As filed with the Securities and Exchange Commission on
January 25, 2001
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
______________________
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(Name of Small Business Issuer in its Charter)
New York 6141
State or other jurisdiction (Primary Standard Industrial
of incorporation or organization) Classification Code Number)
16-1576984
(I.R.S. Employer
Identification No.)
______________________
Single Source Financial Services Lawrence I. Washor
Corporation Washor & Associates
10780 Santa Monica Boulevard 11150 West Olympic Boulevard
Suite 240 Suite 980
Los Angeles, California 90025 Los Angeles, California 90064
(888) 262-1600 (310) 479-2660
(Name, address and telephone number (Name, address and telephone
of registrant's principal executive number of agent for service)
offices and principal place of business)
______________________
Copies to:
Lawrence I. Washor
Washor & Associates
11150 West Olympic Blvd., Suite 980
Los Angeles, California 90064
Telephone: (310) 479-2660
Facsimile: (310) 479-1022
Approximate date of commencement of proposed sale to public:
As soon as practicable after 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, check the following box. [ ]
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 following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Registered Offering Price Per Unit Aggregate Offering Price Registration Fee
Common Stock, $.001 par value
Common Stock Offered by Selling
Shareholders 1,125,000 $2.00 $2,250,000 $ 550.00
Total Registration Fee* $ 550.00
* $1,237.50 was initially paid.
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, as amended, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
TABLE OF CONTENTS
Item 1. Summary Information and Risk Factors . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Forward Looking Statements . . . . . . . . . . . . . . . .
2. Limited Operating History. . . . . . . . . . . . . . . . .
3. No Operating Profit. . . . . . . . . . . . . . . . . . . .
4. Need for Operating Capital . . . . . . . . . . . . . . . .
5. Limitation of Liability of Directors. . . . . . . . . . .
6. Speculative Investment . . . . . . . . . . . . . . . . . .
7. Penny Stock Regulation . . . . . . . . . . . . . . . . . .
8. Reliance on Key Personnel. . . . . . . . . . . . . . . . .
9. Determination of Offering Price. . . . . . . . . . . . . .
10. No Foreseeable Dividends . . . . . . . . . . . . . . . . .
11. Management of Growth . . . . . . . . . . . . . . . . . . .
12. Best Efforts Offering. . . . . . . . . . . . . . . . . . .
13. No Public Market for Security. . . . . . . . . . . . . . .
14. Control By Existing Shareholders . . . . . . . . . . . . .
15. Our Ability to Implement Our Business Strategy . . . . . .
16. Change in Electronic Financial Credit and
Payment Procedures . . . . . . . . . . . . . . . . . . .
17. Securities Market Factors. . . . . . . . . . . . . . . . .
18. Effect of Economy. . . . . . . . . . . . . . . . . . . . .
19. No Liability or Other Insurance. . . . . . . . . . . . . .
20. Competition. . . . . . . . . . . . . . . . . . . . . . . .
21. No Assurances of Revenue or Operating Profits. . . . . . .
22. Federal Income Tax Consequences. . . . . . . . . . . . . .
23. Management . . . . . . . . . . . . . . . . . . . . . . . .
24. Potential Conflicts of Interest. . . . . . . . . . . . . .
25. Sales Force of Independent Contractors . . . . . . . . . .
Item 4. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . .
Item 5. Determination of Offering Price. . . . . . . . . . . . . .
Item 6. Dilution . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Selling Shareholders . . . . . . . . . . . . . . . . . . .
Item 8. Plan of Distribution . . . . . . . . . . . . . . . . . . .
Item 9. Legal Proceedings. . . . . . . . . . . . . . . . . . . . .
Item 10. Management . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . .
Item 12. Description of Securities. . . . . . . . . . . . . . . . .
Common Stock Eligible For Future Sale. . . . . . . . . .
Item 13. Interest of Named Experts and Counsel. . . . . . . . . . .
Item 14. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities . . . . . . . . . . . . .
Item 15. Organization Within Last Five Years. . . . . . . . . . . .
Item 16. Description of Business. . . . . . . . . . . . . . . . . .
Item 17. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . .
Item 18. Description of Property. . . . . . . . . . . . . . . . . .
Item 19. Certain Relationships and Related Transactions . . . . . .
Item 20. Market for Common Equity and Related Shareholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . .
Item 21. Executive Compensation - Remuneration of Directors
and Officers . . . . . . . . . . . . . . . . . . . . . .
Item 22. Financial Statements . . . . . . . . . . . . . . . . . . .
Item 23. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . . . . . . . . . .
Index to Financial Statements. . . . . . . . . . . . . . . . . . . .
Alternative Page - Preliminary Prospectus. . . . . . . . . . . . . .
Part II - Information Not Required In Prospectus . . . . . . . . . .
Item 24. Indemnification of Directors and Officers. . . . . . . . .
Item 25. Other Expenses of Issuance and Distribution. . . . . . . .
Item 26. Recent Sales of Unregistered Securities. . . . . . . . . .
Item 27. Exhibit Index. . . . . . . . . . . . . . . . . . . . . . .
Item 28. Undertakings . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . . . .
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be accepted
prior to the time the Registration Statement becomes effective.
This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such State.
Preliminary Prospectus
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
a New York corporation
1,125,000 Shares of Common Stock at $2.01 Per Share
($.001 Par Value) by the Selling Shareholders (See below)
Certain shareholders (see "Selling Shareholders") Single Source
Financial Services Corporation, a New York corporation (the
"Company"), are offering to sell 1,125,000 shares of common
stock, $.001 par value (the "Common Stock") at $2.00 per
share. The Company sells and leases various types of equipment
to record electronic financial transactions, such as credit and
debit card purchases, to merchants. The Company also offers
access to electronic processing of such financial transactions. Prior
to this offering, there has been no public market for the Common
Stock and there can be no assurance that any such market will
develop in the future or that if developed, such a market will be
maintained.
The Selling Shareholders acquired the Common Stock in
private placement transactions which were exempt from the
registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "1933 Act"). The
Selling Shareholders may from time to time sell shares of the
Common Stock on the OTC Bulletin Board, on any other
national securities exchange or automated quotation system
on which the Common Stock may be listed or traded, in
negotiated transactions or otherwise, at prices then prevailing
or related to the then current market price or at negotiated
prices. The Common Stock of the Selling Shareholders may
be sold directly or through brokers or dealers. See "Plan of
Distribution."
The initial offering price for the Common Stock has been
determined by the Company's Management and does not necessarily
relate to the Company's book value, net worth, financial condition
or other established criteria of value. The Company will receive
none of the proceeds from the sale of the Common Stock by its
shareholders.
The Company will receive no part of the proceeds from the
sale of the shares of the Common Stock owned by the Selling
Shareholders. All expenses of registration incurred in
connection with this offering will be paid by the Company, but
all selling and other expenses incurred by the Selling Shareholders
will be paid by the Selling Shareholders. See "Selling Shareholders."
The Selling Shareholders and any broker-dealers participating
in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the 1933 Act, and any
commissions or discounts given to any such broker-dealer may
be regarded as underwriting commissions or discounts under
the 1933 Act.
The Common Stock has not been registered for sale
under the securities laws of any state as of the date of this
Prospectus. However, 10,999,133 shares of the Company's
Common Stock were issued pursuant to an exchange offer which
commenced in October, 1994 under Rule 504. Pursuant to a
subsequent six to one reverse stock split, these shareholders held
1,833,189 shares free of any restriction on transfer and resale.
Nonetheless, brokers or dealers effecting transactions in the
Common Stock should confirm the registration thereof under the
securities laws of the states in which transactions occur or the
existence of an exemption from registration.
THE SECURITIES OFFERED HEREBY ARE HIGHLY
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
AND SUBSTANTIAL DILUTION. SEE "RISK FACTORS"
BEGINNING ON PAGE 5 AND "DILUTION."
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
After the effective date of this registration, the Company intends
to apply to participate on the Over-the-Counter Bulletin Board
Electronic Quotation Service ("Bulletin Board") maintained by the
National Association of Securities Dealers, Inc. ("NASD"). The
Company will also then be a reporting issuer subject to the
reporting requirements established by the Securities and Exchange
Commission, including, but not limited to, the filing of quarterly
reports on Form 10Q and the filing of annual reports on Form 10K.
The date of this Prospectus is , 2001
Item 3. Summary Information and Risk Factors.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS, WHICH CONTAINS MORE DETAILED
INFORMATION WITH RESPECT TO EACH OF THE
MATTERS SUMMARIZED IN THIS PROSPECTUS AS WELL
AS OTHER MATTERS NOT COVERED IN THE SUMMARY.
ALL PROSPECTIVE INVESTORS SHOULD CAREFULLY
REVIEW THE ENTIRE CONTENTS OF THE PROSPECTUS
AND THE EXHIBITS ATTACHED HERETO, INDIVIDUALLY
AND WITH THEIR OWN TAX, LEGAL AND BUSINESS
ADVISORS. All share and per share information reflects a one
share for every six share reverse stock split effective as of October
18, 2000.
This Prospectus contains certain forward looking statements and
information relating to the Company that are based on the beliefs of
Management as well as assumptions made by, and information
currently available to, the Company. When used in this Prospectus,
the words "anticipate", "believe", "estimate", "expect", "will",
"could", "may", and similar expressions are intended to identify
forward looking statements but the absence of any word does not
mean that the statement is not forward looking. Such statements
reflect the current views of Management with respect to future
events and are subject to certain risks, uncertainties, and
assumptions, including those described under "Risks Factors" and
elsewhere in this Prospectus. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
herein. In addition to the other information in this Prospectus, the
above factors should be carefully considered in evaluating the
Company and its business and before purchasing the securities
offered hereby.
The Company: Single Source Financial Services Corporation
("Company") is a New York corporation formed on
September 19, 1994. The Company's principal
business address is 10780 Santa Monica Boulevard,
Suite 240, Los Angeles, California 90025. The
telephone number is (888) 262-1600.
Business of The Company intends to acquire several companies
the Company: in the financial services area. On November 7,
2000, the Company acquired Single Source Electronic
Transactions, Inc. ("SSET"), a Nevada corporation.
SSET is the Company's only acquisition to date
and constitutes the Company's only operating
business. SSET sells and leases to merchants various
types of equipment used to record and to facilitate
electronic financial transactions, such as credit and
debit card purchases. However, where the merchant
elects to lease the equipment, SSET sells the lease
to an outside equipment leasing company. The Company
offers a wide range of such electronic transaction
equipment, including, without limitation, credit card
processing equipment, debit card processing equipment,
automated teller machines ("ATM"), smart cards,
construction and maintenance of internet web sites,
including electronic credit capabilities, and
electronic check verification equipment. In addition,
the Company attempts to offer access to the
electronic processing of such transactions to its
customers at the lowest available rate. For these
reasons, the Company believes that its operation of
SSET will become profitable over the next few months.
State of The Company was incorporated under the name Ream
Organization Printing Paper Corp., pursuant to the laws of the
of the State of New York, on September 19, 1994. In
Company: November, 2000, the Company changed its name to
Single Source Financial Services Corporation.
Common Stock Prior to the offering, there are 11,845,689 shares
Outstanding of the Common Stock outstanding. 10,012,500 shares
Prior to were used to acquire SSET. These 10,012,500 shares
Offering: are currently restricted. The remaining 1,833,189
shares resulted from a 1994 exchange offer effected
under Rule 504 and a subsequent six for one stock
split. These 1,833,189 shares have no restrictions
on transfer or resale.
Securities In the instant offering, the Selling Shareholders are
Offered offering 1,125,000 shares of Common Stock at $2.00
Herein: per share. Such 1,125,000 shares are a portion of
those received by such Selling Shareholders from
their sale of SSET to the Company.
Sales by 1,125,000 shares of the Common Stock have been
Selling registered pursuant to the Registration Statement of
Shareholders: which this Prospectus forms a part for sale by the
holders thereof ("Selling Shareholders"). Sales by
the Selling Shareholders are not part of the offering
being sold by the Company and the Company will not
receive any proceeds from any sale of securities by
the Selling Shareholders. The Selling Shareholders
may effect sales of the Common Stock at prevailing
prices or in transactions at negotiated prices or by
gift or a combination thereof.
No Proceeds The Company will receive no proceeds for the sale
to the Company of the stock by the Selling Shareholders.
for the Sale of
the Stock:
Common Stock After the offering is complete, the Company will
Outstanding have 11,845,689 shares of Common Stock which
After are issued and outstanding. 2,958,189 shares of
Offering: such stock shall be unrestricted with respect to
transfer and resale. In effect, such stock will be
"free-trading".
Risk Factors: Investment in the Common Stock involves a high
degree of risk and immediate substantial dilution.
See "Risks Factors" and "Dilution".
RISK FACTORS
In addition to the other information provided in this Prospectus,
the following risk factors should be considered carefully in
evaluating the Company and its business before purchasing any of
the Common Stock. A purchase of the Common Stock is
speculative in nature and involves numerous risks. No purchase of
the Common Stock should be made by any person who cannot
afford to lose the entire amount of such investment.
AS NOTED ABOVE, THIS PROSPECTUS SPECIFIES
FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THE RESULTS
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS
AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE
SPECIFIED IN THE FOLLOWING RISK FACTORS AND
ELSEWHERE IN THIS PROSPECTUS. PROSPECTIVE
PURCHASERS OF SHARES MUST BE PREPARED FOR THE
POSSIBLE LOSS OF THEIR ENTIRE INVESTMENTS IN THE
COMPANY. THE ORDER IN WHICH THE FOLLOWING
RISK FACTORS ARE PRESENTED IS ARBITRARY, AND
PROSPECTIVE PURCHASERS OF SHARES SHOULD NOT
CONCLUDE, BECAUSE OF THE ORDER OF
PRESENTATION OF THE FOLLOWING RISK FACTORS,
THAT ONE RISK FACTOR IS MORE SIGNIFICANT THAN
THE OTHER RISK FACTORS.
1. Forward Looking Statements. Information specified in this
Prospectus contains "forward looking statements" which can be
identified by the use of forward-looking terminology such as
"believes", "could", "possibly", "probably", "anticipates",
"estimates", "projects", "expects", "may", "will" or "should" or the
negative thereof or other variations thereon or comparable
terminology. Such statements are subject to certain risks,
uncertainties and assumptions. No assurances can be given that the
future results anticipated by the forward-looking statements will be
achieved. The following matters constitute cautionary statements
identifying important factors with respect to such forward-looking
statements, including certain risks and uncertainties, that could
cause actual results to vary materially from the future results
covered in such forward-looking statements. Among the key
factors that have a direct bearing on the Company's results of
operations are the Company's lack of capital, the newness of the
Company's business operations, and the cost and effectiveness of
the Company's operating strategy. Other factors could also cause
actual results to vary materially from the future results covered in
such forward-looking statements.
2. Limited Operating History. The Company has a limited
operating history. Although the Company was formed in 1994, it
has not operated any business during the past five years and its
operation of SSET did not commence until November 7, 2000.
Thus, the Company has no operating history from which a
prospective investor could judge the Company's operating
efficiency or effectiveness. Furthermore, there is no history from
which a prospective investor could determine the ability of
management to properly operate the business. Furthermore, new
businesses traditionally have difficulties in their operation since they
come upon unforeseen problems, expenses, and delays.
3. No Operating Profit. To date, neither the Company nor
SSET has ever generated a profit in its business operation.
Although Management believes that SSET will become profitable
within the next 90 days, there can be no assurance that it will do so
or that it will ever make a profit.
4. Need For Operating Capital. The Company's plans for
expansion require it to obtain significant operating capital over the
next few years. The Company intends to acquire other companies
similar to SSET and to acquire compatible financial services
companies when, and if, such companies become available. As can
be seen from the attached financials, both the Company and SSET
have limited capital available to fund such transactions. Therefore,
the Company will be dependent upon raising funds to accomplish
these goals. In the event that the Company is able to increase
SSET revenue as it anticipates it can, the Company will probably
require additional funds to satisfy its capital needs over the next year.
However, there can be no assurance that the Company will be able
to raise the necessary funds or that it will be able to do so on terms
acceptable to it. Likewise, many of the Company's competitors are
better financed than the Company and are in a better position to
take advantage of such acquisition opportunities than is the
Company. Nonetheless, the Company believes that such funds
may be available from its current major shareholders.
5. Limitation of Liability of Directors and Officers. Article VI
of the Articles of Incorporation of the Company and Article VI of
the Company's Bylaws include provisions eliminating the personal
liability of the directors and officers of the Company to the
Company and its shareholders for damages for breach of fiduciary
duty as a director or officer. Accordingly, the Articles of
Incorporation provide that the directors of the Company may have
no liability to the shareholders of the Company for any mistakes or
errors of judgment or for any act of omission, unless such act or
omission involves intentional misconduct, bad faith, a knowing
violation of law or a personal financial gain or other advantage.
The Bylaws provide that the directors and officers may have no
personal liability unless finally adjudicated to be liable for
negligence or misconduct in the performance of duty.
DISCLOSURE OF OPINION OF SECURITIES AND
EXCHANGE COMMISSION REGARDING
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES:
INSOFAR AS INDEMNIFICATION FOR LIABILITIES
ARISING PURSUANT TO THE SECURITIES ACT OF 1933
MAY BE PERMITTED TO DIRECTORS, OFFICERS OR
PERSONS CONTROLLING THE COMPANY PURSUANT TO
THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN
INFORMED THAT IN THE OPINION OF THE SECURITIES
AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE SECURITIES ACT OF 1933 AND IS,
THEREFORE, UNENFORCEABLE.
6. Speculative Investment. Our business objectives must be
considered speculative and there is no assurance that we will satisfy
those objectives. No assurance can be given that the shareholders
of the Company will realize a substantial return on their purchase of
the Common Stock, or any return whatsoever, or that the
shareholders of the Company will not lose their entire investment in
the Company. For this reason, each prospective purchaser should
read this Prospectus and all exhibits to this Prospectus carefully and
should consult with that purchaser's attorney, business advisor, or
investment advisor.
7. Penny Stock Regulation. The Securities and Exchange
Commission ("Commission") has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny
stocks". Penny stocks generally are equity securities with a price of
less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules,
to deliver a standardized risk disclosure document prepared by the
Commission, which specifies information about penny stocks and
the nature and significance of risks of the penny stock market. The
broker-dealer also must provide the customer with bid and offer
quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly
account statements indicating the market value of each penny stock
held in the customer's account. In addition, the penny stock rules
require that, prior to a transaction in a penny stock not otherwise
exempt from those rules, the broker-dealer must 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 trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. If any of the
Company's Common Stock becomes subject to the penny stock
rules, holders of that Common Stock may have difficulty selling
that Common Stock.
8. Reliance on Key Personnel. Our future success will depend
in part on the services of our key personnel and, additionally, on
our ability to identify, hire and retain additional qualified personnel.
There is significant competition for qualified personnel in the areas
of our activities, and there can be no assurance that we will be able
to continue to attract and retain such personnel necessary for the
development of our business. Because of the intense competition,
there can be no assurance that we will be successful in adding
personnel as needed to satisfy the staffing requirements of the
Company. Failure to attract and retain key personnel could have a
material adverse effect on the Company. We do not maintain key
person life insurance on any of our key personnel.
9. Determination of Offering Price. The Offering Price of the
Common Stock was arbitrarily determined by Company
Management. Among the factors considered in determining the
price of the Common Stock were Management's opinion of the
prospects of the Company, the background of the Company, the
results of the Company's short operating history and current
conditions affecting the Company's business and operations.
However, the offering price does not bear any relationship to the
Company's assets, earnings, book value, cash flow, or other
generally accepted criteria of valuation.
10. No Foreseeable Dividends. To date, the Company has
never paid any dividends to its shareholders. Furthermore, the
Company does not anticipate paying dividends on the Common
Stock in the foreseeable future; but, rather, the Company plans to
retain earnings, if any, for the operation and expansion of the
business of the Company.
11. Management of Growth. With every newly organized
corporation, it is important that the Company properly manage its
plans for growth. To date, the Company has required, and is
expected to continue to require, the full utilization of the
Company's management, financial, and other resources, since the
Company has not had adequate working capital. The Company's
ability to expand its business effectively will depend on its ability to
improve and expand its operations, including its financial and
management information systems, and to recruit, train and manage
executive staff and other employees. There can be no assurance that
Management will be able to manage its growth effectively, and the
failure to effectively manage growth may have a materially adverse
effect on the Company's results of operations. Furthermore, there
can be no assurance that the Company will experience any growth.
12. No Public Market for Securities. Prior to this Offering,
there has been no public market for the Common Stock being
offered hereby. There can be no assurance that such a public
market will develop, even if this Offering were to prove successful,
or that if a public market were to develop it will continue to be
maintained. Therefore, there can be no assurance that an investor
will be able to liquidate his/her investment in the Company's public
stock if the investor should desire to do so.
13. Control by Existing Shareholders. Our directors, officers
and principal (greater than 5%) shareholders, taken as a group,
together with their affiliates, beneficially own, in the aggregate, a
majority of the Company's outstanding Common Stock. Certain
principal shareholders are directors or executive officers of the
Company and certain other company principals are related by blood
to each other. As a result of such ownership, these shareholders
may be able to exert significant influence, or even control, over
matters requiring approval by the shareholders of the Company,
including the election of directors.
14. Our Ability to Implement our Business Strategy. Although
we intend to pursue a strategy of aggressive marketing of our
products and services and expansion of services to a growing
customer base, implementation of this strategy will depend in large
part on our ability to (i) establish a significant customer base and
maintain favorable relationships with those customers; (ii)
effectively introduce acceptable products to our customers at
competitive rates; (iii) obtain adequate financing on favorable terms
to fund our business strategy; (iv) maintain appropriate procedures,
policies, and systems; (v) hire, train, and retain skilled employees;
and (vi) continue to operate in the face of increasing competition.
Our inability to obtain or maintain any or all of these factors could
impair our ability to successfully implement our business strategy,
which could have a material adverse effect on our results of
operations and financial condition.
15. Changes in Electronic Financial Credit and Payment
Procedures. At the current time, there is substantial development in
the manner in which consumers pay merchants for goods and
services. In addition to credit cards, consumers use, inter alia,
smart cards, debit cards, ATM machines, signature verification
processes, and the internet. The Company's current business
operations are based upon these changes in payment methodology.
For this reason, the Company offers through purchase and lease a
wide variety of equipment which a merchant can use to obtain
virtually instantaneous electronic payment for products and services
sold to a consumer. In addition, the Company offers access to low
rate processing services for such transactions. The Company
believes that its wide variety of equipment and its low rate
processing services makes it extremely competitive. However, the
industry is rapidly changing and developing and the Company must
keep abreast of such developments and changes as they occur if it is
to remain competitive. Furthermore, the rapid development of the
industry may cause certain products or services to become obsolete.
There can be no assurance as to which services, if any, may become
obsolete and what effect obsolescence will have on the Company.
Also, as the amount of national debt increases or decreases, federal
and state governments may regulate this industry through the
passage of new laws. Currently, only the banking aspects of this
industry are regulated. There is no way to predict the effect that
additional regulation would have upon the manner in which the
Company does business.
16. Securities Market Factors. There is currently no public
market for the Company's Common Stock. Should there develop a
market for the Company's Common Stock, the market price for the
Company's Common Stock may be significantly affected by such
factors as the Company's financial results, introduction of new
services, competitive companies and products and general
economic conditions. Additionally, in recent years, the stock
market has experienced a high level of price and volume volatility.
During this period, market prices for many companies, particularly
small and emerging growth companies, have experienced wide price
fluctuations not necessarily related to the operating performance of
such companies. The market price for the Company's Common
Stock may be affected by general stock market volatility. If a
market does not develop for the Company's Common Stock, new
investors and the Selling Shareholders may be required to retain
their stock position in the Company for an indefinite period of time.
17. Effect of Economy. The electronic financial transaction
industry is dependent upon consumer purchase of goods from
merchants. Management believes that the greater the volume of
such consumer purchases, the greater will be the need for the
products and services offered by the Company. In the event of a
poor economy, not only will consumer purchases decrease, but
merchants will be less willing to invest in new equipment to effect
electronic transfers. Thus, a poor economy should have a material
negative effect on the Company's operations and may make it
impossible for the Company to proceed with its current plan of
operations.
18. No Liability or Other Insurance. Our business may expose
us to potential liability risks that are inherent in the marketing of
products. However, we do not currently have any liability
insurance. Since products liability insurance is expensive, there can
be no assurance that we will be able to obtain or maintain such
insurance on acceptable terms or, if obtained, that such insurance
will provide adequate coverage against potential liabilities.
Although we are attempting to become additional insureds on the
policies of the manufacturers from whom we purchase equipment,
there can be no assurance that we will be able to do so. In addition,
the Company intends to obtain general liability insurance to cover
the day to day risks of operating a business. Notwithstanding the
foregoing, the Company intends to attempt to avoid activities which
contain unacceptable liability exposure. Nonetheless, Management
believes that the inability to obtain appropriate insurance could have
a material adverse effect upon the business operations and growth
and the Company's ability to expand the business.
19. Competition. The Company is in a very competitive
industry. The financial electronic transaction industry continues to
undergo change and competition is intense and is expected to
increase. There can be no assurance that competitors have not or
will not succeed in developing techniques or procedures that are
more attractive and/or easy to use and would, accordingly, render
our products and services obsolete and noncompetitive.
Furthermore, much of our competition has substantially greater
experience, financial and technical resources and production,
marketing and development capabilities than we do.
20. No Assurances of Revenue or Operating Profits. To date,
the Company has generated no revenue and neither the Company
nor SSET has generated any profit. There can be no assurance that
the Company will be able to develop or maintain consistent revenue
sources or that the Company's operations will become profitable.
21. Federal Income Tax Consequences. We have obtained no
ruling from the Internal Revenue Service and no opinion of counsel
with respect to the federal income tax consequences of the purchase
or sale of the Common Stock. Consequently, investors must
evaluate for themselves the income tax implications which attach to
their purchase, and any subsequent sale, of the Common Stock.
However, Management believes that any profit generated from the
sale of the Common Stock in the Company will be treated as a
long-term or short-term capital gain.
22. Management. Except for Mr. Graham and Mr. Gifis, the
current Company Management has only limited experience in the
electronic reporting and processing of financial transactions. (See
"Management"). This could prove to be detrimental to the
Company's growth and success. Since success or failure of the
Company depends to a large extent upon Management, their lack of
experience and its effect on the Company's business could have a
substantial adverse impact upon the Company's operations.
23. Potential Conflicts of Interest. Company Management is,
and will continue to be, involved in the management of businesses
in addition to the business of the Company. Therefore,
Management's time will not be devoted to the Company on a sole
basis. There can be no assurance that due to other competing
business interests, Management will be able to devote sufficient
time to the Company's business although it intends to do so.
Furthermore, Management may become involved in other
businesses which compete for the business of the Company.
Although Management intends to operate in a fair and reasonable
way with respect to business decisions affecting the Company, there
can be no assurance that it will be able to do so.
24. Sales Force of Independent Contractors. The Company
operates from offices located in California and in other States using
independent contractors for its sales force. There can be no
assurance that the Company will be able to find sufficient numbers
of independent contractors to keep the various offices operating or
that the Company will be able to manage such independent
contractors sufficiently to keep the offices operating at maximum
efficiency and profitability. Therefore, the Company's ability to
successfully hire and manage its sales force in the various states
may have a material impact upon the financial success and growth
of the Company. This is especially true as the number of offices in
the various States increases.
Item 4. Use of Proceeds.
There will be no proceeds to the Company from the sale of the
Common Stock by the Selling Shareholders.
Item 5. Determination of Offering Price.
Management has considered the following factors to determine the
offering price herein. In this regard, the Common Stock is not yet
quoted on the OTC Bulletin Board or any other national securities
exchange or automated quotation system and as such does not
currently have an average bid or ask price. The offering price of
the Common Stock was determined by the Company Management
based upon its own evaluation of Company operations and
Company potential. Such value has no relationship to any
established criteria of value, such as book value or earnings per
share. Additionally, because the Company has no significant
operating history and has not generated any significant earnings to
date, the offering price of the Common Stock is not based on past
earnings, nor is the offering price of the Common Stock indicative
of current market value for the assets owned by the Company.
Item 6. Dilution.
As of October 31, 2000, there were 1,833,189 shares of Common
Stock issued and outstanding with a net tangible book value of
($2,685) or a net tangible book value of ($.00146) per share. On
November 7, 2000, the Company purchased SSET for 10,057,500
shares of Common Stock, a portion of which shares are being
registered herein.
The Company is registering 1,125,000 shares paid by the
Company to acquire SSET at $2.00 per share. Thus, as of
November 7, 2000, there are 11,845,689 shares of the
Company's Common Stock issued and outstanding.
Assuming that as of October 31, 2000, the Company had obtained
all the assets of SSET, there would be a total of 11,845,689 shares
of Common Stock issued and outstanding with a net tangible book
value of ($99,213) or a net tangible book value of ($.00837) per share.
Assuming that all 1,125,000 shares registered hereby were sold, the
purchasing shareholders would own 9.49% of the outstanding shares.
The dilution to the purchasing stockholders would be $2.00837 per share
or (1.00415) per share based on a purchase price of $2.00 per share.
Net tangible book value per share is obtained by subtracting from
the total tangible assets the total liabilities and then dividing the sum
by the total number of outstanding shares. Dilution is the difference
between the public Offering price per share and the net tangible
book value per share immediately after the Offering.
The following Chart sets forth dilution.
Public Offering price per share $2.00
Net tangible book value per share
as of October 31, 2000 ($ .00837)
Pro forma net tangible book value
per share after Offering ($ .00837)
Dilution per share to investors $2.00837
Gain per share to original shareholders $2.00837
Item 7. Selling Shareholders.
The following table sets forth the number of shares of Common
Stock which may be offered for sale from time to time by the
Selling Shareholders. These shares of Common Stock constitute a
part of the restricted Common Stock known to the Company to be
beneficially owned by the Selling Shareholders. To the extent that
they own any other restricted Common Stock or any unrestricted
Common Stock, it shall be noted below. None of the Selling
Shareholders have held any position or office with the Company,
except as specified in the following table. Other than the
relationships described below, none of the Selling Shareholders had
or have any material relationship with the Company.
Baki Arbria
20,487 Shares of Common Stock
In addition, Mr. Arbria holds 479,513 shares of restricted Common
Stock.
Brandon Becker
663,539 Shares of Common Stock
In addition, Mr. Becker holds 2,271,875 shares of restricted
Common Stock and 236,342 shares of additional unrestricted
Common Stock. Mr. Becker is also the Vice President and a
Director of the Company.
Lorraine Dorsey
250,000 Shares of Common Stock
Arlene Rosenblatt
20,487 Shares of Common Stock
In addition, Ms. Rosenblatt holds 1,296,875 shares of restricted
Common Stock and 118,171 shares of additional unrestricted
Common Stock. Ms. Rosenblatt is also a Director of the Company.
Michael Sock
20,487 Shares of Common Stock
In addition, Mr. Sock holds 361,342 shares of restricted Common
Stock and 118,171 shares of unrestricted Common Stock.
Harry L. Wilson
25,000 Shares of Common Stock
In addition, Mr. Wilson holds 225,000 shares of restricted Common
Stock and is the Secretary, the Treasurer, and a Director of the
Company.
Item 8. Plan of Distribution.
The Selling Shareholders may from time to time sell all or a
portion of their shares of Common Stock in the over-the-counter
market, or on any other national securities exchange on which the
Common Stock is or becomes listed or traded, in negotiated
transactions or otherwise, at prices then prevailing or related to the
then current market price or at negotiated prices. These shares of
Common Stock will not be sold in an underwritten public offering.
These shares of Common Stock may be sold directly or through
brokers or dealers. The methods by which this Common Stock may
be sold by the Selling Shareholders include: (a) a block trade
(which may involve crosses) in which the broker or dealer so
engaged will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its transactions in which the
broker solicits purchasers; and (d) privately negotiated transactions.
In effecting sales, brokers and dealers engaged by Selling
Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers may receive commissions or
discounts from Selling Shareholders (or, if any such broker-dealer
acts as agent for the purchaser of such shares, from such purchaser)
in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers
may agree with the Selling Shareholders to sell a specified number
of such shares at a stipulated price per share, and, to the extent
such broker-dealer is unable to do so acting as agent for a Selling
Shareholder, to purchase as principal any unsold shares at the price
required to fulfill the broker-deal commitment to such Selling
Shareholder. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions
(which may involve crosses and block transactions and sales to and
through other broker-dealers, including transactions of the nature
described above) in the over-the-counter market or otherwise at
prices and on terms then prevailing at the time of sale, at prices then
related to the then-current market price or in negotiated
transactions and, in connection with such resales, may pay to, or
receive from, the purchasers of such shares commissions as
described above.
In connection with the distribution of their Common Stock, the
Selling Shareholders may enter into hedging transactions with
broker-dealers. In connection with such transactions,
broker-dealers may engage in short sales of the Common Stock in
the course of hedging the positions they assume with the Selling
Shareholders. The Selling Shareholders may also sell the Common
Stock short and redeliver the Common stock to close out the short
positions. The Selling Shareholders may also enter into option or
other transactions with broker-dealers which require the delivery to
the broker-dealer of the shares of Common Stock. The Selling
Shareholders may also loan or pledge the shares of Common Stock
to a broker-dealer and the broker-dealer may sell the Common
Stock so loaned or upon a default the broker-dealer may affect
sales of the pledged shares. In addition to the foregoing, the Selling
Shareholders may enter into, from time to time, other types of
hedging transactions.
The Selling Shareholders and any broker-dealers participating in
the distributions of the Common Stock may be deemed to be
"underwriters" within the meaning of Section 2(11) of the 1933 Act
and any profit on the sale of the Common Stock by the Selling
Shareholders and any commissions or discounts given to any such
broker-dealer may be deemed to be underwriting commissions or
discounts under the 1933 Act.
The shares of restricted Common Stock may also be sold pursuant
to Rule 144 under the 1933 Act beginning one year after issuance,
provided such date is at least 90 days after the date of this
Prospectus.
The Company has filed the Registration Statement, of which this
Prospectus forms a part, with respect to the sale of the Common
Stock. There can be no assurance that the Selling Shareholders will
sell any or all of the shares of Common Stock offered hereunder.
Under the Securities Exchange Act of 1934 ("Exchange Act")
and the regulations thereunder, any person engaged in a distribution
of the shares of Common stock offered by this Prospectus may not
simultaneously engage in market making activities with respect to
the Common Stock of the Company during the applicable "cooling
off" periods prior to the commencement of such distribution. In
addition, and without limiting the foregoing, the Selling
Shareholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including,
without limitation, Rules 10b-6 and 10b-7, provisions of which may
limit the timing of purchases and sales of Common Stock by the
Selling Shareholders.
We have advised the Selling Shareholders that, during such time
as they may be engaged in a distribution of any of the shares of
Common Stock the Company is registering by this Registration
Statement, they are required to comply with Regulation M
promulgated under the Securities Exchange Act of 1934. In
general, Regulation M precludes any Selling Shareholder, any
affiliated purchasers and any broker-dealer or other person who
participates in such distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security
which is the subject of the distribution until the entire distribution
is complete. Regulation M defines a "distribution" as an offering of
securities that is distinguished from ordinary trading activities by
the magnitude of the offering and the presence of special selling
efforts and selling methods. Regulation M also defines a
"distribution participant" as an underwriter, prospective
underwriter, broker, dealer or other person who has agreed to
participate or who is participating in a distribution.
Regulation M prohibits any bids or purchases made in order to
stabilize the price of a security in connection with the distribution
of that security, except as specifically permitted by Rule 104 of
Regulation M. The stabilizing transactions may cause the price of
the Common Stock to be higher than it would otherwise be in the
absence of these transactions. We have advised the Selling
Shareholders that stabilizing transactions permitted by Regulation
M allow bids to purchase the Common Stock so long as the
stabilizing bids do not exceed a specified maximum, and that
Regulation M specifically prohibits stabilizing that is the result of
fraudulent, manipulative, or deceptive practices. Selling
shareholders and distribution participants will be required to consult
with their own legal counsel to ensure compliance with Regulation M.
Item 9. Legal Proceedings.
Except as described below, there are no legal actions pending
against the Company nor are any such legal actions contemplated
although from time to time, the Company may be party to various
legal actions and complaints arising in the ordinary course of
business.
However, SSET and Michael Venni, the Manager of SSET's Los
Angeles office, are named in a lawsuit entitled E-Commerce
Processing, a California corporation v. Michael Venni and Single
Source Electronics (sic) Transactions, Los Angeles Superior Court
Case No. BC 237039. The case alleges that SSET wrongfully hired
E-Commerce Processing ("ECI") staff from ECI, that SSET took
ECI trade secret information, leads, and customers, that SSET
defamed ECI, and that SSET committed unfair competition. ECI
seeks unspecified compensatory and punitive damages.
SSET denies ECI's allegations and denies that it owes any amount
to ECI. SSET also contends that ECI is interfering with its
business by calling its staff in order to threaten and harass them and
by defaming SSET. SSET has filed a cross-complaint against ECI
for defamation, interference with prospective business advantage,
and various other torts. SSET has no other actions pending.
Item 10. Management.
The directors and principal executive officers of the Company are
as follows:
Name Age Position
Arnold F. Sock 46 President and Director
Brandon Becker 29 Vice President and Director
Harry L. Wilson 56 Secretary, Chief Financial
Officer and Director
Pamela Becker 54 Director
Arlene Rosenblatt 66 Director
Arnold F. Sock was elected a Director of the Company in July,
2000 and President in September, 2000. Since 1994 Mr. Sock has
been a Consultant to various businesses regarding business,
management, operations, accounting, financial and legal matters.
He has also been an officer and/or director of various businesses.
Mr. Sock currently serves in the following capacities with the
following companies: Chairman of the Board and Secretary of Tax
Debt Negotiators, Inc. (TDN) (a tax debt resolution firm) since
December, 1998; President of Taxpayer Service Network, Inc.
(TSN) (an EAP provider offering tax and credit debt resolutions)
since October, 1999; and Director and Secretary of TDN
Marketing Corporation (markets TDN and TSN products and
services) since April, 2000.
Prior to becoming President of the Company, Mr. Sock was a
Director and President of Internet Business's International, Inc., a
publicly traded company (OTC:BB: IBUI) from November, 1998
through August, 1999. Prior to that Mr. Sock was Director of
Operations for Commercial Ventures, Inc., a real estate investment
company from September, 1997 to September, 1998. For the four
years prior to that Mr. Sock provided business consulting services
to a wide variety of businesses.
Mr. Sock teaches real estate law for the Construction
Management Certificate program at California State University at
Dominquez Hills as an Adjunct Professor. Mr. Sock has an
Associate in Science degree in Business Administration and a
Bachelor of Science degree in Accounting from Roger Williams
University, a Juris Doctorate degree from the University of West
Los Angeles and a Master of Laws in Taxation from Golden Gate
University Law School. Mr. Sock is a member of the California
State Bar.
Brandon Becker was elected Vice President and a Director of the
Company in September, 2000. Since 1998, Mr. Becker has been
President of Los Angeles Commercial Investments, Inc., a business
broker. Mr. Becker is also a Director of Tax Debt Negotiators,
Inc., a corporation which provides assistance to persons with state
and federal tax debt problems. From 1995 to 1998, Mr. Becker was
the Manager of Venture Capital Investment Group, Inc., which
assists businesses in resolving their debt problems. From 1991 to
1994, Mr. Becker was Executive Vice President for Concord
Business Investments, a business broker. Mr. Becker attended
Santa Monica City College. Brandon Becker is the son of Pamela
Becker.
Harry L. Wilson was elected a Director of the Company in July,
2000 and Secretary and Chief Financial Officer in September,
2000. Since 1998, Mr. Wilson has been President and a Director of
Tax Debt Negotiators, Inc., a corporation which provides
assistance to persons with state and federal tax debt payment
problems. From 1994 to 1998, Mr. Wilson was Director of Central
Processing for Kaye Kotts, which negotiates the resolution of IRS
collection matters. From 1997 to 1998, Mr. Wilson was
Secretary/Treasurer of IRS Solutions, which provides assistance to
persons with state and federal tax debt problems. Mr. Wilson holds
a Bachelor of Arts degree from the University of California at Santa
Barbara and an MBA from Pepperdine University.
Pamela Becker was elected a Director of the Company in July,
2000. Since 1991, Mrs. Becker has been the Escrow
Officer/Manager of Vera's Escrow and its predecessor First City
Escrow. Prior to 1991, Mrs. Becker owned and operated various
businesses including a Burger King franchise and several hotels.
Mrs. Becker attended the University of California at Berkeley and
Boston University. Mrs. Becker is the mother of Brandon Becker.
Arlene Rosenblatt was elected a Director of the Company in July,
2000. Mrs. Rosenblatt is a Consultant to small businesses
regarding computer-related problems. Mrs. Rosenblatt is also a
retired Certified High School Teacher with additional training for
certification in business organizations, computers and math. Mrs.
Rosenblatt is active with and has served as President of various
community organizations which have an emphasis in business
management and cost control. Mrs. Rosenblatt has a Bachelor of
Science degree from the University of California at Los Angeles.
Additionally, it is anticipated that Messrs. William Graham and
Arnold Sock will serve as executive officers of SSET as it
continues operations. It is anticipated that Mr. Graham will
become the president and Mr. Arnold Sock will become the
Secretary and Treasurer of SSET. It is anticipated that Mr. Melvin
Gifis will remain as National Sales Manager of SSET.
William Graham, 58, was the President of SSET from its
formation in 1998 until it was acquired by the Company. From
1995 until SSET began operating in January, 2000, Mr. Graham
was an independent sales officer for 1st National Processing and 1st
National Bankcard of Simi Valley, California, one of the largest
independent processors for credit card transactions in the United
States. Previous to that, Mr. Graham was Vice President and
National Trainer for T.V. Fanfare, an advertising firm, for which
Mr. Graham worked off and on for 22 years. Mr. Graham has been
involved in direct sales for his entire career.
Melvin Gifis, 57, became employed by SSET in December 1999 as
National Sales Manager. Prior to that time Mr. Grifis was
employed by Aamco Transmissions, Inc., as a Consultant to its
franchisees. Mr. Gifis has worked in the automotive industry for
more than 25 years and has held senior management positions with
various franchisees of General Motors, Ford Motor Company and
Aamco Transmissions, Inc. Mr. Gifis attended Pasadena City
College.
Additionally, it is anticipated that Mr. Sock, Mr. Becker,
Ms. Becker, Mr. Wilson and Ms. Rosenblatt will continue to serve
as the directors of SSET.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following tables set forth certain information regarding
the beneficial ownership of the Company's Common Stock as of
November 7, 2000, by each person or entity known by the
Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, each of the Company's
directors and named executive officers, and all directors and
executive officers of the Company as a group. On November 7,
2000, there were 11,845,689 shares of Common Stock issued and
outstanding.
(a) Security Ownership of Certain Beneficial Owners.
As of November 7, 2000, the following shareholders held more
than 5% of the issued and outstanding Common Stock of the
Company:
Name and Address of Amount and Nature of Percent of
Title of Case Beneficial Owner Beneficial Ownership Class
Common Brandon Becker 3,171,756 shares 22.90%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Kendra Becker 918,171 shares 6.63%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Pamela Becker 935,533 shares 6.75%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Arlene Rosenblatt 1,435,533 shares 10.36%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Julie Rosenblatt 918,171 shares 6.63%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Arnold F. Sock 1,421,875 shares 10.26%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
(b) Security Ownership by Management.
As of November 7, 2000, the following table shows the amount of
Common Stock beneficially held by Management:
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
Common Brandon Becker 3,171,756 shares 22.90%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Pamela Becker 935,533 shares 6.75%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Arlene Rosenblatt 1,435,533 shares 10.36%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Arnold F. Sock 1,421,875 shares 10.26%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Harry L. Wilson 250,000 shares 1.80%
10780 Santa Monica Blvd. direct ownership
Santa Monica, CA 90025
Common Officers and Directors 7,214,697 shares 52.10%
Taken as a Whole direct ownership
Beneficial Ownership. Beneficial ownership is determined in
accordance with the rules of the Commission and generally includes
voting or investment power with respect to securities. In
accordance with Commission rules, shares of the Company's
Common Stock which may be acquired upon exercise of stock
options or warrants which are currently exercisable or which
become exercisable within 60 days of the date of the table are
deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in
the table above have sole voting and investment power with respect
to all shares of the Company's Common Stock indicated as
beneficially owned by them.
(c) Changes in Control.
Management of the Company is not aware of any arrangements
which may result in "changes in control" as that term is defined by
the provisions of Section 228.403(c) of Regulation S-B.
Item 12. Description of Securities.
The Company is authorized to issue 100,000,000 shares of
Common Stock, $.001 par value, with each share of Common
Stock having equal rights, including voting privileges. The holders
of the Company's Common Stock are entitled to one vote for each
share of record and each fractional share shall be entitled to a
corresponding fractional vote, on all matters to be voted on by
shareholders. There is no cumulative voting.
The holders of the Company's Common Stock are entitled to
receive dividends when, as and if declared by the Company's Board
of Directors from funds legally available therefor; provided,
however, that cash dividends are at the sole discretion of the
Company's Board of Directors. In the event of liquidation,
dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining available
for distribution to them after payment of liabilities of the Company
and after provision has been made for each class of stock, if any,
having preference in relation to the Company's Common Stock.
Holders of the shares of the Company's Common Stock have no
preemptive rights. All of the outstanding shares of the Company's
Common Stock are duly authorized, validly issued, fully paid and
non-assessable.
Dividend Policy. Any payment of dividends will be at the sole
and absolute discretion of the Company's Board of Directors and will
depend upon earnings, financial condition, capital requirements,
amount of indebtedness, contractual restrictions with respect to
payment of dividends, and other factors. Any such dividends may
be paid in cash, property or shares of the Company's Common
Stock. The Company has not paid any dividends since its
formation, and it is not probable that any dividends on the
Company's $.001 par value Common Stock will be declared at any
time in the foreseeable future. Any future dividends will be subject
to the discretion of the Company's Board of Directors, and will
depend upon, among other things, the operating and financial
condition of the Company, the Company's capital requirements and
general business conditions. Therefore, there can be no assurance
that any dividends on the Company's $.001 par value Common
Stock will be paid in the future.
COMMON STOCK ELIGIBLE FOR FUTURE SALE.
If the Company's shareholders sell substantial amounts of the
Common Stock in the public market following this offering, the
prevailing market price of the Common Stock could decline, as well
as the Company's ability to raise equity capital in the future. Upon
the closing of this offering and assuming all shares of Common
Stock available for sale herein are sold, the Company will have
outstanding an aggregate of 11,845,689 shares of Common Stock
(including the Common Stock being offered herein). All of the
Common Stock sold in this offering will be freely tradeable without
restriction and other shares of the Company's Common Stock will
be eligible for sale in the public market as follows:
Number of
Shares Nature of Shares When Available For Sale
1,833,189 Common Stock acquired Stock is currently
through a 1994 Exchange freely tradeable without
Offer Promulgated Under restriction on transfer
Rule 504 which was or resale.
completed in 1995
8,887,500 Shares acquired on purchase Restriction on Shares
of SSET and not registered may be removed in
herein accordance with the
provisions of Rule 144.
Item 13. Interest of Named Experts and Counsel.
No "expert", as that term is defined pursuant to Section
228.509(a) of Regulation S-B, or the Company's "counsel", as that
term is defined pursuant to Section 228.509(b) of Regulation S-B,
was hired on a contingent basis, or will receive a direct or indirect
interest in the Company, or was a promoter, underwriter, voting
trustee, director, officer or employee of the Company, at any time
prior to the filing of this Registration Statement.
Item 14. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities.
IN THE OPINION OF THE SECURITIES AND EXCHANGE
COMMISSION, INDEMNIFICATION FOR LIABILITIES
ARISING PURSUANT TO THE SECURITIES ACT OF 1933 IS
CONTRARY TO PUBLIC POLICY AND, THEREFORE,
UNENFORCEABLE.
Item 15. Organization Within Last Five Years.
On November 7, 2000, the Company purchased 100% of the
issued and outstanding stock of SSET for 10,012,500 shares of
restricted Common Stock in the Company. The acquisition was
made in order to permit the Company to acquire the financial
electronic transaction business of SSET. The Company's stock was
distributed to the shareholders of SSET on a pro rata basis. For a
breakdown of such stock, please see the chart contained below:
Name of Shareholder Number of Shares of SSFS Common Stock
(a) Baki Arbria 500,000
(b) Brandon Becker 2,935,414
(c) Kendra Becker 800,000
(d) Martin Becker 200,000
(e) Pamela Becker 817,362
(f) Lorraine Dorsey 250,000
(g) Mara Gorodezky 125,000
(h) Arlene Rosenblatt 1,317,362
(i) Julie Rosenblatt 800,000
(j) Sid Rosenblatt 200,000
(k) Arnold F. Sock, Esq. 1,303,704
(l) Leona Sock 131,829
(m) Michael Sock 381,829
(n) Harry L. Wilson 250,000
10,012,500
In this regard, it should be noted that Brandon Becker, Kendra
Becker, Martin Becker, and Pamela Becker are immediate family
members. It should also be noted that Sid Rosenblatt, Julie
Rosenblatt and Arlene Rosenblatt are immediate family members.
Arnold F. Sock, Michael Sock, and Leona Sock are also immediate
family members.
The Company has no parent companies and other than SSET, the
Company has no subsidiaries.
Additional information about certain relationships and related
transactions is provided more completely under the portion of this
Prospectus entitled "Certain Relationships and Related
Transactions" at Item 19 below.
Item 16. Description of Business.
(a) Business Development.
Single Source Financial Services Corporation is a New York
corporation which was incorporated on September 19, 1994 under
the name Ream Printing Paper Corp. On October 18, 2000, the
Board of Directors voted to change the name of the corporation to
Single Source Financial Services Corporation which name change
took place in November, 2000.
The Company has never been in bankruptcy, receivership, or any
similar proceeding.
On November 7, 2000, the Company acquired Single Source
Electronic Transactions, Inc., a Nevada corporation ("SSET") for
10,012,500 shares of Common Stock in the Company. Prior to the
acquisition, the Company had not engaged in any business for a
number of years.
SSET was formed in January, 1998, and commenced operation in
California in January, 2000. Although the Company has operated,
to date, at a loss, SSET's business has expanded and Management
believes that SSET will become profitable after approximately two
or three months due to the continued expansion of the business in
sales volume and geographic coverage.
The purchase of SSET was a material acquisition by the Company
and constitutes the initial business which the Company intends to
acquire. Based upon such acquisition, the Company sells and leases
all types of financial electronic transaction equipment to merchants
and offers the merchants access to electronic processing of such
transactions. In the event that the merchant elects to acquire the
equipment through a lease transaction, SSET sells the lease to an
equipment leasing company at a discounted rate. Although SSET
has been operating since January, 2000, the Company has been
involved in the operation of the SSET business for less than a week.
Based upon the SSET acquisition, the Company has acquired 7
offices located in Los Angeles, California, Mission Hills, California,
Irvine, California, San Diego, California, Houston, Texas,
Providence, Rhode Island, and Denver, Colorado. The Company
has also acquired an independent contractor who is selling for the
Company in Florida. Thus, as a result of the acquisition, the
Company currently has approximately twenty-five employees who
are managers and administrative personnel responsible for the
individual offices and the Company as a whole and approximately
seventy independent contractors who are responsible for selling the
Company's products directly to individual merchants. The
independent contractors are commissioned while the Company's
employees are salaried. As of this time, the Company is considering
closing of its Mission Hills office and has hired a new Florida
independent contractor to replace the former independent
contractor who was let go.
The Company operates as an independent sales organization. The
term "independent sales organization" means that the Company
does not have a formal relationship with any specific processor.
This is the first and only business which the Company has operated
during the past three years.
(b) Business of Issuer.
At the current time, the Company's exclusive business is the sale
and lease of various types of financial electronic transaction
equipment to merchants and the offer to merchants of access to
electronic processing of such transactions. However, in those cases
where a merchant elects to lease equipment, SSET sells the lease to
an equipment leasing company. The Company offers processing
services through 1st National Processing, a third party processor.
With respect to those accounts which the Company refers to 1st
National Processing, the Company receives a small residual steam
of payments from the processor. The payments constitute a small
percentage of the business sent to the processor by those customers
referred to the processor by the Company and is called a "residual".
The Company operates by causing its independent contractors to
contact merchants in order to sell or lease to the merchants
equipment to perform financial electronic transactions such as
credit and debit card transactions. At the current time, the
Company has approximately 25 full-time employees and
approximately 70 independent contractors. The Company carries a
number of different brands of electronic transaction processing
equipment and sells and leases the equipment at prices ranging from
$500.00 to $2,500.00. The Company also offers electronic
transaction processing services to the Company's equipment buyers
or lessees through 1st National Processing in order to permit 1st
National Processing to process the customer's electronic
transactions.
The Company offers a wide variety of electronic transaction
processing equipment to merchants including, without limitation,
credit card processing equipment, debit card processing equipment,
smart cards, ATMs, electronic check verification services, and
internet web sites capable of taking credit cards, debit cards, and
checks. The Company also offers what it believes to be the lowest
transaction processing fee available.
Basically, such a credit or debit card transaction is done as
follows: The card is swiped through a terminal at the merchant's
facility and an amount of purchase is punched in. Thereafter the
card and transaction information is electronically transmitted to a
third party processor. The processor sends the information to a
database network to verify that the card is not listed as stolen, lost,
altered or otherwise invalid. If the card is valid, the third party
processor then elects to process the transaction or forward it to a
larger processor for processing. The election is made based on the
transaction amount, type of merchant, and whether the card was
used at the terminal or the card information was orally provided
(e.g., telephone order). Next, the processor contacts the card
issuer's bank (issuing bank) to see if there is sufficient credit
available on the card account to allow the transaction to be
approved. If the transaction is approved the issuing bank sends the
funds due to the processor's bank (settlement bank). The
settlement bank then deducts the processor's fees, placing them in
the processor's account, and forwards the balance to the merchant's
bank (receiving bank). These transactions are almost instantaneous
and allow for the prompt exchange of funds.
Additionally, after the transactions is completed, a portion of
the funds collected by the processor are paid to the independent sales
offices as a residual. Although the residual per transaction is very
small, due to a large number of transactions, the residual can
increase in value substantially. For example, SSET's current
residual is about 15% of the amount received by the processor.
Since the Company has taken over the SSET business, there has
been no publicly announced new product or service. Likewise,
there is no major customer since the customer base is fairly broad.
The business does not utilize raw materials. The business does
purchase equipment for resale and lease and such equipment is
readily available. The Company's major suppliers are CrossCheck,
Inc. for check guarantee equipment, Talento for EFT Terminals,
MAGTEK for MICR Check Readers, TASQ for ATMs, and similar
dealers for other related equipment.
The Company has no patents, trademarks, licenses, franchises,
concessions, royalties or labor contracts. However, the Company
intends to develop and trademark an appropriate corporate logo
over the next few months.
Although electronic transaction processing is regulated through
the banking industry, the business in which the Company operates is
not regulated by any governmental entity. The Company is aware
of no environmental law issues in connection with the Company's
operations.
The Company is aware of no current attempts to impose
governmental regulation on the Company's current business.
Therefore, the Company is unable to predict in any meaningful way
what regulation, if any, would be imposed and what effect it would
have upon the Company. However, the Company Management
believes that it would be able to comply with all such regulations
and that to the extent such regulation caused certain companies to
cease operations, it would improve the Company's competitive
position.
Although the electronic financial transaction industry is relatively
new, it has generated a good deal of interest since it permits
merchants to obtain prompt payment for their sales of goods and
services at a relatively small price. As a result thereof, the business
is very competitive and there are thousands of companies seeking to
sell such services or to process such transactions. The Company
believes that it has an edge over many of its competitors because it
has an extremely wide variety of electronic transaction methods
available to its customers and because it offers what Management
believes to be the lowest transaction processing fees in the United
States through 1st National Processing. The diversity in transaction
processing methods is important since it permits customers to
purchase all of its electronic financial transaction equipment needs
from a single seller.
(c) Reports to Security Holders.
As of this time the Company is not required to deliver any annual
reports to its security holders. However, commencing on October
31, 2001, the Company intends to do so voluntarily. Management
currently intends that such reports will include audited financial
statements.
The Company is not yet a reporting company. However, after this
Registration becomes effective, the Company intends to file the
required quarterly and annual reports.
The Company's web site is located at www.ssetonline.com. This
web site explains the services currently offered by the Company.
Its toll free telephone number is (888) 262-1600.
Item 17. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(a) Plan of Operation.
During the next 12 months, the Company intends to expand its
current operations by the opening and development of new offices
in various additional parts of the United States. In order to open a
new office, the Company must lease space, hire and train
management for the office and hire and train independent
contractors to sell the Company's products to merchants. The
Company believes that the cost of opening an office is
approximately $25,000 to $50,000. This includes maintaining a
small inventory of equipment and waiting for the generation of sales
after the office is opened. It is anticipated that as each office is
open, the Company will add 2 to 5 management employees and 5 to
15 independent contractor salesmen. This cost can be minimized by
hiring experienced management and sales staff in the various
locations where the Company desires to open. Historically, the
Company has expanded its business and covered operating deficits
by borrowing, and repaying, funds from existing major shareholders.
The Company anticipates that it will continue to do so over the next year.
Absent the development of a new electronic transaction modality,
the Company does not anticipate adding any new products to those
currently offered. However, depending upon customer demand, the
Company may add additional brands of equipment to those which it
currently sells.
The Company does not anticipate adding any significant plant or
equipment. Nor does the Company anticipate engaging in any
product research and development.
However, the Company is currently considering the acquisition of
an electronic transaction processor. The Company believes that the
acquisition of a processor will enable the Company to maximize the
income from those merchants which it signs for processing.
Management also believes that it can acquire a small to mid-size
processor for Company stock and approximately $1,000,000 in
cash depending upon the processor. This will enable the Company
to obtain income from processing transactions which can be
referred to the Company's processor by independent sales offices in
addition to those owned by the Company. However, there can be
no assurance that such an acquisition will occur during the next 12
months or at all.
In addition, the Company would also consider the acquisition of
any other complimentary financial services business which may be
presented to the Company. However, there can be no assurance
that such a business opportunity will be presented to the Company
or that if such an opportunity is presented to the Company, the
Company will be able to acquire such a business on terms
acceptable to it.
(b) Management's Discussion and Analysis of Financial
Condition and Results of Operations.
During the past 2 years, the Company has had no business
operations and there have been no changes in its financial condition
until November 7, 2000. On November 7, 2000, the Company
acquired SSET for 10,012,500 shares of its Common Stock.
However, the Company has not operated SSET for a sufficient time
to enable it to present a meaningful analysis of those issues
presented for discussion herein.
However, Management currently believes that the Company will
have 3 sources of funds available to it during the next 12 months.
First, the Company should generate profit from its sales and leasing
of electronic transaction equipment. Second, the Company should
generate income from its residual steam. Third, the Company
should generate capital from its sale of the stock registered herein.
One trend which Management believes will impact liquidity is that
as a number of customers referred to 1st National Processing
increases, so will the amount of residuals received by the Company
on a monthly basis. Additionally, although Management believes
that SSET will continue to expand its operations and increase its
revenue under the Company, there is uncertainty since the
Company has only been involved with SSET for a very short time.
The Company has no material commitments. Although the
Company anticipates that it will expand and that it may acquire
other businesses, there are no existing commitments that require it
to do so.
Although the Company's business is not seasonal in nature, the
residuals tend to be larger during the holiday season because there
are a greater number of consumer transactions.
Item 18. Description of Property.
The Company does not own any real estate or any other
significant property. However, the Company does lease the
following offices:
1. Los Angeles Office, 10780 Santa Monica Blvd., Suite 240,
Los Angeles, California 90025;
2. San Diego Office, 11440 West Bernardo Court, Suite 30,
San Diego, California 92127;
3. Mission Hills Office, 15545 Devonshire Street, Suite 200,
Mission Hills, California 91345;
4. Orange County Office, 17900 Skypark Circle, Suite 230,
Irvine, California 92614;
5. Rhode Island Office, One Davol Square, Suite 9,
Providence, Rhode Island 02903;
6. Denver Office, 707 Seventeenth Street, Suite 2972, Denver,
Colorado 80202; and
7. Houston Office, 1000 F.M. Road, Suite 206, Houston,
Texas 77090.
Item 19. Certain Relationships and Related Transactions.
On November 7, 2000, the Company purchased 100% of the
issued and outstanding stock of SSET for 10,012,500 shares of
restricted Common Stock in the Company. The acquisition was
made in order to permit the Company to acquire the financial
electronic transaction business of SSET for the Company. The
Company's stock was distributed to the shareholders of SSET on a
pro rata basis. For a breakdown of such stock, please see the chart
contained in response to Item 15.
In this regard, it should be noted that Brandon Becker, Kendra
Becker, Martin Becker, and Pamela Becker are immediate family
members. It should also be noted that Sid Rosenblatt, Julie
Rosenblatt and Arlene Rosenblatt are immediate family members.
Arnold F. Sock, Esq., Michael Sock, and Leona Sock are also
immediate family members.
Item 20. Market for Common Equity and Related Stockholder
Matters.
(a) Market Information.
The Company's Common Stock is not currently being traded on
any public trading market or markets. The Common Stock is the
only class of security issued by the Company.
At the current time, there are 1,833,189 issued and outstanding
shares of Common Stock which have no restriction on transfer or
resale in accordance with a Rule 504 reorganization. Through this
offering, the Company proposes to register 1,125,000 shares of
Common Stock in the hands of certain investors. Subject to the
offering becoming effective, there will be 2,958,189 shares of
Common Stock eligible for trading.
The remaining 8,932,500 shares of Common Stock issued to
acquire SSET is restricted stock. The restriction on the transfer of
such stock may be removed in accordance with the safe harbor
contained in Rule 144. Rule 144 provides that after the stock is
held for one year, the shareholders may sell the greater of 1% of the
issued and outstanding stock of the Company or the average
number of shares sold per week over the past 3 weeks through a
broker-assisted public transaction in each fiscal quarter. Moreover,
this requires that the issuer be current in its required final reporting.
The same number of shares may be sold in each succession quarter
until the shareholder has sold all his stock. Furthermore, after the
stock has been held for 2 years, all remaining stock of the
shareholder may be sold unless the shareholder is an affiliate. Thus,
within the next year, all of the 8,932,500 restricted shares will be
eligible for sale under Rule 144.
(b) Holders.
At the current time, there are approximately 1,400 shareholders of
the Company's Common Stock.
(c) Dividends.
To date, no cash dividends have been issued. It is not anticipated
that any will be issued in the foreseeable future. Management is
aware of no restriction on its ability to pay dividends on its
Common Stock.
Item 21. Executive Compensation - Remuneration of Directors and
Officers.
During the Company's last completed fiscal year, ended October
31, 2000, no compensation was awarded to, earned by or paid to
the President or any other officer or director of the Company,
although compensation may be paid in the future.
Monetary compensation of $150,000 per year is to be paid to
William Graham, President of SSET, the business acquired by the
Company on November 7, 2000. Mr. Graham will also be paid the
cost of leasing a 2000 Lincoln, the monthly cost of a cell phone and
the cost of his health benefits. Monetary compensation of $93,000
per year is to be paid to Melvin Grifis, National Sales Manager.
The Company will also pay the monthly cost of a cell phone for Mr.
Grifis.
The Company has not entered into any employment contracts or
any compensatory plan or arrangement with its officers or the
officers or other personnel of SSET.
Item 22. Financial Statements.
Index to Financial Statements and Financial Statements appear
hereinafter.
Item 23. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There have been no changes in or disagreements with the
Company's accountants as required to be disclosed pursuant to
Section 228.304 of Regulation S-B.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock
offered hereby has been passed upon for the Company by Washor
& Associates, Los Angeles, California.
EXPERTS
The financial statements of the Company for the fiscal year ended
October 31, 1999 appearing in this Prospectus and Registration
Statement have been included herein in reliance on the report of
Rotenberg & Company, LLP, Certified Public Accountants, given
on the authority of that firm as experts in accounting and auditing.
Financial statements of Single Source Electronic Transactions, Inc.
with a ten (10) month ending October 31, 2000 appearing in this
Prospectus and Registration Statement have been included herein in
reliance on the report of Jonathan P. Reuben, C.P.A., an
accountancy corporation, given on the authority of that firm as
experts on accounting and auditing.
ADDITIONAL INFORMATION
The Company will be subject to certain informational requirements
of the Exchange Act, and, in accordance therewith, will file reports
and other information with the Commission. Such reports and
other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington D.C. 20549 or at regional offices of the
Commission at Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and Seven World Trade Center,
New York, New York 10048. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
The address of such site is http://www.sec.gov.
A Registration Statement on Form SB-2 relating to the securities
offered hereby has been filed by the Company with the
Commission. The Prospectus does not contain all of the
information set forth in such Registration Statement. For further
information with respect to the Company and to the securities
offered hereby, reference is made to such Registration Statement,
including the exhibits thereto. Statements contained in this
Prospectus as to the content of any contract or other document
referred to in this Prospectus are not necessarily complete and in
each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such
reference.
INDEX TO FINANCIAL STATEMENTS
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(formerly REAM PRINTING PAPER CORP.)
FISCAL YEAR ENDED OCTOBER 31, 1999
and FISCAL YEAR ENDED OCTOBER 31, 2000
Page
Table of Contents For Audited Financial Audited
Statements . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Independent Auditor's Report of Jonathon P. Reuben . . . . . F-3
Independent Auditor's Report of Rotenberg & Company, LLP . . F-4
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . F-5
Statements of Operations . . . . . . . . . . . . . . . . . . F-6
Statement of Stockholders' Equity (Deficit). . . . . . . . . F-7
Statements of Cash Flows . . . . . . . . . . . . . . . . . . F-8
Notes to Financial Statements of Single Source
Financial Services Corporation (Formerly Ream
Printing Paper Corp.). . . . . . . . . . . . . . . . . . . . F-9
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
FISCAL YEAR ENDED OCTOBER 31, 1999
and FISCAL YEAR ENDED OCTOBER 31, 2000
Table of Contents For Audited Financial Audited
Statements . . . . . . . . . . . . . . . . . . . . . . . . . F-10
Independent Auditors' Report . . . . . . . . . . . . . . . . F-11
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . F-12
Statements of Operations . . . . . . . . . . . . . . . . . . F-13
Statement of Stockholders' Equity (Deficit). . . . . . . . . F-14
Statements of Cash Flows . . . . . . . . . . . . . . . . . . F-15
Cash Flow Worksheet. . . . . . . . . . . . . . . . . . . . . F-16
Notes to Financial Statements of Single Source
Electronic Transactions, Inc.. . . . . . . . . . . . . . . . F-17
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(formerly REAM PRINTING PAPER CORP.)
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Pro Forma Combined Financial Data. . . . . . . . . . . . . . F-18
Unaudited Pro Forma Combined Statement of Operations . . . . F-19
Unaudited Pro Forma Combined Balance Sheets. . . . . . . . . F-20
REAM PAPER PRINTING CORP.
(A Development Stage Company)
(A New York Corporation)
Rochester, New York
TABLE OF CONTENTS
Independent Auditor's Report of Jonathon P. Reuben . . . . . F-3
Independent Auditor's Report of Rotenberg & Company, LLP . . F-4
Balance Sheet at October 31, 2000. . . . . . . . . . . . . . F-5
Statement of Operations and Deficit Accumulated During
the Development Stage . . . . . . . . . . . . . . . . . . F-6
Statements of Stockholders' Deficit. . . . . . . . . . . . . F-7
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . F-8
Notes to Financial Statements. . . . . . . . . . . . . . . . F-9
F-2
Independent Auditors' Report
Board of Directors
Single Source Financial Services Corporation
Los Angeles, California
We have audited the accompanying balance sheet of Single Source
Financial Services Corporation, formerly Ream Printing Paper Corp.,
(A Development Stage Company) as of October 31, 2000, and the
related statements of operations and deficit accumulated during
the development stage, stockholder's deficit., and cash flows for
the year then ended. 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
audits.
We conducted our audits in accordance with generally accepted
auditing standards. These standards require that we plan and perform
the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide 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 Single
Source Financial Services Corporation as of October 31, 2000, and
the results of of its operations and its cash flows for the year
then ended.
ss/ Jonathon P. Reuben C.P.A.
Jonathon P. Reuben, C.P.A.
An Accountancy Corporation
Torrance. California
January 31, 2001
F-3
[Letterhead]
ROTENBERG & COMPANY, LLP
Certified Public Accountants and Consultants
Member of Summit International Associates, Inc.
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Ream Paper Printing Corp.
Rochester, New York
We have audited the accompanying balance sheet of Ream Paper
Printing Corp. (A Development Stage Company) (A New York
Corporation) as of October 31, 1999, and the related statements of
operations, changes in stockholders' deficit, and cash flows for the
period September 19, 1994 (date of inception) to October 31,
1999. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the financial statements. 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 Ream Paper
Printing Corp. as of October 31, 1999, and the results of its
operations and its cash flows for the period September 19, 1994
(date of inception) to October 31, 1999, in conformity with
generally accepted accounting principles.
Rochester, New York
November 2, 1999
ROCHESTER BUFFALO
500 First Federal Plaza 50 Dyke Road,
Rochester, NY 14614 West Seneca, NY 14224
Tel (716) 546-1158 Tel (716) 675-4412
Fax (716) 546-2943 Fax (716) 675-7670
Email: cpa@rotenbergllp.com
F-4
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp. (A Development Stage Company)
Balance Sheets
October 31,
2000 1999
Assets
Current Assets $ 0 $ 0
Total Assets $ 0 $ 0
Liabilities and Stockholders' Deficit
Current Liabilities
Franchise taxes payable $ 800 $1,515
Accrued expenses 0 1,170
Total Current Liabilities 800 2,685
Stockholders' Deficit
Common Stock, $.001 par value, 100,000,000
shares authorized, 1,833,189 shares issued
and outstanding October 31, 2000 and 1999 1,833 1,833
Additional Paid-in Capital 12,298 9,166
Deficit Accumulated During the Development Stage (14,931) (13,684)
Total Stockholders' Deficit (800) (2,685)
Total Liabilities and Stockholders' Deficit $ 0 $ 0
F-5
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp. (A Development Stage Company)
Statements of Operation and Deficit Accumulated During the Development Stage
Deficit
For the Year Ended Accumulated
October 31, During the
2000 1999 Development Stage
Revenue $ 0 $ 0 $ 0
Operating Expenses
General and administrative expenses (1,247) (55) (14,931)
Net Loss $ (1,247) $ (55) $ (14,931)
Basic Loss Per Share $ (0.0007) $ (0.0000)
Weighted Average Shares
Outstanding 1,833,189 1,833,189
F-6
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp. (A Development Stage Company)
Statements of Stockholders' Deficit
Deficit
Accumulated
Additional During the
Common Stock Paid-in Developemnt
Shares Amount Capital Stage
Balance - September 19, 1994 0 $ 0 $ 0 $ 0
Common stock issued for services 1,833,189 1,833 9,166 0
Net loss from inception (9/19/94)
through 10/31/98 0 0 0 (13,629)
Balance - October 31, 1998 1,833,189 $1,833 $ 9,166 $(13,629)
Net loss for the year ended 10/31/99 0 0 0 (55)
Balance - October 31, 1999 1,833,189 1,833 9,166 (13,684)
Donated Capital 0 0 3,132 0
Net loss for the year ended 10/31/00 0 0 0 (1,247)
Balance - October 31, 2000 1,833,189 $1,833 $12,298 $-14,931
F-7
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp. (A Development Stage Company)
Statements of Cash Flows
Accumulated
For the Year Ended Deficit
October 31, During the
2000 1999 Development Stage
Cash Flows from Operating Activities $ (1,247) $ (55) $ (14,931)
Net income (loss)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Organization costs 0 0 10,999
Increase (Decrease) in Liabilities
Increase (decrease) in franchise tax payable (715) 0 800
Increase (decrease) in accrued expenses (1,170) 0 0
Net cash used in operating activities (3,132) (55) (3,132)
Cash Flows from Financing Activities
Expenses paid by shareholders' 3,132 55 3,132
Net cash provided by financing activities 3,132 55 3,132
Net Increase (Decrease) in Cash and Cash
Equivalents 0 0 0
Beginning Balance - Cash and Cash Equivalents 0 0 0
Ending Balance - Cash and Cash Equivalents $ 0 $ 0 0
Supplemental Information:
Cash Paid For:
Interest Expense $ 0 $ 0
Income Taxes $ 0 $ 0
F-8
NOTES TO FINANCIAL STATEMENTS OF
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(Formerly Ream Printing Paper Corp.)
Note 1 - Organization
Ream Printing Paper Corp. (the "Company") was incorporated
in New York on September 19, 1994, for the purpose of
selling paper printing supplies. On November 2000, the
Company's board of directors authorized its name to be
changed to Single Source Financial Services Corporation.
The Company is in the development stage as defined in FASB
Statement 7. The Company has not paid any dividends and
dividends, which may be paid in the future, will depend on
the financial requirements of the Company and other relevant
factors.
Note 2 - Summary of Significant Accounting Policies
a. Property and Equipment
The cost of property and equipment is depreciated over
the estimated useful lives of the related assets.
Depreciation is computed on the straight-line method for
financial reporting purposes and for income tax reporting
purposes.
b. Net Loss Per Share
The Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" ("EPS") that established standards
for the computation, presentation and disclosure of
earnings per share, replacing the presentation of Primary
EPS with a presentation of Basic EPS.
c. Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers cash and cash equivalents to include all stable,
highly liquid investments with maturities of three months
or less.
d. Pervasiveness of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
e. Income Taxes
The Company accounts for its income taxes under the
provisions of Statement of Financial Accounting Standards
109 ("SFAS 109"). The method of accounting for income
taxes under SFAS 109 is an asset and liability method.
The asset and liability method requires the recognition of
deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between
tax bases and financial reporting bases of other assets
and liabilities.
f. Fair Value of Financial Instruments
Pursuant to SFAS No. 107, "Disclosures About Fair Value
of Financial Instruments", the Company is required to
estimate the fair value of all financial instruments
included on its balance sheets as of June 30, 2000 and
December 31, 1999. The Company considers the carrying
value of such amounts in the financial statements to
approximate their face value.
Note 3 - Issuance of Common Stock
The Company issued 10,999,133 shares of its common stock in
exchange for services. In October 2000, the Company authorized
a 6:1 reverse stock split thereby reducing the total number
of shares outstanding to 1,833,189. The Company's financial
statements have been prepared as if the reverse stock split
occured at the Company's inception. Each share outstanding is
entitled to one vote.
Note 4 - Income Taxes
For income tax reporting purposes, the Company is treated as
a start up. All losses the Company incurred prior to the
commencement of its operations are suspended. As of October
31, 2000, the Company has suspended losses of approximately
$15,000. Upon the commencement of the Company's operations,
the suspended losses will be amortized for income tax
purposes over a five-year period to offset future earnings.
An allowance has been provided for by the Company which
reduced the tax benefits accrued by the Company for these
start up costs to zero, as it cannot be determined when, or if,
the tax benefits derived from these losses will materialize.
Note 6 - Related Party Transactions
The Company's shareholders have personally paid expenses
incurred by the Company. The Shareholder's have made these
advances without expectation of reimbursement. The Company
has treated these advances as contributions to capital.
Note 7 - Subsequent Events
a) On November 7, 2000, the Company acquired 100% of the
outstanding stock of Single Source Electronic
Transactions, Inc. in exchange for issuing 10,012,500
shares of its common stock.
b) The Company is in the process of registering with the
Securities Exchange Commission a public offering under
which the Company plans on raising $3,000,000 through
the issuance of 2,000,000 shares of its common stock.
F-9
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
FINANCIAL STATEMENTS
Contents
Page
Independent Auditors' Report . . . . . . . . . . . . . . . . F-11
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . F-12
Statements of Operations . . . . . . . . . . . . . . . . . . F-13
Statement of Stockholders' Equity (Deficit). . . . . . . . . F-14
Statements of Cash Flows . . . . . . . . . . . . . . . . . . F-15
Cash Flow Worksheet. . . . . . . . . . . . . . . . . . . . . F-16
Notes to Financial Statements. . . . . . . . . . . . . . . . F-17
F-10
Independent Auditors' Report
Board of Directors
Single Source Electronic Transactions, Inc.
Los Angeles, California
We have audited the accompanying balance sheets of
Single Source Electronic Transactions, Inc., as of October
31, 2000, and December 31, 1999, and the related
statements of operations, cash flows, and stockholders'
equity, for the ten months ended October 31, 2000, and
for the year ended December 31, 1999. 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 audits.
We conducted our audits in accordance with generally
accepted auditing standards. These standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide 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 Single Source Electronic Transactions, Inc as
of October 31, 2000, and December 31, 1999, and the
results of its operations and its cash flows for the ten
months ended October 31, 2000, and for the year ended
December 31, 1999, in conformity with generally
accepted accounting principles.
ss/ Jonathon P. Reuben C.P.A.
Jonathon P. Reuben, C.P.A.
An Accountancy Corporation
Torrance. California
January 17, 2001
F-11
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
BALANCE SHEETS
October 31, December 31,
2000 1999
ASSETS
Current Assets
Cash and Cash Equivalents $ 6,845 $ 4,607
Loans receivable 9,750 0
Inventories 42,197 0
Total Current Assets 58,792 4,607
Property and Equipment
Furniture 992 0
Office equipment 9,347 0
10,339 0
Accumulated depreciation (220) 0
10,119 0
Other Assets
Note Receivable - Employee 25,422 0
Purchase merchant portfolios
(net accumulated amortization) 0 15,600
Deposits and other assets 6,938 0
32,360 15,600
Total Assets $ 101,271 $ 20,207
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Bank overdraft $ 17,697 0
Franchise tax payable 800 800
Accounts payable 79,432
Accrued payroll 7,122
Other payables 0 3,635
Total Current Liabilities 105,051 4,435
Long Term Debt 92,743 0
Total Liabilities 197,794 4,435
Stockholders' Equity (Deficit)
Common Stock, par value $.001,
authorized 25,000,000 shares,
issued and outstanding 1,000
shares at October 31, 2000,
and at December 31, 1999 1 1
Additional Paid in Capital 6,999 6,999
Retained Earnings (Deficit) (103,523) 8,772
Total Stockholders' Equity
(Deficit) (96,523) 15,772
Total Liabilities and Stock-
holders' Equity (Deficit) $ 101,271 $ 20,207
F-12
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
STATEMENT OF OPERATIONS
For the Ten Months For the Year
Ended Ended
October 31, 2000 December 31, 1999
Revenues $ 571,462 $ 62,681
Cost of revenues (128,196) (10,096)
Gross profit 443,266 52,585
Selling, general, and
administrative expenses (958,507) (43,129)
Net Income (Loss) from operations (515,241) 9,456
Other income (expense)
Gain on sale of residual interest
in merchant accounts 413,067 0
Interest income 422 0
Interest expense (9,743) 0
Net Income (Loss) before income
taxes (111,495) 9,456
Provision for income tax (800) (800)
Net Income (Loss) before income
taxes $ (112,295) $ 8,656
Basic Income (Loss) Per Share $ (112) $ 9
F-13
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
Balance - December 31, 1998 1,000 $ 1 $ 6,999 $ 116
Net income for the year ended
December 31, 1999 0 0 0 8,656
Balance - December 31, 1999 1,000 $ 1 $ 6,999 $ 8,772
Net loss for the ten-months ended
October 31, 2000 0 0 0 (112,295)
Balance - October 31, 2000 1,000 $ 1 $ 6,999 $-103,523
F-14
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
STATEMENTS OF CASH FLOWS
For the Ten For the Year
Months Ended
Ended December 31,
October 31, 2000 1999
Cash Flows from Operating Activities
Net income (loss) $ (112,295) $ 8,656
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 2,887 400
Interest income (422) 0
Interest expense 9,743 0
Gain on sale of interest in merchant
account residuals (413,067) 0
(Increase) Decrease in Assets
(Increase) decrease in loans receivable 0
(Increase) decrease in inventories (42,197) 0
(Increase) decrease in deposits and
other assets (6,938) 0
Increase (Decrease) in Liabilities
Increase (decrease) in bank overdraft 17,697 0
Increase (decrease) in income tax payable 0 800
Increase (decrease) in accounts payable 79,432 0
Increase (decrease) in accrued payroll 7,122 0
Increase (decrease) in accrued payroll (3,635) 3,635
Net cash used in operating activities (461,673) 13,491
Cash Flows from Investing Activities
Acquistion of interest in merchant account residuals 0 (16,000)
Advances to employees (34,750) 0
Equipment acquisition (10,339) 0
Net cash provided (used) in investing activities (45,089) (16,000)
Cash Flows from Financing Activities
Advances from affiliates 509,000 0
Net cash provided by financing activities 509,000 0
Net Increase (Decrease) in Cash and Cash
Equivalents 2,238 (2,509)
Beginning Balance - Cash and Cash
Equivalents 4,607 7,116
Ending Balance - Cash and Cash
Equivalents $ 6,845 $ 4,607
Supplemental Information:
Non-cash Investing and Financing Activities:
On October 31, 2000, the Company sold its residual interest in all merchant accounts
that the Company had in interest in to an affiliate in cancellation of $426,000 of
indebtedness.
For the Ten For the Year
Months Ended
Ended December 31,
October 31, 2000 1999
Cash Paid For:
Interest Expense $ 0 $ 0
Income Taxes $ 800 $ 0
F-15
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
CASH FLOW WORKSHEETS
October 31, December 31, Non-
2000 1999 Difference Operating Investment Finance Cash
Cash 6,845 4,607 2,238 2,238
Loans receivable 9,750 0 9,750 9,750 0
Inventories 42,197 0 42,197 42,197 0
Furniture 992 0 992 992 0
Office equipment 9,347 0 9,347 9,347 0
Accumulated depreciation (220) 0 (220) (220) 0
Note Receivable 25,422 0 25,422 422 25,000 0
Purchase merchant portfolios 0 0
(net accumulated amortization) 0 15,600 (15,600) (2,667) (12,933) 0
Deposits and other assets 6,938 0 6,938 6,938 0
Bank overdraft (17,697) (17,697) (17,697) 0
Accounts payable (79,432) (79,432) (79,432) 0
Accrued payroll (7,122) (7,122) (7,122) 0
Other payables 0 (3,635) 3,635 3,635 0
Long Term Debt (92,743) 0 (92,743) (9,743) (509,000) 426,000.00 0
Common Stock, no par value,
authorized ______ shares,
issued and outstanding 0 0
1,000 shares at 10/31/00, 0 0
and at 10/31/99 (7,000) (7,000) 0 0
Retained Earnings (Deficit) 102,723 (9,572) 112,295 112,295 0
413,067 (413,067.00) 0
0 0 0 471,423 35,339 (509,000) 0 2,238
(2,238)
December 31, December 31, Non-
1999 1998 Difference Operating Investment Finance Cash
Cash 4,607 7116 (2,509) (2,509) (2,509)
Loans receivable 0 0 0 0
Inventories 0 0 0 0 0
Furniture 0 0 0 0 0
Office equipment 0 0 0 0 0
Accumulated depreciation 0 0 0 0 0
Note Receivable 0 0 0 0
Purchase merchant portfolios 0 0 0
(net accumulated amortization) 15,600 15,600 (400) 16,000 0 0 0
Deposits and other assets 0 0 0 0 0
Bank overdraft 0 0 0 0
Accounts payable 0 0 0 0
Accrued payroll 0 0 0 0
Other payables (3,635) (3,635) (3,635) 0 0
Long Term Debt 0 0 0 0 0.00 0 0
Common Stock, no par value,
authorized ______ shares, 0 0
issued and outstanding 0 0
1,000 shares at 10/31/00, 0 0
and at 12/31/99 (7,000) -7000 0 0 0
Retained Earnings (Deficit) (9,572) -116 (9,456) (9,456) 0 0
0 0.00 0 0
0 0 0 (13,491) 16,000 0 0 (2,509)
2,509
F-16
NOTES TO FINANCIAL STATEMENT OF
SINGLE SOURCE ELECTRONIC TRANSACTIONS, INC.
Note 1 - Organization
Single Source Electronic Transactions, Inc. (the
"Company") was incorporated in Nevada on
January 5, 1998. The Company is in the business
of selling credit and debit card processing
equipment to retailers. The Company also offers
electronic transaction processing services to its
customers through a third party processor. The
Company receives residuals on each transaction
processed through the processor by the
Company's customers. The Company acts as a
facilitator to its' customers in obtaining lease
financing of the equipment. In these
arrangements the leasing company pays full sales
price of the equipment to the Company without
recourse.
Note 2 - Summary of Significant Accounting Policies
a. Property and Equipment
The cost of property and equipment is
depreciated over the estimated useful lives of the
related assets. Depreciation is computed on the
straight-line method for financial reporting and
income tax reporting purposes.
b. Net Loss Per Share
The Company adopted the provisions of
Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share"
("EPS") that established standards for the
computation, presentation and disclosure of
earnings per share, replacing the presentation of
Primary EPS with a presentation of Basic EPS.
Basic weighted average shares outstanding as of
October 31, 2000, and December 31, 1999 was
1,000 shares.
c. Cash and Cash Equivalents
For purposes of the statement of cash flows, the
Company considers cash and cash equivalents to
include all stable, highly liquid investments with
maturities of three months or less.
d. Pervasiveness of Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make
estimates and assumptions that affect the
reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at
the date of the financial statements and the
reported amounts of revenues and expenses
during the reporting period. Actual results could
differ from those estimates.
e. Income Taxes
The Company accounts for its income taxes
under the provisions of Statement of Financial
Accounting Standards 109 ("SFAS 109"). The
method of accounting for income taxes under
SFAS 109 is an asset and liability method. The
asset and liability method requires the
recognition of deferred tax liabilities and assets
for the expected future tax consequences of
temporary differences between tax bases and
financial reporting bases of other assets and
liabilities.
f. Fair Value of Financial Instruments
Pursuant to SFAS No. 107, "Disclosures About
Fair Value of Financial Instruments", the
Company is required to estimate the fair value of
all financial instruments included on its balance
sheets as of October 31, 2000, and December
31, 1999. The Company considers the carrying
value of such amounts in the financial statements
to approximate their face value.
Note 3 - Note Receivable - Employee
In August 2000, the Company advanced to an
employee $25,000, which is evidenced by a
promissory note. The loan is assessed interest at
an annual rate of 7%. The loan matures in July
2003, when the principal balance and accrued
interest become fully and due and payable.
Interest accrued on this loan for the ten-month
period ended October 31, 2000 was $423, which
was credited to operations.
Note 4 - Inventories
Inventories at October 31, 2000, consisted of
equipment held for sale to the Company's
customers. Inventories are valued at the lower of
cost determined by the FIFO method or market.
Note 5 - Property and Equipment
Depreciation charged to operations for the ten
months ended October 31, 2000, amounted to
$220. The Company useful lives of furniture and
office equipment for purposes of computing
depreciation is five years.
Note 6 - Related Party Transactions
a) In 1999, the Company acquired all of the
interest in residuals due two of its former
employees for $16,000. The purchase price
was capitalized and amortized over a ten-
year life using the straight-line method for
financial reporting and income tax reporting
purposes. Amortization expense charged to
operations for the ten-month period ended
October 31, 2000, and for the year ended
December 31, 1999, were $2,667 and $400,
respectively.
b) On September 20, 2000, the Company
received two copiers from an affiliate by
assuming the leases on the equipment. The
first lease is payable in monthly installments
of $152, with the final installment due in
June 2005. The second lease is payable in
monthly installments of $167, with the final
installment due in April 2001. The Company
has accounted for the assumption of these
leases as operating leases.
c) The Company leases its Los Angeles office
from an affiliate on a month-to-month basis
at a rate of $4,601.23 per month. Effective
January 1, 2001 this monthly rate increases
to $6,920.42 per month.
d) During 2000, the Company borrowed a total
of $509,000 from an affiliate. The loans are
evidenced by a promissory note and are
assessed interest at an annual rate of 8%.
The principal balance and accrued interest
become payable in thirty-six equal monthly
installments commencing on April 3, 2003.
Any remaining principal and accrued interest
becomes fully due and payable on April 5,
2006. Accrued interest charged to
operations on this loan for the ten-months
ended October 31, 2000, amounted to
$9,743.
On October 31, 2000, the Company sold to the
lender all of its interest in residuals earned
currently and in the future on all customer
accounts in existence at the time of sale for
$426,000. Under the terms of the sale, the
balance owed the affiliate was reduced by the
sales price. The balance of the loan as of
October 31, 2000, amounted to $92,743.
e) The Company has experienced a loss for the
ten-months ended October 31, 2000, of
$112,295, and has liabilities in excess of
assets at October 31, 2000, totaling $95,723.
The Company's shareholders' have
committed to fund any shortfalls necessary to
meet the Company's obligations of at least
the twelve months.
Note 7 - Income Taxes
Deferred income taxes arise from temporary
differences resulting from income and expense
items reported for financial accounting and tax
purposes in different periods. Deferred taxes are
classified as current or non-current, depending
on the classification of the assets and liabilities to
which they relate.
For the Ten Months For the Year
Ended Ended
October 31, 2000 December 31, 1999
Income taxes payable $ - $ 1,418
Less tax benefit of net
operating loss carry back - (1,418)
Income taxes currently payable $ - $ -
The Company did not calculate a provision for
deferred taxes for the ten-month period ended
October 31, 2000, or for the year ended
December 31, 1999, as any timing differences
between financial statement and income tax
reporting purposes were immaterial.
The Company has available at October 31, 2000,
approximately $102,000 of unused operating
loss carryforwards that may be applied against
future taxable income and that expire in 2020.
An allowance has been provided for by the
Company which reduced the tax benefits accrued
by the Company for its net operating losses to
zero, as it cannot be determined when, or if, the
tax benefits derived from these operating losses
will materialize.
Note 8 - Leases
As of October 31, 2000, the Company leases 6
offices that are located in California, Colorado,
Rhode Island, Texas, and Florida, under non-
cancelable leases under terms of one year or less.
In addition, as discussed further in Note 6, the
Company assumed leases on copier equipment,
which expire in various years through 2005.
Rental expense charged to operations for the
ten-month period ended October 31, 2000, and
for the year ended December 31, 1999, were
$85,263, and $0, respectively, consisting solely
of minimum rental payments.
Minimum rental commitments under the
noncancelable equipment lease expire as follows:
2001 $ 1,824
2002 $ 1,824
2003 $ 1,824
2004 $ 1,824
2005 $ 1,216
Total minimum lease payments $ 8,512
Note 9 - Segment Information
The Company currently operates in only one
reportable segment, which conducts business
throughout five States. The Company principally
operated during 1999 and during the ten-month
period ended October 31, 2000, in California
where significantly all of the Company's sales
were generated.
The Company receives significantly all of its
inventory from two suppliers. However,
Management believes that there is no shortage of
inventory available from other suppliers and the
Company's operations would not be affected by
the inability of its current providers to meet its
inventory needs.
F-17
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(formerly REAM PRINTING PAPER CORP.)
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Pro Forma Combined Financial Data
The Unaudited Pro Forma Combined Balance Sheet of the Company,
together with the Unaudited Pro Forma Combined Statement of
Operations, have been prepared to illustrate the estimated
effect of the Company's acquisition of Single Source Electronic
Transactions, Inc. as if the acquisition took place on October 31,
2000. The Pro Forma Financial Statements should be read in
conjunction with the separate historical financial statements of
the Company and Single Source Electronic Transactions, Inc. and
related notes thereto.
F-18
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp. (A Development Stage Company)
Unaudited Proforma Combined Statement of Operations
Single Source Single Source
Financial Services Electronic
Corporation Transactions, Inc. Proforma
Year Ended Ten Months Ended Proforma Combined
October 31, 2000 October 31, 2000 Adjustments Company
Revenue $ - $ 571,462 - $ 571,462
Costs of revenues - (128,196) - (128,196)
Gross profit - 443,266 - 443,266
Operating expenses
General and administrative expenses (1,247) (958,507) - (959,754)
Net income (loss) from operations (1,247) (515,241) - (516,488)
Other income (expense) - 403,746 - 403,746
Net loss before income taxes (1,247) (111,495) - (112,742)
Provision for income tax - (800) - (800)
Net Loss $ (1,247) $ (112,295) $ (113,542)
Basic Loss Per Share $ (0.0007) $ (0.0096)
Weighted Average Shares Outstanding 1,833,189 1) 10,012,500 11,845,689
1) Issuance of 10,012,500 shares of Single Source Financial
Corporation's common stock in exchange for 100% of the
outstanding stock of Single Source Electronic Transactions, Inc.
F-19
Single Source Financial Services Corporation
Formerly Ream Printing Paper Corp.
Unaudited Pro Forma Combined Balance Sheets
Single Source Single Source
Financial Services Electronic
Corporation Transactions, Inc. Proforma Proforma
October 31, 2000 October 31, 2000 Adjustments Company
ASSETS
Current Assets
Cash and cash equivalents $ - $ 6,845 - $ 6,845
Loans receivable - 9,750 - 9,750
Inventories - 42,197 - 42,197
Total Current Assets - 58,792 - 58,792
Property and Equipment
Furniture - 992 - 992
Office equipment - 9,347 - 9,347
- 10,339 - 10,339
Accumulated depreciation - (220) - (220)
10,119 - 10,119
Other Assets
Note Receivable - Employee - 25,422 - 25,422
Purchase merchant portfolios
(net accumulated amortization) - - -
Deposits and other assets - 6,938 - 6,938
- 32,360 - 32,360
Total Assets $ - $ 101,271 - $ 101,271
Liabilites and Stockholders' (Deficit)
Current Liabilties
Bank overdraft $ - $ 17,697 - $ 17,697
Franchise tax payable 800 800 - 1,600
Accounts payable - 79,432 - 79,432
Accrued payroll - 7,122 - 7,122
Other payables - - -
Total Current Liabilities 800 105,051 - 105,851
Long Term Debt - 92,743 - 92,743
Total Liabilities 800 197,794 - 198,594
Stockholders' (Deficit)
Common stock $ 1,833 $ 1 1) 10,012 11,846
Additional paid in capital 12,298 6,999 1) (10,012) 9,286
Retained earnings (deficit) (14,931) (103,523) (118,454)
Total Stockholders' (Deficit) (800) (96,523) - (97,323)
Total Liabilities and
Stockholders' (Deficit) $ - $ 101,271 - $ 101,271
1) Issuance of 10,012,500 shares of Single Source Financial
Corporation's common stock in exchange for 100% of the
outstanding stock of Single Source Electronic Transactions, Inc.
F-20
ALTERNATE PAGE
Preliminary Prospectus
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
a New York corporation
1,125,000 Shares of $.001 Par Value
Common Stock at $2.00 Per Share
This Prospectus relates to the sale or other disposition
of outstanding shares of common stock, par value $.001 (the
"Common Stock"), of Single Source Financial Services
Corporation, a New York corporation (the "Company"), owned by
certain selling shareholders (the "Selling Shareholders"). The
Company sells and leases various types of equipment to record
electronic financial transactions, such as credit card and debit
card purchases to merchants. The Company also offers access to
electronic processing of such financial transactions.
The Selling Shareholders acquired the Common Stock in private
placement transactions which were exempt from the registration
and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "1933 Act"). The Selling Shareholders may from
time to time sell shares of the Common Stock on the OTC Bulletin
Board, on any other national securities exchange or automated
quotation system on which the Common Stock may be listed or
traded, in negotiated transactions or otherwise, at prices then
prevailing or related to the then current market price or at
negotiated prices. The Common Stock of the Selling Shareholders
may be sold directly or through brokers or dealers. See "Plan of
Distribution."
The Registration Statement of which this Prospectus is a part
also relates to a self-underwritten direct public offering
(the "Offering") of 2,000,000 shares of the Common Stock by the
Company.
The Company will receive no part of the proceeds from the
sale of the shares of the Common Stock owned by the Selling
Shareholders. All expenses of registration incurred in connection
with this offering will be paid by the Company, but all selling and
other expenses incurred by the Selling Shareholders will be paid by
the Selling Shareholders. See "Selling Shareholders."
The Selling Shareholders and any broker-dealers participating
in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the 1933 Act, and any
commissions or discounts given to any such broker-dealer may be
regarded as underwriting commissions or discounts under the 1933 Act.
The Common Stock has not been registered for sale by the Selling
Shareholders under the securities laws of any state as of the date of
this Prospectus. Brokers or dealers effecting transactions in the
Common Stock should confirm the registration thereof under the
securities laws of the states in which transactions occur or the
existence of any exemption from registration.
THE SECURITIES OFFERED HEREBY ARE
HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK AND SUBSTANTIAL DILUTION.
SEE "RISK FACTORS" BEGINNING ON PAGE 5
AND "DILUTION."
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 2001
This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security offered by this
Shares Prospectus, or an offer to sell or a solicitation of
an offer to buy any security, by any person in any jurisdiction
in which such offer or solicitation would be unlawful. Neither
the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances, imply that the information in
this Prospectus is correct as of any time subsequent to the date
of this Prospectus.
TABLE OF CONTENTS
Page
Summary Information and Risk Factors . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . .
Determination of Offering Price. . . . . . . . . . . . . . .
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling Shareholders . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . .
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . . . . .
Description of Securities. . . . . . . . . . . . . . . . . .
Interest of Named Experts and Counsel. . . . . . . . . . . .
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities. . . . . .
Organization Within Last Five Years. . . . . . . . . . . . .
Description of Business. . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . .
Description of Property. . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions . . . . . . .
Market for Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . .
Executive Compensation - Remuneration of
Directors and Officers. . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . . . . . .
Indemnification of Directors and Officers. . . . . . . . . .
Other Expenses of Issuance and Distribution. . . . . . . . .
Recent Sales of Unregistered Securities. . . . . . . . . . .
Exhibit List . . . . . . . . . . . . . . . . . . . . . . . .
Undertakings . . . . . . . . . . . . . . . . . . . . . . . .
Until _______, 2001 (___ days from the date of this Prospectus),
all persons effecting transactions in the registered securities,
whether or not participating in this distribution, may be required
to deliver a Prospectus.
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
1,125,000 Shares of Common Stock
_______________________
PROSPECTUS
_______________________
___________, 2001
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Article Six of the Company's Articles of Incorporation
eliminates the personal liability of the directors to the Company
or its shareholders for damages for any breach of duty.
Such personal liability is not eliminated if a judgment or other
final adjudication adverse to the director establishes that his
acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law or that he personally
gained in fact a financial profit or other advantage to which he
was not legally entitled or that he violated certain provisions
of New York law. The provisions of New York establish director
liability for voting for or concurring in the declaration of
improper dividends, improper purchases of the Company's Common
Stock, certain improper distributions of assets to shareholders
and improper loans.
Article Six of the Company's Bylaws provide that the Company
will indemnify officers and directors except in relation to matters
as to which they shall be finally adjudicated to be liable for
for negligence or misconduct in the performance of duty.
Indemnification Agreements. We anticipate entering into
indemnification agreements with each of the Company's directors
and executive officers pursuant to which we shall indemnify each
such director and officer for all expenses and liabilities, including
criminal monetary judgments, penalties and fines, incurred by each
such director or officer in connection with any criminal or civil
action brought or threatened against such director or officer for
being or having been an executive officer or director of the
Company, to the extent allowed by applicable law and the charter
documents.
Director and Officer Liability Insurance. At some time in the
future the Company may obtain director and officer liability
insurance which could provide coverage against certain securities
laws violations.
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the 1993 Act and will
be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution.
The Company will pay all expenses in connection with the
registration of the Common Stock and no other expenses. The
estimated expenses of issuance and distribution are set forth below.
Registration Fee Approximately $ 1,237.50
Legal Fees Approximately $35,000.00
Accounting Fees Approximately $ 7,000.00
Administrative Expenses Approximately $ 6,762.50
Total $50,000.00
Item 26. Recent Sales of Unregistered Securities.
During the past 3 years, the Company has only issued
unregistered securities on one occasion. On November 7, 2000,
the Company issued 10,012,500 shares of Common Stock for all
of the issued and outstanding stock of Single Source Electronic
Transactions, Inc., a Nevada corporation. SSET is seeking to
register 1,125,000 shares of that stock in this Offering. No other
stock has been issued during the past 3 years.
Item 27. Exhibit Index.
Copies of the following documents are filed with this Registration
Statement, Form SB-2, as exhibits:
Exhibit No.
1 Underwriting Agreement (Not Applicable)
2 Plan of Merger (Not Applicable)
3.1 Articles of Incorporation
3.2 Certificate of Amendment of the Certificate of Incorporation
3.3 Bylaws
4 Instruments Defining Rights (Not Applicable)
5.1 Securities Opinion of Washor & Associates Regarding Legality
of Securities Being Registered
8. Opinion Re: Tax Matters (Not Applicable)
9. Voting Trust Agreement (Not Applicable)
10.1 Stock Purchase Agreement
11.1 Computation of Per Share Earnings
15 Letter on Unaudited Interim Financial Information
(Not Applicable)
16 Letter on Change in Certifying Accountant (Not Applicable)
21.1 List of the Registrant's Subsidiaries
23.1 Consent of Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney (appears on signature page in Part II of
the Registration Statement)
25 Statement of Eligibility of Trustee (Not Applicable)
26 Invitations For Competitive Bids (Not Applicable)
27 Financial Data Schedule
Exhibit 3.1
ARTICLES OF INCORPORATION OF
REAM PRINTING PAPER CORP.
Under Section 402 of the Business Corporation Law.
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, for
the purpose of forming a corporation pursuant to Section 402
of the Business Corporation Law of the State of New York, does
hereby certify and set forth:
ARTICLE I Name
The name of this corporation is Ream Printing Paper Corp.
ARTICLE II Purposes and Powers
Section 1. Purposes. The purpose(s) for which the corporation
is formed are:
To engage in any lawful act or activity for which
corporation may be organized under the business corporation law,
provided that the corporation is not formed to engage in any act or
activity which requires the act or approval of any state official,
department, board, agency or other body without such approval or
consent first being obtained.
To carry on a general mercantile, industrial, investing and
trading business in all its branches; to devise, invent, manufacture,
fabricate, assemble, install, service, maintain, alter, buy, sell,
import, export, license as licence or licensee, leases lessor or
lessee, distribute, job, enter into, negotiate, execute, acquire,
and assign contracts in respect of, acquire, receive, grant, and
assign licensing arrangements, portions, franchises, and other rights
in respect of and generally deal in and with at wholesale and retail,
as principal, and as sales, business, special, or general agent,
representative, broker, factor, merchant, distributor, jobber,
advisor, or in any other lawful capacity, goods, wares, merchandise,
commodities, and unimproved, improved, finished, processed and
other real, personal and mixed property of any and all kinds,
together with the components, resultants, and by-products thereof.
To create, manufacture, contract for, sell, import, export,
distribute, job and generally deal in and with, whether at wholesale
or retail, and as principal, agent, broker, factor, commission
merchant, licence, licensee or otherwise, any and all kinds of
goods, wares, and merchandise, and in connection therewith or
independent thereof, to establish and maintain, by any manner or
means, buying offices, distribution centers, specialty and other
shops, stores, mail-order establishments, concessions, leased
departments, and any and all other departments, sites and locations
necessary, convenient or useful in the furtherance of any business
of the corporation.
To acquire by purchase, subscription, underwriting or otherwise,
and to own, hold for investment, or otherwise, and to use, sell,
assign, transfer, mortgage, pledge, exchange or otherwise dispose
of real and personal property of every sort and description and
wheresoever situated, including shares of stock, bonds, debentures,
notes, scrip, securities, evidences of indebtedness, contracts or
obligations of any corporation or association, whether domestic or
foreign, or of any firm or individual or of the United States or any
state, territory or dependency of the United States or any foreign
country, or any municipality or local authority within or without the
United States, and also to issue in exchange therefore, stocks, binds
or other securities or evidences of indebtedness of this corporation
and, while the owner or holder of any such property, to receive,
collect and dispose of the interest, dividends and income on or from
such property and to possess and exercise in respect thereto all of
the rights, powers and privileges of ownership, including all voting
powers thereon.
To construct, build, purchase, lease or otherwise acquire, equip,
hold, own, improve, develop, manage, maintain, control, operate,
lease, mortgage, create liens upon, sell, convey or otherwise
dispose of and turn to account, any and all plants, machinery,
works, implements and things or property, real and personal, of
every kind and description, incidental to, connected with, or
suitable, necessary or convenient for any of the purposes
enumerated herein, including all or any part or parts of the
properties, assets, business and good will of any persons, firms,
associations or corporations.
The powers, rights and privileges provided in this certificate
are not to be deemed to be in limitation of similar, other or
additional powers, rights and privileges granted or permitted to a
corporation by the Business Corporation Law, it being intended that
this corporation shall have all the rights, powers and privileges
granted or permitted to a corporation by such statute.
ARTICLE III Corporation Office
The office of the corporation is to be located in the County of
Monroe, State of New York.
ARTICLE IV Number of Shares
The aggregate number of shares which the corporation shall have
the authority to issue is Twenty Million (20,000,000), all of which
shall have a par value of One ($.001) Mill.
ARTICLE V Agent for the Corporation
The Secretary of State is designated as agent of the corporation
upon whom process against it may be served. The post office address
to which the Secretary of State shall mail a copy of any process
against the corporation served upon him is:
2541 Monroe Avenue, Suite 301
Rochester, New York 14618
ARTICLE VI Directors Liability
The personal liability of directors to the corporation or its
shareholders for damages for any breach of duty in such capacity is
hereby eliminated except that such personal liability shall not be
eliminated if a judgment or other final adjudication adverse to such
director establishes that his acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law or
that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled or that his acts
violated Section 719 of the Business Corporation Law.
No shareholder of this corporation shall have a preemptive right
because of his shareholdings to have first offered to him any part of
any of the presently authorized shares of this corporation hereafter
issued, optioned or sold, or any part of any debentures, bonds,
notes or securities of this corporation convertible into shares
hereafter issued, optioned or sold by the corporation. This
provision shall operate to defeat rights in all shares and classes of
shares now authorized and in all debentures, bonds, notes or
securities of the corporation which may be convertible into shares
and classes of shares and also to defeat preemptive rights in any and
all shares and classes of shares and securities convertible into
shares which this corporation may be hereafter authorized to issue by
any amended certificate duly filed.
IN WITNESS WHEREOF, this certificate has been subscribed to this
12th day of September 1994 by the undersigned, who affirms that the
statements made herein are true under the penalties of perjury.
MORRIS DIAMOND
105 SOUTHERN PARKWAY
ROCHESTER, NEW YORK 14618
Exhibit 3.2
Certificate of Amendment of the
Certificate of Incorporation of
Ream Printing Paper Corp.
Under Section 805 of the Business Corporation Laws
_____________________
FIRST: The name of the corporation is Single Source Financial
Services Corporation. The name under which the corporation was
formed is Ream Printing Paper Corp.
SECOND: The Certificate of Incorporation of the Corporation
was filed by the Department of State on September 19, 1994.
THIRD: The Amendments of the Certificate of Incorporation
effected by this Certificate of Amendment are as follows:
1. To change the name of the Corporation from Ream Printing
Paper Corp. to Single Source Financial Services Corporation; and
2. To increase the authorized number of shares in the
Corporation from 20,000,000 to 100,000,000.
FOURTH: To accomplish the foregoing amendments, Article 1 of
the Certificate of Incorporation relating to the name of the
Corporation is hereby stricken out in its entirety and the following
new article is substituted in lieu thereof:
Article 1 Name
The name of this Corporation is Single Source Financial Services
Corporation.
To accomplish the foregoing amendment, Article 4 of the Articles
of Incorporation relating to the number of authorized shares is
hereby stricken out in its entirety and the following new article is
substituted in lieu thereof:
Article 4 Number of Shares
The aggregate number of shares which the Corporation shall have
the authority to issue is one hundred million (100,000,000), all of
which shall have a par value of one mill ($.001).
FIFTH: The manner in which the foregoing amendments of the
Certificate of Incorporation were authorized is as follows:
The foregoing amendments were approved by a vote of the
majority of the Board of Directors and by the vote of a greater
number or proportion of the holders of securities required to
approve such amendments.
Signed on November 6, 2000
_______________________________
Arnold F. Sock, President of
Ream Printing Paper Corp.
Exhibit 3.3
BYLAWS OF
REAM PRINTING PAPER CORP.
ARTICLE I Offices
The principal office of the corporation shall be located in the State
of New York in the County of Monroe. The corporation may have
such other offices, either within or outside the state, as the Board
of Directors may designate or as the business of the corporation may
require from time to time. The registered office of the corporation
may be, but need not be, identical with the principal office, and the
address of the registered office may be changed from time to time
by the Board of Directors.
ARTICLE II Shareholders
Section 1. Annual Meeting. the annual meeting of the shareholders
shall be held at 4:00 PM on the Third Tuesday in the month of
February in each year, beginning with the year 1995. If the day
fixed for the annual meeting shall be a legal holiday, such meeting
shall be held on the next succeeding business day.
Section 2. Special Meetings. Special meetings of the shareholders,
for any purpose, unless otherwise prescribed by statute, may be
called by the president or by the Board of Directors, and shall be
called by the president at the request of the holders of not less than
one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate
any place as the place for any annual meeting or for any special
meeting called by the Board of Directors. A waiver of notice signed
by all shareholders entitled to vote at a meeting may designate any
place as the place for such meeting. If no designation is made, or
if a special meeting shall be called otherwise than by the Board,
the place of meeting shall be the registered office of the corporation.
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting, and, in case of a special
meeting, the purposes for which the meeting is called, shall be
delivered not less than ten nor more than fifty days before the date
of the meeting, either personally or by mail, by or at the direction
of the president, or the secretary, or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at such
meeting, except that if the authorized capital stock is to be increased
at least thirty days notice shall be given. If mailed, such notice
shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
If requested by the person or persons lawfully calling such meeting,
the secretary shall give notice thereof at corporate expense.
Section 5. Closing of Transfer Books or Fixing of Record Date.
For the purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof,
or shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper
purpose, the Board of Directors may provide that the stock transfer
books shall be closed for any stated period not exceeding fifty days.
If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten
days immediately preceding such meeting. In lieu of closing the
stock transfer books the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty days, and, in case of
a meeting of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not
closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record
date for such determination of shareholders. When a determination
of shareholders entitled to vote at any meeting of shareholders has
been made as provided in this section, such determination shall
apply to any adjournment thereof except where the determination
has been made through the closing of this stock transfer books and
the stated period of the closing has expired.
Section 6. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at
least ten days before each meeting of shareholders, a complete list
of the shareholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each. For a period of
ten days prior to such meeting, this list shall be kept on file at
the principal office of the corporation and shall be subject to
inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting. The original
stock transfer books shall be prima facie evidence as to who are
the shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders.
Section 7. Quorum. Fifty One Percent (51%) of the outstanding
shares of the corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of shareholders.
If less than a quorum of the outstanding shares are represented at a
meeting, a majority of the shares so represented may adjourn the
meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified The shareholders
present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
If a quorum is present, the affirmative vote of a majority of
the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by law or
the articles of incorporation.
Section 8. Proxies. At all meetings of shareholders, a shareholder
may vote by proxy executed in writing by the shareholder or his or
her duly authorized attorney-in-fact. Such proxy shall be filed with
the secretary of the corporation before or at the time of the
meeting. No proxy shall be valid after eleven months from the date
of its execution , unless otherwise provided in the proxy.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote, and each fractional share shall
be entitled to a corresponding fractional vote on each matter
submitted to a vote at a meeting of shareholders. Cumulative voting
shall not be allowed.
Section 10. Voting of Shares by Certain Holders. Neither treasury
shares, nor shares of its own stock held by the corporation in a
fiduciary capacity, nor shares held by another corporation if a
majority of the shares entitled to vote for the election of Directors
of such other corporation is held by this corporation, shall be voted
at any meeting or counted in determining the total number of
outstanding shares at any given time.
Shares standing in the name of another corporation may be voted
by such officer, agent or proxy as the bylaws of such corporation
may prescribe or, in the absence of such provision, as the Board of
Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator
may be voted by him or her, either in person or by proxy, without a
transfer of such shares into his or her name. Shares standing in the
name of a trustee may be voted by him or her, either in person or by
proxy, but not trustee shall be entitled to vote shares held by him or
her without a transfer of such shares into his or her name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may
be voted by such receiver without the transfer thereof into his or
her name if authority to do so be contained in an appropriate order
of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of
the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
Section 11. Informal Action by Shareholders. Any action required
to be taken at a meeting of the shareholders, or any other action
which may be taken without a meeting of the shareholders, may be
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof. Such consent shall
have the same force and effect as a unanimous vote of the shareholders.
ARTICLE III Board of Directors
Section 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors, except as
otherwise provided by statute or the articles of incorporation.
Section 2. Number, Tenure and Qualifications. The number of
Directors of the corporation shall be not less than three nor more
than five, unless a lesser number is allowed by statute. Directors
shall be elected at each annual meeting of shareholders. Each
director shall hold office until the next annual meeting of
shareholders and thereafter until his or her successor shall have
been elected and qualified.
Directors need not be residents of this state or shareholders of
the corporation. Directors shall be removable in the manner provided
by statute.
Section 3. Vacancies. Any director may resign at any time by
giving written notice to the president or to the secretary of the
corporation. Any vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining
Directors though not less than a quorum. A director elected to fill
a vacancy shall be elected for the unexpired term of his or her
predecessor in office. Any Directorship to be filled by the
affirmative vote of a majority of the Directors then in office or by
an election at an annual meeting or at a special meeting of
shareholders called for that purpose, and a director so chosen shall
hold office for the term specified in Section 2 above.
Section 4. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw
immediately after and at the same place as the annual meeting of
shareholders. The Board of Directors shall be held without other
notice than this bylaw immediately after and at the same place as
the annual meeting of shareholders. The Board of Directors may
provide by resolution the time and place for the holding of
additional regular meetings without other notice than such resolution.
Section 5. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president or any
two Directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place as the place
for holding any special meeting of the Board of Directors called by
them.
Section 6. Notice. Notice of any special meeting shall be given at
least seven days previous thereto by written notice delivered
personally or mailed to each director at his or her business address,
or by notice given at least two days previously by telegraph. If
mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting.
The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be
specified in the notice of waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of Directors fixed by
Section 2 shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the Directors present
may adjourn the meeting from time to time without further notice.
Section 8. Manner of Acting. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors.
Section 9. Compensation. By resolution of the Board of Directors,
any director may be paid any one or more of the following:
expenses, if any, of attendance at meetings; a fixed sum for
attendance at each meeting; or a stated salary as director. No such
payment shall preclude any director from serving the corporation in
any other capacity and receiving compensation therefor.
Section 10. Information Action by Directors. Any action required
or permitted to be taken at a meeting of the Directors may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the Directors entitled to vote with
respect to the subject matter thereof. Such consent shall have the
same force and effect as a unanimous vote of the Directors.
ARTICLE IV Officers and Agents
Section 1. General. The officers of the corporation shall be a
president, one or more vice presidents, a secretary and a treasurer.
The salaries of all the officers of the corporation shall be fixed by
the Board of Directors.
One person may hold any two offices, except that no person may
simultaneously hold the offices of president and secretary.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected by the Board of Directors annually at
the first meeting of the Board held after each annual meeting of the
shareholders.
Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of
the corporation will be served thereby.
Section 4. Vacancies. A vacancy in any office, however,
occurring, may be filled by the Board of Directors for the unexpired
portion of the term.
Section 5. President. The president shall:
(a) subject to the direction and supervision of the Board of
Directors, be the chief executive officer of the corporation;
(b) shall have general and active control of its affairs and
business and general supervision of its officers, agents and
employees; and
(c) the president shall have custody of the treasurer's
bond, if any.
Section 6. Vice Presidents. The vice presidents shall:
(a) assist the president; and
(b) shall perform such duties as may be assigned to them by
the president or by the Board of Directors.
Section 7. Secretary. The secretary shall:
(a) keep the minutes of the proceedings of the shareholders
and the Board of Directors;
(b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law;
(c) be custodian of the corporate records and of the seal of
the corporation and affix the seal to all documents when authorized
by the Board of Directors;
(d) keep at its registered office or principal place of business
a record containing the names and addresses of all shareholders and
the number and class of shares held by each, unless such a record
shall be kept at the office of the corporation's transfer agent or
registrar;
(e) sign with the president, or a vice president, certificates
for shares of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors;
(f) have general charge of the stock transfer books of the
corporation, unless the corporation has a transfer agent; and
(g) in general, perform all duties incident to the office as
secretary and such other duties as from time to time may be assigned
to him or her by the president or by the Board of Directors.
Section 8. Treasurer. The treasurer shall:
(a) be the principal financial officer of the corporation;
(b) perform all other duties incident to the office of the
treasurer and, upon request of the Board, shall make such reports
to it as may be required at any time;
(c) be the principal accounting officer of the corporation; and
(d) have such other powers and perform such other duties as may
be from time to time prescribed by the Board of Directors or the
president;
ARTICLE V Stock
Section 1. Certificates. The shares of stock shall be represented
by consecutively numbered certificates signed in the name of the
corporation by its president or a vice president and the secretary,
and shall be sealed with the seal of the corporation, or with a
facsimile thereof. No certificate shall be issued until the shares
represented thereby are fully paid.
Section 2. Consideration for Shares. Shares shall be issued for
such consideration, expressed in dollars (but not less than the par
value thereof, if any) as shall be fixed from time to time by the
Board of Directors. Such consideration may consist, in whole or in
part of money, other property, tangible or intangible, or in labor
or services actually performed for the corporation, but neither
promissory notes nor future services shall constitute payment or
part payment for shares.
Section 3. Transfer of Shares. Upon surrender to the corporation
or to a transfer agent of the corporation of a certificate of stock
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, and such documentary stamps
as may be required by law, it shall be the duty of the corporation
to issue a new certificates to the person entitled thereto, and cancel
the old certificate. Every such transfer of stock shall be entered on
the stock book of the corporation which shall be kept at its principal
office, or by its registrar duly appointed.
Section 4. Transfer Agents, Registrars and Paying Agents. The
Board may at its discretion appoint one or more transfer agents,
registrars and agents for making payment upon any class of stock,
bond, debenture or other security of the corporation.
ARTICLE VI Indemnification of Officers and Directors
Each director and officer of this corporation shall be indemnified by
the corporation against all costs and expenses actually and
necessarily incurred by him or her in connection with the defense of
any action, suit or proceeding in which he or she may be involved
or to which he or she may be made a party by reason of his or her
being or having been such director or officer, except in relation to
matters as to which he or she shall be finally adjudged in such
action, suit or proceeding to be liable for negligence or misconduct
in the performance of duty.
ARTICLE VII Miscellaneous
Section 1. Waivers of Notice. Whenever notice is required by law,
by the articles of incorporation or by these bylaws, a waiver thereof
in writing signed by the director, shareholder or other person
entitled to said notice, whether before or after the time stated
therein, or his or her appearance at such meeting in person or (in
the case of a shareholders' meeting) by proxy, shall be equivalent to
such notice.
Section 2. Seal. The corporate seal of the corporation shall be in
the form impressed on the margin hereof.
Section 3. Fiscal Year. The fiscal year of the corporation shall be
as established by the Board of Directors.
Section 4. Amendments. The Board of Directors shall have power
to make, amend and repeal the bylaws of the corporation at any
regular meeting of the Board or at any special meeting called for
the purpose.
APPROVED:
DATED: September 21, 1994 ______________________________
Director:
______________________________
Director:
______________________________
Director:
Exhibit 5.1
WASHOR & ASSOCIATES
11150 WEST OLYMPIC BOULEVARD
SUITE 980
LOS ANGELES, CALIFORNIA 90064
TELEPHONE (310) 479-2660
TELECOPIER (310) 479-1022
November 21, 2000
Single Source Financial
Services Corporation
10780 Santa Monica Boulevard, Suite 240
Los Angeles, California 90025
Re: Opinion Regarding Legality of Common Stock
Ladies and Gentlemen:
We have examined the Registration Statement on Form SB-2 (the
"Registration Statement") to be filed by Single Source Financial
Services Corporation (formerly Ream Printing Paper Corp.), a New
York corporation (the "Company"), with the Securities and
Exchange Commission ("Commission"). It is our understanding
that the Registration Statement is to be filed in connection with
the registration under the Securities Act of 1933, as amended (the
"1933 Act"), of shares of common stock ("Common Stock") to be
sold by the Company and by certain selling shareholders.
We have examined original or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the
purposes of this opinion. For the purposes of this opinion, we have
assumed the authenticity of all documents submitted to us and the
genuineness of the signatures of persons signing all documents in
connection with which this opinion is rendered, the authority of
such persons signing on behalf of the parties thereto, and the due
authorization, execution and delivery of all documents by the
parties thereto.
Based upon the foregoing, we are of the opinion that: when, as
and if (i) the Registration Statement shall have become effective
pursuant to the provisions of the 1933 Act, (ii) the Company or the
selling shareholders shall have received payment in full for their
Common Stock; (iii) the Common Stock shall have been issued in
the form and containing the terms described in the Registration
Statement, and (iv) any legally required consents, approvals,
authorizations or other orders of the Commission and any other
regulatory authority shall have been obtained, the Common Stock,
when sold, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Form
SB-2 Registration Statement and to the use of our name under the
heading "Legal Matters" in the Form SB-2 Registration Statement.
We do not find it necessary for the purposes of this opinion,
and accordingly we do not purport to cover herein, the application
of the securities or "Blue Sky" laws of the various states to the
sale of the Common Stock.
This opinion is furnished to you in connection with the filing
of the Form SB-2 Registration Statement, and is not to be used,
circulated, quoted or otherwise relied upon for any other purpose.
Very truly yours,
Lawrence I. Washor
LIW:ah
Exhibit 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made, and
entered into, effective as of the 7th day of November, 2000, by,
and between, Single Source Electronic Transactions, Inc., a Nevada
corporation ("SSET"), and its shareholders (hereinafter referred
to collectively with SSET as "Sellers") and Single Source Financial
Services Corporation, previously known as Ream Printing Paper Corp.,
a New York corporation ("SSFS"), as follows:
RECITALS
WHEREFORE, SSET has developed an independent sales organization
over the past nine (9) months which sells and leases electronic
financial transaction equipment to merchants and signs such merchants
up with a processor in order to permit the processing of such
electronic financial transactions.
WHEREFORE, SSFS desires to develop its business as an independent
sales organization and, ultimately, to become a processor.
WHEREFORE, the parties believe that as an initial step in the
development of its business, SSFS should acquire SSET.
WHEREFORE, SSET desires to be acquired by SSFS, and SSFS desires
to acquire SSET, under the terms and conditions set forth herein.
AGREEMENT
In consideration of the mutual covenants and conditions
contained herein, SSET and SSFS agree, as follows:
SECTION 1. STOCK PURCHASE
1.1 Purchase and Sale. Each of the shareholders in SSET
hereby transfers and sells all of the issued and outstanding stock of
SSET to SSFS in exchange for 10,012,500 shares of restricted stock in
SSFS and SSFS hereby purchases all of the issued and outstanding
stock of SSET in exchange for 10,012,500 shares of its restricted
stock under the terms and conditions set forth herein.
1.2 Compensation. The shareholders of SSET shall be compensated
by the delivery to each of them one (1) share of restricted stock in
SSFS for each one (1) share of stock in SSET which they deliver to SSFS.
1.3 Operation of Business. Until the close of this transaction,
SSET shall continue to operate its day to day business as it has for
the past six (6) months and SSET shall not engage in any transaction
which materially affects its financial condition or the business
pending the completion of the transaction.
1.4 Excluded Assets. Except in the ordinary course of business,
no asset of SSET shall be removed from SSET pending the completion of
this transaction.
SECTION 2. STOCK CONSIDERATION
THE COMMON STOCK IN SSFS TO BE ISSUED PURSUANT
TO THIS AGREEMENT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THE COMMON STOCK ISSUED PURSUANT
HERETO MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
THE SECURITIES ARE REGISTERED UNDER THE ACT OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
2.1 Shares to Be Issued. On November 7, 2000, SSFS shall
cause 10,012,500 shares of restricted common stock to be delivered
to the shareholders of SSET as follows:
Number of Shares of SSFS
Name of Shareholder Common Stock
(a) Baki Arbria 500,000
(b) Brandon Becker 2,935,414
(c) Kendra Becker 800,000
(d) Martin Becker 200,000
(e) Pamela Becker 817,362
(f) Lorraine Dorsey 250,000
(g) Mara Gorodezky 125,000
(h) Arlene Rosenblatt 1,317,362
(i) Julie Rosenblatt 800,000
(j) Sid Rosenblatt 200,000
(k) Arnold F. Sock, Esq. 1,303,704
(l) Leona Sock 131,829
(m) Michael Sock 381,829
(n) Harry L. Wilson 250,000
The SSFS stock, when issued, shall be fully paid, validly issued
and non-assessable.
In exchange, each listed shareholder shall deliver the same number
of shares of stock in SSFS which shall contribute all of the SSFS
stock held by such shareholder.
2.2 Registration Rights. It is anticipated that SSFS will
shortly be filing an SB-2 with the SEC. If, and when, such an SB-2
is filed, SSFS shall register the following number of shares of SSFS
common stock which have issued to the following:
Name of Shareholder
(a) Baki Arbria 20,487
(b) Brandon Becker 663,539
(c) Lorraine Dorsey 250,000
(d) Mara Gorodezky 125,000
(e) Arlene Rosenblatt 20,487
(f) Michael Sock 20,487
(j) Harry L. Wilson 25,000
1,125,000
2.3 Legends and Restrictions.
(a) Legend. Sellers acknowledge, understand, and agree that
the certificate(s) representing the stock consideration shall bear
legends in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT THE PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS. ANY INVESTORS SHOULD
BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME."
(b) Stop Transfer Instructions. Stop transfer
instructions in respect of the Stock Consideration may be issued,
at any time, to any transfer agent, transfer clerk or other agent
acting for the Issuer.
SECTION 3. SSET STOCK
THE COMMON STOCK IN SSET TO BE SOLD PURSUANT
TO THIS AGREEMENT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THE COMMON STOCK ISSUED
PURSUANT HERETO MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS THE SECURITIES ARE REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
3.1 Shares to Be Issued. On November 7, 2000, Sellers shall
cause all of the issued and outstanding common stock to be
delivered to SSFS. When transferred, the SSET stock shall be duly
issued, validly paid, and non-assessable.
3.2 Legends and Restrictions.
(a) Legend. SSFS agrees that the certificate(s) representing
the SSET stock being transferred to it shall bear legends in
substantially the following form:
"THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT THE PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS. ANY INVESTORS SHOULD
BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME."
(b) Stop Transfer Instructions. Stop transfer instructions
in respect of the Stock Consideration may be issued, at any time,
to any transfer agent, transfer clerk or other agent acting for
the Issuer.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 SSET Representations and Warranties. In order to induce
SSFS to accept this Agreement, SSET, and its shareholders, and
each of them (hereinafter referred to collectively as "Sellers"),
hereby represents and warrants to SSFS, as follows:
(a) Opportunity to Investigate. Sellers or their Investment
Advisor (if any) have been given a full opportunity to ask questions
of and to receive answers from the officers, agents and
representatives of SSFS concerning the terms and conditions of this
Agreement and the business and status of SSFS and to obtain such
other information that Sellers or their Investment Advisor (if any)
desires in order to evaluate an investment in SSFS, and all such
questions have been answered to the full satisfaction of Sellers.
Sellers acknowledge that Sellers or their Investment Advisor (if
any) have had access to the same kind of information concerning
Ream that is required by Schedule A of the Securities Act of 1933,
as amended, to the extent that SSFS possesses such information.
(b) Reviewed Merits With Investments Advisor. Sellers have
reviewed the merits of an investment in SSFS with tax and legal
counsel and an investment advisor to the extent deemed advisable
by Sellers.
(c) Acknowledgment of Risks. Sellers acknowledge and
understand that I) SSFS is in a very competitive field, and expects
to encounter competition from other companies which have
substantially more resources and experience, and are better known,
than SSFS; ii) SSFS's future is dependent upon its acceptance in the
marketplace, and there can be no assurances that acceptance will be
achieved; iii) although SSFS cannot accurately predict its future
operating results, it will incur losses from operations subsequent to
the date hereof and extending into an indeterminable time in the
future and there can be no assurances that it will ever achieve
profitability; iv) the aggregate number of capital shares sold by
SSFS, from time to time, and the price at which such shares are
sold, will be determined by the Board of Directors of SSFS, in its
discretion, giving consideration to the needs of SSFS to obtain
financing, and there can be no assurance as to the price(s) for which
SSFS will sell its capital shares in the future and no assurance can
be given that SSFS will be able to obtain such financing, on terms
acceptable to Ream, at the time it is required; and v) in purchasing
the SSFS Shares, Sellers are making a highly speculative investment.
(d) Shares Not Registered. Sellers understand that the SSFS
Shares being acquired by Sellers have not been registered under the
Act, or the securities laws of any state, in reliance upon specific
exemptions from registration thereunder, and Sellers agrees that the
SSFS Shares may not be sold, offered for sale, transferred, pledged,
hypothecated or otherwise disposed of except pursuant to a
registration in compliance with the Act and applicable state
securities laws or pursuant to an exemption from registration.
(e) No Federal or State Endorsement. Sellers understand that
no federal or state agency has made any finding or determination as
to the fairness of an investment in, or any recommendation or
endorsement of, the SSFS Shares or SSFS.
(f) Additional Financing. Sellers understand that SSFS will
require additional financing in the future, that SSFS has no
commitments for such financing at this time and has no assurances
that it will be able to obtain additional financing, or if obtained
what price, terms and conditions will be attached to such
financing. Sellers acknowledge that SSFS presently intends to
issue substantial shares in several rounds of future financings and
reorganizations, and that in the course of such issuances, Sellers'
percentage ownership in SSFS will be substantially diluted.
(g) Independent Investigation. In making its decision to
purchase the Ream Shares, Sellers have relied solely upon
independent investigations made by them or their Investment
Advisor (if any). Sellers have received no representation or
warranty from SSFS or any of its affiliates, employees or agents or
any of its subsidiaries, employees or agents, except as set forth
herein.
(h) Authority. Sellers represent that they have the requisite
authority to enter into this Agreement, that its entry into this
Agreement will not violate any agreement of Sellers, or any of
them, any applicable law, or any judicial order, decree, or writ.
(i) Sellers' Intent. Sellers are acquiring the SSFS Securities
solely for their own account as principal, for investment purposes
only, and except as provided herein, not with a view to the resale or
distribution thereof, in whole or in part.
(j) Existence and Good Standing. SSET is a Nevada corporation,
duly, fully, and validly formed and existing, under, and by virtue
of, the laws of the State of California. SSET is in good standing
as a limited liability company under the laws of the State of
California.
(k) Legal Authorization. Sellers are legally authorized to enter
into this Agreement and Sellers' entry into this Agreement will not
violate any other agreement, covenant, and condition to which Sellers,
or any of them, are a party.
(l) Accuracy and Survival of Representations. Each
representation and warranty of Sellers contained herein and all
information furnished by Sellers to SSFS is true, correct and
complete in all respects. All representations and warranties set
forth above or in any other written statement or document delivered
by Sellers in connection with the transaction contemplated hereby
will be true, correct and complete in all respects on and as of the
date of the closing, as if made on, and as of, such date and shall
survive such closing.
4.2 SSFS Representations and Warranties. In order to induce
Sellers to enter into this Agreement, SSFS hereby represents and
warrants to Sellers, as follows:
(a) Opportunity to Investigate. SSFS has been given a full
opportunity to ask questions of and to receive answers from the
officers, agents and representatives of Sellers concerning the terms
and conditions of this Agreement and to obtain such other
information from Sellers, or any of them, that SSFS desires in order
to evaluate an acquisition of SSFS and all of such questions have
been answered to the full satisfaction of SSFS.
(b) Independent Investigation. In making its decision to acquire
SSET, SSFS has relied solely upon independent investigations
made by it. SSFS has received no current representation or
warranty from Sellers or any of their current affiliates, employees or
agents, except as set forth herein.
(c) Corporate Status. SSFS is a corporation, duly, fully, and
validly formed and existing, under, and by virtue of, the laws of the
State of New York. SSFS is in good standing as a corporation
under the laws of the State of New York;
(d) SSFS Authority. SSFS is legally authorized to enter into
this Agreement and SSFS's entry into this Agreement will not
violate any other agreement, covenant, and condition to which
SSFS is a party; and
(e) Accuracy and Survival of Representations. Each
representation and warranty of SSFS contained herein and all
information furnished to Sellers by SSFS is true, correct and
complete in all respects. All representations and warranties set
forth above or in any other written statement or document delivered
by SSFS in connection with the transaction contemplated hereby
will be true, correct and complete in all respects on and as of the
date of closing, as if made on, and as of, such date and shall survive
such closing.
4.3 Representations of Arnold F. Sock. Arnold F. Sock
represents that he is authorized to sign this Agreement on behalf of
each of the selling shareholders.
SECTION 5. GENERAL PROVISIONS
5.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid,
return receipt requested, telegraphed, or sent by facsimile
transmission and shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the
person to receive such notice; (ii) if sent by certified or registered
mail, three (3) business days after the date of mailing; (iii) if given
by telegraph, one (1) business day after the date delivered to the
telegraph company, with charges prepaid; or (iv) if given by
facsimile transmission, the date transmitted. Any notice, request,
demand, direction or other communication sent by telegraph or
facsimile transmission must be perfected within forty-eight (48)
hours by mailing a copy in the United States Mail, first class,
postage prepaid.
To SSET: Mr. William Graham
Single Source Electronic Transactions, Inc.
10780 Santa Monica Blvd., Suite 240
Los Angeles, California 90025
To SSFS: Arnold F. Sock, Esq.
Single Source Financial Services Corporation
10780 Santa Monica Blvd., Suite 240
Los Angeles, California 90025
Notice of change of address shall be given by written notice in the
manner detailed in this paragraph. Rejection or other refusal to
accept or the failure to deliver due to any change of address of
which no notice was given shall not effect the time at which such
notice shall be deemed to have been given and shall constitute
receipt of such communication.
5.2 Severability. Each and every provision of this Agreement
is severable from each and all of the other provisions of this
Agreement. In the event that any provision of this Agreement is for
any reason unenforceable, the balance of the Agreement shall
nonetheless remain in full force and effect.
5.3 Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the
subject matters referred to herein. No representation, covenant,
undertaking, promise, or other prior or contemporary agreement,
whether oral or written, respecting such subject matters, which is
not specifically contained herein, shall be deemed in any way to
exist or bind any of the parties hereto. The parties hereto
acknowledge that each party has not executed this Agreement in
reliance on any promise, representation, or warranty, which is not
contained herein.
5.4 Construction. This Agreement shall not be construed
against the party preparing it, but shall be construed as if all
parties jointly prepared this Agreement, and any uncertainty
or ambiguity shall not be interpreted against any one party. The
Agreement is to be performed in the County of Los Angeles, State of
California, and shall be interpreted, enforced and governed by, and
under, the laws of the State of California. Any action with respect
to or relating to the subject matter of this Agreement shall only be
filed in the County of Los Angeles, State of California and any
arbitration proceeding with respect to or relating to the subject
matter of this Agreement shall only be heard in the County of Los
Angeles, State of California.
5.5 Modification. This Agreement shall not be modified by
either party by any oral representation or agreement made before,
or after, the execution of this Agreement. All modifications to
this Agreement must be in writing and signed by each party hereto.
5.6 Attorney's Fees. In any court action arising out of, or
relating to, this Agreement, or the breach thereof, the prevailing
party shall be awarded his reasonable attorney's fees against the
non-prevailing party.
5.7 Waiver. The waiver of any provision or breach of this
Agreement in any instance or instances shall not constitute a waiver
of, or a release of, any other provision or breach of this Agreement
in any other instance or instances.
5.8 Binding on Successors and Assigns. This Agreement shall
be binding on, and shall inure to the benefit of, the parties and to
their respective heirs and legal representatives, successors, and
assignees.
5.9 Cooperation. The parties agree to perform any and all acts
and to execute and deliver, upon request, any and all documents
reasonably necessary or convenient to carry out the terms of this
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
Date: November 7, 2000 Single Source Financial Services
Corporation, A New York corporation
By:______________________________
Arnold F. Sock, Secretary
Date: November 7, 2000 Single Source Electronic Transactions,
Inc., A Nevada corporation
By:______________________________
William Graham, Secretary
Exhibit 11.1
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
COMPUTATION OF LOSS PER COMMON SHARE
The Company has generated no revenue from which a calculation
of loss per share can be determined. The Company has only
incurred expenses of organization and taxes, has had no income
from operations and has no securities outstanding except for the
$.001 par value Common Stock.
Exhibit 21.1
LIST OF THE REGISTRANT'S SUBSIDIARIES
Name Jurisdiction of Incorporation
Single Source Electronic
Transactions, Inc. Nevada
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in this Registration Statement on Form
SB-2 of our report dated November 2, 1999 relating to the financial
statements of Single Source Financial Services Corporation (formerly
named Ream Printing Paper Corp.), for the fiscal year ended October
31, 1999 and the reference to our firm under the caption "Experts"
in the accompanying Prospectus.
________________________________
Rotenberg & Company, LLP
Certified Public Accountants
Rochester, New York
November 16, 2000
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Single Source Electronic Transactions, Inc.
10780 Santa Monica Blvd., Suite 240
Los Angeles, California 90025
We consent to the use in this Registration Statement of
Single Source Electronic Transactions, Inc., on Form SB-2 of
our report dated January 17, 2001 and to the reference to us
under the headings "Experts."
ss/ Jonathon P. Reuben C.P.A.
Jonathon P. Reuben, C.P.A.
An Accountancy Corporation
Torrance, CA 90505
January 31, 2001
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Single Source Financial Services Corporation.
10780 Santa Monica Blvd., Suite 240
Los Angeles, California 90025
We consent to the use in this Registration Statement of
Single Source Financial Services Corporation., on Form SB-2 of
our report dated January 31, 2001 and to the reference to us
under the headings "Experts."
ss/ Jonathon P. Reuben C.P.A.
Jonathon P. Reuben, C.P.A.
An Accountancy Corporation
Torrance, CA 90505
January 31, 2001
Exhibit 23.2
CONSENT OF COUNSEL
(Included in Exhibit 5.1)
Exhibit 24.1
RESOLUTIONS ADOPTED BY UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS
OF
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
(a New York corporation)
In accordance with the provisions of the New York Business
Corporation Law and the By-Laws of the Corporation, the
undersigned, being all of the Directors ("Directors") of Single
Source Financial Services Corporation, a New York corporation
("Corporation"), do hereby adopt the following preambles and
resolutions by their unanimous written consent:
WHEREAS, this Corporation is in the process of filing a Form
SB-2 Registration Statement with the Securities and Exchange
Commission ("Commission") in connection with the registration by
certain of its shareholders of shares of its common stock for sale
by such selling shareholders;
WHEREAS, the Board of Directors has reviewed the draft SB-2
Registration Statement provided to them and has determined that
such draft SB-2 appears to be true and accurate in all regards;
WHEREAS, in connection with such filing with the Commission,
it is desired to provide authority to the President, Arnold F. Sock,
to execute the Form SB-2 Registration Statement and any amendments,
including post-effective amendments thereto, in the name of and on
behalf of the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that this Corporation caused
the Form SB-2 Registration Statement to be filed with the Securities
and Exchange Commission as soon as possible.
RESOLVED FURTHER, that each of the undersigned hereby
authorizes and appoints Arnold F. Sock, Esq. as his attorney-in-fact
to execute in the name of each such person and to file such
amendments (including post-effective amendments) to this Registration
Statement as the Registrant deems appropriate and appoints such person
as attorney-in-fact to sign on his behalf individually and in each
capacity stated below and to file all amendments, exhibits, supplements
and post-effective amendments to this Registration Statement.
RESOLVED FURTHER, that the officers of this Corporation, and each
of them, shall perform such acts, and shall execute and file such
additional documents, as are necessary to carry out the terms of this
Written Consent.
RESOLVED FURTHER, that the Secretary of the Corporation be, and
he hereby is, authorized, directed, and empowered to file this
Unanimous Written Consent in the Minute Book of the Corporation, as
part of the official records of the Corporation.
November 16, 2000 s/Brandon Becker Director
BRANDON BECKER
November 16, 2000 s/Pamela Becker Director
PAMELA BECKER
November 16, 2000 s/Arlene Rosenblatt Director
ARLENE ROSENBLATT
November 16, 2000 s/Arnold F. Sock Director
ARNOLD F. SOCK
November 16, 2000 s/Harry L. Wilson Director
HARRY L. WILSON
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
CERTIFICATE OF SECRETARY
The undersigned, Arnold F. Sock, the duly elected and incumbent
Secretary of Single Source Financial Services Corporation, a New
York corporation (the "Corporation"), hereby certifies that the
foregoing is a true and correct copy of the Resolutions Adopted by
Unanimous Written Consent of the Board of Directors of the
Corporation effective as of November 16, 2000, and that the
foregoing resolutions have not been changed and remain in full
force and effect.
Dated: November 16, 2000. s/Arnold F. Sock
Arnold F. Sock, Secretary
Exhibit 27
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE FYE OCTOBER
31, 1999 AUDITED FINANCIAL STATEMENTS AND FYE
OCTOBER 31, 2000 UNAUDITED FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
Oct-31-1999 Oct-31-2000
Cash and cash items 0 0
Marketable securities 0 0
Notes and accounts receivable trade 0 0
Allowance for doubtful accounts 0 0
Inventory 0 0
Total current assets 0 0
Property, plant and equipment 0 0
Accumulated depreciation 0 0
Total assets 0 0
Total current liabilities $2685 $55
Bonds, Mortgages and similar debt 0 0
Preferred stock-mandatory redemption 0 0
Preferred stock-no mandatory redemption 0 0
Common stock 10,999,133 1,833,189
(.00l par value) (.00l par value)
Other stockholders' equity 0 0
Total liabilities and stockholders' equity 0 0
Net sales of tangible products 0 0
Total revenues 0 0
Cost of tangible goods sold 0 0
Total costs and expenses applicable to sales
and revenues 0 0
Other costs and expenses 0 0
Provision for doubtful accounts and notes 0 0
Interest and amortization of debt discount 0 0
Income before taxes and other items 0 0
Income tax expense 0 0
Income/loss continuing operations 0 0
Discontinued operations 0 0
Extraordinary items 0 0
Cumulative effect-changes in accounting
principles 0 0
Net income or loss ($13,684) ($55)
Earnings per share--primary 0 0
Earnings per share fully diluted 0 0
Item 28. Undertakings.
A. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933
Act and will be governed by the final adjudication of such issue.
B. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the 1933 Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
(Section 230.424(b) of Regulation S-B) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any additional or changed material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and
authorized this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Los Angeles, California
on the 23rd day of January, 2001.
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
By: s/Arnold F. Sock
Arnold F. Sock, President
POWER OF ATTORNEY
Each of the undersigned hereby authorizes Arnold F. Sock as his
attorney-in-fact to execute in the name of each such person and to
file such amendments (including post-effective amendments) to this
Registration Statement as the Registrant deems appropriate and
appoints such person as attorney-in-fact to sign on his behalf
individually and in each capacity stated below and to file all
amendments, exhibits, supplements and post-effective amendments
to this Registration Statement.
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons
in the capacities and on the dates stated:
Signature Title Date
s/Arnold F. Sock President and Director January 23rd, 2001
Arnold F. Sock (Principal Executive Officer)
s/Harry L. Wilson Chief Financial Officer January 23rd, 2001
Harry L. Wilson Secretary and Director
s/Brandon Becker Vice President and January 23rd, 2001
Brandon Becker
s/Pamela Becker Director January 23rd, 2001
Pamela Becker
s/Arlene Rosenblatt Director January 23rd, 2001
Arlene Rosenblatt