SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended: December 31, 2002
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)
3816 W. Linebaugh Ave., Suite 200 Tampa, FL 33624
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(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code:(813) 964-1300
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.
State issuer's revenues for its most recent fiscal year. $0
Small Business Disclosure Format:
__X____ Yes _______ No
As of December 31, 2002, 24,192,767 shares of common stock and no shares of
preferred stock were outstanding. The aggregate market value of the 8,278,831
shares of Stock held by non-affiliates of Registrant was $1,324,612 based upon a
bid price of $.16 on December 31, 2002.
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 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 9
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 9
Item 6. Management's Discussion and Analysis or Plan of Operation 10
Item 7. Financial Statements 14
Item 8. Changes in and Disagreements With Accountants on Accounting 14
and Financial Disclosure
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 14
Item 10. Executive Compensation 16
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. Control and Procedures 24
SIGNATURES 25
Part I
Item 1. 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
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,
2
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
----------------
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.
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
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.
4
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 agreements for marketing the licensed
software had been negotiated through March 31, 2002.
The market for information security, including software products professional
services, training and managed security services are intensely competitive, 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.
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.
5
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.
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 will 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 has been assigned
to the Cybrix Group, Inc. The Cybrix Group, Inc. and shareholdersare the same
as Geosystems, Inc.
Geosystems 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.
6
Global has agreed to issue 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 Letter of Intent for the North American Marketing
rights for the following patented products from Japan. Final license terms have
not been worked out.
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.
7
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.
PROCESS 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.
Subsidiaries
------------
All subsidiaries were inactive and were abandoned or rescinded 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 paid 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.
Presently, none of the officers receive salaries, however, 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. The officers and directors
did not receive salaries during 200, 2001 and 2002.
Item 2. Properties.
In 2002, the Company maintained its corporate records at 3816 W. Linebaugh Ave.,
Suite 200 Tampa, FL 33624.
Item 3. Legal Proceedings.
The Company is not a party to any pending legal proceedings, as of date of this
report.
8
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 Registrant's Common Equity and Related Stockholder Matters.
The outstanding registered securities of Art Music & Entertainment, Inc. are not
now presently traded on any exchange nor on the OTC Bulletin Board nor the "Pink
Sheets."
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
The Company anticipates its shares will trade over the counter Quotations, if
made, 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, 2002, there are approximately
262 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.
9
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Financial Condition
- -------------------
During fiscal year 2002, the Company continued to be a development stage entity
with no sales and revenues. The company had no capital for operations and had
no 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 and sales. The company has no sources
of capital except to use its stock for private placements. The company will be
reliant upon loans from offices 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 ($366,906) at December 31, 2002.
The Company has no current assets and no other assets at December 31, 2002.
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 consummation of a business combination or
10
whether it will incur further operating losses through any 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.
Results of Operations 2002 Compared to 2001
- -------------------------------------------
Business operations were none and no revenues were generated in 2002 or
2001. The Company at year end had no cash. The Company needed cash or loans from
any sources, for any significant business operations.
During the fiscal year ended December 31, 2002, the Company incurred
general and administrative expenses of $39,462 compared to no such expenses in
2001. The net loss was ($39,462) in 2002 compared to no loss in 2001. Loss per
share was ($.01) in 2002 and none in 2001.
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.
11
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. In the event the
Company is able to complete a business combination during this period, lack of
its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of completing a business combination. There is no
assurance, however, that without funds it will ultimately allow registrant to
complete a business combination. Once a business combination is completed, 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.
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.
12
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 $7,869, all of which is current, no cash, no assets, and no capital
commitments. The company has negotiated a software license for marketing and has
marketing rights for Tomigel and has signed a letter of intent with regard to
the Software License. The effects of such conditions could easily be to cause
the Company's bankruptcy, except there are no assets to liquidate in Bankruptcy.
The Company has incurred significant losses from operations for the year ended
December 31, 2002, and such losses are expected to continue. In addition, the
company has a $6,504 working capital deficit for the year ended December 31,
2002. 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.
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.
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Item 7. Financial Statements and Supplemental Data.
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).
Part III
Item 9. Directors and Executive Officers of the Registrant and 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 76 President & Director
Frances McCrimmon 55 Director
Saburo Oto 53 Director
BERTRAM E. CUTLER, 76, Secretary. 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.
14
Frances McCrimmon, 55, 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. Mrs. McCrimmon has made presentations representing the Pasco
County School System at many national, state, and local conferences and
conventions.
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. He was one of the very first Japanese native audit partners for
the accounting firm. After successfully selling all assets of the investment
holding firm in 1998, he started his own consulting business.
During his consultancy activities, he served several positions as a member of
board of advisors of public-owned company.
In 2001, he has joined in Global Asset & Services, Inc. (an OTCBB company,
symbol "GAST"), as one of the Company's directors and major shareholders. He has
provided Global with tremendous international network and financial
management/experience.
He holds a Finance degree from Brigham Young University and did post-graduate
work at University of California, Los Angeles.
15
None of the above individuals have a criminal history or have had any adverse
securities actions taken against them.
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 recorded no compensation to the executive officers as a
group for services contributed to the Company in all capacities during the 2001
fiscal year. No one executive officer received, or has accrued for his benefit,
in excess of $100,000 for the year. No cash bonuses were or are to be paid to
such persons.
The Company does not have any employee incentive stock option plans.
There are no plans pursuant to which cash or non-cash compensation was
paid or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
16
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
Name and Year Consulting Bonus Other Annual Restricted Securities Long Term All Other
Principal Fees ($) or ($) Compensation ($) Stock Underlying Compensation Compensation
Position Salary Award(s)($) Options/SARs Option
-------- ---- -------- ------- ---------------- ----------- ------------ ------ -------------
Norman
Brander,
President 2000 0 0 0 0 0 0 0
(Resigned) 2001 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
Sheryl B.
Salvadore,
Secretary 2000 0 0 0 0 0 0 0
(Resigned) 2001 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
Thomas
McCrimmon,
President, 2000 0 0 0 0 0 0 0
Director 2001 0 0 0 0 0 0 0
(Resigned)
========= ==== ========= ======== ================ =========== ============= ======= =============
Bertram 2002 0 0 0 0 0 0 0
Cutler, 2001 0 0 0 400,000 0 0 0
President, 2000 0 0 0 0 0 0 0
Secretary
Director
========= ==== ========= ======== ================ =========== ============= ======= =============
Officers 2002 0 0 0 200,000 0 0 0
as a Group 2001 0 0 0 0 0 0 0
Secretary 2002 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
(1)As of August 3, 2002 Thomas L. McCrimmon resigned as Director and President
of the Company. As of August 12, 2002, Mr. Bertram Cutler was appointed
President and Mr. Saburo Oto was appointed Director of the Company.
17
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
Cash Compensation Security Grants
Name Annual Meeting Consulting Number Number of
Retainer Fees ($) Fees/Other of Securities
Fees ($) Fees ($) Shares Underlying
(#) Options/SARs(#)
- -------------------------------------------- ---------------- --------------- ------------------ ------------- ---------------
A. Saburo Oto 0 0 0 0 0
B. Thomas McCrimmon (resigned) 0 0 0 0 0
C. Bertram Cutler 0 0 0 0 0
D. Frances McCrimmon 0 0 0 0 0
D. Directors as a Group 0 0 0 0 0
============================================ ================ =============== ================== ============= =================
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)
No officer or director has received any other remuneration in the two
year period prior to the filing of this registration statement. There is no
current plan in existence, to pay or accrue compensation to its officers and
directors for services related to seeking business opportunities and completing
a merger or acquisition transaction. See "Certain Relationships and Related
Transactions." The Company has no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more such
programs in the future.
18
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 Management and Beneficial Owners.
The following table sets forth information, as of December 31, 2002, 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.
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) 2,320,000 9.6%
President/Director
3816 W. Linebaugh, Suite 200
Tampa, FL 33624
Common Asia Glove, Inc. 3,150,000 13%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
(Beneficial owners:
Chiharu Nagashima
Sayaka Nagaishima
Koki Nagashima
Shingo Nagashima
Kengo Nagashima)
Frances McCrimmon & (2) 4,988,936 20.6%
Thomas McCrimmon
3816 W. Linebaugh Ave.,
Tampa, FL 33624
20
Common Keystone Assets & Services, Inc. 4,500,000 18.6%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
(Benefical Owner-Dane Chapman)
Common Saburo Oto (2)(3)(1) 1,100,000 4.5%
3816 W. Linebaugh Ave.,
Tampa, FL 33624
All Officers and 7,908,936 32%
Directors as a Group
(2 Persons)
(1) Includes 500,000 shares owned by Christine Oto.
(2) Director
(3) Officer
Item 12. Certain Relationships and Related Transactions.
In 2002 the following CMR Associates was issued 2,300,000 shares for services in
reorganizing the Company and obtaining the software license/business from Japan
in December 2001.
CRM subsequently conveyed shares to its principal shareholders as follow in
December 2001.
Marvin Oto 900,000 shares
Saburo Oto 600,000
Christina Oto 800,000
Saburo Oto, is related to Marvin Oto and Christine Oto as their father.
Thomas Bojacizgiev received 100,000 shares for services rendered in
December 2001.
Bert Cutler received 400,000 shares for services in agreeing to serve on
the Board of the company in December 2001.
Thomas McCrimmon IV, (son of Thomas L. McCrimmon, former President and
Director)(200,000 shares) Matthew McCrimmon (100,000 shares) and Tina McCrimmon
(100,000 shares) were issued shares for services rendered in December 2001.
In 2002, total of 4,800,000 shares were issued to the Directors for services
rendered (Bertram Cutler-(1,800,000 shares, Frances McCrimmon-500,000 shares,
Saburo Oto-500,000 shares and Thomas McCrimmon-3,000,000 shares).
In 2002, the Company issued shares to the following persons who are officers and
directors or 10% greater shareholders:
Common Shares issued in 2002 Consideration
---------------------------- -------------
ASIA GLOVE 2,800,000 License agreement
Bertram Cutler 1,800,000 Consulting Services
Frances McCrimmon 500,000 Consulting Services
Keystone Assets 4,500,000 Consulting Services
Saburo Oto 500,000 Consulting Services
Thomas McCrimmon 3,000,000 Consulting Services
21
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:
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:
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
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
22
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
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
99.14 Sarbanes-Oxley Certification
23
10.17 Agreement and Plan of Reorganization of Exhibit listed under hardship exemption
AM&E, Inc. and Marin Movies, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.18 Agreement and Plan of Reorganization Exhibit listed under hardship exemption
of AM&E, Inc. and Classical Music as provided in Rule 202 of Regulation
Collection, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.19 Agreement and Plan of Reorganization Exhibit listed under hardship exemption
of AM&E, Inc. and Octopus as provided in Rule 202 of Regulation
Entertainment, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.20 Agreement and Plan of Reorganization Exhibit listed under hardship exemption
of AM&E, Inc. and Spellbinder as provided in Rule 202 of Regulation
Productions, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.21 Merger Agreement of Chatham Exhibit listed under hardship exemption
International, Inc. and Art Music as provided in Rule 202 of Regulation
& Entertainment, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.22 Articles of Amendment Exhibit in 8K filed January 17, 2002
changing name to Global
Assets & Services, Inc.
10.23 Software License Page __ attached hereto.
(b) Reports on Form 8-K. Reports on Form 8-K for the twelve month
period ended December 31, 2002.
8-K filed 12/03/2002
8-K filed 10/01/2002
8-K filed 8/21/2002
8-K12g3/A filed 5/21/2002
8-K filed 5/21/2002
8-K filed 5/01/2002
8-K filed 3/14/2002
8-K filed 1/18/2002
(c) Proxy Statements. There were no proxy statements or annual reports sent to
stockholders during the period covered herein.
Item 14. Control and Procedures
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.
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 27th day of November, 2001.
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 April 23, 2003
- -------------------- & Chief Financial Officer ----------------
Bertram Cutler
Directors:
/s/ Saburo Oto
--------------
Saburo Oto
/s/Bertram Cutler
-----------------
Bertram Cutler
/s/Frances McCrimmon
---------------------
Frances McCrimmon
25
CERTIFICATION PURSUANT TO SECTION
302 OF THE SARBANES OXLEY ACT
I, Bertram Cutler, certify that:
1. I have reviewed this annual report on Form 10-KSB of Global Assets &
Services,Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 23, 2003
/s/Bertram Cutler
-----------------------
Bertram Cutler, President
CERTIFICATION PURSUANT TO SECTION
302 OF THE SARBANES OXLEY ACT
I, Bertram Cutler, certify that:
1. I have reviewed this annual report on Form 10-KSB of Global Assets &
Services,Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 23, 2003
/s/Bertram Cutler
-----------------------
Bertram Cutler, Chief Financial Officer
FORM 10-KSB
INDEX OF FINANCIAL STATEMENTS
Pages
Auditors Report- Michael Johnson & CO F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Changes in Stockholders Deficit F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6 - F-8
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Financial Statements
December 31, 2002
MICHAEL JOHNSON & CO., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.s
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Global Assets and Services, Inc.
Tampa, Florida
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, 2002 and 2001, and the related statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 2002 and 2001 and for the period from May 25, 1988 (inception) to December
31, 2002. 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, 2002 and 2001 and the
results of their operations and their cash flows for the years ended December
31, 2002 and 2001, and the period May 25, 1988 (inception) to December 31, 2002,
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
March 17, 2003
/s/Michael Johnson & Co., LLC
F-1
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.)
(A Development Stage Company)
Balance Sheets
December 31,
2002 2001
---------------- -------------
ASSETS;
Current Assets:
Cash $ 1,365 $ 100
---------------- -------------
Total Current Assets 1,365 100
---------------- -------------
TOTAL ASSETS $ 1,365 $ 100
================ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities $ 7,869 $ 36,162
---------------- -------------
Total Current Liabilities 7,869 36,162
---------------- -------------
Stockholders Equity:
Common stock, $.001 par value, 100,000,000 shares
authorized, 24,192,767shares issued and outstanding 24,192 7,797
in 2002, 7,797,767 shares outstanding in 2001
Additional Paid-In Capital 2,320,958 204,566
Deficit accumulated during the
development stage (2,351,654) (248,425)
---------------- -------------
Total Stockholders Equity (6,504) (36,062)
---------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,365 $ 100
================ =============
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 Developement Stage Company)
Statements of Operations
May 25,
1988
Year Ended (Inception) to
December 31, December 31,
2002 2001 2002
---- ---- ----
Revenue:
Revenue $ - $- $ 846,545
(Less) Cost of Sales - - (336,524)
------------ --------- ------------
Total Income - - 510,021
Operating Expenses
Doubtful Accounts - - 34,469
Consultants Fees 1,089,333 3,400 1,431,512
Legal and Accounting Fees 18,391 36,062 97,083
Advertising - - 14,542
Directors and Officers Fees 974,500 - 974,500
Interest Expense - - 8,577
Telephone 1,574 - 27,816
Travel 7,500 7,500
Rent 4,426 - 47,096
Other General Expenses 7,505 - 222,601
------------ --------- ------------
Total Expenses 2,103,229 39,462 2,865,696
------------ --------- ------------
Net Loss From Operations (2,103,229) (39,462) (2,355,675)
------------ --------- ------------
Other Income
Interest Income - - 4,021
------------ --------- ------------
Net Loss $ (2,103,229) $ (39,462) $ (2,351,654)
============ ========= ============
Per Share Information:
Weighted average number
of common shares outstanding 17,374,017 4,397,767
------------ ---------
Net Gain (Loss) per common share $ (0.12) *
============ =========
* Less than $.01
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)
Deficit
PREFFERED STOCKS COMMON STOCKS Additional Accum. During Total
Paid-In Development Stockholders'
# of Shares Amount # of Shares Amount Capital Stage Equity
----------- ------ ----------- ------ ----------- ------------- -------------
Balance December 31, 1995 - - 3,575,268 $ 3,575 $ 87,810 $ (132,399) $ (41,014)
Issuance for Merger 693,221 55,556,100 66,533 67 (67) - 55,556,100
Reverse merger (486,754) (48,675,400) - - - - (48,675,400)
Deduction other assets - (6,763,122) - - - - (6,763,122)
Loss for year - - - - - (72,473) (72,473)
-------- ---------- ---------- ------ ---------- ---------- -----------
Balance - December 31, 1996 206,467 117,578 3,641,801 3,642 87,743 (204,872) 4,091
-------- ---------- ---------- ------ ---------- ---------- -----------
Preferred Stock to Common Stock (206,467) (117,578) 755,966 755 116,823 - -
-------- ---------- ---------- ------ ---------- ---------- -----------
Loss for year - - - - - (4,091) (4,091)
-------- ---------- ---------- ------ ---------- ---------- -----------
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)
======== ========== ========== ======== ========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL ASSETS & 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,
2002 2001 2002
---- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (2,103,229) $ (39,462) $ (2,351,654)
Issuance of common stock for services 1,454,537 3,400 1,457,937
Adjustments to reconcile net loss to cash used in
operating activities:
Increase (decrease) in accounts payable (28,293) 36,162 7,869
---------- ------- ------------
Net Cash Used by Operating Activities (676,985) 100 (885,848)
---------- ------- ------------
Cash Flows from Financing Activities:
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 676,250 - 887,213
---------- ------- ------------
Net Increase in Cash & Cash Equivalents (735) 100 1,365
Beginning Cash & Cash Equivalents 2,100 - -
---------- ------- ------------
Ending Cash & Cash Equivalents $ 1,365 $ 100 $ 1,365
========== ======= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest $ - $ - $-
========== ======= ============
Cash paid for Income Taxes $ - $ - $-
========== ======= ============
NON-CASH TRANSACTIONS
Common stock issued in exchange for services $2,406,537 $ 3,400 $ 1,457,937
========== ======= ============
The accompanying notes are an integral part of these financial statements.
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2002
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.
The art, music and entertainment industries in which the Company is operating
are highly volatile and competitive. Accordingly, the Company is exposed to
significant risk in competing against other entities, who have greater resources
and experience.
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.
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2002
Note 1 - Organization and Summary of Significant Accounting Policies (Cont):
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.
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 $ 705,496
Valuation allowance (705,496)
------------
Net deferred tax assets $ 0
============
At December 31, 2002, the Company had net operating loss carryforwards of
approximately $2,351,654 for federal income tax purposes. These carryforwards if
not utilized to offset taxable income will begin to expire in 2010.
GLOBAL ASSETS AND SERVICES, INC.
(Formerly Art, Music and Entertainment, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2002
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, 2002, the Company
issued 16,395,000 shares of common stock for compensation for consulting fees
and cash.
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 - Cancellation of Preferred Stock:
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.
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 $6,504 and the Company has an
accumulated deficit at December 31, 2002 of $2,351,654.
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 - Subsequent Event:
On February 14, 2003 the Board of Directors met to authorize the issuance of
2,775,000 shares of common stock for management and consulting services.