1
Date Filed: August 21, 2003 SEC File No. 333-91436
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2/A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OCIS Corp.
----------------------------------------------
(Name of small business issuer in its Charter)
Nevada 26-0014658
- ------------------------------ ----------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2081 South Lakeline Drive, Salt Lake City, Utah 84109
-------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
5084
--------------------------------------------------------
(Primary Standard Industrial Classification Code Number)
Copies to: Registered Agent:
Victor D. Schwarz, Esq. Kirk Blosch, Secretary
Victor D. Schwarz, LLC OCIS Corp.
4764 South 900 East, Suite 3(A) 2081 South Lakeline Drive
Salt Lake City, Utah 84117 Salt Lake City, Utah 84109
Phone: (801) 270-0930 Phone: (801) 467-4566
Fax: (801) 685-0949 Fax: (801) 487-4566
------------------------------------
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this registration statement.
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount to Offering Price Aggregate Offering Registration
to be Registered be Registered per Share Price Fee (1)(2)
- ------------------- ----------------- ---------------- ------------------ ------------
Shares of Common
Stock, $0.001 par
value 600,000 Shares $ 0.25 $150,000 $ 13.80
<FN>
(1) Estimated solely for purposes of calculating the registration fee based on 600,000 shares of
common stock offered at $0.25 per share.
(2) The registration fee has been calculated in accordance with Fee Rate Schedule, based on
$0.000092 of the aggregate offering amount.
</FN>
2
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. [X]
The Registrant hereby amends this registration statement on such dates as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section
8(a), may determine.
3
[FRONT COVER PAGE]
SUBJECT TO COMPLETION -- DATED August 21, 2003
OCIS Corp.
Shares of Common Stock
$0.25 per share
This prospectus relates to the public offering for cash by OCIS Corp., of
a minimum of 300,000 and a maximum of 600,000 shares of common stock. This is
our first sale of shares of common stock to investors outside of our three
initial shareholders. There is no public market for the common stock, and
there is no assurance that one will develop following the offering described
in this prospectus.
We are offering the common stock subject to the subscription and payment
of a minimum of 300,000 shares during an offering period expiring December 31,
2003. We reserve the right to close the offering upon the sale of the minimum
number of shares.
At the date of this prospectus, our officers and directors are the only
persons selling the shares and none will receive a commission on any sales
they make. Where required by state law, an independent sales agent may be
used. If an independent sales agent is used, we may pay a ten percent
commission on any sales by the sales agent. We currently do not have any
sales agent agreements in place.
All funds collected from the sale of the common stock will be deposited
in an escrow account with Escrow Specialists, an unaffiliated escrow company
in Ogden, Utah, which will be our escrow agent. If the minimum 300,000 shares
are not sold and paid for during the offering period, all funds will be
promptly returned to subscribers in full, without paying interest or deducting
expenses. All subscribers' checks should be made payable to "ESCROW
SPECIALISTS-OCIS Corp., Escrow Account."
Price Commissions Proceeds to Company
---------- --------------- -----------------------
Per share $ 0.25 $ -0- $ 0.25
Total Minimum $ 75,000.00 $ -0- $ 75,000.00
Offering
Total Maximum $150,000.00 $ -0- $150,000.00
Offering
This investment involves a high degree of risk, including immediate and
substantial dilution from the public offering price. You should carefully
read and consider the sections entitled "RISK FACTORS" beginning at page 7 and
"DILUTION" beginning at page 10.
Neither the Securities and Exchange Commission or any state securities
commission has approved or disapproved these securities, or determined if the
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is __________, 2003
4
Table of Contents
Pursuant to Item 502 of Regulation S-B
Section Page
- ------- ----
PROSPECTUS SUMMARY ............................................... 5
SUMMARY FINANCIAL INFORMATION..................................... 6
RISK FACTORS ..................................................... 6
Risk Factors Relating to the Business of the Company ........ 6
Risk Factors Relating to the Offering........................ 8
DILUTION ......................................................... 9
COMPARATIVE DATA ................................................. 10
PLAN OF DISTRIBUTION ............................................. 10
USE OF PROCEEDS .................................................. 12
DESCRIPTION OF BUSINESS .......................................... 13
Organization and Corporate History .......................... 13
Business in General ......................................... 13
Products and Services ....................................... 14
Marketing and Distribution .................................. 15
Competition ................................................. 15
Plan of Operation ........................................... 16
Manufacturing, Supplies, and Quality Control ................ 18
Domain Names, Tradename and Copyrights ...................... 18
Research and Development .................................... 18
Regulation and Environmental Compliance ..................... 18
Employees ................................................... 18
DESCRIPTION OF PROPERTY .......................................... 19
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES ......... 19
REMUNERATION OF OFFICERS AND DIRECTORS ........................... 20
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ......... 21
PRINCIPAL SHAREHOLDERS ........................................... 23
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ........ 24
DESCRIPTION OF CAPITAL STOCK ..................................... 24
LITIGATION ....................................................... 26
LEGALITY OF SHARES ............................................... 26
EXPERTS .......................................................... 27
ADDITIONAL INFORMATION ........................................... 27
INDEX TO FINANCIAL STATEMENTS .................................... 28
FINANCIAL STATEMENTS ............................................. F-1
5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, the financial statements and notes appearing elsewhere in this
prospectus.
Business description ............ OCIS Corp. was organized to take advantage
of the market for used equipment,
particularly warehouse and office
equipment. OCIS purchases used equipment
from distressed businesses or from business
which are upgrading and then resells the
equipment to other businesses. OCIS was
formed in 2002 and has had only limited
operations. We are currently not
profitable and will rely on the proceeds
from this offering to help fund operations
over the next twelve months and to pay off
existing obligations. There is currently
no market for our stock and no assurances
can be given that one will develop.
Contact information ............. OCIS Corp.
Attn.: Brent W. Schlesinger, President
2081 South Lakeline Drive,
Salt Lake City, Utah 84109
Phone: (801) 467-4566
Fax: (603) 487-4566
Securities Offered .............. 600,000 shares of common stock, par value
$0.001 per share.
Subscription payments will only be released from the escrow account if the
minimum number of shares is sold or for the purpose of refunding subscription
payments to the subscribers. Subscribers will not have the use or right to
return of such funds during the escrow period, which expires on December 31,
2003, unless the minimum is raised prior to that time and the offering closed
by management. If the offering is terminated before the minimum number of
shares is sold, subscription payments will be refunded in full to subscribers,
without paying interest or deducting expenses, by mailing refund checks within
two business days of the termination of the offering.
If the minimum offering is sold within the specified period, the net proceeds
from subscribers will be disbursed to OCIS. Shares will be issued and mailed
to subscribers within one week of the disbursement of the minimum net proceeds
to OCIS, or within one week of the receipt by OCIS of additional subscription
payments once the minimum has been met.
6
SUMMARY FINANCIAL INFORMATION
The following table shows selected summarized financial data for OCIS at the
dates and for the periods indicated. The data should be read in conjunction
with the financial statements and notes included in this prospectus beginning
on page F-6.
STATEMENT OF OPERATIONS DATA:
- ----------------------------
From Inception For the Six
(February 6, 2002) Months Ended
to December 31, 2002 June 30, 2003
------------------- ---------------
(Audited) (Unaudited)
Revenues ........................ $ 12,500 $ 4,830
Expenses ........................ $ 21,204 $ 5,452
Net (Loss)....................... $ (22,174) $ (4,953)
Basic (Loss) per Share .......... $ (0.04) $ ( 0.01)
Weighted Average Number
of Shares Outstanding.......... $ 600,000 $ 600,000
BALANCE SHEET DATA:
- ------------------
December 31, 2002 June 30, 2003
--------------- ---------------
(Audited) (Unaudited)
Total Current Assets............. $ 40,485 $ 39,213
Total Assets..................... $ 40,485 $ 39,213
Total Current Liabilities ....... $ 32,714 $ 36,340
Working Capital ................. $ 7,771 $ 2,873
Shareholders' Equity ............ $ 7,771 $ 2,873
RISK FACTORS
The purchase of our common stock involves a high degree of risk. Before
investing, you should consider the negative implications of all the material
in this prospectus including the following risk factors.
RISK FACTORS RELATING TO THE BUSINESS OF THE COMPANY
The lack of a prior operating history creates uncertainty for investors in
this offering and makes evaluating an investment difficult.
- ------------------------------------------------------------------------------
Other than the purchase of initial inventory, OCIS has had only limited
operations since its organization and is a "start-up" or "development stage"
company. We have no history of operations you can use to evaluate our
business and its potential success. Because we have no operating history
demonstrating our ability to conduct business, your investment risk is greater
than with an established company. Accordingly, you should not invest in OCIS
if you cannot afford the loss of your entire investment.
7
Without proceeds from this offering, our ability to continue in business is
questionable and even with the proceeds from this offering, there is still
uncertainty about our ability to generate profits and remain operating.
- ----------------------------------------------------------------------
We have limited operating capital. As of June 30, 2003, our working capital,
total current assets less total current liabilities, was only $2,873. As a
result the report of our auditors contains a warning, called a going concern
opinion, about OCIS's ability to continue operations. Without money from this
offering or the timely receipt of additional financing from other sources,
there is substantial doubt that we can continue in business. We have not
identified any other sources of funds if this offering is unsuccessful. Even
with the proceeds from this offering, we have no proven operations and the
future success of our business is questionable, particularly given the
relatively small amount of capital we are initially seeking. Unfortunately,
the stage of our current operations will make it difficult for us to raise
more capital, at least initially, then we are currently seeking.
If we do not start generating revenues, our ability to remain in business is
questionable.
- ---------------------------------------------------------------------------
OCIS expects to have an initial operating loss due to the costs and expenses
associated with a start-up operation. For the six months ended June 30, 2003,
the date of our most recent financial statements included in this prospectus,
we had only marginal revenue of $4,830 and had working capital of $2,873. We
have only limited inventory and if we are unable to sell current inventory, we
will not be able to remain in business. The development stage of our
operation makes it impossible to establish the commercial viability of our
proposed business plan. As a result, we cannot predict when or if we will be
able to generate revenues or develop into a successful or profitable business.
Even with the proceeds from this offering, without revenues from operations we
will not be able to stay in business beyond the next twelve months.
Even with the proceeds from this offering, if we are not able to raise capital
in the future, our ability to remain in business may be questionable.
- ------------------------------------------------------------------------------
We may need additional financing before we are profitable. We may not receive
sufficient revenue from sales operations before our available funds are
expended. The funds from this offering may not be adequate for us to finance
our planned operations, or to fully exploit the potential market for our
products. For instance, we may discover that our initial inventory cannot be
sold, or takes longer to sell than anticipated. We do not know if any
additional funds will be available from any source or, if available, whether
sufficient funds will be available to last until our revenues support our
business operations. It is likely that additional capital raised would dilute
investors percentage of ownership in this offering.
8
We will depend on the ability of our president to execute our business plan.
If he is not successful in executing the business plan, we would most likely
cease operations.
- ------------------------------------------------------------------------------
We have been and will continue for some time to be dependent on the general
business acumen and experience of our president, Brent Schlesinger, to make
the business decisions required on behalf of OCIS. Although Mr. Schlesinger
has extensive experience in the used equipment marketplace, he has not run a
public company. Because your investment hinges on the success of OCIS's
business, your investment decision depends primarily on your assessment of Mr.
Schlesinger's ability to implement OCIS's business plan. Accordingly, you
should carefully consider the included information about Mr. Schlesinger.
RISK FACTORS RELATING TO THE OFFERING
The book value of your investment will be much lower than the purchase price
creating an immediate dilution to your investment and in the case of
liquidation a loss of some, if not all, of your investment.
- -------------------------------------------------------------------------
Persons purchasing shares in this offering will suffer a substantial and
immediate dilution to the book value of the common stock below the offering
price. The book value of our shares on June 30, 2003, was approximately
$0.005 per share. After sales of the minimum 300,000 shares, the book value
per share will be approximately $0.086, or a loss, based on the net tangible
book value, to subscribers of approximately $0.164 per share. After sales of
the maximum 600,000 shares, the book value per share will be approximately
$0.127, or a loss to subscribers, based on the net tangible book value, of
approximately $0.123 per share.
There is no current market for OCIS's stock making any investment an illiquid,
long term investment. Should a market not develop, you may not be able to
sell the stock.
- ----------------------------------------------------------------------------
At the present time, there is no public market for shares of OCIS's common
stock, and we do not know if a public market will develop after the offering.
Upon completion of the minimum offering, OCIS will seek a securities broker-
dealer, called a market maker, willing to apply for a trading symbol and trade
our stock. We do not know if such a market maker will continue acting for us,
or that an active market will be developed or maintained. Even if a market
develops, the future market price may be lower than the price you paid because
the determination of the offering price was arbitrary. If no market develops,
or if the future market price is low, you may be unable to sell your shares or
may only be able to sell at a loss. Investors in this offering should
consider any investment in shares of our common stock as an illiquid, long
term investment.
9
Once an investment is made, you will no longer be able to withdraw your funds
unless the minimum is not raised which will tie up your moneys for a long
period of time if your circumstances or mind should change.
- ------------------------------------------------------------------------------
Investors do not have the right to withdraw invested funds. Subscription
payments will only be released from the escrow account to OCIS, if the minimum
number of shares is sold, or for the purpose of refunding subscription
payments to the subscribers, if the minimum number of shares is not sold.
Therefore, once you have invested, you will not have the use or right to
return of such funds during the escrow period, which expires on December 31,
2003.
Current management owns most of the shares and will control OCIS leaving
investors in this offering to be dependent on managements ability and making
it difficult to change management or our direction if an investor should
become dissatisfied with management or our business model.
- ------------------------------------------------------------------------------
OCIS issued 600,000 shares of common stock to founders and current management
in connection with our organization and initial inventory purchase. Upon
completion of the minimum and/or maximum offering, management will have
control of approximately 66.67% and 50%, respectively, of the outstanding
shares. As a result, management will most likely be in a position to elect at
least a majority of the Board of Directors, to dissolve, merge or sell the
assets, and to direct our business affairs without shareholder input or
consent. In addition, management's cash investment per share is considerably
less than the share price in the offering, which means your investment is at
proportionately greater risk because your investment per share is greater.
DILUTION
On June 30, 2003, OCIS had a net tangible book value, total tangible assets
less total liabilities, of $2,873. The following table sets forth the dilution
to persons purchasing common stock in this offering without taking into
account any changes in OCIS' net tangible book value after June 30, 2003,
except the sale of the minimum and maximum shares of common stock offered at
the public offering price and receipt of the minimum $75,000 and the maximum
$150,000, gross proceeds therefrom. The net tangible book value per share is
determined by subtracting total liabilities from the tangible
assets of OCIS divided by the total number of shares of common stock
outstanding.
Minimum Maximum
Shares Shares
Sold Sold
--------- ---------
Shares Outstanding 900,000 1,200,000
Public offering price per share $ 0.25 $ 0.25
Net tangible book value per share
before this offering $ 0.005
Adjusted net tangible book value per
share after this offering $ 0.086 $ 0.127
Increase per share attributable to
to new investors $ 0.081 $ 0.122
Dilution per share to new investors $ 0.164 $ 0.123
10
COMPARATIVE DATA
The following chart illustrates the percentage of ownership in OCIS held by
the present shareholder, by the public investors that purchase the minimum and
maximum number of shares of common stock in this offering, and a comparison of
the relative money invested by the present shareholder of OCIS and by the
public investors in this offering.
Total Total
Shares Purchased Consideration Average
---------------- ---------------- Price
Number % Amount % Per Share
---------------- ---------------- ---------
Minimum Offering
Present Shareholder 600,000 66.67 $ 30,000 28.57 $ 0.05
New Investors 300,000 33.33 $ 75,000 71.43 $ 0.25
Maximum Offering
Present Shareholder 600,000 50.00 $ 30,000 16.67 $ 0.05
New Investors 600,000 50.00 $150,000 83.33 $ 0.25
Total consideration for present shareholders is based on the total cash and
promissory notes contributed by the existing shareholder. Total consideration
for new investors is based on estimated gross proceeds from the offering.
Average price per share for existing shareholders is determined by dividing
the number of shares of common stock outstanding on June 30, 2003, into the
total consideration paid.
PLAN OF DISTRIBUTION
OCIS will sell up to 600,000 shares of common stock to the public on a "best
efforts, 300,000 shares minimum, 600,000 shares maximum" basis. If OCIS fails
to sell the minimum number of shares of common stock within the offering
Period which expires December 31, 2003, the offering will be terminated. In
the event of such termination, subscription payments will be refunded in full
to subscribers, without paying interest or deducting expenses, by mailing
refund checks within two business days of the termination of the offering.
All subscription payments should be made payable to "Escrow Specialists-OCIS
Corp., Escrow Account." Escrow Specialists is a private Ogden, Utah company
unrelated to OCIS or our management, which will act as OCIS's escrow agent for
this offering. OCIS will deposit subscription payments no later than noon of
the next business day following receipt in the escrow account maintained by
Escrow Specialists, as escrow agent, pending the sale of the minimum number of
shares of common stock within the offering period.
Subscription payments will only be released from the escrow account if the
minimum number of shares is sold or for the purpose of refunding subscription
payments to the subscribers. Subscribers will not have the use or right to
return of such funds during the escrow period, which may last as long as 120
days from the effective date of this prospectus.
If the minimum is sold within the specified period, the net proceeds from
subscribers will be disbursed to OCIS. Shares will be issued and mailed to
subscribers within one week of the disbursement of the net proceeds to OCIS,
or within one week of the receipt by OCIS of additional subscription payments
once the minimum has been met.
Any changes in the offering's material terms after the registration
statement's effectiveness will terminate the offering and entitle subscribers
to a refund. Material changes include an extension of the offering period, a
11
change in the offering price, the addition of a minimum purchase requirement,
a change in the amount of proceeds necessary to release the funds in escrow,
or a change in the estimates for application of the proceeds.
The common stock is being offered by Brent Schlesinger, Jeff Holmes and Kirk
Blosch, the officers and directors of OCIS and were required by state law,
sales agents licensed in the appropriate jurisdiction. No commissions will be
paid on sales made by our officers and directors. If state law requires a
licensed sales agent for sales of securities in the state, we may enter into
agreements with certain broker-dealers or sales agents to sell the shares of
common stock. If we enter into any agreements with broker-dealers or sales
agents we may pay a commission of up to 10% of the sales made by such sales
agent. If OCIS enters into any agreements with a broker-dealer, we will file
such agreements with the National Association of Securities Dealers and file a
post-effective amendment to this prospectus referencing such agreements. Once
a sales agreement is entered with a broker-dealer, we will have to receive
approval from the National Association of Securities Dealers Corporate Finance
Department indicating the compensation charged is acceptable and receive
approval of from the SEC on the post-effective amendment. Officers and
directors of OCIS may purchase shares in the offering. The officers and
directors may, but are not required, purchase the shares in an effort to reach
the minimum subscription amount of 300,000 shares.
It is anticipated that shares will be sold to friends, family and
acquaintances of our officers and directors. We do not anticipate any form of
advertising and all contacts will be made personally by our officers and
directors. Once a person indicates a desire to purchase shares, the officers
will accept the subscription and deposit it within twenty-four hours into the
escrow account. Once the escrow minimum has been reached, the officers and
directors will notify the subscriber that the minimum has been reached and his
or her shares will be delivered to them.
Determination of Offering Price
- -------------------------------
Prior to the offering there has been no market for OCIS's common stock and
there can be no assurance that a regular trading market will develop on
completion of this offering. The offering price of the common stock was
determined by management of OCIS and may not be indicative of the market price
for the common stock after the offering or of the value of OCIS. At this
time, an investment in OCIS, which has no revenues from operations, is an
investment based on the perceived value of OCIS's products and potential
market, the president's ability to develop a market, and OCIS's overall
business strategy, none of which can be quantified. Among the factors
considered in determining the initial public offering price were OCIS's
proposed business activities and the scope and nature of the products we
intend to offer and the market we are targeting; OCIS's limited operations,
current financial condition and possible need for additional working capital;
its future prospects, the experience of our president, the economics of OCIS's
industry in general, prior sales of OCIS's common stock, the general condition
of the equity securities market, the anticipated marketability of OCIS's
common stock as compared to similar securities of companies considered
comparable to OCIS, and other relevant factors. As stated above, the factors
considered are difficult to quantify and the initial public offering price
should be considered arbitrary and may be based more on a perceived value at
this time rather than an actual proven value.
12
USE OF PROCEEDS
The gross proceeds to be received by OCIS from the sale of the minimum and the
maximum number of shares of common stock are estimated at approximately
$75,000, and $150,000, respectively. Cost of the offering are estimated at
$25,000. The chart assumes the payment of a ten percent commission on sales
of the shares of common stock in this offering. If no commissions are paid or
less commissions than indicated are paid, the excess amounts will be added to
working capital. It is anticipated that during the 12 month period following
the offering, OCIS intends to use the proceeds from the offering in the
following general amounts and order of priority. The allocation of proceeds
is based on OCIS's estimates. The table sets forth the minimum, maximum
investments as well as an assumed sale of 75% of the shares or $112,500. The
percentages have been rounded.
Minimum Assuming Maximum
Amount Proceeds of Amount
ITEM ($75,000) % $112,500 % ($150,000) %
- ---------------------------------- ---------- ----- ------------ ----- ---------- -----
<s> <c> <c> <c> <c> <c> <c>
Offering Expense $ 25,000 33.3 $ 25,000 22.2 $ 25,000 16.7
Purchase of Inventory 11,786 15.7 29,286 26.0 46,147 30.8
Payment of Debt 32,714 43.6 32,714 29.1 32,714 21.8
Legal Expenses 4,000 6.3 12,500 11.1 12,500 8.3
Accounting 1,500 2.0 7,500 6.7 12,500 8.3
Marketing and Sales Development -0- -0- 4,500 4.0 6,250 4.2
Working Capital -0- -0- 1,000 0.9 14,889 9.9
---------- ----- ---------- ------ ---------- -----
TOTAL PROCEEDS $ 75,000 100.0 $ 112,500 100.0 $ 150,000 100.0
========== ===== =========== ======= ========== =====
The above estimates of expenditures may differ under certain circumstances.
We would anticipate most changes to result in the increase in the purchase of
inventory if items we wanted to be able to resell became available. Most
changes in the above estimates would be in the reduction of working capital as
we used the working capital to purchase additional inventory. Otherwise, we
anticipate using working capital to cover any unforseen expenses such as
additional legal or accounting cost, transportation cost related to our
inventory, possibly insurance cost related to inventory and additional lease
cost if our inventory became to large for our current facilities. Working
capital, if available, will also be used for additional marketing cost and
operational needs such as travel expense for fuel and other charges related to
delivering and picking up inventory. The exact itemization of these working
capital cost are difficult to determine at this time. If we pay sales
commissions, the above amounts will be changed primarily removing amounts
otherwise aimed to purchase additional inventory. Prior to paying any sales
commissions, we will amend prospectus with a post-effective amendment to
indicate the changes if sales commission are to be paid.
The use of proceeds includes repayment of $25,581 of debt related to the
purchase of our initial inventory. This inventory was purchased from our
president, Brent Schlesinger, in February 2002. The note must be repaid by
December 31, 2003, or on the closing of this offering. The note bears
interest at six percent per annum. As our initial inventory is sold, we will
be repaying this initial debt. The payment of debt also includes accounts
payable which relate to general corporate obligations from vendors. Any
proceeds not needed to repay this debt and accounts payable will be applied to
the purchase of additional inventory.
13
The amounts set forth merely indicate the general application of net proceeds
of the offering. Actual expenditures relating to the development of OCIS's
business may differ from the estimates depending on available products and the
general market for used equipment. OCIS recognizes that such proceeds may be
insufficient to enable OCIS to fully exploit its business plan and objectives
and OCIS may have to seek additional financing through loans, the sale of
additional securities, or other financing arrangements. No such arrangements
exist or are contemplated, and there can be no assurance that they may be
available in the future should the need arise. All funds not being utilized
by OCIS for our proposed business will be held in interest bearing accounts,
short term interest bearing certificates of deposit, treasury bills, or other
high grade short term securities. Those funds which OCIS receives, other than
from the offering, will be utilized for the purpose of paying any additional
costs of this offering and funding OCIS business operations.
DESCRIPTION OF BUSINESS
This description of OCIS's Business and Plan of Operation may contain
"forward-looking" statements. Examples of forward-looking statements include,
but are not limited to: (a) projections of revenues, capital expenditures,
growth, prospects, dividends, capital structure and other financial matters;
(b) statements of plans and objectives of OCIS or its management or Board of
Directors; (c) statements of future economic performance; (d) statements of
assumptions underlying other statements and statements about OCIS and its
business relating to the future; and (e) any statements using the words
"anticipate," "expect," "may," "project," "intend" or similar expressions.
Organization and Corporate History
- ----------------------------------
OCIS Corp. was organized on February 6, 2002, in the state of Nevada. OCIS
was organized to engage in the purchase and sale of used business equipment
with an initial emphasis on used warehousing equipment. As part of the
organization of OCIS, an initial inventory was purchased and a president with
experience in the used equipment market was hired. The initial equipment
inventory primarily consisted of warehousing rack systems and forklifts.
Business in General
- -------------------
Our initial focus will be on buying and selling used warehouse storage systems
and office components that will facilitate office, commercial and industrial
users with their inventory control, manufacturing process and or office
equipment needs. Once we have established a foothold in the warehousing and
office components market, we plan on expanding to encompass other used
business equipment. As part of the organization of OCIS, we purchased an
initial inventory which consist of warehousing rack systems and forklifts.
OCIS is hopeful that we will be able to initially roll our inventory, sell and
purchase inventory, three times per year. With the proceeds from this
offering, we hope we can pay existing obligations and purchase additional used
equipment for re-sale.
14
Inventory purchase will be driven by market conditions in various industries.
As market conditions weaken in an industry, it is often a good time for
companies, such as OCIS, to purchase equipment. As the market conditions
improve, OCIS will then be able to sell the inventory to expanding companies.
Inventory purchases often reflect conditions in geographical areas. As
certain areas of the country expand and contract, companies like OCIS are able
to move office and warehousing equipment from contracting areas to expanding
areas.
Management believes the used equipment market will expand as the economy comes
out of the recession. As companies begin to expand, they will need to
purchase additional equipment. Management believes companies will focus more
on used equipment since it is more economical to purchase and generally
functions as well as new equipment.
Our initial inventory has focused on the warehousing equipment because current
market conditions have resulted in the ability to purchase used warehousing
equipment at economical prices. As the economy improves, management believes
this will be the first sector that will see increased demands for equipment.
Over the past several quarters, management believes inventory was reduced
causing a decrease in the need for warehousing equipment. Eventually,
management believes, the need to expand inventories will result in increased
demand for warehousing equipment. Management focused on warehousing equipment
because of its durability and long product lifecycle.
Management of OCIS feels there is always a demand for used equipment but the
price of the used equipment, like most products, increases as the economy
improves. As the economy appears to improve, management is hopeful it will be
able to sell its current inventory at a profit and purchase additional
equipment. Management of OCIS has found there is always a ready supply of
used equipment as businesses upgrade, move or smaller companies go out of
business.
Products and Services
- ---------------------
OCIS initial focus is going to be on warehousing equipment with the majority
of its current inventory consisting of warehousing rack systems and related
equipment such as forklifts and conveyors. Management will not, however,
limit itself to any particular business equipment.
Our current inventory of warehousing equipment consists of 3 forklifts with
the capacity to lift between 3,000 to 8,000 pounds. We have also purchased
conveyor belts to allow inventory to be moved in a warehousing environment.
The conveyor belts we have all operate on a gravity system with a belt and
roller to allow the products to move over them. Our racking system is
designed to hold pallets with the products on top of the pallets. The racking
system typically consists of large metal shelves wide and sturdy enough to
accommodate thousands of pounds of pallets. We have also purchased high
density push back rack shelving systems which allow flexibility in warehousing
design because the racks are mobile and can be moved into place as the
inventory needs of companies demand.
In addition to warehouse equipment, management will focus on office equipment
including partitions, desk, work spaces and cabinets. Initially, management
will not focus on computer or server related systems because of the short life
cycle and obsolescence in these areas and the current glut of used computer
equipment. Instead, management intends to focus on business equipment that
has long life cycles.
15
Marketing and Distribution
- --------------------------
OCIS's management relies on industry contacts to locate used equipment. Ocis'
president, Brent Schlesinger, has been in the material handling industry for
over twenty years. His experience and contacts developed as president of
another company have brought him into contact with many companies in the
United States and with material handling specialist (inventory managers) at
these companies. Mr. Schlesinger also keeps in contact with the auction
companies that liquidate industrial equipment. These companies will contact
those people in the industry, such as Mr. Schlesinger, as they need to
liquidate or acquire equipment. Mr. Schlesinger also spends time personally
contacting business to inform them of product offerings. These contacts are
aimed at finding not only customers to purchase used equipment but to find any
businesses that have equipment they would like to sell.
As funds permit and, depending on the type of equipment OCIS has in inventory,
we will advertise our products in trade journals and in local papers. The
kind of equipment in inventory often will dictate the type of marketing
program we have in place. With equipment like warehousing, the potential
customers are often known to us or readily identifiable so we will use more
direct marketing and personal sales efforts to these companies. If our
inventory consist of office equipment, we will rely on advertising in local
papers and trade journals as the most effective marketing campaign.
The nature of our products will require that our market area be limited to
Utah and the surrounding states, at first. The geographical limit is the
result of the size of our products currently being offered. The
transportation of the products has to be done by truck or trailer. The longer
the distance from our storage facility in Utah the more difficult and
expensive it will be to deliver the products. Accordingly, until our business
expands to the point we feel a new facility can be opened in another region of
the country, we will limit our geographical area to Utah and our surrounding
states which are within a days drive of our yard. These states would be
Idaho, Nevada, Wyoming and Colorado. We anticipate most of our business at
first to be within Utah and slowly expanding to the boarder areas of Idaho,
Wyoming and Nevada. By limiting our geographical coverage, most of our
shipping can be done with pickup trucks and rented trailers or through a
rental of a local semi trailer for the day. This helps keep our cost down by
not having to incur or pass along expensive shipping cost. It also allows us
to store all of our inventory at a yard without having to have other storage
facilities around the country. All products are simply stored at our yard
until the day they need to be loaded and delivered to a clients facility.
With many customers located in the same area, customers are also able to pick
up the products themselves and save any shipping cost. We typically will try
and pass along the shipping cost if possible. However, in an industry where
competition is based on price, we may have to absorb some of the shipping
cost.
Competition
- -----------
The market for used equipment is very competitive. In addition to small
companies like OCIS, many larger companies offer similar services.
Additionally, many manufactures offer to sell used equipment or take it in
trade when they install newer equipment. The manufactures used the resale of
used equipment as a means of obtaining service contracts and to maintain
contact with companies that will eventually want to upgrade to newer
equipment.
16
Many companies have also started reselling their own equipment in a way to
maximize the proceeds they receive. Additionally, business liquidators have
become more aggressive at handling all aspects of the liquidation process and
instead of relying on the traditional auction to sell equipment, they will now
hold equipment for longer periods to maximize potential proceeds of the sale.
With our small size and having only begun business operations, we consider
ourselves to be at a competitive disadvantage. This industry is very
competitive. Typically, the competition is going to be on price point with
the company able to offer the cheapest price going to be able to make the
sale. In the material handling market as well as the office product market,
the products are very similar and typically all products perform the same
function equally well. This leaves the competition focused on price.
Plan of Operation
- -----------------
OCIS has purchased an initial inventory of used warehousing equipment which we
plan to use as a base to start our business. This inventory we hope to be
able to sell during the next six months. The proceeds from the sale of the
inventory will be used to fund operations, pay obligations and purchase
additional equipment for sale. We will also use the proceeds from this
offering to purchase additional inventory of used warehousing and office
equipment.
Management intends to keep operating cost as low as possible to allow OCIS to
build inventory and sales. Management, accordingly, does not plan on taking
salaries until revenues from operation allow salaries to be paid without
jeopardizing OCIS ability to continue in business. Management has also
structured the initial inventory purchase to allow OCIS to raise the minimum
in this offering before the purchase price must be paid, or to have until
December 31, 2003, before payment is due on the initial inventory purchase
price. As inventory is sold, OCIS will use the cost basis of each item to pay
down the promissory note used to purchase the initial inventory. Initially
management believes that expenses can be kept to a minimum and existing
inventory and funds on hand will allow OCIS to continue in business at least
twelve months.
OCIS will need to raise at least the minimum offering amount to be able to pay
for our initial inventory. Otherwise, as current inventory is sold, we will
be paying a majority of the proceeds to pay off the existing note for the
purchase of the inventory leaving insufficient funds to purchase additional
inventory and pay ongoing obligations. If OCIS is unable to raise the minimum
amount in this offering our future success would be in jeopardy without
capital from another source. If this offering is successful, and, at least
the minimum raised, the promissory note used to purchase the initial inventory
will be due and payable. The note at June 30, 2003, had a balance owing of
$25,581. We will therefore, use part of the proceeds from the offering to pay
the note off. This will allow us to buy additional inventory as current
inventory is sold.
Proceeds of this offering should allow us to purchase enough inventory to fund
operations through next year and pay the current note obligations. Once we
are able to start rolling over inventory, which we hope to roll over at
least three times per year, we will be able to hire additional personnel and
pay management salaries. The nature of our business is such that we can
operate with only limited personnel. This is because we operate more like a
warehouse where goods are stored until resold. By selling used equipment to
17
business, a store front is not necessary and office and retail expenses are
avoided. With a current monthly lease of only $500, we believe we can use our
current facility for at lease eighteen months to two years before additional
space is required.
Our current capital was invested by OCIS founders at inception. At inception,
two founders purchased common stock for $10,000 cash and demand promissory
notes for an additional $15,000 for a total purchase price of $25,000. The
notes have been paid in full. The notes and the cash were for the purchase of
500,000 shares of OCIS common stock.
Management is hopeful existing cash and promissory notes will be sufficient
capital to fund OCIS until additional capital can be raised in this offering.
If management is unsuccessful in raising additional capital, OCIS will not
have sufficient resources to continue to purchase inventory. Except for
paying off existing obligations we would probably not be able to continue in
business beyond next year. Even with the proceeds from this offering, we may
need additional capital if we want to be able to expand our business. Also,
although management believes with the minimum from this offering we will have
sufficient capital to keep OCIS operating for at least twelve months, we
probably would not be able to expand operations. We probably would remain at
only an operating level to sustain a small profit and future growth would be
limited until additional capital could be raised to expand our inventory. If
only the minimum is raised it is unlikely we would hire any employees in the
foreseeable future. Even with the maximum offering raised, we will delay
hiring any employees until management believes we can do so and operate at a
profit. This would probably delay any hiring for at least eight to twelve
months as we build our inventory and customer base.
As of December 31, 2002, we had a working capital surplus of only $7,771 with
$32,714 in obligations. Our major obligation at December 31, 2003 consisted
of our promissory note to the our president for $29,856 for the purchase of
our initial inventory. Since December 31, 2003, our working capital surplus
has decreased to $2,873 as of June 30, 2003. This decrease is the result of
the need to borrow additional capital from the founders of OCIS to pay ongoing
expenses and the addition of some accounts payable. Our note to the our
president for the initial inventory was reduced to $25,581 on June 30, 2003 as
the result of the sale of some inventory with the inventory cost basis going
to pay the note. To date, most expenses have been for professional services
such as accounting and attorney's fees in organizing OCIS and conducting
initial audits. We anticipate monthly ongoing expenses to be held to a
minimum until revenue allows us to expand our workforce, advertise and
purchase additional inventory. We are trying to keep our cash needs to a
minimum. Except for the paying of legal and accounting cost associated with
this offering, and a $500 per month lease, our cash flow has been minor. We
are hoping to keep costs down until this offering is complete to conserve
cash. If this offering is not successful, we would only have enough cash on
hand to pay existing obligations. We would not be able to engage in any
marketing and would be in a position to only try and sell our existing
inventory and pay the debt associated with it. We do believe we could stay in
business at least twelve months even if this offering is not successful.
However, we would not be able to expand operations and probably would not be
profitable. If we receive the minimum in this offering, we think we will be
able to continue in business for at least another twelve months without having
to raise additional capital. This will give us time to establish customers.
18
For the year ended December 31, 2003, we have had revenue of only $12,500
related to the sale of inventory. Since the beginning of 2003 through June 30,
2003, we had additional sales of $4,830 which all occurred in the first
quarter of 2003. We had no sales for the three months ended June 30, 2003.
Even with this revenue, we still had a net loss since inception in February
2002 through December 31, 2002, of $22,174 and a net loss for the six months
ended June 30, 2003 of $4,953. For the three months ended June 30, 2003, we
had a net loss of $1,470. This loss is the result of the lack of revenue and
the legal and accounting cost associated with our organization and the
preparation and filing of our registration statement related to this
prospectus.
Manufacturing, Supplies, and Quality Control
- --------------------------------------------
OCIS does not manufacture any equipment. OCIS does inspect all equipment to
assure that it is in good condition prior to any purchase or sale. We do not
provide any warranties to the equipment we sell. All equipment is sold "as
is."
Inventory on hand will very as funds permit. Management is hopeful that with
the funds from this offering, we will be able to increase our inventory and
take advantage of the ability to purchase additional inventory if a good
opportunity presents itself. Presently, existing capital will not allow us to
purchase all the inventory we want and we have had to pass on the opportunity
to purchase some office and warehousing equipment which were at good prices.
As we are able to sell existing inventory, management intends to purchase as
much new inventory as funds permit with the profits from the sales.
Domain Names, Trademarks and Copyrights
- ---------------------------------------
OCIS has no intellectual property and we do not anticipate, given current
business objectives, that any intellectual property, other than trade names
will be developed.
Research and Development
- ------------------------
The nature of our business does not require we spend capital on research and
development.
Regulation and Environmental Compliance
- ---------------------------------------
Our business is not subject to many, if any, regulations or environmental
compliance. The used equipment we sell tends to be very basic items not
subject to many standards other than certain warehouse equipment which must be
able to hold weight distributions indicated on the product. Typically, these
standards were already approved when the equipment was originally sold and no
new testing is required.
Employees
- ---------
OCIS has no employees at this time. All employee functions are currently
handled by Brent Schlesinger and, when needed, Kirk Blosch and Jeff Holmes who
are the officers and directors of the Company. If our business plan is
successful, we expect we will be able to hire part or full-time employees to
assist operations as needed.
19
DESCRIPTION OF PROPERTIES
Executive Office and Yard
- -------------------------
We currently lease a yard at 3942 South 210 West in Salt Lake City, Utah at a
lease rate of $500 per month for storing our inventory. The lease is month to
month. The yard is approximately fifty feet by two hundred ten feet. The
yard has a gravel surface and is surrounded by a wire fence to prevent theft
of our inventory. We do not have the use of any facilities at the yard except
the open space. All inventory that needs to be covered is done so through
tamps placed over the inventory. The yard is in satisfactory conditions for
our use which is solely as a storage facility for our inventory. Management
believes this facility will serve our purposes for at least the next twelve
months. Our officers utilize their home offices on a rent free basis.
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
The following table sets forth the name, age, and position of each executive
officer and director and the term of office of each director of OCIS.
Name Age Position Held Position Since
- ---- --- -------- -------------------
Brent W. Schlesinger 48 President, Director 2002
Jeff W. Holmes 50 Director 2002
Kirk Blosch 49 Secretary,
Treasurer, Director 2002
The term of office of each director is one year and until his or her successor
is elected at the annual shareholders' meeting and is qualified, subject to
removal by the shareholders. The term of office for each officer is for one
year and until a successor is elected at the annual meeting of the board of
directors and is qualified, subject to removal by the board of directors.
OCIS does not have a standing audit, nominating or compensation committee.
The size of OCIS's board has not permitted the board of directors to divide up
some of the corporate governance provisions. It is anticipated as our
business expands, that board of director committees will be formed. At this
time, however, the exact timing and the nature of such committees is unknown.
Biographical Information
- ------------------------
Set forth below is certain biographical information with respect to OCIS's
existing officer and director.
Brent W. Schlesinger was the president and general manager of Yale Industrial
Trucks, Inc. in Salt Lake City, Utah from 1989 to 1994 where he oversaw all
daily activity for the company. Yale Industrial managed a fleet of rental
fork lifts and engaged in the purchase and sale of used warehouse equipment.
From 1994 until hired by OCIS, Mr. Schlesinger operated his own private
company doing business as PS Enterprises. PS Enterprises was a sole
proprietorship and never incorporated. Mr. Schlesinger's business was engaged
in the purchase and sale of warehouse equipment.
20
Jeff W. Holmes is a general partner and founder in the partnership of Blosch
and Holmes, LLC, a business consulting and private venture funding general
partnership founded in 1984. Since September 1997, Mr. Holmes has been a
managing partner of the Scottsdale Equity Growth Fund, LLC, which is a private
equity fund engaged in financing technology companies. Since September 1998,
Mr. Holmes is the managing partner of DMG Advisors, LLC which provides
consulting to private and public companies. Mr. Holmes is also the president
and director of Barbecue Capital Corp. which is listed on the OTC Bulletin
Board but currently does not have any operations. Mr. Holmes also served as
the chairman of the board of directors of Ion Laser Technology, 1983 to 1994 a
medical device company listed on the American Stock Exchange. Mr. Holmes is
presently the chairman of the board of Calibrus, Inc. a contact center located
in Phoenix, Arizona. As a contact center, Calibrus handles inbound and
outbound telephone calls for corporations. These calls can range from
assistance with customer service to third party verification were a Calibrus
operate will verify a party has agreed to purchase products over the telephone
from another contact or call center. Mr. Holmes graduated from the University
of Utah in 1976 with a Bachelor of Science degree in Marketing and Management.
Kirk Blosch is a general partner and founder of Blosch and Holmes LLC, a
business consulting and private venture funding general partnership
established in 1984. Mr. Blosch is and has been since October 1999 a member
of the board of directors of Calibrus, Inc. a contact center located in
Phoenix, Arizona. From the first quarter of 1997 through the second quarter
of 2000, Mr. Blosch was a director of Zevex International, a medical product
company specializing in medical devices and ultrasound technology. Zevex
(ZVXI) is traded on NASDAQ. Kirk graduated from the University of Utah in
1977 with a B.S. degree in Speech Communications.
REMUNERATION OF OFFICERS AND DIRECTORS
The following table sets forth certain summary information concerning the
compensation paid or accrued since inception to OCIS's chief executive officer
and/or any of its other officers that received compensation in excess of
$100,000 during such period (From February 6, 2002 [inception] to December 31,
2002).
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Awards Payouts
------ ------ -------
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary($) Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
Brent W. Schlesinger 2002 $ -0- -0- -0- -0- -0- -0- -0-
President
Employment Agreements
- ---------------------
OCIS does not have an employment agreement with Mr. Schlesinger, our
President. Mr. Schlesinger has not received compensation in connection with
serving as an officer and director of OCIS, and does not intend to receive
compensation until revenues from operations support such compensation.
21
Board Compensation
- ------------------
OCIS's director receives no compensation for attendance at board meetings.
Additional members of the Board of Directors who may be appointed following
the completion of the offering will serve for no compensation until the next
annual meeting of shareholders.
Options/Stock Appreciation Rights ("SAR") Grants in Last Fiscal Year
- --------------------------------------------------------------------
No individual grants of stock options (whether or not in tandem with SARs), or
freestanding SARs were made since inception to any of the named executive
officers.
Bonuses and Deferred Compensation
- ---------------------------------
There are no compensation plans or arrangements, including payments to be
received from OCIS, with respect to any person named as a director, executive
officer, promoter or control person above which would in any way result in
payments to any such person because of his resignation, retirement, or other
termination of such person's employment with OCIS or its subsidiaries, or any
change in control of OCIS, or a change in the person's responsibilities.
Compensation Pursuant to Plans
- ------------------------------
OCIS has no compensation plan in place.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Lack of Prior Public Market and Possible Volatility of Stock Price
- ------------------------------------------------------------------
Prior to this offering, there has been no public market for the common stock
and there can be no assurance that a significant public market for the common
stock will develop or be sustained after the offering. OCIS will seek a Market
Maker to apply to have OCIS's common stock included for quotation in the over-
the-counter market on the OTC Bulletin Board. There can be no assurance that
the Market Maker's activities will be continued, or that an active trading
market for OCIS's common stock will be developed or maintained. The future
market price of the common stock may be highly volatile. Securities of
issuers having relatively limited capitalization, limited market makers or
securities recently issued in a public offering are particularly susceptible
to fluctuations based on short-term trading strategies of certain investors.
Although the initial offering price of the common stock reflects OCIS's
assessment of current market conditions, there can be no assurance that such
price will be maintained following the offering. Depending on market
conditions and interest in OCIS stock, we may seek alternative markets such as
the Pink Sheets that tend to have even less liquidity and following then the
OTC Bulletin Board.
Following completion of this offering, and listing of our stock on the OTC
Bulletin Board or other markets such as the Pink Sheets, our common stock may
be subject to special sales practice requirements applicable to "designated
securities" on "penny stock" which are stock which trade below $5.00 per share
and whose underlying companies do not meet certain minimum asset requirements.
No assurance can be given that the bid price for our common stock will be
above $5.00 per share following the offering. If such $5.00 minimum bid price
is not maintained and another
22
exemption is not available, our common stock would be subject to additional
sales practice requirements imposed on broker-dealers who sell common stock to
persons other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written agreement to the transaction prior
to the sale. These limitations make it difficult for broker dealers to sell
penny stocks and most will not recommend a penny stock or sell a penny stock
except to long term customers who are accredited investors. Because of these
limitations many brokers do not follow penny stock or recommend them to
clients. Consequently, the penny stock rules may affect the ability of
broker-dealers to sell our common stock and also may affect the ability of
persons acquiring our common stock to resell such securities in any trading
market that may develop. If brokers do not recommend OCIS to their clients,
it may be difficult to establish a market for the securities or to develop a
wide spread shareholder base. Therefore, an investor trying to resell our
shares may have difficulty because there may be little demand for our shares
and even small share sales may result in a reduction in our share price.
We currently have no options, warrants or other rights outstanding to purchase
or convert into shares of our common or preferred stock. We have not paid any
cash dividends since inception, and we do not anticipate we will pay dividends
in the foreseeable future.
Possible Sale of Common Stock Pursuant to Rule 144
- --------------------------------------------------
OCIS has previously issued shares of common stock that constitute "restricted
securities" as that term is defined in Rule 144 adopted under the Securities
Act. Subject to certain restrictions, such securities may generally be sold
in limited amounts one year after their acquisition. OCIS issued 600,000
shares of common stock to OCIS's founder in connection with its organization.
The shares of common stock issued to OCIS's founder may become eligible for
resale under Rule 144 in February 2003. (See "MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS").
Shareholders
- ------------
As of March 26, 2003, OCIS has three shareholders.
Control by Existing Shareholders
- ---------------------------------
Upon completion of the minimum and/or maximum offering, approximately 66.67%
and 50%, respectively, of the outstanding shares of common stock will be
beneficially owned by the current president and existing shareholder of OCIS.
As a result, the person currently in control of OCIS will most likely continue
to be in a position to elect at least a majority of the Board of Directors of
OCIS, to dissolve, merge or sell the assets of OCIS, and generally, to direct
the affairs of OCIS.
23
Disproportionate Risks
- ----------------------
Upon completion of the minimum offering, the present shareholder will own
approximately 66.67% of the then issued and outstanding shares of OCIS, for
which they will have contributed $10,000 in cash, $15,000 in promissory notes
and $5,000 in inventory. Persons purchasing shares of common stock in the
minimum offering will own approximately 33.33% of the then issued and
outstanding shares, for which they will have paid $75,000, or approximately
71.43% of the then invested capital. Upon completion of the maximum offering,
the present shareholder will own approximately 50% of the then issued and
outstanding shares of OCIS. Persons purchasing shares of common stock in the
maximum offering will own approximately 50% of the then issued and outstanding
shares, for which they will have paid $150,000, or approximately 83.33% of the
then invested capital. Consequently, the purchasers in this offering will bear
a disproportionately greater risk investing in OCIS's business than its
present shareholder.
Dividends
- ---------
At this time we do not plan on paying dividends and will use any profits to
fund growth.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of March 15, 2003, the name and address and
the number of shares of OCIS's common stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by
OCIS to own beneficially, more than 5% of the 600,000 shares of common stock
issued and outstanding, and the name and shareholdings of each director and
named executive officer and of all named executive officers and directors as a
group.
Principal Shareholders: Amount and Percent(2)
Nature of Percent(2) After
Beneficial Before Offering
Class Name and Address Ownership(1) Offering Minimum Maximum
- ------ ---------------- ------------ -------- ------- -------
Common Brent W. Schlesinger 100,000 16.67% 11.11% 8.33%
3942 South 210 West
Salt Lake City, Utah 84107
Common Kirk Blosch 250,000 41.66 27.78 20.83
2081 South Lake Line Rd.
Salt Lake City, Utah 84109
Common Jeff W. Holmes 250,000 41.66 27.78 20.83
600 Highway 50 Pinewild
At Marla Bay, Unit 101
Zephyr Cove Nevada 89448
24
Officers and Directors: Amount and Percent(2)
Nature of After
Beneficial Before Offering
Class Name and Address Ownership(1) Offering Minimum Maximum
- ------ ---------------- ------------ -------- ------- -------
Common Brent W. Schlesinger --------See Above---------
Kirk Blosch --------See Above---------
Jeff W. Holmes --------See Above---------
All Officers and Directors
as a group (3 persons) 600,000 100% 66.66% 50.00%
- ------------------------
(1) All shares are owned beneficially and of record by the named shareholder
and the shareholder has sole voting, investment, and dispositive power of the
shares.
(2) All percentages have been rounded to the nearest one-tenth of one percent.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Transactions with Management and Others
- ---------------------------------------
The information set forth below is provided by OCIS based on what OCIS
believes may be material to the shareholders in light of all the circumstances
of the particular case. The significance of the transactions disclosed may be
evaluated by each potential investor after taking into account the
relationship of the parties to the transactions and the amounts involved in
the transactions.
On organization of OCIS, two founders, Jeff W. Holmes and Kirk Blosch, who are
the founders and officers and directors of OCIS, purchased 500,000 shares of
OCIS common stock for $25,000 consisting of $10,000 in cash and promissory
notes for $15,000. Each purchased 250,000 shares. The promissory notes for
$15,000 have been paid in full.
OCIS purchased its original inventory from Brent Schlesinger. Mr. Schlesinger
was subsequently appointed a director and president of OCIS. As part of the
purchase price of the initial inventory, OCIS issued Mr. Schlesinger 100,000
shares of common stock. OCIS also gave Mr. Schlesinger a promissory note for
$40,626. This note has been reduced to $25,581. The $15,045 used to reduced
the note balance was part of the proceeds from the sale of inventory.
DESCRIPTION OF CAPITAL STOCK
General
- -------
The Registrant is authorized to issue ninety million (90,000,000) shares of
common stock, par value $0.001 per share and ten million (10,000,000) shares
of preferred stock, par value $0.001 per share. OCIS has six hundred thousand
(600,000) shares of common stock and no shares of preferred stock issued and
outstanding at August 20, 2003. Although OCIS's Board of Directors has no
present intention to do so, the Board of directors has authority, without
action by or vote of OCIS's shareholders, to issue all or part of the
25
authorized but unissued shares. In addition, OCIS's Board of Directors has
authority, without action by or vote of OCIS's shareholders, to fix and
determine the rights, preferences, and privileges of the preferred stock,
which may be given voting rights superior to that of the common stock, which
power may be used to hinder or deter a takeover proposal, should any occur.
Any issuance of additional shares of common stock or preferred stock will
dilute the percentage ownership interest of shareholders and may further
dilute the book value of OCIS's shares.
Common Stock
- ------------
The holders of common stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of shareholders. Shares of common stock do
not carry cumulative voting rights and, therefore, a majority of the shares of
outstanding common stock will be able to elect the entire board of directors
and, if they do so, minority shareholders would not be able to elect any
persons to the board of directors. OCIS's bylaws provide that a majority of
the issued and outstanding shares of OCIS constitutes a quorum for
shareholders' meetings, except with respect to certain matters for which a
greater percentage quorum is required by statute or the bylaws. Shareholders
of OCIS have no preemptive rights to acquire additional shares of common stock
or other securities. The common stock is not subject to redemption and
carries no subscription or conversion rights. In the event of liquidation of
OCIS, the shares of common stock are entitled to share equally in corporate
assets after satisfaction of all liabilities. Holders of common stock are
entitled to receive such dividends as the board of directors may from time to
time declare out of funds legally available for the payment of dividends.
OCIS seeks growth and expansion of its business through the reinvestment of
profits, if any, and does not anticipate that it will pay dividends in the
foreseeable future.
Preferred Stock
- ---------------
The authority to issue the preferred stock is vested in the board of directors
of OCIS, which has authority to fix and determine the powers, qualifications,
limitations, restrictions, designations, rights, preferences, or other
variations of each class or series within each class which OCIS is authorized
to issue. The above described authority of the board of directors may be
exercised by corporate resolution from time to time as the board of directors
sees fit.
Non-Cumulative Voting
- ---------------------
The holders of shares of common stock of OCIS do not have cumulative voting
rights. Thus, the holders of more than 50% of such outstanding shares, voting
for election of directors, can elect all of the directors to be elected, and
in such event, the holders of the remaining shares will not be able to elect
any of OCIS's directors. If the maximum number of shares offered hereby are
sold, the present shareholder will own approximately 50% of OCIS's issued and
outstanding shares, and remain in a position to potentially elect all of the
members of the Board of Directors. Further, if the minimum number of shares
are sold, current management will own approximately 66.67% of OCIS's common
stock and will therefore control OCIS.
26
Transfer Agent
- --------------
OCIS's transfer agent is Colonial Stock Transfer Company, 66 Exchange Place,
Salt Lake City, Utah 84111, Telephone (801) 355-5740 and Facsimile (801) 355-
6505.
Market Information
- ------------------
At the present time, there is no public market for any of OCIS's securities,
and there is no assurance any market will develop after the offering. The
development of a trading market following completion of this offering will be
dependent on market makers and other broker-dealers initiating quotations in
interdealer quotation media, in maintaining a trading position, and otherwise
engaging in market making activities in OCIS's securities. There is no
assurance that any trading market for OCIS's securities will develop following
the offering.
Reports to Shareholders
- -----------------------
OCIS will prepare and file an annual report on from 10KSB with the Securities
and Exchange Commission which report will contain audited financial
statements. We intend to file this report within 90 days of the end of our
fiscal year. This report will be available over the internet at the
Securities and Exchange Commission web site www.sec.gov. We will also supply
this report to any shareholders who request it. In addition, OCIS may, from
time to time, issue unaudited interim reports and financial statements, as may
be required under the Securities Exchange Act of 1934, as amended. These
reports will also be supplied to any shareholder who request it and be
available for review on the SEC web site.
Dividend Policy
- ---------------
The holders of common stock are entitled to dividends when, and if, declared
by the Board of Directors from funds legally available therefore, subject to
any preference on preferred stock, if applicable, which may then be
outstanding. OCIS has not paid a dividend since our incorporation. Because
OCIS is in the formative stage and will be engaged in start-up operations for
the next several years, it is not anticipated that funds will be available for
the issuance of dividends in the foreseeable future.
LITIGATION
OCIS is not a party to any pending legal proceeding and no such action by or
against us, to the best of our knowledge, has been threatened.
LEGALITY OF SHARES
Victor D. Schwarz, Salt Lake City, Utah, counsel to OCIS, has rendered an
opinion that the common stock being offered hereby, when sold and issued under
the terms set forth in this registration statement, will be fully paid and
nonassessable under the corporate laws of the state of Nevada.
27
EXPERTS
The financial statements included herein and elsewhere in this registration
statement, to the extent and for the period indicated, have been included in
this prospectus and the registration statement, in reliance on the report of
David Thomson, Certified Public Accountant, Salt Lake City, Utah, given on the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
OCIS has filed this registration statement on Form SB-2 under the Securities
Act with the Commission, SEC File No. 333-91436, under the Securities Act with
respect to the securities offered by this prospectus. This prospectus omits
certain information contained in the registration statement. For further
information, reference is made to the registration statement and to the
exhibits and other schedules filed therewith. Statements contained in this
prospectus as to the contents of any contract or other document referred to
are not necessarily complete, and where such contract or document is an
exhibit to the registration statement, each such statement is deemed to be
qualified and amplified in all respects by the provisions of the exhibit.
Copies of the complete registration statement, including exhibits, may be
examined without charge at the Commission's principal offices in Washington,
D.C., and copies of all or any part of the filed materials may be obtained
from the Public Reference Section of the Commission, at 450 Fifth Street,
N.W., Washington, D.C. 20549, on payment the ususal fees for reproduction, or
may be obtain from the Commission's EDGAR Database at http://www.sec.gov.
OCIS will be subject to Section 15(d) and the reporting requirements of
Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, as such, OCIS will file annual, quarterly, and current reports
with the Commission containing financial information examined and reported
upon, with an opinion expressed by independent certified public accountants,
at least annually, and OCIS may also provide unaudited quarterly or other
interim reports as it deems appropriate. OCIS intends to comply with the
periodic reporting requirements of Section 13 of the Exchange Act, and such
other of said statutes' requirements as may become applicable from time to
time. OCIS will not be required to file or make the additional reports of
issuers subject to Section 14 of the Exchange Act, and as such has no plans to
submit annual reports to shareholders or proxy statements and other reports
required, except for the annual report on form 10KSB which will be made
available to shareholders, until and unless, we may become subject to Section
14 requirements, by registration of a class of its securities pursuant to
Section 12(b) or Section 12(g) of the Exchange Act or otherwise.
28
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
PAGE
December 31, 2002
- -----------------
Independent Auditor's Report F-1
Balance Sheets F-2
Statements of Operations F-3
Statement of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
June 30, 2003
- -------------
Balance Sheets F-10
Statements of Operations F-11
Statement of Stockholders' Equity F-12
Statements of Cash Flows F-13
Notes to Financial Statements F-13
F-1
Independent Auditor's Report
Board of Directors
OCIS CORP.
Salt Lake City, Utah
I have audited the accompanying balance sheet of OCIS Corp. (A development
stage company) as of December 31, 2002 and the related statements of
operations, stockholders' equity and cash flows from inception (February 6,
2002) to December 31, 2002. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on the
financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OCIS Corp. (A development
stage company) as of December 31, 2002, and the results of its operations and
its cash flows from inception (February 6, 2002) to December 31, 2002 in
conformity with accounting principles generally accepted in the United States
of America.
As discussed in Note 1, the Company has been in the development stage since
its inception on February 6, 2002. The Company has limited operating capital
with limited revenue from operations. Realization of a major portion of the
assets is dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
/s/
David T. Thomson, P.C.
Salt Lake City, Utah
February 20, 2003
F-2
OCIS CORP.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
December 31,
2002
------------
CURRENT ASSETS:
Cash in bank $ 1,194
Inventory 39,291
-----------
Total Current Assets 40,485
-----------
TOTAL ASSETS $ 40,485
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,548
Accrued interest payable - officer 310
Note Payable - officer 29,856
-----------
Total Current Liabilities 32,714
-----------
STOCKHOLDERS' EQUITY:
Preferred stock; $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding 0
Common Stock; $.001 par value, 90,000,000 shares authorized
600,000 shares issued and outstanding 600
Capital in excess of par value 29,400
Common stock subscribed (55)
Earnings (deficit) accumulated during the
development stage (22,174)
-----------
Total Stockholders' Equity 7,771
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,485
===========
The accompanying notes are an integral part of these financial statements.
F-3
OCIS CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
From Inception
(February 6, 2002)
To
December 31,
2002
------------------
REVENUE:
Sales $ 12,500
Less costs of goods sold (11,942)
-------------
GROSS PROFIT 558
EXPENSES:
General and administrative 21,204
-------------
21,204
-------------
INCOME (LOSS) FROM OPERATIONS (20,646)
OTHER INCOME (EXPENSE)
Interest income 512
Interest expense (2,040)
-------------
NET INCOME (LOSS) BEFORE INCOME TAXES (22,174)
Provision for income taxes 0
-------------
NET INCOME (LOSS) $ (22,174)
=============
EARNINGS (LOSS) PER SHARE $ $0.04
=============
WEIGHTED NUMBER OF SHARES OUTSTANDING 600,000
=============
The accompanying notes are an integral part of these financial statements.
F-4
OCIS CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Capital in Common During the
---------------------- Excess of Stock Development
Shares Amount Par Value Subscribed Stage
----------- --------- ----------- ------------ -------------
<s> <c> <c> <c> <c> <c>
BALANCE, February 6, 2002
(inception) 0 $ 0 $ 0 $ 0 $ 0
Shares issued to initial
stockholders for cash
and notes receivable,
February 6, 2002
at $.05 per share 500,000 500 24,500 (15,000) 0
Shares issued to initial
stockholder for acquisition
of inventory,
February 6, 2002
at $.05 per share 100,000 100 4,900 0 0
Cash received for
common stock subscriptions 0 0 0 14,945 0
Net income (loss)
from inception to
December 31, 2002 0 0 0 0 (22,174)
--------- ------- --------- ---------- -----------
BALANCE, December 31, 2002 600,000 $ 600 $ 29,400 $ (55) $ (22,174)
========= ======= ========= ========== ===========
The accompanying notes are an integral part of these financial statements.
F-5
OCIS CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
From Inception
(February 6, 2002)
To
December 31,
2002
------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash from sale of equipment $ 17,500
Cash paid to suppliers and others (28,953)
Cash from interest income 512
Cash paid for interest expense (2,040)
-----------
Cash Flows (Used) by Operating Activities (12,981)
-----------
CASH FLOW FROM INVESTING ACTIVITIES: 0
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 24,945
Payment on note payable (10,770)
-----------
Cash Flows Provided (Used) by Financing Activities 14,175
-----------
NET INCREASE (DECREASE) IN CASH 1,194
CASH - BEGINNING OF PERIOD 0
-----------
CASH - END OF PERIOD $ 1,194
-----------
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
NET INCOME (LOSS) $ (22,174)
-----------
Adjustment to reconcile net income (loss) to net
cash provided (used) by operating activities
Stock issued to acquire inventory 5,000
Debt issued to acquire inventory 40,626
Changes in assets and liabilities
(Increase) decrease in inventory (39,291)
Increase (decrease) in accounts payable 2,548
Increase (decrease) in accrued interest 310
-----------
Total Adjustments 9,193
-----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (12,981)
===========
The accompanying notes are an integral part of these financial statements.
F-6
OCIS CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of Nevada
on February 6, 2002 and has elected a fiscal year end of December 31st. The
Company intends to engage in business operations to buy used equipment
wholesale and to sell it to other dealers or to retail customers. To this end,
the Company has acquired an inventory of used material handling equipment.
The Company is considered a development stage company as defined in SFAS No.
7. The Company has at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors. All of the Company's
revenue to date was from sales to two companies located in Utah.
Net Earnings Per Share - The computation of net income (loss) per share of
common stock is based on the weighted average number of shares outstanding
during the period presented.
Income Taxes - Income tax expenses includes federal and state taxes currently
payable and deferred taxes arising from temporary differences between income
for financial reporting and income tax purposes. Due to a loss from
inception, the Company has no tax liability. At this time the Company has no
deferred taxes arising from temporary differences between income for financial
reporting and income tax purposes.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents. During the period ending
December 31, 2002, the Company did not have non-cash investing or financing
activities.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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.
Inventory - Inventory consists of used finished product purchased for resale
and is stated at the lower of cost determined by the FIFO Method or Market.
Inventory cots include those costs directly attributable to the product before
sale.
Revenue recognition - The Company will recognize revenue at the time the sale
of the used equipment takes place and title has transferred to the customer
which occurs upon shipment. The Company has $12,500 of sales to date.
F-7
NOTE 2 - COMMON STOCK TRANSACTIONS
The Company on February 6, 2002 sold 500,000 shares of common stock to
two initial stockholders (250,000 shares to each individual) at $.05 per share
for a total amount of $25,000. The individuals each paid $5,000 for the
shares and each entered into a promissory note for $7,500 for the remaining
purchase amount. The financed amount of $15,000 for the shares purchase is
being shown as common stock subscribed and is treated as a reduction of equity
in the balance sheet. The notes carry simple interest at a rate of 6% per
annum. The principle and interest are due and payable on December 31, 2002 or
on demand of holder. During the year ended December 31, 2002, $14,945 was
paid on the principle amounts due on the promissory notes leaving a combined
balance owed on the notes at December 31, 2002 of $55.
Also during the year ended December 31, 2002, $512 was received on the
accrued interest due on the above notes. At December 31, 2002, the accrued
interest receivable balance on the above was nil. Also on February 6, 2002,
the Company sold 100,000 shares of it common stock at $.05 per share for a
total amount of $5,000 as part of its purchase of assets as described in Note
4.
NOTE 3 - RELATED PARTY TRANSACTIONS
An officer of the Company is providing a mailing address to the Company
without charge. This service has been determined by the Company to have only
nominal value. As of December 31, 2002 no compensation has been paid or
accrued to any officers or directors of the Corporation because amounts are
only of a nominal value.
NOTE 4 - NOTE PAYABLE - OFFICER
At inception, the Company entered into a Purchase and Sale Agreement with the
President of the Company and P.S. Enterprises, a Utah DBA of the President.
Under the agreement the Company purchased material handling inventory. The
purchase price of the inventory was $45,626. The Company purchased the
inventory through the issuance of 100,000 shares of common stock at $.05 per
share for an amount of $5,000 and a promissory note for the remaining amount
of $40,626. Each inventory item purchased was valued at the lower of market
value or at no more than the cost of the inventory to the President or P. S.
Enterprises. The note is to be repaid in full on or before February 6, 2003
(extended to August 6, 2003), or is due and payable in full on the closing of
any public offering of securities by the Company. The note is secured by the
inventory purchased and the agreement states that all proceeds from the sale
of the inventory purchased by the note shall be applied to the payment of the
note less selling expenses. The note has simple interest at a rate of 6%. The
interest is due and payable February 6, 2003 (extended to August 6, 2003), or
at the time of closing of a public offering of securities by the Company.
During the year ended December 31, 2002, the Company paid $1,730 against the
accrued interest owed on the note payable to the officer. At December 31,
2002, the balance of accrued interest payable on the above was $309.
F-8
OCIS CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 INCOME TAXES
Income tax expense consists of the following components:
2002
-------
Current $ -
Estimated deferred tax liability (benefits) ( 3,326)
Less valuation allowance 3,326
--------
Net $ -
--------
At December 31, 2002, the Company had a net federal operating loss (NOL) of
$22,174, which can be carried forward to offset operating income. The net
operating loss expires 2022. A valuation allowance of $3,326 has been
established each year for those tax credits, which are not expected to be
realized. The change in the NOL benefit for 2002 was $3,326.
NOTE 6 - PROPOSED OFFERING OF COMMON STOCK
The Company is in the process of completing a Form SB-2 Registration Statement
under the Securities Act of 1933. The Company is proposing to sell a minimum
of 300,000 or a maximum of 600,000 shares of its common stock at $.25 per
share for a total minimum of $75,000 to a total maximum of $150,000. The
period of the offering to sell the common stock will be 120 days from the
effective date of the Registration Statement. The officers of the Company
will act as sales agents and will not be paid any commissions on the sale of
the common stock. Expenses of the offering are estimated to be $25,000.
F-9
OCIS Corp.
FINANCIAL STATEMENTS
June 30, 2003
(UNAUDITED)
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. These
financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.
F-10
OCIS CORP.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
June 30, December 31,
2003 2002
---------- ---------------
(Unaudited)
CURRENT ASSETS:
Cash in bank $ 412 $ 1,194
Inventory 38,801 39,291
--------- -----------
Total Current Assets 39,213 40,485
--------- -----------
TOTAL ASSETS $ 39,213 $ 40,485
--------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,173 $ 2,548
Due to officers and stockholders 4,945 -
Accrued interest payable -
officers and stockholders 641 310
Note payable - officer 25,581 29,856
--------- -----------
Total Current Liabilities 36,340 32,714
--------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock; $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding - -
Common stock $.001 par value,
90,000,000 shares
authorized, 600,000 shares
issued and outstanding
both periods 600 600
Capital in excess of par value 29,400 29,400
Common stock subscribed - (55)
Deficit accumulated during the
development stage (27,127) (22,174)
--------- -----------
Total Stockholders' Equity (Deficit) 2,873 7,771
--------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,213 $ 40,485
--------- -----------
The accompanying notes are an integral part of these financial statements.
F-11
OCIS CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three For the Six From
Months Ended Months Ended Inception to Cumulative
June 30, June 30, June 30, During the
-------------------- ------------ ------------ Development
2003 2002 2003 2002 Stage
---------- --------- -------------- ----------- -----------
<s> <c> <c> <c> <c> <c>
REVENUE
Sales $ - $ - $ 4,830 $ - $ 17,330
Cost of goods sold - - (3,444) - (15,386)
---------- ---------- ------------ ------------ -----------
Gross profit (loss) - - 1,386 - 1,944
---------- ---------- ------------ ------------ -----------
EXPENSES:
General and administrative 1,019 8,754 5,452 11,813 26,656
---------- ---------- ------------ ------------ -----------
Total Expenses 1,019 8,754 5,452 11,813 26,656
---------- ---------- ------------ ------------ -----------
NET INCOME (LOSS) FROM
OPERATIONS (1,019) (8,754) (4,066) (11,813) (24,712)
OTHER INCOME (EXPENSE)
Interest income - 224 - 355 512
Interest expense (451) (608) (887) (962) (2,927)
---------- ---------- ------------ ------------ -----------
NET INCOME BEFORE INCOME
TAXES (1,470) (9,138) (4,953) (12,420) (27,127)
Provision for income taxes - - - - -
---------- ---------- ------------ ------------ -----------
NET INCOME (LOSS) $ (1,470) $ (9,138) $ (4,953) $ (12,420) $ (27,127)
========== ========== ============ ============ ===========
INCOME (LOSS) PER SHARE $ (0.00) $ (0.02) $ (0.01) $ (0.02) $ (0.05)
========== ========== ============ ============ ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 600,000 600,000 600,000 600,000 600,000
========== ========== ============ ============ ===========
The accompanying notes are an integral part of these financial statements.
F-12
OCIS CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six From
Months Ended Inception to Cumulative
June 30, June 30, During the
------------- ------------- Development
2003 2002 Stage
------------- ------------- ------------
<s> <c> <c> <c>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash from sale of equipment $ 4,830 $ - $ 22,330
Cash paid to suppliers and others (5,782) (8,960) (34,735)
Cash paid for taxes - - -
Cash from interest income - - 512
Cash paid for interest (555) - (2,595)
----------- ----------- -----------
Net cash provided (used) from
operating activities (1,507) (8,960) (14,488)
----------- ----------- -----------
CASH FLOWS FROM (USED) IN INVESTING :
ACTIVITIES - - -
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 55 10,000 25,000
Due to officers 4,945 - 4,945
Payment on note payable (4,275) - (15,045)
----------- ----------- -----------
Net cash Provided (Used
by financing activities 725 10,000 14,900
----------- ----------- -----------
NET CASH PROVIDED (USED) DURING PERIOD (782) 1,040 412
CASH - BEGINNING OF PERIOD 1,194 - -
----------- ----------- -----------
CASH - ENDING OF PERIOD $ 412 $ 1,040 $ 412
=========== =========== ===========
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
NET INCOME (LOSS) $ (4,953) $ (12,420) $ (27,127)
----------- ----------- -----------
Adjustment to reconcile net income (loss)
to net cash provided (used) by operating
activities
Stock issued to acquire inventory - 5,000 5,000
Debt issued to acquire inventory - 40,626 40,626
Changes in assets and liabilities
(Increase) in accrued receivable - (355) -
(Increase) decrease in inventory 490 (48,426) (38,801)
Increase (decrease) in accounts payable 2,625 5,653 5,173
Increase (decrease) in accrued interest 331 962 641
----------- ----------- -----------
Total adjustments 3,446 3,460 12,639
----------- ----------- -----------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES $ (1,507) $ (8,960) $ (14,488)
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-13
OCIS, CORP.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - FINANCIAL STATEMENTS
The Company, without audit, has prepared the accompanying financial
statements. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operation and cash flows at June 30, 2003 and 2002 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 2002
audited financial statements. The results of operations for the periods ended
June 30, 2003 and 2002 are not necessarily indicative of the operating results
for the full year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of Nevada
on February 6, 2002 and has elected a fiscal year end of December 31st. The
Company intends to engage in business operations to buy used equipment
wholesale and to sell it to other dealers or to retail customers. To this end,
the Company has acquired an inventory of used material handling equipment.
The Company is considered a development stage company as defined in SFAS No.
7. The Company has at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors. All of the Company's
revenue to date was from sales to companies located in Utah.
Net Earnings Per Share - The computation of net income (loss) per share of
common stock is based on the weighted average number of shares outstanding
during the period presented.
Income Taxes - Income tax expenses includes federal and state taxes currently
payable and deferred taxes arising from temporary differences between income
for financial reporting and income tax purposes. Due to a loss from
inception, the Company has no tax liability. At this time the Company has no
deferred taxes arising from temporary differences between income for financial
reporting and income tax purposes.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents. During the periods ending June
30, 2003 and 2002 and December 31, 2002, the Company did not have non-cash
investing or financing activities.
F-14
OCIS, CORP.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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.
Inventory - Inventory consists of used finished product purchased for resale
and is stated at the lower of cost determined by the FIFO Method or Market.
Inventory cots include those costs directly attributable to the product before
sale.
Revenue recognition - The Company recognizes revenue at the time the sale of
the used equipment takes place and title has transferred to the customer which
occurs upon shipment. The Company has $17,330 of sales to date.
NOTE 3 - COMMON STOCK TRANSACTIONS
The Company on February 6, 2002 sold 500,000 shares of common stock to two
initial stockholders (250,000 shares to each individual) at $.05 per share for
a total amount of $25,000. The individuals each paid $5,000 for the shares
and each entered into a promissory note for $7,500 for the remaining purchase
amount. The financed amount of $15,000 for the shares purchase was being
shown as common stock subscribed and was treated as a reduction of equity in
the balance sheet. The notes carried simple interest at a rate of 6% per
annum. The principle and interest were due and payable on December 31, 2002
or on demand of holder. During the year ended December 31, 2002, $14,945 was
paid on the principle amounts due on the promissory notes leaving a combined
balance owed on the notes at December 31, 2002 of $55 which was subsequently
paid.
During the six months and the year ended June 30, 2003 and December 31, 2002
respectively, $-0- and $512 was received on the accrued interest due on the
above notes. At June 30, 2003 and December 31, 2002, the accrued interest
receivable balance on the above was $-0-. Also on February 6, 2002, the
Company sold 100,000 shares of it common stock at $.05 per share for a total
amount of $5,000 as part of its purchase of assets as described in Note 5.
NOTE 4 - RELATED PARTY TRANSACTIONS
An officer of the Company is providing a mailing address to the Company
without charge. This service has been determined by the Company to have only
nominal value. As of June 30, 2003 and December 31, 2002 no compensation has
been paid or accrued to any officers or directors of the Corporation because
amounts are only of a nominal value.
F-15
OCIS, CORP.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS - CONTINUED
Certain officers and stockholders of the Company have advance funds to the
Company to pay operating expenses. The funds are due upon demand, are
unsecured and carry interest at 6%. The balance of the amount due to the
officers and stockholders at June 30, 2003 is $4,945 and the accrued interest
owed is $95. Subsequent to June 30, 2003, the Company received another $1,000
advance from officers and stockholders to be used to pay operating expenses.
NOTE 5 - NOTE PAYABLE - OFFICER
At inception, the Company entered into a Purchase and Sale Agreement with the
President of the Company and P.S. Enterprises, a Utah DBA of the President.
Under the agreement the Company purchased material handling inventory. The
purchase price of the inventory was $45,626. The Company purchased the
inventory through the issuance of 100,000 shares of common stock at $.05 per
share for an amount of $5,000 and a promissory note for the remaining amount
of $40,626. Each inventory item purchased was valued at the lower of market
value or at no more than the cost of the inventory to the President or P. S.
Enterprises. The note is to be repaid in full on or before February 6, 2003
(extended to December 31, 2003), or is due and payable in full on the closing
of any public offering of securities by the Company. The note is secured by
the inventory purchased and the agreement states that all proceeds from the
sale of the inventory purchased by the note shall be applied to the payment of
the note less selling expenses.
The note has simple interest at a rate of 6%. The interest is due and payable
February 6, 2003 (extended to December 31, 2003), or at the time of closing of
a public offering of securities by the Company. During the six months ended
June 30, 2003, the Company paid $555 and during the year ended December 31,
2002, the Company paid $1,730 against the accrued interest owed on the note
payable to the officer. At June 30, 2003, and December 31, 2002, the balance
of accrued interest payable on the above was $546 and $309 respectively.
NOTE 6 - DEVELOPMENT STAGE COMPANY AND GOING CONCERN
The Company is a development stage company as defined in Financial Accounting
Standards Board Statement No. 7. At June 30, 2003 the Company's major asset
is inventory of used equipment held for sale in the amount of $38,801. From
inception to date the Company has a profit of $1,944 from the sale of its
equipment. The only other asset is cash of $412. The Company has a deficit
accumulated during the development stage of $27,127 and has borrowed from its
officers and stockholders to pay for operating expenses.
Accordingly, the entity's ability to accomplish it business strategy and to
ultimately become profitable is at this time is dependent on the success of
its ability to generate significant revenue and to ultimately achieve
profitable operations. There can be no assurance that the Company will be
able to obtain additional funding or generate profitable operations or the
funding if obtained will be on terms favorable to or affordable or in adequate
amounts needed to complete its current business plan. The Company is
currently is in the process of selling its common stock to raise capital to so
that it can successfully develop successful operations per its business plan.
Ultimately, however, the Company will need to achieve profitable operations in
order to continue as a going concern
44
[BACK COVER PAGE]
OCIS Corp.
600,000 Shares
Common Stock
PROSPECTUS
______, 2003
No dealer, salesman or any other person has been authorized to give
information or to make any representations other than those contained in this
prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by OCIS. Neither the delivery of the
prospectus nor any sale made hereunder shall under any circumstances create
any implication that there has been no change in the affairs of OCIS since the
date hereof. This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities covered by this prospectus in
any state or other jurisdiction to any person to whom it is unlawful to make
such offer in such state or jurisdiction.
Table of Contents
Section Page
- ------- ----
PROSPECTUS SUMMARY......................................................... 5
RISK FACTORS............................................................... 6
PLAN OF DISTRIBUTION....................................................... 10
USE OF PROCEEDS............................................................ 12
DESCRIPTION OF BUSINESS.................................................... 13
DESCRIPTION OF PROPERTY.................................................... 19
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES................... 19
REMUNERATION OF OFFICERS AND DIRECTORS..................................... 20
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS................... 21
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.................. 24
DESCRIPTION OF CAPITAL STOCK............................................... 24
LITIGATION................................................................. 26
LEGALITY OF SHARES......................................................... 26
EXPERTS.................................................................... 27
ADDITIONAL INFORMATION..................................................... 27
INDEX TO FINANCIAL STATEMENTS.............................................. 28
FINANCIAL STATEMENTS.......................................................F-1
Until ___________, 2003 (120 days after the effective date of this
prospectus), all dealers effecting transactions in the common stock, whether
or not participating in the distribution, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification of Officers, Directors and Others
- -------------------------------------------------
The following is a brief summary of certain indemnification provisions of
OCIS's certificate of incorporation and the Nevada Revised Statutes. This
summary is qualified in its entirety by reference to the text thereof.
Section 78.751 of the Nevada Revised Statutes confers on a director or officer
an absolute right to indemnification for expenses, including attorneys' fees,
actually and reasonably incurred by him to the extent he is successful on the
merits or otherwise in defense of any action, suit, or proceeding. This
section also entitles a director or officer to partial indemnification against
expenses to the extent that he has been successful in defending any claim,
issue, or matter asserted in such proceeding. The Nevada Revised Statutes
indemnification section further permits the corporation to indemnify officers
and directors in circumstances where indemnification is not mandated by the
statute and certain statutory standards are satisfied.
The Nevada Revised Statutes expressly make indemnification contingent upon a
determination that indemnification is proper in the circumstances. Such
determination must be made by the board of directors, the shareholders, or
independent legal counsel. The Nevada Revised Statutes also permit a
corporation, in its articles of incorporation, bylaws, or an agreement, to pay
attorneys' fees and other litigation expenses on behalf of a corporate
official in advance of the final disposition of the action upon receipt of an
undertaking by or on behalf of the corporate official to repay such expenses
to the corporation if it is ultimately determined that he is not entitled to
be indemnified by the corporation. The corporation may also purchase and
maintain insurance to provide indemnification.
The Nevada Revised Statutes also provide that indemnification authorized by
the statute is not exclusive of, but is in addition to, indemnification rights
granted under a corporation's articles of incorporation, an agreement, or
pursuant to a vote of shareholders or disinterested directors.
The foregoing discussion of indemnification merely summarizes certain aspects
of indemnification provisions and is limited by reference to Section 78.751 of
the Nevada Revised Statues. OCIS's articles of incorporation and bylaws
contain specific provisions relating to indemnification of directors,
officers, employees, and/or agents of OCIS, which provide that OCIS will
indemnify our officers and directors to the full extent permitted by the above
referenced statute.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer
46
or controlling person in connection with the securities being registered),
OCIS 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 OCIS is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses(*) to OCIS in connection
with the offering described in the registration statement:
Registration Fee............................................$ 13.80*
Accounting Fees and Expenses................................ 2,000.00*
Legal Fees and Expenses..................................... 18,486.00*
Blue Sky Fees............................................... 2,500.00*
Printing and Engraving...................................... 1,000.00*
Transfer Agent Fees......................................... 1,000.00*
------
Total Expenses..............................................$25,000.80
======
(*) All figures are estimates.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
OCIS has issued shares to three individuals related to our formation and the
purchase of initial inventory. We issued 250,000 shares each to Jeff Holmes
and Kirk Blosch for total consideration of $12,500 each. The consideration
consisted of $5,000 cash and a promissory note for $7,500 each. The shares
were issued when they formed OCIS on February 6, 2002. Also on February 6,
2002, OCIS issued 100,000 shares to our president, Brent Schlesinger, as part
of the purchase price of our initial inventory. The shares were valued,
solely for purposes of the inventory purchase, at $5,000. All shares issued
were common stock. The securities issued in the foregoing transactions were
issued in reliance on the exemption from registration and the prospectus
delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"), set forth in Section 3(b) and/or Section 4(2) of the
Securities Act and the regulations promulgated thereunder. Two of the
shareholders are accredited investors and received their shares on the
formation of OCIS. The third shareholder received his shares in relation to
our purchase of inventory . He is now the president of OCIS. No form of
solicitation was used in the purchase of the shares of common stock. All
parties new each other prior to forming the business.
47
ITEM 27. EXHIBITS
Copies of the following documents have been included as exhibits to this
amended registration statement, pursuant to Item 601 of Regulation S-B.
SEC
Exhibit Reference
No. No. Title of Document Location
- ------- --------- ----------------- --------
3. Certificate of Incorporation and Bylaws
3.01 3(i) Articles of Incorporation Prior Filing
3.02 3(ii) Bylaws Prior Filing
4. Instruments defining the rights of holders
4.01 4 Specimen Stock Certificate Prior Filing
5.01 5 Opinion of Victor D. Schwarz, LLC
Attorneys at Law This Filing
10. Material Contracts
10.01 10 Asset Purchase Agreement Prior Filing
10.02 10 Addendum to Asset Purchase Agreement Prior Filing
10.03 10 Form of Proceeds Escrow Agreement Prior Filing
10.04 10 Promissory Note-Holmes Prior Filing
10.05 10 Promissory Note-Blosch Prior Filing
10.06 10 Promissory Note-Asset Purchase Prior Filing
10.07 10 Amendment to Promissory Note-
Asset Purchase Prior Filing
10.08 10 Second Amendment to Promissory Note-
Asset Purchase This Filing
23. Consents of Experts and Counsel
23.01 23 Consent of Victor D. Schwarz, LLC,
Attorneys at Law See Exhibit
5.01
23.02 23 Consent of Dave Thomson, This filing
Certified Public Accountants
24. Powers of Attorney
24.01 Powers of Attorney are included on signature page(3)
Exhibits listed as being filed in a prior filing were filed in the initial
SB-2 filing, file number 333-91436.
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing.
(b) Financial Statement Schedules
All schedules are omitted because they are not applicable or because the
required information is included in the financial statements or notes thereto.
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to (i) include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in
the prospectus any facts or events which, individually or in the aggregate,
represent a fundamental change to the information in the registration
statement; and (iii) include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
48
(2) For the purpose of determining liability under the Securities Act, each
post-effective amendment will be treated as a new registration statement of
the securities offered, and the offering of the securities at that time shall
be the initial bona fide offering.
(3) If, applicable, file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by
a director, officer or controlling person of the small business issuer 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 small business issuer 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 Securities Act and will be
governed by the final adjudication of such issue.
49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form SB-2 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the city of Salt Lake City, State of Utah, on
21st day of August, 2003.
OCIS Corp.
By: /s/
-------------------------------
Brent W. Schlesinger, President
Principal Financial and Accounting
Officer
By: /s/
-------------------------------
Kirk Blosch, Principal Accounting
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
amended registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/
- --------------------
Brent W. Schlesinger Director, August 21, 2003
Chief Executive Officer
/s/
- -------------------- Director, Secretary August 21, 2003
Kirk Blosch Principal Accounting Officer
/s/
- -------------------- Director August 21, 2003
Jeff W. Holmes