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EX-5.1 - OPINION OF SICHENZIA ROSS FRIEDMAN FERENCE LLP - Onyx Service & Solutions, Inc | ex-5_1.htm |
EX-23.1 - CONSENT OF MALONEBAILEY, LLP - Onyx Service & Solutions, Inc | ex-23_1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
ONYX SERVICE &
SOLUTIONS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State of
other jurisdiction of incorporation or organization)
6199
(Primary
Standard Industrial Classification Code Number)
80-0513468
(I.R.S.
Employer Identification Number)
7337
Oswego Road
Liverpool,
New York 13090
(315)
451-4822
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Onyx
Service & Solutions, Inc.
7337
Oswego Road
Liverpool,
New York 13090
(315)
451-4822
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
As soon
as practicable after this Registration Statement is declared effective
(Approximate
date of commencement of proposed sale to the public)
Copies to:
Benjamin
Tan, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd
Floor,
New York,
NY 10006
Tel:
(212) 930 9700
Fax:
(212) 930 9725
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
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b2 of the Exchange Act.
Large
accelerated filer o Accelerated
filer o
Non-accelerated
filer (Do not check if a smaller reporting company) o Smaller
reporting company x
Calculation
of Registration Fee
Title
of Each Class of Securities to be Registered
|
Amount
to be Registered (1)
|
Proposed
Maximum Offering Price Per Unit (2)
|
Proposed
Maximum Aggregate Offering Price
|
Amount
of Registration Fee
|
||||
Common
Stock, $0.0001 par value
|
309,000
|
$0.25
|
$77,250
|
$5.51
|
(1)
|
Pursuant
to Rule 416 promulgated under the Securities Act of 1933, as amended,
there are also registered hereunder such indeterminate number of
additional shares as may be issued to the selling stockholders to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
|
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(a) promulgated under the Securities Act of 1933, as amended,
based on the price at which the common stock will initially be
sold.
|
The
Registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer and sale is not permitted.
PRELIMINARY PROSPECTUS
|
SUBJECT TO COMPLETION, DATED MARCH 9,
2010
|
ONYX
SERVICE & SOLUTIONS, INC.
309,000
Shares of Common Stock, par value $0.0001
The
selling stockholders identified in this prospectus are offering for sale from
time to time up to 309,000 shares of our common
stock, par value $0.0001 (“Common Stock”).
The
selling stockholders may sell Common Stock from time to time in the principal
market in which the Common Stock is traded at the prevailing market price or in
negotiated transactions. The selling stockholders may be deemed underwriters of
the shares of Common Stock, which they are offering. We will pay the expenses of
registering these shares.
We have
set an offering price for these securities at $0.25 per share of Common Stock
offered through this prospectus. We are registering the shares on behalf of the
selling stockholders. We will not receive any proceeds from this
offering.
Our
Common Stock is presently not traded or quoted on any market or securities
exchange. The sales price to the public is fixed at $0.25 per share until such
time as our Common Stock is quoted on the Over-The-Counter (OTC) Bulletin Board
or other exchange or quotation system. Although we intend to request a
registered broker-dealer apply to have of our Common Stock quoted on the OTC
Bulletin Board, public trading of our Common Stock may never materialize or even
if materialized, be sustained. If our Common Stock is quoted on the on the OTC
Bulletin Board, then the sale price to the public will vary according to
prevailing market prices or privately negotiated prices by the Selling
Stockholders.
Investing
in our Common Stock involves a high degree of risk. You may lose your entire
investment. See “Risk Factors” beginning on page 5 for a discussion of
certain risk factors that you should consider.
You
should read the entire prospectus before making an investment
decision.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is [
], 2010
TABLE
OF CONTENTS
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ABOUT THIS PROSPECTUS
The
selling stockholders are offering to sell and seeking offers to buy shares of
our Common Stock, only in jurisdictions where offers and sales are permitted.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy the securities in any circumstances under which the offer or
solicitation is unlawful.
The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of our Common Stock. Neither the delivery of this prospectus nor any
distribution of securities in accordance with this prospectus shall, under any
circumstances, imply that there has been no change in our affairs since the date
of this prospectus. The prospectus will be updated and updated prospectuses made
available for delivery to the extent required by the federal securities
laws.
PROSPECTUS SUMMARY
The
following summary highlights selected information contained in this prospectus.
This summary does not contain all the information you should consider before
investing in the securities. Before making an investment decision, you should
read the entire prospectus carefully, including “Risk Factors” and our financial
statements, including the notes to the financial statements appearing elsewhere
in this prospectus. As used throughout this prospectus, the terms “we,” “us,”
and “our” and words of like import refer to Onyx Service & Solutions,
Inc..
THE
COMPANY
The
Company was incorporated in the State of Delaware on November 25, 2009. As of
November 25, 2009, we own three Automated Teller Machines (“ATMs”) and manage 19
ATMS throughout upstate New York
On
November 25, 2009, we entered into an asset purchase agreement with Fresca
Worldwide Trading Corp. (“Fresca”), a Nevada corporation, to purchase from
Fresca all its assets including without limitation three ATMs and the rights to
manage 19 other ATMS throughout upstate New York. The acquisition was
completed on November 25, 2009. Prior to such acquisition of assets,
we had no operations or assets.
Our
Business
Our ATMs
are situated at retail stores, convenience stores, bars, restaurants, gas
stations, colleges and hospitals.
We deploy
and operate ATM’s primarily under the following two programs:
Full
placement program.
Under a
full placement arrangement, we own the ATM and are responsible for controlling
substantially all aspects of its operation including maintenance, cash
management and loading, supplies, signage and telecommunications services. We
may pay site owners a commission based on a percentage of sales. We are
generally responsible for almost all of the expenses related to the operation of
the ATM with the exception of power and, on occasion, telecommunications. We
typically use this program for major national and regional
merchants.
1
Merchant-owned
program
Under a
merchant-owned arrangement, the merchant (or, for a merchant using lease
financing, its lease finance provider) typically buys the ATM through us and the
merchant is responsible for most of the operating expenses such as maintenance,
cash management and loading, and supplies. We typically provide all transaction
processing services, and the merchants use our maintenance services from time to
time. Our rental program is similar to our merchant-owned program, except that
the merchant rents the ATM from us rather than purchasing it, and we provide the
maintenance and supplies for the machine.
Most of
our new ATM’s feature advanced functionality, diagnostics and ease of use
including color displays, personal computer-based operating systems, thermal
printing, dial-up and remote monitoring capabilities, and upgrade and
capacity-expansion capability. All machines can perform basic cash dispensing
and balance inquiry transactions, transmit on-screen marketing, dispense coupons
and conduct marketing surveys. Most of our equipment is modular in design, which
allows us to be flexible and accommodating to the needs of our clients as
technology advances.
We
upgrade our ATM machines in compliance with ATM technology. All ATM machines we
operate are upgraded with triple DES encryption, which is compliant with the ATM
industry regulations. This upgrade reduces the number and frequency of service
calls due to outages and other ATM-related problems and, in turn, reduces the
cost of maintaining each ATM machine. The ATM’s are also equipped with “smart
technology” that allows us to determine on a preset time basis the operational
status of the ATM. It informs us which vault cash is low, the number of times
the ATM has been used, as well as other helpful information that helps us
provide better service to our ATM using public.
Revenue
Our
revenues are principally derived from two types of fees, which we charge for
processing transactions on our ATM network. We receive an interchange fee from
the issuer of the credit or debit card for processing a transaction when a
cardholder uses an ATM in our network. In addition, in most cases we receive a
surcharge fee from the cardholder when the cardholder makes a cash withdrawal
from an ATM in our network.
We
receive interchange fees for transactions on ATM’s that we own. We also receive
the interchange fee for transactions on ATM’s owned by third party vendors
included within our network. We keep all interchange fees. The interchange fees
received by us vary from network to network and to some extent from issuer to
issuer, but generally range from $0.15 to $0.55 per cash withdrawal. Interchange
fees for balance inquiries, account transfers and denied transactions are
generally substantially less than fees for cash withdrawals.
The
interchange fees received by us from the card issuer are independent of the
service fees charged by the card issuer to the cardholder in connection with ATM
transactions. Service fees charged by card issuers to cardholders in connection
with transactions through our network range from zero to as much as $2.50 per
transaction. We do not receive any portion of these service fees and do not
record any revenues therefrom.
We impose
a surcharge fee for cash withdrawals. Surcharge fees are a substantial
additional source of revenue for us and other ATM network operators. The
surcharge fee for ATM’s in our network ranges between $1.50 and $4.00 per
withdrawal. We have 3 different circumstances for recording the surcharge fee as
revenue. In the first case, when we own and service the ATM, we receive and
report all of the surcharge fee as revenue. In the second case, where we own but
do not service the ATMs, we record the surcharge fee as revenue and record the
portion of the fee paid to the owner of the ATM location as commission expense
for servicing the ATM. In the third case, on ATM’s owned and serviced by third
party vendors we rebate all of each fee to the third party and do not report any
surcharge fee revenue.
In
addition to revenues derived from interchange and surcharge fees, we also derive
revenues from providing network management services to third parties owning ATMs
included in our ATM network. These services include 24 hour transaction
processing, monitoring and notification of ATM status and cash condition,
notification of ATM service interruptions, in some cases dispatch of field
service personnel for necessary service calls and cash settlement and reporting
services. The fees for these services are paid by the owners of the
ATMs.
2
Summary
Financial Information
The table
below summarizes our audited balance sheet as November 30, 2009 and the related
statement of operations for the period from the date of inception to November
30, 2009.
Balance Sheet:
|
As of November 30, 2009
|
|||
Cash
|
$ | 6,100 | ||
Total
Assets
|
$ | 6,100 | ||
Total
Liabilities
|
$ | 36,895 | ||
Total
Stockholders’ Deficit
|
$ | (30,795 | ) |
Statement of Operations:
|
For the Period ended
November 30, 2009
|
|||
Revenue
|
$ | - | ||
Expenses
|
$ | - | ||
NET
LOSS
|
$ | - | ||
Weighted
Average Shares Outstanding – Basic and Diluted
|
4,000,000 |
Plan
of Distribution
This
offering is not being underwritten. The selling stockholders and any of their
pledgees, donees, assignees and successors-in-interest may, from time to time,
sell any or all of their shares of common stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions or by
gift. These sales may be made at fixed or negotiated prices. The selling
stockholders may use any one or more of the following methods when selling or
otherwise transferring shares:
|
·
|
ordinary brokerage transactions
and transactions in which the broker-dealer solicits
purchasers;
|
|
·
|
block trades in which a
broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
|
|
·
|
sales to a broker-dealer as
principal and the resale by the broker-dealer of the shares for its
account;
|
|
·
|
an exchange distribution in
accordance with the rules of the applicable exchange;
|
|
·
|
privately negotiated
transactions, including gifts;
|
|
·
|
covering short sales made after
the date of this prospectus;
|
|
·
|
pursuant to an arrangement or
agreement with a broker-dealer to sell a specified number of such shares
at a stipulated price per share;
|
|
·
|
a combination of any such methods
of sale; and
|
|
·
|
any other method of sale
permitted pursuant to applicable
law.
|
The sales
price of the Common Stock being offered to the public by the selling
stockholders in this prospectus has been fixed at $0.25 per share until such
time as our Common Stock is quoted on the OTC Bulletin Board or inter-dealer
quotation system or exchange. Although we intend to request a registered
broker-dealer apply to have our Common Stock quoted on the OTC Bulletin Board,
public trading of our Common Stock may never materialize or if materialized, be
sustained. If our Common Stock is quoted on the OTC Bulletin Board, then the
sales price to the public will vary according to the selling decisions of each
selling stockholder and the market for our stock at the time of resale. In these
circumstances, the sales price to the public may be:
|
·
|
the
market price of our common stock prevailing at the time of
sale;
|
|
|
|
·
|
a
price related to such prevailing market price of our common stock;
or
|
|
|
|
|
·
|
such
other price as the Selling Stockholders determine from time to
time.
|
The
selling stockholders may also sell shares under Rule 144 of the Securities Act
of 1933, as amended (the “Securities Act”), if available, rather than pursuant
to this prospectus. The selling stockholders shall have the sole and absolute
discretion not to accept any purchase offer or make any sale of shares if they
deem the purchase price to be unsatisfactory at any particular
time.
The
selling stockholders and their pledgees, donees, transferees or other successors
in interest, may also sell the shares directly to market makers acting as
principals and/or broker-dealers acting as agents for themselves or their
customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholder and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that the selling stockholders will attempt to
sell shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then existing market
price. We cannot assure that all or any of the shares offered in this prospectus
will be issued to, or sold by, the selling stockholders. The selling
stockholders and any brokers, dealers or agents, upon effecting the sale of any
of the shares offered in this prospectus, may be deemed to be an “underwriters”
as that term is defined under the Securities Act in connection with such sales.
In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We are
required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the selling stockholder,
but excluding brokerage commissions or underwriter discounts.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter. The selling stockholders have
not entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. If the selling
stockholders propose to sell shares to an underwriter, we will be required to
amend this prospectus to reflect the terms of the underwritten
offering.
The
selling stockholders may pledge shares to brokers under the margin provisions of
customer agreements. If the selling stockholders defaults on a margin loan, the
broker may, from time to time, offer and sell the pledged shares. The selling
stockholders and any other persons participating in the sale or distribution of
the shares will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations under such Act,
including, without limitation, Regulation M. These provisions may restrict
certain activities of, and limit the timing of purchases and sales of any of the
shares by, the selling stockholder or any other such person. In the event the
selling stockholders is deemed an affiliated purchaser or distribution
participant within the meaning of Regulation M, then the selling stockholder
will not be permitted to engage in short sales of common stock. Furthermore,
under Regulation M, persons engaged in a distribution of securities are
prohibited from simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior
to the commencement of such distributions, subject to specified exceptions or
exemptions. In addition, if a short sale is deemed to be a stabilizing activity,
then the selling stockholder will not be permitted to engage in a short sale of
our Common Stock. All of these limitations may affect the marketability of the
shares.
If a
selling stockholder notifies us that it has a material arrangement with a
broker-dealer for the resale of the Common Stock, then we would be required to
amend the registration statement of which this prospectus is a part, and file a
prospectus supplement to describe the agreement between the selling stockholder
and the broker-dealer.
3
THE
OFFERING
This
prospectus relates to the 309,000 shares of the Common Stock of the
Company.
The Company
|
Onyx
Service & Solutions, Inc.
|
Selling
stockholders
|
The
selling stockholders named in this prospectus are existing stockholders of
our Company who purchased shares of our Common Stock from us in the
private placement transactions consummated on March 3, 2010. The issuance
of the shares by us to the selling stockholders was exempt from the
registration requirements of the Securities Act of 1933, as amended, or
the Securities Act. See “Selling Stockholders.”
|
Capitalization
|
Common
Stock, par value $0.0001 per share
250,000,000
authorized
4,309,000
issued and outstanding as of March 9, 2010
|
Preferred
Stock, par value $0.0001 per share
10,000,000
authorized
None issued and outstanding as of March 9, 2010
|
|
Common
Stock outstanding prior to offering
|
4,309,000
|
Common
Stock offered by Company
|
0
|
Total
shares of Common Stock offered by selling stockholders
|
309,000
|
Common
Stock to be outstanding after the offering
|
4,309,000
|
Use
of Proceeds
|
We
will not receive any of the proceeds of sale of the shares of Common Stock
by the selling stockholders.
|
See
“Risk Factors” beginning on page 5 and other information included in
this prospectus for a discussion of factors you should consider before
deciding to invest in shares of our common
stock.
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER
INFORMATION
CONTAINED
IN THIS PROSPECTUS
This
prospectus contains some forward-looking statements. Forward-looking statements
give our current expectations or forecasts of future events. You can identify
these statements by the fact that they do not relate strictly to historical or
current facts. Forward-looking statements involve risks and uncertainties.
Forward-looking statements include statements regarding, among other things, (a)
our projected sales, profitability, and cash flows, (b) our growth strategies,
(c) anticipated trends in our industries, (d) our future financing plans and (e)
our anticipated needs for working capital. They are generally identifiable by
use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,”
“potential,” “projects,” “continuing,” “ongoing,” “expects,” “management
believes,” “we believe,” “we intend” or the negative of these words or other
variations on these words or comparable terminology. These statements may be
found under “Management's Discussion and Analysis of Financial Condition and
Results of Operations” and “Business,” as well as in this prospectus generally.
In particular, these include statements relating to future actions, prospective
products or product approvals, future performance or results of current and
anticipated products, sales efforts, expenses, the outcome of contingencies such
as legal proceedings, and financial results.
4
Any or
all of our forward-looking statements in this report may turn out to be
inaccurate. They can be affected by inaccurate assumptions we might make or by
known or unknown risks or uncertainties. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary materially as a
result of various factors, including, without limitation, the risks outlined
under “Risk Factors” and matters described in this prospectus generally. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. You
should not place undue reliance on these forward-looking
statements.
The
forward-looking statements speak only as of the date on which they are made,
and, except to the extent required by federal securities laws, we undertake no
obligation to publicly update any forward-looking statements, whether as the
result of new information, future events, or otherwise.
RISK FACTORS
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this prospectus. If any of the following risks actually occur, our business,
operating results and financial condition could be harmed and the value of our
stock could go down. This means you could lose all or a part of your
investment.
Risks
Relating to Our Company
We
have a limited operating history which may not be an indicator of our future
results.
As a
result of our limited operating history, our plan for rapid growth, and the
increasingly competitive nature of the markets in which we operate, the
historical financial data is of limited value in evaluating our future revenue
and operating expenses. Our planned expense levels will be based in part on
expectations concerning future revenue, which is difficult to forecast
accurately based on current plans of expansion and growth. We may be unable to
adjust spending in a timely manner to compensate for any unexpected shortfall in
revenue. Further, general and administrative expenses may increase significantly
as we expand operations. To the extent that these expenses precede, or are not
rapidly followed by, a corresponding increase in revenue, our business,
operating results, and financial condition will suffer.
Margaret
A. Burton and Mary Passalaqua are our only executive officers,
directors and employees. We will need additional employees to implement our
business strategy.
Margaret
A. Burton and Mary Passalaqua are our only executive officers, directors and
employees and each only spends 30% of her time on our business. Our success
depends upon their continuing and increasing their contributions to our company.
If they were to terminate their employment with us or fail to increase their
time on our operations necessary to grow our business, our operating results
would suffer. Our future success also depends in large part upon our ability to
hire and retain additional highly skilled managerial, operational and marketing
personnel. Should we be unable to attract and retain skilled personnel, our
performance will suffer.
Mary
Passalaqua, our chief executive officer and president, also serves as our
Principal Financial Officer. Her lack of financial expertise renders her reliant
on outside financial advisors, including our independent public
auditors.
Mary
Passalaqua, our Chief Executive Officer, President and director, serves as our
Principal Executive Officer and Principal Financial Officer. A Principal
Financial Officer’s duties include oversight of the financial condition of a
company, including assisting the Company’s independent auditors with Company’s
fiscal year audit and result of operations and preparation of the Company’s
unaudited financial statements and results of operations for each of the
quarters of the Company’s fiscal year. Also, a reporting company’s Principal
Financial Officer is required to sign the company’s periodic reports as such and
attest as the veracity of such company’s disclosure, including, but not limited
to the company’s financial statements and internal controls and procedures. Due
to Ms. Passalaqua’s lack of financial expertise, especially in the ATM industry,
she is reliant on outside financial advisors, including our independent public
auditors.
5
We
only have 22 ATM’s currently located with 19 different regional customers. Our
business would suffer if we could not replace a significant amount of customers
who stopped using our ATMs.
We have
contracts with a limited number of regional customers. We own and/or manage a
total of 22 privately owned Automated Teller Machines, or ATM’s, located at 19
different merchants in Onondaga County in upstate New York. Our Company
would suffer dramatically if a significant number of merchants decided to stop
using our ATMs and we were unable to replace such customers.
The
continued growth and acceptance of debit cards as a means of payment could
negatively impact our results of operations.
The use
of debit cards by consumers has been growing. Consumers use debit cards to make
purchases from merchants, with the amount of the purchase automatically deducted
from the consumers' checking accounts. An increasing number of merchants are
accepting debit cards as a method of payment, and are also permitting consumers
to use the debit cards to obtain cash. The increasing use of debit cards to
obtain cash may reduce the number of cash withdrawals from our ATM’s, and may
adversely affect our revenues from surcharge fees. A continued increased in the
use and acceptance of debit cards could have a material adverse effect on our
business, results of operations and financial condition.
There
are other several industry trends which we expect to increase and which could
hurt us if we fail to grow our business.
We have
noted the following trends in the ATM industry which we expect to continue in
the foreseeable future:
·
|
A
consolidation in the banking industry, causing the number of different
financial institutions and different ATM networks to decline. Generally,
users who use ATMs affiliated with their banks are not charged surcharge
fees. This consolidation and resulting proliferation of affiliated ATMs is
causing regional operators who charge surcharge fees, such as our Company,
to lose current and potential customers, market share and
revenue.
|
|
·
|
An
increase in the public’s use of bank cards as a either credit or debit
card as compared to utilizing cash to make
purchases.
|
·
|
An
increase in the number and proliferation of ATM sites by national banking
institutions which facilitate their customers access to cash and making
stand alone ATMs, such as ours, less necessary.
|
|
·
|
An
increase in and public awareness of identity theft and ATM fraud often
perpetuated by persons manipulating and damaging stand alone ATMs such as
ours, which may cause potential customers to be weary of utilizing ATM
machines not affiliated with regional or national banking institutions,
including our ATMs.
|
·
|
National
banks lowering their surcharge fees relative to stand alone ATMs, such as
ours
|
|
·
|
An
increase in banks’ affiliations with other institutions (e.g., airlines,
merchants, charities) which enable customers to use their bank cards as
credit/debit cards and earn points redeemable at such other
institutions
|
·
|
A
decrease in merchants’ required minimum purchases before accepting a
customer’s credit cards and bank cards used as either a credit or debit
card.
|
|
·
|
The
ability of a customer to receive cash back from a merchant when using
his/her debit cards to make a purchase at the merchant, thereby decreasing
the need for the customer to use an
ATM.
|
·
|
Credit
card processors diversifying their business by taking advantage of
existing relationships with merchants to place ATMs at sites with those
merchants.
|
|
·
|
Number
of retailers issuing their own in-store credit cards and offering their
customers utilizing such retailer’s credit card with discounted
merchandise.
|
·
|
Companies
that have the capability to provide both back office services and ATM
management services.
|
|
·
|
Consolidators
in the business such as TRM/E-Funds and
Cardtronics/E-trade.
|
6
We
believe that the foregoing industry trends will most likely have a material
adverse effect on our future financial condition and/or results of operations,
especially if we fail to grow our business.
Any
regulation or elimination of surcharge or interchange fees could have a
materially adverse impact on our results of operations.
The
imposition of surcharge fees is not currently subject to federal regulation.
However, several states in which we currently have no operations have banned
companies from imposing such fees, generally as a result of activities of
consumer advocacy groups that believe that transaction fees are unfair to users.
There have been, however, various state and local efforts in the United States
to ban or limit transaction fees. We are not aware of any existing bans or
limits on transaction fees applicable to us in any of the jurisdictions in which
we currently do business. We cannot guarantee that transaction fees will not be
banned or limited in the jurisdictions in the United States in which we operate.
Such a ban or limit could materially limit or reduce our ATM
revenues.
Our ATM
business is subject to government and industry regulations, which we describe
below. This regulatory environment is subject to change and various proposals
have been made which, if finalized, could affect our ATM operations. Our failure
to comply with existing or future laws and regulations pertaining to our ATM
business could result in restrictions on our ability to provide our products and
services, as well as the imposition of civil fines.
Mergers,
acquisitions and personnel changes at financial institutions and electronic
funds transfer networks and independent sales organizations may adversely affect
our business, financial condition and results of operations.
Currently,
the banking industry is consolidating, causing the number of financial
institutions and ATM networks to decline. This consolidation could cause us to
lose:
·
|
current
and potential customers;
|
|
|
|
|
·
|
market
share if the combined entity determines that it is more efficient to
develop in-house products and services similar to ours or use our
competitors' product and services; and
|
|
·
|
revenue
if the combined institution is able to negotiate a greater volume discount
for, or discontinue the use of, our products and
services.
|
The ATM and electronic transaction
processing industries are increasingly competitive, which could adversely impact
our results from operations and financial condition.
The ATM
business is and can be expected to remain highly competitive. While our
principal competition comes from national and regional banks, we also compete
with independent ATM companies. All of these competitors offer services similar
to or substantially the same as those offered by our company. Most of these
competitors are larger, more established and have greater financial and other
resources than our company. Such competition could prevent us from obtaining or
maintaining desirable locations for our machines or could cause us to reduce our
user fees generated by our ATM’s or could cause our profits to
decline.
The
independent ATM business has become increasingly competitive since entities
other than banks have entered the market and relatively few barriers exist to
entry. We face intense competition from a number of companies. Further,
we expect that competition will intensify as the movement towards increasing
consolidation within the financial services industry continues. Many of our
competitors have significantly greater financial, technical and marketing
resources, greater name recognition and a larger installed customer base than we
do.
In the
market for electronic transaction processing, the principal factors on which we
compete are price and service levels. The future growth of our revenues in this
market is dependent upon securing an increasing volume of transactions. If we
cannot control our transaction processing expenses, we may not remain price
competitive and our revenues will be adversely affected.
7
In
addition to our current competitors, we expect substantial competition from
established and new companies. We cannot assure you that we will be able to
compete effectively against current and future competitors. Increased
competition could result in price reductions, reduced gross margins or loss of
market share.
If
the computer network and data centers we use were to suffer a significant
interruption, our business and customer reputation could be adversely impacted
and result in a loss of customers.
Our
ability to provide reliable service largely depends on the efficient and
uninterrupted operations of the computer network systems and data centers we
use. Any significant interruptions could severely harm our business and
reputation and result in a loss of customers. Our systems and operations could
be exposed to damage or interruption from fire, natural disaster, power loss,
telecommunications failure, unauthorized entry and computer viruses. Although we
have taken steps to prevent a system failure, we cannot be certain that our
measures will be successful and that we will not experience system failures.
Further, our property and business interruption insurance may not be adequate to
compensate us for all losses or failures that may occur.
We
may be unable to defend ourselves from claims of intellectual property
infringements, which could have a negative impact on our results of
operations.
Although
we believe that our business operations do not infringe upon third parties’
intellectual property rights, third parties may assert infringement claims
against us in the future. In particular, there has been a substantial increase
in the issuance of business process patents for Internet-related business
processes, which may have broad implications for all participants in Internet
commerce. Claims for infringement of these patents are becoming an increasing
source of litigation. If we become subject to an infringement claim, we may be
required to modify our products, services and technologies or obtain a license
to permit our continued use of those rights. We may not be able to do either of
these things in a timely manner or upon reasonable terms and conditions. Failure
to do so could seriously harm our business and operating results. In addition,
future litigation relating to infringement claims could result in substantial
costs to us and a diversion of management resources. Adverse determinations in
any litigation or proceeding could also subject us to significant liabilities
and could prevent us from using some of our products, services or
technologies.
Risks
Related to Our Common Stock
Currently
there is no active market for our common stock.
There is
not currently an active trading market for the shares. Following the
effectiveness of this registration statement, we intend to request that a
broker-dealer / market maker submit an application to make a market for our
shares on the OTC Bulletin Board. However, there can be no assurance that the
application will be accepted or that any trading market will ever develop or be
maintained on the OTC Bulletin Board, pink sheets or any other recognized
trading market or exchange. Any trading market for the common stock that may
develop in the future will most likely be very volatile, and numerous factors
beyond the control of the Company may have a significant effect on the market.
Only companies that report their current financial information to the SEC may
have their securities included on the OTC Bulletin Board. Therefore, only upon
the effective date of this registration statement will our shares become
eligible to be quoted on the OTC Bulletin Board. In the event that we lose our
status as a "reporting issuer," any future quotation of its common stock on the
OTC Bulletin Board may be jeopardized.
Our
Preferred Stock could be issued to inhibit potential investors or delay or
prevent a change of control that may favor you.
Some of
the provisions of our certificate of incorporation, our bylaws and Delaware law
could, together or separately, discourage potential acquisition proposals or
delay or prevent a change in control. In particular, our board of directors is
authorized to issue up to 10,000,000 shares of preferred stock (less any
outstanding shares of preferred stock) with rights and privileges that might be
senior to our common stock, without the consent of the holders of the common
stock.
8
Our
Common Stock is subject to the "Penny Stock" rules of the SEC and the trading
market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
·
|
the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
·
|
obtain
financial information and investment experience objectives of the person;
and
|
·
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Availability
for sale of a substantial number of shares of our common stock may cause the
price of our common stock to decline.
If our
stockholders sell substantial amounts of common stock in the public market, or
upon the expiration of any statutory holding period, under Rule 144, it could
create a circumstance commonly referred to as an “overhang” and in anticipation
of which the market price of our Common Stock could fall. The
existence of an overhang, whether or not sales have occurred or are occurring,
also could make more difficult our ability to raise additional financing through
the sale of equity or equity-related securities in the future at a time and
price that we deem reasonable or appropriate.
9
Provisions
of our Articles of Incorporation and Delaware law could deter a change of
control, which could discourage or delay offers to acquire the
Company.
Provisions
of our Articles of Incorporation and Delaware law may make it more difficult for
someone to acquire control of the Company or for our stockholders to remove
existing management, and might discourage a third party from offering to acquire
the Company, even if a change in control or in management would be beneficial to
stockholders. For example, our Articles of Incorporation allows us to
issue 10,000,000 shares of preferred stock without any vote or further action by
stockholders.
Volatility
in our Common Stock price may subject the Company to securities
litigation.
The
market for our Common Stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its
securities. We may, in the future, be the target of similar litigation.
Securities litigation could result in substantial costs and liabilities and
could divert management’s attention and resources.
The
elimination of monetary liability against the Company’s directors, officers and
employees under the Company’s Articles of Incorporation, By-Laws and Delaware
law, and the existence of indemnification rights to the Company’s directors,
officers and employees may result in substantial expenditures by the Company and
may discourage lawsuits against our directors, officers and
employees.
Our
Articles of Incorporation and By-Laws contain a provision that provides for
indemnification of directors and officers against any and all expenses,
including amounts paid upon judgments, counsel fees and amounts paid in
settlement by any such person in any proceeding that they are made a party to by
reason of being or having been directors or officers of the Company, except in
relation to matters as to which any such director or officer shall be adjudged
to be liable for his own negligence or misconduct in the performance of his
duties. Such indemnification shall be in addition to any other rights
to which those indemnified may be entitled under any law. The
foregoing indemnification obligations could result in the Company incurring
substantial expenditures to cover the cost of settlement or damage awards
against directors and officers, which we may be unable to
recoup. These provisions and resultant costs may also discourage the
Company from bringing a lawsuit against directors and officers for breaches of
their fiduciary duties and may similarly discourage the filing of derivative
litigation by our stockholders against our directors and officers even though
such actions, if successful, might otherwise benefit the Company and our
stockholders.
USE OF PROCEEDS
We will
not receive any proceeds from the sale of the common stock offered through this
prospectus by the selling stockholders.
The $0.25
per share offering price of our Common Stock was determined by based on the
$0.25 per share sales price of our Common Stock in private placement
transactions of an aggregate of 309,000 shares consummated on March 3, 2010.
There is no relationship whatsoever between this price and our assets, earnings,
book value or any other objective criteria of value.
We intend
to apply to request a broker-dealer apply to have our common stock quoted on the
OTC Bulletin Board upon our becoming a reporting entity under the Exchange Act.
We intend to file a registration statement under the Exchange Act concurrently
with the effectiveness of the registration statement of which this prospectus is
a part. If our Common Stock becomes is quoted on the OTC Bulletin Board and a
market for the stock develops, the actual price of stock will be determined by
prevailing market prices at the time of sale or by private transactions
negotiated by the Selling Stockholders named in this prospectus. The offering
price would thus be determined by market factors and the independent decisions
of the Selling Stockholders named in this prospectus.
10
The
Common Stock to be sold by the selling stockholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing stockholders.
SELECTED FINANCIAL DATA
The
following selected statement of operations data contains statement of operations
data and balance sheet data of the Company from the date of inception
through November 30, 2009 . The statement of operations data and balance sheet
data were derived from the audited financial statements. Such financial data
should be read in conjunction with the financial statements and the notes to the
financial statements starting on page F-1 and with the section entitled
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” below.
Statement
of Operation Data:
Statement of Operations:
|
For the Period ended
November 30, 2009
|
|||
Revenue
|
$ | - | ||
Expenses
|
$ | - | ||
NET
LOSS
|
$ | - | ||
Weighted
Average Shares Outstanding – Basic and Diluted
|
4,000,000 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You
should read the following discussion together with "Selected Historical
Financial Data" and our consolidated financial statements and the related notes
included elsewhere in this prospectus. Our discussion includes forward-looking
statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations and intentions. Actual results and
the timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including those
set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking
Statements and Business sections in this prospectus. We use terms such as
“anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,”
“believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions
to identify forward-looking statements.
THE
COMPANY
Organization and Basis of
Presentation
The
Company was incorporated in the State of Delaware on November 25, 2009. As of
November 25, 2009, we own three Automated Teller Machines (“ATMs”) and manage 19
ATMS throughout upstate New York
On
November 25, 2009, we entered into an asset purchase agreement with Fresca
Worldwide Trading Corp. (“Fresca”), a Nevada corporation , to purchase from
Fresca all its assets including without limitation three ATMs and the rights to
manage 19 other ATMS throughout upstate New York. The acquisition was
completed on November 25, 2009. Prior to such acquisition of assets,
we had no operations or assets.
11
Overview
We own
and/or manage a total of 22 Automated Teller Machines, or ATMs, located at 19
different merchants in Onondaga County in upstate New York.
Our
revenues are principally derived from two types of fees which we charge for
processing transactions on our ATM network. We receive an interchange fee from
the issuer of the credit or debit card for processing a transaction when a
cardholder uses an ATM in our network. In addition, in most cases we receive a
surcharge fee from the cardholder when the cardholder makes a cash withdrawal
from an ATM in our network.
Surcharge/convenience
fees are fees assessed directly to the consumer utilizing the ATM terminals
owned by the Company. The surcharge/convenience fees assessed range from $1.50
to $4.00 based upon a cash withdrawal transaction from the ATM
terminals.
Interchange
fees are fees assessed directly to the card issuer of the consumer. The
interchange fees are comprised of two fees: (1) an interchange fee ranging from
approximately $0.40 to $0.55 based upon each cash withdrawal transaction; and
(2) an interchange fee ranging from approximately $0.15 to $0.25 based upon an
account inquiry by the consumer.
We compete
in a fragmented industry in which no one firm has a significant market share and
can strongly influence the industry outcome. Our industry is populated by a
large number of financial institutions and Independent Sales Organizations, or
ISOs, which deploy ATMs. The industry we compete in is also characterized
by essentially undifferentiated services.
Additionally,
the industry in which we compete is showing increasing signs of being an
industry in decline. Reasons for this market decline include:
·
|
Emergence
of debit cards, “pay pass” machines and RFID as substitutes for cash in
making purchases;
|
|
|
|
|
·
|
Increasing
acceptance of debit cards by younger demographics;
and
|
|
·
|
Market
saturation of prime ATM locations in the
U.S.
|
The
demand for our ATM services is primarily a function of population growth and new
business creation to serve that population growth.
Our
business strategy to grow our business includes the following:
·
|
Acquiring
additional ATMs from borrowings or financings from private placement of
our securities;
|
|
|
|
|
·
|
Continuing
to search for profitable locations for the placement of our ATM’s;
and
|
|
·
|
Grow
our margins by conservatively hiring additional staff on as-needed
basis.
|
12
Industry
Trends
We have
noted the following trends in the ATM industry which we expect to continue in
the foreseeable future:
·
|
A
consolidation in the banking industry, causing the number of different
financial institutions and different ATM networks to decline. Generally,
users who use ATMs affiliated with their banks are not charged surcharge
fees. This consolidation and resulting proliferation of affiliated ATM’s
is causing regional operators who charge surcharge fees, such as our
Company, to lose current and potential customers, market share and
revenue.
|
|
·
|
A
marked increase in the acceptance and utilization of consumers and
retailers ATMs cards which can also be used as either a credit card or
debit card.
|
·
|
An
increase in the public’s use of bank cards as a either credit or debit
card as compared to utilizing cash to make purchases.
|
|
·
|
An
increase in the number and proliferation of ATM sites by national banking
institutions which facilitate their customers access to cash and making
stand alone ATMs, such as ours, less
necessary.
|
·
|
An
increase in and public awareness of identity theft and ATM fraud often
perpetuated by persons manipulating and damaging stand alone ATM’s such as
ours, which may cause potential customers to be weary of utilizing ATM
machines not affiliated with regional or national banking institutions,
including our ATM’s.
|
|
·
|
National
banks lowering their surcharge fees relative to stand alone ATM’s, such as
ours
|
·
|
An
increase in banks’ affiliations with other institutions (e.g., airlines,
merchants, charities) which enable customers to use their bank cards as
credit/debit cards and earn points redeemable at such other
institutions
|
|
·
|
A
decrease in merchants’ required minimum purchases before accepting a
customers’ credit cards and bank cards which can be used as a credit or
debit card;
|
|
·
|
The
ability of a customer to receive cash back from a merchant when using
his/her debit cards to make a purchase at the merchant, thereby decreasing
the need for the customer to use an ATM.
|
|
·
|
Credit
card processors diversifying their business by taking advantage of
existing relationships with merchants to place ATMs at sites with those
merchants.
|
·
|
Number
of retailers issuing their own in-store credit cards and offering their
customers utilizing such retailer’s credit card with discounted
merchandise.
|
|
·
|
Companies
that have the capability to provide both back office services and ATM
management services.
|
·
|
Consolidators
in the business such as TRM/E-Funds and
Cardtronics/E-trade.
|
We expect
these trends to increase which could harm our business and operations if we fail
to grow our business.
13
The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States of America
requires management to make judgments, assumptions and estimates that affect the
amounts reported in our consolidated financial statements and accompanying
notes. We base our estimates and judgments on historical experience and on
various other assumptions that we believe are reasonable under the
circumstances. However, future events are subject to change, and the best
estimates and judgments routinely require adjustment. The amounts of assets and
liabilities reported in our consolidated balance sheet, and the amounts of
revenues and expenses reported for each of our fiscal periods, are affected by
estimates and assumptions which are used for, but not limited to, the accounting
for allowance for doubtful accounts, goodwill and intangible asset impairments,
restructurings, inventory and income taxes. Actual results could differ from
these estimates. The following critical accounting policies are significantly
affected by judgments, assumptions and estimates used in the preparation of our
consolidated financial statements.
Revenue Recognition
Policies
The
Company derives its primary revenue from the sources described below, which
includes surcharge revenue and interexchange revenue. Surcharge fees are added
fees which the Company charges the ATM user for dispensing cash. The Company
receives all of the Surcharge fees on the ATMs it owns or services but none of
the Surcharge fees on third party owned ATMs in its network. Interexchange fees
are fees charged between banks for transferring money. The Company receives all
of the interexchange fees on ATMs in its network whether owned or
not.
Surcharge/convenience
fees are fees assessed directly to the consumer utilizing the ATM terminals
owned by the Company. The surcharge/convenience fees assessed range from $1.50
to $4.00 based upon a cash withdrawal transaction from the ATM
terminals.
Interchange
fees are fees assessed directly to the card issuer of the consumer. The
interchange fees are comprised of two fees: (1) an interchange fee ranging from
approximately $0.40 to $0.55 based upon each cash withdrawal transaction; and
(2) an interchange fee ranging from approximately $0.15 to $0.25 based upon an
account inquiry by the consumer.
Recent
Accounting Pronouncements
In May
2009, the FASB issued ASC 855, “Subsequent Events”. ASC 855 establishes general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. ASC 855 was effective for the Company for the period ending
June 30, 2009. The adoption did not have a material impact on the Company’s
financial statements.
In
June 2009, the FASB issued ASC 105, “The FASB Accounting Standards
Codification™ and the Hierarchy of Generally Accepted Accounting
Principles,” which created a single source of authoritative nongovernmental U.S.
GAAP. The Codification was effective for the Company’s interim and annual
periods ending after September 15, 2009. Upon adoption, all existing
non-SEC accounting and reporting standards were superseded. All other non-SEC
accounting literature not included in the Codification are considered
non-authoritative. The required disclosures have been incorporated into and did
not have a material impact on the Company’s financial statements.
Onyx does
not expect the adoption of any recently issued accounting pronouncements to have
a significant impact on its financial position, results of operations or cash
flows.
Liquidity
and Capital Resources
Our
primary liquidityand capital resource needs are to finance the costs of our
operations and to make capital expenditure.
We were
incorporated on November 25, 2009 and are in the start up phase. As
of November 30, 2009, we have $6,100 in cash and three ATM machines owned by the
company with management rights for 19 others.
We
believe that the Interexchange revenue and Surcharge revenue received through
the operation of these ATM machines will provide us with the resources necessary
to satisfy our liquidity needs for the next twelve months. To the
extent that such funds are insufficient, our shareholders have agreed to fund
our operations for the next twelve-month period and beyond in the form of a loan
or loans. However, there is no formal agreement with our
shareholders, in writing or otherwise, and accordingly may not be enforced
against them in the event that our shareholders decide not to continue to fund
the Company.
14
General
We are
currently a provider of both privately-owned and company-owned Automatic Teller
Machines , or ATM’s, in Onondaga County in upstate New York. The Company
receives revenues from the collection of the surcharge revenues and
inter-exchange revenues.
Organization
and Basis of Presentation
The
Company was incorporated in the State of Delaware on November 25, 2009. As of
November 25, 2009, we own three Automated Teller Machines (“ATMs”) and manage 19
ATMS throughout upstate New York
On
November 25, 2009, we entered into an asset purchase agreement with Fresca
Worldwide Trading Corp. (“Fresca”), a Nevada corporation , to purchase from
Fresca all its assets including without limitation three ATMs and the rights to
manage 19 other ATMS throughout upstate New York. The acquisition was
completed on November 25, 2009. Prior to such acquisition of assets,
we had no operations or assets.
We deploy
and operate ATM’s primarily under the following two programs:
Full
placement program.
Under a
full placement arrangement, we own the ATM and are responsible for controlling
substantially all aspects of its operation including maintenance, cash
management and loading, supplies, signage and telecommunications services. We
may pay site owners a commission based on a percentage of sales. We are
generally responsible for almost all of the expenses related to the operation of
the ATM with the exception of power and, on occasion, telecommunications. We
typically use this program for major national and regional
merchants.
Merchant-owned
program
Under a
merchant-owned arrangement, the merchant (or, for a merchant using lease
financing, its lease finance provider) typically buys the ATM through us and the
merchant is responsible for most of the operating expenses such as maintenance,
cash management and loading, and supplies. We typically provide all transaction
processing services, and the merchants use our maintenance services from time to
time. Our rental program is similar to our merchant-owned program, except that
the merchant rents the ATM from us rather than purchasing it, and we provide the
maintenance and supplies for the machine.
15
Most of
our new ATM’s feature advanced functionality, diagnostics and ease of use
including color displays, personal computer-based operating systems, thermal
printing, dial-up and remote monitoring capabilities, and upgrade and
capacity-expansion capability. All machines can perform basic cash dispensing
and balance inquiry transactions, transmit on-screen marketing, dispense coupons
and conduct marketing surveys. Most of our equipment is modular in design, which
allows us to be flexible and accommodating to the needs of our clients as
technology advances.
We
upgrade our ATM machines in compliance with ATM technology. All ATM machines we
operate are upgraded with triple DES encryption, which is compliant with the ATM
industry regulations. This upgrade reduces the number and frequency of service
calls due to outages and other ATM-related problems and, in turn, reduces the
cost of maintaining each ATM machine. The ATM’s are also equipped with “smart
technology” that allows us to determine on a preset time basis the operational
status of the ATM. It informs us which vault cash is low, the number of times
the ATM has been used, as well as other helpful information that helps us
provide better service to our ATM using public.
ATM
Relationships. Our ATMs are purchased from Triton Systems and
to a lesser extent, from Tranax Corporation. We believe that the large quantity
of ATMs from these manufacturers enables us to receive favorable pricing. In
addition, we maintain close working relationships with these manufacturers in
the course of our business, allowing us to stay informed regarding product
updates and to minimize technical problems with purchased equipment. Although a
majority of our ATMs are from Triton Systems, we believe that our relationship
with Tranax Corporation is good and that we would be able to purchase the ATMs
we require from them if we were no longer able to purchase ATMs from Triton
Systems.
Merchant Customers.
We have contracts with a limited number of regional customers. We own and/or
manage a total of 22 privately owned Automated Teller Machines, or ATM’s,
located at 19 different merchants in Onondaga County in upstate New York. The
terms of our merchant contracts vary as a result of negotiations at the time of
execution. In the case of our full placement programs, the contract terms for
contracts currently in place typically include:
16
·
|
an
initial term of at least five
years;
|
|
|
·
|
ATM
exclusivity at locations where we install an ATM and, in many cases, a
right of first refusal for all other
locations;
|
|
|
·
|
a
requirement that the merchant provide a highly visible space for the ATM
and signage;
|
|
|
·
|
protection
for us against underperforming locations by permitting us to increase the
withdrawal fee or remove ATMs; and
|
|
|
·
|
provisions
making the merchant's fee variable depending on the number of ATM
transactions.
|
|
|
New
contracts under our merchant-owned or rental arrangements typically include
seven year terms with other terms similar to our full placement contracts, as
well as the following additional terms:
·
|
provisions
imposing an obligation on the merchant to ensure the ATM is operational at
all times its store is open to the public;
and
|
|
|
·
|
provisions
that require a merchant to use its best efforts to have any purchaser of
the merchant's store assume our
contract.
|
17
We
upgrade our ATM machines in compliance with ATM technology. All ATM machines we
operate are upgraded with triple DES encryption, which is compliant with the ATM
industry regulations. This upgrade reduces the number and frequency of service
calls due to outages and other ATM related problems and, in turn, reduces the
cost of maintaining each ATM machine. The smart technology allows us to
determine on a preset time basis the operational status of the ATM. It also
tells us which vault cash is low, and the number of times the ATM has been used,
as well as other helpful information that helps us provide better service to our
ATM using public.
Breach
of contracts
Although
our merchant-owned ATM customers have multi-year contracts with us for
transaction processing services, due to competition, some of these customers may
leave us for our competitors prior to the expiration of their contracts, or may
not renew their contracts upon their expiration. Additionally, some merchants
may sell or close their stores. When these events occur, we pursue these
customers to continue to utilize our processing services with us or
alternatively, in the event they terminate their relationship with us prior to
the expiration of their contacts, we seek payment of damages under a breach of
contract clause in our contracts.
Our
ATM Network
General. ATM
locations in our network are concentrated in upstate New York. The following
lists the names and locations of ATM’s either owned and/or managed by
us.
ATMS owned by
Company
Make/Model
|
Location
|
Triton
9100
|
Bada
Bing, 234 Wolf St., Syracuse, NY 13208
|
Tranax
HT-1100
|
Looker’s,
Inc., 1400 N. Salina St., Syracuse, NY 13208
|
Triton
9100
|
Valkyrie
Club, 1637 N. Salina St., Syracuse, NY
13208
|
18
ATMs managed by
Company
Triton
9500
|
#1
Convenience, 1000 Butternut St., Syracuse, NY 13208
|
Triton
9100
|
Burnet
Deli, 832 Burnet Ave., Syracuse, NY 13203
|
Triton
9500
|
C&C
Mini Mart, 1431 N. Salina St., Syracuse, NY 13208
|
Triton
9500
|
Corner
Convenience, 2817 S. Salina St., Syracuse, NY 13205
|
Triton
9500
|
Downtown
Smoke Shop, 359 S. Salina St., Syracuse, NY 13202
|
Tranax
1000
|
Franco’s
Cased & Kegs, 2008 South Ave., Syracuse, NY 13207
|
Triton
9500
|
Glen
Haven, Inc., 7434 Fair Haven Rd., Homer, NY 13077
|
Triton
9500
|
Ho-Beaus,
105 West St., Homer, NY 13077
|
Triton
9500
|
J.
Dubs, Inc., 6735 Route 41, Homer, NY 13077
|
Triton
9100
|
Lake
St. Lanes, 10 Lake St., New Berlin, NY 13411
|
Triton
9500
|
Mondo’s
Convenience, 1127 S. Salina St., Syracuse, NY 13208
|
Triton
9100
|
Michael’s
Beverage, 1601 Bellevue Ave., Syracuse, NY 13204
|
Triton
9100
|
Northside
Market, 106 Oak St., Syracuse, NY 13203
|
Tranax
1000
|
Paul’s
Big M. W, 1st
& Utica Sts., Oswego, NY 13126
|
Triton
9100
|
Pavia’s
Super Mkt., 854 N. Salina St., Syracuse, NY 13208
|
Triton
9500
|
Rich’s
Deli, 413 Milton Ave., Syracuse, NY 13204
|
Triton
9500
|
Salina
Dollar Discount, 111 E. Seneca Tpk., Syracuse, NY 13205
|
Triton
9500
|
Syracuse
Upstate Market, 124 Merriman Ave., Syracuse, NY 13204
|
Triton
9100
|
Trapper’s
Pub, 5950 Butternut Dr., E. Syracuse, NY
13057
|
19
The
operation of the network involves the performance of many complementary tasks
and services, including principally:
·
|
acquiring
ATMs for us or our customers;
|
·
|
selecting
locations for ATM’s and entering into leases for access to those
locations;
|
·
|
in
the case of third party merchants, establishing relationships with them
for processing transactions on their
ATM’s;
|
·
|
establishing
relationships with national and regional card organizations and credit
card issuers to promote usage of ATM’s in the
network;
|
·
|
processing
transactions conducted on ATM’s;
|
·
|
supplying
ATMs with cash and monitoring cash levels for
re-supply,;
|
·
|
monitoring
ATM operations and managing the service needs of ATM’s;
and
|
·
|
managing
the collection of fees generated from the operation of the
network.
|
20
ATM
Locations. We believe that the profitable operation of an ATM is largely
dependent upon its location. Thus, we devote significant effort to the selection
of locations that will generate high cardholder utilization. Additionally, we
believe the availability of attractive sites is a principal factor affecting our
ability to achieve further market penetration. We attempt to identify locations
in areas with high pedestrian counts where people need access to cash and where
use of the ATM is convenient and secure. In addition, we believe such locations
also provide a convenience to the retailer who may wish to avoid the financial
exposure and added overhead of offering check-cashing services to their
customers. Key target locations for our ATMs include the following
·
|
convenience
stores and combination convenience stores and gas
stations,
|
·
|
regional
retailers,
|
·
|
bars/clubs,
|
·
|
theaters,
and
|
·
|
bowling
alleys.
|
Our goal
is to secure key locations in advance of our competitors as we believe
cardholders generally establish a pattern of continued usage of a particular
ATM. Further, we believe such patterned usage will continue unless there are
frequent problems with the location, such as a machine being out of
service.
We enter
into leases for our ATM locations. The leases generally provide for the payment
to the lessor of either a portion of the fees generated by use of the ATM or a
fixed monthly rent. Most of our leases have a term of approximately five years
with a five-year renewable terms. We generally have the right to terminate a
lease if the ATM does not meet certain performance standards. The lessor
generally has the right to terminate a lease before the end of the lease term if
we breach the lease agreement or become the debtor in a bankruptcy
proceeding.
Typical ATM
Transaction. In a typical ATM transaction in our network, a debit or
credit cardholder inserts a credit or debit card into an ATM to withdraw funds
or obtain a balance inquiry. The transaction is routed from the ATM to a
processing center at Meta Bank. First Data or Columbus Data by dedicated dial-up
communication links. The processing center computers identify the card issuer by
the bank identification number contained within the card's magnetic strip. The
transaction is then switched to the local issuing bank or card organization (or
its designated processor) for authorization. Once the authorization is received,
the authorization message is routed back to the ATM and the transaction is
completed.
Authorization of ATM
transactions. Transactions processed on ATM’s in our network are the
responsibility of the card issuer. We are not liable for dispensing cash in
error if we receive a proper authorization message from a card
issuer.
Transaction
Volumes. We monitor the
number of transactions that are made by cardholders on ATM’s in our network. The
transaction volumes processed on any given ATM are affected by a number of
factors, including location of the ATM, the amount of time the ATM has been
installed at that location, and market demographics. Our experience is that the
number of transactions on a newly installed ATM is initially very low and
increases for a period of three to nine months after installation as consumers
become familiar with the location of the machine.
Competition
Individuals
seeking ATM-related services have a variety of choices at banking locations and
within retail establishments. The convenience cash delivery and balance inquiry
market is, and we expect it to remain, highly competitive due to the fact that
there are few barriers to entry into the business. Our principal competition
arises from other independent sales organizations, or ISOs, similar to the
Company including Innovus, TRM Corp, IMS and Cardtronics. We also compete with
numerous national and regional banks that operate ATM’s at their branches and at
other non-branch locations. In addition, we believe that there will be continued
consolidation in the ATM industry in the United States. Accordingly, new
competitors may emerge and quickly acquire significant market
share.
21
Competitive
factors in our business include network availability and response time, price to
both the card issuer and to our customers, and ATM locations. Our principal
competitors are national ATM companies that have a dominant share of the market.
These companies have greater sales, financial, production, distribution and
marketing resources than ours.
We have
identified the following additional categories of ATM network
operators:
·
|
Financial
Institutions. Banks have been traditional deployers of ATMs, which have
customarily been located at their banking facilities. In addition, the
present trend is for many banks to place ATMs in retail environments when
the bank has an existing relationship with the retailer. This practice
presents both a threat and an opportunity. It is a threat if the financial
institution chooses to manage this program on its own, whereby it would
limit the ATM locations available to us. On the other hand, it may be an
opportunity if the financial institution chooses to outsource the
management of this type of program to companies such as
ours.
|
·
|
Credit
Card Processors. Several of the credit card processors have diversified
their business by taking advantage of existing relationships with
merchants to place ATMs at sites with those
merchants.
|
·
|
Third
Party Operators. This category includes data processing companies that
have historically provided ATM services to financial
institutions.
|
·
|
Companies
that have the capability to provide both back office services and ATM
management services.
|
·
|
Consolidators
in the business such as TRM/E-Funds and
Cardtronics/E-Trade.
|
Management
believes that many of the above providers, with the exception of Cardtronics,
deploy ATMs to diversify their operations and that the operation of the ATM
network provides a secondary income source to a primary business.
In April
1996, national debit and credit card organizations changed the rules applicable
to their members to permit the imposition of surcharge/convenience fees. Since
such time, there has been increased competition, both from existing ATM network
operators and from new companies entering the industry. There can be no
assurance that we will compete successfully with national ATM companies. A
continued increase in competition could adversely affect our margins and may
have a material adverse effect on our financial condition and results of
operations.
ATM
Network Technology
Most of
the ATMs in our network are manufactured by Triton and Tranax. Due to the wide
range of advanced technology available, we are able to supply our customers with
state-of-the-art ATMs providing electronic features and reliability through
sophisticated diagnostics and self-testing routines. The various machine types
perform functions ranging from the basic routines, which include dispensing
cash, displaying account information, and providing a receipt to the user, to
more sophisticated routines such as dispensing stamps or coupons and providing
advertising revenue through the use of monochrome or color monitor graphics.
Many of our ATMs are modular and upgradeable so we may adapt them to provide
additional services in response to changing technology and consumer demand. Our
field services staff tests each ATM prior to placing it in service.
22
Vault
Cash
Currently
we are using our own cash for three ATMs in New York State. The vault cash is
replenished periodically based upon cash withdrawals. For the remaining 19 ATMs
in our network, such as merchant-owned ATMs, ATMs owned by other third party
owners, the vault cash is replenished by such merchants or other third
parties.
Significant
Relationships
We have a
limited number of regional customers. We own and/or manage a total of 22
privately owned Automated Teller Machines, or ATMs, located at 19 different
merchants in Onondaga County in upstate New York. Although, we do not rely
on any single merchant for our revenues, our Company would suffer dramatically
if a significant number of merchants decided to stop using our
ATM’s.
Trademarks
We not
have any trademarks.
Software
Copyrights
We do not
have any software copyrights.
Regulatory
Matters
New York
State
New York
State has several acts and regulations which pertain to the ATM industry,
including the New York Banking Law and the ATM Safety Act. The ATM Safety Act
mandates and proscribes the following for banking institutions that operate one
or more ATMs within New York State: surveillance cameras, adequate lighting,
locking devices for indoor ATMs to permit entry only to persons using a
magnetic-strip plastic card of similar device, access and compliance with
building codes to permit an unobstructed view of the interior of the ATM
facility, reflective mirrors as necessary to permit a person entering an indoor
ATM facility to view areas within such facility that are otherwise concealed to
plain view, certain signage. Although we are not a “banking institution” as
defined in the ATM Safety Act and are not required to comply with the
requirements of the Act, if New York State determines that such requirements are
to be extended to our business, it will have a material adverse effect on our
margins and operations.
Surcharge Regulation.
The imposition of surcharge fees is not currently subject to federal regulation.
There have been various efforts in the United States and in New York State to
ban or limit transaction fees. We are not aware of any existing bans or limits
on transaction fees applicable to us. We cannot guarantee, however, that
transaction fees will not be banned or limited in New York. Such a ban or limit
could materially limit or reduce our ATM revenues.
Our ATM
business is subject to government and industry regulations, which we describe
below. This regulatory environment is subject to change and various proposals
have been made which, if finalized, could affect our ATM operations. Our failure
to comply with existing or future laws and regulations pertaining to our ATM
business could result in restrictions on our ability to provide our products and
services, as well as the imposition of civil fines.
Electronic Funds Transfer
Act. The United
States Electronic Funds Transfer Act, while directed principally at banks and
other financial institutions, also has provisions that apply to us. In
particular, the Act requires ATM operators who impose withdrawal fees to notify
a customer of the withdrawal fee before the customer completes a withdrawal and
incurs the fee. Notification must be made through signs placed at or on the ATM
and by notification either on the ATM screen or through a print-out from the
ATM. All of our ATM’s provide both types of notification.
23
Americans with Disabilities
Act. The
Americans with Disabilities Act, or the ADA, currently includes provisions
regulating the amount of clear floor space required in front of each ATM,
prescribing the maximum height and reach depth of each ATM and mandating that
instructions and all information for use of the ATM be made accessible to and
independently usable by persons with vision impairments. The United States
Department of Justice is currently drafting new accessibility guidelines under
the ADA that will cover virtually all aspects of commercial activity relating to
disabled persons. We expect that these new guidelines will include provisions
that will require our ATMs to be more accessible to the disabled. Under the
current proposals, height and reach requirements would be shortened, keypads
would be required to be laid out in the manner of telephone keypads with
selected Braille symbols, and ATMs would be required to have process speech
capabilities. These new guidelines would affect the manufacture of ATM equipment
going forward and could require us to retire or upgrade many of the ATMs we own,
potentially at significant cost to us. This also applies to those merchant-owned
ATM’s where we are not responsible for upgrade costs. The comment period on the
proposed guidelines ended May 31, 2005. No guidelines have yet been
promulgated. Should the guidelines proposed become final, new equipment in new
locations will be required to comply with new accessibility
requirements.
Anti-fraud
Initiatives. Because of reported
instances of fraudulent use of ATMs, legislation is pending that would require
New York State or federal licensing and background checks of ATM operators.
There are proposals pending in New York State, which would require merchants
that are not financial institutions to be licensed in order to maintain an ATM
on their premises; other jurisdictions currently require such licensing. New
licensing requirements could increase our cost of doing business in those
markets.
Electronic Financial
Transactions Network Regulations. Electronic Financial
Transactions Networks, or EFTN, has adopted extensive regulations that are
applicable to various aspects of our operations. These regulations include the
encryption standards described more fully below and limitations on the maximum
amount of cash that can be withdrawn from each machine. As described in “Triple
DES” below, we will need to convert our ATMs to the new encryption standards by
their compliance dates. With respect to all other EFTN regulations, we believe
that we are in material compliance with the regulations that are currently in
effect and, if any deficiencies were discovered, we would be able to correct
them before they had a material adverse impact on our business.
Network Regulations.
National and regional networks have adopted extensive regulations that are
applicable to various aspects of our operations and the operations of other ATM
network operators. We believe that we are in material compliance with these
regulations and, if any deficiencies were discovered, that we would be able to
correct them before they had a material adverse impact on our
business.
Triple DES. The Digital Encryption
Standard, or DES, is the encryption standard that ATMs use to encrypt the
personal identification number that is transmitted to the processing agent
during an ATM transaction. Due to concerns over the increased processing power
of computers and their potential to decode the DES encryption, MasterCard
International (MasterCard) and VISA have advised all ATM operators that any ATM
using its network must be compliant with the more rigorous and secure Triple
Data Encryptions Standard Compliance “Triple DES” standard.
Triple
DES uses an enhanced encryption key pad residing in ATMs and point-of-sale
terminals that makes it far more difficult for even the fastest computers to
determine all the possible algorithmic combinations used to scramble
the
consumer’s personal identification number (PIN). The use of Single DES keys,
while effective for decades without any known security breaches by computer
hackers, is now thought to be vulnerable to today's faster computer
processors.
The
nation's largest PIN-based debit network, Star, which is owned by First Data
Corp., a company based in Omaha, Nebraska, mandated that after June 30, 2003,
all new and replacement ATMs must be capable of supporting Triple DES
transactions. MasterCard required every new or replaced ATM to be Triple DES
compliant by April 1, 2002 and that all ATMs that are installed or to be
installed must be Triple DES compliant by March 31, 2005. VISA had given the
networks until December 31, 2005 to be Triple DES compliant. All of our ATMs are
equipped with Triple DES encryption. All new ATM’s that we purchase are Triple
DES compliant.
24
Employees
At
November 30, 2009, we do not have any full-time employees. Ms. Burton and Ms.
Passalaqua are the company’s officers. Both Ms. Burton and Ms. Passalaqua spend
approximately 30% of their time on our Company’s business.
Our
employee is not represented by a labor union. We have not experienced work
stoppages and consider our employee relations to be good. Our business is highly
automated and we outsource specialized, repetitive functions such as cash
delivery and security. As a result, our labor requirements for operation of the
network are relatively modest and are centered on monitoring activities to
ensure service quality and cash reconciliation and control.
DESCRIPTION OF PROPERTIES
The
following is a description of our properties:
Location
|
Approximate
Square Footage
|
Use
|
||
Liverpool,
NY
|
750
sq. ft.
|
General
office use; operations, accounting,
and
related administration.
|
||
Liverpool,
NY
|
300
sq. ft.
|
General
warehouse use, equipment storage, and
maintenance
operations.
|
We lease
our general office and warehouse space in Liverpool, NY pursuant to a three year
lease on November 29, 2009 with Mary Passalaqua, a principal stockholder,
officer and director of the Company. Pursuant to the lease, the property can
only be used for ATM ownership and management. The lease term is from December
1, 2009 through November 30, 2012. Our rent is $3,600 per year payable $300 per
month, subject to adjustment if the real estate taxes on the land and buildings,
of which the leased properties are a part, are in excess of the amount of the
real estate taxes thereon for the former fiscal year. We did not pay a security
deposit. We are responsible for utilities for the leased properties and we may
not sublet any portion of the property without the consent of Mary
Passalaqua.
We
believe the terms of the lease are fair, and the monthly lease rate is at or
below the cost for comparable space.
In
general, all facilities are in good condition and are operating at capacities
that range from 80% to 100%. All facilities are leased under operating leases.
In comparison to similar facilities in the area, we believe the terms of the
lease are fair, and the monthly lease rate is at or below the cost for
comparable space.
LEGAL PROCEEDINGS
We know
of no material, active, pending or threatened proceeding against us
or our subsidiaries, nor are we, or any subsidiary, involved as a
plaintiff or defendant in any material proceeding or pending
litigation.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
No
Public Market for Common Stock
There is
presently no public market for our Common Stock. We intend to request a
registered broker-dealer to apply to have our common stock listed on the OTC
Bulletin Board upon the effectiveness of the registration statement of which
this prospectus forms a part. However, we can provide no assurance that our
shares will be traded on the OTC Bulletin Board or, if traded, that a public
market will materialize.
25
The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or quotation
system. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock, to deliver a standardized risk disclosure document prepared by
the SEC, that: (a) contains a description of the nature and level of risk in the
market for penny stocks in both public offerings and secondary trading; (b)
contains a description of the broker's or dealer's duties to the customer and of
the rights and remedies available to the customer with respect to a violation to
such duties or other requirements of Securities' laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and (f) contains such other information and
is in such form, including language, type, size and format, as the Securities
and Exchange Commission shall require by rule or regulation. The broker-dealer
also must provide, prior to effecting any transaction in a penny stock, the
customer with: (a) bid and offer quotations for the penny stock; (b) the
compensation of the broker-dealer and its salesperson in the transaction; (c)
the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock;
and (d) monthly account statements showing the market value of each penny stock
held in the customer's account. In addition, the penny stock rules require that
prior to a transaction in a penny stock not otherwise exempt from those rules;
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
acknowledgment of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed and dated copy of
a suitably written statement.
Holders
of Our Common Stock
As of the
date of this prospectus, we have 44 registered stockholders.
Dividends
We have
not paid dividends on our common stock and do not anticipate paying such
dividends in the foreseeable future.
Securities
authorized for issuance under equity compensation plans
As of the
date of this prospectus, we do not have any securities authorized for issuance
under any equity compensation plans and we do not have any equity compensation
plans.
Shares
Eligible for Future Sale
There is
no established trading market for our Common Stock. Future sales of substantial
amounts of our common stock in the trading market could adversely affect market
prices.
This is
an offering of 309,000 shares of our Common Stock by the selling
stockholders, all of which has issued to the selling stockholders. As
of March 9, 2010, we have presently 4,309,000 shares of Common Stock
issued and outstanding. None of the 4,309,000 shares is currently eligible for
resale under Rule 144.
26
Rule
144 Shares
After
February 15, 2008, a person who has beneficially owned shares of a company’s
common stock for at least six months is entitled to sell within any three month
period a number of shares that does not exceed 1% of the number of shares of our
common stock then outstanding, which, in our case, would equal approximately
43,090 shares of our common stock as of the date of this
prospectus.
Consequently,
as of March 9, 2010 there are approximately 4,309,000 shares of our
Common Stock held by 44 shareholders of record, none of which are currently
available for resale to the public and in accordance with the volume and trading
limitations of Rule 144 of the Act.
Sales
under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company. Under Rule 144(b), a person who is not one of the company’s affiliates
at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least one year, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
Penny
Stock Regulations
Our
shares of common stock are subject to the "penny stock" rules of the Securities
Exchange Act of 1934 and various rules under this Act. In general terms, "penny
stock" is defined as any equity security that has a market price less than $5.00
per share, subject to certain exceptions. The rules provide that any equity
security is considered to be a penny stock unless that security is registered
and traded on a national securities exchange meeting specified criteria set by
the SEC, issued by a registered investment company, and excluded from the
definition on the basis of price (at least $5.00 per share), or based on the
issuer's net tangible assets or revenues. In the last case, the issuer's net
tangible assets must exceed $3,000,000 if in continuous operation for at least
three years or $5,000,000 if in operation for less than three years, or the
issuer's average revenues for each of the past three years must exceed
$6,000,000.
Trading
in shares of penny stock is subject to additional sales practice requirements
for broker-dealers who sell penny stocks to persons other than established
customers and accredited investors. Accredited investors, in general, include
individuals with assets in excess of $1,000,000 or annual income exceeding
$200,000 (or $300,000 together with their spouse), and certain institutional
investors. For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of the security and must have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, the rules
require the delivery, prior to the first transaction, of a risk disclosure
document relating to the penny stock. A broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative,
and current quotations for the security. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks. These rules may
restrict the ability of broker-dealers to trade or maintain a market in our
common stock, to the extent it is penny stock, and may affect the ability of
shareholders to sell their shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of our Common Stock as of March 3, 2010 by (i) each executive officer
named under “Executive Compensation,” (ii) each member of our Board of
Directors, (iii) each person deemed to be the beneficial owner of more than five
percent (5%) of any class of our Common Stock, and (iv) all of our executive
officers and directors as a group. Unless otherwise indicated, each person named
in the following table is assumed to have sole voting power and investment power
with respect to all shares of our Common Stock listed as owned by such person.
Unless otherwise noted, the address for each reporting person below is c/o Onyx
Service & Solutions, Inc. located at 7337 Oswego Road, Liverpool, New York
13090 and our telephone number is (315) 451-4822.
27
Name
and Address of Beneficial Holder
|
Shares
of
Common Stock
|
Percentage of Common
Stock(1)
|
||||||
Margaret
A. Burton
Secretary
and a director
6204
Beaver Run
Jamesville,
NY 13078
|
2,000,000 | 46.4 | % | |||||
Mary
Passalaqua
President,
Chief Executive Officer and a director
106
Glenwood Drive. S.
Liverpool,
NY 13090
|
2,000,000 | 46.4 | % | |||||
All
executive officers and directors as a group (without naming them) (1
person)
|
4,000,000 | 92.8 | % |
(1)
|
Applicable
percentage of ownership is based on 4,309,00 shares of Common Stock issued
and outstanding. Pursuant to Rule 13d-3 promulgated under the Exchange
Act, any securities not outstanding which are subject to warrants, rights
or conversion privileges exercisable within 60 days are deemed to be
outstanding for purposes of computing the percentage of outstanding
securities of the class owned by such person but are not deemed to be
outstanding for the purposes of computing the percentage of any other
person.
|
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS
Our
Directors and Executive Officers
The
following table sets forth information regarding the members of our board of
directors and our executive officers and other significant employees. All
directors hold office for one-year terms until the election and qualification of
their successors. Officers are elected annually by the board of directors and
serve at the discretion of the board.
Name
|
Age
|
Position
|
||
Margaret
A. Burton
|
45
|
Secretary
and a director
|
||
Mary
Passalaqua
|
60
|
President,
Chief Executive Officer and a
director
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors:
Margaret A. Burton is a
graduate of Trident Charleston Technical and Onondaga Medical Career School and
has earned a Teaching Assistant Certification from the New York State Dept. of
Education. Ms. Burton was employed as a Teaching Assistant by the Jamesville
Dewitt Central School from October 10, 1997 through November of 2000. She was
employed as Parent Advocate by the Jamesville-Dewitt School District form
September 2002 through June 2005.
Since September 2005, she has been employed part-time as a Teaching Assistant
with the Jamesville-Dewitt Central School and from September 2006 has been the
After-School Program Staff Supervisor for Casey’s Place at the Elmcrest
Children’s Center. Ms. Burton has been serving on the Board of Directors and as
Secretary since November 25, 2009.
Mary Passalaqua is a 1969
graduate of Liverpool High School in Liverpool, New York. From 1992
to 1999, Ms. Passalaqua was Assistant Financial Officer for American Telecom,
Inc., located in Liverpool, New York. From 2000 through 2006, Ms.
Passalaqua was an owner and secretary at Laqua’s 491 Chevrolet. Ms.
Passalaqua was the Managing Member of Cobalt Blue, LLC from 2003 through
2006. She became President and Director of Callaway Properties, Inc.
in March 2004 and our President, Chief Financial Officer and director from
November 25, 2009.
28
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our Board of Directors and hold
office until removed by the Board.
Significant
Employees
We have
no employees other than Ms. Burton and Ms. Passalaqua as the company’s officers.
We conduct our business through agreements with consultants and arms-length
third parties. Both Ms. Burton and Ms. Passalaqua spend approximately 30% of
their time on our Company’s business.
Committees
of the Board of Directors
Our audit
committee presently consists of Ms.Passalaqua, our president, chief executive
officer and non-independent director. We do not have a compensation committee,
nominating committee, an executive committee of our board of directors, stock
plan committee or any other committees.
Code
of Ethics
We have
not adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions in that our officers and
directors serves in all the above capacities.
Employment
Agreements
The
Company is not a party to any employment agreements.
EXECUTIVE COMPENSATION
Management
Compensation
We have
not paid any salary, bonus or other compensation to Margaret A. Burton or Mary
Passalasua, our officers and directors, since our inception. We presently have
no compensation arrangements with Ms. Burton or with Ms.
Passalaqua.
Stock
Option Grants
No stock
options or stock appreciation rights under any stock incentive plans or
otherwise were granted to Ms. Burton and Ms. Passalaqua since our
inception.
Director
Compensation
We do not
currently pay, nor have we in the past, paid Ms. Burton or Ms. Passalaqua, our
officers and directors, any salary or fees for their services. It is however our
policy to pay director expenses in attending board meetings.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Under
Delaware law, a corporation may indemnify its officers, directors, employees and
agents under certain circumstances, including indemnification of such persons
against liability under the Securities Act of 1933, as amended. Those
circumstances include that an officer, director, employee or agent may be
indemnified if the person acted in good faith and in a manner that he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
29
Article 8
of our Articles of Incorporation provide that no director shall be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty by such director as a director. Notwithstanding the
foregoing sentence, a director shall be liable to the extent provided by
applicable law, (i) for breach of the director’s duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the Delaware General Corporation law or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment.
We are
also permitted to apply for insurance on behalf of any director, officer,
employee or other agent for liability arising out of his actions, whether or not
the Delaware General Corporation Law would permit indemnification.
Indemnification
Against Public Policy
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling an issuer pursuant to
the foregoing provisions, the opinion of the Commission is that such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
director, officer or controlling person 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, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The
effect of indemnification may be to limit the rights of the Company and its
stockholders (through stockholders’ derivative suits on behalf of the Company)
to recover monetary damages and expenses against a director for breach of
fiduciary duty.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL PERSONS
We lease
our general office and warehouse space in Liverpool, NY pursuant to a three year
lease, dated November 29, 2009 with Mary Passalaqua, a principal stockholder,
officer and director of the Company. Pursuant to the lease, the property can
only be used for ATM ownership and management. Our rent is $3,600 per year
payable $300 per month, subject to adjustment if the real estate taxes on the
land and buildings, of which the leased properties are a part, are in excess of
the amount of the real estate taxes thereon for the former fiscal year. We did
not pay a security deposit. We are responsible for utilities for the leased
properties and we may not sublet any portion of the property without the consent
of Mary Passalaqua. The lease expires on December 1, 2012.
SELLING STOCKHOLDERS
The
securities being offered hereunder are being offered by the selling stockholders
listed below or their respective transferees, pledgees, donees or successors.
Each selling stockholder may from time to time offer and sell any or all of such
selling stockholder’s shares that are registered under this prospectus. Because
no selling stockholder is obligated to sell shares, and because the selling
stockholders may also acquire publicly traded shares of our Common Stock, we
cannot accurately estimate how many shares each selling shareholder will own
after the offering.
All
expenses incurred with respect to the registration of the Common Stock covered
by this prospectus will be borne by us, but we will not be obligated to pay any
underwriting fees, discounts, commissions or other expenses incurred by any
selling stockholder in connection with the sale of shares.
30
None of
the selling stockholder is a broker dealer or an affiliate of a broker dealer
that has any agreement or understanding to distribute any of the shares being
registered. None of the stockholders is or has been an officer or director of
our Company or any of its predecessors or affiliates within the last three
years, nor has any selling stockholder had a material relationship with the
Company or each other.
After due
inquiry and investigation and based on information provided by the selling
stockholders, none of the selling stockholders has an existing short position in
our stock.
Other
than as described in this prospectus, we have not in the past three years
engaged in any securities transaction with any of the selling stockholders, any
affiliates of the selling stockholders, or, after due inquiry and investigation,
to the knowledge of the management of the Company, any person with whom any
selling shareholder has a contractual relationship regarding the transaction (or
any predecessors of those persons).
On March
3, 2010, the Company consummated a sale of 309,000 shares of Common Stock to the
selling stockholders for aggregate gross proceeds of $77,250, at a price of $.25
per share was
exempt from registration under Section 4(2) of the Securities Act based upon our
compliance with Regulation D as promulgated by the SEC under the Securities Act
of 1933, as amended (the “Securities Act”). Transfers of such shares were
restricted by the Company in accordance with the requirements of the Securities
Act.
The
following table sets forth the names of the selling stockholders, the number of
shares of Common Stock owned beneficially by the selling stockholders as of
March 9, 2010 and prior to the offering contemplated hereby, and the number of
shares of our Common Stock that may be offered by the selling stockholders
pursuant to this prospectus and the maximum number of shares of Common Stock
which will be owned after the offering by the selling stockholders and the
percentage beneficial ownership upon completion of the offering. The table and
the other information contained under the captions “Selling Stockholders” and
“Plan of Distribution” have been prepared based upon information furnished to us
by or on behalf of the selling stockholders. All stockholders listed below are
eligible to sell their shares. The percentage ownerships set forth below are
based on 4,309,000 shares outstanding as of the date of this
prospectus.
Name
of Stockholder (3)
|
Total
Number of Shares of Common Stock Held Prior to Offering
|
Number
of Shares of Common Stock Held and Offered Pursuant to this Prospectus
|
Shares
Beneficially Owned Before Offering (Percentage) (1)(2)
|
Shares
Beneficially Owned After the Offering (Number)(1)
|
Shares
Beneficially Owned After the Offering (Percentage) (2)
|
|||||
Baitsell
Coby A
104
Whittemore Road
Oswego,
NY 13126
|
3,000
|
3,000
|
.*
|
0
|
0
|
|||||
Baitsell
Jaime G
104
Whittemore Road
Oswego,
NY 13126
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Barnaba
Carolyn
3285
Greenleafe Drive
Phoenix,
NY 13135
|
2,000
|
2,000
|
*
|
0
|
0
|
|||||
Beckley
Sarah
162
Brown Ave
Mattydale
NY 13211
|
2,000
|
2,000
|
*
|
0
|
0
|
|||||
Carbona
Pattianne
123
Parker Ave
Liverpool,
NY 13088
|
3,000
|
3,000
|
*
|
0
|
0
|
31
Catricola
Jayne
21
McLaughlin St
Staten
Island, NY 10305
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Catricola
John A
79
Belfast Ave
Staten
Island NY 10306
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Catricola
Mary J
8
Victoria Road
Staten
Island, NY 10312
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
DiMarco
Christopher J
6875
Buckley Road
N
Syracuse, NY 13212
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
DiMarco
Stephen
8535
Long Leaf Tr
Liverpool,
NY 13090
|
5,000
|
5,000
|
*
|
0
|
0
|
|||||
Doyle
Michael
5109
S Salina St
Syracuse,
NY 13205
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Edelman
Freddie L
7777
Indian Hill Road
Manlius
NY 13104
|
100,000
|
100,000
|
2.32%
|
0
|
0
|
|||||
Emerson
John P
3602
Ransom Road
Jamesville,
NY 13078
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Evans
Mary K
4754
Norstar Blvd Apt 203,
Liverpool,
NY 13088
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Godin
Amanda
123
Parker Ave
Liverpool,
NY 13088
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Harlander
Scott
4585
Westbrook Cir
Manlius,
NY 13104
|
6,000
|
6,000
|
*
|
0
|
0
|
|||||
Harper
William D
10031
Carousel Center
Syracuse,
NY 13290
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Kristoff
Thomas
6972
Colonial Drive
Fayetteville,
NY 13066
|
5,000
|
5,000
|
*
|
0
|
0
|
|||||
Kruger
Barbara C
18
Forester Road
Liverpool,
NY 13090
|
2,000
|
2,000
|
*
|
0
|
0
|
32
Kruger
Thomas R
7678
Mountain Ash
Liverpool,
NY 13090
|
2,000
|
2,000
|
*
|
0
|
0
|
|||||
Lambertson
Loriann
478
Englewood Avenue
Staten
Island, NY 10309
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Lombardo
Anthony E
790
Fairway Cir
Baldwinsville,
NY 13027
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Lombardo
Anthony L J
790
Fairway Cir
Baldwinsville,
NY 13027
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Lombardo
Corey
790
Fairway Cir
Baldwinsville,
NY 13027
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Lombardo
Louis P
790
Fairway Cir
Baldwinsville,
NY 13027
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Martano
Joseph
15
Poe Street
Staten
Island, NY 10307
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
McHenry
Garry
234
W Foster Ave
Palmyra
NY 14522
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Passalaqua
John F
4055
Wetzel Road,
Liverpool,
NY 13090
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Passalaqua
Joseph J
8744
Riverside House Path,
Brewerton
NY 13029
|
10,000
|
10,000
|
*
|
0
|
0
|
|||||
Passalaqua
Stephanie
8744
Riverside House Path,
Brewerton
NY 13029
|
10,000
|
10,000
|
*
|
0
|
0
|
|||||
Penfield
Colleen M
5717
State Route 104 E
Oswego,
NY 13126
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Penfield
Robert W
5717
State Route 104 E
Oswego,
NY 13126
|
3,000
|
3,000
|
*
|
0
|
0
|
33
Schiltz
Brenda J
209
Old Cove Road
Liverpool,
NY 13088
|
2,000
|
2,000
|
*
|
0
|
0
|
|||||
Sheveleva
Inna
4055
Wetzel Road
Liverpool,
NY 13090
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Sollish
Margaret L
8
Salina Street,
Baldwinsville,
NY 13027
|
2,000
|
2,000
|
*
|
0
|
0
|
|||||
Stever
David F
124
Lincoln Ave S
Liverpool,
NY 13088
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Susko
Gerald
7814
Hunt Lane,
Fayetteville,
NY 13066
|
20,000
|
20,000
|
*
|
0
|
0
|
|||||
Susko
Lisa
7814
Hunt Lane,
Fayetteville,
NY 13066
|
20,000
|
20,000
|
*
|
0
|
0
|
|||||
Taylor
Michele
PO
Box 2843
Liverpool,
NY 13089
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Toth
Joan
8
Victoria Road,
Staten
Island, NY 10312
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Walter
Whitney A
8758
Columbine Drive
Baldwinsville,
NY 13027
|
3,000
|
3,000
|
*
|
0
|
0
|
|||||
Belmont
Partners, LLC
360
Main Street
Washington
VA 22747
|
40,000
|
40,000
|
*
|
0
|
0
|
*Represents
less than 1%
(1)
|
Under
applicable SEC rules, a person is deemed to beneficially own securities
which the person as the right to acquire within 60 days through the
exercise of any option or warrant or through the conversion of a
convertible security. Also under applicable SEC rules, a person is deemed
to be the “beneficial owner” of a security with regard to which the person
directly or indirectly, has or shares (a) voting power, which includes the
power to vote or direct the voting of the security, or (b) investment
power, which includes the power to dispose, or direct the disposition, of
the security, in each case, irrespective of the person’s economic interest
in the security. Each listed selling stockholder has the sole investment
and voting power with respect to all shares of common stock shown as
beneficially owned by such selling stockholder, except as otherwise
indicated in the footnotes to the
table.
|
(2)
|
As
of March 9, 2010 there were 4,309,000 shares of our
Common Stock issued and outstanding. In determining the percent of Common
Stock beneficially owned by a selling stockholder
on March 9, 2010, (a) the numerator is the number of
shares of common stock beneficially owned by such selling stockholder
(including shares that he has the right to acquire within 60 days
of March 9, 2010), and (b) the denominator is the sum of
(i) the 4,309,000 Common Stock outstanding on March 9, 2010 and (ii)
the number of shares of Common Stock such selling stockholders has the
right to acquire within 60 days of March 9, 2010.
|
(3)
|
All
the selling stockholders are individuals resident in the United States of
America and each of them has sole voting and dispositive power over the
shares beneficially owned by them.
|
34
None of
the selling stockholders is a member, affiliate or associate of any
broker-dealer. None of the selling stockholders has, or within the past three
years has had, any position, office or material relationship with us or any of
our predecessors or affiliates.
PLAN OF DISTRIBUTION
This
prospectus is part of a registration statement that enables the selling
stockholders to sell their shares on a continuous or delayed after this
registration statement is declared effective by the Securities and Exchange
Commission. The selling stockholders may sell some or all of their common stock
in one or more transactions, including block transactions:
·
|
In
public markets as the common stock may be trading from time to
time;
|
|
·
|
In
privately negotiated transactions;
|
·
|
Through
the writing of options on the common stock;
|
|
·
|
In
short sales; or
|
·
|
In
any combination of the aforementioned methods of
distributions.
|
·
|
the market price of our common stock prevailing at the time of sale; |
·
|
a price related to such prevailing market price of our common stock; or |
·
|
such other price as the Selling Stockholders determine from time to time. |
35
The
selling stockholders named in this prospectus may also sell their shares
directly to market makers acting as agents in unsolicited brokerage
transactions. Any broker or dealer participating in such transactions as agent
may receive a commission from the selling stockholders, or, if they act as agent
for the purchaser of such common stock, from such purchaser. The selling
stockholders are expected to pay the usual and customary brokerage fees for such
services.
We can
provide no assurance that all or any of the Common Stock offered will be sold by
the selling stockholders named in this prospectus.
The
estimated costs of this offering are $40,000. We are bearing all costs relating
to the registration of the common stock. The selling stockholders, however, will
pay any commissions or other fees payable to brokers or dealers in connection
with any sale of the common stock.
The
selling stockholders named in this prospectus must comply with the requirements
of the Securities Act and the Exchange Act in the offer and sale of the common
stock. The selling stockholders and any broker-dealers who execute sales for the
selling stockholders may be deemed to be an "underwriter" within the meaning of
the Securities Act in connection with such sales. In particular, during such
times as the selling stockholders may be deemed to be engaged in a distribution
of the common stock, and therefore be considered to be an underwriter, they must
comply with applicable law and be required to, among other things:
·
|
Not
engage in any stabilization activities in connection with our Common
Stock;
|
|
·
|
Furnish
each broker or dealer through which Common Stock may be offered, such
copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
|
|
·
|
Not
bid for or purchase any of our securities or attempt to induce any person
to purchase any of our securities other than as permitted under the
Exchange Act.
|
If an
underwriter is selected in connection with this offering, an amendment will be
filed to identify the underwriter, disclose the arrangements with the
underwriter, and we will file the underwriting agreement as an exhibit to this
prospectus.
The
selling shareholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations under such act, including, without
limitation, Regulation M. These provisions may restrict certain activities of,
and limit the timing of purchases and sales of any of the shares by the selling
stockholders or any other such person. In the event that the selling
stockholders are deemed affiliated purchasers or distribution participants
within the meaning of Regulation M, then the selling stockholders will not be
permitted to engage in short sales of Common Stock. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. In regards to short sells, if such short sale is deemed to be a
stabilizing activity, then the selling stockholder will not be permitted to
engage in a short sale of our Common Stock. All of these limitations may affect
the marketability of the shares.
DESCRIPTION OF SECURITIES
We are
authorized to issue 250,000,000 shares of common stock, $.0001 par value and
10,000,000 shares of preferred stock, par value $.0001.
Common
Stock
There are
issued and outstanding 4,309,000 shares of Common Stock. The holders of Common
Stock are entitled to one vote per share. They are not entitled to cumulative
voting rights or preemptive rights. The holders of Common
Stock are entitled to receive ratably such dividends, if any, as may be declared
by the board of directors out of legally available funds. However, the current
policy of the board of directors is to retain earnings, if any, for operations
and growth. Upon liquidation, dissolution or winding-up, the holders of Common
Stock are entitled to share ratably in all assets that are legally available for
distribution after payment in full of any preferential amounts. The holders of
Common Stock have no subscription, redemption or conversion rights. The rights,
preferences and privileges of holders of Common Stock are subject to, and may be
adversely affected by, the rights of the holders of any series of preferred
stock, which may be designated solely by action of the board of directors and
issued in the future.
Preferred
Stock
There are
no issued and outstanding shares of preferred stock. The Articles of
Incorporation of the Company provide for 10,000,000 shares of $.0001 par value
preferred stock. There are no terms or conditions set forth in the Articles with
respect to such preferred stock nor are there any “blank check” provisions that
would enable the Board of Directors to establish a series of preferred stock
having rights, preferences, terms and conditions as designated by the
Board.
36
Registration
Rights
None.
Our legal
counsel, Sichenzia Ross Friedman Ference LLP, located at 61 Broadway, New York,
NY 10006, is passing on the validity of the issuance of the Common Stock offered
under this prospectus.
Our
financial statements as of November 30,2009 , included in this
prospectus, have been audited by MaloneBailey, LLP our independent
registered public accountants, as stated in their report appearing herein and
are so included herein in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No
"expert" or "counsel" as defined by Item 509 of Regulation S-K promulgated under
the Securities Act, whose services were used in the preparation of this Form
S-1, was hired on a contingent basis or will receive a direct or indirect
interest in us or our parents or subsidiaries, nor was any of them a promoter,
underwriter, voting trustee, director, officer or employee of the Company.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have
had no changes in or disagreements with our accountants.
FINANCIAL
STATEMENTS
Our
financial statements and notes thereto for the period from the date of the
Company’s incorporation to November 30, 2009 the signature page and are
incorporated by reference herein.
WHERE YOU CAN FIND MORE INFORMATION
We have
filed a registration statement on Form S-1 under the Securities Act of 1933 with
the Securities and Exchange Commission with respect to the shares of our Common
Stock offered through this prospectus. This prospectus is filed as a part of
that registration statement and does not contain all of the information
contained in the registration
statement and exhibits. We refer you to our registration statement and each
exhibit attached to it for a more complete description of matters involving us,
and the statements we have made in this prospectus are qualified in their
entirety by reference to these additional materials. You may inspect the
registration statement and exhibits and schedules filed with the Securities and
Exchange Commission at the Commission’s principal office in Washington, D.C.
Copies of all or any part of the registration statement may be obtained from the
Public Reference Section of the Securities and Exchange Commission, 100 F Street
NE, Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for
further information on the operation of the public reference rooms. The
Securities and Exchange Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and information
regarding registrants that file electronically with the Commission. In addition,
we will file electronic versions of our annual and quarterly reports on the
Commission’s Electronic Data Gathering Analysis and Retrieval, or EDGAR System.
Our registration statement and the referenced exhibits can also be found on this
site as well as our quarterly and annual reports. We will not send the annual
report to our shareholders unless requested by the individual
shareholders.
37
ITEM 8. FINANCIAL STATEMENTS AND
|
|
CONTENTS
|
|
Page
|
|
F-1
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
38
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Board of Directors
Onyx
Service & Solutions, Inc.
Liverpool,
New York
We have
audited the accompanying balance sheet of Onyx Service & Solutions, Inc.
(the “Company”), as of November 30, 2009 and the related statements of
operations, changes in stockholders’ equity and cash flows for the period from
November 25, 2009, date of inception, to November 30, 2009. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatements. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of November 30, 2009
and the results of its operations and its cash flows for the period from
November 25, 2009, date of inception, to November 30, 2009 in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, The Company has suffered recurring losses from operations, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters are described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
MaloneBailey,
LLP
www.malonebailey.com
Houston,
Texas
March 8,
2010
F-1
ONYX SERVICE AND SOLUTIONS, INC.
(A
Development Stage Company)
|
BALANCE
SHEET
|
November
30,
|
||||
|
2009
|
|||
ASSETS
|
||||
CURRENT
ASSETS:
|
||||
Cash
|
$ | 6,100 | ||
TOTAL
CURRENT ASSETS
|
6,100 | |||
TOTAL
ASSETS
|
$ | 6,100 | ||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
Current
Liabilities:
|
||||
Due
to shareholders
|
$ | 36,895 | ||
TOTAL
CURRENT ASSETS
|
36,895 | |||
TOTAL
LIABILITIES
|
36,895 | |||
STOCKHOLDERS'
(Deficit)
|
||||
Preferred
Stock, $0.0001 par value, 10,000,000 shares authorized, none
outstanding
|
- | |||
Common
Stock, $0.0001 par value, 250,000,000 shares authorized,
|
||||
4,000,000
shares issued and outstanding
|
400 | |||
Subscription
receivable
|
(3,000 | ) | ||
Additional-paid-in
capital
|
(28,195 | ) | ||
Deficit
accumulated during the development state
|
- | |||
TOTAL
STOCKHOLDERS' DEFICIT
|
(30,795 | ) | ||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 6,100 | ||
See
accompanying notes to financial
statements
|
F-2
ONYX SERVICE AND SOLUTIONS, INC.
(A
Development Stage Company)
|
STATEMENT
OF OPERATIONS
|
Period
from November 25, 2009 (Inception)
|
||||
Through
November 30, 2009
|
||||
Expenses
|
||||
General
and administrative expense
|
$ | - | ||
NET
LOSS
|
$ | - | ||
Net
Loss Per Shares - Basic and Diluted
|
$ | - | ||
Weighted
Average Shares Outstanding - Basic and Diluted
|
4,000,000 |
See
accompanying notes to financial
statements
|
F-3
ONYX SERVICE AND SOLUTIONS,
INC.
(A
Development Stage Company)
|
STATEMENT
OF STOCKHOLDERS' EQUITY (DEFICIT)
|
Common
Stock
|
||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Subscription
Receivable
|
Accumulated Deficit
During Development Stage
|
Total
Stockholders'
Equity
(Deficit)
|
|||||||||||||||||||
Balance
as of November 25, 2009
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Capital
stock issued for cash at par value ($0.0001 per share)
|
4,000,000 | 400 | 2,600 | (3,000 | ) | - | - | |||||||||||||||||
Net
liabilities assumed in purchase of Fresca's ATMs
|
- | - | (30,795 | ) | - | - | (30,795 | ) | ||||||||||||||||
Net
Loss for the year
|
- | - | - | - | - | - | ||||||||||||||||||
Balance
as of November 30, 2009
|
4,000,000 | $ | 400 | $ | (28,195 | ) | $ | (3,000 | ) | $ | - | $ | (30,795 | ) |
See
accompanying notes to financial
statements
|
F-4
ONYX SERVICE AND SOLUTIONS, INC.
(A
Development Stage Company)
|
STATEMENT
OF CASH FLOWS
|
Period
from November 25,2009
|
||||
(Inception)
Through November 30,
|
||||
2009
|
||||
Operating
Activities:
|
||||
Net
Income (Loss)
|
$ | - | ||
Adjustments
to reconcile net income (loss) to net
|
||||
cash
(used in) provided by operating activities:
|
||||
Increase
(Decrease) in Accounts Payable
|
- | |||
Net
cash (used in) provided by operating activities
|
- | |||
Investing
Activities:
|
||||
Cash
acquired from the purchase of equipment
|
6,100 | |||
Net
cash provided by investing activities
|
6,100 | |||
Financing
Activities:
|
||||
Proceeds
from issuance of stock
|
- | |||
Net
cash provided by financing activities
|
- | |||
Net
change in Cash
|
6,100 | |||
Cash
at Beginning of Period
|
- | |||
Cash
at End of Period
|
$ | 6,100 | ||
Supplemental
Disclosures:
|
||||
Interest
paid
|
$ | - | ||
Income
taxes paid
|
$ | - | ||
Noncash
Investing and Financing Activities
|
||||
Liabilities
assumed from debts in exchange of assets acquired
|
$ | 36,895 |
See
accompanying notes to financial
statements
|
F-5
ONYX SERVICE AND SOLUTIONS, INC.
(A
Development Stage Company)
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
NOTE
1. NATURE
OF BUSINESS AND BACKGROUND
Organization and Nature of
Business
The
Company was incorporated in the State of Delaware on November 25, 2009. As of
November 25, 2009, we own three Automated Teller Machines (“ATMs”) and manage 19
ATMS throughout upstate New York
On
November 25, 2009, we entered into an asset purchase agreement with Fresca
Worldwide Trading Corp. (“Fresca”), a Nevada corporation , to purchase from
Fresca all its assets including without limitation three ATMs and the rights to
manage 19 other ATMS throughout upstate New York. The acquisition was
completed on November 25, 2009. Prior to such acquisition of assets,
we had no operations or assets.
Onyx
Service and Solutions, Inc. (the Company) is currently a provider of both
privately owned and company owned automatic teller machines (ATM). The Company
receives revenues from the collection of the surcharge revenues and
inter-exchange revenues.
Organization
and Basis of Presentation
The
accompanying financial statements of Onyx Service and Solutions,
Inc have been prepared in accordance
with accounting principles generally accepted
in the United States of America
and the rules of the Securities and Exchange Commission.
The
Company was formed under the laws of the State of Delaware. On
November 25, 2009 the Company entered into an asset purchase agreement with
Fresca Worldwide Trading, Corp. a Nevada Corporation, which is an affiliated
entity under common control, for the purchase of its ATM assets. The
Company agreed to pay Fresca Worldwide Trading, Corp. $10,400 for the
purchase of its ATM assets and assumed $36,895 liabilities on November 25,
2009. As the assets purchase transaction is a
transaction between entities under common control, the
assets transferred are recorded at Fresca’s historical cost.
NOTE
2. GOING
CONCERN
The
accompanying financial statements have been prepared on the basis of accounting
principles applicable to a “going concern”,
which
assume the Company will continue in operation for at least one year and will be
able to realize its assets and discharge its liabilities in the normal course of
operations. The Company is in the exploration stage since its formation and has
not yet realized any revenues from its planned operations. The ability of the
Company to emerge from the exploration stage with respect to its
principal business activity is dependent upon
its successful efforts to raise additional debt and/or equity financing and
generate significant revenue. These factors raise substantial doubt
regarding Onyx's ability to continue
as a going concern. Management plans to raise additional capital
through equity and/or debt financings. The company cannot offer any assurances
that it will be successful in executing its plans to continue as a going
concern. The company’s financial statements at November 30, 2009 do not include
any adjustments that might result from the inability to continue as a going
concern.
If Onyx
were unable to continue as a going concern, substantial adjustments would be
necessary to the carrying values of assets, the reported amounts of its
liabilities, the reported revenues and expenses, and the balance sheet
classifications used.
NOTE
3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
USE
OF ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the 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.
CONCENTRATIONS
OF CREDIT RISK
The
Company's ATM’s are located in New York State and usage of those ATM’s may be
affected by economic conditions in those areas. The Company has experienced
decrease in revenues due to decreased locations and worsened economic
conditions.
F-6
The
Company maintains cash balances with a financial institution insured by the
Federal Deposit Insurance Corporation. There are no uninsured balances at
November 30, 2009.
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 90days or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
FAIR
VALUE OF FINANCIAL INSTRUMENTS
The
amounts of financial instruments including cash, prepaid expenses, accounts
payable and notes payable, approximated their fair values as of November 30,
2009.
PERVASIVENESS
OF ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles required 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.
REVENUE
RECOGNITION
The
Company derives its revenue from surcharge revenue and inter exchange revenue.
Surcharge fees are added fees which the Company charges the ATM user for
dispensing cash. Inter exchange fees are fees charged between banks for
transferring money. The Company receives all of the Surcharge Fees and receives
a portion of the Inter exchange fees as income. The Company recognizes the net
fees received as revenues.
The
Company receives interchange fees for transactions on ATM’s that it
owns. The Company also receives the interchange fee for transactions on
ATM’s owned by third party vendors included within its network. The Company
keeps and reports all interchange fees as revenues.
The
Company has 3 different circumstances for recording the surcharge fee as
revenue. In the first case, for ATM’s owned and serviced by the Company, the
Company receives and reports all of the surcharge fees as revenue. In the second
case, where the Company owns but does not service the ATM’s, the Company records
the surcharge fee as revenue and records the portion of the fee paid to the
owner of the ATM location as commission expense. In the third case, of ATM’s
owned and serviced by third party vendors, the Company rebates all of the
surcharge fee to the third party and does not report any surcharge fee
revenue.
Property
and equipment are initially recorded at cost. Gains or losses on disposals are
reflected as gain or loss in the
period of
disposal. The cost of improvements that extend the life of plant and equipment
are capitalized. These capitalized costs may include structural improvements,
equipment and fixtures. All ordinary repairs and maintenance costs are expensed
as incurred. Depreciation for financial reporting purposes is computed on a
straight-line basis over the estimated useful lives of five to seven years. The
company valued the ATM machines acquired at zero book value as the assets
acquired had been fully depreciated at the date of purchase.
EARNINGS
(LOSS) PER SHARE
The basic
earnings (loss) per share are calculated by dividing the Company’s net income
available to common shareholders by the weighted average number of common shares
outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company’s net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares
outstanding.
INCOME
TAXES
The
Company accounts for income taxes in accordance with U.S. GAAP accounting for
income tax rules, which requires an asset and liability approach for
financial accounting and reporting for income taxes and allows recognition and
measurement of deferred tax assets based upon the likelihood of realization of
tax benefits in future years. Under the asset and liability approach, deferred
taxes are provided for the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income
tax purposes. A valuation allowance is provided for deferred tax assets if it is
more likely than not these items will either expire before the Company is able
to realize their benefits, or that future deductibility is
uncertain.
F-7
RECENT
ACCOUNTING PRONOUNCEMENTS
In May
2009, the FASB issued ASC 855, “Subsequent Events”. ASC 855 establishes general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. ASC 855 was effective for the Company for the period ending
June 30, 2009. The adoption did not have a material impact on the Company’s
financial statements.
In June
2009, the FASB issued ASC 105, “The FASB Accounting Standards
Codification™ and the Hierarchy of Generally Accepted Accounting
Principles,” which created a single source of authoritative nongovernmental U.S.
GAAP. The Codification was effective for the Company’s interim and annual
periods ending after September 15, 2009. Upon adoption, all existing
non-SEC accounting and reporting standards were superseded. All other non-SEC
accounting literature not included in the Codification are considered
non-authoritative. The required disclosures have been incorporated into and did
not have a material impact on the Company’s financial statements.
Onyx does
not expect the adoption of any recently issued accounting pronouncements to have
a significant impact on its financial
position, results of operations or cash flows.
NOTE
4. RELATED
PARTY TRANSACTIONS
On
November 25, 2009, the Company entered a purchase agreement with Fresca
Worldwide Trading to assume liabilities from debts in exchange for $6,100 cash
within the ATM machines purchased. The total liabilities assumed is $36,895 from
Fresca, owned by the same shareholders of the Company, Mary Passalaqua and
Margaret Burton. The payable balance is accrued as a due to shareholders that is
due on demand and does not bear interest. The balance of due to
shareholders is outstanding as of November 30, 2009.
NOTE
5. COMMON
STOCK TRANSACTIONS
On
November 25, 2009, 4,000,000 shares of common stock were issued for cash to the
Company’s two majority shareholders for $3,000 in subscriptions
receivable.
As of
November 30, 2009, the Company has 250,000,000 shares of common stock authorized
at $0.0001 par value per share and 4,000,000 shares of common stock issued and
outstanding.
NOTE
7. SUBSEQUENT
EVENTS
The
following event occurred subsequent to November 30, 2009:
|
a.)
|
On
December 18, 2009, the Company borrowed a total of $22,000 from the two
majority shareholders. The notes bear interest at 8% per annum and is
payable on demand.
|
|
b.)
|
On
March 3, 2010, the Company consummated a sale of 309,000 shares of Common
Stock to the selling stockholders for aggregate gross proceeds of $77,250,
at a price of $.25 per share.
|
|
c.)
|
On
November 29, 2009, the company entered a three year lease with the
company’s shareholder, Mary Passalaqua, for the general office and
warehouse space in NY at a rent rate of $300 per month. The term of the
lease is from December 01, 2009 and expired on November 30,
2012.
|
F-8
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other
Expenses of Issuance and Distribution
The
estimated expenses of the registration, all of which have been paid by the
Company as follows:
Amount
|
|||
SEC
filing fee
|
$
|
100
|
|
Printing
and filing
|
800
|
||
Legal
expenses, including blue sky
|
30,000
|
||
Accounting
expenses
|
4,600
|
||
Miscellaneous
|
1,000
|
||
Total
|
36,500
|
Item
14. Indemnification
of Directors and Officers.
Under
Delaware law, a corporation may indemnify its officers, directors, employees and
agents under certain circumstances, including indemnification of such persons
against liability under the Securities Act of 1933, as amended. Those
circumstances include that an officer, director, employee or agent may be
indemnified if the person acted in good faith and in a manner that he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
Article 8
of our Articles of Incorporation provide that no director shall be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty by such director as a director. Notwithstanding the
foregoing sentence, a director shall be liable to the extent provided by
applicable law, (i) for breach of the director’s duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the Delaware General Corporation law or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment.
We are
also permitted to apply for insurance on behalf of any director, officer,
employee or other agent for liability arising out of his actions, whether or not
the Delaware General Corporation Law would permit indemnification.
Indemnification
Against Public Policy
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling an issuer pursuant to
the foregoing provisions, the opinion of the Commission is that such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
director, officer or controlling person 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, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
39
The
effect of indemnification may be to limit the rights of the Company and its
stockholders (through stockholders’ derivative suits on behalf of the Company)
to recover monetary damages and expenses against a director for breach of
fiduciary duty.
Item
15. Recent
Sales of Unregistered Securities.
We
completed a private placement of 309,000 shares of Common Stock in March 3, 2010
at a purchase price of $0.25 per share which resulted in gross proceeds of
$77,250.
We
completed the private placement pursuant to Regulation D and Section 4(2) under
the Securities Act. Each purchaser represented to us that they were either an
“accredited investor” as in Rule 501 under Regulation D of the Securities Act.
Each purchaser represented his intention to acquire the securities for
investment only and not with a view toward distribution. Appropriate legends
were affixed to the stock certificate issued to each purchaser in accordance
with Regulation D. Each investor was given adequate access to sufficient
information about us to make an informed investment decision. None of the
securities were sold through an underwriter and accordingly, there were no
underwriting discounts or commissions involved.
Item
16. Exhibits
and Financial Statement Schedules
Description
|
||
3.1
|
Articles
of Incorporation.
|
|
3.2
|
By-laws.
|
|
4.1
|
Form
of Common Stock Certificate.
|
|
10.1
|
Asset
Purchase Agreement dated November 25, 2009 between the Company
and Fresca Worldwide Trading Corp.
|
|
10.2
|
Lease
agreements between Company and Mary Passalaqua dated November
29, 2009.
|
|
23.2
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1)
|
Item
17. Undertakings
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
ii. To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
40
iii. To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(5) Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B
or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
i. Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
ii. Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
iii. The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
iv. Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
41
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Liverpool, New
York, on the 9th day of March 2010.
ONYX
SERVICE & SOLUTIONS, INC.
|
|||
By:
|
/s/
Mary Passalaqua
|
||
Mary
Passalaqua
|
|||
President,
Chief Executive Officer and
Director
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed below by the following persons on behalf of the Company in the
capacities and on the dates indicated.
/s/
Mary Passalaqua
|
March 9,
2010
|
|
Mary
Passalaqua
|
||
President
, Chief Executive Officer and director
|
/s/
Margaret A. Burton
|
March 9,
2010
|
|
Margaret
A. Burton
|
||
Secretary
and director
|
42