As Filed with the Securities and Exchange Commission on May 9, 2012 File No.333-
FORM S-1
SECURITIES AND EXCHANGE COMMISSION
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COURT DOCUMENT SERVICES, INC. | ||
(Exact name of registrant as specified in its charter) | ||
Florida | 7380 | 65-1170540 |
(State or jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
1913 South Florida Avenue Lakeland, Florida 33803 (888) 376-7897 Facsimile: (888) 801-1644 (Address and telephone number of principal executive offices)
Michael J. Daniels 1913 South Florida Avenue Lakeland, Florida 33803 (888) 376-7897 (Name, address and telephone number of agent for service) |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement of the earlier effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated file, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer.o | Accelerated filer. o |
Non-accelerated filer. o (Do not check if a smaller reporting company) | Smaller reporting company. þ |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | Amount to be registered1 | Proposed maximum offering price per unit | Proposed Maximum Aggregate Offering Price2 | Amount of Registration Fee |
Common Stock par value $0.01 | 586,066 | $0.10 | $58,606.60 | $6.72 |
Total | 586,066 |
| $58,606.60 | $6.72 |
1 Maximum 586,066 shares of common stock, with no minimum, relate to the Offering by twenty-nine (29) selling security holders. 2 Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.
COURT DOCUMENT SERVICES, INC.
The Securities Being Offered by Selling Security Holders of Court Document Services, Inc. Are Shares of Common Stock
Shares offered by Security Holders: 586,066
The selling security holders named in this prospectus are offering to sell 586,066 shares of Court Document Services, Inc.s (CDSIs) common stock through this prospectus and we deem them underwriters as that term is defined in Section 2(a)(11) of the Securities Act of 1933.
CDSIs common stock is presently not traded on any market or securities exchange. Accordingly, the sales price to the public is fixed at $0.10 per share for the duration of the offering or until the stock is listed on the OTCBB or other exchange then the selling security holders may sell at the prevailing market price or at privately negotiated prices. A trading market will be available if our stock becomes listed on a trading exchange.
Management has not made a decision to seek quotation on the OTCBB at this time and there is no guarantee that quotation will be sought. Until a decision to seek a quotation is made, selling security holders must sell their shares at the fixed price of $.10 per share. In the event management files an application with FINRA for a quotation and we are cleared by FINRA for quotation, then the selling security holders may use any one or more of the following methods when selling shares: (i) ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; (ii) block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (iii) purchases by a broker-dealer as principal and resale by the broker-dealer for its account; (iv) an exchange distribution in accordance with the rules of the applicable exchange; (v) privately negotiated transactions; (vi) effected short sales after the date the registration statement of which this Prospectus is a part is declared effective by the Securities and Exchange Commission; (vii) through the writing or settlement of options or other hedging transactions, whether through options exchange or otherwise; (viii) broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share; and (ix) a combination of any such methods of sale.
CDSI is not selling any shares of its common stock in this offering and therefore will not receive any proceeds from this offering. The shares of CDSIs common stock being offered through this prospectus will be offered by the selling security holders from time to time for a period ending nine months after the date the registration statement has been declared effective by the SEC, or until the date on which we otherwise terminate the offering prior to the expiration of nine months. The actual number of shares sold will vary depending upon the individual decisions of the selling security holders. None of the proceeds from the sale of stock by the selling security holders will be placed in escrow, trust or similar account.
Our common stock is not currently listed or quoted on any quotation medium and involves a high degree of risk. You should read the "RISK FACTORS" section beginning on page 3 before you decide to purchase any of our common stock.
Neither the Securities and Exchange Commission nor any state commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Nor have they made, nor will they make, any determination as to whether anyone should buy these securities. Any representation to the contrary is a criminal offense.
| Per Share | Total |
Price to Public, Offering | $0.10 | $58,606.60 |
Underwriting Discounts and Commissions, Offering | -0- | -0- |
Proceeds to Court Document Services, Inc. | -0- | -0- |
The date of this prospectus is , 2012
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TABLE OF CONTENTS
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Impact of the Penny Stock Rules on Buying or Selling Our Common Stock | I- | 10 |
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Directors, Executive Officers, Promoters and Control Persons | I- | 13 |
Security Ownership of Certain Beneficial Owners and Management | I- | 14 |
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Disclosure of Commission Position on Indemnification for Securities Act Liabilities | I- | 16 |
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | I- | 25 |
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Dealer Prospectus Delivery Instructions
Until , 2012 all dealers that effect transactions in these shares of common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART I Information Required In Prospectus
PROSPECTUS SUMMARY
This summary highlights certain information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information regarding Court Document Services, Inc. (Us, We, Our, "CDSI, the Company, or "the Corporation") and our financial statements and the related notes appearing elsewhere in this prospectus.
The Corporation |
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Our Business | Since incorporation on September 26, 2002, Court Document Services, Inc. has engaged in the operation of a retail non-attorney documentation typing service. Court Document Services, Inc. will continue to rely on its experience to try to be competitive in the marketing of its document typing service. We believe that because we use personnel experienced in the typing of legal documents rather than personnel with no legal training we have a competitive advantage. This is only our belief and is not supported by any study to prove this belief. To support our belief, our Company will continue to use personnel as independent contractors that have specific legal training in legal document preparation. Due to recession that began in 2008 we have seen an increase in the number of non-attorney document typing services in our market area. We believe we can increase our market share due to the quality of our independent contractors; however, there is no guarantee we will be able to do so. By analyzing the advertising of other competitive companies, we know that a low price advertising campaign for us will not be successful because competition has brought the pricing of our type of services to essentially the same price. We believe that by concentrating our efforts on the quality of our personnel while providing for cost effectiveness we can grow and expand our business; however, again, there is no guarantee that we will be successful at achieving growth and expansion. CDSIs Lakeland office is our sole physical location and our efforts at expansion are focused on gaining additional business for this location through a statewide advertising effort. While our key employee has over twenty (20) years experience in this area of business, we do not have a competitive advantage over our competitors as a result of this experience. Due to the proliferation of the number of competitors that have entered our target market experience has become less of a competitive advantage. Being in a market segment with a high number of competitors makes any investment in our Company a high risk. We do compete with many national document businesses such as LegalZoom, LegalDocs, U.S. Legal Forms, and Law Smart. These firms have the experienced personnel, years in business, capitalization, and a reputation that make it difficult for us to compete. As a result of such competition, we will concentrate our efforts on trying to more fully develop the personal, in-home business for our Company in the State of Florida. |
Our State of Organization | We were incorporated in Florida on September 26, 2002. Our principal address is 1913 South Florida Avenue, Lakeland, Florida, 33803. Our phone number is (888) 376-7897. |
The Offering |
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Number of Shares Being Offered | We are offering to sell up to 586,066 shares of common stock at the fixed price of $0.10 per share for the duration of the offering or until such time as the stock is listed on the OTCBB or other exchange at which time the selling security holders may then sell at the prevailing market price or at privately negotiated prices. |
Number of Shares Outstanding After the Offering | 2,500,000 shares of our common stock are issued and outstanding. We have no other securities issued. |
Use of proceeds | We will not receive any of the proceeds from the sale of shares of common stock by the selling security holders. |
Plan of Distribution | The Offering is made by the selling security holders named in this Prospectus to the extent they sell shares. We may or may not seek quotation of our common stock on the Over-the-Counter-Bulletin-Board (OTCBB). Management has made no decision as to whether to seek a listing and will not do so until such time as it can properly make a decision based on the value to the shareholders of such a listing. No assurance can be given that our common stock will be approved for quotation on the OTCBB even if we make application to the OTCBB. Selling security holders, as underwriters, must sell their shares at $.10 per share for the duration of this offering or until the stock is listed on the OTCBB or other exchange and then they may sell their shares at prevailing market prices or at privately negotiated prices. |
Risk Factors | You should carefully consider all the information in this Prospectus including the information set forth in the section of the Prospectus entitled Risk Factors beginning on page 3 before deciding whether to invest in our common stock. |
Lack of Liquidity in our common stock | Our common stock is not presently quoted on or traded on any securities exchange or automatic quotation system and we have not yet applied for listing or quotation on any public market. We can provide no assurance that there will ever be an established pubic trading market for our common stock. If we decide to seek quotation on the OTCBB, we must obtain a market maker to file an application with the Financial Industry Regulatory Authority (FINRA) on our behalf. There is a risk that we may not be able to obtain a market maker to file such an application. If a market maker does file an application on our behalf, it may take as long as nine (9) months to one (1) year to be approved by the FINRA. We may or may not seek to have a market maker file a Listing Application on our behalf. |
Selected Financial Data |
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| For the Year ended December 31, 2011 (Audited) | For the Year Ended December 31, 2010 (Audited) | |
Balance Sheet |
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Total Assets | $ 804 | $ 40,563 | |
Total Liabilities | $ 3,945 | $ 3,712 | |
Stockholders Equity | $ (3,141) | $ 36,851 | |
Statement of Operations |
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Revenue | $ 113,239 | $ 113,568 | |
Total Expense | $ 153,231 | $ 115,381 | |
Other Income (expense) |
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Net Income (Loss) | $ (39,992) | $ (1,813) |
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RISK FACTORS
Before you invest in our common stock, you should be aware that there are risks, as described below. You should carefully consider these risk factors together with all of the other information included in this prospectus before you decide to purchase shares of our common stock. Any of the following risks could adversely affect our business, financial condition and results of operations. We have incurred both profits and losses from inception while realizing our revenues and we may never generate substantially more revenues or be profitable in the future.
Risks Relating to Our Business
Economic events have adversely impacted our business and our results of operations and may continue to do so.
Many parts of the world including the United States are currently in a recession and we believe that these weak general economic conditions will continue through the end of 2012 and most likely beyond. The ongoing effects of the housing crisis, high unemployment and the rising of commodities prices may further exacerbate current economic conditions that impact our business. As the economy struggles, our clients may become more apprehensive about the economy and/or related factors, and may reduce their level of discretionary spending. A decrease in spending due to lower consumer discretionary income or consumer confidence in the economy could impact the amount they spend on their legal needs, thereby decreasing our revenues and negatively affecting our operating results. Additionally, we believe there is a risk that if the current negative economic conditions persist for a long period of time and become more pervasive, consumers might make long-lasting changes to their discretionary spending behavior on a more permanent basis.
The current industry downturn is negatively impacting our business with a revenue decline in fiscal 2011.
We had a loss from continuing operations, net of taxes of $39,992 in fiscal 2011. Our revenues were flat due to the weak economic environment. If the economic environment deteriorates further, or is prolonged, resulting in continued flat revenues and our actions to respond to these conditions are not sufficient, we could continue to see our revenues flat and we would continue to suffer losses.
Changing discretionary spending patterns and general economic conditions could reduce our client traffic which would have an adverse effect on our revenues.
Purchases of our services are discretionary for our clients and, therefore, we are susceptible to economic slowdowns. In particular, our services cater primarily to clients that have less discretionary disposable income than those attracted to attorney services. We believe that the vast majority of our revenues are derived from working class families that must budget more closely than those with more disposable income. Accordingly, we believe that our business is particularly susceptible to any factors that cause a reduction in disposable income. We also believe that consumers generally are more willing to make discretionary purchases during periods in which favorable economic conditions prevail.
The future performance of the U.S. economy and global economies are uncertain and are directly affected by numerous global and national factors, in addition to other factors that are beyond our control. These factors, which also affect discretionary consumer spending, include among other items, international, national, regional and local economic conditions, disposable consumer income, consumer confidence, terrorist attacks and the United States participation in military actions. We believe that these factors have adversely impacted our business and, should these conditions continue, worsen or be perceived to be worsening or should similar conditions occur in the future, we would expect them to continue to adversely impact our business.
There are factors both within and without our control that can cause our results of operations to fluctuate significantly.
A number of factors have historically affected, and will continue to affect, our business revenue including, among other factors:
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our ability to execute our business strategy effectively;
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competition;
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consumer trends;
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and general international, national, regional and local economic conditions.
Our results of operations and revenues could be adversely affected by our inability to expand our operations.
There are factors which may impact the amount of time and money required for the expansion of our business, including but not limited to, a change in laws that define the unauthorized practice of law, shortages of skilled labor, delays with our independent contractors and their production of client documents and increased competition.
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Our growth depends on our ability to expand and operate profitably.
A substantial majority of our historical growth has been due to a thriving economy. When comparing fiscal 2011 to fiscal 2010, revenues were flat due to the continued recession. Our ability to expand is dependent upon a number of factors, some of which are beyond our control, including but not limited to our ability to:
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find clients with disposable income;
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develop additional sources of marketing that are within our budgetary constraints;
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raise, borrow or have available an adequate amount of money for expansion costs;
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hire, train and retain the independent contractors and other employees necessary to meet staffing needs in a timely manner;
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and successfully promote our services and compete in the market in which we are located.
We are reviewing our business model to determine whether we should consider looking for additional sites for potential future offices. Typically, there has been a ramp-up period of six to nine months before an independent paralegal business can achieve its targeted level of performance. This ramp-up period, however, could be longer if the weak economic environment continues. The delay in achieving targeted level of performance is usually due to higher operating costs caused by start-up and other temporary inefficiencies associated with opening a new office such as lack of market familiarity and acceptance should we enter new markets.
We may not be able to attract enough clients because potential clients may be unfamiliar with our Company or our services might not appeal to them. As a result, the operating results generated at a new office may not equal the operating results generated at our existing location. In the event we choose to open a new office we may even operate at a loss, which could have a significant adverse effect on our overall operating results.
Our existing senior personnel, management systems, financial controls, information systems and other systems and procedures may be inadequate to support any expansion, which could require us to incur substantial expenditures that could adversely affect our operating results.
Our Company may not be able to compete successfully with other companies offering the same or equivalent services and, as a result, we may not achieve our projected revenue and profitability targets.
If our Company is unable to compete successfully with other businesses in our existing market, we may not achieve growth or historical revenue and profitability targets. Our industry is intensely competitive with respect to price, quality of service, office location, and whether our services are strictly offered in office or at the clients location. We compete with national chains and independently owned paralegal services for clients, qualified management and other staff. Compared to our business, our competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established in the market where our business is located or may be located should we choose to expand.
Our success depends in part upon the continued popularity of non-attorney services.
Shifts in consumer preferences away from this type of service could materially adversely affect our operating results. The non-attorney industry is characterized by the continual introduction of new concepts and is subject to rapidly changing consumer preferences, tastes and purchasing habits. Our success depends in part on our ability to anticipate and respond to changing consumer preferences, as well as other factors affecting our industry, including new market entrants and demographic changes.
Continued expansion by our competitors could prevent us from realizing anticipated benefits from growth in our existing office revenue.
Our competitors have opened many businesses in recent years and a key element of our strategy is to expand our sales in our existing market. If we overestimate demand for our services or underestimate the popularity of our competitors, we may be unable to realize anticipated revenues from expansion in our current market. Similarly, if one or more of our competitors open new offices in our existing or anticipated markets, revenues in our office may be lower than we expect. Any unanticipated slowdown in demand due to industry growth or other factors could reduce our revenue and results of operations, which could cause our revenue to decline substantially.
If we discover material weaknesses in the financial reporting of prior management it may cause us to restate our financial statements in the event such weaknesses are determined to not be acceptable to financial reporting requirements.
When new management took control on January 31, 2012, it had the responsibility to review the internal controls over financial accounting. While this review of material weaknesses is ongoing, the discovery of any weaknesses that would require us to restate our financial statements could cause us to expend additional funds that would have a material impact on our ability to generate profits and on the profits of past operations.
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Non-attorney legal services have been the target of cease and desist actions and other proceedings alleging, among other things, the unauthorized practice of law. Proceedings of this nature by The Florida Bar, if successful, could result in our ceasing operations.
Our results of operations and liquidity may be adversely affected by legal or governmental proceedings brought by or on behalf of The Florida Bar. In recent years, a number of non-attorney service providers have been subject to lawsuits to cease and desist offering non-attorney services, alleging violations of state law regarding the unauthorized practice of law. A number of these lawsuits have resulted in the closure of some of our competitors. In the event we were named in this type of proceeding we may incur substantial damages and expenses resulting from such a lawsuit, which would increase the cost of operating our business and decrease the cash available for other uses, and may require us to borrow capital or cease operations.
Litigation concerning our ability to offer non-attorney services could impact our results of operations or require us to incur additional liabilities.
Occasionally clients file complaints or lawsuits against non-attorney service providers alleging that they are responsible for a loss or injury they suffered at or after a visit to our Company for services. We may also be subject to a variety of other claims arising in the ordinary course of our business, including contract claims and claims alleging violations of state laws regarding the unauthorized practice of law and similar matters. In addition, we could become subject to class action lawsuits related to these matters in the future. Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend against and may divert time and money away from our operations and hurt our performance. A judgment significantly in excess of our insurance coverage for any claims would materially adversely affect our financial condition, results of operations and liquidity. Adverse publicity resulting from these claims may negatively impact sales.
Taxing authorities may select to audit our federal, state and/or local tax returns from time to time, which may result in tax assessments and penalties that could have an adverse effect on our results of operations and financial condition.
We are subject to federal, state and local taxes in the U.S. Although we believe that our tax reporting is reasonable, if any taxing authority disagrees with the positions taken by the Company on its tax returns, we could have additional tax liabilities, including interest and penalties, which, if material, could have an adverse impact on our results of operations and financial condition.
We may experience higher operating costs, including increases in employee salaries and independent contractor fees, which will adversely affect our operating results if we cannot increase our prices to cover them.
Any increase in the compensation or benefits to our employees or independent contractors, will result in an increase in our operating costs. If we are unable or unwilling to increase our prices or take other actions to offset increased operating costs, our operating results will suffer. Factors that may affect the compensation and benefits that we pay to our independent contractors and employees include local unemployment rates and changes in minimum wage and employee benefits laws. Other factors that could cause our operating costs to increase include fuel prices, cost of gas and electricity, occupancy and related costs, maintenance expenditures and increases in other day-to-day expenses. In addition, various proposals that would require employers to provide health insurance for all of their employees are being considered from time-to-time in the U.S. Congress and various states. The imposition of any requirement that we provide health insurance to all employees could have an adverse effect on our operating performance.
Increases in the minimum wage could increase our labor costs. For example, under the Federal Minimum Wage Act of 2007, on July 24, 2009, the federal minimum wage increased to $7.25 per hour. If we are unable to offset the increased labor costs by increasing our prices or by other means, this could have a material adverse effect on our business and results of operations.
Our operating results may fluctuate significantly due to the nature of our business and these fluctuations make it more difficult for us to predict accurately and address in a timely manner factors that may have a negative impact on our business.
Our business is subject to fluctuations that may vary greatly depending upon the region in which our particular office is located. These fluctuations can make it more difficult for us to predict accurately and address in a timely manner factors that may have a negative impact on our business. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. In addition, in the past we have incurred, and in the future are likely to incur, a net loss in the fourth quarter due to the nature of our business, with revenues generally being less in the fourth quarter primarily due to our clients spending less on our services during the holiday period.
Our results of operations are affected by a variety of factors, including increased competition, and have fluctuated significantly in the past and can be expected to continue to fluctuate significantly in the future.
Our results of operations have fluctuated significantly in the past and can be expected to continue to fluctuate significantly in the future. Our results of operations are affected by a variety of factors, including:
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the timing of business openings by competitors;
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changes in consumer preferences;
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general economic conditions;
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government regulation; and
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actions by our competitors.
Our office is located in a region that is susceptible to severe unemployment conditions. As a result, declining employment in this area could affect our business, resulting in fewer client visits to the office and otherwise have a material adverse impact on our business. It is our belief that you should not rely on our past results of operations as being indicative of the future.
Negative factors or publicity surrounding our industry could adversely affect consumer choice, which could reduce sales and make our business less valuable.
It is our belief that our competitive strengths include the quality of our independent contractors and management. Therefore we believe that adverse publicity relating to these factors or other similar concerns affects us more than it would competitors that compete primarily on other factors. Any shifts in consumer preferences away from the kinds of services we offer, particularly divorce, bankruptcy and incorporation, whether because of negative publicity or an improving economy, would make our business less appealing and adversely affect our revenues. Adverse changes involving any of these factors could further reduce our client traffic and/or impose practical limits on pricing, which could further reduce our revenues and operating income.
We depend upon clients that cannot afford or do not like to use the services of a licensed attorney, which subject us to the possible risk of a shortage of clients during periods of high employment.
Our ability to maintain consistent business depends in part upon our ability to acquire new clients. Our inability to gain new clients during periods of high employment could increase our costs and could cause a slowdown in business at our office or temporarily close. If we temporarily close our business, we may experience a significant reduction in revenue during the time affected by the closure and thereafter, as our clients may change their habits of using non-attorneys we risk permanent closure. We have no long-term contracts to provide our services to any large group or organization which could provide a stable client base.
We may incur additional costs or liabilities and lose revenues impacting operating results as a result of litigation and government regulation affecting the operation of our business.
Our business is subject to extensive federal, state, and local government regulation, including regulations related to the specific requirements of using independent contractors. Typically our business license must be renewed annually and may be suspended or revoked at any time for cause.
We could be subject to litigation and governmental fine, censure or closure in connection with issues relating to our services that might be considered to be the unauthorized practice of law. To date, none of these matters has had a material adverse effect on our business, but that may not continue to be the case in the future.
The costs of operating our business may increase if there are changes in laws governing independent contractors, unemployment tax rates, sales taxes or other laws and regulations such as those governing access for the disabled, including the Americans with Disabilities Act. If any of these costs were to increase and we were unable to offset the increase by increasing our prices or by other means, this could have a material adverse effect on our business and results of operations.
The failure to enforce and maintain our intellectual property rights could enable others to use names confusingly similar to Court Document Services and other names and marks used by our business, which could adversely affect the value of the CDSIs brand.
We have not registered the Court Document Services mark used by our business as a trade name in Florida or any state or the United States Patent and Trademark Office. The success of our business depends on our continued ability to use our existing trade name in order to increase our brand awareness. In that regard, we believe that our trade name is valuable asset that is critical to our success. The unauthorized use or other misappropriation of our trade name could diminish the value of our business concept and may cause a decline in our revenue.
Any new indebtedness may adversely affect our financial condition, results of operations, limit our operational and financing flexibility and negatively impact our business.
Any revolving credit facility, and other debt instruments we may enter into in the future, may have negative consequences to the Company, including but not limited to the following:
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our ability to obtain financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;
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we may use a substantial portion of our cash flows from operations to pay interest on any new indebtedness, which will reduce the funds available to us for operations and other purposes;
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our level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt;
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our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and
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our level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business.
We expect that we will depend primarily upon our operations to provide funds to pay our expenses and to pay any amounts that may become due under any new credit facility and any other indebtedness we may incur. Our ability to make these payments depends on our future performance, which will be affected by various financial, business, economic and other factors, many of which we cannot control.
We could face labor shortages that could slow our growth and adversely impact our ability to operate our business.
Our success depends in part upon our ability to attract, motivate and retain a sufficient number of qualified independent contractors necessary to keep pace with our anticipated increase in sales and meet the needs of our existing business. A sufficient number of qualified individuals of the requisite caliber to fill these positions may be in short supply. Any future inability to recruit and retain qualified individuals may delay our ability to increase the sales at our business. Any such delays, any material increases in employee turnover rate or any widespread employee dissatisfaction could have a material adverse effect on our business and results of operations.
We depend on the services of key a key executive, the loss of whom could materially harm our business and our strategic direction if we were unable to replace them with executives of equal experience and capabilities.
Our senior executive, Michael J. Daniels, is important to our success because he is instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities and arranging any necessary financing. Losing the services of Mr. Daniels could adversely affect our business until a suitable replacement could be found. Mr. Daniels and our Secretary/Treasurer, Ms. Deborah Igoe are not bound by employment agreements with us. We do not maintain key person life insurance policies on any of our executives.
We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.
Reporting obligations as a public company are likely to place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel. We estimate that it will cost approximately $15,000 annually to maintain the proper management and financial controls for our filings. In addition, as a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, so that our management can certify as to the effectiveness of our internal controls and our independent registered public accounting firm can render an opinion on the effectiveness of our internal controls over financial reporting, which requires us to document and test the design and operating effectiveness of our internal controls over financial reporting. If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot render an unqualified opinion on the effectiveness of our internal controls over financial reporting, or if material weaknesses in our internal controls are identified, or if we fail to comply with other obligations imposed by the Sarbanes-Oxley Act rules relating to corporate governance matters, we could be subject to regulatory scrutiny and a loss of public confidence, which could have a material adverse effect on our business and our stock price. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.
Risks Relating to our Common Stock
Our future results may vary significantly in the future which may adversely affect the price of our common stock.
It is possible that our quarterly revenues and operating results may vary significantly in the future and that period-to-period comparisons of our revenues and operating results are not necessarily meaningful indicators of the future. You should not rely on the results of one quarter as an indication of our future performance. It is also possible that in some future quarters, our revenues and
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operating results will fall below our expectations or the expectations of market analysts and investors. If we do not meet these expectations, the price of our common stock may decline significantly.
We do not anticipate paying cash dividends for the foreseeable future, and therefore investors should not buy our stock if they wish to receive cash dividends.
No dividends were declared during 2011 and 2010. We have not paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
A significant number of our shares will be eligible for sale and their sale or potential sale may depress the market price of our common stock.
Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. This prospectus covers 586,066 shares of common stock, being registered for sale by the selling stockholders. If additional shares of our common stock become available for resale in the public market pursuant to other offerings, the supply of our common stock will increase, which could decrease its price. Some or all of the shares of common stock may be offered from time to time in the open market pursuant to Rule 144, and these sales may have a depressive effect on the market for our shares of common stock.
If we fail to continue to comply with the listing requirements of the OTCBB, the price of our common stock and our ability to access the capital markets could be negatively impacted.
We may or may not apply to have our common stock listed on the OTCBB. If we choose to do so we will be subject to certain continued listing standards. We cannot provide any assurance that we will be able to continue to satisfy the requirements of the OTCBBs continued listing standards. A delisting of our common stock could negatively affect the price and liquidity of our common stock and could impair our ability to raise capital in the future.
Our stock price will be extremely volatile.
The trading price of our common stock will be subject to wide fluctuations in response to announcements of our business developments or those of our competitors, quarterly variations in operating results, and other events or factors. In addition, stock markets have experienced extreme price volatility in recent years. This volatility has had a substantial effect on the market prices of companies, at times for reasons unrelated to their operating performance. Such broad market fluctuations may adversely affect the price of our stock.
We will not have an underwriter for our offering and so we cannot guarantee how much, if any, of the offering will be sold.
The common shares offered are being offered by our existing security holders. We have not retained an underwriter to assist in offering the common shares. Our security holders have limited experience in the offer and sale of securities, and as a result, they may be unable to sell any of the common shares.
Because we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and experience further dilution.
We are authorized to issue up to 500,000,000 shares of common stock, of which 2,500,000 shares of common stock are issued and outstanding as of January 31, 2012. Our board of directors has the authority to issue additional shares of common stock, and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.
Since our securities are subject to penny stock rules you may have difficulty selling your shares.
Our shares of common stock are penny stocks and are covered by Section 12(g) of the 1934 Securities and Exchange Act which imposes additional sales practices which requires broker/dealers who sell Court Document Services, Inc.s securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and furnishing monthly account statements. For sales of our securities a broker/dealer must make a special suitability determination and receive from its client a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholders ability to dispose of his stock.
Our Amended and Restated Articles of Incorporation provide for one class of blank check preferred stock solely at the discretion of the Board of Directors.
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Our Board of Directors may, at its sole discretion, issue stock from our authorized blank check preferred class. Shareholders do not have any control regarding the issuance of any shares from this class and may be adversely affected by any such issuance or subsequent sale in the form of dilution, voting, and value of their shares. The preferred shares may also be issued with preferences or rights that may adversely affect the holders of our common stock.
Since our President/Treasurer, Michael J. Daniels, is also our Chief Financial Officer and controlling shareholder, there may be a conflict of interest for Mr. Daniels for our Company and his other business interests.
Our President/treasurer is our Chief Financial Officer and our controlling shareholder. Mr. Daniels has the ability to control all business matters and he has clients from his consulting business that may cause a conflict with his acting independently regarding our Company. Such a conflict of interest would likely cause investors to lose all or part of their investment in the event decisions made on behalf of her clients from her law practice were to be placed ahead of the interests of our Company.
At the present time our Officers and Directors provide their services on an unpaid basis and may not be able to continue their services without pay.
Since our Company is not currently operating with earnings and cash flows to support officer and director salaries, our Officers and Directors work on an unpaid basis. If and when our Company has increased its operations to support salaries, both of our Officers/Directors will be compensated at the rate of $26,000 per year, which compensation will be adjusted annually based on individual performance and performance of the Company. Revenues and earnings, as well as sufficient cash flow, will be considered when determining when salaries may be available to our officers and directors. Cash flows must be sufficient to meet the monthly cash needs of the business. Earnings are determined quarterly and will be analyzed along with our cash flows to determine if there is sufficient cash remaining after all expenses are paid to commence salaries for Mr. Daniels and Ms. Igoe. Until then, there is a risk that our officers and directors may need to find work elsewhere to supplement their income, distracting them from our operations resulting in poor quality control and a loss of clients and business.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as believe, expect, anticipate, estimate, intend, plan, target, project, likely, will, would, could and words or phrases of similar meaning. They may relate to, among other things:
·
a reduction in consumer and/or business spending in our market due to business layoffs or budget reductions, negative consumer sentiment, access to consumer credit, events or occurrences affecting the securities and/or financial markets, occurrences affecting our common stock, housing values, changes in federal, state, foreign and/or local tax levels or other factors;
·
risks relating to the business industry and our business, including competition, changes in consumer tastes and preferences, risks associated with expanding our business, increases in energy costs, demographic trends, traffic patterns, weather conditions, independent contractor availability, benefits and cost increases, litigation judgments or, government regulation, our ability to maintain adequate financing facilities, our liquidity and capital resources, prevailing interest rates and legal and regulatory matters;
·
public health issues, including, without limitation risks relating to the spread of pandemic diseases;
·
legal proceedings and regulatory matters; and
·
other risks detailed in Risk Factors herein and in our reports filed from time to time with the SEC.
Additionally, our ability to expand our business is dependent upon various factors, such as the availability of capital on favorable terms, the ability to obtain various government permits and licenses, and the recruitment and training of skilled management and business employees.
All forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive and governmental factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward-looking statements. These risks and uncertainties may include those discussed in Risk Factors. Given these risks and uncertainties, we urge you to read this prospectus completely with the understanding that actual future results may be materially different from what we plan or expect. These factors and the other risk factors described in this prospectus are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected
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consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.
All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements made in this prospectus may not prove to be correct.
USE OF PROCEEDS
Upon registration with the U.S. Securities Exchange Commission, 586,066 of our outstanding shares of common stock will be eligible for sale under the Securities Act. We will not receive any proceeds from the sale of the common stock offered through this prospectus. We will however incur all costs associated with this registration statement and prospectus. There is no minimum amount of shares that must be sold during this offering.
DETERMINATION OF OFFERING PRICE
The price of the shares we are offering was arbitrarily determined. The offering price bears no relationship whatsoever to our assets or earnings. The selling security holders paid $250-$500 for their shares, or approximately $0.02 per share. Selling at the offering price of $0.10 per share provides a small profit which we believe is a fair return on their investment. Among other factors considered were:
·
Our nine (9) full years operating history,
·
Our current share book value; and
·
Our management expertise.
DILUTION
The common stock to be sold by the selling security holders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution of equity interests to our existing stockholders.
IMPACT OF THE "PENNY STOCK" RULES ON BUYING OR SELLING OUR COMMON STOCK
The SEC has adopted penny stock regulations which apply to securities traded over-the- counter. These regulations generally define penny stock to be any equity security that has a market price of less than $5.00 per share or an equity security of an issuer with net tangible assets of less than $5,000,000 as indicated in audited financial statements, if the corporation has been in continuous operations for less than three years. Subject to certain limited exceptions, the rules for any transaction involving a penny stock require the delivery, prior to the transaction, of a risk disclosure document prepared by the SEC that contains certain information describing the nature and level of risk associated with investments in the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Monthly account statements must be sent by the broker-dealer disclosing the estimated market value of each penny stock held in the account or indicating that the estimated market value cannot be determined because of the unavailability of firm quotes. In addition, the rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established clients and institutional accredited investors (generally institutions with assets in excess of $5,000,000). These practices require that, prior to the purchase, the broker-dealer determined that transactions in penny stocks were suitable for the purchaser and obtained the purchaser's written consent to the transaction. If a market for our common stock does develop and our shares trade below $5.00 per share, it will be a penny stock. Consequently, the penny stock rules will likely restrict the ability of broker-dealers to sell our shares and will likely affect the ability of purchasers in the offering to sell our shares in the secondary market.
Trading in our common stock will be subject to the "penny stock" rules.
SELLING SECURITY HOLDERS
This prospectus will be used for the offering of shares of our common stock owned by selling security holders. The selling security holders may offer for sale up to 586,066 of the 2,500,000 shares of our common stock issued to them. Selling security holders, both non-affiliates and affiliates, are considered underwriters under the Securities Act of 1933, as amended, and as such must sell their shares at the fixed price of $0.10 per share for the duration of the offering or until the stock is quoted on the OTCBB or other exchange then at which time the selling security holders may sell at the prevailing market price or at privately negotiated prices.
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We will not receive any proceeds from such sales. The sale of the securities by the selling security holders is subject to the prospectus delivery and other requirements of the Securities Act. All selling security holders have been advised to notify any purchaser of their shares that none of the proceeds from the sale of their stock will go to our Company. All expenses of this offering are being paid for by us on behalf of selling security holders. The following table sets forth information on our selling security shareholders.
Table 1.0 Selling Security Holders
Name of security holder | Shares beneficially owned as of the date of this prospectus1 | Percent owned as of the date of this prospectus | Maximum number of shares to be sold pursuant to this prospectus | Percent owned after offering is complete | Position, office or other material relationship to the Company within last three years | |
If All Shares sold2 | If No shares sold3 | |||||
Deborah Igoe | 25,252 | 1% | 25,252 | 0% | 1% | Secretary |
Soren Asadou | 25,252 | 1% | 25,252 | 0% | 1% |
|
Catherine A. Bradaick | 25,252 | 1% | 25,252 | 0% | 1% |
|
William B. and Wilma J. Harrison4 | 25,252 | 1% | 25,252 | 0% | 1% |
|
William B. Harrison, II and Belvey Harrison4 | 25,252 | 1% | 25,252 | 0% | 1% |
|
Joseph and Ruth Scutero | 25,252 | 1% | 25,252 | 0% | 1% |
|
William B. Harrion, III4 | 25,252 | 1% | 25,252 | 0% | 1% |
|
William Eckert | 25,252 | 1% | 25,252 | 0% | 1% | Spouse of Secretary |
Lynnette J. Harrison4 | 25,252 | 1% | 25,252 | 0% | 1% |
|
Donald and Catherine Hejmanowski JTWROS | 25,252 | 1% | 25,252 | 0% | 1% |
|
Jennifer Thomas 8 | 25,252 | 1% | 25,252 | 0% | 1% |
|
Patrick A. Thomas 8 | 25,252 | 1% | 25,252 | 0% | 1% |
|
Jerry Neel, Jr. 7 | 25,252 | 1% | 25,252 | 0% | 1% |
|
Marisu Neel 7 | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Dylan Kepes 6 | 17,676 | 00071% | 17,676 | 0% | 0.0071% |
|
Mark and Deborah Kepes 6 | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Damon Kepes 6 | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Eileen Love | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Meshel & Joseph Coleman | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Rolland and Betty Owens | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Heather Hedrick | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Karen Wolfson | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Larry Chapman | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Martin Mink | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Chad Sparks 5 | 17,676 | 0.0071% | 17,676 | 0% | 0.0071% |
|
Keri L. Sparks 5 | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Brandi J. Peachey | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Douglas P. Zolla, Jr | 12,626 | 0.0051% | 12,626 | 0% | 0.0051% |
|
Totals: | 586,066 | 13.05% | 586,066 | 0% | 13.05% |
|
1 On January 31, 2012 the par value of the stock was changed from $1.00 to $0.01. In addition, the Board of Directors approved of a forward stock split of 5,000:1 resulting in a forward increase in the sole shareholders shares from 500 to 2,500,000. 2 The percentage of shares held in the event the Selling Security Holders sell all of their 586,066 shares offered in the Offering. 3 The percentage held in the event the Selling Security Holders sell none of their 586,066 shares offered in the offering. 4 William B. and Wilma J. Harrison are the parents of William B. Harrison II and Lynnette J. Harrison, and the grandparents of William B. Harrison III. They are of legal age, live in separate residences and have sole and dispositive rights over the disposal of their shares, and the voting rights attached thereto, and are not directly or indirectly influenced or controlled by each other.5Chad and Keri Sparks are siblings who are of legal age, live in separate residences and have sole and dispositive rights over the disposal of their shares, and the voting rights attached thereto, and are not directly or indirectly influenced or controlled by each other. 6Mark and Deborah Kepes and Damon and Dylan Kepes are father and mother and sons, respectively. Damon and Dylan are of legal age, live separate and apart from each other (and their parents) and have sole and dispositive rights over the disposal of their shares, and the voting rights attached thereto, and are not directly or indirectly influenced or controlled by each other or their parents. 7 Jerry and Marisu Neel are husband and wife. Accordingly, each is deemed to be the beneficial owners of their spouses shares. 8 Patrick and Jennifer Thomas are husband and wife. Accordingly, each is deemed to be the beneficial owners of their spouses shares. |
All of the shares offered by this prospectus may be offered for sale, from time to time, by the selling shareholders, pursuant to this prospectus, in one or more private or negotiated transactions. Management has not made a decision to seek quotation on the OTCBB at this time and there is no guarantee that quotation will be sought. Until a decision to seek a quotation is made (and we are cleared for quotation), selling security holders must sell their shares at the fixed price of $.10 per share. Should a trading market develop on an exchange, selling security holders may sell at the prevailing market price. If we file a successful application with FINRA and we are cleared for quotation, only then will the selling security holders be able to also sell their shares in open market transactions in the over-the-counter market at prevailing market prices. The selling shareholders may affect these transactions by selling their shares directly to one or more purchasers or to or through broker-dealers or agents. The compensation to a particular broker-dealer or agent may be in excess of customary commissions. Each of the selling shareholders has been declared an "underwriter" within the meaning of the Securities Act in connection with each sale of shares. The selling shareholders will pay all commissions, transfer taxes and other expenses associated with their sales. In the event the selling security holders sell all of their shares in the offering they will own no shares in our Company upon completion of the offering.
Each selling shareholder acquired their shares under the exemption provided by Rule 4(2) of the Securities Act of 1933, as amended. The shares were not a part of a public offering. There was no distribution of a prospectus, private placement memorandum, or business plan to the public. Shares were sold to friends, family and personal business acquaintances of the President, Michael J. Daniels and our Secretary, Deborah Igoe. Each individual had specific knowledge of the Companys operation that was given to them personally by our officers. Each individual is considered educated and informed concerning investments such as the $250-$500 investment in our Company.
PLAN OF DISTRIBUTION
This prospectus is part of a registration statement that enables the selling security holders to sell their shares on a continuous basis for a period of nine months after this registration statement is declared effective. The selling security holders may sell some or all of their common stock in one or more transactions, including block transactions:
·
On such public markets as the common stock may from time to time be trading,
·
In privately negotiated transactions,
·
Through the writing of options on the common stock,
·
In short sales, or
·
In any combination of these methods of distribution.
The sales price to the public is fixed at $0.10 per share for the duration of the offering or until the stock is listed on the OTCBB or other exchange then at which time the selling security holders may sell at the prevailing market price or at privately negotiated prices. We may or may not apply to have our common stock traded on the OTCBB. Should we choose not to apply a public market for our common stock may never materialize.
Each security holder invested from $250 to $500 for the purchase of their shares for a total investment of $11,050. Our President/Treasurer Michael J. Daniels, who is not a selling security holder, invested a total of $50,350 for the shares he acquired. Upon effectiveness of this registration statement, the selling security holders named in this prospectus may also sell their shares directly to market makers acting as agents in unsolicited brokerage transactions. Any broker or dealer, participating in such transactions as agent, may receive a commission from either the selling security holder or, if they act as agent for the purchaser of such common stock, from the purchaser. The selling security holders will likely pay the usual and customary brokerage fees for such services. The maximum commission or discount to be received by any member of the National Association of Securities Dealers, Inc. or independent broker-dealer will not be greater than eight percent (8%) for the sale of any securities being registered.
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We can provide no assurance that all or any of the common stock offered will be sold by the selling security holders named in this prospectus.
As of March 31, 2012, we have expended approximately $6,005 of the estimated $14,005 cost of this offering. Of the offering costs expended so far we have spent monies for accounting fees, PCAOB audit fees, stock transfer agent fees and our filing fee with the SEC. We are bearing all costs relating to the registration of the common stock. The selling security holders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.
The selling security holders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of shares of our common stock. The selling security holders are deemed underwriters as defined in the 1933 Securities Act, as amended, and any broker-dealers who execute sales for the selling security holders are "underwriters" within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling security holders sell their common stock, they must comply with applicable law and may, among other things, be required:
·
Not to engage in any stabilization activities in connection with our common stock;
·
Furnish each broker or dealer through which shares of our common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
·
Not to bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act.
The selling security holders should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will apply to purchases and sales of shares of common stock by the selling security holders, and that there are restrictions on market-making activities by persons engaged in the distribution of shares. Under Regulation M, the selling security holders or their agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while such selling security holder is distributing shares covered by this prospectus. Accordingly, the selling security holders are not permitted to cover short sales by purchasing shares while the distribution is taking place. The selling security holders are advised that if a particular offer of common stock is to be made on terms constituting a material change from the information set forth above with respect to the Plan of Distribution, then, to the extent required, a post-effective amendment to the accompanying registration statement must be filed with the SEC.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings nor are any contemplated by us at this time.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers
The names and ages of our directors and executive officers are set forth below. Our By-Laws provide for not less than one and not more than fifteen directors. All directors are elected annually by the stockholders to serve until the next annual meeting of the stockholders and until their successors are duly elected and qualified.
Mr. Daniels has over thirty-five (35) years of business experience. He has been involved in start-up companies as well as companies needing an experienced executive to help the business gain market share and reduce expenses to increase profits. His skills working with financial professionals such as C.P.A.s, accountants and P.C.A.O.B. Auditors provide us with the ability to keep our internal controls over financial accounting consistent with the requirements of Regulation S-K Item 308, Internal Control Over Financial Reporting.
Ms. Igoe has been a business owner for over ten (10) years. Ms. Igoe has been the owner or majority shareholder in a number of small businesses that she has owned. She has gained her experience in accounting and finance while working with C.P.A.s and accountants. In addition, Ms. Igoe has experience at business operations and developing business models for business operations.
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Table 2.0 Directors and Executive Officers
Name | Age | Position |
Michael J. Daniels | 65 | President/Treasurer/Chairman of the Board of Directors1 |
Deborah Igoe | 50 | Secretary 2 |
1 This is the second directorship held by Mr. Daniels in a company that has filed a registration statement or any public company. Mr. Daniels became President subsequent to his purchase of stock in our Company on January 31, 2012. Mr. Daniels was an officer/director in Cheetah Consulting, Inc. n/k/a Vision Industries. Mr. Daniels resigned his position in this company in 2005. 2 This is the first position as an officer in a public company for Ms. Igoe. |
Background of Executive Officers and Directors
- Michael J. Daniels has served as our President/Treasurer and Chairman of the Board of Directors since we acquired control of the business on January 31, 2012. Mr. Daniels has worked as a business owner and consultant for the last ten (10) years for 5 Dogs Inc. and Cheetah Consulting, Inc. Mr. Daniels holds a B.A. in Management from Webster University. As a business owner and consultant he was responsible for conducting due diligence on various businesses from determining the value of a private business to negotiating the purchase of a business. Once he acquired a business he was responsible for all employee hiring and training; instituting accounting procedures; compliance with all state and federal regulations, if any; and advertising. It is Mr. Daniels skills in business management that we believe made him an ideal fit for this company. Mr. Daniels will work 20 hours per week for our Company and provide consulting services on an ongoing basis to his prior clients.
- Deborah Igoe has served as our Secretary since we acquired control of the business on January31, 2012. Ms. Igoe has been a small business owner for more than the last ten (10) years. She has been responsible for the leasing and build-out of high-end beauty salons. She has provided the interior and systems design used in the operations of the business. She has negotiated independent contractor agreements; insurance policy implementation and the financial systems and controls of the businesses. Advertising and customer service have been a particular area of concentration for Ms. Igoe. She will work whatever number of hours required by the business of our Company.
.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the beneficial ownership of shares of our common stock with respect to stockholders who were known by us to be beneficial owners of more than 5% of our common stock as of January 31, 2012, and our officers and directors, individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares of common stock.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission ("SEC") and generally includes voting or investment power with respect to securities. In accordance with the SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees, if applicable. Subject to community property laws, where applicable, the persons or entities named in Table 1.0 (See "Selling Security Holders") have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.
Table 3.0 Beneficial Ownership
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DESCRIPTION OF SECURITIES
General
We are authorized to issue up to 500,000,000 shares of common stock, $0.01 par value per share, of which 2,500,000 shares are issued and outstanding. This prospectus is offering 586,066 of our issued and outstanding shares, which are held by the selling security holders. Upon the effectiveness of this registration statement, of which this prospectus forms a part, we will have 586,066 outstanding common shares registered for sale by our selling security holders in accordance with the Securities Act of 1933.
Common Stock
Subject to the rights of holders of preferred stock, if any, holders of shares of our common stock are entitled to share equally on a per share basis in such dividends as may be declared by our Board of Directors out of funds legally available therefore. There are presently no plans to pay dividends with respect to the shares of our common stock. Upon our liquidation, dissolution or winding up, after payment of creditors and the holders of any of our senior securities, including preferred stock, if any, our assets will be divided pro rata on a per share basis among the holders of the shares of our common stock. The common stock is not subject to any liability for further assessments. There are no conversion or redemption privileges or any sinking fund provisions with respect to the common stock and the common stock is not subject to call. The holders of common stock do not have any pre-emptive or other subscription rights.
Holders of shares of common stock are entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.
Pursuant to the legal opinion of Harrison Law, P.A., all of the issued and outstanding shares of common stock being registered in this registration statement are duly authorized, fully paid, validly issued, and non-assessable. Harrison Law, P.A.s legal opinion regarding the issued and outstanding common stock appears elsewhere as an exhibit to this prospectus.
Preferred Stock
Our Amended and Restated Articles of Incorporation authorize the issuance of one class of preferred blank check stock to be issued solely at the discretion of the Board of Directors. No preferred blank check stock has been defined or issued as of January 31, 2012.
Debt Securities
We currently have no provisions to issue debt securities.
Warrants
We currently have no provisions to issue warrants.
Dividend
No dividends have been paid since our incorporation on September 26, 2002. We anticipate that any earnings, in the foreseeable future, will be retained for development and expansion of our business and we do not anticipate paying any cash dividends in the near future. Our Board of Directors has sole discretion to pay cash dividends with respect to our common stock based on our financial condition, results of operations, capital requirements, contractual obligations, and other relevant factors.
Shares Eligible for Future Sale
Upon the effectiveness of the registration statement, of which this prospectus forms a part, we will have 586,066 outstanding common shares registered for sale by our selling security holders in accordance with the Securities Act of 1933. Prior to this registration, no public trading market has existed for shares of our common stock. The sale or availability for sale of substantial amounts of common stock in the public trading market could adversely affect the market prices for our common stock.
We currently have no shareholder holding shares that are eligible to be sold under Rule 144 of the Securities Act of 1933, as amended.
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Transfer Agent and Registrar
We have engaged the services of Island Stock Transfer Inc., 15500 Roosevelt Blvd., Suite 301, Clearwater, Florida, to act as our transfer agent and registrar.
.INTEREST OF NAMED EXPERTS AND COUNSEL
Drake and Klein CPAs, an independent certified public accountant, whose reports appear elsewhere in this registration statement, was paid in cash for services rendered. Therefore, they have no direct or indirect interest in us. Drake and Kleins report is given based on their authority as an expert in accounting and auditing. Drake and Klein CPAs has provided audited financials for Court Document Services, Inc. for December 31, 2011 and December 31, 2010.
Diane J. Harrison, Esq., of Harrison Law, P.A., is the counsel who has given an opinion on the validity of the securities being registered which appears elsewhere in this registration statement; she has an indirect interest in the Company. Ms. Harrison is the spouse of our President Michael J. Daniels and she is providing the legal opinion on the validity of our common stock. Accordingly, there may be a conflict of interest. Such conflict of interest would likely cause investors to lose all or part of their investment in the event decisions made on behalf of her spouse were to be placed ahead of the interests of our Company.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation do include a provision for indemnifying, to the fullest extent permitted by law, a director, officer or control person of the corporation or its stockholders for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such.
Our By-Laws, Article XV, Section 3, permit us to indemnify any Director, Officer, agent or employee as to those liabilities and on those terms and conditions as appropriate and to purchase and maintain insurance on behalf of any such persons whether or not the corporation would have the power to indemnify such person against the liability insured against.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of Court Document Services, Inc. pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is unenforceable.
ORGANIZATION WITHIN LAST FIVE YEARS
The Company was incorporated under the laws of the State of Florida on September 26, 2002 under the name Court Document Services, Inc. The company was organized to type and prepare documents at the direction of clients to file with state and federal bodies. The Company does not have any subsidiaries or related companies.
We have not been involved in any bankruptcy, receivership or similar proceedings since inception nor have we been party to a reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business. We do not foresee any circumstances that would cause us to alter our current business model within the next twelve months. In the event we need to raise additional capital, we will seek funds from private sources, as well as the sale of stock in our Company. In the event our Company chooses to sell stock it will file a Form D with the Securities and Exchange Commission and prepare a private placement memorandum for distribution to accredited investors. Management believes that it does have a fiduciary responsibility to its shareholders and under specific circumstances, those that will create additional shareholder value, the Company will consider a merger, acquisition, roll-up or other business combination to increase shareholder value.
The Company has had no related transactions with any related persons, promoters or control persons that have had an interest in our business.
DESCRIPTION OF BUSINESS
Business Development
Court Document Services, Inc. (CDSI) was incorporated on September 26, 2002 under the laws of the State of Florida. With nine (9) years of operation, the business has had profits and losses during our nine (9) years in business. CDSI currently sells to the public at large. We are in a commercial building that has approximately twelve (12) offices spaces with our Company occupying
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one (1) unit comprising approximately 800 square feet. The office space has 2 desks and 4 chairs with a desktop computer system, printer/scanner, ancillary equipment, and office supplies and all of the related equipment for use in a business; all of which has been fully depreciated over the last two (2) years. The office is located on a main artery of the City of Lakeland that runs from the far south of the city to the far north of the city. This location was originally chosen for its exposure to the high volume of drive-by traffic daily.
Mr. Daniel Kelson, our founder and former President, developed the business model for Court Document Services, Inc. capitalizing on his expertise and experience from his ten (10) years as general manager of the business when it was a sole proprietorship prior to incorporation. The business model is geared to the public at large. We process our clients documents from our office location or our independent contractors may process their work from home and submit their work to the home office for final review prior to be delivered to the client. Since we must not violate the unauthorized practice of law statutes our independent contractors must know the law and take a clients information within the purview of the state of Florida laws. In addition, the independent contractors must have approval from the home office prior to accepting a potential client. To capitalize on the experience of Mr. Kelson, who has remained as our Vice President of Operations, our Company continues to keep abreast of the State of Florida and its rulings regarding the unauthorized practice of law. It is our belief that to maintain a strict adherence to the State of Florida and its rulings regarding the unauthorized practice of law, we need to have an individual with the experience to observe our independent contractors at work as well as research rulings handed down regarding our type of work.
We are currently developing a business model to provide services for those people who are currently outside the service area of our current independent contractors. Many of our competitors that offer services similar to ours work as Internet providers only and do not have a physical office where clients can go for contact with the company as well as they do not have people working in the field. We believe that this is a market that can be penetrated more fully than has been done in the past by The Company. As of January 31, 2012 all of our revenue was derived from our document typing service business.
An area that our Company is trying to incorporate into the business model is sub-contracting our services to companies and law firms for the preparation of legal documents. It is our belief that many small law firms or individual practitioners could benefit from our services. In our experience the cost of maintaining a full-time employee versus using a contractor to perform routine tasks is higher. To assist the sole practitioner and small law firms with this cost we are preparing a proposal that we can present that will help reduce the labor costs.
Past President Daniel Kelson historically tracked sales by the hour to determine the optimum hours of operation. We operate daily from 8:30 a.m. to 5:00 p.m. Monday through Friday with Saturday appointments available.
Mr. Kelson resigned his position as President with the Company on January 31, 2012 when he sold all of the stock in the corporation to the current shareholders. He remains as Vice President of Operations.
Our Business
(1) Principal Products or Services and Their Markets
We provide document preparation and typing services to the general public on an appointment basis. We currently offer our services to people needing the assistance in the preparation of divorce documents and bankruptcy petitions as the primary documents. In addition, we prepare corporate, limited liability company, partnership, and other business entity documents at the direction of our clients.
Our document typing services are designed to meet the standards set for non-attorney documentation preparation companies such as ours. Our work that is used by our clients to file with the State of Florida as well as the Federal Bankruptcy Court is prepared with our Company acknowledgment on the documents as required by the State of Florida and the Federal Bankruptcy Court.
While we offer our services to the public at large, we are trying to expand our business to include business to business services. We make use of our own website www.court-documents.com to target the typical individual that may be in need of our services in our target market area. We began using advertising in local publications and found this approach to be effective. Now, our advertising campaign consists primarily of the Internet and advertising in local publications in our larger markets.
(2) Distribution Methods of Our Products
The primary delivery of our products is through client interviews at the clients location or an in office interview from our location. Our clients documents are then processed and sent to the client. Independent contractors are assigned a geographical area. Each independent contractor is required to provide their own vehicle and private insurance. Our sales are comprised of 95% clients location and 5% in office interviews.
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Clients call in from one of our advertising sources or from a referral. Our Vice President of Operations, Daniel Kelson is responsible for screening all calls and arranging payment prior to services being performed. Once the appointment is made the client is given a time that our independent contractor will arrive at their location to conduct the full interview and information gathering process.
(3) Status of Any Publicly Announced New Product or Service.
We have not developed any new or unique products or services that would make us stand above our competition. We do believe however that the quality of our work product is what has allowed our business to remain viable. Our new President believes that we can develop additional services that will be different from our competitors and will allow us to target a larger market segment.
(4) Our Competition
To compete effectively in our industry, a company must understand and then respond to the specific needs of the client. Many of our competitors have greater financial resources than we have, enabling them to finance acquisition and development opportunities or develop and support their own operations. In addition, many of these companies can offer additional product offerings and services not provided by us. Many also have greater name recognition. Our competitors may have the luxury of sacrificing profitability in order to capture a greater portion of the market. Consequently, we may encounter significant competition in our efforts to achieve our growth objectives. Our competitors have methods of operation that have been proven over time to be successful.
Since we are in a recessionary period our large competitors have chosen to advertise extremely low prices in an effort to gain sales. Our former President Daniel Kelson chose not to compete on a price basis and continued an advertising campaign based on quality. Our incoming President Michael J. Daniels has extensive experience in advertising and our Company has chosen to compete by offering quality and service as the main selling points. It is too early to be able to analyze the results of this new advertising approach.
(5) Sources and Availability of Raw Materials
At this time we do not see a critical dependence on any supplier(s) that could adversely affect our operations. Other than independent contractors we do not rely on the supply of any natural resources for our operations. With at least four (4) major universities in the State of Florida and given the current state of recession and unemployment we do not anticipate a shortage of potential candidates to use as independent contractors.
(6) Dependence on Limited Clients
We do not have any limitation on clients at this time. Presently we are not soliciting business outside of the State of Florida. If we are able to expand our business we will expand our service area beyond Florida to cover a larger population base.
(7) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts
At the present time we do own the domain name www.court-documents.com. We may rely on certain proprietary technologies, trade secrets, and know-how that are not patentable. Although we may take action to protect our unpatented trade secrets and our proprietary information, in part, by the use of confidentiality agreements with our employees, consultants and certain of our contractors, we cannot guaranty that:
·
These agreements will not be breached;
·
We would have adequate remedies for any breach; or
·
Our proprietary trade secrets and know-how will not otherwise become known or be independently developed or discovered by competitors.
We cannot guaranty that our actions will be sufficient to prevent imitation or duplication of our products and services by others or prevent others from claiming violations of their trade secrets and proprietary rights.
(8) Need for Government Approval of Principal Products or Services
There are no federal or state approvals that are required for the specific services that we offer.
(9) Government Regulation
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There are no federal or state regulations that require a special business license for our business however the City of St. Petersburg requires us to maintain a yearly business license. We are required to have a local business license as well as a sales tax exemption certificate. We are not required as a company to maintain workers compensation insurance and pay into the Florida unemployment compensation fund since we use independent contractors. When our new officers and directors begin to receive a salary we will then have to apply for Workers Compensation insurance and pay into the Florida unemployment compensation fund.
As a Florida corporation we must file an annual report with the Department of State in Florida.
(10) Research and Development during Our Last Two Fiscal Years
During the last two fiscal years we do not know of any specific research and development that took place. Since the change in control on January 31, 2012 we have begun researching the development of different services to be offered. The cost of our research and development of alternative services are limited and we do not feel the cost of developing additional services will have any significant impact on our profitability.
(11) Cost and Effects of Compliance with Environmental Laws
As a business we are not subject to federal, state or local environmental laws.
(12) Our Employees
At January 31, 2012 there was one (1) full-time employee and four (4) independent contractors. Our former President, Daniel Kelson, was a shareholder in the Company. At the present time, Mr. Daniels, our current President and Treasurer, devotes approximately 20 hours per week to the Company. As the business increases, he will dedicate more of his time to our operations if and when necessary. In addition, Deborah Igoe our Secretary devotes approximately 20 hours per week to Court Document Services, Inc. Ms. Igoe has a small business of her own that she also spends time with. Ms. Igoe will devote whatever time is necessary to accomplish the goals of Company.
Our former President Daniel Kelson is now our Vice President of Operations and is responsible for the daily operations of our Company. Mr. Kelson works approximately 45-55 hours per week. He is now paid as an independent contractor.
Reports to Security Holders
We will be required to file reports and other information with the U.S. Securities and Exchange Commission (SEC) when our registration statement is effective and we are a fully reporting company. You may read and copy any document that we file at the SEC's public reference facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its public reference facilities. Our SEC filings will be available to you free of charge at the SEC's web site at <www.sec.gov>. We believe that we will be an electronic filer making our information available through an Internet site maintained by the SEC that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This information may be found at www.sec.gov.
We are not required by the Florida Revised Statutes to provide annual reports. At the request of a shareholder, we will send a copy of an annual report to include audited financial statements. In the event we become a reporting company with the SEC, we will file all necessary quarterly and annual reports.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following management's discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes contained elsewhere in this prospectus. This section of our prospectus includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
We are an operating company that is seeking to expand operations when we believe the current economic downturn has stopped. We have an operating history and have generated revenues in every period in which we have been operational. We have yet to undertake any expansion activity. We believe the economy is in the latter stages of an economic downturn and there is a reasonable
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likelihood that increased revenues can be derived from our business in the foreseeable future when our economy begins to improve. If we are able to increase revenues there is no guarantee that we will be able to generate any profits. We do not believe that our operation will require us to acquire additional capital that can provide our Company cash for its operations over the next twelve (12) months.
Our Board of Directors believes that we cannot expand as an on-going business during the next twelve months since we are in an economic downturn. Management believes that it must follow a prudent strategy of keeping any profits in our Company to avoid having to take on any debt. Both of our officers/directors have therefore decided to forego any cash compensation until we believe that the economy has begun to change and our revenues increase accordingly.
Our future financial success will be dependent on the success of our ability to generate more revenue through an aggressive direct marketing campaign targeting homeowners in our specific target market area. Any significant revenue increases may take years to complete and future cash flows, if any, are impossible to predict at this time. Since we are in a highly competitive industry where the failure rate for small individual businesses is at an all time high management is developing a business model that will concentrate on cost control with slow business development.
Results of Operations
General
The following table shows our revenues, expenditures and net income for the periods ended December 31, 2011 and 2010 (audited).
Table 4.0 Revenues, Expenditures and Net Income
Period Ended: | Revenue | Expenses | Provision For Income Taxes | Net Income (Loss) |
December 31, 2011 | $ 113,239 | $ 153,231 | $ 0 | $(39,992) |
December 31, 2010 | $ 113,568 | $ 115,381 | $ 0 | $(1,813) |
Results of Operations for the Period Ended December 31, 2011
For the year ended December 31, 2011 our revenue decreased to $113,239. This decrease represents less than a 1% decrease in revenues. We did incur a loss during the period of $39,992. We believe our loss is closely related to the downturn in the economy. Out total number of clients dropped during the fiscal year 2011 which we believe was a direct result of the current state of the economy. Accordingly, we saw an increase in expenses without offsetting revenue increases. As a direct result of our failure to respond to the continuing decline in the economy, the profits for the fiscal year 2011 were negatively affected. In order to try to increase business we continued to advertise heavily with no correlating increase in revenues thereby resulting in our large loss.
Our cash and cash equivalents of $804 represent a decrease of approximately 25.2% from the same period in 2010. We believe that we will bring in sufficient cash for operations to continue through our next year. We have begun a cost cutting policy that we believe will allow us to continue operations without the new for additional cash from outside sources.
Results of Operations for the Year Ended December 31, 2010
For the year ended December 31, 2010 our revenue decreased by $1,643 from year end 2009. We did incur a loss of $1813.00 during the period although our net income remained flat. Our flat revenues and loss we believe tracked closely to the downturn in the economy. While our numbers were not significantly lower, we believe that management did not accurately prepare for the severe downturn in the economy.
Our cash and cash equivalents of $1,075 represent a decrease from the same period in 2009. Prior management believed that our Company had sufficient cash for operations to continue through the next year.
Liquidity & Capital Resources
Since inception, our Company has concentrated its efforts in document typing and preparation of papers to be filed with government agencies and departments both federal and state. Management believed it could capitalize on the number of consumers who preferred using non-attorney services versus paying for their legal services through a licensed attorney. Our services have to be limited to those documents that the courts and government agencies permit non-lawyers to prepare at the direction of clients.
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Our internal liquidity is provided by our operations. Our total current assets exceed our current liabilities due to the fact that the current shareholders purchased the business without any financing and the current revenue is sufficient to pay all of the bills of our Company without any borrowing or terms exceeding weekly payment for any products or services. Management believes that in the fiscal year 2012 the Company will show a revenue increase and may show a profit however there is no guarantee that we will increase revenues or show a profit. Management forecasts our profits to be minimal. Management does believe that revenues are increasing and operations should be sustainable in the long-term of at least twelve (12) months due to the increase in cash flow from sales of our Company. In the event our Company needs additional funds, our management believes that a small business loan should be obtainable on reasonable terms due to the Company having no debt and owning all of the assets of the corporation free and clear of any encumbrances. There is no guarantee that such a small business loan will be obtained or if there will be terms that will be suitable for our Company.
In the event we are unable to generate sufficient funds to continue our business efforts, we will seek additional capital through a private placement of our common shares or debt financing. If we are pursued by a larger company for a business combination we will analyze all strategies to continue our Company and maintain or increase shareholder value. Under these circumstances we would consider a merger, acquisition, joint venture, strategic alliance, a roll-up, or other business combination for the purposes of continuing the business and maintaining or increasing shareholder value. Management believes its responsibility to maintain shareholder value is of paramount importance, which means the Company should consider the aforementioned alternatives in the event funding is not available on favorable terms to the Company when needed.
In the event cash flow was to tighten, management would consider additional paid in capital to ease our cash flow.
We have not entered into any discussions with any companies, financial institutions, investment banks, broker-dealers, promoters or other parties regarding the pursuit of any business combination that would result in a change in control. We set forth above the circumstances under which this would occur, keeping in mind the fiduciary responsibility of management to maintain shareholder value.
DESCRIPTION OF PROPERTY
Our principal business address is at 1913 South Florida Avenue, Lakeland, Florida 33803, which is a commercial building fronting a major north/south thoroughfare in the city. We do not own the building but rent office space of approximately 800 square feet on the premises. The building is a single story stucco building that is in satisfactory condition. We own our furniture, computer system, ancillary equipment, and office supplies and all of the related equipment purchased for use in a business. The Company has no leased equipment for business purposes. All furniture, fixtures and equipment is owned without any liens or encumbrances.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
To the best of our knowledge there are no transactions involving any director, executive officer, or any security holder who is a beneficial owner or any member of the immediate family of the officers and directors.
AUDIT COMMITTEE
We do not have an audit committee that is comprised of any independent director. We rely on our President/Treasurer, Michael J. Daniels, for our audit committee financial expert as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act. Our Board of Directors acts as our audit committee. The Board has determined that the relationship of Mr. Daniels as both our Company President/Treasurer and our audit committee financial expert is not detrimental to the Company. Mr. Daniels has an understanding of GAAP and financial statements; the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves in a fair and impartial manner; has experience analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to or exceed the breadth and complexity of issues that can reasonably be expected to be raised by the issuers financial statements; an understanding of internal control over financial reporting; and an understanding of audit committee functions. Mr. Daniels has gained this experience through his experience with public reporting companies as well as coordinating financial statements with various C.P.A.s.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is not quoted or traded on any quotation medium at this time. Once we are fully reporting with the SEC, we may or may not apply to have our common stock included for quotation on the FINRA OTC Bulletin Board. However, until such a decision is made and an application is accepted and trading of our stock on the FINRA OTC Bulletin Board begins shareholders who wish to sell their shares will have to sell their shares at the fixed price of $0.10 per share. In the event the stock is listed on the
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OTCBB or other exchange, the selling security holders may sell at the prevailing market price or at privately negotiated prices. There can be no assurance that an active trading market for our stock will develop. If our stock is included for quotation on the FINRA OTC Bulletin Board price quotations will reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Should a market develop for our shares, the trading price of the common stock is likely to be highly volatile and could be subject to wide fluctuations in response to factors such as actual or anticipated variations in quarterly operating results; announcements of new product innovations, new sales formats, or new services by us or our competitors; changes in financial estimates by securities analysts; conditions or trends in Internet use, such as increased Internet advertising and online ordering by small independent operators or traditional brick and mortar operations; changes in the market valuations of other businesses; announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments; additions or departures of key personnel; sales of common stock; and other events or factors, many of which are beyond our control. In addition, the stock market in general, and the market for our type of business in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. These broad market and industry factors may materially adversely affect the market price of the common stock, regardless of our operating performance.
Consequently, future announcements concerning us or our competitors, litigation, or public concerns as to the commercial value of our business may cause the market price of our common stock to fluctuate substantially for reasons which may be unrelated to operating results. These fluctuations, as well as general economic, political and market conditions, may have a material adverse effect on the market price of our common stock.
At the present time we have no outstanding options or warrants to purchase securities convertible into common stock. There are no shares of common stock that could be sold by an affiliated selling shareholder according to Rule 144.
No cash dividends have been paid during the last three (3) years. In the near future, we intend to retain any earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. The declaration and payment of cash dividends by us are subject to the discretion of our board of directors. Any future determination to pay cash dividends will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant at the time by the board of directors. We are not currently subject to any contractual arrangements that restrict our ability to pay cash dividends.
We have thirty (30) stockholders of record of our common stock as of January 31, 2012.
EXECUTIVE COMPENSATION
At the present time both of our Officers and Directors have forgone and cash or stock compensation for their services. Both Officers believe it prudent to keep the earnings in our Company to continue operations. If and when our revenues and earnings allow for compensation, both Mr. Daniels and Ms. Igoe will collect a salary of $26,000 per year, which will be adjusted annually according to their performance and the performance of our Company.
Revenues and earnings, as well as sufficient cash flow, must be considered when determining when salaries may be available to our officers and directors. Cash flows must be sufficient to meet the monthly cash needs of the business. Earnings are determined quarterly and will be analyzed along with our cash flows to determine if there is sufficient cash remaining after all expenses are paid to commence salaries for Mr. Daniels and Ms. Igoe. The amount of compensation to one or both officers will be no more than net profits will allow.
The following table sets forth information concerning the annual and long-term compensation of our President and Secretary/Treasurer, and the most highly compensated employee and/or executive officer who served at the end of the fiscal years December 31, 2011 and 2010, and whose salary and bonus exceeded $100,000 for the fiscal years ended December 31, 2011 and 2010, for services rendered in all capacities to us. The listed individuals shall be hereinafter referred to as the "Named Executive Officers."
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Table 5.0 Summary Compensation
Name and principal position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Com-pensation ($) | Non-Qualified Deferred Compen-sation Earnings ($) | All Other Compen-sation ($) | Total ($) |
Daniel Kelson1 | 2011 | 28,305 | -0- | -0- | -0- | -0- | -0- | -0- | 28,305 |
2010 | 17,150 | -0- | -0- | -0- | -0- | -0- | -0- | 17,150 | |
Michael J. Daniels2, Pres. And Treasurer | 20114 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
2010 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |
Deborah Igoe3, Secretary | 20114 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
2010 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |
1 There is no employment contract with Mr. Kelson at this time. Nor are there any agreements for compensation in the future. Mr. Kelson has sold all of his stock in our Company and has resigned all of his positions. He is now the Vice-President of Operations and is paid as an independent contractor. 2There is no employment contract with Mr. Daniels at this time. Nor are there any agreements for compensation in the future. A salary and stock options and/or warrants program may be developed in the future. 3 There is no employment contract with Ms. Igoe at this time. Nor are there any agreements for compensation in the future. A salary and stock options and/or warrants program may be developed in the future. 4 Both Mr. Daniels and Ms. Igoe will forgo any cash compensation during the fiscal year 2012. Their experience dictates that any cash compensation at this time would be counterproductive to the financial security of our Company. Should our Company generate sufficient cash flow and net profits in the fiscal year 2012 both Mr. Daniels and Ms. Igoe will be compensated. Any compensation will be decided by the Board of Directors, with shareholder approval, if and when profits (after all expenses, excluding income taxes, are paid) allow for salaries to be paid. In other words, the amount of compensation to one or both officers will be no more than net profits will allow. |
Table 6.0 Outstanding equity awards for 2011
| Option Awards | Stock Awards | |||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value Of Shares Of Units Of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
Daniel Kelson | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Michael J. Daniels, Pres. and Treas. | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Deborah Igoe, Sec. | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Compensation of Directors
Pursuant to our By Laws, directors will not be compensated for their services in their capacity as directors. If and when the Company has net profits, after all expenses are paid prior to any income tax being considered, director compensation for actual attendance at each regular or special meeting of the Board may be authorized. At this time, Directors are not paid for meetings attended. All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.
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Table 7.0 Director Compensation for 2011
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total ($) |
Daniel Kelson | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Michael J. Daniels | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Deborah Igoe | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Additional Compensation of Directors
As of January 31, 2012, our directors have received no compensation. Pursuant to our By Laws, directors will not be compensated for their services in their capacity as directors, but may, by resolution of the board, be paid a fixed sum and expenses for actual attendance at each regular or special meeting of the Board. At this time, Directors meeting expenses are not paid. In the future, such payment will be revisited as the Companys performance and income improves. There can be no guarantee that we will ever have profits from which our Directors may receive payment.
Board of Directors and Committees
Currently, our Board of Directors consists of Michael J. Daniels, Chairman and Deborah Igoe, Director. We are not actively seeking additional board members. At present, the Board of Directors has not established any committees.
Employment Agreements
Currently, we have no employment agreements with any of our Directors or Officers.
DISCLOSURE CONTROLS AND PROCEDURES
Our Board of Directors believes that since our new management took control on January 31, 2012, our disclosure controls and procedures, developed by our new Chairman/President/Treasurer, Michael J. Daniels, are in keeping with the intent of the regulations. Mr. Daniels and the full Board of Directors find the Companys disclosure controls and procedures meet the requirements. Management has the responsibility for establishing and maintaining adequate controls over the financial reporting of our Company. Our controls and procedures include, without limitation, those designed to ensure that information to be disclosed is recorded, processed, summarized and reported within the appropriate time periods and that the information is communicated to management, including its principal executive officer and principal financial officer, as appropriate, regarding timely disclosure. There were no disclosure requirements for 2011 and 2010 except for income tax reporting.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our Chairman/President/Treasurer, Michael J. Daniels, will be providing a full financial reporting and accounting of the Company according to the Generally Accepted Accounting Principles and guidelines established by the American Institute of Certified Public Accountants. The Board of Directors found no weaknesses in the controls that were established for 2010 and 2011 and through January 31, 2012 when new management assumed control of our Company. As of this filing, our Chairman/President/Treasurer, Michael J. Daniels, believes that the Company will be able to provide timely and accurate reports and keep those who invest in our Company fully informed of the true financial status of the Company at all times. Should there be additional changes in our internal control over financial reporting, these changes will be made available in our reports filed with the Securities and Exchange Commission.
CODE OF ETHICS
We adopted a Code of Ethics as of January 31, 2012 that applies to our principal executive officer, principal financial officer, and principal accounting officer as well as our employees. Our complete Code of Ethics is included in this registration statement as an exhibit and is available for viewing on our website, www.court-documents.com. Our annual report filed with the Securities Exchange Commission will set forth the manner in which a copy of our code may be requested at no charge. The following is a summation of the key points of the Code of Ethics we adopted:
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·
Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
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Full, fair, accurate, timely, and understandable disclosure reports and documents that an issuer files with, or submits to, the Commission and in other public communications made by our Company;
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Full compliance with applicable government laws, rules and regulations;
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The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
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Accountability for adherence to the code.
CORPORATE GOVERNANCE
We are not listed on a national securities exchange or in an inter-dealer quotation system that has requirements that a majority of the board of directors be independent. Further, we have not applied for a listing with a national exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. We have conducted regular Board of Director meetings on the last business Friday of each quarter for the last calendar year. Each of our directors has attended all meetings. We have no standing committees regarding compensation, audit or other nominating committees. At our annual shareholders meetings, each shareholder is given specific information on how he/she can direct communications to the officers and directors of the corporation. All communications from shareholders are relayed to the members of the Board of Directors. We have no independent directors on our Board of Directors as defined in Item 407 of Regulation S-K.
EXPERTS
Certain of the financial statements of Court Document Services, Inc. included in this prospectus and elsewhere in the registration statement, to the extent and for the periods indicated in their reports, have been audited or reviewed by Drake & Klein, C.P.A., independent certified public accountant, whose reports thereon appear elsewhere herein and in the registration statement.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On March 1, 2012, we engaged Drake & Klein, C.P.A.s, as our independent auditors. They are our first auditors and we have had no disagreements with Drake & Klein on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, in connection with its reports.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for Court Document Services, Inc. by Harrison Law, P.A., 6860 Gulfport Blvd. South, No. 162, South Pasadena, Florida, 33707. The spousal relationship between our President/Treasurer Michael J. Daniels and Diane J. Harrison the President of Harrison Law, P.A. may create a conflict of interest with our Company operating independently by Harrison Law, P.A. providing the opinion of the validity of the shares of the Company.
CONFLICT OF INTERESTS
The President/Treasurer of our Company Michael J. Daniels is the husband of the principal in the firm of Harrison Law, P.A. This firm is providing the opinion as to the validity of our shares. There could be a conflict of interest that could arise if a client of CDSIs was also a client of Harrison Law, P.A. and it was necessary for Harrison Law, P.A. to put the interests of the client above those of CDSIs. Currently there are no mutual clients of Harrison Law, P.A. and Court Document Services, Inc. In the event a client is referred by Harrison Law, P.A. to The Company there is no financial arrangement whereby Harrison Law, P.A. receives any of the monies earned by Court Document Services, Inc. The only fees paid to Harrison Law, P.A., if any, will be for legal advice and work.
WHERE YOU CAN FIND FURTHER INFORMATION
Court Document Services, Inc. will be subject to the informational requirements of the Securities Exchange Act of 1934, and in accordance therewith files reports, or information statements and other information with the Securities and Exchange Commission. Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street N. E., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a web site that contains reports,
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proxy and information statements, and other information regarding registrants that file electronically with the Commission. The address of the Commissions web site is http://www.sec.gov.
Court Document Services, Inc. has filed with the Commission a registration statement on Form S-1 under the Securities Act of 1933 with respect to the common stock being offered hereby. As permitted by the rules and regulations of the Commission, this prospectus does not contain all the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to Court Document Services, Inc. and the common stock offered hereby, reference is made to the registration statement, and such exhibits and schedules. A copy of the registration statement, and the exhibits and schedules thereto, may be inspected without charge at the public reference facilities maintained by the Commission at the addresses set forth above, and copies of all or any part of the registration statement may be obtained from such offices upon payment of the fees prescribed by the Commission. In addition, the registration statement may be accessed at the Commissions web site. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete and, in each instance, reference is made to the copy of such contract or document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.
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FINANCIAL STATEMENTS
CONTENTS
F-1
Drake & Klein CPAs
A PCAOB Registered Accounting Firm
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Court Document Services Inc.
We have audited the accompanying balance sheets of Court Document Services Inc. as of December 31, 2011 and 2010, and the related statements of income, stockholders equity, and cash flows for the years then ended. The management of Court Document Services Inc. is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Court Document Services Inc. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Drake & Klein CPAs
Drake & Klein CPAs
April 16, 2012
PO Box 2493 Dunedin, FL 34697-2493 727-512-2743 | 2451 McMullen Booth Rd. Suite 210 Clearwater, FL 33759-1362 |
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| As of | ||
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| December 31, 2011 (audited) | December 31, 2010 (audited) | |
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| ASSETS |
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Current Assets: |
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| Cash and Cash Equivalents | $ 804 | $ 1,075 | |
| Due from Shareholders | 0 | 39,488 | |
| Total Current Assets | 804 | 40,563 | |
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Total Assets: | $ 804 | $ 40,563 | ||
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| LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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| Accounts Payable | $ 2,475 | $ 1,596 | |
| Income Tax Liabilities | 1,470 | 2,116 | |
| Total Current Liabilities | 3,945 | 3,712 | |
| Commitments and contingencies (Note 9) |
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Stockholders' Equity (deficiency): |
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| Common Stock, $0.01 per share par value; 500,000,000 shares authorized; and 2,500,000 issued outstanding | 25,000 | 25,000 | |
| Additional Paid in Capital | (24,900) | (24,900) | |
| Retained earnings (accumulated deficit) | (3,241) | 36,751 | |
| Total Stockholders Equity (deficiency) | (3,141) | 36,851 | |
Total Liabilities and Stockholders' Equity (Deficit) | $ 804 | $ 40,563 |
The accompanying notes are an integral part of these statements.
F-3
COURT DOCUMENT SERVICES, INC.
Statements of Operations
For the Years Ended December 31, 2011 and 2010
| For the Year Ending, December 31, 2011 | For the Year Ending, December 31, 2010 |
Revenue: |
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Sales | 113,239 | 113,568 |
Selling, general and administrative expenses | 153,231 | 115,381 |
Loss from operations | (39,992) | (1,813) |
Net Loss | (39,992) | (1,813) |
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Basic and diluted net loss per share | (0.02) | (0.00) |
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Weighted average shares outstanding |
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-Basic and Diluted | 2,500,000 | 2,500,000 |
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The accompanying notes are an integral part of these statements.
F-4
COURT DOCUMENT SERVICES, INC.
Statement of Changes in Stockholders Equity (Deficiency)
For the Years Ended December 31, 2011 and 2010
|
| Common Stock |
| Additional Paid in Capital |
| Subscription Receivable |
| Retained Earnings (Accumulated Deficit) |
| Total Shareholders Equity (Deficit) | ||
Shares |
| Amount | ||||||||||
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Balance as of December 31,2009 |
| 500 | $ | 500 | $ | - | $ | (400) | $ | 38,564 | $ | 38,664 |
Stock split 5000:1, authorized January 30, 2012* |
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Cancel old shares |
| (500) |
| (500) |
| 100 |
| 400 |
| - |
| - |
Issue new shares |
| 2,500,000 |
| 25,000 |
| (25,000) |
| - |
| - |
| - |
Balance at December 31, 2009 as reinstated For Stock split |
| 2,500,000 |
| 25,000 |
| 24,900 |
| - |
| 38,564 |
| 38,664 |
Net Loss 2010 |
| - |
| - |
| - |
| - |
| (1,813) |
| (1,813) |
Balance; December 31, 2010 |
| 2,500,000 |
| 25,000 |
| (24,900) |
| - |
| 36,751 |
| 36,851 |
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Net Loss 2011 |
| - |
| - |
| - |
| - |
| (39,992) |
| (39,992) |
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Balance at December 31, 2011 |
| 2,500,000 | $ | $ 25,000 | $ | $ (24,900) | $ | - | $ | (3,241) | $ | $ (3,141) |
*A stock split authorized on January 30, 2012 was retroactively applied to all years presented.
The accompanying notes are an integral part of these statements.
F-5
COURT DOCUMENT SERVICES, INC.
Statements Cash Flows
For the Years Ended December 31, 2011 and 2010
| For the Year Ending, December 31, 2011 | For the Year Ending, December 31, 2010 |
Cash Flows from Operating Activities: |
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Net Income (Loss) | $ (39,992) | $ (1,813) |
Adjustments to reconcile Net Income (Loss) to net cash used in operating activities: |
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Write off of loan payable to shareholder | 23,464 | - |
Write off of receivable from employees | - | 200 |
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Changes in operating assets and liabilities: |
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Prepaid Taxes | - | (3,058) |
Loan to shareholder | 16,024 | 686 |
Accounts payable | 879 | 973 |
Income tax payable | - | 367 |
Deferred revenue | (646) | 2,116 |
Net Cash Flows Provided (Used) by Operating Activities | (271) | (529) |
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Net increase (decrease) in cash | (271) | (529) |
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Cash - Beginning of period | 1,075 | 1,604 |
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Cash End of period | $ 804 | $ 1,075 |
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Supplemental Disclosures of cash flow information: |
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Cash paid for Interest | - | - |
Cash paid for Taxes | - | - |
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The accompanying notes are an integral part of these statements.
F-6
Court Document Services, Inc.
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010
NOTE 1.
NATURE OF OPERATIONS
Organization
Court Document Services, Inc. (the Company, we, us, or our) was incorporated under the laws of the State of Florida on September 26, 2002.
Nature of Operations
The Company is a provider of retail non-attorney documentation typing service, based in Lakeland Florida. The company services the central Florida market.
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Use of Estimates
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
Cash and Cash Equivalents
The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Property and Equipment
Property and equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment exists at December 31, 2011.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
F-7
Court Document Services, Inc.
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010
(Continued)
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
The Company recognizes revenue on our products in accordance with ASC 605-10, Revenue Recognition in Financial Statements. Under these guidelines, revenue is recognized on sales transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has several revenue streams as follows:
| | Sales are recognized at the point of sale or at the time product is delivered to the client. |
| | Delivery charges are included in the sales revenue. |
Stock-Based Compensation
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.
Advertising
The costs of advertising are expensed as incurred. Advertising expense was $43,813 and $20,027 for the years ending December 31, 2010 and 2009, respectively.
Beginning September 1, 2009, the Company adopted the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2011, tax years 2011, 2010 and 2009 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years.
F-8
Court Document Services, Inc.
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010
(Continued)
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Advertising (continued)
Effective September 1, 2009, the Company adopted ASC 740-10, Definition of Settlement in FASB Interpretation No. 48, (ASC 740-10), which was issued on May 2, 2007. ASC 740-10 amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term effectively settled replaces the term ultimately settled when used to describe recognition, and the terms settlement or settled replace the terms ultimate settlement or ultimately settled when used to describe measurement of a tax position under ASC 740-10. ASC 740-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the
statute of limitations remains open. The adoption of ASC 740-10 did not have an impact on the accompanying consolidated financial statements.
Net Earnings (Loss) Per Share
In accordance with ASC 260-10, Earnings Per Share, basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. At December 31, 2011 and 2010 there were no potentially dilutes securities.
Recent Accounting Pronouncements
The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2011 through the date these financial statements were issued.
Subsequent Events
The Company has evaluated subsequent events through April 13, 2012 to assess the need for potential recognition or disclosure in this report. Based upon this evaluation, management determined that all subsequent events that require recognition in the financial statements have been included.
NOTE 3.
RELATED PARTY TRANSACTIONS
During 2011 and 2010, the sole stockholder borrowed and loaned money to the Company as needed. As of December 31, 2010, the stockholder owed the Company $39,488. In 2011, the Company was owed $23,464 which was written off as officer compensation of December 31, 2011 and included in Selling, General and Administrative expense.
F-9
Court Document Services, Inc.
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010
(Continued)
NOTE 4.
COMMITMENTS AND CONTINGENCIES
Legal
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of December 31, 2011, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations, except as noted.
Other Commitments
The Company enters into various contracts or agreements in the normal course of business whereby such contracts or agreements may contain commitments. There are no firm commitments as of December 31, 2011.
The Company is operating from rented offices in Lakeland on a month and month basis.
NOTE 5.
STOCKHOLDERS EQUITY
As of December 31, 2011 and 2010, the Company had 500 shares of common stock authorized with 100 shares issued and outstanding. The common stock is voting. In January 2012 the authorized amount was increased to 500,000,000 shares of common stock and a stock split was approved at 5,000:1. These changes have been retro-actively applied to these financial statements.
The Company has no options or warrants outstanding in either year.
NOTE 6.
SUBSEQUENT EVENTS
On January 30, 2012, the Board of Directors approved the change in the par value from $1.00 to $0.01. Additionally, it approved a forward split of 5,000 to 1 resulting in the sole shareholders shares changing from 500 to 2,500,000. The Company amended and restated its Articles of Incorporation which authorized the issuance of one class of preferred blank check stock to be issued solely at the discretion of the Board of Directors.
On January 31, 2012, the sole shareholder, Daniel Kelson, sold all of his shares to the current shareholders. As a result of the change of ownership, Michael J. Daniels was appointed as President, Treasurer, and Chairman of the Board of Directors. Also, Deborah Igoe was appointed as Secretary.
F-10
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by Court Document Services, Inc. in connection with the sale of the securities being registered. All amounts are estimates except the Securities and Exchange Commission registration fee and the Accounting Fees and Expenses:
Registration Fee | $6.72 |
Federal taxes, state taxes and fees | $0.00 |
Printing and Engraving Expenses | $1,000.00 |
Accounting Fees and Expenses | $10,000.00 |
Legal Fees and Expenses | $0.00 |
Transfer Agent's Fees and Expenses | $1,000.00 |
Miscellaneous | $2,000.00 |
Total | $14,004.89 |
We will bear all the costs and expenses associated with the preparation and filing of this registration statement including the registration fees of the selling security holders.
Item 14 Indemnification of Directors and Officers
Title XXXVI, Chapter 607 of the Florida Statutes permits corporations to indemnify a director, officer or control person of the corporation for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expense. Our Articles of Incorporation do include such a provision automatically indemnifying a director, officer or control person of the corporation or its stockholders for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such.
Article XV, Paragraph 3 of our By-Laws permits us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or his actions in such capacity, regardless of whether or not Florida law would permit indemnification. We have not obtained any such insurance at this time.
We have been advised that it is the position of the Securities and Exchange Commission that insofar as the foregoing provisions may be invoked to disclaim liability for damages arising under the Securities Act of 1933, as amended, that such provisions are against public policy as expressed in the Securities Act and are therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities
There have been no sales of Court Document Services, Inc.'s common stock without registration during the last three years.
II-1
Item 16. Index of Exhibits
The following Exhibits are filed as part of this Registration Statement, pursuant to Item 601 of Regulation S-1. All Exhibits are attached hereto unless otherwise noted.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1)
to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)
That for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)
Each prospectus filed pursuant to Rule 424(b)(§230.424(b) of Title 17 of the Code of Federal Regulations Chapter II, Securities and Exchange Commission) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(ii)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant
II-2
has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lakeland, Florida, on May 9, 2012.
(Registrant) COURT DOCUMENT SERVICES, INC. |
By: /s/ Michael J. Daniels |
Michael J. Daniels |
President |
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons and in the capacities and on the dates indicated.
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Date |
| Name |
May 9, 2012 |
| /s/ MICHAEL J. DANIELS |
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| Michael J. Daniels Principal Executive Officer, President, Principal Accounting Officer, Treasurer |
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May 9, 2012 |
| /s/ DEBORAH IGOE |
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| Deborah Igoe Secretary |
II-3
EXHIBIT 3(i)
ARTICLES OF INCORORATION
In compliance with Chapter 607 and/or Chapter 621. F.S. (Profit)
ARTICLE I
NAME
The name of the corporation shall be:
Court Document Services, Inc.
ARTICLE II
PRINCIPAL OFFICE
The principal place of business/mailing address is
P.O. Box 90103
Lakeland, FL 33804
ARTICLE III
PURPOSE
The purpose for which the corporation is organized is:
Paralegal Services
ARTICLE IV
SHARES
The number of shares of stock is:
500
ARTICLE V
INITIAL OFFICERS/DIRECTORS (optional)
The name(s), address(es) and titles(s):
Daniel Kelson
5510 Chiles Lane
Lakeland, FL 33804
ARTICLE VI
REGISTERED AGENT
The name and Florida street address of the registered agent is:
Daniel Kelson
5510 Chiles Lane
Lakeland, FL 33804
ARTICLE VII
INCORPORATOR
The name and address of the incorporator is:
Daniel Kelson
5510 Chiles Lane
Lakeland, FL 33804
************************************************************************************Having been named its registered-agent to accept service of process for the above state corporation at the place designated in this certificate, I am familiar with and accept the appointment as registered agent and agree to act in this capacity.
/s/Daniel Kelson |
| 9/26/02 |
Signature/Registered Agent |
| Date |
/s/Daniel Kelson |
| 9/26/02 |
Signature/Incorporator |
| Date |
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
COURT DOCUMENT SERVICES, INC.
A Florida Corporation
Daniel Kelson certifies that:
1.
Daniel Kelson is the duly elected and acting President/Secretary/Treasurer of the corporation herein above named.
2.
The Articles of Incorporation shall be amended and restated to read in full as follows:
ARTICLE I.
The name of the corporation shall be Court Document Services, Inc. and shall be governed by Title XXXVI Chapter 607 of the Florida Statutes.
ARTICLE II.
The nature of the business shall be to engage in any and all lawful activity permitted by the laws of the State of Florida and desirable to support the continued existence of the corporation.
The corporation shall have the power to conduct its business both within and outside the State of Florida.
ARTICLE III.
The principal office of the corporation shall be: 1913 South Florida Avenue, Lakeland, Florida 33803.
ARTICLE IV.
The total authorized capital stock of the corporation shall be five hundred million (500,000,000) shares of common stock with a par value of $.01 per share, all or any part of which capital stock may be paid for in cash, in property or in labor and services at a fair valuation to be fixed by the Board of Directors. Such stock may be issued from time to time without any action by the stockholders for such consideration as may be fixed from time to time by the Board of Directors, and shares so issued, the full consideration for which has been paid or delivered shall be deemed the fully paid up stock, and the holder of such shares shall not be liable for any further payment thereof. Each share of stock shall have voting privileges and will be eligible for dividends.
There shall be one class of preferred blank check stock to be issued solely at the discretion of the Board of Directors.
ARTICLE V.
The corporation shall have perpetual existence. The date when the corporation existence shall commence is September 26, 2002 upon the filing of the original articles of incorporation.
ARTICLE VI.
The registered agent and the office of the resident agent shall be:
Michael J. Daniels: 1913 South Florida Avenue, Lakeland, Florida 33803.
ARTICLE VII.
The governing board of this corporation shall be known as Directors, which shall consist of not less than one (1) Director and not more than fifteen (15) Directors and the number of the Directors may from time to time be increased or decreased in such manner provided by the By-Laws of this corporation, provided that the number of Directors shall not be reduced to less than one (1) Director.
The election of the Directors shall be on an annual basis. Each Director shall be of full and legal age.
A quorum for the transaction of business shall be a simple majority of the Directors so qualified and present at a meeting. Meetings of the Board of Directors may be held within or without the State of Florida and members of the Board of Directors need not be stockholders. Attendance at any meeting of the Board of Directors may be in person or by any electronic or telephonic means accessible.
ARTICLE VIII.
The name and post office address of the initial member of the Board of Directors is:
Daniels Kelson: 1913 South Florida Avenue, Lakeland, Florida 33803.
ARTICLE IX.
The name and post office address of the Officers, subject to this Charter and By-Laws of the corporation and the laws of the State of Florida, shall hold office for the first year of business or until removal, resignation or an election is held by the Board of Directors for the election of the officers and or the successors have been duly elected and qualified is:
Daniel Kelson: 1913 South Florida Avenue, Lakeland, Florida 33803
ARTICLE X.
The name and post office address to the subscribers to these Articles of Incorporation are:
Daniel Kelson: 1913 South Florida Avenue, Lakeland, Florida 33803.
ARTICLE XI.
The corporation shall have the power to indemnify any officer, director or former officer or director to the fullest extent permitted by law.
ARTICLE XII.
If all of the directors severally and collectively consent in writing to any action taken or to be taken by the corporation and the writings evidencing their consent are filed with the Secretary of the Corporation, the action shall be as valid as though it had been authorized at a meeting of the Board of Directors.
The undersigned, being the subscriber to these Articles of Incorporation, for the purpose of forming a corporation to do business both within and without the State of Florida, and in pursuance of the general corporation law of the State of Florida, does make and file this certificate hereby declaring and certifying that the facts hereinabove stated are true and accordingly has hereunto set his hand this 31st day of January, 2012. The effective date of this amendment and restatement shall be January 31, 2012.
I further declare under penalty of perjury under the laws of the State of Florida that the matters set forth in this Amended and Restated Articles of Incorporation are true and correct to the best of my knowledge.
/s/ DANIEL KELSON
Daniel Kelson
CERTIFICATE OF RESTATED ARTICLES OF INCORPORATION
In accordance with Title XXXVI, Chapter 607, Section 607.1007 of the Florida Statutes, the Board of Directors of Court Document Services, Inc. has approved the filing of Amended and Restated Articles of Incorporation and that this Restatement does contain amendment(s) that required shareholder approval and that the board of Directors adopted the Restatement after submission of the same to the shareholders and a majority approval by the shareholders.
The shareholders at a meeting duly held on the 31st day of January, 2012 adopted the Restated Articles of Incorporation and any and all amendments to the original Articles of Incorporation of Court Document Services, Inc. and that the number of votes cast for the amendment(s) by the shareholders was sufficient for approval in accordance with Title XXXVI, Chapter 607, Section 607.1006. The duly adopted and Restated Articles of Incorporation supersede the original Articles of Incorporation and all amendments to them.
The undersigned, being the President/Secretary/Treasurer for the purpose of filing this Certificate with the state of Florida and in pursuance of the general corporation law of the State of Florida does make and file this Certificate hereby declaring and certifying the facts above stated are true and, accordingly has set his hand this 31st day of January, 2012.
/s/DANIEL KELSON
Daniel Kelson
WRITTEN ACCEPTANCE BY REGISTERED AGENT
I, Michael J. Daniels, the undersigned being the registered agent for COURT DOCUMENT SERVICES, INC., do hereby state that I am familiar with and accept the duties and responsibilities as registered agent for said corporation. I hereby declare and certify the facts hereinabove stated are true, and accordingly hereunto set my hand this 31st day of January, 2012.
/s/ MICHAEL J. DANIELS
Michael J. Daniels
EXHIBIT 3(iii)
BY LAWS
OF
COURT DOCUMENT SERVICES, INC.
ARTICLE I - OFFICES
The principal office of the corporation shall be established and maintained as designated in the Articles of Incorporation. The corporation may also have offices at such places within or without the State of Florida as the Board of Directors (hereinafter, "Board") may from time to time establish.
ARTICLE II - STOCKHOLDERS
1.
PLACE OF MEETINGS. Meetings of the Stockholders shall be held at the principal office of the corporation or at such place within or without the State of Florida as the Board shall authorize.
2.
ANNUAL MEETING. The annual meeting of Stockholders shall be held on the first Monday of each year in the month which this Corporation's initial Articles of Incorporation were first filed with the Secretary of State; however, if such day falls on a legal holiday, then on the next business day following at the same time, the Stockholders shall elect a Board and transact such other business as may properly come before the meeting.
3.
SPECIAL MEETINGS. Special meetings of the Stockholders may be called by the Board or by the President or at the written request of Stockholders owning a majority of the stock entitled to vote at such meeting. A meeting requested by the Stockholders shall be called for a date not less than ten nor more than sixty days after a request is made. The Secretary shall issue the call for the meeting unless the President, the Board or the Stockholders shall designate another to make said call.
4.
NOTICE OF MEETINGS. Written Notice of each meeting of Stockholders shall state the purpose of the meeting and the time and place of the meeting. Notice shall be mailed to each Stockholder having the right and entitled to vote at such meetings to his last address as it appears on the records of the corporation, not less than ten nor more than sixty days before the date set for such meeting. Such notice shall be sufficient for the meeting and any adjournment thereof. If any Stockholder shall transfer h is stock after notice, it shall not be necessary to notify the transferee. Any Stockholder may waive notice of any meeting before, during or after the meeting.
5.
RECORD DATE. The Board may fix a record date not more than forty days prior to the date set for a meeting of Stockholders as the date of which the Stockholders of record who have the right to and are entitled to notice of and to vote at such meeting and any adjournment thereof shall be determined. Notice that such date has been fixed may be published in the city, town or county where the principal office of the corporation is located and in each city or town where a transfer agent of the stock of the corporation is located.
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6.
VOTING. Every Stockholder shall be entitled at each meeting and upon each proposal presented at each meeting to one vote for each share of voting stock recorded in his name on the books of the corporation on the record date as fixed by the Board. If no record date was fixed, on the date of the meeting the book of records of Stockholders shall be produced at the meeting upon the request of any Stockholder. Upon demand of any Stockholder, the vote for Directors and the vote upon any question before the meeting shall be by ballot. All elections for Directors shall be decided by plurality vote; all other questions shall be decided by majority vote.
7.
QUORUM. The presence, in person or by proxy, of Stockholders holding a majority of the stock of the corporation entitled to vote shall constitute a quorum at all meetings of the Stockholders. In case quorum shall not be present at any meeting, a majority in interest of the Stockholders entitled to vote thereat present in person or by proxy, shall have power to adjourn the meeting from time to time, out notice other than announcement at the meeting, until the requisite amount of stock entitled to shall be present. At any such adjourned meeting at which the requisite amount of stock entitled to vote be represented, any business may be transacted which might have been transacted at the meeting as originally noticed; but only those Stockholders entitled to vote at the meeting shall be entitled to vote at any adjournment or adjournments thereof.
8.
PROXIES. At any Stockholders' meeting or any adjournment thereof, any Stockholder of record having the right and entitled to vote thereat may be represented and vote by proxy appointed in an instrument. No such proxy shall be voted after three years from the date of the instrument unless the instrument provides for a longer period. In the event that any such instrument provides for or more persons to act as proxies, a majority of such persons present at the meeting, or if only one is present, that one, shall have all the powers conferred by the instrument upon all persons so designated unless the instrument shall otherwise provide.
9.
STOCKHOLDER LIST. After fixing a record date for a meeting, the corporation shall prepare an alphabetical list of the names of all its Stockholders who are entitled to notice of a Stockholders' meeting. Such list shall be arranged by voting group with the names and addresses of, and the number class and series if any, of shares held by each. This list shall be available for inspection by any Stockholder for a period of ten days prior to the meeting.
ARTICLE III - DIRECTORS
1.
BOARD OF DIRECTORS. The business of the corporation shall be managed and its corporate powers exercised by a Board each of whom shall be of full age. It shall not be necessary for Directors to be Stockholders. The number of Director(s) shall be determined by the Stockholders at their annual meeting. There shall be no less than one (1) director and no more than fifteen (15) directors.
2.
ELECTION AND TERM OF DIRECTORS. Directors shall be elected at the annual meeting of stockholders and each Director elected shall hold office until his successor has been elected and qualified, or until the Director's prior resignation or removal.
3.
VACANCIES. If the office of any Director, member of a committee or other office becomes vacant the remaining Directors in office, by a majority vote, may appoint any qualified person to fill such vacancy, who shall hold office for the unexpired term and until a successor shall be duly chosen.
4.
REMOVAL OF DIRECTORS. Any or all of the Directors may be removed with or without cause by a vote of a majority of all the stock outstanding and entitled to vote at a special meeting of Stockholders called for that purpose.
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5.
NEWLY CREATED DIRECTORSHIPS. The number of Directors may be increased by amendment of these By-laws by the affirmative vote of a majority of the Directors, though less than a quorum, or, by the affirmative vote of a majority in interest of the Stockholders, at the annual meeting or at a special meeting called for that purpose, and by like vote the additional Directors may be chosen at such meeting to hold office until the next annual election and until their successors are elected and qualify.
6.
RESIGNATION. A Director may resign at any time by giving written notice to the Board, the President or the Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such officer, and the acceptance of the resignation shall not be necessary to make it effective.
7.
QUORUM OF D1RECTORS. A majority of the Directors shall constitute a quorum for the transaction of business. If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting until a quorum is obtained and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned.
8.
PLACE AND TIME OF BOARD MEETINGS. The Board may hold its meetings at the office of the corporation or at such other places either within or without the State of Florida as it may from time to time determine. There shall be semi-annual meetings of the Board of Directors to conduct a review of the business and policies of the corporation and to conduct any business that may be brought forward.
9.
REGULAR ANNUAL MEETING. A regular meeting of the Board shall be held immediately following the annual meeting of the Stockholders at the place of such annual meeting of Stockholders.
10.
NOTICE OF MEETINGS OF THE BOARD. Regular meetings of the Board may be held without notice at such time and place as it shall from time to time determine. Special meetings of the Board shall be held upon notice to the Directors and may be called by the President upon three days notice to each Director either personally or by mail or by wire or by facsimile; special meetings shall be called by the President or by the Secretary in a like manner on written request by two Directors. Notice of a meeting need not be given to any Director who submits a Waiver of Notice whether before or after the meeting or who attends the meeting without protesting prior thereto or at its commencement, the lack of notice to him.
11.
EXECUTIVE AND OTHER COMMITTEES. The Board, by resolution, may designate two or more of their number to one or more committees, which, to the extent provided in said resolution or these By-laws may exercise the powers of the Board in the management of the business of the corporation.
12.
COMPENSATION. No compensation shall be paid to Directors, as such for their services, but by resolution of the Board a fixed sum and expenses for actual attendance, at each regular or special meeting of the Board may be authorized. Nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefore.
ARTICLE IV - OFFICERS
1.
OFFICERS. ELECTION AND TERM.
1.1.
The Board may elect or appoint a Chairman, a President, one or more Vice-Presidents, a Secretary, an Assistant Secretary, a Treasurer and an Assistant Treasurer and such other officers as it may determine who shall have duties and powers as hereinafter provided.
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1.2.
All officers shall be elected or appointed to hold office until the meeting of the Board following the next annual meeting of Stockholders and until their successors have been elected or appointed and qualified.
2.
REMOVAL. RESIGNATION. SALARY. ETC.
2.1.
Any officer elected or appointed by the Board may be removed by the Board with or without cause.
2.2.
In the event of the death, resignation or removal of an officer, the Board in its discretion may elect or appoint a successor to fill the unexpired term.
2.3.
Any two or more offices may be held by the same person.
2.4.
The salaries of all officers shall be fixed by the Board.
2.5.
The Directors may require any officer to give security for the faithful performance of his duties.
3.
CHAIRMAN. The Chairman of the Board, if one be elected, shall preside at all meetings of the Board and shall have and perform such other duties from time to time as may be assigned to him by the Board or the executive committee.
4.
PRESIDENT. The President may be the chief executive officer of the corporation and shall have the general powers and duties of supervision and management usually vested in the office of the President of the corporation. The President shall preside at all meetings of the Stockholders if present thereat, and in the absence or non-election of the Chairman of the Board, at all meetings of the Board, and shall have general supervision direction and control of the business of the corporation. Except as the Board shall authorize the execution thereof in some other manner, the President shall execute bonds, mortgages and other contracts in behalf of the corporation and shall cause the seal to be affixed to any instrument requiring it and when so affixed, the seal shall be attested by the signature of the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer.
5.
VICE PRESIDENTS. During the absence or disability of the President, the Vice-President, or if there be more than one, the executive Vice-President, shall have all the powers and functions of the President. Each Vice-President shall perform such other duties as the Board shall prescribe.
6.
SECRETARY. The Secretary shall attend all meetings of the Board and of the Stockholders, record all votes and minutes of all proceedings in a book to kept for that purpose, give or cause to be given notice of all meetings of Stockholders and of meetings and special meetings of the Board, keep in safe custody the seal of the corporation and affix it to any instrument when authorized by the Board. or the President, when required, prepare or cause to be prepared and available at each meeting of Stockholders a certified list in alphabetical order of the names of Stockholders entitled to vote thereat, indicating the number of shares of each respective class held by each, keep all the documents and records of the corporation as required by law or otherwise in a proper and safe manner, and perform such other duties as may be prescribed by the Board or assigned by the President.
7.
ASSISTANT SECRETARIES. During the absence or disability of the Secretary, the Assistant-Secretary, or if there are more than one, the one so designated by the Secretary or by the Board, shall have all the powers and functions of the Secretary.
8.
TREASURER. The Treasurer shall have the custody of the corporate funds and securities, keep full and accurate accounts of receipts and disbursements in the corporate books, deposit all money and other
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valuables in the name and to the credit of the corporation in such depositories as may be designated by the Board, disburse the funds of the corporation as may be ordered or authorized by the Board and preserve proper vouchers for such disbursements, render to the President and Board at the regular meetings of the Board, or whenever they require it, an account of all the transactions made as Treasurer and of the financial condition of the corporation. The Treasurer shall also render a full financial report at the annual meeting of the Stockholders if so requested. The Treasurer may request and shall be furnished by all corporate officers and agents with such reports and statements as he may require as to all financial transactions of the corporation, and perform such other duties as are designated by these By-laws or as from time to time are assigned by the Board.
9.
ASSISTANT TREASURERS. During the absence or disability of the Treasurer, the Assistant Treasurer, or if there be more than one, the one so designated by the Treasurer or the Board, shall have all the powers and functions of the Treasurer.
10.
SURETIES AND BONDS. In case the Board shall so require, any officer or agent of the corporation shall execute to the corporation a bond in such sum and with such surety or sureties as the Board may direct, conditioned upon the faithful performance of duties to the corporation and including responsibility for negligence and for the accounting of all property, funds or securities of the corporation which the officer or agent may be responsible for.
ARTICLE V - CERTIFICATES FOR SHARES
1.
CERTIFICATES. The shares of the corporation shall be represented by certificates. They shall be numbered and entered in the books of the corporation as they are issued. They shall exhibit the holder's name, the number of shares and shall be signed by the President and Secretary and shall bear the corporate seal. When such certificates are signed by the transfer agent or an assistant transfer agent or by a transfer clerk acting on behalf of the corporation and a registrar, the signatures of such officers may be facsimiles.
2.
LOST OR DESTROYED CERTIFICATES. The Board may direct a new certificate or certificates to be issued in place of any certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board may, in its discretion as a condition preceding the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or the owner's legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.
3.
TRANSFER OF SHARES. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation which shall be kept at its principal office. Whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer ledger. No transfer shall be made within ten days next preceding the annual meeting of the Stockholders.
4.
CLOSING TRANSFER BOOKS. The Board shall have the power to close the share transfer books of the corporation for a period of not more than ten days during the thirty day period immediately preceding
4.1.
any Stockholder's meeting, or
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4.2.
any date upon which Stockholders shall be called upon to have a right to take action without a meeting, or
4.3.
any date fixed for the payment of a dividend or any other form of distribution, and only those Stockholders of record at the time the transfer books are closed, shall be recognized as such for the purpose of
4.3.1.
receiving notice of or voting at such meeting or
4.3.2.
allowing them to take appropriate action, or
4.3.3.
entitling them to receive any dividend or other form of distribution.
ARTICLE VI DIVIDENDS
The Board may out of funds legally available, at any regular or special meeting declare dividends upon the capital stock of the corporation as and when it deems expedient. Before declaring any dividend there may be set apart out of any funds of the corporation available for dividends, such sum or sums as the Board from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends for such other purposes as the Board shall deem conducive to the interest of the corporation.
ARTICLE VII - CORPORATE SEAL
The seal of the corporation shall bear the name of the corporation, the year of its organization and the words "CORPORATE SEAL, Florida" or "OFFICIAL CORPORATE SEAL, Florida". The seal may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon adhesive substance affixed thereto. The seal on the certificates for shares or on any corporate obligation for the payment of money may be facsimile, engraved or printed.
ARTICLE VIII - EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or countersigned, executed, verified or acknowledged by such officer or officers or other person or persons as the Board may from time to time designate. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall be determined from time to time by resolution of the Board.
ARTICLE IX - FISCAL YEAR
The fiscal year shall begin on the first day of each year.
ARTICLE X - NOTICE AND WAIVER OF NOTICE
1.
SUFFICIENCY OF NOTICE. Whenever any notice is required by these By-laws to be given, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in a United States Postal Service post office mail collecting container in a sealed postage-paid wrapper, addressed to the person entitled thereto at the last known post office address,
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and such notice shall be deemed to have been given on the day of such mailing. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by Statute.
2.
WAIVERS. Whenever any notice whatever is required to be given under the provisions of any law, or under the provisions of the Articles of Incorporation of the corporation or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE XI - CONSTRUCTION
Whenever a conflict arises between the language of these By-laws and the Articles of Incorporation, the Articles of Incorporation shall govern.
ARTICLE XII - CLOSE CORPORATION
1.
CONDUCT OF BUSINESS WITHOUT MEETINGS. Any action of the Stockholders, Directors or committees may be taken without a meeting if consent in writing, setting forth the action so taken, shall be signed by all persons who would be entitled to vote on such action at a meeting and filed with the Secretary of the corporation as part of the proceedings of the Stockholders, Director or committees as the case may be.
2.
MANAGEMENT BY STOCKHOLDERS. In the event the Stockholders are named in the Articles of Incorporation and are empowered therein to manage the affairs of the corporation in lieu of Directors, the Stockholders of the corporation shall be deemed Directors for the purposes of these By-laws and wherever the words "Directors", "Board of Directors" or "Board" appear in these Bylaws those words shall be taken to mean Stockholders.
3.
MANAGEMENT BY A BOARD. The Stockholders may, by majority vote, create a Board to manage the business of the corporation and exercise its corporate powers.
ARTICLE XIII - AMENDMENTS
These By-laws may be altered or repealed and By-laws may be made at any annual meeting of the Stockholders or at any special meeting thereof if notice of the proposed alteration or repeal to made contained in the notice of such special meeting, by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote thereat, or by the affirmative vote of a majority of the Board if notice of the proposed alteration or repeal to be made is contained in the notice of such special meeting.
ARTICLE XIV - EMERGENCY BY-LAWS
1.
CONDUCT OF BUSINESS WITHOUT MEETINGS. Pursuant to Florida Statues the corporation adopts the following By-laws, which shall be effective only if a quorum of the Directors of the corporation cannot be readily assembled because of some catastrophic event.
2.
CALLING A MEETING. In the event of such catastrophic event, any member of the Board shall be authorized to call a meeting of the Board. Such member calling an emergency meeting shall use any means of communication at their disposal to notify all other members of the Board of such meeting.
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3.
QUORUM. Anyone member of the Board shall constitute a quorum of the Board. The members of the Board meeting during such an emergency may select any person or persons as additional Board members, officers or agents of the corporation.
4.
INDEMNIFICATION. The members of such emergency Board are authorized to utilize any means at their disposal to preserve and protect the assets of the corporation. Any action taken in good faith and acted upon in accordance with these By-laws shall bind the corporation; and the corporation shall hold harmless any Director, officer, employee or agent who undertakes an action pursuant to these By-laws.
5.
TERMINATION OF EMERGENCY BY-LAWS. These emergency By-laws shall not be effective at the end of the emergency period.
ARTICLE XV - MISCELLANEOUS
1.
REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other corporations standing in the name of this corporation may be voted or represented and all incidents thereto may be exercised on behalf of the corporation by the Chairman of the Board, the President or any Vice President and the Secretary or an Assistant Secretary.
2.
SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a subsidiary shall not be entitled to vote on any matter. A subsidiary for these purposes is defined as a corporation, the shares of which possessing more than 25% of the total combined voting power of all classes of shares entitled to vote, are owned directly or indirectly through one (1) or more subsidiaries.
3.
INDEMNITY. Subject to applicable law, the corporation may indemnify any Director, Officer, agent or employee as to those liabilities and on those terms and conditions as appropriate. In any event, the corporation shall have the right to purchase and maintain insurance on behalf of any such persons whether or not the corporation would have the power to indemnify such person against the liability insured against.
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May 9, 2012
Board of Directors
Court Document Services, Inc.
1913 South Florida Avenue
Lakeland Florida 33803
Re:
Registration Statement on Form S-1 of Court Document Services, Inc.
Dear Directors:
You have requested our opinion as counsel for Court Document Services, Inc., a Florida corporation (the Company), in connection with the filing of the Companys Registration Statement on Form S-1 filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Act), on or about the date hereof, as to the legality of 586,066 shares of Companys common stock, par value $0.01 per share, being offered by selling security holders in a secondary offering (the Shares).
We have made such legal examination and inquiries as we have deemed advisable or necessary for the purpose of rendering this opinion and have examined originals or copies of the Registration Statement; the Articles of Incorporation and any amendments thereto; the Bylaws and any amendments thereto; the Companys resolutions of the Board of Directors authorizing the issuance of shares and the registration described above; and such other corporate documents and matters as we have deemed necessary to render our opinion. In our examinations, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, photostatic, or conformed copies and the authenticity of the originals of all such latter documents. In addition, we have relied upon certificates and advice from various state authorities and public officials, and we have assumed the accuracy of the factual matters contained therein.
The opinions set forth herein are limited to matters governed by the laws of the State of Florida, including applicable statutory provisions, applicable provisions of the Florida constitution, and reported judicial decisions interpreting those laws. Our opinion is based on these laws as in effect on the date hereof and as of the effective date of the Registration Statement, and we assume no obligation to revise or supplement this opinion after the effective date of the Registration Statement should the law be changed by legislative action, judicial decision, or otherwise.
Based upon and subject to the foregoing, it is our opinion that the 586,066 shares of common stock being offered by the Company and which are being registered in the Registration Statement have been duly authorized, and when distributed and sold in the manner referred to in the Registration Statement will be legally issued, fully paid, and non-assessable.
We hereby consent to the discussion in the Registration Statement of this opinion, to the filing of this opinion as an exhibit to the Registration Statement, to the references to our firm under the caption Interest of Named Experts and Counsel, and to all references made to us elsewhere in the Registration Statement and in the Prospectus forming a part thereof.
Sincerely,
HARRISON LAW, P.A.
/s/Diane J. Harrison
Diane J. Harrison
EXHIBIT 14
COURT DOCUMENT SERVICES, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
(ADOPTED BY THE BOARD OF DIRECTORS ON JANUARY 31, 2012)
INTRODUCTION
This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise but it sets out basic principles to guide all employees of Court Document Services, Inc. (the "Company"). All of our officers, directors and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The code should also be provided to and followed by the Company's agents and representatives, including consultants.
If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.
Those who violate standards in this Code will be subject to disciplinary action, up to and including termination of employment. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 14 of this Code.
1.
COMPLIANCE WITH LAWS, RULES AND REGULATIONS
Obey the law, both in letter and in spirit, is the foundation on which our ethical standards are built. All employees must respect and obey the laws of the cities, states and countries in which we operate. Although not all employees are expected to know the details of these laws, it is important to know enough about them to determine when to seek advice from supervisors, managers or other appropriate personnel.
2.
CONFLICTS OF INTEREST
A "conflict of interest" exists when a person's private interests interferes in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and efficiently. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.
It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf. Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by our Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with higher levels of management. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel or consult with the procedures described in Section 14 of this Code.
3.
INSIDER TRADING
Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All non-public information about the Company should be considered confidential information. To use non-public
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information for persona financial benefit or to "tip" others who might make an investment decision on the basis of this information is not only unethical but also illegal.
4.
CORPORATE OPPORTUNITIES
Employees, officer and directors are prohibited from taking for themselves personally, opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee may use corporate property, information or position for improper personal gain and no employee may compete with the Company, directly or indirectly.
5.
COMPETITION AND FAIR DEALING
We seek to outperform our competition fairly and honestly. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each officer, director and employee should respect the rights of and deal fairly with the Company's customers, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.
The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift, or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent, unless it (a) is not in cash, (b) is consistent with customary business practices, (c) is not excessive in value, (d) cannot be construed as a bribe or payoff and (e) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts that you are not certain are appropriate.
6.
DISCRIMINATION AND HARASSMENT
The diversity of the Company's employees is a tremendous asset. We are firmly committed to providing equal opportunity in all respects aspects of employment and will not tolerate illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.
7.
HEALTH AND SAFETY
The Company strives to provide each employee with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.
Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of alcohol and/or illegal drugs in the workplace will not be tolerated.
8.
RECORD-KEEPING
The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, only the true and actual number of hours worked should be reported.
Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or the Company's controller or chief financial officer.
All of the Company's books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company's transactions and must conform to both applicable legal
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requirements and to the Company's systems of accounting and internal controls. Unrecorded or "off the books" funds or assets should not be maintained unless permitted by applicable laws or regulations.
Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos and formal reports. Records should always be retained or destroyed according to the Company's record retention policies. In accordance with these policies, in the event of litigation or governmental investigation please consultant your supervisor. All e-mail communications are the property of the Company and employees, officers and directors should not expect that Company or personal e-mail communications are private. All e-mails are the property of the Company. No employee, officer or director shall use Company computers, including access to the internet, for personal or non-Company business.
9.
CONFIDENTIALITY
Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends. In connection with this obligation, employees, officers and directors may be required to execute confidentiality agreements confirming their agreement to be bound not to disclose confidential information. If you are uncertain whether particular information is confidential or non-public, please consult your supervisor.
10.
PROTECTION AND PROPER USE OF COMPANY ASSETS
All officers, directors and employees should endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business.
The obligation of officers, directors and employees to protect the Company's assets includes it proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.
11.
PAYMENTS TO GOVERNMENT PERSONNEL
The Unites States Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.
In addition, the U. S. government has a number of laws and regulations regarding business gratuities that may be accepted by U. S. government personnel. The promise, offer or delivery to an official or employee of the U. S. government of a gist, favor or other gratuity in violation of these rules would not only violate Company policy, but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.
12.
WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS
Any waiver of the provisions of this Code may be made only by the Board of Directors and will be promptly disclosed as required by law or stock exchange rule or regulation.
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13.
REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR
Employees are encouraged to talk with supervisors, managers or Company officials about observed illegal or unethical behavior, and when in doubt about the best course of action in a particular situation. It is the Company's policy not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct, and the failure to do so could serve as grounds for termination.
Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.
14.
COMPLIANCE PROCEDURES
We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations, it is difficult to know if a violation has occurred. Since we cannot anticipate every situation that may arise, it is important that we have a way to approach a new question or problem. These are steps to keep in mind:
·
Make sure you have all the facts. In order to reach the rights solutions, we must be as fully informed as possible.
·
Ask yourself, what specifically am I being asked to do - does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
·
Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
·
Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Keep in mind that it is your supervisor's responsibility to help solve problems. If your supervisor does not or cannot remedy the situation, or you are uncomfortable binging the problem to the attention of your supervisor, bring the issue to the attention of the human resources supervisor, or to an officer of the Company.
·
You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind for good faith reports of ethical violations.
·
Always ask first - act later. If you are unsure of what to do in any situation, seek guidance before your act.
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CODE OF ETHICS FOR THE CHIEF EXECUTIVE OFFICER
AND SENIOR FINANCIAL OFFICERS
OF COURT DOCUMENT SERVICES, INC.
Court Document Services, Inc. (the "Company") has a Code of Business Conduct and Ethics applicable to all employees, officers and directors of the Company. The Chief Executive Officer (CEO) and senior financial officers of the Company, including its chief financial officer and principal accounting officer, are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest and compliance with law. In addition to the Code of Business Conduct and Ethics, the CEO and senior financial officers of the Company are also subject to the following specific policies:
1.
The CEO and senior financial officers are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports and other filings required to be made by the Company with the Securities and Exchange Commission. Accordingly, it is the responsibility of the CEO and each senior financial officer promptly to bring to the attention of the Board of Directors any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise impairs the ability of the Company to make full, fair, accurate, timely and understandable public disclosures.
2.
The CEO and each senior financial officer shall promptly bring to the attention of the Company's Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.
3.
The CEO and each senior financial officer shall promptly bring to the attention of the Board of Directors and the Audit Committee any information he or she may have concerning any violation of the Company's Code of Business Conduct and Ethics, including any actual or apparent conflicts of interest between personal and processional relationships, involving management or other employees who have a significant rule in the Company's financial reporting, disclosures or internal controls.
4.
The CEO and each senior financial officer shall promptly bring to the attention of the Board of Directors and Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Code of Business Conduct and Ethics or of these additional procedures.
5.
The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of the Code of Business Conduct and Ethics of these additional procedures by the CEO and the Company's senior financial officers. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to the Code of Business Conduct and Ethics and to these additional procedures, and shall include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or reassignment of the individual involved, suspension with or without pay or benefits (as determined by the Board) and termination of the individual's employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.
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Drake & Klein CPAs
EXHIBIT 23
A PCAOB Registered Accounting Firm
Consent of Independent Registered Public Accounting Firm
We consent to the inclusion in this Form S-1, dated May 8, 2012, of our audit report dated April 16, 2012 relative to the financial statements of Court Document Services Inc. as of December 31, 2011 and 2010 and for each of the years then ended.
We also consent to the reference to our firm under the caption "Experts" and in Changes In and Disagreements with Accountants on Accounting and Financial Disclosure in such Registration Statement.
/s/ Drake & Klein CPAs
Drake & Klein CPAs
f/k/a Randall N Drake CPA PA
Clearwater, Florida
May 8, 2012
PO Box 2493
2451 McMullen Booth Rd.
Dunedin, FL 34697-2493
Suite 210
727-512-2743
Clearwater, FL 33759-1362
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