U. S. Securities and Exchange Commission
Washington, D.C. 20549
First Amended
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
BOULDER CAPITAL OPPORTUNITIES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1341980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4750 Table Mesa Drive, Boulder, CO 80303
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (303) 442-1021
Securities to be registered under Section 12(b) of the
Act:
Title of each class Name of each exchange on
to be so registered which each class is to be
registered
Not Applicable
Securities to be registered under Section 12(g) of the
Act:
Common Stock
(Title of class)
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
The Company was incorporated under the laws
of the State of Colorado on April 22, 1996, and is in
the early developmental and promotional stages. To
date the Company's only activities have been
organizational ones, directed at developing its business
plan and raising its initial capital. The Company has
not commenced any commercial operations. The
Company has no full-time employees and owns no real
estate.
The Company's business plan is to seek,
investigate, and, if warranted, acquire one or more
properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The
acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and
may encompass assets or a business entity, such as a
corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely
that the Company will be able to take advantage of
more than one such business opportunity. The
Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to
short-term earnings.
At the present time the Company has not
identified any business opportunity that it plans to
pursue, nor has the Company reached any agreement
or definitive understanding with any person concerning
an acquisition. The Company's officer and director
has previously been involved in transactions involving
a merger between an established company and a blind
pool or blank check entity, and has a number of
contacts within the field of corporate finance. As a
result, he has had preliminary contacts with
representatives of numerous companies concerning the
general possibility of a merger or acquisition by a
blind pool or blank check company. However, none
of these preliminary contacts or discussions involved
the possibility of a merger or acquisition transaction
with the Company.
It is anticipated that the Company's officer and
director will contact broker-dealers and other persons
with whom he is acquainted who are involved in
corporate finance matters to advise them of the
Company's existence and to determine if any
companies or businesses they represent have an interest
in considering a merger or acquisition with the
Company. No assurance can be given that the
Company will be successful in finding or acquiring a
desirable business opportunity, given the limited funds
that are expected to be available for acquisitions, or
that any acquisition that occurs will be on terms that
are favorable to the Company or its stockholders.
The Company's search will be directed toward
small and medium-sized enterprises which have a
desire to become public corporations and which are
able to satisfy, or anticipate in the reasonably near
future being able to satisfy, the minimum asset
requirements in order to qualify shares for trading on
NASDAQ (See "Investigation and Selection of
Business Opportunities"). The Company anticipates
that the business opportunities presented to it will (i)
be recently organized with no operating history, or a
history of losses attributable to under-capitalization or
other factors; (ii) be experiencing financial or
operating difficulties; (iii) be in need of funds to deve-
lop a new product or service or to expand into a new
market; (iv) be relying upon an untested product or
marketing concept; or (v) have a combination of the
characteristics mentioned in (i) through (iv). The
Company intends to concentrate its acquisition efforts
on properties or businesses that it believes to be
undervalued. Given the above factors, investors
should expect that any acquisition candidate may have
a history of losses or low profitability.
The Company does not propose to restrict its
search for investment opportunities to any particular
geographical area or industry, and may, therefore,
engage in essentially any business, to the extent of its
limited resources. This includes industries such as
service, finance, natural resources, manufacturing, high
technology, product development, medical,
communications and others. The Company's
discretion in the selection of business opportunities is
unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.
As a consequence of this registration of its
securities, any entity which has an interest in being
acquired by, or merging into the Company, is expected
to be an entity that desires to become a public
company and establish a public trading market for its
securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock
constituting control of the Company would be issued
by the Company or purchased from the current
principal shareholders of the Company by the
acquiring entity or its affiliates. If stock is purchased
from the current shareholders, the transaction is very
likely to result in substantial gains to them relative to
their purchase price for such stock. In the Company's
judgment, none of its officers and directors would
thereby become an "underwriter" within the meaning
of the Section 2(11) of the Securities Act of 1933, as
amended. The sale of a controlling interest by certain
principal shareholders of the Company could occur at
a time when the other shareholders of the Company
remain subject to restrictions on the transfer of their
shares.
Depending upon the nature of the transaction,
the current sole officer and director of the Company
may resign his management positions with the
Company in connection with the Company's
acquisition of a business opportunity. See "Form of
Acquisition," below, and "Risk Factors - The
Company - Lack of Continuity in Management." In
the event of such a resignation, the Company's current
management would not have any control over the
conduct of the Company's business following the
Company's combination with a business opportunity.
It is anticipated that business opportunities will
come to the Company's attention from various sources,
including its officer and director, its other
stockholders, professional advisors such as attorneys
and accountants, securities broker-dealers, venture
capitalists, members of the financial community, and
others who may present unsolicited proposals. The
Company has no plans, understandings, agreements, or
commitments with any individual for such person to
act as a finder of opportunities for the Company.
The Company does not foresee that it would
enter into a merger or acquisition transaction with any
business with which its sole officer or director is
currently affiliated. Should the Company determine in
the future, contrary to foregoing expectations, that a
transaction with an affiliate would be in the best
interests of the Company and its stockholders, the
Company is in general permitted by Colorado law to
enter into such a transaction if:
(1) The material facts as to the
relationship or interest of the affiliate and as to the
contract or transaction are disclosed or are known to
the Board of Directors, and the Board in good faith
authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested
directors, even though the disinterested directors
constitute less than a quorum; or
(2) The material facts as to the
relationship or interest of the affiliate and as to the
contract or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good
faith by vote of the stockholders; or
(3) The contract or transaction is fair as
to the Company as of the time it is authorized,
approved or ratified, by the Board of Directors or the
stockholders.
INVESTIGATION AND SELECTION OF BUSINESS
OPPORTUNITIES
To a large extent, a decision to participate in
a specific business opportunity may be made upon
management's analysis of the quality of the other
company's management and personnel, the anticipated
acceptability of new products or marketing concepts,
the merit of technological changes, the perceived
benefit the company will derive from becoming a
publicly held entity, and numerous other factors which
are difficult, if not impossible, to analyze through the
application of any objective criteria. In many
instances, it is anticipated that the historical operations
of a specific business opportunity may not necessarily
be indicative of the potential for the future because of
the possible need to shift marketing approaches
substantially, expand significantly, change product
emphasis, change or substantially augment
management, or make other changes. The Company
will be dependent upon the owners of a business
opportunity to identify any such problems which may
exist and to implement, or be primarily responsible for
the implementation of, required changes. Because the
Company may participate in a business opportunity
with a newly organized firm or with a firm which is
entering a new phase of growth, it should be
emphasized that the Company will incur further risks,
because management in many instances will not have
proved its abilities or effectiveness, the eventual
market for such company's products or services will
likely not be established, and such company may not
be profitable when acquired.
It is anticipated that the Company will not be
able to diversify, but will essentially be limited to one
such venture because of the Company's limited
financing. This lack of diversification will not permit
the Company to offset potential losses from one
business opportunity against profits from another, and
should be considered an adverse factor affecting any
decision to purchase the Company's securities.
It is emphasized that management of the
Company may effect transactions having a potentially
adverse impact upon the Company's shareholders
pursuant to the authority and discretion of the
Company's management to complete acquisitions
without submitting any proposal to the stockholders
for their consideration. Holders of the Company's
securities should not anticipate that the Company
necessarily will furnish such holders, prior to any
merger or acquisition, with financial statements, or any
other documentation, concerning a target company or
its business. In some instances, however, the proposed
participation in a business opportunity may be
submitted to the stockholders for their consideration,
either voluntarily by such directors to seek the
stockholders' advice and consent or because state law
so requires.
The analysis of business opportunities will be
undertaken by or under the supervision of the
Company's President, who is not a professional
business analyst. See "Management." Although there
are no current plans to do so, Company management
might hire an outside consultant to assist in the
investigation and selection of business opportunities,
and might pay a finder's fee. Since Company
management has no current plans to use any outside
consultants or advisors to assist in the investigation
and selection of business opportunities, no policies
have been adopted regarding use of such consultants or
advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the
term of service, or regarding the total amount of fees
that may be paid. However, because of the limited
resources of the Company, it is likely that any such
fee the Company agrees to pay would be paid in stock
and not in cash. Otherwise, the Company anticipates
that it will consider, among other things, the following
factors:
(1) Potential for growth and profitability,
indicated by new technology, anticipated market
expansion, or new products;
(2) The Company's perception of how
any particular business opportunity will be received by
the investment community and by the Company's
stockholders;
(3) Whether, following the business
combination, the financial condition of the business
opportunity would be, or would have a significant
prospect in the foreseeable future of becoming
sufficient to enable the securities of the Company to
qualify for listing on an exchange or on a national
automated securities quotation system, such as
NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of Rule
15c2-6 recently adopted by the Securities and
Exchange Commission. See "Risk Factors - The
Company - Regulation of Penny Stocks."
(4) Capital requirements and anticipated
availability of required funds, to be provided by the
Company or from operations, through the sale of
additional securities, through joint ventures or similar
arrangements, or from other sources;
(5) The extent to which the business
opportunity can be advanced;
(6) Competitive position as compared to
other companies of similar size and experience within
the industry segment as well as within the industry as
a whole;
(7) Strength and diversity of existing
management, or management prospects that are
scheduled for recruitment;
(8) The cost of participation by the
Company as compared to the perceived tangible and
intangible values and potential; and
(9) The accessibility of required
management expertise, personnel, raw materials,
services, professional assistance, and other required
items.
In regard to the possibility that the shares of
the Company would qualify for listing on NASDAQ,
the current standards include the requirements that the
issuer of the securities that are sought to be listed have
total assets of at least $4,000,000 and total capital and
surplus of at least $2,000,000. Many, and perhaps
most, of the business opportunities that might be
potential candidates for a combination with the
Company would not satisfy the NASDAQ listing
criteria.
No one of the factors described above will be
controlling in the selection of a business opportunity,
and management will attempt to analyze all factors
appropriate to each opportunity and make a
determination based upon reasonable investigative
measures and available data. Potentially available
business opportunities may occur in many different in-
dustries 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. Potential investors must
recognize that, because of the Company's limited
capital available for investigation and management's
limited experience in business analysis, the Company
may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.
The Company is unable to predict when it may
participate in a business opportunity. It expects,
however, that the analysis of specific proposals and the
selection of a business opportunity may take several
months or more.
Prior to making a decision to participate in a
business opportunity, the Company will generally
request that it be provided with written materials
regarding the business opportunity containing such
items as a description of products, services and
company history; management resumes; financial
information; available projections, with related
assumptions upon which they are based; an
explanation of proprietary products and services;
evidence of existing patents, trademarks, or services
marks, or rights thereto; present and proposed forms of
compensation to management; a description of
transactions between such company and its affiliates
during relevant periods; a description of present and
required facilities; an analysis of risks and competitive
conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or
if they are not available, unaudited financial
statements, together with reasonable assurances that
audited financial statements would be able to be
produced within a reasonable period of time not to
exceed 60 days following completion of a merger
transaction; and other information deemed relevant.
As part of the Company's investigation, the
Company's executive officers and directors may 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.
It is possible that the range of business
opportunities that might be available for consideration
by the Company could be limited by the impact of
Securities and Exchange Commission regulations
regarding purchase and sale of "penny stocks." The
regulations would affect, and possibly impair, any
market that might develop in the Company's securities
until such time as they qualify for listing on NASDAQ
or on another exchange which would make them
exempt from applicability of the "penny stock"
regulations. See "Risk Factors - Regulation of Penny
Stocks."
Company management believes that various
types of potential merger or acquisition candidates
might find a business combination with the Company
to be attractive. These include acquisition candidates
desiring to create a public market for their shares in
order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for
raising capital through the public sale of securities and
believe that the possible prior existence of a public
market for their securities would be beneficial, and
acquisition candidates which plan to acquire additional
assets through issuance of securities rather than for
cash, and believe that the possibility of development of
a public market for their securities will be of
assistance in that process. Acquisition candidates
which have a need for an immediate cash infusion are
not likely to find a potential business combination with
the Company to be an attractive alternative.
FORM OF ACQUISITION
It is impossible to predict the manner in which
the Company may participate in a business
opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of
the Company and the promoters of the opportunity
and, upon the basis of that review and the relative
negotiating strength of the Company and such
promoters, the legal structure or method deemed by
management to be suitable will be selected. Such
structure may include, but is not limited to leases,
purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company
may act directly or indirectly through an interest in a
partnership, corporation or other form of organization.
Implementing such structure may require the merger,
consolidation or reorganization of the Company with
other corporations or forms of business organization,
and although it is likely, there is no assurance that the
Company would be the surviving entity. In addition,
the present management and stockholders of the
Company most likely will not have control of a
majority of the voting shares of the Company
following a reorganization transaction. As part of such
a transaction, the Company's existing directors may
resign and new directors may be appointed without
any vote by stockholders.
It is likely that the Company will acquire its
participation in a business opportunity through the
issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction
cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or
not an acquisition is a so-called "tax free"
reorganization under the Internal Revenue Code of
1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e.
80% or more) of the common stock of the combined
entities immediately following the reorganization. If
a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions
provided under the Internal Revenue Code, the
Company's current stockholders would retain in the
aggregate 20% or less of the total issued and
outstanding shares. This could result in substantial
additional dilution in the equity of those who were
stockholders of the Company prior to such
reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or
transfer of shares representing a controlling interest in
the Company by the current officers, directors and
principal shareholders. (See "Description of Business -
General").
It is anticipated that any new securities issued
in any reorganization would be issued in reliance upon
exemptions, if any are available, from registration
under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register
such securities either at the time the transaction is
consummated, or under certain conditions or at
specified times thereafter. The issuance of substantial
additional securities and their potential sale into any
trading market that might develop in the Company's
securities may have a depressive effect upon such
market.
The Company will participate in a business
opportunity only after the negotiation and execution of
a written agreement. Although the terms of such
agreement cannot be predicted, generally such an
agreement would require specific representations and
warranties by all of the parties thereto, specify certain
events of default, detail the terms of closing and the
conditions which must be satisfied by each of the
parties thereto prior to such closing, outline the
manner of bearing costs if the transaction is not
closed, set forth remedies upon default, and include
miscellaneous other terms.
As a general matter, the Company anticipates
that it, and/or its officers and principal shareholders
will enter into a letter of intent with the management,
principals or owners of a prospective business
opportunity prior to signing a binding agreement.
Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the
parties to consummate the transaction. Execution of
a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither
the Company nor any of the other parties to the letter
of intent will be bound to consummate the acquisition
unless and until a definitive agreement concerning the
acquisition as described in the preceding paragraph is
executed. Even after a definitive agreement is
executed, it is possible that the acquisition would not
be consummated should any party elect to exercise any
right provided in the agreement to terminate it on
specified grounds.
It is anticipated that 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 and
substantial costs for accountants, attorneys and others.
If a decision is made not to participate in a specific
business opportunity, the costs theretofore incurred in
the related investigation would not be recoverable.
Moreover, because many providers of goods and
services require compensation at the time or soon after
the goods and services are provided, the inability of
the Company to pay until an indeterminate future time
may make it impossible to procure goods and services.
INVESTMENT COMPANY ACT AND OTHER
REGULATION
The Company may participate in a business
opportunity by purchasing, trading or selling the
securities of such business. The Company does not,
however, intend to engage primarily in such activities.
Specifically, the Company intends to conduct its
activities so as to avoid being classified as an
"investment company" under the Investment Company
Act of 1940 (the "Investment Act"), and therefore to
avoid application of the costly and restrictive
registration and other provisions of the Investment
Act, and the regulations promulgated thereunder.
Section 3(a) of the Investment Act contains the
definition of an "investment company," and it
excludes any entity that does not engage primarily in
the business of investing, reinvesting or trading in
securities, or that does not engage in the business of
investing, owning, holding or trading "investment
securities" (defined as "all securities other than
government securities or securities of majority-owned
subsidiaries") the value of which exceeds 40% of the
value of its total assets (excluding government
securities, cash or cash items). The Company intends
to implement its business plan in a manner which will
result in the availability of this exception from the
definition of "investment company." Consequently, the
Company's participation in a business or opportunity
through the purchase and sale of investment securities
will be limited.
The Company's plan of business may involve
changes in its capital structure, management, control
and business, especially if it consummates a
reorganization as discussed above. Each of these areas
is regulated by the Investment Act, in order to protect
purchasers of investment company securities. Since
the Company will not register as an investment
company, stockholders will not be afforded these
protections.
Any securities which the Company might
acquire in exchange for its Common Stock will be
"restricted securities" within the meaning of the
Securities Act of 1933, as amended (the "Act"). If the
Company elects to resell such securities, such sale
cannot proceed unless a registration statement has been
declared effective by the Securities and Exchange
Commission or an exemption from registration is
available. Section 4(1) of the Act, which exempts
sales of securities not involving a distribution, would
in all likelihood be available to permit a private sale.
Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be
necessary, the Company would be required to comply
with the provisions of the Act to effect such resale.
An acquisition made by the Company may be
in an industry which is regulated or licensed by
federal, state or local authorities. Compliance with
such regulations can be expected to be a
time-consuming and expensive process.
COMPETITION
The Company expects to encounter substantial
competition in its efforts to locate attractive
opportunities, primarily from business development
companies, venture capital partnerships and
corporations, venture capital affiliates of large
industrial and financial companies, small investment
companies, and wealthy individuals. Many of these
entities will have significantly greater experience,
resources and managerial capabilities than the
Company and will therefore be in a better position
than the Company to obtain access to attractive
business opportunities. The Company also will
experience competition from other public "blind pool"
companies, many of which may have more funds
available than does the Company.
ADMINISTRATIVE OFFICES
The Company currently maintains a mailing
address at 4750 Table Mesa Drive, Boulder, Colorado
80303, which is the office address of its legal counsel.
The Company's telephone number there is (303) 442-
1021. Other than this mailing address, the Company
does not currently maintain any other office facilities,
and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. The
Company pays no rent or other fees for the use of this
mailing address.
EMPLOYEES
The Company is a development stage company
and currently has no employees. Management of the
Company expects to use consultants, attorneys and
accountants as necessary, and does not anticipate a
need to engage any full-time employees so long as it
is seeking and evaluating business opportunities. The
need for employees and their availability will be
addressed in connection with the decision whether or
not to acquire or participate in specific business
opportunities. Although there is no current plan with
respect to its nature or amount, remuneration may be
paid to or accrued for the benefit of, the Company's
sole officerprior to, or in conjunction with, the
completion of a business acquisition. See "Executive
Compensation" and under "Certain Relationships and
Related Transactions."
RISK FACTORS
A. CONFLICTS OF INTEREST. Certain
conflicts of interest exist between the Company and its
sole officer and director. He has other business
interests to which he devotes his attention, and he may
be expected to continue to do so although management
time should be devoted to the business of the
Company. As a result, conflicts of interest may arise
that can be resolved only through his exercise of such
judgment as is consistent with his fiduciary duties to
the Company. See "Management," and "Conflicts of
Interest."
The Company's President may elect, in the
future, to form one or more additional blind pool or
blank check companies with a business plan similar or
identical to that of the Company. Any such additional
blind pool or blank check companies would also be in
direct competition with the Company for available
business opportunities. (See Item 5 - "Directors,
Executive Officers, Promoters and Control Persons -
Conflicts of Interest.")
It is anticipated that Company's President may
actively negotiate or otherwise consent to the purchase
of a portion of his common stock as a condition to, or
in connection with, a proposed merger or acquisition
transaction. In this process, the Company's President
may consider his own personal pecuniary benefit rather
than the best interests of other Company shareholders,
and the other Company shareholders are not expected
to be afforded the opportunity to approve or consent
to any particular stock buy-out transaction. See
"Conflicts of Interest."
B. POSSIBLE NEED FOR ADDITIONAL
FINANCING. The Company has very limited funds,
and such funds may not be adequate to take advantage
of any available business opportunities. Even if the
Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business
opportunity, the Company may not have enough
capital to exploit the opportunity. The ultimate
success of the Company may depend upon its ability
to raise additional capital. The Company has not
investigated the availability, source, or terms that
might govern the acquisition of additional capital and
will not do so until it determines a need for additional
financing. If additional capital is needed, there is no
assurance that funds will be available from any source
or, if available, that they can be obtained on terms
acceptable to the Company. If not available, the
Company's operations will be limited to those that can
be financed with its modest capital.
C. REGULATION OF PENNY STOCKS.
The Company's securities, when available for trading,
will be subject to a Securities and Exchange
Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such
securities to persons other than established customers
or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or
individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or
that, when combined with a spouse's income, exceeds
$300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability
determination for the purchaser and receive the
purchaser's written agreement to the transaction prior
to the sale. Consequently, the rule may affect the
ability of broker-dealers to sell the Company's
securities and also may affect the ability of purchasers
in this offering to sell their securities in any market
that might develop therefor.
In addition, the Securities and Exchange
Commission has adopted a number of rules to regulate
"penny stocks." Such rules include Rules 3a51-1, 15g-
1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under
the Securities Exchange Act of 1934, as amended.
Because the securities of the Company may constitute
"penny stocks" within the meaning of the rules, the
rules would apply to the Company and to its securities.
The rules may further affect the ability of owners of
Shares to sell the securities of the Company in any
market that might develop for them.
Shareholders should be aware that, according
to Securities and Exchange Commission Release No.
34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the
security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of
prices through prearranged matching of purchases and
sales and false and misleading press releases; (iii)
"boiler room" practices involving high-pressure sales
tactics and unrealistic price projections by
inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differentials and markups by
selling broker-dealers; and (v) the wholesale dumping
of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those
prices and with consequent investor losses. The
Company's management is aware of the abuses that
have occurred historically in the penny stock market.
Although the Company does not expect to be in a
position to dictate the behavior of the market or of
broker-dealers who participate in the market,
management will strive within the confines of practical
limitations to prevent the described patterns from
being established with respect to the Company's
securities.
D. NO OPERATING HISTORY. The
Company was formed in April of 1996 for the purpose
of registering its common stock under the 1934 Act
and acquiring a business opportunity. The Company
has no operating history, revenues from operations, or
assets other than cash from private sales of stock. The
Company faces all of the risks of a new business and
the special risks inherent in the investigation,
acquisition, or involvement in a new business
opportunity. The Company must be regarded as a new
or "start-up" venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such
ventures are subject.
PROFITABILITY. There is no assurance that the
Company will acquire a favorable business op-
portunity. Even if the Company should become
involved in a business opportunity, there is no
assurance that it will generate revenues or profits, or
that the market price of the Company's Common
Stock will be increased thereby.
F. POSSIBLE BUSINESS - Not Identified
and Highly Risky. The Company has not identified
and has no commitments to enter into or acquire a
specific business opportunity and therefore can
disclose the risks and hazards of a business or
opportunity that it may enter into in only a general
manner, and cannot disclose the risks and hazards of
any specific business or opportunity that it may enter
into. An investor can expect a potential business
opportunity to be quite risky. The Company's
acquisition of or participation in a business opportunity
will likely be highly illiquid and could result in a total
loss to the Company and its stockholders if the
business or opportunity proves to be unsuccessful. See
Item 1 "Description of Business."
G. TYPE OF BUSINESS ACQUIRED. The
type of business to be acquired may be one that
desires to avoid effecting its own public offering and
the accompanying expense, delays, uncertainties, and
federal and state requirements which purport to protect
investors. Because of the Company's limited capital,
it is more likely than not that any acquisition by the
Company will involve other parties whose primary
interest is the acquisition of control of a publicly
traded company. Moreover, any business opportunity
acquired may be currently unprofitable or present other
negative factors.
H. IMPRACTICABILITY OF
EXHAUSTIVE INVESTIGATION. The Company's
limited funds and the lack of full-time management
will likely make it impracticable to conduct a complete
and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or
other resources thereto. Management decisions,
therefore, will likely be made without detailed
feasibility studies, independent analysis, market
surveys and the like which, if the Company had more
funds available to it, would be desirable. The
Company will be particularly dependent in making
decisions upon information provided by the promoter,
owner, sponsor, or others associated with the business
opportunity seeking the Company's participation. A
significant portion of the Company's available funds
may be expended for investigative expenses and other
expenses related to preliminary aspects of completing
an acquisition transaction, whether or not any business
opportunity investigated is eventually acquired.
I. LACK OF DIVERSIFICATION. Because
of the limited financial resources that the Company
has, it is unlikely that the Company will be able to
diversify its acquisitions or operations. The
Company's probable inability to diversify its activities
into more than one area will subject the Company to
economic fluctuations within a particular business or
industry and therefore increase the risks associated
with the Company's operations.
J. POSSIBLE RELIANCE UPON
UNAUDITED FINANCIAL STATEMENTS. The
Company generally will require audited financial
statements from companies that it proposes to acquire.
No assurance can be given, however, that audited
financials will be available to the Company. In cases
where audited financials are unavailable, the Company
will have to rely upon unaudited information received
from target companies' management that has not been
verified by outside auditors. The lack of the type of
independent verification which audited financial
statements would provide, increases the risk that the
Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and
accurate information about the financial condition and
operating history of the target company. This risk
increases the prospect that the acquisition of such a
company might prove to be an unfavorable one for the
Company or the holders of the Company's securities.
Moreover, the Company will be subject to the
reporting provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about
significant acquisitions, including audited financial
statements for any business that it acquires. Conse-
quently, acquisition prospects that do not have, or are
unable to provide reasonable assurances that they will
be able to obtain, the required audited statements
would not be considered by the Company to be
appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
Should the Company, during the time it remains
subject to the reporting provisions of the Exchange
Act, complete an acquisition of an entity for which
audited financial statements prove to be unobtainable,
the Company would be exposed to enforcement actions
by the Securities and Exchange Commission (the
"Commission") and to corresponding administrative
sanctions, including permanent injunctions against the
Company and its management. The legal and other
costs of defending a Commission enforcement action
are likely to have material, adverse consequences for
the Company and its business. The imposition of
administrative sanctions would subject the Company to
further adverse consequences.
In addition, the lack of audited financial
statements would prevent the securities of the
Company from becoming eligible for listing on
NASDAQ, the automated quotation system sponsored
by the National Association of Securities Dealers, Inc.,
or on any existing stock exchange. Moreover, the lack
of such financial statements is likely to discourage
broker-dealers from becoming or continuing to serve
as market makers in the securities of the Company.
Without audited financial statements, the Company
would almost certainly be unable to offer securities
under a registration statement pursuant to the
Securities Act of 1933, and the ability of the Company
to raise capital would be significantly limited until
such financial statements were to become available.
K. OTHER REGULATION. An acquisition
made by the Company may be of a business that is
subject to regulation or licensing by federal, state, or
local authorities. Compliance with such regulations
and licensing can be expected to be a time-consuming,
expensive process and may limit other investment
opportunities of the Company.
L. DEPENDENCE UPON MANAGEMENT;
LIMITED PARTICIPATION OF MANAGEMENT.
The Company currently has a single individual who is
serving as its sole officer and director. The Company
will be heavily dependent upon his skills, talents, and
abilities to implement its business plan, and may, from
time to time, find that the inability of the sole officer
and director to devote his full time attention to the
business of the Company results in a delay in progress
toward implementing its business plan. Furthermore,
since one individual is serving as the sole officer and
director of the Company, it will be entirely dependent
upon his experience in seeking, investigating, and
acquiring a business and in making decisions regarding
the Company's operations. See "Management."
Because investors will not be able to evaluate the
merits of possible business acquisitions by the
Company, they should critically assess the information
concerning the Company's sole officer and director.
M. LACK OF CONTINUITY IN
MANAGEMENT. The Company does not have an
employment agreement with its sole officer and
director, and as a result, there is no assurance that he
will continue to manage the Company in the future.
In connection with acquisition of a business
opportunity, it is likely the current officer and director
of the Company may resign. A decision to resign will
be based upon the identity of the business opportunity
and the nature of the transaction, and is likely to occur
without the vote or consent of the stockholders of the
Company.
N. INDEMNIFICATION OF OFFICERS
AND DIRECTORS. The Company's Articles of
Incorporation provide for the indemnification of its
directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other
expenses incurred by them in any litigation to which
they become a party arising from their association with
or activities on behalf of the Company. The Company
will also bear the expenses of such litigation for any
of its directors, officers, employees, or agents, upon
such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall
not have been entitled to indemnification. This
indemnification policy could result in substantial
expenditures by the Company which it will be unable
to recoup.
O. DIRECTOR'S LIABILITY LIMITED.
The Company's Articles of Incorporation exclude
personal liability of its directors to the Company and
its stockholders for monetary damages for breach of
fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have
a much more limited right of action against its
directors than otherwise would be the case. This
provision does not affect the liability of any director
under federal or applicable state securities laws.
P. DEPENDENCE UPON OUTSIDE
ADVISORS. To supplement the business experience
of its sole officer and director, the Company may be
required to employ accountants, technical experts,
appraisers, attorneys, or other consultants or advisors.
The selection of any such advisors will be made by the
Company's President without any input from stock-
holders. Furthermore, it is anticipated that such
persons may be engaged on an "as needed" basis
without a continuing fiduciary or other obligation to
the Company. In the event the President of the
Company considers it necessary to hire outside
advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required
services.
Q. LEVERAGED TRANSACTIONS. There
is a possibility that any acquisition of a business
opportunity by the Company may be leveraged, i.e.,
the Company may finance the acquisition of the
business opportunity by borrowing against the assets
of the business opportunity to be acquired, or against
the projected future revenues or profits of the business
opportunity. This could increase the Company's
exposure to larger losses. A business opportunity
acquired through a leveraged transaction is profitable
only if it generates enough revenues to cover the
related debt and expenses. Failure to make payments
on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all
of the assets acquired. There is no assurance that any
business opportunity acquired through a leveraged
transaction will generate sufficient revenues to cover
the related debt and expenses.
R. COMPETITION. The search for
potentially profitable business opportunities is
intensely competitive. The Company expects to be at
a disadvantage when competing with many firms that
have substantially greater financial and management
resources and capabilities than the Company. These
competitive conditions will exist in any industry in
which the Company may become interested.
S. NO FORESEEABLE DIVIDENDS. The
Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the
foreseeable future.
T. LOSS OF CONTROL BY PRESENT
MANAGEMENT AND STOCKHOLDERS. The
Company may consider an acquisition in which the
Company would issue as consideration for the business
opportunity to be acquired an amount of the
Company's authorized but unissued Common Stock
that would, upon issuance, represent the great majority
of the voting power and equity of the Company. The
result of such an acquisition would be that the
acquired company's stockholders and management
would control the Company, and the Company's
management could be replaced by persons unknown at
this time. Such a merger would result in a greatly
reduced percentage of ownership of the Company by
its current shareholders. In addition, the Company's
President could sell his control block of stock at a
premium price to the acquired company's stockholders.
U. NO PUBLIC MARKET EXISTS. There
is no public market for the Company's common stock,
and no assurance can be given that a market will
develop or that a shareholder ever will be able to
liquidate his investment without considerable delay, if
at all. If a market should develop, the price may be
highly volatile. Factors such as those discussed in this
"Risk Factors" section may have a significant impact
upon the market price of the securities offered hereby.
Owing to the low price of the securities, many
brokerage firms may not be willing to effect transac-
tions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in these
securities, the combination of brokerage commissions,
state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending
institutions will not permit the use of such securities as
collateral for any loans.
V. RULE 144 SALES. All of the
outstanding shares of Common Stock held by present
stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933,
as amended. As restricted shares, these shares may be
resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or
other applicable exemptions from registration under
the Act and as required under applicable state sec-
urities laws. Rule 144 provides in essence that a
person who has held restricted securities for a
prescribed period may, under certain conditions, sell
every three months, in brokerage transactions, a
number of shares that does not exceed the greater of
1.0% of a company's outstanding common stock or
the average weekly trading volume during the four
calendar weeks prior to the sale. There is no limit on
the amount of restricted securities that may be sold by
a nonaffiliate after the restricted securities have been
held by the owner for a period of three years. A sale
under Rule 144 or under any other exemption from the
Act, if available, or pursuant to subsequent
registrations of shares of Common Stock of present
stockholders, may have a depressive effect upon the
price of the Common Stock in any market that may
develop. Of the total 1,010,00 shares of common
stock held by present stockholders of the Company
710,000 shares will become available for resale under
Rule 144 ninety (90) days after the Company registers
its common stock under Section 12(g) of the Securities
and Exchange Commission, all of which will be
subject to applicable volume restrictions under the
Rule, and the remaining 300,000 shares will become
available for resale starting in April, 1998.
W. BLUE SKY CONSIDERATIONS.
Because the securities registered hereunder have not
been registered for resale under the blue sky laws of
any state, the holders of such 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 law restrictions upon
the ability of investors to sell the securities and of
purchasers to purchase the securities. Some
jurisdictions may not under any circumstances allow
the trading or resale of blind-pool or "blank-check"
securities. Accordingly, investors should consider the
secondary market for the Company's securities to be
a limited one.
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development
stage and, since inception, has experienced no
significant change in liquidity or capital resources or
stockholder's equity other than the receipt of net
proceeds in the amount of $6,250.00 from its inside
capitalization funds. Consequently, the Company's
balance sheet for the period of April 22, 1996
(inception) through April 30, 1996, reflects a current
asset value of $6,249 and a total asset value of $8,024,
primarily in the form of cash.
The Company will carry out its plan of
business as discussed above. The Company cannot
predict to what extent its liquidity and capital
resources will be diminished prior to the
consummation of a business combination or whether
its capital will be further depleted by the operating
losses (if any) of the business entity which the
Company may eventually acquire.
RESULTS OF OPERATIONS
During the period from April 22, 1996
(inception) through April 30, 1996, the Company has
engaged in no significant operations other than
organizational activities, acquisition of capital and
preparation for registration of its securities under the
Securities Exchange Act of 1934, as amended. No
revenues were received by the Company during this
period.
For the current fiscal year, the Company
anticipates incurring a loss as a result of organizational
expenses, expenses associated with registration under
the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition
candidates. The Company anticipates that until a
business combination is completed with an acquisition
candidate, it will not generate revenues other than
interest income, and may continue to operate at a loss
after completing a business combination, depending
upon the performance of the acquired business.
NEED FOR ADDITIONAL FINANCING
The Company believes that its existing capital
will be sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act
of 1934, as amended, for a period of approximately
one year. Accordingly, in the event the Company is
able to complete a business combination during this
period, it anticipates that its existing capital will be
sufficient to allow it to accomplish the goal of
completing a business combination. There is no
assurance, however, that the available funds will
ultimately prove to be adequate to allow it to complete
a business combination, and once a business
combination is completed, the Company's needs for
additional financing are likely to increase substantially.
No commitments to provide additional funds
have been made by management or other stockholders.
Accordingly, there can be no assurance that any
additional funds will be available to the Company to
allow it to cover its expenses.
Irrespective of whether the Company's cash
assets prove to be inadequate to meet the Company's
operational needs, the Company might seek to
compensate providers of services by issuances of stock
in lieu of cash. For information as to the Company's
policy in regard to payment for consulting services,
see "Certain Relationships and Transactions."
ITEM 3. DESCRIPTION OF PROPERTY.
The Company does not currently maintain an
office or any other facilities. It does currently
maintain a mailing address at 4750 Table Mesa Drive,
Boulder, Colorado 80303, which is the office address
of its legal counsel. The Company pays no rent for
the use of this mailing address. The Company does
not believe that it will need to maintain an office at
any time in the foreseeable future in order to carry out
its plan of operations described herein. The
Company's telephone number is (303) 442-1021.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date of
this Registration Statement, the number of shares of
Common Stock owned of record and beneficially by
executive officers, directors and persons who hold
5.0% or more of the outstanding Common Stock of
the Company. Also included are the shares held by all
executive officers and directors as a group.
<TABLE>
<CAPTION>
Name and Address Number of Shares % of Class
Owned Beneficially Owned
</CAPTION>
<S> <C> <C>
Robert Soehngen <F1> 660,000 65.35
2434 Vine Place
Boulder, Colorado 80304
All directors and executive 660,000 65.35
officers as a group (1 person)
<FN>
<F1>
(1) The person listed is the sole officer and
director of the Company.
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS.
The directors and executive officers currently
serving the Company are as follows:
Name Age Positions Held and Tenure
Robert Soehngen 45 President and Director
since April, 1996
The director named above will serve until the
first annual meeting of the Company's stockholders.
Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold
their positions at the pleasure of the board of directors,
absent any employment agreement, of which none
currently exists or is contemplated. There is no
arrangement or understanding between the sole director
and officer of the Company and any other person
pursuant to which any director or officer was or is to
be selected as a director or officer.
The sole director and officer of the Company
will devote his time to the Company's affairs on an
"as needed" basis. As a result, the actual amount of
time which he will devote to the Company's affairs is
unknown and is likely to vary substantially from
month to month.
BIOGRAPHICAL INFORMATION
ROBERT SOEHNGEN. Mr. Soehngen, who
is the Company's President, has served as the sole
officer and director of the Company since its
inception.
Mr. Soehngen is currently self-employed as a
business consultant, providing consulting services
relating to mergers and acquisitions. From 1980 to
1995 he was a partner in Sawyer/Soehngen
Partnership, a real estate partnership which owned
commercial property in downtown Boulder, Colorado.
Mr. Soehngen has also been engaged in the securities
business in various capacities from 1975 to the
present. From 1984 through 1990 he was President of
National Securities Network, Inc. From 1991 through
1994 he was Director of Corporate Finance for
Spencer Edwards, Inc., Nutmeg Securities, Inc., and
Brookstreet Securities Corporation, and from 1994
through 1995 was an Account Executive with Toluca
Pacific Securities. From 1989 through 1995, Mr.
Soehngen was President of National Securities Holding
Corporation and in that capacity maintained the books
and records of a publicly-held subsidiary corporation
until it was merged with an operating business in
September 1995. Mr. Soehngen graduated from the
University of Colorado in 1972, with a B.S. in
Finance.
INDEMNIFICATION OF OFFICERS AND
DIRECTORS
As permitted by Colorado law, the Company's
Articles of Incorporation provide that the Company
will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action brought against
them on account of their being or having been
Company directors or officers unless, in any such
action, they are adjudged to have acted with gross
negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been
informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore,
unenforceable.
EXCLUSION OF LIABILITY
Pursuant to the Colorado Business Corporation
Act, the Company's Articles of Incorporation exclude
personal liability for its directors for monetary
damages based upon any violation of their fiduciary
duties as directors, except as to liability for any breach
of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section
7-106-401 of the Colorado Business Corporation Act,
or any transaction from which a director receives an
improper personal benefit. This exclusion of liability
does not limit any right which a director may have to
be indemnified and does not affect any director's
liability under federal or applicable state securities
laws.
OTHER BLIND POOL ACTIVITIES
The Company's sole officer and director is not
currently affiliated with any other blind pool
companies. However, he may elect, in the future, to
form, or to seek to become affiliated with one or more
such entities.
In September 1995, Mr. Soehngen merged
National Securities Holding Corporation, a public shell
corporation he controlled, with New Frontier Media,
Inc., a CD-ROM manufacturer. In conjunction with
that transaction, Mr. Soehngen retained a total of
66,055 shares, representing approximatelly 1.65% of
the issued and outstanding stock of New Frontier
Media, Inc. Mr. Soehngen also has a consulting
agreement with New Frontier Media, Inc. pursuant to
which he has agreed to provide consultation services
and assistance in merger and acquisition activities and
in locating interim or "bridge financing" for any such
mergers and acquisitions. The compensation payable
to Mr. Soehngen for such consultation services may
include cash or securities, and will be payable upon
the successful closing of a merger/acquisition
transaction or the completion of any financing.
CONFLICTS OF INTEREST
The sole officer and director of the Company
will not devote more than a portion of his time to the
affairs of the Company. There will be occasions when
the time requirements of the Company's business
conflict with the demands of his other business and
investment activities. Such conflicts may require that
the Company attempt to employ additional personnel.
There is no assurance that the services of such persons
will be available or that they can be obtained upon
terms favorable to the Company.
The Company's sole officer and director may
actively negotiate or otherwise consent to the purchase
of a portion of his common stock as a condition to, or
in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial
premium over the initial cost of such shares may be
paid by the purchaser in conjunction with any sale of
shares by the Company's officer and director which is
made as a condition to, or in connection with, a
proposed merger or acquisition transaction. The fact
that a substantial premium may be paid to the
Company's sole officer and director to acquire his
shares creates a potential conflict of interest for him in
satisfying his fiduciary duties to the Company and its
other shareholders. Even though such a sale could
result in a substantial profit to him, he would be
legally required to make the decision based upon the
best interests of the Company and the Company's
other shareholders, rather than his own personal
pecuniary benefit.
ITEM 6. EXECUTIVE COMPENSATION.
At inception of the Company, its sole Director,
Robert Soehngen, received 560,000 shares of Common
Stock valued at $.0025 per share in consideration of
pre-incorporation services rendered to the Company
related to investigating and developing the Company's
proposed business plan and capital structure, and
completion of the incorporation and organization of
the Company. Three other persons each received a
total of 50,000 shares valued at $0.0025 per share in
consideration of pre-incorporation services rendered to
the Company related to investigating and developing
the Company's proposed business plan and capital
structure. No officer or director has received any
other remuneration. Although there is no current plan
in existence, it is possible that the Company will adopt
a plan to pay or accrue compensation to its sole officer
and director for services related to seeking business
opportunities and completing a merger or acquisition
transaction. See "Certain Relationships and Related
Transactions." The Company has no stock option,
retirement, pension, or profit-sharing programs for the
benefit of directors, officers or other employees, but
the Board of Directors may recommend adoption of
one or more such programs in the future.
ITEM 7. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS.
Prior to the date of this Registration Statement,
the Company issued to its officer and director, and to
other shareholders, a total of 1,010,000 shares of
Common Stock for a total of $6,250.00 in cash and
$1,775.00 in services. Certificates evidencing the
Common Stock issued by the Company to these
persons have all been stamped with a restrictive
legend, and are subject to stop transfer orders by the
Company. For additional information concerning
restrictions that are imposed upon the securities held
by current stockholders, and the responsibilities of
such stockholders to comply with federal securities
laws in the disposition of such Common Stock, see
"Risk Factors - Rule 144 Sales."
No officer, director, promoter, or affiliate of
the Company has or proposes to have any direct or
indirect material interest in any asset proposed to be
acquired by the Company through security holdings,
contracts, options, or otherwise.
The Company has adopted a policy under
which any consulting or finder's fee that may be paid
to a third party for consulting services to assist
management in evaluating a prospective business
opportunity would be paid in stock or in cash. Any
such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict
whether or in what amount such a stock issuance
might be made.
Although there is no current plan in existence,
it is possible that the Company will adopt a plan to
pay or accrue compensation to its sole officer and
director for services related to seeking business
opportunities and completing a merger or acquisition
transaction.
The Company maintains a mailing address at
the office of its legal counsel, but otherwise does not
maintain an office. As a result, it pays no rent and
incurs no expenses for maintenance of an office and
does not anticipate paying rent or incurring office
expenses in the future. It is likely that the Company
will establish and maintain an office after completion
of a business combination.
Although management has no current plans to
cause the Company to do so, it is possible that the
Company may enter into an agreement with an
acquisition candidate requiring the sale of all or a
portion of the Common Stock held by the Company's
current stockholders to the acquisition candidate or
principals thereof, or to other individuals or business
entities, or requiring some other form of payment to
the Company's current stockholders, or requiring the
future employment of specified officers and payment
of salaries to them. It is more likely than not that any
sale of securities by the Company's current
stockholders to an acquisition candidate would be at a
price substantially higher than that originally paid by
such stockholders. Any payment to current
stockholders in the context of an acquisition involving
the Company would be determined entirely by the
largely unforeseeable terms of a future agreement with
an unidentified business entity.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation
authorize the issuance of 100,000,000 shares of
Common Stock. Each record holder of Common
Stock is entitled to one vote for each share held on all
matters properly submitted to the stockholders for their
vote. Cumulative voting for the election of directors
is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common
Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors
out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of
the Company, holders are entitled to receive, ratably,
the net assets of the Company available to
stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights
upon liquidation. Holders of outstanding shares of
Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares
when offered and sold will be, duly authorized, validly
issued, fully paid, and nonassessable. To the extent
that additional shares of the Company's Common
Stock are issued, the relative interests of then existing
stockholders may be diluted.
PREFERRED STOCK
The Company's Articles of Incorporation
authorize the issuance of 10,000,000 shares of
preferred stock. The Board of Directors of the
Company is authorized to issue the preferred stock
from time to time in series and is further authorized to
establish such series, to fix and determine the
variations in the relative rights and preferences as
between series, to fix voting rights, if any, for each
series, and to allow for the conversion of preferred
stock into Common Stock. No preferred stock has
been issued by the Company. The Company anti-
cipates that preferred stock may be utilized in making
acquisitions.
TRANSFER AGENT
The Company is currently serving as its own
transfer agent, and plans to continue to serve in that
capacity until such time as management believes it is
necessary or appropriate to employ an independent
transfer agent in order to facilitate the creation of a
public trading market for the Company's securities.
Since the Company does not currently expect any
public market to develop for its securities until after it
has completed a business combination, it does not
currently anticipate that it will seek to employ an
independent transfer agent until it has completed such
a transaction.
REPORTS TO STOCKHOLDERS
The Company plans to furnish its stockholders
with an annual report for each fiscal year containing
financial statements audited by its independent
certified public accountants. In the event the
Company enters into a business combination with
another company, it is the present intention of
management to continue furnishing annual reports to
stockholders. Additionally, the Company may, in its
sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems
appropriate. The Company intends to comply with the
periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to
those requirements.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON
THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
No public trading market exists for the
Company's securities and all of its outstanding
securities are restricted securities as defined in Rule
144. There were nine (9) holders of record of the
Company's common stock on April 30, 1996. No
dividends have been paid to date and the Company's
Board of Directors does not anticipate paying
dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending
legal proceedings, and no such proceedings are known
to be contemplated.
No director, officer or affiliate of the
Company, and no owner of record or beneficial owner
of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or
security holder is a party adverse to the Company or
has a material interest adverse to the Company in
reference to pending litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED
SECURIITES.
Since April 22, 1996 (the date of the
Company's formation), the Company has sold its
Common Stock to the persons listed in the table below
in transactions summarized as follows:
<TABLE>
<CAPTION>
Name Date of Shares Aggregate Purchase Price
Sale Purchase Price per Share
</CAPTION>
<S> <C> <C> <C> <C>
Robert Soehngen 04/22/96 560,000 1,400.00 <F1> 0.0025
Gary S. Joiner 04/22/96 50,000 125.00 <F2> 0.0025
Grant W. Peck 04/22/96 50,000 125.00 <F2> 0.0025
Dean F. Sessions 04/22/96 50,000 125.00 <F2> 0.0025
Robert Soehngen 04/23/96 100,000 250.00 0.0025
Steven C. Signer 04/26/96 50,000 1,500.00 0.03
Dev K. Mahanti 04/26/96 50,000 1,500.00 0.03
Thomas Soehngen 04/28/96 40,000 1,200.00 0.03
John F. O'Neil 04/29/96 30,000 900.00 0.03
Douglas L. Ray 04/29/96 30,000 900.00 0.03
<FN>
<F1>
(1) Consideration consisted of pre-incorporation
consulting services rendered to the Registrant
related to investigating and developing the
Registrant's proposed business plan and capital
structure and completing the organization and
incorporation of the Registrant.
<FN>
<F2>
(2) Consideration consisted of pre-incorporation
consulting services rendered to the Registrant
related to investigating and developing the
Registrant's proposed business plan and capital
structure.
</TABLE>
Each of the sales listed above was made for
cash or services. All of the listed sales were made in
reliance upon the exemption from registration offered
by Section 4(2) of the Securities Act of 1933, as
amended. Based upon Purchaser Questionnaires
completed by each of the subscribers and the pre-
existing relationship between the subscribers of the
Company's sole officer and director, the Company had
reasonable grounds to believe immediately prior to
making an offer to the private investors, and did in
fact believe, when such subscriptions were accepted,
that such purchasers (1) were purchasing for invest-
ment and not with a view to distribution, and (2) had
such knowledge and experience in financial and busi-
ness matters that they were capable of evaluating the
merits and risks of their investment and were able to
bear those risks. The purchasers had access to
pertinent information enabling them to ask informed
questions. The shares were issued without the benefit
of registration. An appropriate restrictive legend is
imprinted upon each of the certificates representing
such shares, and stop-transfer instructions have been
entered in the Company's transfer records. All such
sales were effected without the aid of underwriters,
and no sales commissions were paid.
ITEM 5. INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The Articles of Incorporation and the Bylaws
of the Company, filed as Exhibits 3.1 and 3.2,
respectively, provide that the Company will indemnify
its officers and directors for costs and expenses
incurred in connection with the defense of actions,
suits, or proceedings where the officer or director
acted in good faith and in a manner he reasonably
believed to be in the Company's best interest and is a
party by reason of his status as an officer or director,
absent a finding of negligence or misconduct in the
performance of duty.
FINANCIAL STATEMENTS<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
The Exhibits listed below are filed as part of
this Registration Statement.
Exhibit
No. Document
2.1 Articles of Incorporation
2.2 Bylaws
3.1 Specimen Stock Certificate
Item 2. Description of Exhibits.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the registrant caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BOULDER CAPITAL OPPORTUNITIES, INC.
By: /s/ Robert Soehngen, President and Director
(Principal Executive Officer)
Date: July 29, 1996
<PAGE>
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange
Act of 1934
BOULDER CAPITAL OPPORTUNITIES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1341980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
4750 Table Mesa Drive, Boulder, CO 80303
(Address of principal executive offices)
Issuer's telephone number, (303) 442-1021
EXHIBIT INDEX
Exhibit
No.
2.1 Articles of Incorporation
2.2 Bylaws
<PAGE>
EXHIBIT 2.1
ARTICLES OF INCORPORATION<PAGE>
EXHIBIT 2.2
BYLAWS
ARTICLES OF INCORPORATION
OF
BOULDER CAPITAL OPPORTUNITIES, INC.
The undersigned, who, if a natural person, is
eighteen years of age or older, hereby establishes a
corporation pursuant to the Colorado Business
Corporation Act as amended and adopts the following
Articles of Incorporation:
FIRST: The name of the corporation is
Boulder Capital Opportunities, Inc.
SECOND: The corporation shall have and
may exercise all of the rights, powers and privileges
now or hereafter conferred upon corporations
organized under the laws of Colorado. In addition,
the corporation may do everything necessary, suitable
or proper for the accomplishment of any of its
corporate purposes. The corporation may conduct
part or all of its business in any part of Colorado, the
United States or the world and may hold, purchase,
mortgage, lease and convey real and personal property
in any of such places.
THIRD: The aggregate number of shares
which the corporation shall have authority to issue is
one hundred ten million (110,000,000) shares of
which a portion shall be common stock and a portion
shall be preferred stock, all as described below.
A. Common Stock. The aggregate
number of common shares which the corporation shall
have the authority to issue is one hundred million
(100,000,000), which shares shall be designated
"Common Stock." Subject to all the rights of the
Preferred Stock as expressly provided herein, by law
or by the Board of Directors pursuant to this Article,
the Common Stock of the corporation shall possess all
such rights and privileges as are afforded to capital
stock by applicable law in the absense of any express
grant of rights or privileges in these Articles of
Incorporation, including, but not limited to, the
following rights and privileges:
(a) dividends may be declared and
paid or set apart for payment on the Common
Stock out of any assets or funds of the
corporation legally available for the payment
of dividends;
(b) the holders of Common Stock
shall have unlimited voting rights, including
the right to vote for the election of directors
and on all other matters requiring stockholder
action. Each holder of Common Stock shall
have one vote for each share of Common
Stock standing in his name on the books of the
corporation and entitled to vote, except that in
the election of directors each holder of
Common Stock shall have as many votes for
each share of Common Stock held by him as
there are directors to be elected and for whose
election the holder of Common Stock has a
right to vote. Cumulative voting shall not be
permitted in the election of directors or
otherwise.
(c) on the voluntary or involuntary
liquidation, dissolution or winding up of the
corporation, and after paying or aduquately
providing for the payment of all of its
obligations and amounts payable in liquidation,
dissolution or winding up, and subject to the
rights of the holders of Preferred Stock, if
any, the net assets of the corporation shall be
distributed pro rata to the holders of the
Common Stock.
B. Preferred Stock. The aggregate
number of preferred shares which this corporation
shall have the authority to issue is ten million
(10,000,000) shares, each with no par value, which
shares shall be designated "Preferred Stock." Shares
of Preferred Stock may be issued from time to time in
one or more series as determined by the Board of
Directors. The Board of Directors is hereby
authorized, by resolution or resolutions, to provide
from time to time, out of the unissued shares of
Preferred Stock not then allocated to any series of
Preferred Stock, for a series of the Preferred Stock.
Each such series shall have distinctive serial
designations. Before any shares of any such series of
Preferred Stock are issued, the Board of Directors
shall fix and determine, and is hereby expressly
empowered to fix and determine, by resolution or
resolutions, the voting powers, full or limited, or no
voting powers, and the designations, preferences and
relative, participating, optional or other special rights,
and the qualifications, limitations and restrictions
thereof as provided by Colorado law. Before issuing
any shares of a class or series, the corporation shall
deliver to the secretary of state for filing articles of
amendment to these articles of incorporation that set
forth information required by Colorado law, including
but not limited to, the designations, preferences,
limitations, and relative rights of the class or series of
shares.
C. Voting. Unless otherwise
ordered by a court of competent jurisdiction, at all
meetings of shareholders one-third of the shares of a
voting group entitled to vote at such meeting,
represented in person or by proxy, shall constitute a
quorum of that voting group.
FOURTH: The number of directors of the
corporation shall be fixed by the bylaws, or if the
bylaws fail to fix such a number, then by resolution
adopted from time to time by the board of directors,
provided that the number of directors shall not be
more than five (5) nor less than one (1). One (1)
director shall constitute the initial board of directors.
The following person is elected to serve as the
corporation's initial director until the first annual
meeting of shareholders or until his successors are
duly elected and qualified:
Name
Address
Robert Soehngen
2434 Vine Place
Boulder, CO 80304
FIFTH: The street address of the initial
registered office of the corporation is 4750 Table
Mesa Drive, Boulder, Colorado 80303. The name of
the initial registered agent of the corporation at such
address is Gary S. Joiner.
SIXTH: The address of the initial
principal office of the corporation is 4750 Table Mesa
Drive, Boulder, Co 80303.
SEVENTH: The following provisions are
inserted for the management of the business and for
the conduct of the affairs of the corporation, and the
same are in furtherance of and not in limitation or
exclusion of the powers conferred by law.
(a) Conflicting Interest
Transactions. As used in this paragraph, "conflicting
interest transaction" means any of the following: (i)
a loan or other assistance by the corporation to a
director of the corporation or to an entity in which a
director of the corporation is a director or officer or
has a financial interest; (ii) a guaranty by the
corporation of an obligation of a director of the
corporation or of an obligation of an entity in which
a director of the corporation is a director or officer or
has a financial interest; or (iii) a contract or
transaction between the corporation and a director of
the corporation or between the corporation and an
entity in which a director of the corporation is a
director or officer or has a financial interest. No
conflicting interest transaction shall be void or
voidable, be enjoined, be set aside, or give rise to an
award of damages or other sanctions in a proceeding
by a shareholder or by or in the right of the
corporation, solely because the conflicting interest
transaction involves a director of the corporation or an
entity in which a director of the corporation is a
director or officer or has a financial interest, or solely
because the director is present at or participates in the
meeting of the corporation's board of directors or of
the committee of the board of directors which
authorized, approves or ratifies a conflicting interest
transaction, or solely because the director's vote is
counted for such purpose if: (A) the material facts as
to the director's relationship or interest and as to the
conflicting interest transaction are disclosed or are
known to the board of directors or the committee, and
the board of directors or committee in good faith
authorizes, approves or ratifies the conflicting interest
transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested
directors are less than a quorum; or (B) the material
facts as to the director's relationship or interest and as
to the conflicting interest transaction are disclosed or
are known to the shareholders entitled to vote thereon,
and the conflicting interest transaction is specifically
authorized, approved or ratified in good faith by a
vote of the shareholders; or (C) a conflicting interest
transaction is fair as to the corporation as of the time
it is authorized, approved or ratified by the board of
directors, a committee thereof, or the shareholders.
Common or interested directors may be counted in
determining the presence of a quorum at a meeting of
the board of directors or of a committee which
authorizes, approves or ratifies the conflicting interest
transaction.
(b) Loans and Guaranties for the
Benefit of Directors. Neither the board of directors
nor any committee thereof shall authorize a loan by
the corporation to a director of the corporation or to
an entity in which a director of the corporation is a
director or officer or has a financial interest, or a
guaranty by the corporation of an obligation of a
director of the corporation or of an obligation of an
entity in which a director of the corporation is a
director or officer or has a financial interest, until at
least ten days after written notice of the proposed
authorization of the loan or guaranty has been given
to the shareholders who would be entitled to vote
thereon if the issue of the loan or guaranty were
submitted to a vote of the shareholders. The
requirements of this paragraph (b) are in addition to,
and not in substitution for, the provisions of paragraph
(a) of Article SEVENTH.
(c) Indemnification. The
corporation shall indemnify, to the maximum extent
permitted by law, any person who is or was a
director, officer, agent, fiduciary or employee of the
corporation against any claim, liability or expenses
arising against or incurred by such person made party
to a proceeding because he is or was a director,
officer, agent, fiduciary or employee of the
corporation or because he was a director, officer,
agent, fiduciary or employee of the corporation or
because he is or was serving another entity as a
director, officer, partner, trustee, employee, fiduciary
or agent at the corporation's request. The corporation
shall further have the authority to the maximum extent
permitted by law to purchase and maintain insurance
providing such indemnification.
(d) Limitation on Director's
Liability. No director of this corporation shall have
any personal liability for monetary damages to the
corporation or its shareholders for breach of his
fiduciary duty as a director, except that this provision
shall not eliminate or limit the personal liability of a
director to the corporation or its shareholders for
monetary damages for: (i) any breach of the director's
duty of loyalty to the corporation or its shareholders;
(ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law; (iii) voting for or assenting to a distribution in
violation of Colorado Revised Statutes Section 7-106-401 or
the articles of incorporation if it is established that the
director did not perform his duties in compliance with
Colorado Revised Statutes Section 7-108-401, provided that
the personal liability of a director in this circumstance
shall be limited to the amount of the distribution
which exceeds what could have been distributed
without violation of Colorado Revised Statutes Section 7-106-
401 or the articles of incorporation; or (iv) any
transaction from which the director directly or
indirectly derives an improper personal benefit.
Nothing contained herein will be construed to deprive
any director of his right to all defenses ordinarily
available to a director nor will anything herein be
construed to deprive any director of any right he may
have for contribution from any other director or other
person.
(e) Negation of Equitable Interests
in Shares or Rights. Unless a person is recognized as
a shareholder through procedures established by the
corporation pursuant to Colorado Revised Statutes Section 7-
107-204 or any similar law, the corporation shall be
entitled to treat the registered holder of any shares of
the corporation as the owner thereof for all purposes
permitted by the Colorado Business Corporation Act,
including without limitation all rights deriving from
such shares, and the corporation shall not be bound to
recognize any equitable or other claim to, or interest
in, such shares or rights deriving from such shares on
the part of any other person including without
limitation, a purchaser, assignee or transferee of such
shares, unless and until such other person becomes the
registered holder of such shares or is recognized as
such, whether or not the corporation shall have either
actual or constructive notice of the claimed interest of
such other person. By way of example and not of
limitation, until such other person has become the
registered holder of such shares or is recognized
pursuant to Colorado Revised Statutes Section 7-107-204 or
any similar applicable law, he shall not be entitled:
(i) to receive notice of the meetings of the
shareholders; (ii) to vote at such meetings; (iii) to
examine a list of the shareholders; (iv) to be paid
dividends or other distributions payable to
shareholders; or (v) to own, enjoy and exercise any
other rights deriving from such shares against the
corporation. Nothing contained herein will be
construed to deprive any beneficial shareholder, as
defined in Colorado Revised Statutes Section 7-113-101(1),
of any right he may have pursuant to Article 113 of
the Colorado Business Corporation Act or any
subsequent law.
<PAGE>
EIGHTH: The name and address of the
incorporator is:
Gary S. Joiner
4750 Table Mesa Drive
Boulder, Colorado 80303
DATED the _____ day of April, 1996.
/s/ Gary S. Joiner
Incorporator
Gary S. Joiner hereby consents to the
appointment as the initial registered agent for Global
Capital Access Corporation.
/s/ Gary S. Joiner
Initial Registered Agent
BYLAWS
OF
BOULDER CAPITAL OPPORTUNITIES, INC.
ARTICLE I
Offices
The principal office of the corporation shall be
designated from time to time by the corporation and
may be within or outside of Colorado.
The corporation may have such other offices,
either within or outside Colorado, as the board of
directors may designate or as the business of the
corporation may require from time to time.
The registered office of the corporation
required by the Colorado Business Corporation Act to
be maintained in Colorado may be, but need not be,
identical with the principal office, and the address of
the registered office may be changed from time to
time by the board of directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual
meeting of the shareholders shall be held during the
month of September of each year on a date and at a
time fixed by the board of directors of the corporation
(or by the president in the absence of action by the
board of directors), beginning with the year 1997, for
the purpose of electing directors and for the
transaction of such other business as may come before
the meeting. If the election of directors is not held on
the day fixed as provided herein for any annual
meeting of the shareholders, or any adjournment
thereof, the board of directors shall cause the election
to be held at a special meeting of the shareholders as
soon thereafter as it may conveniently be held.
A shareholder may apply to the district court
in the county in Colorado where the corporation's
principal office is located or, if the corporation has no
principal office in Colorado, to the district court of
the county in which the corporation's registered office
is located to seek an order that a shareholder meeting
be held (i) if an annual meeting was not held within
six months after the close of the corporation's most
recently ended fiscal year or fifteen months after its
last annual meeting, whichever is earlier, or (ii) if the
shareholder participated in a proper call of or proper
demand for a special meeting and notice of the special
meeting was not given within thirty days after the date
of the call or the date the last of the demands
necessary to require calling of the meeting was
received by the corporation pursuant to C.R.S. Section 7-
107-102(1)(b), or the special meeting was not held in
accordance with the notice.
Section 2. Special Meetings. Unless
otherwise prescribed by statute, special meetings of
the shareholders may be called for any purpose by the
president or by the board of directors. The president
shall call a special meeting of the shareholders if the
corporation receives one or more written demands for
the meeting, stating the purpose or purposes for which
it is to be held, signed and dated by holders of shares
representing at least ten percent of all the votes
entitled to be cast on any issue proposed to be
considered at the meeting.
Section 3. Place of Meeting. The board
of directors may designate any place, either within or
outside Colorado, as the place for any annual meeting
or any special meeting called by the board of
directors. A waiver of notice signed by all
shareholders entitled to vote at a meeting may
designate any place, either within or outside Colorado,
as the place for such meeting. If no designation is
made, or if a special meeting is called other than by
the board, the place of meeting shall be the principal
office of the corporation.
Section 4. Notice of Meeting. Written
notice stating the place, date, and hour of the meeting
shall be given not less than ten nor more than sixty
days before the date of the meeting, except that (i) if
the number of authorized shares is to be increased, at
least thirty days' notice shall be given, or (ii) any
other longer notice period is required by the Colorado
Business Corporation Act. Notice of a special
meeting shall include a description of the purpose or
purposes of the meeting. Notice of an annual meeting
need not include a description of the purpose or
purposes of the meeting except the purpose or
purposes shall be stated with respect to (i) an
amendment to the articles of incorporation of the
corporation, (ii) a merger or share exchange in which
the corporation is a party and, with respect to a share
exchange, in which the corporation's shares will be
acquired, (iii) a sale, lease, exchange or other
disposition, other than in the usual and regular course
of business, of all or substantially all of the property
of the corporation or of another entity which this
corporation controls, in each case with or without the
goodwill, (iv) a dissolution of the corporation, or (v)
any other purpose for which a statement of purpose is
required by the Colorado Business Corporation Act.
Notice shall be given personally or by mail, private
carrier, telegraph, teletype, electronically transmitted
facsimile or other form of wire or wireless
communication by or at the direction of the president,
the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote
at such meeting. If mailed and if in a comprehensible
form, such notice shall be deemed to be given and
effective when deposited in the United States mail,
addressed to the shareholder at his address as it
appears in the corporation's current record of
shareholders, with postage prepaid. If notice is given
other than by mail, and provided that such notice is in
a comprehensible form, the notice is given and
effective on the date received by the shareholder.
If requested by the person or persons lawfully
calling such meeting, the corporation shall give notice
thereof at corporation expense. No notice need be
sent to any shareholder if three successive notices
mailed to the last known address of such shareholder
have been returned as undeliverable until such time as
another address for such shareholder is made known
to the corporation by such shareholder. In order to be
entitled to receive notice of any meeting, a
shareholder shall advise the corporation in writing of
any change in such shareholder's mailing address as
shown on the corporation's books and records.
When a meeting is adjourned to another date,
time or place, notice need not be given of the new
date, time or place if the new date, time or place of
such meeting is announced before adjournment at the
meeting at which the adjournment is taken. At the
adjourned meeting the corporation may transact any
business which may have been transacted at the
original meeting. If the adjournment is for more than
120 days, or if a new record date is fixed for the
adjourned meeting, a new notice of the adjourned
meeting shall be given to each shareholder of record
entitled to vote at the meeting as of the new record
date.
A shareholder may waive notice of a meeting
before or after the time and date of the meeting by a
writing signed by such shareholder. Such waiver shall
be delivered to the corporation for filing with the
corporate records. Further, by attending a meeting
either in person or by proxy, a shareholder waives
objection to lack of notice or defective notice of the
meeting unless the shareholder objects at the
beginning of the meeting to the holding of the meeting
or the transaction of business at the meeting because
of lack of notice or defective notice. By attending the
meeting, the shareholder also waives any objection to
consideration at the meeting of a particular matter not
within the purpose or purposes described in the
meeting notice unless the shareholder objects to
considering the matter when it is presented.
Section 5. Fixing of Record Date. For the
purposes of determining shareholders entitled to (i)
notice of or vote at any meeting of shareholders or
any adjournment thereof, (ii) receive distributions or
share dividends, or (ii) demand a special meeting, or
to make a determination of shareholders for any other
proper purpose, the board of directors may fix a
future date as the record date for any such
determination of shareholders, such date in any case
to be not more than seventy days, and, in case of a
meeting of shareholders not less than ten days, prior
to the date on which the particular action requiring
such determination of shareholders is to be taken. If
no record date is fixed by the directors, the record
date shall be the date on which notice of the meeting
is mailed to shareholders, or the date on which the
resolution of the board of directors providing for a
distribution is adopted, as the case may be. When a
determination of shareholders entitled to vote at any
meeting of shareholders is made as provided in this
Section, such determination shall apply to any
adjournment thereof unless the board of directors fixes
a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date
fixed for the original meeting.
Notwithstanding the above, the record date for
determining the shareholders entitled to take action
without a meeting or entitled to be given notice of
action so taken shall be the date a writing upon which
the action is taken is first received by the corporation.
The record date for determining shareholders entitled
to demand a special meeting shall be the date of the
earliest of any of the demands pursuant to which the
meeting is called.
Section 6. Voting Lists. The secretary
shall make, at the earlier of ten days before each
meeting of shareholders or two business days after
notice of the meeting has been given, a complete list
of the shareholders entitled to be given notice of such
meeting or any adjournment thereof. The list shall be
arranged by voting groups and within each voting
group by class or series of shares, shall be in
alphabetical order within each class or series, and
shall show the address of and the number of shares of
each class or series held by each shareholder. For the
period beginning the earlier of ten days prior to the
meeting or two business days after notice of the
meeting is given and continuing through the meeting
and any adjournment thereof, this list shall be kept on
file at the principal office of the corporation, or at a
place (which shall be identified in the notice) in the
city where the meeting will be held. Such list shall be
available for inspection on written demand by any
shareholder (including for the purpose of this Section
6 any holder of voting trust certificates) or his agent
or attorney during regular business hours and during
the period available for inspection. The original stock
transfer books shall be prima facie evidence as to the
shareholders entitled to examine such list or to vote at
any meeting of shareholders.
Any shareholder, his agent or attorney may
copy the list during regular business hours and during
the period it is available for inspection, provided (i)
the shareholder has been a shareholder for at least
three months immediately preceding the demand or
holds at least five percent of all outstanding shares of
any class of shares as of the date of the demand, (ii)
the demand is made in good faith and for a purpose
reasonably related to the demanding shareholder's
interest as a shareholder, (iii) the shareholder
describes with reasonable particularity the purpose and
the records the shareholder desires to inspect, (iv) the
records are directly connected with the described
purpose and (v) the shareholder pays a reasonable
charge covering the costs of labor and material for
such copies, not to exceed the estimated cost of
production and reproduction.
Section 7. Recognition Procedure for
Beneficial Owners. The board of directors may adopt
by resolution a procedure whereby a shareholder of
the corporation may certify in writing to the
corporation that all or a portion of the shares
registered in the name of such shareholder are held
for the account of a specified person or persons. The
resolution may set forth (i) the types of nominees to
which it applies, (ii) the rights or privileges that the
corporation will recognize in a beneficial owner,
which may include rights and privileges other than
voting; (iii) the form of certification and the
information to be contained therein, (iv) if the
certification is with respect to a record date, the time
within which the certification must be received by the
corporation, (v) the period for which the nominee's
use of the procedure is effective, and (vi) such other
provisions with respect to the procedure as the board
deems necessary or desirable. Upon receipt by the
corporation of a certificate complying with the
procedure established by the board of directors, the
persons specified in the certification shall be deemed,
for the purpose or purposes set forth in the
certification, to be the registered holders of the
number of shares specified in place of the shareholder
making the certification.
Section 8. Quorum and Manner of Acting.
One-third of the votes entitled to be cast on a matter
by a voting group shall constitute a quorum of that
voting group for action on the matter. If less than
one-third of such votes are represented at a meeting,
a majority of the votes so represented may adjourn the
meeting from time to time without further notice, for
a period not to exceed 120 days for any one
adjournment. If a quorum is present at such
adjourned meeting, any business may be transacted
which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly
organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum,
unless the meeting is adjourned and a new record date
is set for the adjourned meeting.
If a quorum exists, action on a matter other
than the election of directors by a voting group is
approved if the votes cast within the voting group
favoring the action exceed the votes cast within the
voting group opposing the action, unless the vote of a
greater number or voting by classes is required by law
or the articles of incorporation.
Section 9. Proxies. At all meetings of
shareholders, a shareholder may vote by proxy by
signing an appointment form or similar writing, either
personally or by his duly authorized attorney-in-fact.
A shareholder may also appoint a proxy by
transmitting or authorizing the transmission of a
telegram, teletype, or other electronic transmission
providing a written statement of the appointment to
the proxy, a proxy solicitor, proxy support service
organization, or other person duly authorized by the
proxy to receive appointments as agent for the proxy,
or to the corporation. The transmitted appointment
shall set forth or be transmitted with written evidence
from which it can be determined that the shareholder
transmitted or authorized the transmission of the
appointment. The proxy appointment form or similar
writing shall be filed with the secretary of the
corporation before or at the time of the meeting. The
appointment of a proxy is effective when received by
the corporation and is valid for eleven months unless
a different period is expressly provided in the
appointment form or similar writing.
Any complete copy, including an electronically
transmitted facsimile, of an appointment of a proxy
may be substituted for or used in lieu of the original
appointment for any purpose for which the original
appointment could be used.
Revocation of a proxy does not affect the right
of the corporation to accept the proxy's authority
unless (i) the corporation had notice that the
appointment was coupled with an interest and notice
that such interest is extinguished is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment, or (ii) other notice of the
revocation of the appointment is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment. Other notice of revocation
may, in the discretion of the corporation, be deemed
to include the appearance at a shareholders' meeting
of the shareholder who granted the proxy and his
voting in person on any matter subject to a vote at
such meeting.
The death or incapacity of the shareholder
appointing a proxy does not affect the right of the
corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment.
The corporation shall not be required to
recognize an appointment made irrevocable if it has
received a writing revoking the appointment signed by
the shareholder (including a shareholder who is a
successor to the shareholder who granted the proxy)
either personally or by his attorney-in-fact,
notwithstanding that the revocation may be a breach of
an obligation of the shareholder to another person not
to revoke the appointment.
Subject to Section 11 and any express
limitation on the proxy's authority appearing on the
appointment form, the corporation is entitled to accept
the proxy's vote or other action as that of the
shareholder making the appointment.
Section 10.Voting of Shares. Each
outstanding share, regardless of class, shall be entitled
to one vote, except in the election of directors, and
each fractional share shall be entitled to a
corresponding fractional vote on each matter submitted
to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class
or classes are limited or denied by the articles of
incorporation and by the resolution of the board of
directors authorizing the issuance of the shares of any
particular class, as permitted by the Colorado Business
Corporation Act. Cumulative voting shall not be
permitted in the election of directors or for any other
purpose. Each record holder of shares of common
stock shall be entitled to vote in the election of
directors and shall have as many votes for each of the
shares owned by him as there are directors to be
elected and for whose election he has the right to
vote.
At each election of directors, that number of
candidates equaling the number of directors to be
elected, having the highest number of votes cast in
favor of their election, shall be elected to the board of
directors.
Except as otherwise ordered by a court of
competent jurisdiction upon a finding that the purpose
of this Section would not be violated in the
circumstances presented to the court, the shares of the
corporation are not entitled to be voted if they are
owned, directly or indirectly, by a second corporation,
domestic or foreign, and the first corporation owns,
directly or indirectly, a majority of the shares entitled
to vote for directors of the second corporation except
to the extent the second corporation holds the shares
in a fiduciary capacity.
Redeemable shares are not entitled to be voted
after notice of redemption is mailed to the holders and
a sum sufficient to redeem the shares has been
deposited with a bank, trust company or other
financial institution under an irrevocable obligation to
pay the holders the redemption price on surrender of
the shares.
Section 11.Corporation's Acceptance of
Votes. If the name signed on a vote, consent, waiver,
proxy appointment, or proxy appointment revocation
corresponds to the name of a shareholder, the
corporation, if acting in good faith, is entitled to
accept the vote, consent, waiver, proxy appointment
or proxy appointment revocation and give it effect as
the act of the shareholder. If the name signed on a
vote, consent, waiver, proxy appointment or proxy
appointment revocation does not correspond to the
name of a shareholder, the corporation, if acting in
good faith, is nevertheless entitled to accept the vote,
consent, waiver, proxy appointment or proxy
appointment revocation and to give it effect as the act
of the shareholder if:
(i) the shareholder is an entity and
the name signed purports to be that of an officer or
agent of the entity;
(ii) the name signed purports to be
that of an administrator, executor, guardian or
conservator representing the June 28, 1996
shareholder and, if the corporation requests, evidence
of fiduciary status acceptable to the corporation has
been presented with respect to the vote, consent,
waiver, proxy appointment or proxy appointment
revocation;
(iii)the name signed purports to be
that of a receiver or trustee in bankruptcy of the
shareholder and, if the corporation requests, evidence
of this status acceptable to the corporation has been
presented with respect to the vote, consent, waiver,
proxy appointment or proxy appointment revocation;
(iv) the name signed purports to be
that of a pledgee, beneficial owner or attorney-in-fact
of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has
been presented with respect to the vote, consent,
waiver, proxy appointment or proxy appointment
revocation;
(v) two or more persons are the
shareholder as co-tenants or fiduciaries and the name
signed purports to be the name of at least one of the
co-tenants or fiduciaries, and the person signing
appears to be acting on behalf of all the co-tenants or
fiduciaries; or
(vi) the acceptance of the vote,
consent, waiver, proxy appointment or proxy
appointment revocation is otherwise proper under
rules established by the corporation that are not
inconsistent with this Section 11.
The corporation is entitled to reject a vote,
consent, waiver, proxy appointment or proxy
appointment revocation if the secretary or other
officer or agent authorized to tabulate votes, acting in
good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's
authority to sign for the shareholder.
Neither the corporation nor its officers nor any
agent who accepts or rejects a vote, consent, waiver,
proxy appointment or proxy appointment revocation in
good faith and in accordance with the standards of this
Section is liable in damages for the consequences of
the acceptance or rejection.
Section 12.Informal Action by
Shareholders. Any action required or permitted to be
taken at a meeting of the shareholders may be taken
without a meeting if a written consent (or counterparts
thereof) that sets forth the action so taken is signed by
all of the shareholders entitled to vote with respect to
the subject matter thereof and received by the
corporation. Such consent shall have the same force
and effect as a unanimous vote of the shareholders and
may be stated as such in the document. Action taken
under this Section 12 is effective as of the date the last
writing necessary to effect this action is received by
the corporation, unless all of the writings specify a
different effective date, in which case such specified
date shall be the effective date for such action. If any
shareholder revokes his consent as provided for herein
prior to what would otherwise be the effective date,
the action proposed in the consent shall be invalid.
The record date for determining shareholders entitled
to take action without a meeting is the date the
corporation receives a writing upon which the action
is taken.
Any shareholder who has signed a writing
describing and consenting to action taken pursuant to
this Section 12 may revoke such consent by a writing
signed by the shareholder describing the action and
stating that the shareholder's prior consent thereto is
revoked, if such writing is received by the corporation
before the effectiveness of the action.
Section 13.Meetings by
Telecommunication. Any or all of the shareholders
may participate in an annual or special shareholders'
meeting by, or the meeting may be conducted through
the use of, any means of communication by which all
persons participating in the meeting may hear each
other during the meeting. A shareholder participating
in a meeting by this means is deemed to be present in
person at the meeting.
ARTICLE III
Board of Directors
Section 1. General Powers. All corporate
powers shall be exercised by or under the authority
of, and the business and affairs of the corporation
shall be managed under the direction of its board of
directors, except as otherwise provided in the
Colorado Business Corporation Act or the articles of
incorporation.
Section 2. Number, Qualifications and
Tenure. The number of directors of the corporation
shall be fixed from time to time by the board of
directors, within a range of no less than one or more
than five. A director shall be a natural person who is
eighteen years of age or older. A director need not be
a resident of Colorado or a shareholder of the
corporation.
Directors shall be elected at each annual
meeting of shareholders. Each director shall hold
office until the next annual meeting of shareholders
following his election and thereafter until his
successor shall have been elected and qualified.
Directors shall be removed in the manner provided by
the Colorado Business Corporation Act.
Section 3. Vacancies. Any director may
resign at any time by giving written notice to the
corporation. Such resignation shall take effect at the
time the notice is received by the corporation unless
the notice specifies a later effective date. Unless
otherwise specified in the notice of resignation, the
corporation's acceptance of such resignation shall not
be necessary to make it effective. Any vacancy on
the board of directors may be filled by the affirmative
vote of a majority of the shareholders or the board of
directors. If the directors remaining in office
constitute fewer than a quorum of the board, the
directors may fill the vacancy by the affirmative vote
of a majority of all the directors remaining in office.
If elected by the directors, the director shall hold
office until the next annual shareholder's meeting at
which directors are elected. If elected by the
shareholders, the director shall hold office for the
unexpired term of his predecessor in office; except
that, if the director's predecessor was elected by the
directors to fill a vacancy, the director elected by the
shareholders shall hold office for the unexpired term
of the last predecessor elected by the shareholders.
Section 4. Regular Meetings. A regular
meeting of the board of directors shall be held without
notice immediately after and at the same place as the
annual meeting of shareholders. The board of
directors may provide by resolution the time and
place, either within or outside Colorado, for the
holding of additional regular meetings without other
notice.
Section 5. Special Meetings. Special
meetings of the board of directors may be called by or
at the request of the president or chief executive
officer, or any director. The person or persons
authorized to call special meetings of the board of
directors may fix any place, either within or outside
Colorado, as the place for holding any special meeting
of the board of directors called by them, provided that
no meeting shall be called outside the State of
Colorado unless a majority of the board of directors
has so authorized.
Section 6. Notice. Notice of any special
meeting shall be given at least two days prior to the
meeting by written notice either personally delivered
or mailed to each director at his business address, or
by notice transmitted by telegraph, telex,
electronically transmitted facsimile or other form of
wire or wireless communication. If mailed, such
notice shall be deemed to be given and to be effective
on the earlier of (i) three days after such notice is
deposited in the United States mail, properly
addressed, with postage prepaid, or (ii) the date
shown on the return receipt, if mailed by registered or
certified mail return receipt requested. If notice is
given by telex, electronically transmitted facsimile or
other similar form of wire or wireless communication,
such notice shall be deemed to be given and to be
effective when sent, and with respect to a telegram,
such notice shall be deemed to be given and to be
effective when the telegram is delivered to the
telegraph company. If a director has designated in
writing one or more reasonable addresses or facsimile
numbers for delivery of notice to him, notice sent by
mail, telegram, telex, electronically transmitted
facsimile or other form of wire or wireless
communication shall not be deemed to have been
given or to be effective unless sent to such addresses
or facsimile numbers, as the case may be.
A director may waive notice of a meeting
before or after the time and date of the meeting by a
writing signed by such director. Such waiver shall be
delivered to the corporation for filing with the
corporate records. Further, a director's attendance at
or participation in a meeting waives any required
notice to him of the meeting unless at the beginning of
the meeting, or promptly upon his arrival, the director
objects to holding the meeting or transacting business
at the meeting because of lack of notice or defective
notice and does not thereafter vote for or assent to
action taken at the meeting. Neither the business to
be transacted at, nor the purpose of, any regular or
special meeting of the board of directors need be
specified in the notice or waiver of notice of such
meeting.
Section 7. Quorum. A majority of the
number of directors fixed by the board of directors
pursuant to Section 2 or, if no number is fixed, a
majority of the number in office immediately before
the meeting begins, shall constitute a quorum for the
transaction of business at any meeting of the board of
directors. If less than such majority is present at a
meeting, a majority of the directors present may
adjourn the meeting from time to time without further
notice, for a period not to exceed sixty days at any
one adjournment.
Section 8. Manner of Acting. The act of
the majority of the directors present at a meeting at
which a quorum is present shall be the act of the
board of directors. No director may vote or act by
proxy at any meeting of directors.
Section 9. Compensation. By resolution
of the board of directors, any director may be paid
any one or more of the following: his expenses, if
any, of attendance at meetings, a fixed sum for
attendance at each meeting, a stated salary as director,
or such other compensation as the corporation and the
director may reasonably agree upon. No such
payment shall preclude any director from serving the
corporation in any other capacity and receiving
compensation therefor.
Section 10.Presumption of Assent. A
director of the corporation who is present at a meeting
of the board of directors or committee of the board at
which action on any corporate matter is taken shall
be presumed to have assented to the action taken
unless (i) the director objects at the beginning of the
meeting, or promptly upon his arrival, to the holding
of the meeting or the transaction of business at the
meeting and does not thereafter vote for or assent to
any action taken at the meeting, (ii) the director
contemporaneously requests that his dissent or
abstention as to any specific action taken be entered in
the minutes of the meeting, or (iii) the director causes
written notice of his dissent or abstention as to any
specific action to be received by the presiding officer
of the meeting before its adjournment or by the
corporation promptly after the adjournment of the
meeting. A director may dissent to a specific action
at a meeting, while assenting to others. The right to
dissent to a specific action taken at a meeting of the
board of directors or a committee of the board shall
not be available to a director who voted in favor of
such action.
Section 11.Committees. By resolution
adopted by a majority of all the directors in office
when the action is taken, the board of directors may
designate from among its members an executive
committee and one or more other committees, and
appoint one or more members of the board of
directors to serve on them. To the extent provided in
the resolution, each committee shall have all the
authority of the board of directors, except that no such
committee shall have the authority to (i) authorize
distributions, (ii) approve or propose to shareholders
actions or proposals required by the Colorado
Business Corporation Act to be approved by
shareholders, (iii) fill vacancies on the board of
directors or any committee thereof, (iv) amend articles
of incorporation, (v) adopt, amend or repeal the
bylaws, (vi) approve a plan of merger not requiring
shareholder approval, (vii) authorize or approve the
reacquisition of shares unless pursuant to a formula or
method prescribed by the board of directors, or (viii)
authorize or approve the issuance or sale of shares, or
contract for the sale of shares or determine the
designations and relative rights, preferences and
limitations of a class or series of shares, except that
the board of directors may authorize a committee or
officer to do so within limits specifically prescribed by
the board of directors. The committee shall then have
full power within the limits set by the board of
directors to adopt any final resolution setting forth all
preferences, limitations and relative rights of such
class or series and to authorize an amendment of the
articles of incorporation stating the preferences,
limitations and relative rights of a class or series for
filing with the Secretary of State under the Colorado
Business Corporation Act.
Sections 4, 5, 6, 7, 8 and 12 of Article III,
which govern meetings, notice, waiver of notice,
quorum, voting requirements and action without a
meeting of the board of directors, shall apply to
committees and their members appointed under this
Section 11.
Neither the designation of any such committee,
the delegation of authority to such committee, nor any
action by such committee pursuant to its authority
shall alone constitute compliance by any member of
the board of directors or a member of the committee
in question with his responsibility to conform to the
standards of care set forth in Article III, Section 14 of
these bylaws.
Section 12.Action Without a Meeting.
Any action required or permitted to be taken at a
meeting of the directors or any committee designated
by the board of directors may be taken without a
meeting if a written consent (or counterparts thereof)
that sets forth the action so taken is signed by all of
the directors entitled to vote with respect to the action
taken. Such consent shall have the same force and
effect as a unanimous vote of the directors or
committee members and may be stated as such in any
document. Unless the consent specifies a different
effective date, action taken under this Section 12 is
effective at the time the last director signs a writing
describing the action taken, unless, before such time,
any director has revoked his consent by a writing
signed by the director and received by the president or
secretary of the corporation.
Section 13.Telephonic Meetings. The
board of directors may permit any director (or any
member of a committee designated by the board) to
participate in a regular or special meeting of the board
of directors or a committee thereof through the use of
any means of communication by which all directors
participating in the meeting can hear each other during
the meeting. A director participating in a meeting in
this manner is deemed to be present in person at the
meeting.
Section 14.Standard of Care. A director
shall perform his duties as a director, including,
without limitation his duties as a member of any
committee of the board, in good faith, in a manner he
reasonably believes to be in the best interests of the
corporation, and with the care an ordinarily prudent
person in a like position would exercise under similar
circumstances. In performing his duties, a director
shall be entitled to rely on information, opinions,
reports or statements, including financial statements
and other financial data, in each case prepared or
presented by the persons herein designated. However,
he shall not be considered to be acting in good faith if
he has knowledge concerning the matter in question
that would cause such reliance to be unwarranted. A
director shall not be liable to the corporation or its
shareholders for any action he takes or omits to take
as a director if, in connection with such action or
omission, he performs his duties in compliance with
this Section 14.
The designated persons on whom a director is
entitled to rely are (i) one or more officers or
employees of the corporation whom the director
reasonably believes to be reliable and competent in the
matters presented, (ii) legal counsel, public
accountant, or other person as to matters which the
director reasonably believes to be within such person's
professional or expert competence, or (iii) a
committee of the board of directors on which the
director does not serve if the director reasonably
believes the committee merits confidence.
ARTICLE IV
Officers and Agents
Section 1. General. The officers of the
corporation shall be as determined by the board of
directors from time to time, and may include a
president, one or more vice presidents, a secretary, a
treasurer, and such other officers, assistant officers,
committees and agents, including a chairman of the
board, assistant secretaries and assistant treasurers, as
the board may consider necessary. Each officer shall
be a natural person eighteen years of age or older.
The board of directors or the officer or officers
authorized by the board shall from time to time
determine the procedure for the appointment of
officers, their term of office, their authority and duties
and their compensation. One person may hold more
than one office. In all cases where the duties of any
officer, agent or employee are not prescribed by the
bylaws, or by the board of directors, such officer,
agent or employee shall follow the orders and
instructions of the president of the corporation.
Section 2. Appointment and Term of
Office. The officers of the corporation shall be
appointed by the board of directors at each annual
meeting of the board held after each annual meeting
of the shareholders. If the appointment of officers is
not made at such meeting or if an officer or officers
are to be appointed by another officer or officers of
the corporation, such appointment shall be made as
soon thereafter as conveniently may be. Each officer
shall hold office until the first of the following occurs:
his successor shall have been duly appointed and
qualified, his death, his resignation, or his removal in
the manner provided in Section 3.
Section 3. Resignation and Removal. An
officer may resign at any time by giving written notice
of resignation to the corporation. The resignation is
effective when the notice is received by the
corporation unless the notice specifies a later effective
date.
Any officer or agent may be removed at any
time with or without cause by the board of directors
or an officer or officers authorized by the board.
Such removal does not affect the contract rights, if
any, of the corporation or of the person so removed.
The appointment of an officer or agent shall not in
itself create contract rights.
Section 4. Vacancies. A vacancy in any
office, however occurring, may be filled by the board
of directors, or by the officer or officers authorized by
the board, for the unexpired portion of the officer's
term. If an officer resigns and his resignation is made
effective at a later date, the board of directors, or
officer or officers authorized by the board, may
permit the officer to remain in office until the
effective date and may fill the pending vacancy before
the effective date if the board of directors or officer or
officers authorized by the board provide that the
successor shall not take office until the effective date.
In the alternative, the board of directors, or officer or
officers authorized by the board of directors, may
remove the officer at any time before the effective
date and may fill the resulting vacancy.
Section 5. President. Subject to the
direction and supervision of the board of directors,
and unless otherwise determined by the board of
directors in its designation of officers from time to
time, the president shall be the chief executive officer
of the corporation, and shall have general and active
control of its affairs and business and general
supervision of its officers, agents and employees.
Unless otherwise directed by the board of directors,
the president shall attend in person or by substitute
appointed by him, or shall execute on behalf of the
corporation written instruments appointing a proxy or
proxies to represent the corporation, at all meetings of
the stockholders of any other corporation in which the
corporation holds any stock. On behalf of the
corporation, the president may in person or by
substitute or by proxy execute written waivers of
notice and consents with respect to any such meetings.
At all such meetings and otherwise, the president, in
person or by substitute or proxy, may vote the stock
held by the corporation, execute written consents and
other instruments with respect to such stock, and
exercise any and all rights and powers incident to the
ownership or said stock, subject to the instructions, if
any, of the board of directors. The president shall
have custody of the treasurer's bond, if any.
Section 6. Vice Presidents. Any vice
presidents designated by the board of directors as
officers of the corporation shall assist the president
and shall perform such duties as may be assigned to
them by the president or by the board of directors. In
the absence of the president, the vice president, if any
(or, if more than one, the vice presidents in the order
designated by the board of directors, or if the board
makes no such designation, then the vice president
designated by the president, or if neither the board nor
the president makes any such designation, the senior
vice president as determined by first election to that
office), shall have the powers and perform the duties
of the president.
Section 7. Secretary. In the event a
secretary is designated by the board of directors as an
officer of the corporation, the secretary shall (i)
prepare and maintain as permanent records the
minutes of the proceedings of the shareholders and the
board of directors, a record of all actions taken by the
shareholders or board of directors without a meeting,
a record of all actions taken by a committee of the
board of directors in place of the board of directors on
behalf of the corporation, and a record of all waivers
of notice of meetings of shareholders and of the board
of directors or any committee thereof, (ii) see that all
notices are duly given in accordance with the
provisions of these bylaws and as required by law,
(iii) serve as custodian of the corporate records and of
the seal of the corporation and affix the seal to all
documents when authorized by the board of directors,
(iv) keep at the corporation's registered office or
principal place of business a record containing the
names and addresses of all shareholders in a form that
permits preparation of a list of shareholders arranged
by voting group and by class or series of shares
within each group, that is alphabetical within each
class or series and that shows the address of, and the
number of shares of each class or series held by each
shareholder, unless such a record shall be kept at the
office of the corporation's transfer agent or registrar,
(v) maintain at the corporation's principal office the
originals or copies of the corporation's articles of
incorporation, bylaws, minutes of all shareholders'
meetings and records of all action taken by
shareholders without a meeting for the past three
years, all written communications within the past three
years to shareholders as a group or to the holders of
any class or series of shares as a group, a list of the
name and business addresses of the current directors
and officers, a copy of the corporation's most recent
corporate report filed with the Secretary of State, and
financial statements showing in reasonable detail the
corporation's assets and liabilities and results of
operations for the last three years, (vi) have general
charge of the stock transfer books of the corporation,
unless the corporation has a transfer agent, (vii)
authenticate records of the corporation, and (vii) in
general, perform all duties incident to the office of
secretary and such other duties as from time to time
may be assigned to him by the president or by the
board of directors. Assistant secretaries, if any, shall
have the same duties and powers subject to
supervision by the secretary. The directors and/or
shareholders may however respectively designate a
person other than the secretary or assistant secretary
to keep the minutes of their respective meetings.
Any books, records, or minutes of the
corporation may be in written form or in any form
capable of being converted into written form within a
reasonable time.
Section 8. Treasurer. In the event a
treasurer is designated by the board of directors as an
officer of the corporation, the treasurer shall be the
principal financial officer of the corporation, shall
have the care and custody of all funds, securities,
evidences of indebtedness and other personal property
of the corporation and shall deposit the same in
accordance with the instructions of the board of
directors. He shall receive and give receipts and
acquittances for money paid in on account of the
corporation, and shall pay out of the corporation's
funds on hand all bills, payrolls and other just debts
of the corporation of whatever nature upon maturity.
He shall perform all other duties incident to the office
of the treasurer and, upon request of the board, shall
make such reports to it as may be required at any
time. He shall, if required by the board, give the
corporation a bond in such sums and with such
sureties as shall be satisfactory to the board,
conditioned upon the faithful performance of his duties
and for the restoration to the corporation of all books,
papers, vouchers, money and other property of
whatever kind in his possession or under his control
belonging to the corporation. He shall have such
other powers and perform such other duties as may
from time to time be prescribed by the board of
directors or the president. The assistant treasurers, if
any, shall have the same powers and duties, subject to
the supervision of the treasurer.
The treasurer shall also be the principal
accounting officer of the corporation. He shall
prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and
records of account as required by the Colorado
Business Corporation Act, prepare and file all local,
state and federal tax returns, prescribe and maintain
an adequate system of internal audit and prepare and
furnish to the president and the board of directors
statements of account showing the financial position of
the corporation and the results of its operations.
ARTICLE V
Stock
Section 1. Certificates. The board of
directors shall be authorized to issue any of its classes
of shares with or without certificates. The fact that
the shares are not represented by certificates shall
have no effect on the rights and obligations of
shareholders. If the shares are represented by
certificates, such shares shall be represented by
consecutively numbered certificates signed, either
manually or by facsimile, in the name of the
corporation by one or more persons designated by the
board of directors. In case any officer who has
signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such
officer before such certificate is issued, such
certificate may nonetheless be issued by the
corporation with the same effect as if he were such
officer at the date of its issue. Certificates of stock
shall be in such form and shall contain such
information consistent with law as shall be prescribed
by the board of directors. If shares are not
represented by certificates, within a reasonable time
following the issue or transfer of such shares, the
corporation shall send the shareholder a complete
written statement of all of the information required to
be provided to holders of uncertificated shares by the
Colorado Business Corporation Act.
Section 2. Consideration for Shares.
Certificated or uncertificated shares shall not be issued
until the shares represented thereby are fully paid.
The board of directors may authorize the issuance of
shares for consideration consisting of any tangible or
intangible property or benefit to the corporation,
including cash, promissory notes, services performed
or other securities of the corporation. Future services
shall not constitute payment or partial payment for
shares of the corporation. The promissory note of a
subscriber or an affiliate of a subscriber shall not
constitute payment or partial payment for shares of the
corporation unless the note is negotiable and is
secured by collateral, other than the shares being
purchased, having a fair market value at least equal to
the principal amount of the note. For purposes of this
Section 2, "promissory note" means a negotiable
instrument on which there is an obligation to pay
independent of collateral and does not include a non-
recourse note.
Section 3. Lost Certificates. In case of
the alleged loss, destruction or mutilation of a
certificate of stock, the board of directors may direct
the issuance of a new certificate in lieu thereof upon
such terms and conditions in conformity with law as
the board may prescribe. The board of directors may
in its discretion require an affidavit of lost certificate
and/or a bond in such form and amount and with such
surety as it may determine before issuing a new
certificate.
Section 4. Transfer of Shares. Upon
surrender to the corporation or to a transfer agent of
the corporation of a certificate of stock duly endorsed
or accompanied by proper evidence of succession,
assignment or authority to transfer, and receipt of
such documentary stamps as may be required by law
and evidence of compliance with all applicable
securities laws and other restrictions, the corporation
shall issue a new certificate to the person entitled
thereto, and cancel the old certificate. Every such
transfer of stock shall be entered on the stock books
of the corporation which shall be kept at its principal
office or by the person and at the place designated by
the board of directors.
Except as otherwise expressly provided in
Article II, Sections 7 and 11, and except for the
assertion of dissenters' rights to the extent provided in
Article 113 of the Colorado Business Corporation Act,
the corporation shall be entitled to treat the registered
holder of any shares of the corporation as the owner
thereof for all purposes, and the corporation shall not
be bound to recognize any equitable or other claim to,
or interest in, such shares or rights deriving from such
shares on the part of any person other than the
registered holder, including without limitation any
purchaser, assignee or transferee of such shares or
rights deriving from such shares, unless and until such
other person becomes the registered holder of such
shares, whether or not the corporation shall have
either actual or constructive notice of the claimed
interest of such other person.
Section 5. Transfer Agent, Registrars and
Paying Agents. The board may at its discretion
appoint one or more transfer agents, registrars and
agents for making payment upon any class of stock,
bond, debenture or other security of the corporation.
Such agents and registrars may be located either
within or outside Colorado. They shall have such
rights and duties and shall be entitled to such
compensation as may be agreed.
ARTICLE VI
Indemnification of Certain Persons
Section 1. Indemnification. For purposes
of Article VI, a "Proper Person" means any person
who was or is a party or is threatened to be made a
party to any threatened, pending, or complete action,
suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or
informal, by reason of the fact that he is or was a
director, officer, employee, fiduciary or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any foreign or
domestic profit or nonprofit corporation or of any
partnership, joint venture, trust, profit or nonprofit
unincorporated association, limited liability company,
or other enterprise or employee benefit plan. The
corporation shall indemnify any Proper Person against
reasonably incurred expenses (including any attorneys'
fees), judgments, penalties, fines (including any excise
tax assessed with respect to an employee benefit plan)
and amounts paid in settlement reasonably incurred by
him in connection with such action, suit or proceeding
if it is determined by the groups set forth in Section 4
of this Article that he conducted himself in good faith
and that he reasonably believed (i) in the case of
conduct in his official capacity with the corporation,
that his conduct was in the corporation's best
interests, or (ii) in all other cases (except criminal
cases), that his conduct was at least not opposed to the
corporation's best interests, or (iii) in the case of any
criminal proceeding, that he had no reasonable cause
to believe his conduct was unlawful. A Proper Person
will be deemed to be acting in his official capacity
while acting as a director, officer, employee or agent
on behalf of this corporation and not while acting on
this corporation's behalf for some other entity.
No indemnification shall be made under this
Article VI to a Proper Person with respect to any
claim, issue or matter in connection with a proceeding
by or in the right of a corporation in which the Proper
Person was adjudged liable to the corporation or in
connection with any proceeding charging that the
Proper Person derived an improper personal benefit,
whether or not involving action in an official capacity,
in which he was adjudged liable on the basis that he
derived an improper personal benefit. Further,
indemnification under this Section in connection with
a proceeding brought by or in the right of the
corporation shall be limited to reasonable expenses,
including attorneys' fees, incurred in connection with
the proceeding.
Section 2. Right to Indemnification. The
corporation shall indemnify any Proper Person who
was wholly successful, on the merits or otherwise, in
defense of any action, suit, or proceeding as to which
he was entitled to indemnification under Section 1 of
this Article VI against expenses (including attorneys'
fees) reasonably incurred by him in connection with
the proceeding without the necessity of any action by
the corporation other than the determination in good
faith that the defense has been wholly successful.
Section 3. Effect of Termination of
Action. The termination of any action, suit or
proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that
the person seeking indemnification did not meet the
standards of conduct described in Section 1 of this
Article VI. Entry of a judgment by consent as part of
a settlement shall not be deemed an adjudication of
liability, as described in Section 2 of this Article VI.
Section 4. Groups Authorized to Make
Indemnification Determination. Except where there is
a right to indemnification as set forth in Sections 1 or
2 of this Article or where indemnification is ordered
by a court in Section 5, any indemnification shall be
made by the corporation only as authorized in the
specific case upon a determination by a proper group
that indemnification of the Proper Person is
permissible under the circumstances because he has
met the applicable standards of conduct set forth in
Section 1 of this Article. This determination shall be
made by the board of directors by a majority vote of
those present at a meeting at which a quorum is
present, which quorum shall consist of directors not
parties to the proceeding ("Quorum"). If a Quorum
cannot be obtained, the determination shall be made
by a majority vote of a committee of the board of
directors designated by the board, which committee
shall consist of two or more directors not parties to
the proceeding, except that directors who are parties
to the proceeding may participate in the designation of
directors for the committee. If a Quorum of the board
of directors cannot be obtained and the committee
cannot be established, or even if a Quorum is obtained
or the committee is designated and a majority of the
directors constituting such Quorum or committee so
directs, the determination shall be made by (i)
independent legal counsel selected by a vote of the
board of directors or the committee in the manner
specified in this Section 4, or, if a Quorum of the full
board of directors cannot be obtained and a committee
cannot be established, by independent legal counsel
selected by a majority vote of the full board (including
directors who are parties to the action) or (ii) a vote
of the shareholders.
Section 5. Court-Ordered Indemnification.
Any Proper Person may apply for indemnification to
the court conducting the proceeding or to another
court of competent jurisdiction for mandatory
indemnification under Section 2 of this Article,
including indemnification for reasonable expenses
incurred to obtain court-ordered indemnification. If
the court determines that such Proper Person is fairly
and reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not he met
the standards of conduct set forth in Section 1 of this
Article or was adjudged liable in the proceeding, the
court may order such indemnification as the court
deems proper except that if the Proper Person has
been adjudged liable, indemnification shall be limited
to reasonable expenses incurred in connection with the
proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.
Section 6. Advance of Expenses.
Reasonable expenses (including attorneys' fees)
incurred in defending an action, suit or proceeding as
described in Section 1 may be paid by the corporation
to any Proper Person in advance of the final
disposition of such action, suit or proceeding upon
receipt of (i) a written affirmation of such Proper
Person's good faith belief that he has met the
standards of conduct prescribed by Section 1 of this
Article VI, (ii) a written undertaking, executed
personally or on the Proper Person's behalf, to repay
such advances if it is ultimately determined that he did
not meet the prescribed standards of conduct (the
undertaking shall be an unlimited general obligation of
the Proper Person but need not be secured and may be
accepted without reference to financial ability to make
repayment), and (iii) a determination is made by the
proper group (as described in Section 3 of this Article
VI) that the facts as then known to the group would
not preclude indemnification. Determination and
authorization of payments shall be made in the same
manner specified in Section 4 of this Article VI.
Section 7. Witness Expenses. The
sections of this Article VI do not limit the
corporation's authority to pay or reimburse expenses
incurred by a director in connection with an
appearance as a witness in a proceeding at a time
when he has not been a named defendant or
respondent in the proceeding.
Section 8. Report to Shareholders. Any
indemnification of or advance of expenses to a
director in accordance with this Article VI, if arising
out of a proceeding by or on behalf of the
corporation, shall be reported in writing to the
shareholders with or before the notice of the next
shareholders' meeting. If the next shareholder action
is taken without a meeting at the instigation of the
board of directors, such notice shall be given to the
shareholders at or before the time the first shareholder
signs a writing consenting to such action.
ARTICLE VII
Provision of Insurance
By action of the board of directors,
notwithstanding any interest of the directors in the
action, the corporation may purchase and maintain
insurance, in such scope and amounts as the board of
directors deems appropriate on behalf of any person
who is or was a director, officer, employee, fiduciary
or agent of the corporation, or who, while a director,
officer, employee, fiduciary or agent of the
corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any other foreign or
domestic corporation or of any partnership, joint
venture, trust, profit or nonprofit unincorporated
association, limited liability company or other
enterprise or employee benefit plan, against any
liability asserted against, or incurred by, him in that
capacity arising out of his status as such, whether or
not the corporation would have the power to
indemnify him against such liability under the
provisions of Article VI or applicable law. Any such
insurance may be procured from any insurance
company designated by the board of directors of the
corporation, whether such insurance company is
formed under the laws of Colorado or any other
jurisdiction of the United States or elsewhere,
including any insurance company in which the
corporation has an equity interest or any other
interest, through stock ownership or otherwise.
ARTICLE VIII
Miscellaneous
Section 1. Seal. The corporate seal of the
corporation shall be circular in form and shall contain
the name of the corporation and the words, "Seal,
Colorado."
Section 2. Fiscal Year. The fiscal year of
the corporation shall be as established by the board of
directors.
Section 3. Amendments. The board of
directors shall have power, to the maximum extent
permitted by the Colorado Business Corporation Act,
to make, amend and repeal the bylaws of the
corporation at any regular or special meeting of the
board unless the shareholders, in making, amending
or repealing a particular bylaw, expressly provide that
the directors may not amend or repeal such bylaw.
The shareholders also shall have the power to make,
amend or repeal the bylaws of the corporation at any
annual meeting or at any special meeting called for
that purpose.
Section 4. Gender. The masculine gender
is used in these bylaws as a matter of convenience
only and shall be interpreted to include the feminine
and neuter genders as the circumstances indicate.
Section 5. Conflicts. In the event of any
irreconcilable conflict between these bylaws and either
the corporation's articles of incorporation or
applicable law, the latter shall control.
Section 6. Definitions. Except as
otherwise specifically provided in these bylaws, all
terms used in these bylaws shall have the same
definition as in the Colorado Business Corporation
Act.
THE FOREGOING BYLAWS, consisting of
eighteen (18) pages, including this page, constitute the
bylaws of Boulder Capital Opportunities, Inc.,
adopted by the board of directors of the corporation as
of April 22, 1996.
_____________________________________
President
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Boulder Capital Opportunities, Inc.
Boulder, Colorado
We have audited the accompanying balance
sheet of Boulder Capital Opportunities,
Inc. (a development stage Company) as of
April 30, 1996, and the related statements
of operations, stockholders' equity, and
cash flows for the period from April 22,
1996 (inception) to April 30, 1996. These
financial statements are the responsibility
of the Company's management. Our
responsibility is to express an opinion on
these financial statements based on our
audit.
We conducted our audit in accordance with
generally accepted auditing standards.
Those standards require that we plan and
perform the audit 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 by management, as
well as evaluating the overall financial
statement presentation. We believe that our
audit provides 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 Boulder Capital Opportunities, Inc. (a
development stage Company) as of April 30,
1996, and the results of its operations,
and its cash flows for the period from
April 22, 1996 (inception) to April 30,
1996, in conformity with generally accepted
accounting principles.
May 15, 1996
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Balance Sheet
April 30, 1996
ASSETS
Current assets:
Cash $6,249
Total current assets 6,249
Organizational costs 1,775
$8,024
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,500
Total current liabilities 2,500
Stockholders' equity:
Preferred stock, no par value,
10,000,000 shares authorized
-
Common stock, no par value,
100,000,000 shares authorized,
1,010,000 shares issued and
outstanding
8,025
Deficit accumulated during the
development stage (2,501)
5,524
$8,024
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Statement of Operations
For the Period April 22, 1996 to April 30,
1996
Revenue $ -
Costs and expenses:
General and Administrative 2,501
Net Loss $ 2,501
Per share information:
Weighted average number
of common shares
outstanding 1,010,000
Net loss per share $ .0025
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Statement of Changes in
Stockholders' Equity
For the Period From April 22, 1996
(Inception) through April 30, 1996
<TABLE>
Deficit Accumulated
During the
Common Stock Development Stage Total
Shares/Amount
<C> <C> <C>
<S>
Shares issued
at inception
for services at
$0.0025 per share 710,000/$1,775 $ - $1,775
Shares issued for
cash at $0.0025
per share 100,000/250 - 250
Shares issued for
cash at $0.03
per share 200,000/6,000 - 6,000
Net loss for
the year - / - (2,501) (2,501)
Balance
April 30, 1996 1,010,000/$8,025 $(2,501) $5,524
</TABLE>
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period From April 22, 1996
(Inception) to April 30, 1996
Cash flows from
operating activities:
General and
administrative costs $ (1)
Cash flows from investing
activities -
Cash flows from financing
activities:
Capital contributions 6,250
Net cash provided by
financing activities 6,250
Net increase in cash and
cash equivalents 6,249
Beginning cash and
cash equivalents -
Ending cash and cash equivalents $6,249
Reconciliation of net loss
to net cash used in
operating activities:
Net loss $2,501
Increase in account payable (2,500)
Net cash used in operating
activities $ (1)
Supplemental schedule of noncash investing
and financing activities:
On April 22, 1996 professional services
capitalized as organizational costs valued
at $1,775 were exchanged for 710,000
shares of common stock.
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Notes to Financial Statements
April 30, 1996
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
The Company was incorporated on April 22,
1996, in the State of Colorado as Boulder
Capital Opportunities, Inc. The Company is
in the development stage and its intent is
to operate as a capital market access
corporation and to acquire one or more
existing businesses through merger or
acquisition. The Company has had no
significant business activity to date. The
Company has not yet selected a fiscal year
end.
Organizational costs
Organizational costs include costs for
professional fees and will be amortized
using the straight-line method over five
years.
Net loss per share
The net loss per share is computed by
dividing the net loss for the period by the
weighted average number of common shares
outstanding for the period.
Estimates
The preparation of the Company's
financial statements in conformity with
generally accepted accounting principles
requires the Company's management to make
estimates and assumptions that affect the
amounts reported in these financial
statements and accompanying notes. Actual
results could differ from those estimates.
Note 2. STOCKHOLDERS' EQUITY
On April 22, 1996, the Company issued
710,000 shares of its no par value common
stock to affiliates for services valued at
their fair market value of $1,775.
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Notes to Financial Statements (continued)
April 30, 1996
Note 2. STOCKHOLDERS' EQUITY
(continued)
On April 23, 1996, the
Company issued 100,000 shares
of its no par value common
stock to its President at
$0.0025 per share, $250 in
total.
On April 30, 1996 the
Company issued 200,000 shares
of its no par value common
stock to various investors for
$6,000.
Note 3. RELATED PARTY
TRANSACTIONS
At April 30, 1996, the
Company owed $2,500 to a law
firm, an officer of which is a
shareholder of the Company.
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
April 30, 1996
<PAGE>
Boulder Capital Opportunities, Inc.
(A Development Stage Company)
Table of Contents
Page
Report of Independent
Auditors 1
Balance Sheet 2
Statement of Operations 3
Statement of Changes in Stockholders'
Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-7
