SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended: December 31, 2003
Commission File number: 000-30145
GLOBAL ASSETS & SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-3723328
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State or Other Jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
13575 58th Street North, Suite 122, Clearwater, FL 33760
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(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code: (727) 538-1434
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $0
Small Business Disclosure Format:
__X____ Yes _______ No
As of December 31, 2003, 31,497,767 shares of common stock and no shares of
preferred stock were outstanding. The aggregate market value of the 11,025,701
shares of Stock held by non-affiliates of Registrant was $551,285 based upon a
bid price of $.05 on December 31, 2003.
Documents incorporated by reference: (1) The Company's Registration
Statement on Form S-18 (33-41063-A).
TABLE OF CONTENTS
PART I PAGE
Item 1. Description of Business 1
Item 2. Description of Property 11
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 11
Item 6. Management's Discussion and Analysis or Plan of Operation 12
Item 7. Financial Statements 15
Item 8. Changes in and Disagreements With Accountants on Accounting 15
and Financial Disclosure
Item 8A. Controls and Procedures 15
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 16
Item 10. Executive Compensation 17
Item 11. Security Ownership of Certain Beneficial Owners and Management 19
Item 12. Certain Relationships and Related Transactions 21
Item 13. Exhibits and Reports on Form 8-K 22
Item 14. Principal Accountant Fees & Services 24
SIGNATURES 25
Part I
Item 1. Description of Business
General Description of Company
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History
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Art Music & Entertainment, Inc., ("the Company" or "AM&E") a Florida corporation
was organized in May 25, 1988 as Cornerstone Capital, Inc. and the name was
changed on September 22, 1990 to Chatham International, Inc. It completed an
initial public offering which commenced on November 14, 1991, comprised of
16,268 shares of Common Stock and One Zero Coupon U.S. Treasury-Backed
Obligation ("USTBO") with a maturity value of $1,000 at a price of $1,000. The
Registrant offered a maximum of 3,000 units and a minimum of 75 units on a best
efforts basis. The underwriter for the offering was Boe and Company formerly
known as SBV Securities, Inc. A total of 98 units was sold and net proceeds were
$67,770. The Company closed its offering May 14, 1992.
The Company intended upon completion of the public offering, to commence
operations as an export management company and provide a range of business
services and assistance to manufacturers desiring to do business in foreign
markets. The Company was unsuccessful in its efforts. The Company is presently
in the developmental stage.
In April 1996, Art Music and Entertainment merged with Chatham International,
Inc. The Company changed its name to Art Music and Entertainment, Inc. on April
5, 1996.
The Company utilized most of 1996 to further develop its business plan and
acquire the following companies, and develop business plans of each. All
subsidiaries were acquired under a stock exchange agreement which utilized a
$10.00 per share value for its stock.
a. International Jazz Hall of Fame Production Company, Inc. - 3/1/96
b. Marin Movies, Inc. - 3/5/96
c. Classical Music Collection, Inc. - 3/5/96
d. Octopus Entertainment, Inc. - 3/5/96
e. Spellbinder Productions, Inc. - 3/5/96
On March 5, 1996, the Old AME entered into an Agreement and Plan of
Reorganization with the International Art Group, Inc., ("Art Group") under the
terms of which the Old AME acquired all of the outstanding capital stock of Art
Group in exchange for 486,754 shares of Class H Convertible Preferred Stock of
the Old AME. Art Group is not conducting operations and is reportedly the owner
of an exclusive license from the government of the United States to publish and
distribute the only official artwork to commemorate the Quincentennial (500th
anniversary) of the discovery of America. In December 1996, the Company and the
former shareholder of International Art Group, Inc., rescinded and canceled the
merger, and 486,754 shares of the Company's Class H Preferred Stock issued to
effect the merger were returned to the Company. Revenues of $140,400 from sales
of certain of the artwork during 1996 remain with the Company.
1
Old AME executed an Agreement and Plan of Reorganization on March 1, 1996 with
the International Jazz Hall of Fame Production Co. Inc. ("Jazz"). The terms of
the agreement provided for the Old AME to acquire all of the outstanding common
shares of Jazz in exchange for 44,666.68 common shares and 22,807 Class I Voting
Convertible Preferred Shares of the Old AME. Jazz was conducting operations and
is the owner of lithographs of certain jazz artists. During 1996, the Company
realized $184,748 from sales of the jazz lithographs, and $29,247 from its
production of a Jazz Hall of Fame induction ceremony. In January 1997, the
Company and the Class I Convertible Preferred Shareholders agreed to exchange
such convertible preferred stock for 230,000 shares of the restricted common
shares of the Company, which shares were issued in October 1997.
On March 5, 1996, the Old AME signed an Agreement and Plan of Reorganization
with Marin Movies, Inc. ("Marin"). The provisions of the agreement provide for
Old AME to acquire all of the outstanding common stock of Marin in exchange for
2,800 shares of Class G Convertible Preferred Stock of the Old AME. Marin is not
conducting operations and is the owner of master videos of 300 public domain
movies. In January 1997, the Company and the Class G Convertible Preferred
Shareholders agreed to exchange such convertible preferred stock for 28,000
shares of the restricted common shares of the Company, which shares were issued
in October 1997.
An Agreement and Plan of Reorganization with Classical Music Collection, Inc.
("Classical") was executed by the Old AME on March 5, 1996. Under the terms of
the agreement the Old AME acquired all of the outstanding common stock of
Classical in exchange for 11,333.34 of the Old AME's common shares and 1,760 of
the Old AME's Class F Voting convertible Preferred shares. Classical is not
conducting operations and is the owner of certain master music recordings. In
January 1997, the Company and the Class F Convertible Preferred Shareholders
agreed to exchange such convertible preferred stock for 7,967 shares of the
restricted common shares of the Company, which shares were issued in October
1997.
All of the outstanding common stock of Octopus Entertainment, Inc., ("Octopus")
was acquired by the Old AME on March 5, 1996 under an Agreement and Plan of
Reorganization of same date. The outstanding common stock of Octopus was
acquired for 1,000 Class E Voting Convertible Preferred Stock of the Old AME.
Octopus is not conducting operations and its sole assets are the ownership of
two trade names and certain "big-band" sheet music. In January 1997, the Company
and the Class E Convertible Preferred Shareholders agreed to exchange such
convertible preferred stock for 10,000 shares of the restricted common shares of
the Company, which shares were issued in October 1997. The transaction was
cancelled and rescinded in 1998.
Also on March 5, 1996, the Old AME executed an Agreement and Plan of
Reorganization with Spellbinder Productions, Inc. ("Spellbinder"), under which
the Old AME acquired all of the outstanding common stock of Spellbinder in
exchange for 9,533.34 common shares and 100,600 Class C Voting Convertible
Preferred shares of the Old AME. Spellbinder is not conducting operations, and
2
its sole asset is the music and related hardware for a music and illusionary
show copyrighted in 1990. In January 1997, the Company and the Class C
Convertible Preferred Shareholders agreed to exchange such preferred stock for
100,000 shares of the restricted common shares of the Company, which shares were
issued in October 1997. This subsidiary acquisition was rescinded in 1998 after
no activity or capital was produced.
The Company renegotiated in January 1997 with the former owners of the various
assets acquired by the respective classes of convertible preferred stock,
culminating in October 1997 with the exchange of all of the classes of issued
preferred stock for restricted common shares of the Company. The number of the
restricted common shares issued for each class of preferred shares is as
follows:
Retired Class G Preferred for 28,000 shares of common
Retired Class I Preferred for 230,000 shares of common
Retired Class F Preferred for 7,967 shares of common
Retired Class E Preferred for 10,000 shares of common
Retired Class C Preferred for 100,000 shares of common
Retired Class A Preferred for 380,000 shares of common
The Parent Company, AM&E had an affiliation with American Independent Network,
Inc. for television program broadcast time through the utilization of 30 second
commercial spots on the American Independent Network ("AIN"). Due to numerous
difficulties no advertising air time was ever used and the contract was
cancelled. The Company had planned on utilizing a portion of this air time to
sell its own products from its subsidiaries.
By the summer of 1997 AIN planned to be broadcasting its programming on
approximately 200 stations to close to 40 million households. AM&E intended to
create revenue by selling its commercial spots and its time slots for
programming. It did not achieve this goal, and ceased its operations in this
area in 1998.
The Company is a successor registrant pursuant to Section 12(g) 3 of the
Securities Exchange Act of 1934, by virtue of a statutory merger of the Parent,
Global Assets & Services, Inc. a Florida corporation, and its wholly owned
subsidiary, S.D.E. Holdings 3 Inc., a Nevada corporation, with Global Assets &
Services, Inc. being the survivor. There was no change to the issued and
outstanding shares of Global Assets & Services, Inc. and all shares of S.D.E.
Holdings 3 Inc. were retired by virtue of the merger.
On December 20, 2001, Global Assets & Services, Inc. completed a Share Purchase
Agreement with shareholders of S.D.E. Holdings 3 Inc. in which Global Assets &
Services, Inc., a Florida corporation, acquired all 500,000 shares outstanding
of the Registrant for the purposes of accomplishing a Merger of S.D.E. Holdings
3 Inc. and Global Assets & Services, Inc. The Merger was subsequently completed
on December 20, 2001.
3
Current Business
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Global Assets & Services, Inc. (the "Company"), in December 21, 2001 executed a
letter of intent to enter into a Software License Agreement with M-Cube
Corporation. Focus systems, Inc., publicly listed in the Tokyo OTC Market, is
the parent company of M-Cube Corporation, owning 50% of M-Cube Corporation. This
License was to market a new chaos theory encryption software package suitable
for internet communications and data security. A definitive Agreement for this
Software License was executed.
On May 16, 2002 Global Assets & Services executed a Software License Agreement
with M-Cube Corporation of Japan, a subsidiary of Focus Systems Corporation.
Focus Systems is a publicly listed company on the Tokyo JASDAQ Market with
symbol code 4662. The licensing agreement applies to a new chaos theory
encryption software package suitable for data security and wireless/internet
communications.
The Focus Systems encryption package, "C4S. C4K" was developed by a majority
owned subsidiary of Focus, C4 Technology, Inc. based on chaos theory. Focus has
been heavily involved in the development of software for telecommunications.
This led to involvement in information security issues and development of
encryption systems over the past few years. Separately its subsidiary was active
in the provision of internet video, Digital TV Net, and began developing a
suitable encryption package for its own purposes.
While Focus was studying various approaches to information security, it appeared
that the subsidiary had developed a very stable, fast and multi-platform
compatible package that is now known as C4S.C4K. Li Jingye, originally working
at the China Academy of Sciences computer Laboratory and then working as a
visiting research worker at Riken in Tokyo, moved to C4 Technology, Inc. and
Focus Systems Corporation has been heavily involved in the development of
software for the telecommunications field. This involvement has led to research
into information security issues along with the development of encryption
systems. While Focus was examining several approaches to information security it
developed a very secure, fast and multi-platform compatible package that is now
known as C4S and C4K. C4S and C4K utilize technology based on a chaotic signal,
a key of variable length, and two-stage encryption while maintaining a super
fast encryption speed of up to 344.44 Mbps. C4S C4K utilize JAVA compatibility,
which enables it to allow multiple-platforms. The domestic patent in Japan was
granted in February 2001. The open system approach and high speed translate to
wide application in broadband networks.
4
developed the chaos theory encryption package with a shared C4S key and a public
C4K key. The domestic patent in Japan was granted in February 2001. Despite the
security of using a chaotic signal, a key of variable length and two stage
encryption it is possible to encrypt at a speed of up to 228Mbps which is very
fast the industry.
JAVA compatibility means that there is multi-platform capability and this open
system approach and high speed mean wide application in broad band networks.
C4S.C4K is suitable for the very low weight designs typical of mobile phones.
While chaos encryption is inherently fast and secure, it does require floating
point arithmetic and this barred it from mobile applications until Focus devised
a miniature chaotic signal emulator. It is the only chaos theory encryption
package applicable to mobile phones."
Focus relies on a combination of patent, trade secret, copyright and trademark
laws, software licenses, nondisclosure agreement and technical measures to
protect proprietary technology.
Global Assets and Services, Inc. intends to seek North American Industry
Partners to market the software. No licenses for software had been negotiated
through March 31, 2004.
Epond Technologies
On August 25, 2003, Global Assets & Services entered into a License Agreement
with Koki Nagashima and Epond Inc., whereby Global Assets & Services will issue
750,000 shares of restricted stock to Koki Nagashima and Koki Nagashima will
received 57.1% of the license fees of the licensed patent in exchange for
exclusive rights for the licened patent and its pertained rights to produce and
sell product using the invention in all known nations and territories of the
world. The Technology licensed is described as follows:
THE TECHNOLOGY
The technology is a next-generation information distribution system, which uses
a PCMCIA card as its core component. This invention, by making use of a PCMCIA
card equipped with authentication codes within the agent's client PC and the
distribution server, primarily addresses the need to prevent the distribution of
illegal copies and violations of copyright laws. In addition to serving to help
resolve some of the gravest issues that must be overcome in industries in which
there is a steady increase of distribution techniques, this system may contrib-
ute to future development for both hardware and software makers. Furthermore, as
a next-generation distribution system, this system establishes a new technique
for the distribution method for clear moving images and sound data via broad-
band. It incorporates a unique system in which in the event that the distribu-
tion data does not reach its target due to interruption, only the striping can
be retransmitted. This system also allows for averaging of the server-processing
load.
5
BACKGROUND
Using a LAN distribution server, based on the fundamental concept of an
information system where it is possible to use low, mid, and high-speed
communication such as the Internet, there are already a number of streaming
distribution servers and client PC viewers (viewing software) compatible with
this streaming technology on the market. Such distribution software is based on
a high-speed LAN or broadband internet communication, however; it is still the
case that a communication speed of only several Kbps is generated, leading for
example, to the unresolved issue of servers that cannot transmit moving images
via ISDN and are only capable of transmitting sound.
For the configuration of distribution servers and client PC's on the market,
this new system provides exclusive PCMCIA cards for each contracting user to the
part where the client's PC agents are introduced to the distribution server.
This technology therefore enables only those PC's equipped with the requisite
card to access and read system information.
SUMMARY OF TECHNOLOGY DESIGN
Client PC agents connect to the distribution servers via LANs and receive
streaming data in an environment where no communication speed bottlenecks are
created. In other words, the distribution server sends a transmission to client
PCs via LAN and communication between the client PCs agent and the distribution
server agent is not influenced by existing systems. This makes it possible to
preload data without time constraints, and to reduce data volume by compressing
distribution data or to reduce color precision. In this way, the data received
in the distribution server agent of a client PC responds to the requests of the
client PC viewer and in the place of a distribution server the distribution
server agent of that PC conducts high-speed memory transfer.
With this basic configuration, the basis for this invention is a PCMCIA card
equipped with authentication codes in the part of the distribution server and
the agent's client PCs. By equipping a client PC agent with an individually
encrypted authentication code in each PCMCIA card, it is possible for
contracting users to safely and securely be authenticated when they connect to
the distribution server. Furthermore, at the time of receiving data, client PC
agents are able to store temporary memory files and stored files with the unique
authentication code of this encrypted PCMCIA card. As such, data stored by
making use of the PCMCIA card can only be accessed by using that same PCMCIA
card. This makes it possible to prevent data retrieved by any contracting user
to be redistributed to a non-contracting user, or any other form of unauthorized
copies to be made of such data. Although similar methods exist that make use of
lower-priced storage media than the PCMCIA card, they are easily mass-produced
and pose a significant problem in respect to piracy. This invention makes use of
a system employing a PCMCIA card and eliminates any concern over such matters
because PCMCIA cards are not easily reproduced.
In addition, with this system, it is possible to use notebook PCs and other
portable devices, making it an extremely effective system both for users and
makers of hardware and software.
This card will allow an improvement over existing distribution models with the
key features being:
6
Content data stored in client PC agents are processed for distribution as
follows:
1) Data is compressed in order to reduce the volume of distributed data.
2) Even when compressed, moving images require an extremely high amount of
total data. Prior to being transmitted, such a large volume of data is
stripped. As a result, in the event of a communication interruption,
all that needs to be retransmitted is the interrupted striping that did
not arrive at its distribution.
3) Data is processed to make it possible to be distributed, even if the
precision level of moving images and sound is reduced. As a result,
data size can be reduced to between 1/3 and 2/3.
Communication protocols usually can only be inefficiently communicated through
http protocols communicated between ordinary web servers and browsers, resulting
in a significant server load. As such, protocols unique between client PC agents
and distribution server agents are used.
1) As long as there are no interruptions to transmission, a datagram
distribution is used in order to allow for unilateral transmission.
2) In order to reduce server load when a large number of clients are being
simultaneously serviced, a state-full protocol is used.
3) FTP is also used in cases where for security reasons special protocols
are prohibited on the client side.
Content data size is compressed and after being distributed to the client's
distribution server agent making use of the high-speed protocols of this system,
the compressed data of 1) mentioned above is extracted and stored in temporary
files. The operating principles of this system are that prior to beginning to
display moving images on a client PC, the distribution server agent receives
streaming data from the client PC agent of the server side.
Other unique characteristics of the system are that by placing a distribution
server agent within the client PC, it becomes possible to make a response both
as a broadcasting system and a distribution system.
Broadcasting model:
In instances when the time in which contents are to begin and end to be
displayed on the client PC is predetermined, and in instances when there is no
need for the content to remain on the client PC after being displayed. (This
system is sensitive to the need to protect copyrighted contents)
Distribution model:
After initiating display of contents on the client PC, it is possible for the
beginning and conclusion of the displaying to be temporarily interrupted or to
rewind such contents. By placing a server equipped with a client PC agent in
each of the target regions, it is possible to share the load. By establishing
load sharing severs in a single starting point, it is possible to average the
processing load of multiple servers equipped with client PC agents.
7
The company intends to promote and distribute this technology in the United
States.
The market for licensed technology from abroad is intensely competitive, both
from U.S. technology and other foreign technology many of which all
well-established in thier respctive markets and we expect competition to
increase in the future. The company believes that the principal competitive
factors affecting the market for information security include security
effectiveness, manageability, technical features, performance, ease of use,
price, scope of product offerings, professional services capabilities,
distribution relationships and customer service and support. The company cannot
guarantee that it will compete successfully to market against current and
potential competitors, especially those with greater financial resources or
brand name recognition.
Teaming Agreement
On July 23, 2001 Global Assets & Services signed a teaming agreement with
Geosystems Inc. to evaluate and market encryption software based on the C4S and
C4K technology to the government and commercial market.
On October 25, 2002, Global Assets & Services entered into a Contract Agreement
with GeoSystems, Inc., whereby GEO would provide to Global application
development, sale and distribution services, on a 5 year exclusive basis, for C4
encryption products under Global's license, for Federal Goverment and commercial
sectors. Global will provide either $500,000 or 400,000 shares of its restricted
common stock to capitalize the effort.
On February 3, 2003, the Contract Agreement with Geosystems was assigned to the
Cybrix Group, Inc. The Cybrix Group, Inc. and shareholders are the same as
Geosystems, Inc.
Cybrix is a privately held company that has a senior management team with
extensive experience in Government technology fields and sales to the
government. This expertise provides the ability to introduce the software for
testing to the appropriate Governmental agencies. Contacts with several Fortune
100 companies within the telecommunications industry have already been
established through other ongoing commercial projects. These relationships may
be instrumental in the rapid introduction of this software into the personal
communications systems market.
The C4S/C4K software suite may provide the commercial cellular and Internet
industries the ability to outfit end-users with a more secure connectivity
across the Internet and the airwaves. Management believes that the C4 software
suite is a far more advanced technology than existing known solutions, and has
already been successfully tested on e-mail applications, wireless text
messaging, hand held devices, and on streaming video transmissions that exceed
market expected speeds for encryption. The U.S is mainly utilizing 128-bit
encryption schemes. The C4 suite offers users a selectable 8-bit to infinity
encryption scheme. The scalability of encryption level may allow the C4 software
suite to be a possible solution set targeted at the information transmission and
storage arena.
8
Global issued shares as follows:
1. Issue 200,000 S-8 shares of common stock to Koki Nagashima for consulting
services for the encryption software and other related consulting
services.
2. Issue 1,750,000 shares of restricted common stock to Koki Nagashima for
consulting and acquisition services pertaining to TOMIGEL and JUNON System.
3. Issue 300,000 shares of restricted common stock to Mitsunobu Amazaki for
providing consulting and acquisition services for encryption software.
4. Issue 90,000 S-8 shares to Dr. Shigetomi Komatsu for consulting services
pertaining to TOMIGEL and JUNON System.
The Company has signed a License for the North American Marketing rights
for the following patented products from Japan.
PRODUCT DESCRIPTION
Tomigel is an inorganic soil-hardening agent that has been developed in order to
harden any kind of soil from volcanic ash and sea sand to industrial waste.
Tomigel, with its excellent chemical distinction that does not restrict any
aggregate composition, can be utilized to solidify various on the spot soil
types without the use of gravel or sand required in the mixing of concrete. In
addition, the substances hardened by the addition of Tomigel display increased
integrity and strength over typical concrete mixtures.
Tomigel can also be used to safely and effectively neutralize and solidify
industrial waste and other environmentally detrimental substances. Sludge,
incinerated ash, and other forms of industrial and environmental waste can be
contained and deactivated with Tomigel.
Tomigel with its variety of uses both commercially and environmentally and its
attributes that add strength and durability to a variety of soil types, is a
revolutionary material that will prove to benefit industry with decreased cost
and an increased quality of product. Tomigel will also benefit the environment
by containing harmful substances.
9
There are two types of Tomigel: Tomigel-3 and Tomigel-5.
A. Tomigel - 3 (For sludge and industrial wastes) Tomigel - 3 has been
developed for solidifying and closing in sludge of high water content,
incinerated ashes, and harmful materials such as P C B, Cyanide, Cadmium,
Lead, Arsenic, and also such heavy metals as Iron, Nickel, Copper, etc.
B. Tomigel - 5 (For General Construction) Tomigel - 5 has been developed for
stabilizing roadbed, sub-base, and paving road surface, using the soil on
the site spot as aggregate compositions. Tomigel - - 5 can also be used in
construction and as an additive in materials to increase their strength,
non-permeability, and durability.
PRODUCT DESCRIPTION
Junon System-
Junon System is a polystyrene(styrofoam) dissolving agent that quickly, safely,
and non-toxically dissolves polystyrene materials and turns them into a gel,
while maintaining the basic chemical composition of the polystyrene so it can be
recycled. The consolidation of the polystyrene material into a gel that is a
fraction of the size of the original material allows for a more efficient
removal and recycling of the material.
The Company license for Tomigel and Junon Systems provides that the Company
shares the license with ZYX International, Inc. (beneficially Saburo Oto, a
director and Secretary) and the licensees have to pay two thirds of all revenues
from license or sublicense to Japan ZYX Co. The license term is until November
27, 2014.
License Rights for Epond
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In August 2003, the Company entered into a License Agreement with Koki
Nagashima and Epond, Inc. for the PCMCIA card based distribution system
software. The license consideration was 750,000 shares of restricted stock of
the Company, and the Agreement provides that the Company shall pay 57.1% of the
license fees to licensor. The term is until November 27, 2018 and is for
worldwide.
Subsidiaries
------------
All subsidiaries were inactive and were abandoned in 1998.
Services
- --------
None.
Competition
- -----------
The Company will be in competition with many companies of much greater
experience, financial resources and long established businesses. There is no
assurance that the Company will have any success in competition with other
businesses.
Employees and Consultants
- -------------------------
The Company presently has no salaried employees, and its Chairman of the
Board/President, Bertran Cutler and Secretary, Saburo Oto serve on an
as needed basis. These officers intend to devote only such time as necessary to
the business affairs of the Company.
10
Presently, none of the officers receive salaries; however, they are paid
consulting fees in stock, and they are reimbursed for their expenses incurred in
their services as officers. There is no provision for any additional bonuses or
benefits. The Company anticipates that in the near future it may enter into
employment agreements with its officers. Although Directors do not receive
compensation for their services they may be reimbursed for expenses incurred in
attending Board meetings.
Item 2. Description of Property
In 2003, the Company maintains its corporate records at 13575 58th Street North,
Suite 122, Clearwater, Florida 33760.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings, as of date of this
report.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders within period covered by
this report, through solicitation of proxies or otherwise.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
The outstanding shares of Global Assets and Services, Inc. are presently traded
on the OTC Bulletin Board under the symbol GAST.BB.
Common Stock Common Stock
2003 Bid High Bid Low
- ----------------------------------------------------------------
1st Quarter .48 .10
2nd Quarter .16 .05
3rd Quarter .09 .04
4th Quarter .06 .04
Common Stock Common Stock
2002 Bid High Bid Low
- ----------------------------------------------------------------
1st Quarter n/a n/a
2nd Quarter n/a n/a
3rd Quarter 1.00 .05
4th Quarter .37 .06
Common Stock Common Stock
2001 Bid High Bid Low
- ----------------------------------------------------------------
1st Quarter n/a n/a
2nd Quarter n/a n/a
3rd Quarter n/a n/a
4th Quarter n/a n/a
11
The Company's shares trade over the counter on the OTC Bulletin Board Quotations
represent only prices between dealers and do not include retail markups,
markdowns or commissions and accordingly, may not represent actual transactions.
The Company estimates that as of December 31, 2003, there are approximately 273
stockholders of record of the Company's shares.
No dividends have been declared or paid by the Company and the Company presently
intends to retain all future earnings, if any, to finance the expansion and
development of its business.
Item 6. Management's Discussion and Analysis or Plan of Operation
Financial Condition
- -------------------
During fiscal year 2003, the Company continued to be a development stage entity
with no sales and revenues. The company had no capital for operations and had
minimal business operations.
Financial Condition and Changes in Financial Condition
- ------------------------------------------------------
Liquidity and Capital Assets.
- ----------------------------
The Company's primary source of liquidity since inception has been from
funds raised during its initial capitalization. The company has no sources of
capital except to use its stock for private placements. The company will be
reliant upon loans from officers for any cash needs. No loan commitments have
been made by anyone.
The Company remains in the development stage and, since inception, has
experienced significant liquidity problems and has no significant capital
resources now and has stockholder's deficit of ($3,097,788) at December 31,
2003. The Company has no current assets and other assets consisting only of
intangible licenses at December 31, 2003.
The Company is unable to carry out any plan of business without funding.
The Company cannot predict to what extent its current lack of liquidity and
capital resources will impair the business or whether it will incur further
operating losses through business entity which the Company may eventually
acquire. There is no assurance that the Company can continue as a going concern
without substantial funding, for which there is no source.
The Company estimates it will require $25,000 to $30,000 to cover
legal, accounting, transfer and miscellaneous costs of being a reporting company
in the next fiscal year. The Company will have a cash shortfall for current
annual costs of at least $25,000 to $30,000, for which it has no source except
shareholder loans or contributions, none of which have been committed.
12
Results of Operations 2003 Compared to 2002
- -------------------------------------------
Business operations were minimal and no revenues were generated in 2003 or
2002. The Company at year end had minimal cash. The Company needed cash or loans
from any sources, for any significant business operations.
During the fiscal year ended December 31, 2003, the Company incurred
general and administrative expenses of $746,134 compared to $2,103,229 in
expenses in 2002. The net loss was ($746,134) in 2003 compared to ($2,103,229)
in 2002. Loss per share was ($.02) in 2003 and ($.12) in 2002.
The largest factors in expenses for the Company were consultant fees:
$265,500 in 2003 versus $1,089,333 in 2002 and officer/director fees of $435,000
in 2003 versus $974,500 in 2002
Evaluation of Internal and Disclosure Controls
- ----------------------------------------------
The management of the company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
most recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. Lack of its existing
capital may be a sufficient impediment to prevent it from accomplishing the goal
of carying out the business plan as it attempts its business plan, the Company's
needs for additional financing are likely to increase substantially. The Company
will need to raise additional funds to conduct any business activities in the
next twelve months.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
13
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
The Company has no plans for any research and development in the next
twelve months. The Company has no plans at this time for purchases or sales of
fixed assets which would occur in the next twelve months.
The Company has no expectation or anticipation of significant changes
in number of employees in the next twelve months, however, if it achieves a
business acquisition, it may acquire or add employees of an unknown number in
the next twelve months.
The Company's auditor has issued a "going concern" qualification as
part of his opinion in the Audit Report.
There is substantial doubt about the ability of the Company to continue as a
"going concern." The Company has no developed business, no capital, debt in
excess of $52,970, all of which is current, minimal cash, no assets, and no
capital commitments. The company has negotiated a licenses for marketing certain
technoogies from Japan, but has not yet achieved any revenues therefrom. The
effects of such conditions could easily be to cause the Company's bankruptcy.
The Company has incurred significant losses from operations for the year ended
December 31, 2002 totalling $746,134, and such losses are expected to continue.
In addition, the company has a $52,650 (approximately) working capital deficit
for the year ended December 31, 2003. The foregoing raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
include seeking additional capital and/or debt financing or the possible sale of
the Company. There is no guarantee that additional capital and/or debt financing
will be available when and to the extent required, or that if available, it will
be on terms acceptable to the Company. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
14
The Company has received an opinion from its independent auditors containing an
explanatory paragraph that describes such auditors' uncertainty as to the
Company's ability to continue as a going concern due to the Company's negative
cash flow. As of the date the independent auditors rendered this opinion, the
Company did not have access to sufficient committed capital to meet the
Company's projected operating needs for at least the next twelve months. If the
Company does not achieve positive operating results within the next few months,
then it will require additional financing. If positive operating results are not
achieved in the short term, then the Company intends to take measures to reduce
expenditures so as to minimize its requirements for additional financing, which
financing may not be available on terms acceptable to the Company, if at all.
Such measures may include reduction of the Company's cost of operations and
restructuring employee compensation packages. There can be no assurance that the
Company will be able to generate internally or raise sufficient funds to
continue the Company's operations, or that the Company's independent auditors
will not issue another opinion with a going concern qualification. The Company's
consolidated financial statements do not include any adjustments to reflect the
possible future affects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the Company's
possible inability to continue its operations.
Item 7. Financial Statements
Attached hereto and filed as part of this Form 10-KSB are the financial
statements required by Regulation SB. Please refer to pages F-1 through F-8.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
In connection with audit of the two most recent fiscal years and through the
date of dismissed of the accountants, no disagreements exist with any former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the satisfaction of the former accountant would have caused them to
make reference in connection with his report to the subject of the
disagreement(s).
Item 8A. Control and Procedures
The management of the company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
most recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.
15
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a).
The directors and executive officers of the Company as of December 31, 2002, are
as follows:
Name Age Position Held Tenure
---- --- ------------- ------
Bertram Cutler 77 President & Director Annual
Frances McCrimmon 56 Director Annual
Saburo Oto 54 Director & Secretary Annual
BERTRAM E. CUTLER, 77, President. Mr. Cutler devotes as much time as
necessary to the business of the Company and assists Mr. Oto in the day to
day operations of the Company, ongoing negotiations with regard to proposed
mergers and other management matters. Mr. Cutler is a licensed insurance agent
and from 1985 to 1996, served as President of C.D.R.I., Inc., a firm
specializing in marketing programs of the securities and insurance industries.
Previously, Mr. Cutler was co-founder and a consultant to Career Development
Corporation, an executive search firm with offices in Atlanta and Washington,
D.C. (1972-1985). From 1991 to 2000, he was Secretary and a Director of
Strategic Ventures, Inc.
Frances McCrimmon, 56, was appointed as a Director of Global Assets and
Services, Inc. on September 13, 2002. Mrs. McCrimmon, a recently retired
elementary school principal with 30 years experience with the Pasco County
School System, resides in Wesley Chapel, FL. Mrs. McCrimmon attended the
University of South Florida in Tampa, FL and earned a Bachelor's Degree in 1972
for Elementary Education and Exceptional Student Education; a Master's Degree in
1986 in Elementary Education; and a Master's Degree in Educational Leadership in
1992. Mrs. McCrimmon is currently employed as the lead teacher at the Academy at
the Farm, a newly established charter school located in Dade City, FL. During
Mrs. McCrimmon's tenure in Pasco County, she recruited and hired more than 400
employees, conducted staff development activities in Facilitative Leadership,
Myers-Briggs Personality Profiles, Clinical Education, and worked with the
Florida State Department of Education to develop curriculum for Exceptional
Education students.
Saburo (Steve) Oto is a former audit partner at Deloitte & Touche, an
international accounting and consulting firm. Before he joined in 1994, as the
president and CEO, in a privately-owned investment holding firm in Florida( a
subsidiary of a Tokyo-Japan based company), he was the partner in charge of an
international practice group of Delloite & Touche, primarily serving the major
Japanese-owned businesses in Southern California with over 140 bilingual
professionals. In 1998, he started his own consulting business. He holds a
Finance degree from Brigham Young University and did post-graduate work at
University of California, Los Angeles. In 2001, he joined the Company as one of
the Company's directors and major shareholders.
None of the above individuals have a criminal history or have had any adverse
securities actions taken against them.
16
The directors named above will serve until the next annual meeting of
the Company's stockholders. Thereafter, directors will be elected for one-year
terms at the annual stockholders' meeting. Officers will hold their positions at
the pleasure of the board of directors, absent any employment agreement, of
which none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.
The directors and officers of the Company will devote such time to the Company's
affairs on an "as needed" basis, but less than 20 hours per month. As a result,
the actual amount of time which they will devote to the Company's affairs is
unknown and is likely to vary substantially from month to month.
Item 10. Executive Compensation.
The Company does not have any employee incentive stock option plans.
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
Name and Year Consulting Bonus Other Annual Restricted Securities Long Term All Other
Principal Fees ($) or ($) Compensation ($) Stock Underlying Compensation Compensation
Position Salary Award(s)($) Options/SARs Option
- -------- ---- -------- ------- ---------------- ----------- ------------ ------ -------------
Thomas
McCrimmon,
President, 2001 0 0 0 0 (1) 0 0 0
Director 2002 0 0 0 3,000,000 0 0 0
(Resigned) 2003 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
Bertram 2003 0 0 0 1,500,000(3) 0 0 0
Cutler, 2002 0 0 0 1,800,000(2) 0 0 0
President, 2001 0 0 0 400,000 0 0 0
Director
========= ==== ========= ======== ================ =========== ============= ======= =============
Steve Oto, 2003 0 0 0 1,000,000(2)(3) 0 0 0
Secretary, 2002 0 0 0 500,000 0 0 0
Director 2001 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
Officers 2003 0 0 0 2,500,000(2)(3) 0 0 0
as a Group 2002 0 0 0 5,300,000 0 0 0
2001 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
17
(1) As of August 3, 2002 Thomas L. McCrimmon resigned as Director and President
of the Company. As of August 12, 2002, Mr. Bertram Cutler was appointed
President and Mr. Saburo Oto was appointed Director of the Company.
(2) Issued in lieu of salary.
(3) Includes 300,000 shares to Vonnie Oto.
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
Cash Compensation Security Grants
Name Annual Meeting Consulting Number Number of
Retainer Fees ($) Fees/Other of Securities
Fees ($) Fees ($) Restricted Underlying
Shares (#) Options/SARs(#)
- ------------------------------ ---------- ---------------- --------------- ------------------------------ ---------------
A. Saburo Oto 2003 0 0 0 0 0
2002 0 0 0 0 0
2001 0 0 0 0 0
B. Thomas McCrimmon (resigned 2000) 2003 0 0 0 0 0
2002 0 0 0 0 0
2001 0 0 0 0 0
C. Bertram Cutler 2003 0 0 0 0 0
2002 0 0 0 0 0
2001 0 0 0 0 0
D. Frances McCrimmon 2003 0 0 0 0 0
2002 0 0 0 0 0
2001 0 0 0 500,000 0
E. Directors as a Group 2003 0 0 0 0 0
2002 0 0 0 500,000 0
2001 0 0 0 0 0
============================== ========= ================ =============== ================== ============= =================
18
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR
value (None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
Option/SAR Grants Table
Name Number of Securities % of Total Exercise Expiration
Underlying Options/SARs or Price Date
Options/SARs Granted to Employees ($/Sh)
Granted (#) in Fiscal Year
- -------------------------------------------------------------------------------------------------------------------
None
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR value
Name Shares Value Number of Securities Value of Unexercised
Acquired Realized Underlying In the Money
on ($) Unexercised Options/SARs at FY-
Exercise Options/SARs at FY- End ($) Exercisable/
(#) End (#) Exercisable/ Unexercisable
Unexercisable
- ---------------------------------------------------------------------------------------------------------------------
None
Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
The following table sets forth information, as of March 31, 2004, with respect
to the beneficial ownership of the Company's common stock (or Preferred
Convertible Stock which would represent 5% or more of the Company's common
stock) by each person known by the Company to be the beneficial owner of more
than five percent of the outstanding common stock, and by current officers and
directors of the Company. There were 31,497,767 shares issued and outstanding at
March 31, 2004.
19
a.) Officers and Directors
Stock Title Name and Address Amount of Beneficial Percentage
of Class of Beneficial Owner Ownership of Class
- -------- ------------------- --------- --------
Common Bertram E. Cutler (2)(3) 2,586,465 8.2%
President/Director
3816 W. Linebaugh, Suite 200
Tampa, FL 33624
Common Asia Glove, Inc. 5,430,000 17.2%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
(Beneficial owners:
Chiharu Nagashima
Sayaka Nagaishima
Koki Nagashima
Shingo Nagashima
Kengo Nagashima)
Frances McCrimmon (2) 4,888,936 15.5%
3816 W. Linebaugh Ave., (includes 1,345,200
Tampa, FL 33624 shares owned by
husband, Thomas
McCrimmon)
Common Keystone Assets & Services, Inc. 5,000,000 15.8%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
(Benefical Owner-Dane Chapman)
Common Saburo Oto (2)(3)(1) 2,566,665 8.1%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
All Officers and 10,042,066 31.8%
Directors as a Group
(3 Persons)
20
(1) Includes 466,665 shares owned by Christine Oto and 700,000 owned by Vonnie
K. Oto of which Steve Oto disclaims beneficial ownership.
(2) Director
(3) Officer
(4) Includes 2,930,000 shares owned by Asia Glove, Inc. of which Koki Nagashima
is a controlling person and 2,700,000 owned personally by Koki Nagashima.
Item 12. Certain Relationships and Related Transactions
In February 2003, the Company issued shares to the following person who are
officers, directors, or 10% or greater shareholders for the consideration
listed.
500,000 shares of common stock issued to Saburo Oto (officer and director) for
management services rendered, valued at $2,500.
500,000 shares of common stock issued to Bertram Cutler (officer and director)
for management services rendered valued at $2,500.
500,000 shares of common stock issued to Keystone Assets & Services, Inc. (10%+
shareholder) for management services rendered valued at $2,500.
500,000 shares of common stock issued to Matthew McCrimmon (son of Frances
McCrimmon) for management services rendered valued at $2,500.
500,000 shares of common stock issued to Thomas McCrimmon, IV (son of Frances
McCrimmon) for management services rendered valued at $2,500.
In March 2003, the Company issued shares to related parties (certain of
whom became affiliates by virtue of the issuance) as follows:
2,000,000 shares of common stock to Koki Nagashima (10%+ shareholder) for the
Epond/Anti-Fire Product license.
350,000 shares of common stock to Dr. Shigetomi Komatsu for the Epond product
license.
100,000 shares of common stock to Yashuhiro Hagiwara for the Epond product
license.
In May 2003, the Company issued shares as follows:
1,000,000 shares of common restricted stock issued to Bertram Cutler (officer
and director) for management services.
300,000 shares of common restricted stock issued to Vonnie K. Oto (related to
Saburo Oto, officer & director) for management services.
200,000 shares of common restricted stock isued to Saburo Oto (officer and
director) for management services.
150,000 shares of common restricted stock isued to Thomas McCrimmon, IV (son of
Frances McCrimmon) for management services.
21
150,000 shares of common restricted stock isued to Matthew McCrimmon Son of
Frances McCrimmon) for management services.
The Company license for Tomigel and Junon Systems provides that the Company
shares the license with ZYX International, Inc. (beneficially Saburo Oto, a
director and Secretary) and the licensees have to pay two thirds of all revenues
from license or sublicense to Japan ZYX Co. The license term is until November
27, 2014.
In August 2003, the Company entered into a License Agreement with Koki
Nagashima and Epond, Inc. for the PCMCIA card based distribution system
software. The license consideration was 750,000 shares of restricted stock of
the Company, and the Agreement provides that the Company shall pay 57.1% of the
license fees to licensor. The term is until November 27, 2018 and is for
worldwide.
Part IV
Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following exhibits and financial statement schedules are filed as
exhibits to this Report:
22
1. Financial Statements of the Registrant are included under Item 8 hereof as
Pages F-1 through F-8.
2. Financial Statement Schedules - None
3. Exhibits and Reports on Form 8-K
Exhibit # Description Location/Page Number
- --------- ----------------------------------- -----------------------------------
3.1 Articles of Incorporation Exhibit to Registration
Statement filed November
14, 1991 by Registrant on Form S-18
3.2 Bylaws of Registrant Exhibit to Registration
Statement filed November
14, 1991 by Registrant on Form S-18
10.1 Articles of Amendment to Articles Exhibit listed under hardship exemption
of Incorporation of Art Music as provided in Rule 202 of Regulation
& Entertainment, Inc. and Cert. of S-T. Hardship Exemption grant date:
Designation, Preferences, Rights and 5/27/97
Limitation of Classes C, E, F, G, H, I
Convertible Preferred Stock
10.2 Articles of Incorporation of Art Music Exhibit listed under hardship exemption
& Entertainment with attachments as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.3 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Chatham International, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
10.4 Articles of Incorporation of Cornerstone Exhibit listed under hardship exemption
Capital, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.5 Articles of Incorporation of International Exhibit listed under hardship exemption
Jazz Hall of Fame Production Co., Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
23
10.6 Articles of Incorporation of Exhibit listed under hardship
exemption as provided in Rule 202
Octopus Entertainment, Inc. of Regulation S-T. Hardship
Exemption grant date: 5/27/97
10.7 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Octopus Entertainment, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
10.8 Articles of Incorporation of Marin Exhibit listed under hardship exemption
Movies, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.9 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Marin Movies, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.10 Articles of Incorporation of Classical Exhibit listed under hardship exemption
Music Collection, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.11 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Classical Music as provided in Rule 202 of Regulation
Collection, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.12 Articles of Incorporation of Spellbinder Exhibit listed under hardship exemption
Productions, Inc. and Articles of as provided in Rule 202 of Regulation
Amendment to Articles of Incorporation S-T. Hardship Exemption grant date:
5/27/97
10.13 Bylaws of Art Music & Exhibit listed under hardship exemption
Entertainment, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.14 Certificate of Name Change Exhibit listed under hardship exemption
as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.15 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Chatham International, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
23
10.16 Agreement and Plan of Reorganization Exhibit listed under hardship exemption
of AM&E, Inc. and IJHFPC as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.17 License Agreement for PCMCIA Based Distribution
System
10.18 License Agreement for Tomigel & Junon Systems
31 Sarbanes-Oxley Certification
32 Sarbanes-Oxley Certification
(b) Reports on Form 8-K. Reports on Form 8-K for the twelve month period ended
December 31, 2003.
8-K filed 10/23/03
(c) Proxy Statements. There were no proxy statements or annual reports sent to
stockholders during the period covered herein.
Item 14. Principal Accountant Fees and Services
General. Michael Johnson & Co., LLC, CPAs ("MJC") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services is compatible with maintaining MJC's
independence.
Audit Fees. MJC billed the Company $2,000 for the following
professional services: audit of the annual financial statement of the Company
for the fiscal year ended December 31, 2002. MJC billed the Company $3,000 for
the 2003 audit.
There were no audit related fees in 2002 or 2003. There were no tax
fees or other fees in 2002 or 2003.
The Company's Board acts as the audit committee and had no
"pre-approval policies and procedures" in effect for the auditors' engagement
for the audit year 2002 and 2003.
All audit work was performed by the auditors' full time employees.
24
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant had duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized, in the city of Tampa,
State of Florida on this 6th day of May, 2004.
GLOBAL ASSETS & SERVICES, INC.
By: /s/ Bertram Cutler
----------------------------------
Bertram Cutler, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ Bertram Cutler President/Director August 6, 2004
- -------------------- & Chief Financial Officer ----------------
Bertram Cutler
Directors:
/s/ Saburo Oto
- --------------
Saburo Oto
/s/Bertram Cutler
- -----------------
Bertram Cutler
/s/Frances McCrimmon
- ---------------------
Frances McCrimmon
25
GLOBAL ASSETS AND SERVICES, INC.
(RESTATED)
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Financial Statements
December 31, 2003
Michael Johnson & Co., LLC.
9175 Kenyon Ave., #100
Denver, CO 80237
Phone: 303-796-0099
Fax: 303-796-0137
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Global Assets and Services, Inc.
Clearwater, FL
We have audited the accompanying balance sheets of Global Assets and Services,
Inc., (Formerly Art, Music and Entertainment, Inc.) (a development stage
company), as of December 31, 2003 and 2002, and the related statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 2003 and 2002 and for the period from May 25, 1988 (inception) to December
31, 2003. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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 misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global Assets and Services,
Inc., (a development stage company) as of December 31, 2003 and 2002 and the
results of their operations and their cash flows for the years ended December
31, 2003 and 2002, and the period May 25, 1988 (inception) to December 31, 2003,
in conformity with accounting principles generally accepted in the United
States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the Note 6 to the
financial statements the Company is in the development stage, and will require
funds from profitable operations, from borrowings, or from sale of equity
securities to execute its business plan. Management's plans in regard to these
matters are also described in Note 6. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from this uncertainty.
Michael Johnson & Co., LLC
Denver, Colorado
April 12, 2004
August 3, 2004
F-1
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Balance Sheets
December 31,
(Restated)
2003 2002
--------------- ---------------
ASSETS;
Current Assets:
Cash $ 332 $ 1,365
--------------- ---------------
Total Current Assets 332 1,365
--------------- ---------------
TOTAL ASSETS $ 332 $ 1,365
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable and Accrued Liabilities $ 21,795 $ 7,869
Notes Payable 31,175 -
--------------- ---------------
Total Current Liabilities 52,970 7,869
--------------- ---------------
Stockholders Equity:
Common stock, $.001 par value, 100,000,000 shares
authorized, 31,497,767 shares issued and outstanding 31,497 24,192
in 2003, 24,192,767 shares outstanding in 2002
Additional Paid-In Capital 3,013,653 2,320,958
Deficit accumulated during the
development stage (3,097,788) (2,351,654)
--------------- ---------------
Total Stockholders Equity (Deficit) (52,638) (6,504)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 332 $ 1,365
=============== ===============
The accompanying notes are an integral part of these financial statements.
F-2
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Statements of Operations
May 25,
1988
Year Ended (Inception) to
December 31, December 31,
2003 2002 2003
----------------- ----------------- -----------------
Revenue:
Revenue $ - $ - $ 846,545
(Less) Cost of Sales - - (336,524)
----------- ------------ ------------
Total Income - - 510,021
----------- ------------ ------------
Operating Expenses
Doubtful Accounts - - 34,469
Consultants Fees 265,600 1,089,333 1,697,112
Legal and Accounting Fees 20,125 18,391 117,208
Advertising - - 14,542
Directors and Officers Fees 435,000 974,500 1,409,500
Interest Expense - - 8,577
Telephone 2,596 1,574 30,412
Travel 11,909 7,500 19,409
Rent 5,498 4,426 52,594
Other General Expenses 5,406 7,505 228,007
----------- ------------ ------------
Total Expenses 746,134 2,103,229 3,611,830
----------- ------------ ------------
Net Loss From Operations (746,134) (2,103,229) (3,101,809)
----------- ------------ ------------
Other Income
Interest Income - - 4,021
---------- ------------ ------------
Net Loss $ (746,134) $ (2,103,229) $ (3,097,788)
========== ============ ============
Per Share Information:
Weighted average number
of common shares outstanding 31,497,767 17,374,017
---------- ------------
Net Gain (Loss) per common share $ (0.02) $ (0.12)
========== ============
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Stockholders' Equity (Deficit)
December 31, 2003
(Restated Statement)
Deficit
COMMON STOCKS Additional Accum. During Total
Paid-In Development Stockholders'
# of Shares Amount Capital Stage Equity (Deficit)
------------- ----------- -------------- -------------- --------------
Deficit
COMMON STOCKS Additional Accum. During Total
Paid-In Development Stockholders'
# of Shares Amount Capital Stage Equity (Deficit)
----------- ------ ------- ----- ----------------
Balance - December 31, 1997 4,397,767 4,397 204,566 (208,963) -
----------- -------- ---------- ----------- -----------
Balance - December 31, 1998 4,397,767 4,397 204,566 (208,963) -
----------- -------- ---------- ----------- -----------
Balance - December 31, 1999 4,397,767 4,397 204,566 (208,963) -
----------- -------- ---------- ----------- -----------
Balance - December 31, 2000 4,397,767 4,397 204,566 (208,963) -
----------- -------- ---------- ----------- -----------
Issuance of stock for services 12/11 3,400,000 3,400 - - 3,400
Loss for year - - - (39,462) (39,462)
----------- -------- ---------- ----------- -----------
Balance - December 31, 2001 7,797,767 7,797 204,566 (248,425) (36,062)
----------- -------- ---------- ----------- -----------
Issuance of stock for cash 3/28 20,000 20 1,980 - 2,000
Issuance of stock for services 3/28 6,800,000 6,800 673,200 - 680,000
Issuance of stock for services 4/2 1,000,000 1,000 99,000 - 100,000
Issuance of stock for services 6/18 500,000 500 49,500 - 50,000
Issuance of stock for services 7/12 710,000 710 70,327 - 71,037
Issuance of stock for Asset Acquisition 8/12 1,750,000 1,750 654,500 - 656,250
Issuance of stock for services 8/12 590,000 590 58,410 - 59,000
Issuance of stock for cash 9/18 80,000 80 19,920 - 20,000
Issuance of stock for services 10/15 4,945,000 4,945 489,555 - 494,500
Loss for year - - - (2,103,229) (2,103,229)
----------- -------- ---------- ----------- -----------
Balance - December 31, 2002 24,192,767 24,192 2,320,958 (2,351,654) (6,504)
----------- -------- ---------- ----------- -----------
Issuance of stock for services 1/15 2,775,000 2,775 252,225 - 255,000
Issuance of stock for services 3/11 2,630,000 2,630 252,370 - 255,000
Issuance of stock for services 4/20 100,000 100 9,900 - 10,000
Issuance of stock for services 5/28 1,800,000 1,800 178,200 - 180,000
Loss for year - - - (746,134) (746,134)
----------- -------- ---------- ----------- -----------
Balance - December 31, 2003 31,497,767 $ 31,497 $3,013,653 $(3,097,788) $ (52,638)
=========== ======== ========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Statements of Cash Flow
Indirect Method
May 25, 1988
Year Ended (Inception) to
December 31, December 31,
2003 2002 2003
--------------- --------------- -----------------
Cash Flows from Operating Activities:
Net Loss $ (746,134) $ (2,103,229) $ (3,097,788)
Issuance of common stock for services 700,000 1,454,537 2,157,937
Adjustments to reconcile net loss to cash used in
operating activities:
Increase (decrease) in accounts payable 13,926 (28,293) 21,795
--------- ---------- ------------
Net Cash Used by Operating Activities (32,208) (676,985) (918,056)
--------- ---------- ------------
Cash Flows from Financing Activities:
Proceeds from Notes Payble 31,175 - 31,175
Issuance of common stock for Asset Acquisition - 656,250 656,250
Issuance of common stock - 20,000 230,963
--------- ---------- ------------
Net Cash Provided by Financing Activities 31,175 676,250 918,388
--------- ---------- ------------
Net Increase (Decrease) in Cash & Cash Equivalents (1,033) (735) 332
Beginning Cash & Cash Equivalents 1,365 2,100 -
--------- ---------- ------------
Ending Cash & Cash Equivalents $ 332 $ 1,365 $ 332
========= ========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest $ - $ - $8,577
========= ========== ============
Cash paid for Income Taxes $ - $ - $ -
========= ========== ============
NON-CASH TRANSACTIONS
Common stock issued in exchange for services $ 700,000 $1,454,537 $ 2,157,937
========= ==========
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL ASSETS AND SERVICES, INC.
(RESTATED)
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2003
Note 1 - Organization and Summary of Significant Accounting Policies:
Organization:
Art, Music and Entertainment, Inc. ("Company") (formerly Chatham International,
Inc.) was organized originally as Cornerstone Capital, Inc., under the laws of
the State of Florida as a corporation on May 25, 1988. On September 22, 1990 the
Company changed its name to Chatham International, Inc. On April 5, 1996 the
Board of Directors of the Company authorized the name of Company to be changed
from Chatham International, Inc. to Art, Music and Entertainment, Inc., in
connection with a merger, discussed elsewhere herein, with an entity of the same
name. Such change was filed with the Secretary of State of Florida on July 18,
1996. On July 24, 2001 the Board of Directors met in a special meeting to
authorize the name change to Global Assets and Services, Inc.
In December 2001 Global Assets & Services merged with SDE 3 Holdings, Inc.
Global Assets & Services is the surviving Corporation and all shares of stock
outstanding in SDE 3 Holdings, Inc. are retired concurrent with the merger.
Basis of Presentation - Development Stage Company:
The Company has not earned significant revenues from limited principal
operations. Accordingly, the Company" activities have been accounted for as
those of a "Development Stage Enterprise" as set forth in Financial Accounting
Standards Board Statement No. 7 ("SFAS 7"). Among the disclosures required by
SFAS 7 are that the Company's financial statements be identified as those of a
development stage company, and that the statements of operations, stockholders'
equity (deficit) and cash flows disclose activity since the date of the
Company's inception.
Cash and Cash Equivalents:
The Company considers all highly liquid debt instruments, purchased with an
original maturity of three months or less, to be cash equivalents.
Use of Estimates:
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
F-6
GLOBAL ASSETS AND SERVICES, INC.
(RESTATED)
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2003
Note 1 - Organization and Summary of Significant Accounting Policies (Cont):
Net Loss Per Share:
Net loss per share is based on the weighted average number of common shares and
common shares equivalents outstanding during the period.
Other Comprehensive Income:
The Company has no material components of other comprehensive income (loss), and
accordingly, net loss is equal to comprehensive loss in all periods.
Note 2 - Federal Income Taxes:
The Company has made no provision for income taxes because there has been no
income generated since 1997 for financial statements or tax purposes.
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS 109"). "Accounting for Income
Taxes", which requires a change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset and liability
method, deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax basis of existing assets and liabilities.
Deferred tax assets
Net operating loss carryforwards $ 3,097,788
Valuation allowance (3,097,788)
---------------
Net deferred tax assets $ 0
===============
At December 31, 2003, the Company had net operating loss carryforwards of
approximately $3,097,788 for federal income tax purposes. These carryforwards if
not utilized to offset taxable income will begin to expire in 2010.
F-7
GLOBAL ASSETS AND SERVICES, INC.
(RESTATED)
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2003
Note 3 - Capital Stock Transactions:
The authorized capital stock of the Company is 100,000,000 shares of common
stock at $.001 par value. During the period ended December 31, 2003, the Company
issued 7,000,000 shares of common stock for compensation for consulting fees and
for director's fees.
Note 4 - Segment Information:
Global Assets and Services, Inc. operates primarily in a single operating
segment, the asset management and capital raising business.
Note 5 - Subsequent Event:
On March 2, 2004, a promissory note was issued for $13,000 to Wealth
Preservation Stratgegies, Inc. with no interest for consulting fees to be
performed in 2004.
Note 6 - Going Concern:
The financial statements of the Company have been presented on the basis that
they are a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company'
current liabilities exceed current assets by $36,013 and the Company has an
accumulated deficit at December 31, 2003 of $3,018,163.
The future success of the Company is likely dependent on its ability to attain
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to attain future profitable
operations. There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
Note 7 - Restatement of Financials:
These financial statements have been restated to show additional shares of
common stock issued by the Board, however, the amended minutes were not received
by the audit firm.
F-8