Item 1. Business
History
QMIS Finance Securities Corporation, QMIS formerly known as Lightman Grant, Inc. (the Company or QMIS), was originally incorporated on October 10, 1994 in the state of Florida as The Military Playing Card Company. At the time of formation the Company was authorized to issue 1,000 common shares, $1.00 par value. The Company increased its authorized capital stock to 2,000,000 shares of $.001 par value common stock and 1,000,000 shares of $.01 par value preferred stock, on October 25, 1996.
The Company was formed for the purpose of designing, developing, marketing and distributing playing cards, toys, games and other novelties to military exchanges. Although the Company offered several products, such as The Bean Brigade and Emboss Wear, from inception the Company concentrated on designing and selling playing cards. The Company eventually attempted to extend its business to include civilian retail outlets and internet sales, although the Company continued to concentrate on playing cards. All of the playing card designs concentrated on a patriotic theme.
On August 26, 1997, in anticipation of going public, the Company changed its name to Silver Star International, Inc. and increased its authorized capital stock to 50,000,000 shares of $.001 par value common stock and 5,000,000 shares of $1.00 par value preferred stock. The Company went public in November, 2007 when our stock began trading on the NASDAQ over the counter market pink sheets under the symbol SVSR. At the time the Company was not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act). The Company filed a registration statement on Form 10 on May 27, 2010 which went effective on July 27, 2010 subjecting the Company to the Exchange Act reporting requirements, but made the business decision to file Form 15 soon thereafter on September 21, 2010 relieving us of such reporting requirements.
From 1995 through approximately 2000, the Company did a steady business by selling the patriotic themed playing cards through Military PX outlets. However, the largest playing card producer in the United States, the U.S. Playing Card Company came out with its own line of patriotic themed playing cards, against which the Company could not compete and the business ultimately failed.
In September, 2001 the state of Florida administratively dissolved the Company for the failure to file its annual report and pay the associated franchise taxes. The Company was briefly reinstated with the State of Florida in 2005; however, it did not conduct any business operations and was again dissolved thereafter. Other than its current business plan to merge with or acquire an operating business, as more fully described in this section under Current Business Plan, QMIS has not conducted any business operations since approximately 2004.
Effective April 30, 2007 the Company approved and authorized a plan of quasi reorganization and restatement of accounts to eliminate the accumulated deficit and related capital accounts on the Companys balance sheet. The Company concluded its period of reorganization after reaching a settlement agreement with all of its significant creditors. The Company, as approved by its Board of Directors, elected to state its May 1, 2007 balance sheet as a quasi reorganization, pursuant to ARB 43. These rules require the revaluation of all assets and liabilities to their current values through a current charge to earnings and the elimination of any deficit in retained earnings by charging paid-in capital. From May 1, 2007 forward, the Company has recorded net income (and net losses) to retained earnings and (and net losses) to retained earnings and (accumulated deficit).
On September 12, 2007, in its Court Order, the Circuit Court for the 6th Judicial Circuit in and for Pinellas County, Florida granted the application of Century Capital Partners, LLC to have a receiver appointed. The Court appointed Brian T. Scher, Esquire as receiver of the Company. The Court Order appointing Receiver empowered Mr. Scher to evaluate our financial status, to determine whether there are any options for corporate viability, to reinstate our corporation with the Florida Secretary of State, and to obtain copies of our shareholder records from our transfer agent.
Mr. Michael Anthony is the sole member of Century Capital Partners.
Under Mr. Schers receivership, and with funds supplied by Century Capital Partners, the Company reinstated its corporate charter and paid all past due franchise taxes; paid the outstanding debt with the transfer agent; and made an analysis of the Companys debts and potential for viability as a merger candidate. In addition, after acting as the sole temporary officer and director, on November 14, 2007, Mr. Scher appointed Michael Anthony as our sole Director, President, Secretary and Treasurer.
On November 16, 2007, following the submittal of reports by Mr. Scher, the Court discharged the receiver and returned the Company to the control of its Board of Directors.
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On October 23, 2007, Silver Star International, Inc. (now QMIS) was incorporated in Delaware for the purpose of merging with Silver Star International, Inc., a Florida Corporation so as to effect a re-domicile to Delaware. The Delaware Corporation was authorized to issue 250,000,000 shares of $.001 par value common stock and 2,000,000 shares of $.001 par value preferred stock.
In exchange for a capital investment of $19,040 by Century Capital Partners on or near November 19, 2007 QMIS issued to Century Capital Partners 38,000,000 shares (380,000 post-split) of its common stock representing approximately 77% of its common stock outstanding on that date. The funds were used to pay ongoing administrative expenses, including but not limited to, outstanding transfer agent fees, state reinstatement and filing fees and all costs associated with conducting a shareholders meeting. On May 14, 2010 Century Capital Partners transferred its 380,000 shares of common stock to Corporate Services International, Inc., another entity solely owned and controlled by Michael Anthony.
Following notice to the shareholders, the Company conducted an annual shareholders meeting on December 12, 2007 for the purpose of electing directors. At the meeting of shareholders Michael Anthony was elected the sole director by those shareholders that attended either in person or by proxy. Immediately following the shareholder meeting, at a meeting of the Board of Directors, Michael Anthony was appointed President, Secretary and Chief Financial Officer.
In January, 2008 both Silver Star International (now QMIS) the Florida corporation and Silver Star International (now QMIS) the Delaware corporation signed and filed Articles of Merger with their respective states, pursuant to which the Florida Corporations shareholders received one share of new (Delaware) common stock for every one share of old (Florida) common stock they owned. All outstanding shares of the Florida Corporations common stock were effectively purchased by the new Delaware Corporation, effectively merging the Florida Corporation into the Delaware Corporation, and making the Delaware Corporation the surviving entity.
On January 29, 2009, the certificate of incorporation for the Delaware Corporation was amended to increase the authorized capital stock to 320,000,000 of which 300,000,000 shares is common stock, $.001 par value and 20,000,000 shares are preferred stock, $.001 par value. In addition, the Company designated 5,000,000 shares of preferred stock as Series B Preferred Stock. Each share of Series B Preferred Stock is convertible into ten (10) shares of common stock and carries ten (10) votes on all matters brought to a shareholder vote. In addition, the Series B Preferred Stock has a liquidation preference of $1.00 per share.
On or near February 18, 2009, Corporate Services International, Inc. contributed $25,000 as paid in capital to QMIS. This capital contribution is separate from and in addition to the $19,040 capital contribution previously made by Century Capital Partners. QMIS used these funds to pay the costs and expenses necessary to revive the Companys business and implement the Companys business plan. Such expenses include, without limitation, fees to domicile the Company to the state of Delaware; payment of state filing fees; transfer agent fees; calling and holding a shareholders meeting; accounting and legal fees; and costs associated with preparing and filing a Registration Statement, etc. In addition to the capital contributions, as of January 31, 2012, there are outstanding loans payable to Corporate Services International in the amount of $31,868 for ongoing expenses.
In exchange for the $25,000 capital contribution by Corporate Services International the Company issued 5,000,000 shares of its Series B Preferred Stock. Corporate Services International is a personal use business consulting company of which Michael Anthony is the sole shareholder, officer and director.
The Companys transfer agent is Cleartrust, LLC.
Effective March 12, 2009 the Company changed its name to Lightman Grant, Inc., enacted a 1:100 reverse split of its outstanding common stock. The Companys name change is not meant to be reflective of any business plan or particular business industry but rather is thought by management to be neutral and therefore may assist in the Companys current business plan as described herein.
The Company filed a registration statement on Form 10 on May 27, 2010 which went effective on July 27, 2010 subjecting the Company to the Exchange Act reporting requirements, but made the business decision to file Form 15 soon thereafter on September 21, 2010 relieving us of such reporting requirements. The Company again filed a Form 10 Registration Statement on March 13, 2012 which went effective on May 13, 2012 making us subject to the Exchange Act reporting requirements.
On November 13, 2012, Corporate Services International, Inc. / Michael Anthony sold 380,000 shares of common stock, $0.001 par value and 5,000,000 shares of Series B Preferred Stock, $0.001 par value, to Chin Yung Kong for an aggregated price of $ 170,000.00. The sold 380,000 shares of common stock represented approximately 77% of the total issued and outstanding common stock of the Company and the sold 5,000,000 shares of Series B Preferred Stock represent 100% of the total issued and outstanding preferred stock of the Company. As result of this share purchase transaction, Chin Yung Kong became the controlling shareholder of the Company.
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On November 13, 2012, Michael Anthony resigned from all positions he holds in the Company, including Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and Board Director. On November 13, 2012, Chin Yung Kong became the President, Board Director, Secretary, Treasurer, Chief Executive Officer and Chief Financial Officer of the Company.
On March 1, 2013, the Company changed its name to QMIS Finance Securities Corporation and effective on March 1, 2013, the Companys common stock is quoted on the over the counter stock markets under the symbol QMIS.
Current Business Plan
QMIS is a shell company in that it has no or nominal operations and either no or nominal assets. At this time, QMISs purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of the Companys virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to shareholders of the Company because it will not permit the Company to offset potential losses from one venture against gains from another.
Although there is no guarantee that a merger with a private, operating business would result in any benefit to our current or future shareholders, the Company believes there exists a potential benefit to the shareholders from the consummation of such a merger or acquisition. For example, our common stock may become more attractive to the financial community, resulting in an increased share price and/or greater liquidity. Moreover, if all of the preconditions of Rule 144 are met, including the introduction of operating business, current restricted shareholders may be able to utilize Rule 144 for the sale of their shares. Currently, Rule 144 is not available. There is no guarantee that any of these possible benefits will come to fruition.
Negotiations with any merger candidate are expected to focus on the percentage of the Company which the target company shareholders would acquire in exchange for all of their shareholdings in the target company. Depending upon certain factors, such as the target companys assets and liabilities, the Companys current shareholders will most likely hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires an operating business with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Companys then shareholders. Management does not expect to negotiate a cash payment in exchange for the outstanding shares held by non-affiliates.
Management has substantial flexibility in identifying and selecting a prospective new business opportunity. QMIS would not be obligated nor does management intend to seek pre-approval by our shareholders prior to entering into a transaction.
QMIS may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. QMIS may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
QMIS intends to promote itself privately. The Company anticipates that the selection of a business opportunity in which to participate will be complex and risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes), for all shareholders, and other factors.
The analysis of new business opportunities will be undertaken by, or under the supervision of our officer and director, or successor management, with such outside assistance as he or they may deem appropriate. The Company intends to concentrate on identifying preliminary prospective business opportunities, which may be brought to our attention through present associations of the Companys officer and director. In analyzing prospective business opportunities, the Company will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. The Company will not acquire or merge with any company for which audited financial statements are not available.
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The foregoing criteria are not intended to be exhaustive and there may be other criteria that the Company may deem relevant.
The Officer of QMIS has some, but not extensive experience in managing companies similar to the Company and shall mainly rely upon his own efforts, in accomplishing the business purposes of the Company. The Company may from time to time utilize outside consultants or advisors to effectuate its business purposes described herein. No policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants or advisors, the services to be provided, the term of service, or regarding the total amount of fees that may be paid. However, because of the limited resources of the Company, it is likely that any such fee the Company agrees to pay would be paid in stock and not in cash.
QMIS does not intend to obtain funds in one or more private placements to finance the operation of any acquired business opportunity until such time as the Company has successfully consummated such a merger or acquisition. Rather QMIS intends to borrow money from management related parties to finance ongoing operations.
Management intends to devote such time as it deems necessary to carry out the Companys affairs. We cannot project the amount of time that our management will actually devote to our plan of operation.
The time and costs required to pursue new business opportunities, which includes due diligence investigations, negotiating and documenting relevant agreements and preparing requisite documents for filing pursuant to applicable securities laws, cannot be ascertained with any degree of certainty.
QMIS intends to conduct its activities so as to avoid being classified as an Investment Company under the Investment Company Act of 1940, and therefore avoid application of the costly and restrictive registration and other provisions of the Investment Company Act of 1940 and the regulations promulgated thereunder.
GOVERNMENT REGULATIONS
As a registered corporation, the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act) which includes the preparation and filing of periodic, quarterly and annual reports on Forms 8K, 10Q and 10K. The Exchange Act specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act.
QMIS IS A BLANK CHECK COMPANY
At present, QMIS is a blank check company with no revenues and has no specific business plan or purpose other than to seek new business opportunities or to engage in a merger or acquisition with an unidentified company. QMIS is a blank check company and any offerings of our securities would need to comply with Rule 419 under the Securities Act of 1933, as amended. The provisions of Rule 419 apply to every registration statement filed under the Securities Act of 1933, as amended, by a blank check company. Rule 419 requires that the blank check company filing such registration statement deposit the securities being offered and proceeds of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger. In addition, the registrant is required to file a post-effective amendment to the registration statement containing the same information as found in a Form 10 registration statement, upon the execution of an agreement for such acquisition or merger. The rule provides procedures for the release of the offering funds in conjunction with the post effective acquisition or merger. QMIS has no current plans to engage in any such offerings.
QMISS COMMON STOCK IS A PENNY STOCK
QMISs common stock is a penny stock, as defined in Rule 3a51-1 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customers account. In addition, the penny stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchasers written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. So long as the common stock of QMIS is subject to the penny stock rules, it may be more difficult to sell our common stock.
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ACQUISITION OF OPPORTUNITIES
Management owns 380,000 shares of common stock and 5,000,000 shares of series B Preferred Stock. Each share of Series B Preferred Stock entitles the holder thereof to 10 votes on all matters for which shareholders are entitled to vote. Accordingly management controls 99% of the total issued and outstanding shares of QMIS. As a result, management will have substantial flexibility in identifying and selecting a prospective new business opportunity. In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. It may also acquire stock or assets of an existing business. On the consummation of a transaction, it is probable that the present management and shareholders of the Company will no longer be in control of the Company. In addition, the Companys directors may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of the Companys shareholders or may sell their stock in the Company. Moreover, management may sell or otherwise transfer his interest in the Company to new management who will then continue the Company business plan of seeking new business opportunities.
It is anticipated that any securities issued in any reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Company may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after the Company has successfully consummated a merger or acquisition.
QMIS will participate in a business opportunity only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with the Companys attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.
QMIS does not intend to provide its security holders with any complete disclosure documents or audited financial statements concerning an acquisition or merger candidate and its business prior to the consummation of any acquisition or merger transaction.
QMIS has not expended funds on and has no plans to expend funds or time on product research or development.
COMPETITION
QMIS will remain an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns which have significantly greater financial and personnel resources and technical expertise than the Company. In view of QMISs combined extremely limited financial resources and limited management availability, the Company will continue to be at a significant competitive disadvantage compared to the Companys competitors.
EMPLOYEES
QMIS currently has no employees. The business of the Company will be managed by its sole officer and director and such officers or directors which may join the Company in the future, and who may become employees of the Company. The Company does not anticipate a need to engage any fulltime employees at this time. There has not been any compensation paid or charged to the Company for the fiscal year ended April 30, 2013 and there is no compensation charges planned in the foreseeable future.