on our web site.
11
DATA BACKUP INDUSTRY IN GENERAL
TAPE
The data backup industry is filled with many companies that use various backup
methodologies. The most common method is some form of tape as the backup media.
Tape backup comes in many different forms and has advanced over the years in its
capacity and speed in backing up data. The restore process for tape has improved
little in comparison, and the inherent problems with tape failures have not been
solved. Small businesses have relied on tape when they have chosen to attempt to
backup their critical data. The process is often relegated to some office person
who in time fails to make sure that the backups are good or even made on a
regular basis. Tape failures are common, with as many as 50% of all tape backups
having some error. Tape is inconvenient in that a manual process must take place
to replace the tapes, and store them in some safe environment. Tapes are not
checked after a save of the data has been performed. Tape is linear, and the
process to verify that the data has been correctly backed up takes as much time
as the backup itself, that it is not practical to implement such testing.
The total amount of data that small businesses maintain has grown geometrically
over the last 10 years. Companies have Gigabytes of information that needs to be
backed up. Larger tape capacity tapes have been developed, but the cost for
those solutions has increased as well.
HARD DISK
Hard disk backup has become a viable solution, as the price of hard disc storage
has dropped. There are solutions available based on using external large
capacity hard drives attached directly to a network. In many cases a copy of the
data is made, and in case of a failure of the main storage occurs, the data is
available on the external hard drive. This process has the advantage of being a
faster and more accurate backup process. It does not however protect a company
if the main computer location, room or building, is damaged.
SOFTWARE SOLUTIONS USING OFF-SITE STORAGE OF DATA
There are software solutions that track changes to data, and upload that
information via the Internet to a system in a facility in another physical
location. This method keeps a current backup in a secondary location that can be
retrieved if the main storage is unavailable do to system failure. The problem
with this process is that bandwidth usage of a companies Internet connection is
being used continuously. Many companies have the minimum bandwidth they can
survive with, do to the cost of high speed Internet connectivity. This
additional usage can have a large effect on other Internet usage, slowing down
users during normal business hours. Also, the software running on each server
and workstation that monitors the data being changed and process that data and
uploads it to the off site location, can place a significant load on the
computer and slow its processing of the normal work being performed.
COMPETITION
Our competition will come from companies that use all the above discussed
methods, as well as other or new technologies. We feel that we have combined
several concepts together, that solve the practical problems and limitations of
other backup methods, while being able to cost effectively provide the level of
backup data protection services that small business need, and will use.
OUR CONCEPT AND TECHNOLOGY
Our founders have over 40 years of computer industry related experience. Dealing
with daily data backup issues was one of the areas managed by them. Over the
years, data loss and attempted recovery was dealt with many times. As
consultants to companies, and as data processing managers for companies, they
made recommendations on how a company should back up their critical data.
With the advent of more reasonably priced high speed Internet connectivity, and
the dramatic increase of hard disk capacity, and decreased relative cost, a
different overall methodology was developed taking advantage of the following
technologies.
o Hard disk is more reliable than tape. It constantly self
checks, and redundant data checks are automatically performed
when any data is written to the disk. Hard disk is not linear,
and therefore random data retrieval for testing purposes can
be accomplished quickly and easily.
o The use of high-speed Internet connections in small business
has become commonplace. Most companies have DSL or ISDN
connections. Many have partial T1 connections with even
greater bandwidth available.
o The use of the Internet has made most computer users
comfortable using a `browser' such as Internet Explorer or
Netscape.
o Computer software algorithms that allow data compression and
soft data pointers that can mark changes in a data file at a
very low level have been developed.
o Open source operating systems, such as Linux, are available at
almost no cost, and can be configured to be virtually hack
proof and virus proof.
o Custom computer configurations can be created, reducing the
cost of a single computer system.
o Backup services are but one service that the backup server can
perform.
o Large secure site facilities for co-location are available in
most major cities. These facilities have redundant power
supplies, emergency power generators and multiple connections
directly to the Internet Back Bone infrastructure.
12
Based on the above technologies, we developed the Assure Data Remote Backup
Service. We believe our advantages are as follows.
o We maintain two sets of backed up data, with 30 days of
information. We use compression and soft pointers to reduce
the total amount of data that needs to be stored and
transferred. This reduces the total cost of maintaining the
multiple copies of the data.
o The local copy is maintained on a `Locked Down' Linux based
system. This system is directly connected to the local
network. It performs the initial daily backup of all selected
computers, directories and files. Then it transfers, via an
encrypted transmission over the Internet, the backed up data
to a secure server in a secure facility. This insures that a
complete second copy of the backed up data is available in
case of damage to the original facility.
o The process is totally automated. No human intervention is
required. Our system is self monitoring, and emails for
success and failures are sent to both the Assure Data staff,
and selected individuals of the company. This insures that if
a failure does occur, immediate action is taken to insure that
the problem is resolved, and the data is backed up as soon as
possible.
o If a complete local failure occurs, do to a facility loss,
such as fire or a natural disaster, we load a complete copy of
the companies data onto a new backup server and ship it over
night to what ever facility the company will be using for
their new computer location. We then help them restore the
lost data to the new hardware.
o If the loss of data is only on a single computer, and our
local backup system is functioning normally, the customer can
retrieve the data directly from the local backup system,
without having to transfer large amounts of data across the
internet. If a customer needs to retrieve a single file or
directory from any time in the last thirty days, the customer
uses the web based `Assure Data Client Interface' and restores
the correct data from the local unit. At any time the customer
can access the data on the Remote Secure Server, via the
Internet to restore data for testing or any other reason they
may have.
o The pricing is based on the actual storage and bandwidth
usage. This makes the service available and cost effective for
any company that needs to backup one Gigabyte to one hundred
Gigabytes of data.
o The system can be managed from any location where a connection
to the Internet is available. This includes the customer
selection of data to be backed up as well and the restoration
of the data. Our staff can manage the entire process remotely,
including our on site local backup systems located on the
customer site, and the secure server located in the secure
facility located in Dallas.
MARKETING OUR SERVICES
Our marketing plan will use four main concepts.
o Internet marketing using Google Smart Pages and other Internet
search engines. We are currently getting several hundred hits
per month and have developed customers from these leads. As we
progress we expect to develop an online demo of our product.
o We have acquired an extensive list of email addresses for IT
and Network administrators in the US, Canada and Europe. We
are developing an email campaign to market directly to these
decision makers who are directly involved with the maintenance
and security of the data on the networks and computer systems
they are responsible for. Our initial marketing and surveys
pointed to these types of individuals as the primary point of
contact for our marketing efforts. These people understand the
need for insuring the safety of the companies data, and then
they take the information we provide to any other level of
management that is involved with the decision making process.
o Currently we have no strategic marketing partners. But as we
have purchased goods and services from other companies, we
have discussed our services with them, and we have offered
specific commission based programs to those that are
potentially interested in re-marketing our services.
o Our officers have contacts and have developed those into
customers. In addition, referrals from current customers have
resulted in leads to other possible customers.
EXPECTED EMPLOYEE REQUIREMENTS
As the company expands, it is our intention to have the services of Bob Lisle
and Max Kipness in a full time capacity. If the full amount of the offering is
raised, Max Kipness will become involved on a full time basis. Depending on
additional customers being added, Bob Lisle will eventually become involved on a
full time basis. Our projections for employees being added are that each two
hundred customers will require a new employee. This ratio will be monitored and
adjusted as needed. Our process is totally automated, but we need to insure that
if a customer requires help, or just wants to talk to a live Assure Data
representative, that they will be able to do so quickly. Each employee will be
responsible for approximately $500,000 in annual revenue. We do plan to bring on
the first additional employee as soon as the revenue stream allows us to do so.
The fourth employee will not be hired until we reach the required six hundred
customers.
FACILITIES AND OFFICES
We currently have offices in Frisco Texas. Bob Lisle and Max Kipness do much of
their work remotely from their respective offices, or home offices. No large
office space or facilities are required at this time, and we do not expect to
13
require them in the near future. If we grow to be a $5,000,000 a year company,
the total number of employees will be between eight and ten. We will continue to
use secure co-location facilities available across the country and in Europe,
rather than create our own facilities. Using these co-location facilities is far
more cost effective, and allows us to put customer's data in locations that make
logical sense from the prospective of the customer.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
----------------------------------------------------------
As of the date of this prospectus, we have seven customers currently using the
Remote Backup Services of Assure Data Inc. The total average revenue from these
seven customers is approximately $1,775 per month. Expansion of our business
will require significant capital resources that may be funded through the sale
of equity or debt securities issued by us, in addition to the proceeds from our
private placement and this offering.
As of September 30, 2004, we have spent a total of approximately $107,000 in
general operating expenses, expenses, product development, marketing, and legal
and accounting fees. We paid the amounts used in these activities from funds
obtained in a private placement offering in which we raised $100,000 in cash
from April 2003 to September 2003, and approximately $18,000 in revenue from our
customers.
Currently our president is not charging any hourly service fees to Assure Data
Inc. Only actual expenses being incurred are being reimbursed at this time,
including accounting, legal, co-location fees, outside programming and other
expenses required to operate the company. In the future when operating income
increases or sufficient capital is raised from this offering Mr. Lisle may
choose to charge for his services. In addition, as soon as operating income
increases or sufficient capital is raised from this offering, Mr. Kipness may
choose to charge for his services.
Given our low monthly cash flow requirement and the agreement of our officers to
forego salaries until such time as the operating income increases, we believe
that, even though our auditors have expressed substantial doubt about our
ability to continue as a going concern, we have sufficient financial resources
to meet our obligations for at least the next twelve months even without the
proceeds of this offering. Assuming that we do not increase our current capacity
to provide services, our primary cash requirements would be those associated
with maintaining our current customer base and maintaining our status as a
reporting entity. We believe that on an annual basis those costs would not
exceed an average of $1,000 per month. Based on this belief, we would have
adequate financial resources to meet our financial obligations as we currently
conduct business for at least twelve months following the date of this
prospectus. In addition, we currently have the capacity to add 36 more customers
with an average monthly service charge of $250 without increasing our current
monthly expenses. If all 36 customers were added this would increase our monthly
revenues by $9000 per month, and allow continued growth with no requirement for
additional funding. The time necessary to grow the company with out the capital
raised from this offering will be much longer than if the capital is available
to start major marketing of the Assure Data services.
If we obtain funding from the sale of shares in this offering, we will be able
to move forward with our business plan. Executing our business plan will
significantly change our cash needs and monthly burn rate. Based upon our
planned use of proceeds from this offering, we will have to complete at least
50% of the offering, or $150,000 in order to have sufficient funds available to
move forward with our business plan.
The early stages of our business plan are complete. We have a functional service
with paying customers and a small monthly revenue stream. We have a web site
that is listed with a number of search engines, and have a specific `Add Words'
agreement in place with Google, that we receive phone calls from potential
customers weekly as well as `hits' that are turning into customers and potential
customers. This site needs to be expanded and the mass marketing portion of our
business plan will be started. We intend to have Mr. Lisle and Mr. Kipness spend
full time on the services Assure Data Inc. provides and move customer
acquisition to a new level. Mr. Kipness will add additional functionality to our
current services and add new services that are related to the remote backup
process now in place. Low cost office space is available and all other expenses
will be monitored closely to assure that the focus of the next phase of the
business plan moves ahead as planed.
Over the next twelve months we expect our primary expenses to be associated with
new customer acquisition, customer support, upgrades to our current services and
development of new related services. Our business plan is such that if we are
successful in generating net profits from our activities and raising additional
funds, we will acquire more customers, engage in more advertising, hire
additional staff and attempt to grow our company in an orderly way. If we are
successful in raising the entire $300,000 proposed to be raised in this offering
by us, we expect such $300,000, together with the proceeds from our prior
private placement, and our current cash flow, to be sufficient to allow us to
conduct business for at least eighteen (18) months. If we are unable to raise
this entire $300,000 amount, our ability to continue as a going concern may be
jeopardized and we may be required to cease conducting operations in less than 1
year. We wish to remind investors that there is no guarantee that we will be
able to secure any new customers.
We are conducting this offering, in part, because we believe that an early
registration of our equity securities will minimize some of the barriers to
capital formation that otherwise exist. By having a registration statement in
14
place, we believe that we will be in a better position, either to conduct a
future public offering of our securities or to undertake a private placement
with registration rights, than if we were a privately held company. Registering
our shares may help minimize the liquidity discounts we may otherwise have to
take in a future financing because investors may have confidence that the Rule
144(c)(1) public information requirement will be satisfied and a public market
will exist to effect Rule 144(g) broker transactions. We believe that the cost
of registering our securities and undertaking the required disclosure
obligations will be more than offset by being able to get better terms for
future financing efforts. No specific investors have been identified.
ACCOUNTING POLICIES
-------------------
REVENUE RECOGNITION
We expect to generate revenue from providing automated data backup and retrieval
services, virus protection services and `spam' blocking services. Our current
clients have been very satisfied with our services and contacts with potential
customers are ongoing.
STOCK-BASED COMPENSATION
We account for stock-based employee compensation arrangements in accordance with
provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and comply with the disclosure provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation" as amended by SFAS No.
148, "Accounting for Stock-Based Compensation-Transition and Disclosure, an
amendment of FASB Statement No. 123". Under APB Opinion No. 25, compensation
expense for employees is based on the excess, if any, on the date of grant,
between the fair value of our stock over the exercise price.
We account for equity instruments issued to non-employees in accordance with the
provisions of SFAS No. 123 and SFAS No. 148 and Emerging Issues Task Force
("EITF") Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services." All transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable. The measurement date
of the fair value of the equity instrument issued is the earlier of the date on
which the counterparty's performance is complete or the date on which it is
probable that performance will occur.
SALES TO DATE
-------------
We have seven customers currently on line that produce approximately $1775 per
month in continuing revenue. This amount varies slightly based on the total
amount of data being backed up by a customer. Our monthly costs to maintain
these customers are less that $350 per month. This is our cost to house our
secure server in a secure facility in Dallas Texas. We have approximately $2000
in cash. We have no future obligations, and the monthly service fee we pay for
the secure server location and internet connection is on a month to month basis.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
Mr. Robert Lisle, age 55, is our President, Treasurer and a Director. Mr. Lisle
has 25 years of experience in the computer and computer consulting fields. He
has been the President of Information Technology Systems Inc. and Lisle &
Associates for the past twenty-four years. Previous to that he was a systems
analyst for Century 21 Real Estate in Irvine California. Previous to that he was
the Data Processing Manager for JSH Electronics in Culver City California.
Mr. Max Kipness, age 37, is our Vice President, Secretary, and a Director. Mr.
Kipness is a Certified Microsoft Engineer as well as a Cisco Certified Engineer.
He has run his own consulting service business for 5 years. He was also a
Partner in a computer retailing operation, located in Dallas. Mr. Kipness will
be serving as the Chief Technology Officer of the company.
We presently expect to conduct our first annual meetings of shareholders and
directors in March 2005 at which time directors will be elected. All directors
will serve for a period of one year unless removed in accordance with our
bylaws.
EXECUTIVE COMPENSATION
----------------------
We currently have no employees. Mr. Lisle has been compensated by Information
Technology Systems Inc. which has invoiced Assure Data Inc. for his services,
during 2003, and the first nine months of 2004.
Mr. Kipness has been reimbursed for direct expenses, services, as well as
supplies and equipment purchased on behalf of Assure Data Inc. during 2003 and
the first nine months of 2004.
No stock has been issued to any officer, employee or director of the company
except in their capacity as investors. Although we have no current plan in
existence, we may adopt a plan to pay or accrue cash compensation to our
officers and directors for services rendered. We currently do not have a stock
incentive plan for the benefit of officers, directors or employees, but our
Board of Directors may recommend the adoption of such programs in the future.
15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Mr. Lisle loaned us $1,000 to open a checking account and start the basic
operations. That loan was repaid from the initial dollars received from a
private offering.
Mr. Lisle is the president of Information Technology Systems Inc., and performed
services on behalf of Information Technology Systems Inc. and its client Assure
Data Inc. All related fees were invoiced by and paid to Information Technology
Systems Inc. The total amount for 2003 and the first nine months of 2004 for
services, excluding reimbursed actual expenses, is $55,218.
Mr. Kipness has a consulting service and has invoiced and been paid for services
performed for Assure Data Inc. The total amount for 2003 and the first nine
months of 2004 for services, excluding reimbursed actual expenses, is $829.
PROMOTERS
Mr. Lisle and Mr. Kipness developed the processes and services provided by
Assure Data, Inc. They each purchased 266,677 shares of stock at $.001 per
share. In addition, all rights to the processes developed have been granted to
Assure Data, Inc. The processes granted to Assure Data, Inc. took in excess of 1
year to develop, and were operating fully at the time of incorporation. No
specific value was set on the intellectual property provided by Mr. Lisle and
Mr. Kipness. The rights were granted with the full intent that Mr. Lisle and Mr.
Kipness would be major stock holders in the company and use this technology to
build the company into a large and highly profitable company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
As of September 30, 2004, the Company has issued and outstanding 1,000,000
shares of Common Stock. There is no other class of voting security of the
Company issued or outstanding. The following table sets forth the number of
shares of Common Stock beneficially owned as of September 30, 2004 by (i) each
director, (ii) each executive officer named in the Summary Compensation Table
and (iii) each person known to own beneficially more than 5% of our stock and
(iv) all directors, named executive officers and other executive officers as a
group. We calculated beneficial ownership according to Rule 13d-3 of the
Securities Exchange Act as of that date.
Beneficial ownership generally includes voting and investment power with respect
to securities. Unless otherwise indicated below, the persons and entities named
in the table have sole voting and sole investment power with respect to all
shares beneficially owned.
Shares of Common Stock
Name Number of Shares Owned % Total Outstanding Shares
Robert Lisle 266,667 26.7%
6680 Yosemite Ln.
Dallas, TX 75214
Max Kipness 266,667 26.7%
549 Valley View Dr.
Lewisville, TX 75067
Patrica Gunter 416,666 41.6%
174 FM 1830
Argyle, TX 76226
Each person known to own
beneficially more than 5% of our stock (3) 950,000 95.0%
DESCRIPTION OF SECURITIES
-------------------------
COMMON STOCK
Assure Data, Inc. is authorized to issue 100,000,000 shares of common stock,
$.001 par value per share, of which 1,000,000 shares were issued and outstanding
as of the date of this Prospectus. The outstanding shares of common stock are
fully paid and non-assessable. The holders of common stock are entitled to one
vote per share for the election of directors and with respect to all other
matters submitted to a vote of stockholders. Shares of common stock do not have
cumulative voting rights, which mean that the holders of more than 50% of such
shares voting for the election of directors can elect 100% of the directors if
they choose to do so. Our common stock does not have preemptive rights, meaning
that our common shareholders' ownership interest would be diluted if additional
shares of common stock are subsequently issued and the existing shareholders are
16
not granted the right, in the discretion of the Board of Directors, to maintain
their ownership interest in our company. Upon any liquidation, dissolution or
winding-up of our company, our assets, after the payment of debts and
liabilities, will be distributed pro-rata to the holders of the common stock.
The holders of the common stock do not have preemptive or conversion rights to
subscribe for any of our securities and have no right to require us to redeem or
purchase their shares.
The holders of Common Stock are entitled to share equally in dividends, if and
when declared by our Board of Directors, out of funds legally available
therefore, subject to the priorities given to any class of preferred stock which
may be issued.
STOCK OPTIONS
As of the date of this Prospectus, no stock option plan is in effect and no
options have been granted by the board of directors.
TRANSFER AGENT AND REGISTRAR
Securities Transfer Corporation, Frisco, Texas, serves as the transfer agent and
registrar for our shares of common stock.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
--------------------------------------------------------
This is our initial public offering so there is currently no public trading
market for our common stock. We hope to have our common stock prices listed on
the bulletin board maintained by the National Association of Securities Dealers.
To be eligible to have our common stock quoted on the bulletin board, we will be
required to file with the Securities and Exchange Commission periodic reports
required by the Securities and Exchange Act of 1934 and thus be a "reporting"
company, a step we will attempt to accomplish after the effective date of this
registration statement.
As of September 30, 2004, there were 1,000,000 common shares issued and
outstanding. All of these common shares were issued under Section 4(2) of the
Securities Act, and will be subject to the re-sale restrictions of Rule 144.
We have never paid dividends and do not expect to declare any in the foreseeable
future. Instead, we expect to retain all earnings for our growth. Although we
have no specific limitations on our ability to pay dividends, the corporate law
of Nevada, the State under which we are organized, limits our ability to pay
dividends to those instances in which we have earnings and profits. If we are
unable to achieve earnings and profits in a sufficient amount to satisfy the
statutory requirements of Nevada, no dividends will be made, even if our Board
of Directors wanted to pay dividends. Investors should not purchase shares in
this offering if their intent is to receive dividends.
PLAN OF DISTRIBUTION
--------------------
We are offering up to a maximum of 600,000 shares at a price of $0.50 per share
to be sold by us through the efforts of our executive officers. Since our shares
are sold through our executive officers, no compensation will be paid with
respect to such sales. In addition, because the offering is conducted on a "best
efforts" basis, there is no assurance that any of the shares offered hereby will
be sold.
The offering will remain open until the earlier of the sale of all of the shares
offered by us or 90 days after the date of the prospectus, or unless we
determine, in our discretion, to cease the selling efforts prospectus. Our
officers, directors and stockholders and their affiliates may purchase shares in
this offering.
There is no minimum number of shares that must be sold to complete the offering.
As a result, there will be no escrow of any of the proceeds of this offering.
Accordingly, we will have use of such funds once we accept a subscription and
funds have cleared. Such funds shall be non-refundable except as may be required
by applicable law.
Upon effectiveness of this registration statement, we will conduct the sale of
the shares we are offering on a self-underwritten, best-efforts basis. This
means that we do not have an underwriter and that we will sell the shares
directly to investors. Participating on our behalf in the distribution is Robert
Lisle, our Principal Executive Officer, who is exempt from registration as a
broker dealer under Rule 3a4-1 of the Securities Exchange Act. All shares of our
common stock that we are registering for sale by the company that we are able to
sell will be sold at a price per share of $0.50. There can be no assurance that
we will sell all or any of the shares offered. We have no arrangement or
guarantee that we will sell any shares. All subscription checks shall be made to
the order of Assure Data, Inc.
We will pay all the expenses incident to the registration, offering and sale of
the shares to the public.
17
Under the penny stock regulations, a broker-dealer selling penny stocks to
anyone other than an established customer or "accredited investor" (generally,
an individual with a net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with his or her spouse) must make a
special suitability determination for the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale, unless the
broker-dealer is otherwise exempt. In addition, unless the broker-dealer or the
transaction is otherwise exempt, the penny stock regulations require the
broker-dealer to deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Securities and Exchange Commission relating
to the penny stock. A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the Registered Representative and current
quotations for the securities. A broker-dealer is additionally required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account and information with respect to the limited
market in penny stocks.
INVESTOR SUTIABILITY REQUIREMENTS
---------------------------------
This offering is limited to "accredited investors" who are high net worth and/or
sophisticated investors as more fully described below.
ACCREDITATION REQUIREMENTS
An investor is an "accredited investor" only if such investor meets one or more
of the following:
(i) the investor is a natural person who has a net worth , or
joint net worth with that person's spouse exceeding $1,000,000
at the time of purchase;
(ii) the investor is a natural person who individually had income
in excess of $200,000 in each of the two most recent years, or
joint income with that person's spouse in excess of $300,000
in each of those years, and who reasonably expects income in
excess of those levels in the current year;
(iii) the investor is a director or executive officer Assure Data,
Inc.;
(iv) the investor is either (a) a bank defined in Section 3(a)(2)
of the securities Act, or a savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual of fiduciary
capacity; (b) any broker or dealer registered pursuant to
Section 15 of the Securities Act of 1934 as amended; (c) an
insurance company as defined in Section 2(13) of the
Securities Act; (d) an investment company registered under the
Investment Company Securities Act; (e) a Small Business
Investment Company licensed by the United States Small
Business Administration under Section 301(d) or (d) of the
Small Business Investment Securities Act of 1958; (f) a plan
established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees,
if such a plan has total assets in excess of $7,000,000; (g)
an employee benefit plan within the meaning of Title 1 of the
Employee Retirement Income Security Act of 1974, as amended,
if the investment decision is made by a plan fiduciary, which
is either a bank, a savings and loan association, insurance
company, or registered investment advisor, or if the plan has
assets in excess of $7,000,000, or if a self-directed plan,
with the investment decisions made solely by persons that are
accredited investor;
(v) the investor is a private business development company under
Section 202(a)(22) of the Investment Advisers Securities Act
of 1940;
(vi) the investor is any organization described in Section
501(c)(3) of the Internal Revenue Code and certain other
corporations, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of
$7,000,000;
(vii) the investor is any trust with total assets in excess of
$7,000,000 not formed for the specific purpose of acquiring
the securities offered, whose purchase is directed by a
sophisticated person as defined in Section 230.506(b)(2)(ii)
of Regulation D promulgated under the Securities Act; or
(viii) the investor is any entity in which all of the equity owners
are accredited investors.
In the case if a husband and wife subscribing jointly, satisfaction of the net
worth standards must be determined by aggregating their net worth and
satisfaction of the income standards must be determined by joint or individual
tax returns, as the case may be. Any other persons subscribing for shares
jointly, including members of partnerships formed for the purpose of purchasing
shares, must each satisfy the applicable net worth and income standards without
regard to the other joint purchasers. In the case if a subscriber that is itself
a partnership (other than a partnership formed for the purpose of purchasing
shares) of a trust, the applicable net worth income standards must be satisfied
by the entity. In the case of a subscriber purchasing as custodian for a minor,
the applicable net worth standards must be satisfied by the custodian.
Each subscriber will be required to satisfy the investor suitability standards
set forth above. An investment in the shares is only suitable for those
investors who have adequate means to provide for their current needs and
personal contingencies and who have no need for liquidity in this investment.
Furthermore, investors must demonstrate an appropriate level of financial
18
sophistication. Investors should recognize that the suitability standards set
forth above are minimum requirements and that the satisfaction of these
standards does not necessarily mean that investment in the shares is suitable
for an investor meeting these standards. We reserve the right to reject any
subscription for any reason whatsoever.
We will require each investor to make representations and warranties relating to
the suitability of an investment in the shares for each investor as set forth in
the form of subscription agreement to accompany this prospectus. We may also
make or cause to be made such further inquiry as we deem appropriate. We may, in
our absolute discretion, reject subscriptions, in whole or in part, or allot to
a particular investor fewer that the number of shares for which the investor
subscribed. We reserve the right to modify or increase the suitability standards
with respect to certain investors, in order to comply with any applicable state
or local laws, rules or regulations or otherwise.
LEGAL MATTERS
-------------
EXPERTS
-------
The financial statements of Assure Data Inc. as of December 31, 2003 and for the
period from April 28, 2003 (commencement) to December 31, 2003 appearing in this
prospectus have been audited by the firm of Tschopp, Whitcomb & Orr, P.A.,
independent certified public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------
We have filed a registration statement under the Securities Act with respect to
the securities offered hereby with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. This prospectus, which is a part of the registration
statement, does not contain all of the information contained in the registration
statement and the exhibits and schedules thereto, certain items of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to Assure Data, Inc. and the securities offered
hereby, reference is made to the registration statement, including all exhibits
and schedules thereto, which may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N. W., Room 1024,
Washington, D.C. 20549 at prescribed rates during regular business hours. You
may obtain information on the operation of the public reference facilities by
calling the Commission at 1-800-SEC-0330. Also, the SEC maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission at
http://www.sec.gov. Statements contained in this prospectus as to the contents
of any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or document filed as an
exhibit to the registration statement, each such statement being qualified in
its entirety by such reference. We will provide, without charge upon oral or
written request of any person, a copy of any information incorporated by
reference herein. Such request should be directed to us at Assure Data, Inc.,
2591 Dallas Parkway Suite 102 Frisco, Texas 75034 Attention: Robert Lisle,
President.
Following the effectiveness of this registration statement, we will file reports
and other information with the Commission. All of such reports and other
information may be inspected and copied at the Commission's public reference
facilities described above. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the Commission. The address of such site
is http://www.sec.gov. In addition, we intend to make available to our
shareholders annual reports, including audited financial statements, un-audited
quarterly reports and such other reports as we may determine.
19
ASSURE DATA, INC.
(A Development Stage Company)
Table of Contents
Independent Auditors' Report..................................................F2
Financial Statements:
Balance Sheets as of December 31, 2003 and September 30, 2004 (unaudited)..F3
Statements of Operations for the period from April 28, 2003
(commencement) to December 31, 2003, the nine months ended September 30,
2004 (unaudited) and the period from April 28, 2003 (commencement) to
September 30, 2004 (unaudited).............................................F4
Statements of Stockholders' Equity for the period from April 28, 2003
(commencement) to December 31, 2003 and the nine months ended
September 30, 2004 (unaudited).............................................F5
Statements of Cash Flows for the period from April 28, 2003
(commencement) to December 31, 2003, the nine months ended September
30, 2004 (unaudited) and the period from April 28, 2003 (commencement) to
September 30, 2004 (unaudited).............................................F6
Notes to Financial Statements.................................................F7
F1
Independent Auditors' Report
----------------------------
The Board of Directors
Assure Data, Inc.:
We have audited the accompanying balance sheet of Assure Data, Inc. (a
development stage company) as of December 31, 2003 and the related statements of
operations, stockholders' equity and cash flows for the period from April 28,
2003 (date of commencement) through December 31, 2003. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Assure Data, Inc. (a
development stage company), as of December 31, 2003 and the results of its
operations and its cash flows for the period from April 28, 2003 (date of
commencement) through December 31, 2003, 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 3 to the
financial statements, the Company has generated minimal revenues and experienced
an accumulated deficit of approximately $86,000 through December 31, 2003. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are described in
note 3. The accompanying financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should the
Company be unable to continue as a going concern.
March 31, 2004
F2
ASSURE DATA, INC.
(A Development Stage Company)
Balance Sheets
Assets
September 30,
December 31, 2004
2003 (Unaudited)
------------- -------------
Current assets:
Cash $ 4,999 1,498
Accounts receivable 1,775 7,815
------------- -------------
Total current assets 6,774 9,313
Property and equipment, net of
accumulated depreciation of $389 and $2,476 7,736 7,550
------------- -------------
$ 14,510 16,863
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ -- 5,317
------------- -------------
Stockholders' equity:
Common stock: $.001 par value. Authorized:
100,000,000 shares; issued and outstanding:
1,000,000 shares 1,000 1,000
Additional paid-in capital 99,800 99,800
Deficit accumulated during the development
stage (86,290) (89,254)
------------- -------------
Total stockholders' equity 14,510 11,546
------------- -------------
Total liabilities and
stockholders' equity $ 14,510 16,863
============= =============
See accompanying notes to financial statements.
F3
ASSURE DATA, INC.
(A Development Stage Company)
Statements of Operations
Period from
Period from Nine months April 28, 2003
April 28, 2003 ended (commencement) to
(commencement) to September 30, September 30,
December 31, 2004 2004
2003 (Unaudited) (Unaudited)
----------------- ----------------- -----------------
Revenues $ 3,280 14,669 17,949
----------------- ----------------- -----------------
Costs and expenses:
Product development and marketing 10,150 -- 10,150
General and administrative 79,420 17,633 97,053
----------------- ----------------- -----------------
Total costs and expenses 89,570 17,633 107,203
----------------- ----------------- -----------------
Net loss $ (86,290) (2,964) (89,254)
================= ================= =================
Basic and diluted loss per share $ (0.10) (0.00) (0.09)
================= ================= =================
Weighted average number of shares
outstanding - basic and diluted 894,889 1,000,000 942,164
================= ================= =================
See accompanying notes to financial statements.
F4
ASSURE DATA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
Period from April 28, 2003 (commencement) through December 31, 2003 and the
nine months ended September 30, 2004 (Unaudited)
Common Stock Additional Total
--------------------------- Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------------ ------------ ------------ ------------ ------------
Common stock issued at inception 800,000 $ 800 -- -- 800
Common stock issued in private
placement 200,000 200 99,800 -- 100,000
Net loss -- -- -- (86,290) (86,290)
------------ ------------ ------------ ------------ ------------
Balances at December 31, 2003 1,000,000 1,000 99,800 (86,290) 14,510
Net loss (unaudited) -- -- (2,964) (2,964)
------------ ------------ ------------ ------------ ------------
Balances at September 30, 2004
(unaudited) 1,000,000 $ 1,000 99,800 (89,254) 11,546
============ ============ ============ ============ ============
See accompanying notes to financial statements.
F5
ASSURE DATA, INC.
(A Development Stage Company)
Statements of Cash Flows
Period from
Period from April 28, 2003
April 28, 2003 Nine months (commencement)
(commencement) ended to
to September 30, September 30,
December 31, 2004 2004
2003 (Unaudited) (Unaudited)
------------- ------------- -------------
Cash flows from operating activities:
Net loss $ (86,290) $ (2,964) $ (89,254)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 389 2,087 2,476
Changes in assets and liabilities:
Accounts receivable (1,775) (6,040) (7,815)
Accounts payable -- 5,317 5,317
------------- ------------- -------------
Net cash used in operating activities (87,676) (1,600) (89,276)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from issuance of notes payable 1,000 -- 1,000
Repayment of notes payable (1,000) -- (1,000)
------------- ------------- -------------
Net cash provided by (used in)
financing activities -- -- --
------------- ------------- -------------
Cash flows from investing activities:
Purchase of property and equipment (8,125) (1,901) (10,026)
Proceeds from issuance of common stock 100,800 -- 100,800
------------- ------------- -------------
Net cash provided by (used in)
investing activities 92,675 (1,901) 90,774
------------- ------------- -------------
Net increase (decrease) in cash 4,999 (3,501) 1,498
Cash at beginning of period -- 4,999 --
------------- ------------- -------------
Cash at end of period $ 4,999 $ 1,498 $ 1,498
============= ============= =============
See accompanying notes to financial statements.
F6
ASSURE DATA, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2003
(1) Organization and Summary of Significant Accounting Policies
(a) Organization
Assure Data, Inc. (the "Company") is a Nevada corporation which was
formed in November, 2002 and commenced operations in April 2003. The
Company provides fully automated remote data backup services for small
to medium sized businesses.
(b) Property and Equipment
Property and equipment are recorded at cost and depreciated over the
estimated useful lives of the assets which are three years, using the
straight-line method.
(c) Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. Changes in tax rates are recognized in the
period that includes the enactment date.
(d) Financial Instruments Fair Value, Concentration of Business and Credit
Risks
The carrying amount reported in the balance sheet for cash and
accounts receivable approximates fair value because of the immediate
or short-term maturity of these financial instruments.
(e) Use of Estimates
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure
of contingent assets and liabilities to prepare these financial
statements in conformity with accounting principles generally accepted
in the United States of America. Actual results could differ from
those estimates.
(f) Earnings or Loss per Common Share
Basic and diluted loss per common share have been computed based upon
the weighted average number of common shares outstanding during the
period presented. At December 31, 2003, there were no common stock
equivalents outstanding.
(g) Cash Flows
For purposes of cash flows, the Company considers all highly liquid
investments with original maturities of three months of less to be
cash equivalents.
F7
ASSURE DATA, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2003
(2) Related Party Transactions
The Company paid consulting fees of approximately $64,000 to, and purchased
approximately $2,000 of equipment from, a company owned by one of its
officers and shareholders during the period ended December 31, 2003.
(3) Going Concern and Management's Plans
The Company's combined financial statements have been presented on a going
concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As described
herein, the Company has generated minimal revenues and experienced an
accumulated deficit of approximately $86,000 through December 31, 2003.
These matters raise substantial doubt about the Company's ability to
continue as a going concern.
Management's plans with regard to these matters include the following:
o The aggressive marketing of the Company's products and services.
o Obtaining additional capital through the sale of common stock to
existing and new stockholders.
Accordingly, management is of the opinion that aggressive marketing
combined with additional capital will result in improved operations and
cash flow in 2004 and beyond. However, there can be no assurance that
management will be successful in obtaining additional funding or in
attaining profitable operations.
F8
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY INYX, INC.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF INYX, INC. SINCE ANY OF THE DATES AS OF WHICH
INFORMATION IS FURNISHED HEREIN OR SINCE THE DATE HEREOF.
TABLE OF CONTENTS
PROSPECTUS SUMMARY.............................................................3
RISK FACTORS
RISKS RELATED TO OUR INDUSTRY................................................5
RISKS RELTED TO OUR BUSINESS.................................................6
RISKS TO OUR STOCK...........................................................7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................9
USE OF PROCEEDS................................................................9
DETERMINATION OF OFFERING PRICE...............................................10
DESCRIPTION OF BUSINESS.......................................................11
DATA BACKUP INDUSTRY IN GENERAL...............................................12
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS....................14
ACCOUNTING POLICIES...........................................................15
SALES TO DATE.................................................................15
DIRECTORS & EXECUTIVE OFFICERS................................................15
EXECUTIVE COMPENSATION........................................................15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................16
PROMOTERS.....................................................................16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................16
DESCRIPTOIN OF SECURITIES.....................................................16
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS......................17
PLAN OF DISTRIBUTION..........................................................17
INVESTOR SUTIABILITY REQUIREMENTS.............................................18
LEGAL MATTERS.................................................................19
EXPERTS.......................................................................19
WHERE YOU CAN FIND MORE INFORMATION...........................................19
FINANCIAL STATEMENTS AND LEGENDS..............................................F1
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24 - INDEMNIFICATION OF DIRECTORS & OFFICERS.......................II - 1
ITEM 25 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...................II - 1
ITEM 26 - RECENT SALES OF UNREGISTERED SECURITIES.......................II - 2
ITEM 27 - EXHIBITS......................................................II - 2
ITEM 28 - UNDERTAKINGS..................................................II - 3
SIGNATURES................................................................II - 4
DEALER PROSPECTUS DELIVERY OBLIGATIONS
Until _________, 2005, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions
Part II - 1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ---------------------------------------------------
Article Twelve of the Articles of Incorporation of the Company provide that the
Company shall indemnify, to the maximum extent allowed by Nevada law, any person
who is or was a Director, Officer, agent or employee of the corporation, and any
person who serves or served at the Company's request as a Director, Officer,
agent, employee, partner or trustee of another corporation, partnership, joint
venture, trust or other enterprise. An officer or director of the Company could
take the position that this duty on behalf of the Company to indemnify the
director or officer may include the duty to indemnify the officer or director
for the violation of securities laws. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 (the "Act") may be permitted to
directors, officers and controlling persons of the Company pursuant to the
Company's Articles of Incorporation, Bylaws, Nevada law 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 and the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by a controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
ITEM 25 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
- -----------------------------------------------------
The following is an itemized list of the estimate by the Company of the expenses
of the offering:
SEC registration fee $ 50
Accounting fees and expenses* $20,000
Legal* $15,000
Miscellaneous* $ 4,950
Printing * $10,000
-------
Total $50,000
*estimates
Part II - 1
ITEM 26 - RECENT SALES OF UNREGISTERED SECURITIES
- -------------------------------------------------
The following information is furnished with regard to all securities sold by us
within the past three years that were not registered under the Securities Act.
The issuances described hereunder were made in reliance upon the exemptions from
registration set forth in Section 4(2) and Regulation D of the Securities Act
relating to sales by an issuer not involving any public offering. None of the
foregoing transactions involved a distribution or public offering.
In November 2002, the Company was incorporated under the laws of the State of
Nevada. In April 2003 266,667 shares of common stock were issued to Robert Lisle
for $267.00, 266,667 shares of common stock were issued to Max Kipness for
$267.00, and 266,666 shares of common stock were issued to Patrica Gunter for
$267.00. The federal exemption we relied upon in issuing the securities was
Section 4(2) of the Securities Act. The Section 4(2) exemption was available to
us because we did not solicit any purchasers to invest in the company and
instead issued shares to our founders, Mr. Lisle, Mr. Kipness and Patrica
Gunter. In addition, given our founders' involvement in the establishment of the
company, they had access to such information as they deemed necessary to fully
evaluate an investment in our company. No underwriters were used in the
offering.
Beginning in April 2003, we conducted a private offering of 200,000 shares of
Common Stock of our company at a purchase price of $0.50 per share. These shares
were offered and sold to a limited number of investors, without public
solicitation. A total of five individuals purchased shares from us for a total
of $100,000.
The offering was completed on September 30,2003. The federal exemption we relied
upon in issuing these securities was Rule 506 under of the Securities Act. The
Rule 506 exemption was available to us because we did not publicly solicit any
investment in the company. We also gave all of these investors the opportunity
to ask questions of and receive answers from us as to all aspects of our
business as well as access to such information as they deemed necessary to fully
evaluate an investment in our company.
All shares issued under the private placement and all shares issued to Mr.
Lisle, Mr. Kipness and Mrs. Gunter have been and will remain restricted and may
not be transferred unless and until the effectiveness of this registration
statement or pursuant to another applicable exemption.
ITEM 27 - EXHIBITS
- ------------------
1.1 Subscription Agreement
2.1 Secretary of State Certificate
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
5.1 Opinion on legality of shares to be filed by amendment
10.1 Form of Data Protection Agreement
23.1 Consent of Auditors
23.2 Consent of legal council to be filed by amendment
Part II - 2
ITEM 28 - UNDERTAKINGS
- ----------------------
The Company does not presently anticipate using an underwriter in conducting
this offering; if the company changes its plan and utilizes an underwriter, the
Company will provide to the underwriter, at the closing specified in any
underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Company pursuant to the Company's Articles of Incorporation, Bylaws,
Nevada law 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 and the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by a controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue. The
undersigned registrant hereby undertakes that it will:
1. File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(a) Include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(b) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information 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 the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and include any additional
or changed material information on the plan of distribution.
2. For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3. File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
Part II - 3
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 the City of Frisco,
State of Texas on December 8, 2004.
Assure Data Inc.
By: /s/ Robert M. Lisle
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Robert M. Lisle, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
(Signature) /s/ Robert M. Lisle
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Robert M. Lisle
(Title) President, Treasurer, Chief Executive Officer, Chief Financial and
Accounting Officer, Director
(Date)
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(Signature) /s/ Max M. Kipness
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Max M. Kipness
(Title) Secretary and Director
(Date)
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Part II - 4