UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
2
PROFESSIONAL MINING CONSULTANTS, INC.
(Exact name of registrant as specified in its charter)
Amendment 1
Nevada 88-0343832
(State of organization) (I.R.S. Employer Identification No.)
3675 Pecos-McLeod, Suite 1400, Las Vegas, NV 89121
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 866-2500
Registrant's Attorney: Daniel G. Chapman, Esq., 2080 E. Flamingo
Road, Suite 112, Las Vegas, NV 89119
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
ITEM 1. DESCRIPTION OF BUSINESS
Background
Professional Mining Consultants, Inc. (the "Company") is a Nevada
corporation formed on August 28, 1995. Its principal place of
business is located at 3675 Pecos-McLeod, Suite 1400, Las Vegas,
NV 89121. The Company was organized to engage in any lawful
corporate business, including but not limited to, participating
in mergers with and acquisitions of other companies. The Company
has been in the developmental stage since inception and has no
operating history other than organizational matters.
On October 20, 1995, the three founders were issued 20,000 each
of the Common Stock, in exchange for $500.00 each. On July 3,
1996, the Company issued an additional 1,000 shares to each of
the three founders for a total of $1,100 cash. An additional
100,000 shares were issued to 31 individuals on April 16, 1997
pursuant to Rule 504 of Regulation D, for total consideration of
$25,000. This increased the total issued and outstanding stock
163,000.
On March 3, 1998, the Company approved a 30:1 forward split for
its outstanding common stock, resulting in 4,890,000 of its of
its common shares being issued and outstanding.
Previous Business Plan
The Company was originally organized for the purpose of setting
up a Mining Consultant and Engineering office in Las Vegas,
Nevada. The objective was to pursue consulting and management
contracts with startup and small mining companies who are seeking
professional and management expertise. The Company was to focus
on and specialized in developing strategies, extraction and
process technology, management and engineering for both open pit
and placer gold, silver and platinum mining operations.
The Company would provide its expertise in these areas to mining
companies, smelting plants, processing facilities and refineries
seeking to either establish a new operation or expand and improve
their current capabilities. The Company planned to hire
engineering and design people who had an in-depth background in
open pit and placer mining, geology, metallurgy, knowledge of
operating and design of a variety of concentration and milling
facilities, processing and smelting plants, refineries and
laboratories which are capable of running precious metals. These
people would be assigned a variety of different mining projects
around the world, where their proficiency in mining will be used
to set up new plants and facilities, improve current processes
and technology, and when applicable, provide reports and
evaluations for possible joint ventures. The Company was unable
to raise sufficient funding to pursue that objective, and
therefore abandoned its original business plan.
The primary activity of the Company currently involves seeking a
company or companies that it can acquire or with whom it can
merge. The Company has not selected any company as an acquisition
target or merger partner and does not intend to limit potential
candidates to any particular field or industry, but does retain
the right to limit candidates, if it so chooses, to a particular
field or industry. The Company's plans are in the conceptual
stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item
2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to file
periodic reports is suspended pursuant to the Exchange Act, the
Company anticipates that it will continue to voluntarily file
such reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it completes a business combination. This may result
in the Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will identify a business opportunity or complete
a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the identified business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete
with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no
arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be
no assurance the Company will successfully identify and evaluate
suitable business opportunities or conclude a business
combination. Management has not identified any particular
industry or specific business within an industry for evaluations.
The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its
original shareholders, the Company never commenced any
operational activities. There is no assurance the Company will be
able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target business
opportunity to have achieved, and without which the Company would
not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth, or other
negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and
non "arms-length" transactions may also arise in the event the
Company's officers or directors are involved in the management of
any firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this
policy could be changed while current management is in control of
the Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act") must provide certain information about
significant acquisitions, including certified financial
statements for the company acquired, covering one or two years,
depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. If
there is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within
a particular business or industry, thereby increasing the risks
associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors
of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a
public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business
combination with the Company. The perceived adverse consequences
may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders, and
the inability or unwillingness to comply with various federal and
state securities laws enacted for the protection of investors.
These securities laws primarily relate to registering securities
and full disclosure of the Company's business, management, and
financial statements.
TAX CONSEQUENCES OF BUSINESS COMBINATION. Federal and state tax
consequences will, in all likelihood, be major considerations in
any business combination the Company may undertake. Typically,
these transactions may be structured to result in tax-free
treatment to both companies, pursuant to various federal and
state tax provisions. The Company intends to structure any
business combination so as to minimize the federal and state tax
consequences to both the Company and the target entity.
Management cannot assure that a business combination will meet
the statutory requirements for a tax-free reorganization, or that
the parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes,
which may have an adverse effect on both parties to the
transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than incur
the expenses associated with preparing audited financial
statements.
STATE RESALE RESTRICTIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. As a
result of recent changes in federal law, non-issuer trading or
resale of the Company's securities is exempt from state
registration or qualification requirements in most states.
However, some states may continue to restrict or the trading or
resale of blind-pool or "blank-check" securities, or at least
require notice and possibly payment of a fee with respect to such
transactions. Accordingly, investors should consider any
potential secondary market for the Company's securities to be a
limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation.
At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any
specific business or company, and the Company has not identified
any specific business or company for investigation and
evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under
this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict the Company's
virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common
stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of 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 benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to benefit from
the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds to
acquire a target company and, therefore, could commit those funds
to the operations of the business, to combinations with other
target companies, or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the
assets of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender
would be able to exercise the remedies provided by law or by
contract. These leveraging techniques, while reducing the amount
of funds that the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the Company. No
assurance can be given as to the terms or availability of
financing for any acquisition by the Company. During periods when
interest rates are relatively high, the benefits of leveraging
are not as great as during periods of lower interest rates,
because the investment in the business held on a leveraged basis
will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders
from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company.
It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the
Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company 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. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management will rely upon their own efforts in accomplishing the
business purposes of the Company. It is not anticipated that any
outside consultants or advisors, other than the Company's legal
counsel and accountants, will be utilized by the Company to
effectuate its business purposes described herein. However, if
the Company does retain such an outside consultant or advisor,
any cash fee earned by such party will need to be paid by the
prospective merger/acquisition candidate, as the Company has no
cash assets with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In
the past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary, the Company may pay a finder's fee for locating
an acquisition prospect. If any such fee is paid, it will be
approved by the Company's Board of Directors and will be in
accordance with the industry standards. Such fees are customarily
between 1% and 5% of the size of the transaction, based upon a
sliding scale of the amount involved. Such fees are typically in
the range of 5% on a $1,000,000 transaction ratably down to 1% in
a $4,000,000 transaction. Management has adopted a policy that
such a finder's fee could, in certain circumstances, be paid to
any employee, officer, director or 5% shareholder of the Company,
if such person plays a material role in bringing a transaction to
the Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Item 5"). Management intends to concentrate on
identifying prospective business opportunities which may be
brought to its attention through present associations with
management. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may
be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel
of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate
the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business
in its development stage (in that it has not generated
significant revenues from its principal business activities prior
to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in control
of the Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity,
which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a 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 a target company 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 Company's then shareholders, including purchasers in
this offering.
As of September 30, 1999, Management had advanced a total of
$3,350 on behalf of the Company. Management has agreed to
continue to advance funds which shall be used by the Company in
identifying and pursuing agreements with target companies.
Management anticipates that these funds will be repaid from the
proceeds of any agreement with the target company, and that any
such agreement may, in fact, be contingent upon the repayment of
those funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment
company" as an issuer which is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities. While the Company does not intend to engage
in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Item 5").
Liquidity
The Company does not anticipate the need for additional funds
during the next twelve months. The Company's current business
plan does not include any operations which would require
operating capital. To the extent that the Company does have a
need for funds, these requirements will be relatively minor and
Management will advance these funds on the Company's behalf, as
described above (see "Acquisition of Opportunities.")
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space located at 3675 Pecos-McLeod, Suite 1400, Las Vegas, Nevada
89121, at no cost to the Company, and Management expects this
arrangement to continue. The Company pays its own charges for
long distance telephone calls and other miscellaneous
secretarial, photocopying, and similar expenses.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of June 28, 1999, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, the Company's
directors and executive officers individually and as a group.
Except as noted, each person has sole voting and investment power
with respect to the shares shown.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Gregory Eckert 630,000 12.88%
2001 Spring Lake Drive
Henderson, NV 89015
Common Carl Flusche 630,000 12.88%
2001 Spring Lake Drive
Henderson, NV 89015
Common Howard Manoff 630,000 12.88%
2001 Spring Lake Drive
Henderson, NV 89015
Common Bobby Combs 120,000 2.45%
6669 Five Pennies
Circle
Las Vegas, NV 89120
Common Douglas Ansell 120,000 2.45%
P.O. Box 96843
Las Vegas, NV 89193
Common John Michael Eckert 120,000 2.45%
7910 Bermuda Rd.
Las Vegas, NV 89123
Common Total Ownership Over 5% 2,250,000 46.01%
and Officers and
Directors
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Bobby Combs 62 Presiden
6669 Five Pennnies t
Circle
Las Vegas, NV 89120
Douglas Ansell 31 Secretary
P.O. Box 96843
Las Vegas, NV 89193
John Michael Eckert 52 Treasurer
7910 Bermuda Rd.
Las Vegas, NV 89123
</TABLE>
Bobby Combs; President
Mr. Bobby Combs has been a Director/Officer of the Company since
August 1998.
Since October 1995, Mr. Combs has been a Director and Officer of
Silvercrest International, Inc. Since March 1994, Mr. Combs has
been president and majority stockholder of Par One Mortgage, Las
Vegas, Nevada. From January 1994, through February 1994, he was a
loan officer for Summit Capital, Las Vegas, Nevada. Since 1989,
Mr. Combs has been an Officer and Director of Bobby Combs &
Associates. From September 1993 through December 1993, Mr. Combs
was a loan officer for Vegas Valley Mortgage. From March 1993
through August 1993, he was employed at Royal Kinfield Country
Club, Las Vegas, Nevada, where he was the Marshall of the golf
course ensuring that the course play would run smoothly and
appropriately. From September 1990 until December 1991, Mr. Combs
was engaged in building and remodeling homes for Rauhut
Construction, Inc., Las Vegas, Nevada, of which he was a partner.
From March 1989 through August 1990, he was engaged as a salesman
in the ornamental iron industry.
Douglas Ansell; Secretary
Mr. Douglas Ansell has been a director and officer of the Company
since August 1999.
Since June 1998, Mr. Ansell has overseen the operations and been
employed by Incorp Services, Inc., a company that provides
incorporation and corporate services to individuals and
corporations. Additionally, he performs at the MGM Grand
Hotel/Casino/Theme Park in Las Vegas, Nevada.
From May 1997 to June 1998, Mr. Ansell performed corporate
services for individuals and corporations on an independent
contractor basis.
From October 1995 to May 1997, Mr. Ansell was in charge of
research and development of special projects for Facade Systems,
Inc., Las Vegas, Nevada, where he had previously overseen the
development of custom "touch screen" cash control and security
applications for the casino and hospitality industries. More
recently, he has focused his development efforts on the design
and engineering of second-generation artificially intelligent
document management applications.
Since 1981, Mr. Ansell has served in various consulting and
programming capacities within the computer, entertainment, and
gaming industries including, but not limited to, consulting and
software engineering for Desert Coin Corporation, Las Vegas,
Nevada between February 1995 and October 1995 where his duties
included the development of various cash control and anti-theft
systems.
Since 1988, Mr. Ansell has been recognized within the music
industry as one of the nation's top MIDI (Musical Digital
Interface) programmers as well as being highly regarded for his
production and performance skills.
John Michael Eckert; Treasurer
Mr. John Michael Eckert has been a director and officer of the
Company since August 1999.
Since 1992, Mr. Eckert has served as Executive Vice President of
American Properties International, Inc., Las Vegas, NV, a
computer electronic listing for property for sale on internet.
There he was responsible for all plant operations including
purchasing, inventory control, computer systems, processing and
smelting schedules and administration. While there, he
implemented the first computer system for the company, did
extensive travel to Hong Kong, Tokyo, Taiwan, and Korea to set up
trade shows and property exhibitions featuring U.S. real estate,
and established an international on-line interactive computer
network for real estate investments, portfolio planners and
trading companies.
From 1988 through 1991, he was operations manager for Magic
Lantern Productions, an mining company in Las Vegas, Nevada.
While there, he was responsible for initial setup of corporation,
writing company policies and guidelines, hired key personnel,
established operating budgets, and initiated early engineering
plans for mining operations in Nevada, California, and Canada.
From 1986 through 1987, he was employed as a sales engineer with
Mobile Communications, Inc., Las Vegas, Nevada where he sold,
installed and operated E.F. Johnson LTR Systems, (Logic
Transmitted Radio - 2-way multi channel radio) as well as setting
up and licensing remote sites in California, Arizona, Utah, and
Nevada.
In 1985, Mr. Eckert was employed by AGES Company, which was an
Independent Contractor to U.S. West, a local telephone company in
Tucson, Arizona. There, he worked as a supervisor, responsible
for area and cable wrecking as well as the installation of fiber
optic cables.
From 1984 to 1988, he worked Young Film Productions, Tucson, AZ
as a Producer/Unit Production Manager and was responsible for
scheduling feature film, national television commercial, and
television series production for film companies shooting on
location in southern Arizona and the Old Tucson Movie Studios.
From 1981 to 1983, he served as a Sales Engineer for E.F. Johnson
Company, Waseca, MN where performed sales and system design IMTS,
ACS/Rydax, and Cellular Telephone systems to both wire line and
non wire line common carriers.
From 1976 to 1980, he was employed at Mark Webb Productions,
Denver, CO where he produced numerous television commercials for
Arby's Roast Beef, Coca Cola, Lincoln Mercury, and Allstate
Insurance just to name a few.
From 1964 to 1967, he served in the United States Navy. He
received an honorable discharge and is a Vietnam veteran. He
currently holds an FCC Radiotelephone license as well as a LVMPD
Gaming Card. He is also listed in the "Who's Who in Corporate
America", "Who's Who in Entertainment", and "Who's Who in
International Business."
Blank Check Experience
In addition to the experience described above, Mr. Bobby Combs is
or has been an officer and/or director of a number of blank check
companies.
B-N-B Enterprises, Inc. - Treasurer from November 1994
through May 1997. He resigned as part of a merger
agreement with Allwest Systems International, Inc. Mr.
Combs received no compensation as part of the merger,
other than shares in the surviving entity, which were
granted in the same amount as all other shareholders
received. Mr. Combs had no affiliation with Allwest
Systems International, Inc.
Bach-Hauser, Inc. - Officer and Director since October 1995.
Polyspherics, Inc. - Officer and Director since September
1996.
M-80's, Inc. - Officer and Director since May 1998.
Nevada Stock Transfer Corporation - Officer and Director
since April 1987, however, this company is no longer in
existence.
In addition to the experience described above, Mr. Douglas Ansell
is or has been a director and/or officer of a number of blank
check companies.
Austin Land & Resources, Inc. - Secretary from September
1995 through April 1999. He resigned as part of a merger
agreement with Tangible Assets Galleries, Inc. Mr. Ansell
received no compensation as part of the merger, other
than shares in Tangible Assets Galleries, Inc., which
were granted in the same amount as all other shareholders
received. Mr. Ansell had no affiliation with Tangible
Assets Galleries, Inc.
Frozen Assets, Inc. - Officer and Director from June 1995
through March 1998. He resigned as part of a merger
agreement with Growth Industries, Inc. in March 1998,
which then merged with Fragrance Express, Inc., which
then again merged with National Boston Medical, Inc. in
June 1998. Mr. Ansell received no compensation as part of
the merger, other than shares in the surviving entity,
which were granted in the same amount as all other
shareholders received. Mr. Ansell had no affiliation with
either Growth Industries, Inc., Fragrance Express, Inc.
or National Boston Medical, Inc.
Caye Chapel, Inc. - Officer and Director from September 1995
through October 1998. He resigned as part of a merger
agreement in October 1998. Mr. Ansell received no
compensation as part of the merger, other than shares in
the surviving entity, which were granted in the same
amount as all other shareholders received. Mr. Ansell had
no affiliation with the other company involved in the
merger.
Austin Land & Development, Inc. - Officer and Director since
September 1995.
Austin Underground (name changed to Saleoutlet.Com) -
Officer and Director since November 1994.
Boogie Knights, Inc. - Officer and Director since May 1998.
Daughter Judy, Inc. - Officer and Director since June 1998.
Disco Inferno, Inc. - Officer and Director since May 1998.
The Computer Giftware Co. - Officer and Director since
February 1996.
Panda Pacific, Inc. - Officer and Director since May 1997.
Momentum Entertainment, Inc. - Officer and Director since
January 1998.
Brookshire Atlantic, Inc. - Officer and Director since
January 1999.
Master Tan, Inc. - Officer and Director since September
1998.
K-9 Protection, Inc. - Officer and Director since July 1996.
Relational Concepts, Inc. - Officer and Director since April
1999.
Polyspherics, Inc. - Officer and Director since September
1998.
In addition to the experience described above, Mr. John Michael
Eckert is or has been an officer and/or director of a number of
blank check companies.
Charter Group International, Inc. - Officer and Director
from November, 1990 through August, 1997. He resigned as
part of a merger agreement with Signature Brands, Inc.
Mr. Eckert received no compensation as part of the
merger, other than shares in the surviving entity, which
were granted in the same amount as all other shareholders
received. Mr. Eckert had no affiliation with Signature
Brands, Inc.
Handell-Graff, Inc. - Treasurer from November, 1995 through
March, 1999. He resigned as part of a merger agreement
with Healthcomp Evaluation Services Corp. Mr. Eckert
received no compensation as part of the merger, other
than shares in the surviving entity, which were granted
in the same amount as all other shareholders received.
Mr. Eckert had no affiliation with Healthcomp Evaluation
Services Corp.
Asian-American International, Inc. - Treasurer since
November, 1994.
Dream Team International, Inc. - Treasurer since March,
1998.
Las Vegas Sports and Celebrity Hall of Fame, Inc. - Officer
and Director since February 1991.
Sporlox Corporation - Secretary since May, 1998.
There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has
not established any committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs. The officers and
directors of the Company may in the future become shareholders,
officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a
right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph, if a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company have no preference as to which company
will merge or acquire such target company, the company of which
the President first became an officer and director will be
entitled to proceed with the transaction. Except as set forth
above, the Company has not adopted any other conflict of interest
policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They have agreed to act without compensation until authorized by
the Board of Directors, which is not expected to occur until the
Registrant has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will receive
any finders fee, either directly or indirectly, as a result of
their respective efforts to implement the Company's business plan
outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's stock is not listed. Management has not undertaken
any discussions, preliminary or otherwise, with any prospective
market maker concerning the participation of such market maker in
the after-market for the Company's securities and management does
not intend to initiate any such discussions until such time as
the Company has consummated a merger or acquisition. There is no
assurance that a trading market will ever develop or, if such a
market does develop, that it will continue.
After a merger or acquisition has been completed, any or all of
the Company's officers and directors will most likely be the
persons to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
There are 34 holders of the Company's Common Stock. The three
initial directors were each given 20,000 shares of the Common
Stock in exchange for $500.00. On July 3, 1996, the Company
issued an additional 1,000 shares each to the three directors. An
additional 100,000 shares were issued on April 16, 1997 pursuant
to an exemption from registration provided by Rule 504 of
Regulation D. The Company approved a 30:1 forward stock split on
March 3, 1998, having a net result of 4,890,000 of its issued and
outstanding stock. All of the issued and outstanding shares of
the Company's Common Stock were issued in accordance with the
exemption from registration afforded by Section 4(2) of the
Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales of 63,000 shares of stock made to the
founders of the Company on October 20, 1995, and on July 3, 1996,
the Registrant relied on the exemption from registration provided
by Section 4(2) of the Securities Act of 1933, as amended (the
"Act"). With respect to the sales of 100,000 shares of stock to
31 individuals on April 16, 1997, the Company relied on an
exemption from registration provided by Rule 504 of Regulation D
promulgated under the Act. No advertising or general solicitation
was employed in any offering of the shares. The securities were
offered for investment only and not for the purpose of resale or
distribution, and the transfers thereof were appropriately
restricted.
Of the 4,890,000 shares presently outstanding, a total of
2,250,000 are restricted and may not be sold other than pursuant
to a registration statement being in effect, pursuant to an
exemption from registration, or in accordance with Rule 144. In
general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, $0.001 par value, of which
4,890,000 are issued and outstanding. The shares are non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company recently changed auditors from Barry L. Friedman,
P.C. to Merdinger, Fruchter, Rosen & Corso, P.C. as of December
31, 1999. The Company had no disagreement with Barry L. Friedman
concerning his audit.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Merdinger, Fruchter,
Rosen & Corso, P.C. dated February 2, 2000.
Balance Sheets as of December 31, 1999 and December 31,
1998
Statements of Operations for the years ended December
31, 1999 and December 31, 1998
Statement of Stockholders' Equity
Statement of Cash Flow for the years ended December 31,
1999 and December 31, 1998
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF PROFESSIONAL MINING CONSULTANTS,
INC.:
We have audited the accompanying balance sheets of Professional
Mining Consultants, Inc. (A development Stage Company) as of
December 31, 1999 and 1998 and the related statements of
operations, stockholders' equity (deficiency) and cash flows for
the years then ended and for the period from August 28, 1995
(inception) to December 31, 1999. These financials statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Professional Mining Consultants, Inc. as of December 31, 1999
and 1998 and the results of its operations and its cash flows for
the years then ended and for the period from August 28, 1995
(inception) to December 31, 1999 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 1 of the accompanying financial statements, the Company
has no established source of revenue, which raises substantial
doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also discussed in
Note 1. These financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
MERDINGER, FRUCHTER ROSEN & CORSO, P.C.
Certified Public Accounts
Los Angeles, California
February 2, 2000
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<S> <C> <C>
December 31,
1999 1998
ASSETS
CURRENT ASSETS - Cash and Cash $ $
Equivalents - 107
TOTAL ASSETS $ $
- 107
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES - Officers Advances $ 3,350 $
-
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, $0.001 par value; 4,890 4,890
50,000,000 shares authorized;
4,890,000 issued and outstanding
Additional paid-in capital 22,710 22,710
Deficit accumulated during the
development stage (30,950) (27,493)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (3,350) (107) -
TOTAL LIABILITIES AND STOCKHOLDERS' $ $
EQUITY (DEFICIENCY) - 107
</TABLE>
The accompanying notes are an integral part of the financial
statements.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C>
For the
Period from
August 28,
1995
(inception)
For the Year to December
Ended 31,
December 31,
1999 1998 1999
REVENUE $ $ $
- - -
GENERAL, SELLING AND 3,457 13,469 30,950
ADMINISTRATIVE EXPENSES
LOSS BEFORE TAXES (3,457) (13,469) (30,950)
PROVISION FOR INCOME
TAXES - - -
NET LOSS $ (3,457) $ $ (30,950)
(13,469)
NET LOSS PER COMMON $ $
SHARE - basic and - - $(0.01)
diluted
WEIGHTED AVERAGE NUMBER 4,890,000 3,683,001
OF COMMON SHARES 4,890,000
OUTSTANDING - basic and
diluted
</TABLE>
The accompanying notes are an integral part of the financial
statements.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<S> <C> <C> <C> <C> <C>
Additional
paid-
Common Stock in Accumulated
Shares Amount Capital Deficit Total
_
Balance at August 28, - $ - $ - $ - $ -
1995
Issuance of common 1,800,00 1,800 (300) - 1,500
stock for cash on 0
October 20, 1995 at
$0.00083 per share
Net loss -
- - (319) (319)
Balance at December 1,800,00 1,800 (300) (319) 1,181
31, 1995 0
Issuance of common 90,000 90 1,010 - 1,100
stock for cash on
July 3, 1996 at
$0.0122
Net loss - -
- (1,736) (1,736)
Balance at December 1,890,00 1,890 710 (2,055) 545
31, 1996 0
Issuance of common 3,000,00 3,000 22,000 - 25,000
stock for cash on 0
April 16, 1997 at
$0.00833 per share
Net loss - (11,969)
- - (11,969)
Balance at December 4,890,00 4,890 22,710 (14,024) 13,576
31, 1997 0
Net loss - (13,469)
- - (13,469)
Balance at December 4,890,00 4,890 22,710 (27,493) 107
31, 1998 0
Net loss - - (3,457) (3,457)
-
Balance at December 4,890,00 $ 4,890 $ $ $
31, 1999 0 22,710 (30,950) (3,350)
</TABLE>
The accompanying notes are an integral part of the financial
statements.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
For the
Period from
August 28,
1995
(inception)
For the Year to December
Ended 31,
December 31,
1999 1998 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (3,457) $ (13,469) $ (30,950)
Changes in Assets and 3,350 (575) 3,350
Liabilities
Increase (Decrease) in
advance from officers
Net Cash Used in Operating (107) (14,044) (27,600)
Activities
CASH FLOWS PROVIDED BY (27,600)
FINANCING ACTIVITIES: - -
Issuance of common stock for
cash
NET DECREASE IN CASH AND CASH (107) (14,044) -
EQUIVALENTS
CASH AND CASH EQUIVALENTS 107 14,151
- - beginning of period -
CASH AND CASH EQUIVALENTS $ $ 107 $
- - end of period - -
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid during the year -
Interest paid $ $ $ -
- -
Income taxes paid $ $ $ -
- -
</TABLE>
The accompanying notes are an integral part of the financial
statements.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
Professional Mining Consultants, Inc. ("Company") is currently a
development stage company under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 7. The Company was
incorporated under the laws of the State of Nevada on August 28,
1995. It is management's objective to seek a merger with an
existing operating company.
Basis of Presentation
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has no established source of revenue. This
factor raises substantial doubt about the Company's ability to
continue as a going concern. Without realization of additional
capital, it would be unlikely for the Company to continue as a
going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amount, or amounts and classification of
liabilities that might be necessary should the Company be unable
to continue in existence. It is management's objective to seek
additional capital through a merger with an existing operating
company.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased
with original maturities of three months or less to be cash
equivalents.
Concentration of Credit Risk
From time to time the Company places its cash in what it believes
to be credit-worthy financial institutions. However, cash
balances exceed FDIC insured levels at various times during the
year.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES (continued)
Income Taxes
Income taxes are provided for based on the liability method of
accounting pursuant to SFAS No. 109, "Accounting for Income
Taxes". Deferred income taxes, if any, are recorded to reflect
the tax consequences on future years of differences between the
tax bases of assets and liabilities and their financial reporting
amounts at each year-end.
Loss Per Share
During 1998, the Company adopted SFAS No. 128, "Earnings Per
Share," which requires presentation of basic loss per share
("Basic LPS") and diluted loss per share ("Diluted LPS"). The
computation of basic earnings (loss) per share is computed by
dividing income (loss) available to common stockholders by the
weighted average number of outstanding common shares during the
period. Diluted loss per share gives effect to all diluted
potential common shares outstanding during the period. The
computation of diluted LPS does not assume conversion, exercise
or contingent exercise of securities that would have an
antidilutive effect on earnings.
Comprehensive Income
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". SFAS No. 130
establishes standards for the reporting and display of
comprehensive income and its components in the financial
statements. As of December 31, 1999 and 1998, and for the period
from August 28, 1995 (inception) to December 31, 1999, the
Company has no items that represent comprehensive income and,
therefore, has not included a schedule of comprehensive income in
the accompanying financial statements.
Impact of Year 2000 Issue
As of December 31, 1999, the Company does not have any computer
systems or customers and suppliers. Therefore, the issue of the
year 2000 has no effect on the Company's current activities.
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal
property. A director provides office services without charge.
Such costs are immaterial to the financial statements and,
accordingly, have not been reflected therein. The officers and
directors of the Company are involved in other business
activities and may, in the future, become involved in other
business opportunities. If a business opportunity becomes
available for the Company, such persons may face a conflict in
selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of
such conflicts.
NOTE 3 - INCOME TAXES
The reconciliation of the effective income tax rate to the
federal statutory rate is as follows:
<TABLE>
<S> <C> <C> <C>
For the
Period
from
August
28, 1995
(inception)
to
December
December 31, 31,
1999 1998 1999
34.00 % 34.00 % 34.00 %
Federal Income Tax
Rate
Effect of Valuation
Allowance (34.00)% (34.00) (34.00)%
%
Effective Income Tax 0.00 % 0.00 0.00 %
Rate %
</TABLE>
Deferred tax assets and liabilities reflect the net effect of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and amounts used for
income tax purposes. Significant components of the Company's
deferred tax assets and liabilities are as follows:
<TABLE>
<S> <C> <C> <C>
For the
Period from
August 28,
1995
(inception)
to December
31,
December 31,
1999 1998 1999
$ 0 $ 0 $ 30,950
Net operating loss 30,950 27,493
carry forward
Valuation allowance (30,950)
(30,950) (27,493)
Net deferred tax asset $ - $ - $ -
</TABLE>
PROFESSIONAL MINING CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
At December 31, 1999 and 1998, the Company has provided a
valuation allowance for the deferred tax asset since management
has not been able to determine whether that asset is realizable.
The net change in the valuation allowance for the years ended
December 31, 1999 and 1998 increased by $3,457 and $13,469,
respectively. Net operating loss carryforwards expire in various
amounts from 2010 to 2015.
NOTE 4 - STOCKHOLDERS' EQUITY
On October 20, 1995, the Company issued 1,800,000 shares of its
$0.001 par value common stock in consideration of $1,500 in cash.
On July 3, 1996, the Company issued 90,000 shares of its $0.001
par value common stock in consideration of $1,100 in cash.
On April 16, 1997, the Company issued 3,000,000 shares of its
$0.001 par value common stock in consideration of $25,000 in
cash.
On March 3, 1998, the Board of Directors authorized a 30:1
forward stock split, thus increasing the Company's issued and
outstanding stock from 163,000 to 4,890,000 shares. All
references in the financial statements to the common stock and
per share amounts have been restated to reflect the stock split.
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Professional Mining Consultants, Inc.
By: /s/ Douglas Ansell
Douglas Ansell, Secretary
ARTICLES OF INCORPORATION
of
PROFESSIONAL MINING CONSULTANTS, INC.
The undersigned, being of the age of majority, file Articles of
Incorporation to conduct business in corporate form according to
Chapter 78 (Private Corporation Act) of the statutes and the law
of the State of Nevada.
1.0 NAME
The name of the corporation is PROFESSIONAL MINING
CONSULTANTS, INC.
2.0 DURATION
The period of duration of the Corporation is perpetual.
3.0 PURPOSES AND POWERS
3.1 PURPOSES
The purposes for which the Corporation is organized are
as follows:
3.1.1 To do everything necessary, proper, advisable, or
convenient for the accomplishment of the foregoing purposes, and
to do all things incidental to them or connected with them that
are not forbidden by the Nevada Private Corporation Act
(hereinafter "Act"), by other law, or by these Articles.
3.1.2 To carry on any other activities and business lawful in
Nevada or the United States of America.
3.2 POWERS
The Corporation, subject to any specific written
limitations or restrictions imposed by the Act or by these
Articles of Incorporation, shall have the right to and may
exercise the following powers:
3.2.1 To have and exercise all powers specified in the
Private Corporation Act of Nevada;
3.2.2 To enter into lawful arrangement for sharing profits,
deferring compensation, making and entering into pension plans
and the like for it's employees; to enter into reciprocal
associations, joint ventures, partnerships, cooperative
associations, limited liability companies and other similar
activities;
3.2.3 To make any guaranty respecting stocks, dividends,
securities, indebtedness, interest, contracts, or other
obligations created by any domestic or foreign corporations,
associations, partnerships, individuals, or other entities;
3.2.4 Each of the foregoing clauses of this Section shall be
construed as independent powers and the matters expressed in each
clause shall not, unless otherwise expressly provided, be limited
by reference to, or inference from, the terms of any other
clause. The enumeration of specific powers shall not be construed
as limiting or restricting in any manner either the meaning of
general terms used in any of these clauses, or the scope of the
general powers of the Corporation created by them nor shall the
expression of one thing in any of these clauses be deemed to
exclude another not expressed, although it be of like nature.
3.2.5 The corporation shall not engage in the trust, banking,
insurance or railroad business.
3.3 CARRYING OUT OF PURPOSES AND EXERCISE OF POWERS IN ANY
JURISDICTION
The Corporation may carry out its purposes and exercise
it's powers in any state territory, district, or possession
of the United States, or in any foreign country, to the
extent that these purposes and powers are not forbidden by
the law of the state, territory, district, or possession of
the United States, or by the foreign country; and it may
limit the purpose or purposes that it proposes to carry out
or the powers it proposes to exercise in any application to
do business in any state, territory, district, or possession
of the United States or foreign country.
3.4 DIRECTION OF PURPOSES AND EXERCISE OF POWERS BY DIRECTORS
The Directors, subject to any specific written
limitations or restrictions imposed by the Act or by these
Articles of Incorporation, shall direct the carrying out of
the purposes and exercise the powers of the Corporation
without previous authorization or subsequent approval by the
shareholders of the Corporation.
4.0 SHARES
4.1 NUMBER
The aggregate number of the shares that the Corporation
shall have authority to issue shall be 50,000,000 shares of
common stock, each share having a par value of 1 mil. All
shares shall be common, voting, and non-assessable.
4.2 DIVIDENDS
The holders of the Capital Stock shall be entitled to
receive, when and as declared by the Board of Directors,
solely out of unreserved and unrestricted earned surplus,
dividends payable either in cash, in property, or in shares
of the Capital Stock.
No dividends shall be paid if the source out of which
it is proposed to pay the dividend is due to or arises from
unrealized appreciation in value or from a revaluation of
assets; or if the corporation is incapable of paying its
debts as they become due in the usual course of business.
4.3 CUMULATIVE VOTING; PRE-EMPTIVE RIGHTS
There shall be no cumulative voting for Directors. Pre-
emptive rights shall not be granted.
5.0 MINIMUM CAPITAL
The Corporation will not commence business until consideration of
the value of at least $1,000 has been received.
6.0 REGULATION OF INTERNAL AFFAIRS
6.1. BYLAWS
The initial Bylaws shall be adopted by the Board of
Directors. The power to alter, amend, or repeal the Bylaws
or to adopt new Bylaws shall be vested in the Board of
Directors. The Bylaws may contain provisions for the
regulation and management of the affairs of the Corporation
not inconsistent with the Act or these Articles.
6.2. TRANSACTIONS IN WHICH DIRECTORS HAVE AN INTEREST
Any contract or other transaction between the
Corporation and one or more of its Directors or between the
Corporation and any firm of which one or more of its
Directors are members or employees, or in which they are
interested, or between the Corporation and any corporation
or association of which one or more of its Directors are
shareholders, members, directors, officers, or employees or
in which they are interested, shall be valid for all
purposes, notwithstanding the presence of the Director or
Directors at the meeting of the Board of Directors of the
Corporation that acts upon, or in reference to, the contract
or transaction, and notwithstanding his or their
participation in he action, if the fact of such interest
shall be disclosed or known to the Board of Directors and
the Board of Directors shall, nevertheless, authorize or
ratify the contract or transaction, the interested Director
or Directors to be counted in determining whether a quorum
is present and to be entitled to vote on such authorization
or ratification. The section shall not be construed to
invalidate any contract or other transaction that would
otherwise be valid under common and statutory law applicable
to it.
6.3. INDEMNIFICATION AND RELATED MATTERS
6.3.1. The Corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expense (
including attorneys fees), judgment, fines and amounts paid in
settlement actually and reasonable incurred by him in connection
with such action, suit of proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contenders or its equivalent, shall not of itself
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation and, with respect
to any criminal action or proceeding, had actual knowledge that
his or her conduct was unlawful.
6.3.2. The Corporation shall have power to indemnify any
person who was or is a party of is threatened to be made a party
to any threatened or completed action or suit by or in the right
of the Corporation to procure a judgment in it's favor by reason
of the fact that he is or was a director, officer, employee or
agent of the Corporation, or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys fees) actually
and reasonable incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interest of the Corporation except that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expense the court shall deem
proper.
6.3.3. To the extent that a Director, officer, employee or
agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in (a) and (b) or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorneys fees) actually and reasonably incurred by him in
connection therewith.
6.3.4. Any indemnification under (a) and (b) (unless ordered
by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination by the Corporation that
indemnification of the Director, officer, employee or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in (a) and (b). Such determination
shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested
Directors so directs, by independent legal counsel in a written
opinion, or (3) by the shareholders.
6.3.5. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in (d) upon
receipt of an undertaking by or on behalf of the Director,
officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the Corporation as authorized in this section.
6.3.6. The indemnification provided by this section shall not
be deemed exclusive of any other rights to which those identified
may be entitled under any Bylaw, agreement, vote of shareholders
or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a Director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, and personal
representatives of such person.
6.3.7. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
Director, Officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising our of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability
under the provisions of this section.
6.3.8. A Director shall not be personally liable for breach of
fiduciary duty when acting either as a Director or Officer except
for acts involving intentional misconduct, fraud, a knowing
violation of the law or the payment of illegal dividends. NRS
78.037. NRS 78.300
6.4. REMOVAL OF DIRECTORS
Removal shall be governed by the Bylaw provisions and
the Act.
6.5. AMENDMENT OF ARTICLES
The Corporation reserves the right to amend the
Articles of Incorporation in any manner now or hereafter
permitted by the Act.
7.0 RESIDENT AGENT: ADDRESS OF CORPORATION
7.1. The "registered office" of the corporation shall be 1700 E.
Desert Inn Road, Suite 113, Las Vegas, Nevada 89109.
7.2. The initial Resident agent shall be Robert C. Bovard, 1700
East Desert Inn Rd. Suite 113, Las Vegas, Nevada 89109.
8.0 IDENTITY OF DIRECTOR(S)
The initial Board of Directors (the Directors shall be
styled as Directors and not as Trustees) shall be three in number
but may be increased or decreased at the formation and
organization meeting or by authority of Bylaws. Members of the
Board of Directors need not be residents of Nevada. The names and
addresses of the person(s) to serve as Director(s) until the
formation meeting or first annual meeting and until their
successor(s) shall have been elected and qualified or until the
number of members of the Board of Directors is expanded is:
Robert C. Bovard
1700 East Desert Inn Road
Suite 113
Las Vegas, Nevada 89109
The number of Directors may be changed from time to time by
amendment of the Bylaws but no decrease shall have the effect of
reducing such number below one or of shortening the term of any
incumbent Director. Anything to the contrary notwithstanding,
however, the number shall not be less than two if there are only
two if there are only two shareholders of record or one if there
is only one shareholder of record. The Board, if there are more
than two shareholders, shall consist of not less than three nor
more than seven members.
9.0 ORIGINAL INCORPORATORS
The name, address and identity of the original Incorporator
is:
Robert C. Bovard
1700 East Desert Inn Road
Suite 113
Las Vegas, Nevada 89109
DATED this 24th day of August, 1995
/s/ Robert C. Bovard
ROBERT C. BOVARD
BY-LAWS
OF
Professional Mining Consultants, Inc.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the
Company shall be held at its office in the City of Las Vegas,
Clark County, at 1 o'clock in the afternoon on the 29th day of
August in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding day not a legal holiday, for
the purpose of electing directors of the company to serve during
the ensuing year and for the transaction of such other business
as may be brought before the meeting.
At least five days' written notice specifying the time and
place, when and where, the annual meeting shall be convened,
shall be mailed in a United States Post Office addressed to each
of the stockholders of record at the time of issuing the notice
at his or her, or its address last known, as the same appears on
the books of the company.
SECTION 2. Special meetings of the stockholders may be held
at the office of the company in the State of Nevada or elsewhere,
whenever called by the President, or by the Board of Directors,
or by vote of, or by an instrument in writing signed by the
holders of 51% of the issued and outstanding capital stock of the
company. At least ten days' written notice of such meeting,
specifying the day and hour and place, when and where such
meeting shall be convened, and objects for calling the same,
shall be mailed in a United States Post Office, addressed to each
of the stockholders of record at the time of issuing the notice,
at his or her or its address last known, as the same appears on
the books of the company.
SECTION 3. If all the stockholders of the company shall
waive notice of a meeting, no notice of such meeting shall be
required, and whenever all of the stockholders shall meet in
person or by proxy, such meeting shall be valid for all purposes
without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling
any meeting setting forth the substance of the notice, and the
time and place of the mailing of the same to the several
stockholders, and the respective addresses to which the same were
mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
If the address of any stockholder does not appear upon the
books of the company, it will be sufficient to address any notice
to such stockholder at the principal office of the corporation.
SECTION 4. All business lawful to be transacted by the
stockholders of the company, may be transacted at any special
meeting or at any adjournment thereof. Only such business,
however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling
such meetings, but at any stockholders' meeting at which all of
the outstanding capital stock of the company is represented,
either in person or by proxy, any lawful business may be
transacted, and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of more
than 50 percent (50%) in amount of the entire issued and
outstanding capital stock of the company, shall constitute a
quorum for all purposes of such meetings.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend, in person or by proxy,
at the time and place fixed by these By-laws for any annual
meeting, or fixed by a notice as above provided for a special
meeting, a majority in interest of the stockholders present in
person or by proxy may adjourn from time to time without notice
other than by announcement at the meeting, until holders of the
amount of stock requisite to constitute a quorum shall attend.
At any such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted
as originally called.
SECTION 6. At each meeting of the stockholders every
stockholder shall be entitled to vote in person or by his duly
authorized proxy appointed by instrument in writing subscribed by
such stockholder or by his duly authorized attorney. Each
stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the
corporation, ten days preceding the day of such meeting. The
votes for directors, and upon demand by any stockholder, the
votes upon any question before the meeting, shall be by voice
vote.
At each meeting of the stockholders, a full, true and
complete list, in alphabetical order of all the stockholders
entitled to vote at such meeting, and indicating the number of
shares held by each, certified by the Secretary of the Company,
shall be furnished, which list shall be prepared at least ten
days before such meeting, and shall be open to the inspection of
the stockholders, or their agents or proxies, at the place where
such meeting is to be held, and for ten days prior thereto. Only
the persons in whose names shares of stock are registered on the
books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be
entitled to vote at such meeting. Proxies and powers of Attorney
to vote must be filed with the Secretary of the Company before an
election or a meeting of the stockholders, or they cannot be used
at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls
shall be opened and closed; the proxies and ballots issued,
received, and be taken in charge of, for the purpose of the
meeting, and all questions touching the qualifications of voters
and the validity of proxies, and the acceptance or rejection of
votes, shall be decided by two inspectors. Such inspectors shall
be appointed at the meeting by the presiding officer of the
meeting.
SECTION 8. At the stockholders' meetings, the regular order
of business shall be as follows:
1. Reading and approval of the Minutes of previous meeting
or meetings;
2. Reports of the Board of Directors, the President,
Treasurer and Secretary of the Company in the order named;
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7 Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall
consist of 3 persons who shall be chosen by the stockholders
annually, at the annual meeting of the Company, and who shall
hold office for one year, and until their successors are elected
and qualify.
SECTION 2. When any vacancy occurs among the Directors by
death, resignation, disqualification or other cause, the
stockholders, at any regular or special meeting, or at any
adjourned meeting thereof, or the remaining Directors, by the
affirmative vote of a majority therefor shall elect a successor
to hold office for the unexpired portion of the term of the
Director whose place shall have become vacant and until his
successor shall have been elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the
principal office of the company in the state of Nevada or
elsewhere, at such place or places as the Board of Directors may,
from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors
shall hold its first annual meeting for the year immediately
after the annual meeting of the stockholders or immediately after
the election of Directors at such annual meeting.
Regular meetings of the Board of Directors shall be held at
the office of the company in the City of Las Vegas, State of
Nevada on November 1, at 3 o'clock in the P.M. Notice of such
regular meetings shall be mailed to each Director by the
Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if
such notice is not given, provided the meeting is held at the
time and place fixed by these by-laws for holding such regular
meetings.
Special meetings of the Board of Directors may be held on
the call of the President or Secretary on at least three days
notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all
of the members shall be present, even though without or of which
notice shall have been waived by all absentees, provided a quorum
shall be present, shall be valid for all purposes unless
otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the
Board of Directors, either regular or special.
SECTION 5: A majority of the Board of Directors in office
shall constitute a quorum for the transaction of business, but if
at any meeting of the Board there be less than a quorum present,
a majority of those present may adjourn from time to time, until
a quorum shall be present, and no notice of such adjournment
shall be required. The Board of Directors may prescribe rules
not in conflict with these By-laws for the conduct of its
business; provided, however, that in the fixing of salaries of
the officers of the corporation, the unanimous action of all of
the Directors shall be required.
SECTION 6. A Director need not be a stockholder of the
corporation.
SECTION 7. The Directors shall be allowed and paid all
necessary expenses incurred in attending any meeting of the
Board, but shall not receive any compensation for their services
as Directors until such time as the company is able to declare
and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the
stockholders at annual meetings of the stockholders of the
condition of the company, and shall, at request, furnish each of
the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any
contract or act for approval or ratification at any annual
meeting of the stockholders called for the purpose of considering
any such contract or act, which, it approved, or ratified by the
vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting,
provided that a lawful quorum of stockholders be there
represented in person or by proxy, shall be valid and binding
upon the corporation and upon all the stockholders thereof, as if
it had been approved or ratified by every stockholder of the
corporation.
SECTION 9. The Board of Directors shall have the power from
time to time to provide for the management of the offices of the
company in such manner as they see fit, and in particular from
time to time to delegate any of the powers of the Board in the
course of the current business of the company to any standing or
special committee or to any officer or agent and to appoint any
persons to be agents of the company with such powers (including
the power to subdelegate), and upon such terms as may be deemed
fit.
SECTION 10. The Board of Directors is invested with the
complete and unrestrained authority in the management of all the
affairs of the company, and is authorized to exercise for such
purpose as the General Agent of the Company, its entire corporate
authority.
SECTION 11. The regular order of business at meetings of the
Board of Directors shall be as follows:
1. Reading and approval of the minutes of any previous
meeting or meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after
each meeting after the annual meeting of stockholders, shall
elect a President, a Vice-President, a Secretary and a Treasurer
to hold office for one, year next coming, and until their
successors are elected and qualify. The offices of the Secretary
and Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the
Board of Directors.
The Board of Directors may from time to time by resolution,
appoint such additional Vice Presidents and additional Assistant
Secretaries, Assistant Treasurer and Transfer Agents of the
company as it may deem advisable; prescribe their duties, and fix
their compensation, and all such appointed officers shall be
subject to removal at any time by the Board of Directors. all
officers, agents, and factors of the company shall be chosen and
appointed in such manner and shall hold their office for such
terms as the Board of Directors may by resolution prescribe.
SECTION 2. The President shall be the executive officer of
the company and shall have the supervision and, subject to the
control of the Board of Directors, the direction of the Company's
affairs, with full power to execute all resolutions and orders of
the Board of Directors not especially entrusted to some other
officer of the company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all
meetings of the Board of Directors, and at all meetings of the
stockholders, and shall sign the Certificates of Stock issued by
the company and shall perform such, other duties as shall be
prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the
powers and perform all the duties of the President in his absence
or inability to act, including the signing of the Certificates of
Stock issued by the company, and he shall so perform such other
duties as shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have the custody of all the
funds and securities of the company. When necessary or proper he
shall endorse on behalf of the company for collection checks,
notes, and other obligations; he shall deposit all monies to the
credit of the company in such bank or banks or other depository
as the Board of Directors may designate; he shall sign all
receipts and vouchers for payments made by the company, except as
herein otherwise provided. He shall sign with the President all
bills of exchange and promissory notes of the company; he shall
also have the care and custody of the stocks, bonds,
certificates, vouchers, evidence of debts, securities, and such
other property belonging to the company as the Board of Directors
shall designate; he shall sign all papers required by law or by
those By-Laws or the Board of Directors to be signed by the
Treasurer. Whenever required by the Board of Directors, he shall
render a statement of his cash account; he shall enter regularly
in the books of the company to be kept by him for the purpose,
full and accurate accounts of all monies received and paid by him
on account of the company. He shall at all reasonable times
exhibit the books of account to any Directors of the company
during business hours, and he shall perform all acts incident to
the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors,
give bond to the company conditioned for the faithful performance
of all his duties as Treasurer in such sum, and with such
security as shall be approved by the Board of Directors, with
expense of such bond to be borne by the company.
SECTION 5. The Board of Directors may appoint an Assistant
Treasurer who shall leave such powers and perform such duties as
may be prescribed for him by the Treasurer of the company or by
the Board of Directors, and the Board of Directors shall require
the Assistant Treasurer to give a bond to the company in such sum
and with such security as it shall approve, as conditioned for
the faithful performance of his duties as Assistant Treasurer,
the expense of such bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all
meetings of the Board of Directors and the Minutes of all
meetings of the stockholders and of the Executive Committee in
books provided for that purpose. He shall attend to the giving
and serving of all notices of the company; he may sign with the
President or Vice-President, in the name of the Company, all
contracts authorized by the Board of Directors or Executive
Committee; he shall affix the corporate seal of the company
thereto when so authorized by the Board of Directors or Executive
Committee; he shall have the custody of the corporate seal of the
company; he shall affix the corporate seal to all certificates of
stock duly issued by the company; he shall have charge of Stock
Certificate Books, Transfer books and Stock Ledgers, and such
other books and papers as the Board of Directors or the Executive
Committee may direct, all of which shall at all reasonable times
be open to the examination of any Director upon application at
the office of the company during business hours, and he shall, in
general, perform all duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant
Secretary who shall have such powers and perform such duties as
may be prescribed for him by the Secretary of the company or by
the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of
Directors, the President shall have full power and authority in
behalf of the company to attend and to act and to vote at any
meetings of the stockholders of any corporation in which the
company may hold stock, and at any such meetings, shall possess
and may exercise any and all rights and powers incident to the
ownership of such stock, and which as the new owner thereof, the
company might have possessed and exercised if present. The Board
of Directors, by resolution, from time to time, may confer like
powers on any person or persons in place of the President to
represent the company for the purposes in this section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued
in such manner and at such times and upon such conditions as
shall be prescribed by the Board of Directors.
SECTION 2. Ownership of stock in the company shall be
evidenced by certificates of stock in such forms as shall be
prescribed by the Board of Directors, and shall he under the seal
of the company and signed by the President or the Vice-President
and also by the Secretary or by an Assistant Secretary
All certificates shall be consecutively numbered; the name
of the person owning the shares represented thereby with the
number of such shares and the date of issue shall be entered on
time company's books.
No certificates shall be valid unless it is signed by the
President or Vice-President and by the Secretary or Assistant
Secretary.
All certificates surrendered to the company shall be
cancelled and no new certificate shall be issued until the former
certificate for the same number of shares shall have been
surrendered or cancelled.
SECTION 3. No transfer of stock shall be valid as against
the company except on surrender and cancellation of the
certificate therefor, accompanied by an assignment or transfer by
the owner therefor.
Whenever any transfer shall be expressed as made for
collateral security and not absolutely, the same shall be so
expressed in the entry of said transfer on the books of the
company.
SECTION 4. The Board of Directors shall have power and
authority to make all such rules and regulations not inconsistent
herewith as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the capital stock
of the company.
The Board of Directors may appoint a transfer agent and a
registrar of transfers and may require all stock certificates to
bear the signature of such transfer agent and such registrar of
transfer.
SECTION 5. The Stock Transfer Books shall be closed for all
meetings of the stockholders for the period of ten days prior to
such meetings and shall be closed for the payment of dividends
during such periods as from time to time may be fixed by the
Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate
of stock in lieu of one alleged to have been lost or destroyed,
shall make affidavit or affirmation of the fact, and shall
deposit with the company an affidavit. Whereupon, at the end of
six months after the deposit of said affidavit and upon such
person or persons giving Bond of Indemnity to the company with
surety to be approved by the Board of Directors in double the
current value of stock against any damage, loss or inconvenience
to the company which may or can arise in consequence of a new or
duplicate certificate being issued in lieu of the one lost or
missing, the Board of Directors may cause to be issued to such
person or persons a new certificate, or a duplicate of the
certificate, or a duplicate of the certificate so lost or
destroyed. The Board of Directors may, in its discretion refuse
to issue such new or duplicate certificate save upon the order of
some court having jurisdiction in such matter, anything herein to
the contrary notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in
Nevada shall be at 2001 Spring Lake Drive,Henderson, Nevada, and
the company may have a principal office in any other state or
territory as the Board of Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the
By-Laws and Articles of Incorporation of the company shall be
kept at the office of its Resident Agent, Robert C. Bovard, Esq.
1700 E. Desert Inn Rd. #113, Las Vegas in the County of Clark,
State of Nevada, for the inspection of all who are authorized or
have the right to see the same, and for the transfer of stock.
All other books of the company shall be kept at such places as
may be prescribed by the Board of Directors.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to
reserve over and above the capital stock paid in, such an amount
in its discretion as it may deem advisable to fix as a reserve
fund, and may, from time to time, declare dividends from the
accumulated profits of the company in excess of the amounts so
reserved, and pay the same to the stockholders of the company,
and may also, if it deems the same advisable, declare stock
dividends of the unissued capital stock of the company.
SECTION 2. No agreement, contract or obligation (other than
checks in payment of indebtedness incurred by authority of the
Board of Directors involving the payment of monies or the credit
of the company for more than dollars) shall he made without the
authority of the Board of Directors, or of the Executive
Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of
Directors, all agreements and contracts shall be signed by the
President and the Secretary in the name and on behalf of the
company, and shall have the corporate seal thereto attached.
SECTION 4. All monies of the corporation shall be deposited
when and as received by the Treasurer in such bank or banks or
other depository as may from time to time be designated by the
Board of Directors, and such deposits shall be made in the name
of the company.
SECTION 5. No note, draft, acceptance, endorsement or other
evidence of indebtedness shall be valid or against the company
unless the same shall be signed by the President or a Vice-
President, and attested by the Secretary or an Assistant
Secretary, or signed by the Treasurer or an Assistant Treasurer,
and countersigned by the President, Vice-President, or Secretary,
except that the Treasurer or an Assistant Treasurer may, without
countersignature, make endorsements for deposit to the credit of
the company in all its duly authorized depositories.
SECTION 6. No loan or advance of money shall be made by the
company to any stockholder or officer therein, unless the Board
of Directors shall otherwise authorize.
SECTION 7. No director nor executive officer of the company
shall be entitled to any salary or compensation for any services
performed for the company, unless such salary or compensation
shall be fixed by resolution of the Board of Directors, adopted
by the unanimous vote of all the Directors voting in favor
thereof.
SECTION 8. The company may take, acquire, hold, mortgage,
sell, or otherwise deal in stocks or bonds or securities of any
other corporation, if and as often as the Board of Directors
shall so elect.
SECTION 9. The Directors shall have power to authorize and
cause to be executed, mortgages, and liens without limit as to
amount upon the property and franchise of this corporation, and
pursuant to the affirmative vote, either in person or by proxy,
of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in
any manner of the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the
design thereof being as follows:
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be
made at any regular or special meeting of the Board of Directors
by a vote of not less than all of the entire Board, or may be
made by a vote of, or a consent in writing signed by the holders
of 77% of the issued and outstanding capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned.
being the directors of the above named corporation. do hereby
consent to the foregoing By-Laws and adopt the same as and for
the By-Laws of said corporation.
IN WITNESS WHEREOF we have hereunto act our hands this 3rd.
day of October, 1995.
/s/ Gregory T. Eckert
/s/ Howard Manoff
/s/ Carl E. Flusche
