1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS UNDER SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE
ACT OF 1934
SunVest Resorts, Inc.
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(Name of Small Business Issuer in Its Charter)
Florida 65-0693150
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
307 South 21st Avenue, Hollywood, Florida 33020
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(Address of Principal Executive Offices) (Zip Code)
(954) 922-6070
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
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None None
___________________ _____________________
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.02 par value
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(Title of Class)
Part 1
(Alternative 2)
Item 6. DESCRIPTION OF BUSINESS
General
SunVest Resorts, Inc., a Florida corporation (the
"Company"), was created on August 6, 1996, through the merger of
Telshare International, Inc., a publicly-held Delaware
corporation, and two Florida corporations, Colony Plaza
Development, Inc. ("Colony"), and Cove Development, Inc.("Cove").
Teleshare International, Inc., had ceased operations in 1988, but
maintained its publicly held status. As a result of the merger,
the shareholders of Colony and Cove, Harvey Birdman, Diane
Birdman, Louis Birdman, Herbert Hirsch and Bonita Hirsch
(collectively, the "HB Group"), acquired 8,000,000 out of
8,866,000 shares of common stock outstanding, or 90.12% of the
outstanding stock of the Company. At the time of the merger,
Colony owned a newly acquired 302-room resort hotel called Colony
Plaza and located in Ocoee, west of Orlando, Florida, and Cove
owned a newly-acquired 173-room resort hotel called Pirates Cove
and located in Daytona Beach Shores, Florida. The Company
conducts all of its activities strictly through subsidiaries and,
as used herein, the term "Company" refers to SunVest Resorts,
Inc. acting through one or more subsidiary, unless the context
indicates otherwise.
The HB Group, the members of which constitute the management
of the Company, See, Directors, Executive Officers and
Significant Employees, has engaged in the business of acquiring,
renovating and converting hotels into resort hotel condominiums
("condotels") and multi-family rental projects into primary and
second home condominium communities for the last ten years.
Through the end of 1998, the HB Group had converted, including
ongoing projects, 17 condotels and multi-family projects,
containing approximately 2300 units with an estimated aggregate
sell-out price of $106 million.
Current Business and Properties
The Company converts hotels into condotels and develops
large-scale age-focused communities called "active adult
communities (AACs)." All of the Company's current projects are
located in Florida.
Condotels
Conversion into condotels is accomplished through the
purchase and renovation of resort hotels. A typical project
consists of substantial interior and exterior renovation and
upgrading of the existing property through the installation of
kitchens, and other condominium amenities, upgrading bathrooms
and renovation of the common areas such as the front desk,
swimming pool, tennis courts, restaurant, lounge, gift shop and
laundry facility.
Typically, the Company retains ownership and responsibility
for the operation of the front desk, restaurant, lounge and gift
shop (the "Commercial Component". The Company outsources property
maintenance, laundry, rental and resale agent services to
organizations experienced in hotel/condominium management.
Generally, such organizations manage the units for the owners and
retain 55% of the total rental income and pay 45% of the total
rental income to the unit owners. The Company receives 3% of the
gross revenue from rental operations and 5% of the gross revenue
from food and beverage operations.
Since 1996, the Company has converted Colony Plaza and
PiratesCove. Colony's total investment in Colony Plaza was
approximately $6.25 million financed by means of a $1,548,000
first mortgage loan from BankAtlantic FSB, Ft. Lauderdale,
Florida ("BankAtlantic"), personally guaranteed by members of the
HB Group, and a three-year, 18% second mortgage loan from
Mortgage Investment Group 9, Ltd., a Florida limited partnership
("MIG-9"). The general partner of MIG-9, owning a 1% general
partnership interest, is an entity owned by the HB Group; the
members of the HB Group have also purchased 18% of the limited
partnership interests in MIG-9 at the same price as the other
limited partners. In 1996, some of the units at Colony Plaza were
transferred by Colony to Holiday Vacation Ventures, a Florida
general partnership ("HVV"), in exchange for a 65% partnership
interest. HVV, in turn, sold timeshare interests in such units.
As of September 30, 1999, Colony owned the Commercial Component
of Colony Plaza and HVV owned approximately 200 weeks in
timeshare interests.
Cove's total investment in Pirates Cove was approximately
$5.4 million, financed by means of a $1,258,000 first mortgage
loan from BankAtlantic, personally guaranteed by members of the
HB Group, and a $1,300,000 second mortgage loan from Mortgage
Investment Group 10, Ltd. ("MIG-10"). MIG-10 has been structured
identically to MIG-9. As of September 30, 1999, the assets of
Cove consisted of the Commercial Component of Pirates Cove and
eight (8) unsold condotel units.
Active Adult Communities
AAC's are large-scale master planned communities for active
adults age 55 and over. A typical AAC is a complex of
individually-owned garden style or multi-story residences, with
resort-type amenities, such as swimming pool, tennis court and
fitness center, as well as amenities associated with permanent
residence, such as community center, hobby rooms, and convenience
store. AACs are a segment of the resort market experiencing above-
average growth due to the general aging of the U.S. population
with the number of Americans over age 55 projected to grow to 75
million by 2010. The resulting increase in demand for AAC units
is projected to occur as "baby boomers" acquire second homes to
be used as eventual retirement residences.
The Company entered the AAC business in late 1998 by
acquiring, through a wholly-owned Florida limited liability
company, Lakeshore Club Development LC ("Lakeshore LC"),
Lakeshore Club. Lakeshore Club is a complex of 500 already
existing garden-style units set on 110 acres in Fedhaven, Polk
County, Florida, 10 miles east of Lake Wales, 45 miles south of
Disney World, in Orlando, Florida, and on a 7500-acre Lake "Walk
in the Water". The sports-related amenities will include a
fishing pier, marina, lakefront promenade, tennis courts,
exercise rooms, miniature golf course and driving range and
baseball, basketball, volleyball and handball courts. In
addition, it will contain community amenities such as a
clubhouse, 350-seat theater for shows and social events (under
the direction of a full-time social director), arts and crafts
rooms, library, bank, post office, laundromat, beauty salon,
restaurant/convenience store, as well as a 24-hour, on-call
paramedic emergency service and an on-site fire department.
Lakeshore LC acquired Lakeshore Club for $5.5 million and
expects to spend an additional $7.5 million in renovation costs
of the 500 units and the common areas, for a total investment of
$26,000 per unit in hard costs. The total cost of the 500-unit
conversion, including soft costs and $5.5 million in acquisition
costs, is estimated at $20.1 million. A projected total sellout
of $24.7 million is expected, with a sales price structure
ranging from $54,990 to $79,990, depending on the size of the
unit.
Lakeshore LC has financed the acquisition and initial
renovation and other costs of the Lakeshore Club through a $6.2
million first mortgage from BankAtlantic and a $2.5 million
second mortgage loan from Mortgage Investment Group 20, Ltd. (MIG-
20"). MIG-20 has been structured identically to MIG-9 and MIG-10.
The terms of the first mortgage are: maturity date of September
1, 2001 and interest rate at prime + 1-1/2%. The terms of the second
mortgage are: maturity December 2001, interest rate 18%, with no
principal amortized. Management believes that the proceeds from
the two loans and net proceeds from the sale of units will be
sufficient to carry out the 500-unit conversion and common areas
construction and renovation through complete sellout.
The 110-acre parcel can accommodate up to 200 additional
garden-style units. Having already received the appropriate
approvals from Polk County, if Lakeshore LC achieves satisfactory
results in selling the existing 500 units, it will construct the
additional units, thereby further amortizing infrastructure
costs. The aggregate sellout price is projected to be between
$15.0 million and $16.0 million.
On December 30, 1999, Lakeshore LC acquired, for $1.8
million, 420 acres of undeveloped land contiguous to Lakeshore
Club. Lakeshore LC financed this purchase by means of a $1.3
million first mortgage seller-financed loan and a $400,000 second
mortgage loan from Mortgage Investment Group 24, Ltd. ("MIG-24").
MG-24 has been structured identically to MIG-9 and MIG-10. This
phase II parcel has the capacity for the development of up to
2000 AAC units and a golf course. The Company intends to develop
this parcel in phases after the 700 units at Lakeshore Club are
substantially sold.
Construction
Presently, all renovation activities are carried out by the
Company through third party general contractors and
subcontractors, under the supervision of the Company's
management. If the Company were to expand its development as
opposed to renovation activities, the Company would become
subject to the risks and challenges typically associated with
development. Among such risks are construction-related risks,
e.g. weather, local labor conditions and availability of
materials and supplies. Among such challenges is proper
coordination between construction of units with unit sales orders
in order to control the costs and risks associated with completed
but unsold inventory.
Marketing and Sales Activities
Domestically, the Company markets its condotels through
newspaper and other advertising and contacts within real estate
brokerage firms in the area where the project is located. In
Puerto Rico and South America, where the Company has discovered a
significant as yet untapped market for their products, the
Company markets through newspaper advertising and local real
estate brokerage companies. Sales to residents of Puerto Rico
and South America are facilitated by a program developed by the
Company for verifying the income, employment status and credit
history of these customers thus facilitating their obtaining
acquisition financing from U.S. lending institutions.
The Company's marketing activities in connection with the
Lakeshore Club are and will be focused on 50 and over active
adults in South Florida, New York, New Jersey, Massachusetts,
Michigan, Ohio, Illinois, Wisconsin and Ontario and Quebec,
Canada. The Company will use advertising in retirement
publications, newspapers, radio and television and through an in-
house telemarketing program. To attract attention from potential
purchasers travelling through Central Florida for vacation or
otherwise, the Company has secured over two dozen billboards
located along key stretches of highways connecting Fedhaven to
Orlando, Tampa and South Florida.
While more than one factor may contribute to a given sale,
the Company believes that a substantial portion of sales at its
AAC will be attributable to follow-ups on referrals from
residents of these communities and to exposing potential
purchasers to the AAC experience. As a result, as more units at
the Lakeshore Club become renovated and all the amenities are
completed, the Company will implement a program which enables
prospective purchasers to visit and stay (for a modest charge) in
vacation homes for a few days to one week to experience the
Lakeshore Club lifestyle prior to deciding whether to purchase a
home. The Company sells all of its units through in-house
commissioned sales personnel.
Employees
Since its inception and as of September 30, 1999, the
Company had no employees. However, as of that date, the Company
leased the services of 95 full-time employee equivalents, which
are being leased from an independent employee leasing company.
Substantially all of such personnel work within the state of
Florida, primarily at the Company's main office complex located
in Hollywood, Broward County, Florida, and in various sales
offices throughout the state.
Regulation
The Company's sales and operations are subject to regulation
by the federal government and by the State of Florida. On a
federal level, the Federal Trade Commission enforces the Federal
Trade Commission Act, which prohibits unfair or deceptive acts or
competition in interstate commerce. Other federal legislation to
which the Company is or may be subject is contained in the
Securities Act of 1933, as amended, the Securities and Exchange
Act of 1934, as amended, the Truth-in-Lending Act and Regulation
Z, the Equal Opportunity Credit Act and Regulation B, the
Interstate Land Sales Full Disclosure Act and the Civil Rights
Acts of 1964 and 1968. In Florida, the Condominium Act and the
rules and regulations promulgated thereunder as administered by
the Division of Land Sales, Condominiums and Mobile Homes of the
Department of Business and Professional Regulations, provide the
most significant regulation of its conversion business. Florida
law requires the Company to file and obtain approval for a
detailed offering statement describing its business and all
material aspects of a proposed development and sale of fee simple
interests. The Company is required to deliver the offering
statement to all prospective purchasers, together with certain
additional information concerning the terms of the purchase.
Florida law also permits the purchaser of a fee simple interest
to cancel a contract of purchase at any time within 15 calendar
days following the date on which the purchaser has received the
last of the documents that Florida law requires the seller to
provide. The Company believes that it is in material compliance
with all federal and state laws and regulations to which it is
currently or may be subject. Any failure to comply with
applicable laws or regulations could have a material adverse
effect on the profitability of the Company.
Market and Competition
The Company is subject to significant competition from other
entities engaged in the business of resort development, sales and
operation. The condotel and condominium conversion segment of
the Company's business, which is focused in Florida, is
fragmented and localized. Competitors are typically private and,
often, single-project companies. Some may have greater capital
resources than the Company.
The AAC market in Florida is similarly locally-based and
fragmented, but, recently, it has attracted at least one leading
national AAC developer, Del Webb Corporation, which has recently
acquired the Spring Creek communities near Ocala, Florida. Many
of these local and national entities possess significantly
greater financial, marketing, personnel and other resources than
the Company. In addition, there are many hotels and other
vacation resorts in Florida that provide competitive alternatives
to the purchase of a home in the Company's AAC community. The
Company believes, however, that it will compete effectively with
these other entities on the basis of the quality of the homes and
amenities and the very competitive prices it is able to provide
at Lakeshore Club.
Certain Factors Affecting the Company's Operations
Set forth below is a brief description of certain matters
that may affect the Company and its operations:
Financing and Leverage. As a result of acquiring Lakeshore
Club and the adjacent land, the Company is currently highly
leveraged. The Company's degree of leverage from time to time
will affect its net available capital resources, which could
limit its ability to capitalize on business opportunities or
withstand adverse changes. If the Company is at any time unable
to service its debt, refinancing or obtaining additional
financing may be required and may not be available or not
available on terms acceptable to the Company.
Real estate development is dependent on the availability and
cost of financing. In periods of significant growth, the Company
will require significant additional capital resources, whether
from issuances of equity or by incurring additional indebtedness.
To be sure, all three of the Company's projects were partially
financed through second mortgages from a group of about two dozen
private investors by means of MIGs. The HB Group has had a ten-
year relationship with this group and ordinarily has been able to
secure a second mortgage, at 18% interest, for each project
requested. Nevertheless, there is no assurance that MIG financing
will be available in the future.
Since 1996, the Company's cash flow needs were partially
satisfied by means of advances from the HB Group and entities
controlled by the HB Group. See, Interest of Management and
Others in Certain Transactions - Other Transactions. There is no
assurance that such advances, once the current balance thereof is
repaid by the Company, will continue.
Cyclical Nature of Real Estate Operations and Other
Conditions Generally. All of the Company's projects are subject
to real estate market conditions (both where they are located and
in areas where potential customers reside), the cyclical nature
of real estate operations, general national economic conditions
and changing demographic conditions. These are long-term projects
and sales activity varies from period to period, with the
ultimate success of any project not to be judged by results in
any particular period or periods. A project may generate
significantly higher sales levels at inception (whether because
of pent-up demand or other reasons) than it does during later
periods. Revenues and earnings of the Company will also be
affected by period-to-period fluctuations in the mix of product
and unit closing among the Company's projects.
Profitability of the Company's real estate operations also
depend upon the availability and cost of mortgage financing
available to the potential buyers of its units. An increase in
interest rates, which may result from governmental policies and
other factors outside the control of the Company, may adversely
affect the buying decisions of potential unit buyers and their
ability to sell their existing homes.
Geographic Concentration. The Company's current business
operations are centralized in Florida. This geographic
concentration and limited number of projects may create increased
vulnerability to regional economic downturns or adverse project-
specific matters.
Forward Looking Information; Certain Cautionary Statements.
Certain statements contained in this Registration Statement
that are not historical results are forward looking statements.
These forward looking statements involve risks and uncertainties
including, but not limited to, those referred to above. Actual
results may differ materially from those projected or implied.
Further, certain forward looking statements are based upon
assumptions of future events which may not be accurate.
Item 7. Description of Property.
Except for its conversion and development projects, the
Company does not own any property. The Company's executive
offices are located at 307 South 21st Avenue in Hollywood,
Florida, in a 2,500 square foot building owned by Vacation
Investment Plan, Inc., an entity owned by the HB Group. In 1998
and 1999 (9 months), respectively, the Company paid $27,000 and
$21,000, respectively, in rent to such entity.
Item 8. Directors, Executive Officers and Significant
Employees.
Position with the Issuer, Term of Service;
Name Age Business Experience and Family Relationships
Herbert Hirsch 58 Mr. Hirsch has served as President and a
director of the Company since August 1996.
Mr. Hirsch's primary responsibilities are to
coordinate all sales and marketing
activities, to review and approve all sales
contracts and closings and to coordinate all
advertising efforts. Since 1990, Mr. Hirsch,
as a member of the HB Group, has been a
principal with several single project
entities engaged in the resort condominium
and second home residential condominium
conversion and development business.
Harvey Birdman 60 Mr. Birdman has served as Executive Vice
President and a director of the Company
since August 1996. Mr. Birdman's primary
responsibilities are to initiate all project
acquisitions, to arrange all financing and
to analyze all strategic and project
planning. Since 1990, Mr. Birdman, as a
member of the HB Group, has served as a
principal with several single-project
entities engaged in the resort condominium
and second home residential condominium
conversion and development business. Mr.
Birdman is the husband of Diane Birdman and
father of Louis Birdman.
Diane Birdman 54 Mrs. Birdman has served as a Vice President,
the Treasurer and a director of the Company
since August 1996. Mrs. Birdman's primary
responsibilities are to coordinate the
administration of the condominium
associations at the resort properties owned
and developed by the Company and to oversee
the accounting department. Since 1990, Mr.
Birdman, as a member of the HB Group, has
served as a principal with several single-
project entities engaged in the resort
condominium and second home residential
condominium conversion and development
business. Mrs. Birdman attended Broward
Community College, where she majored in
Accounting, and attended Temple University,
where she majored in Business. Mrs. Birdman
is the wife of Harvey Birdman and the mother
of Louis Birdman.
Louis Birdman 34 Mr. Birdman has served as a Vice President,
the Secretary and a director of the Company
since August 1996. Mr. Birdman's primary
responsibilities are to manage all design
and construction activities, as well as to
interact with municipal planning, zoning and
building officials. Mr. Birdman is the owner
of Louis Birdman Architect, P.A., and was
the co-founder and principal-in-charge of
ARC Avenue, Inc., from 1985-1995 and co-
founder of ARC-CON Design Build, Inc., -
General Contractors, where he was principal-
in-charge from 1989-1995. Mr. Birdman is a
registered architect in Florida and a
certified member of the National Council of
Architectural Registration Boards. He
received his Bachelor's degree in Design and
Architecture from the University of Florida
and his Bachelor's degree in Architecture
from the University of Miami. Mr. Birdman is
the son of Harvey and Diane Birdman.
Cary Greenberg 51 Mr. Greenberg has served as Vice President
and Chief Financial Officer of the Company
since March 1998. Mr. Greenberg's primary
responsibilities include oversight of the
financial accounting and internal controls
systems of the Company. In addition, he
participates in the analysis of the
financial feasibility of proposed projects.
Prior to joining the Company, Mr. Greenberg
served for twelve years as the Chief
Financial Officer of a subsidiary of
American Greetings Corporation. Greenberg
is a Certified Public Accountant in New
York, Florida and Texas.
Item 9 Remuneration of Directors and Officers.
(a) Name of Individual Capacity in Which Aggregate
or Identity of Group Remuneration was Received Remuneration
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3 highest paid Directors, President, $0
directors and Vice-President, and
executive officers Treasurer or Secretary
as a group
(b) Remuneration pursuant to ongoing plan or arrangement. None.
Item 10. Security Ownership of Management and Certain Security
Holders.
The following table sets forth information about the voting
securities held of record as of November 9, 1999, by each of the
officers and directors of the Company and all such persons as a
group:
Name and Amount Owned Percent of
Title of Class Address of Owner Before Offering Class*
Common Stock, Herbert Hirsch 1,445,000 16.05%
$.02 par value 307 South 21st Ave. Shares
Hollywood, FL 33020
Common Stock, Harvey Birdman 1,266,000 14.07%
$.02 par value 307 South 21st Ave. Shares
Hollywood, FL 33020
Common Stock, Diane Birdman 1,517,000 16.86%
$.02 par value 307 South 21st Ave. Shares
Hollywood, FL 33020
Common Stock, Louis Birdman(1) 1,855,000 20.61%
$.02 par value 307 South 21st Ave. Shares
Hollywood, FL 33020
All Officers
and Directors 6,083,000 67.59%
as a Group Shares
* Percentages are based on 9,000,000 shares of Common Stock
issued and outstanding on November 9, 1999.
(1) Includes 100,000 Shares owned by Mr. Birdman's children. Mr.
Birdman disclaims beneficial ownership of such shares.
The following table sets forth information as of November 9,
1999, about each shareholder who owns more that 10% of any class
of the Company's securities:
Amount Owned Percent of
Title of Name and Address of Owner Before Class*
Class Offering
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Common Stock, Herbert Hirsch 1,445,000 16.05%
$.02 par 700 S. Ocean Blvd., #1106 Shares
value Boca Raton, Florida 33432
Common Stock, Harvey Birdman 1,266,000 14.07%
$.02 par 3755 NE 214th Street Shares
value Aventura, Florida 33180
Common Stock, Diane Birdman 1,517,000 16.86%
$.02 par 3755 NE 214th Street Shares
value Aventura, Florida 33180
Common Stock, Louis Birdman(1) 1,855,000 20.61%
$.02 par 4000 Island Blvd., #2701 Shares
value Williams Island, Florida 33150
Common Stock, Bonita Hirsch(2) 1,747,000 19.41%
$.02 par 700 S. Ocean Blvd., #1106 Shares
value Boca Raton, Florida 33432
All Officers
and Directors 6,083,000 67.59%
as a Group Shares
* Percentages are based on 9,000,000 shares of Common Stock
issued and outstanding on November 9, 1999.
(1) Includes 100,000 Shares owned by Mr. Birdman's children. Mr.
Birdman disclaims beneficial ownership of such shares.
(2) Includes 300,000 shares owned by Mrs. Hirsch's grandchildren.
Mrs. Hirsch disclaims beneficial ownership of such shares.
As of November 9, 1999, there are no outstanding options,
warrants or other rights to purchase securities from the Company.
Item 11. Interest of Management and Others in Certain
Transactions.
Employee Leasing
Until May, 1999, the Company leased employees providing
personnel-related services from P.D. Payroll Corp., a Florida
corporation owned by the HB Group ("PD"). PD employed the sales,
administrative and in-house construction personnel relating to
properties converted by the Company. In addition, PD provided
centralized payroll and personnel services, including worker's
compensation administration. The Company reimbursed PD at cost
for the salaries and benefits of such personnel. In the last two
years, the Company paid $374,000 to PD. As stated above, since
May 1999, these employees have been employed by an unrelated
company.
The Company has received administrative support from
Corporate Realty Services, Inc. ("CRS"), 48% of which is owned by
the HB Group. The administrative support services have included
such services as record keeping, accounting, use of office
equipment and management services for each of the properties
converted by the Company. The Company pays CRS a base rate fee of
$229,000 per annum plus expenses, which management believes
represents an arms-length, fair price for such services. CRS
maintains credit with suppliers and is reimbursed for the cost of
supplies incurred in connection with the services provided to the
resort properties. In the last two years, the Company has paid
$300,600 to CRS.
Other Transactions
From time to time, in order to help the Company meet its
cash flow obligations, members of the HB Group and entities
controlled by them have made advances to the Company. These
advances have been unsecured and have carried an interest rate of
12%. During 1998, the Company made advances in the total amount
of $335,000 to one or more entities controlled by the HB Group.
These advances were unsecured, carried interest at 12% and were
repaid in their entirety in January 1999. As of September 30,
1999, the Company owed $679,000 to members of the HB Group and
$814,000 to entities controlled by the HB Group.
Members of the HB Group own 100% of the stock of the general
partner of MIG-9, MIG-10, MIG-20 and MIG-24, each a limited
partnership which is a second mortgage lender to Colony, Cove and
Lakeshore LC, respectively. The HB Group also owns an 18% limited
partnership interest in each of MIG-9, MIG-10, MIG-20 and MIG-24,
which it acquired on the same terms as the other limited
partners. The mortgage loans held by MIG-9 and MIG-10 have been
repaid as of December 31, 1998. In the last two years, the HB
Group received in the aggregate $49,750 in their distributive
share of interest received by MIG-9, MIG-10, MIG-20 and MIG-24.
PART II
Item 1. Market Price of and Dividends on the Common Equity
and Other Shareholder Matters.
The Company's Common Stock is traded on the OTC Bulletin
Board under the symbol "SUNE." The following table sets forth the
range of high and low bids for the Common Stock within the last
eleven quarters as reported by NASDAQ. These quotations reflect
inter-dealer prices that without retail mark-up, mark-down or
commission and may not represent actual transactions.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High Low High Low High Low High Low
Bid Bid Bid Bid Bid Bid Bid Bid
1997 1 5/8 1 1/2 1 5/8 1 1/2 1 5/8 1 1/2 1 5/8 1 1/2
1998 2 1 3 5/8 2 1/2 2 1 4 1/4 1 1/4
1999 2 1/2 1/2 3 1 1/2 2 7/8 1 7/8
As of September 30, 1999, the Company had 431 shareholders
of record.
The Board of Directors has not declared and the Company has
not paid any dividends during the last eleven quarters.
Item 2. Legal Proceedings.
The Company is not a party to, nor is any of its property
the subject of any material pending legal proceeding which is not
routine litigation that is incidental to its business or any
other material legal proceeding.
Item 3. Changes in and Disagreements With Accountants.
The Company made no change in, and had no disagreements
with, its accountants.
Item 4. Recent Sales of Registered Securities.
On October 30, 1998, the Company issued 11,532 shares of
Common Stock to 116 individuals, all of whom were either
employees leased to the Company or consultants or advisors to the
Company and none of whom were members of the HB Group or their
immediate families. These shares were issued for no consideration
and under a one-time bonus plan. All of the recipients received
and executed a contract relating to the bonus plan. This offering
was made in reliance on the exemption from the registration
requirements under the Securities Act of 1933 set forth in Rule
701 to such Act.
On September 24, 1999, the Company issued 122,468 shares of
Common Stock to four individuals in consideration of their
efforts in assisting the Company in identifying potential
opportunities for merger partners in the technology area. All of
these individuals qualified as "accredited investors" within the
meaning of Rule 501(a) of Regulation D and acquired such shares
for investment and not with the view to distribution. This
offering was made in reliance on the exemption from the
registration statements under the Securities Act of 1933 set
forth in Section 4(2) of such Act.
Item 5. Indemnification of Officers and Directors.
Under section 10.1 of the Company's Bylaws, the Company will
indemnify its directors and officers to the full extent permitted
under the Florida Business Corporation Act.
PART F/S
Following are:
1. Consolidated Financial Statements together with Independent
Auditor's Report of SunVest Resorts, Inc. for years ended
December 31, 1998 and 1997.
2. Consolidated Balance Sheets (unaudited) of SunVest Resorts,
Inc. as of September 30, 1999 and Consolidated Statements of
Income and Cash Flow (unaudited) for the nine months ended
September 30, 1998 and the nine months ended September 30,
1999.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
INDEPENDENT AUDITORS' REPORT
AND
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
SUNVEST RESORTS, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
CONTENTS
PAGE
Independent auditors' report 1
Consolidated financial statements:
Consolidated balance sheets 2
Consolidated statements of operations 3
Consolidated statements of shareholders' deficit 4
Consolidated statements of cash flows 5 - 6
Summary of significant accounting policies 7 - 10
Notes to consolidated financial statements 11 - 19
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Sunvest Resorts, Inc. and Subsidiaries
Hollywood, Florida
We have audited the accompanying consolidated balance sheets of
Sunvest Resorts, Inc. and Subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of operations,
shareholders' deficit and cash flows for the years then ended.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Sunvest Resorts, Inc. and Subsidiaries, as of
December 31, 1998 and 1997, and the results of their operations
and their cash flows for the years then ended in conformity with
generally accepted accounting principles.
North Miami Beach, Florida
June 15, 1999
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - DECEMBER 31,1998 AND 1997
ASSETS
1998 1997
________ ________
Cash and equivalents $852,800 $423,400
Deposits held in escrow 166,400 204,000
Mortgage notes receivable 1,096,100 1,947,100
Condominium units held for sale 1,602,200 2,963,700
Condominium units underdevelopment 2,958,200 -
Income producing property 3,747,800 914,400
Land held for future development 1,842,500 28,400
Deferred costs 313,000 455,700
Deferred tax asset 231,500 169,800
Other 154,900 121,900
----------- ----------
$12,965,400 $7,228,400
=========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Notes and mortgages payable $11,298,200 $5,043,700
Accounts payable and accrued liabilities 590,000 466,100
Deposits on sales contracts 61,400 142,800
Due to condominium associations 56,300 63,800
Advances from shareholders 967,700 1,237,800
Due to related parties 718,800 793,600
Deferred tax liability - 79,000
----------- ----------
13,692,400 7,826,800
----------- ----------
Minority interest 114,900 50,100
----------- ----------
Shareholders' deficit:
Common stock, $.02 par, authorized 25,000,000 shares;
issued and outstanding 8,877,532 shares in 1998 and
8,866,032 shares in 1997 177,500 177,300
Capital in excess of par 579,600 568,300
Accumulated deficit (1,599,000) (1,394,100)
------------ ------------
(841,900) (648,500)
------------ ------------
$12,965,400 $7,228,400
============ ============
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED, STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
________ ________
Revenues:
Condominium units $2,109,300 5,897,600
Timeshare interests 488,700 781,700
---------- ----------
2,598,000 6,679,300
---------- ----------
Cost of sales:
Condominium units 1,527,800 3,771,600
Timeshare interests 184,600 195,100
---------- ----------
1,712,100 3,966,700
885,900 2,712,600
---------- ----------
Operating expenses:
Advertising, selling and promotion 203,400 1,060,300
General and administrative 877,100 1,050,100
---------- ----------
1,080,600 2,110,400
(Loss) Income before other income (expenses),
minority interest and provision for
income taxes (benefit) (194,800) 602,200
---------- ----------
Other income (expenses):
Rents 476,200 416,400
Interest income 219,300 341,600
Other 134,600 84,000
Interest expense (746,000) (1,114,300)
Depreciation and amortization (208,400) (224,700)
---------- ----------
(123,300) (567,000)
(Loss) income before minority interest and
provision for income taxes (benefit) (317,900) 35,200
Minority interest in (income)
losses of joint venture (27,700) 99,000
---------- ----------
(Loss) Income before provision for income
taxes (benefit) (345,600) 134,200
---------- ----------
Provision for Income taxes (benefit) (140,700) 39,400
---------- ----------
Net (loss) income $(204,900) $94,800
========== ==========
(Loss) income per share of common stock $ (0.02) $ 0.01
========== ==========
Weighted average common shares
outstanding 8,808,080 8,866,032
========== ==========
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1998 AND 1997
Year ending
Balance, Dec. 31, 1997 Balance
Beginning Net Income Dec. 31, 1997
--------- ------------- -------------
Total $ (743,300) $ 94,800 $(648,500)
Common Stock:
Shares 8,866,032 - 8,866,032
Amount $ 177,300 - 177,300
Capital in
excess of par $ 568,300 - 94,800
Accumulated
Deficit $(1,488,900) 94,800 $(1,394,100)
- ----------------------------
Year ended December 31, 1998:
- ----------------------------
Common stock
issued for
promotional Net Balance,
purposes (Loss) ending
------------ ------ ------------
Total 11,500 $(204,900) $ (841,900)
Common Stock
Shares 11,500 - 8,877,532
Amount 200 - $ 177,500
Capital in
excess of par 11,300 - $ 579,600
Accumulated
Deficit $(204,900) $(1,599,000
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
---------- ----------
Cash flows from operating activities:
Sources of cash:
Customers $ 2,684,700 $ 3,837,700
Proceeds from sale of mortgage
notes receivable 783,700 3,609,400
Interest and dividends 206,700 332,900
Other 597,800 534,000
---------- ---------
4,272,900 8,314,000
========== =========
Uses of Cash:
Condominium units 2,878,900 758,500
Suppliers and employees 1,424,400 1,797,200
Interest 701,600 1,123,800
---------- ---------
5,004,900 3,679,600
---------- ---------
Cash (used-in) provided by
operating activities (732,000) 4,634,500
========== =========
Cash flows (used-in) inverting activities:
Uses of cash:
Payments for:
Related parties 74,800 560,000
Shareholders 270,100 450,800
Income producing property 2,802,600 28,200
Land held for future development 1,814,100 -
Other assets 168,600 -
---------- ---------
Cash (used-in) Investing activities (5,130,200) (1,039,000)
========== =========
Cash flows from financing activities:
Sources of cash:
Proceeds from:
Mortgages and notes 9,511,100 5,909,300
Minority interests 37,100 57,100
---------- ---------
9,548,200 5,966,400
Uses of cash:
Payment of:
Mortgages and notes 3,256,600 5,909,300
---------- ---------
Cash provided by (used-in)
financing activities 6,291,600 (3,269,400)
========== =========
Increase in cash and equivalents 429,400 326,100
Cash and equivalents, beginning 423,400 97,300
---------- ---------
Cash and equivalents, ending $ 852,800 $423,400
========== =========
Read the accompanying summary of significant accounting policies
and motes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31,1998 AND 1997
1998 1997
---------- ---------
Reconcilliation of net (loss) income
to cash (used-in) provided by
Operating activities:
Net (loss) income $ (204,900) 94,800
---------- ---------
Adjustments to reconcile net income
(loss) to cash provided by (used-in)
operating activities:
Depreciation and amortization 208,400 294,700
Deferred income taxes (140,700) 39,400
Services paid in form of
common stock 11,500 -
Provision for losses on loans
Receivable 15,000 211,200
Minority interest in joint ventures'
Income (loss) 27,700 (99,000)
Changes in assets and liabilities:
Deposits held In escrow 37,600 (19,700)
Mortgages receivable 836,000 866,800
Condominium units (1,596,700) 3,297,300
Prepaid expenses and other (33,000) 170,900
Accounts payable and accrued
Liabilities 196,000 28,600
Due to condominium association (7,500) (91,900)
Deposits on sales contracts (81,400) (158,600)
---------- ---------
Total adjustments (527,100) 4,539,700
---------- ---------
Cash (used-in) provided by
operating activities $(732,000) $4,634,500
========== =========
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this financial statement.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Basis of accounting:
- -------------------
SunVest Resorts, Inc. and Subsidiaries (the Company) prepares its
financial statements in accordance with generally accepted
accounting principles. This basis of accounting involves the
application of accrual accounting; consequently, revenues and
gains are recognized when earned, and expenses and losses are
recognized when incurred. Financial statement items are recorded
at historical cost and may not necessarily represent current
values.
Principles of consolidation:
- ---------------------------
The consolidated financial statements include the accounts of
SunVest Resorts, Inc. and all subsidiaries. All significant
inter-company balances and transactions have been eliminated in
consolidation.
Management estimates:
- --------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Certain amounts included in the financial statements are
estimated based on currently available information and
management's judgment as to the outcome of future conditions and
circumstances. Changes in the status of certain facts or
circumstances could result in material changes to the estimates
used in the preparation of the financial statements and actual
results could differ from those estimates. Every effort is made
to ensure the integrity of such estimates.
Fair value of financial instruments:
- -----------------------------------
The carrying amounts of cash and equivalents, receivables
(mortgage notes, trade, other and related parties), accounts
payable, accrued liabilities and due to related parties
approximate their fair values because of the short duration of
these instruments.
Impairment of long-lived assets:
- -------------------------------
Long-lived assets and certain identifiable intangibles held and
used by the Company are reviewed for possible impairment whenever
events or circumstances indicate the carrying amount of an asset
may not be recoverable.
Revenue recognition:
- -------------------
Sales of resort condominium units and timeshare interest units
generally are accounted for under the full accrual method, after
certain down payments and other continuing investment tests are
met. Gain (revenue less related costs) is not recognized until
the collectibility of the sales price is reasonably assured and
the process is substantially complete. Revenues are recognized
after the requisite rescission period has expired and the Company
has collected total receipts of a pre-determined minimum but not
less than 10% of the sales price. The agreement for sale
provides for a down payment and a note collateralized by the
condominium unit or timeshare interest, payable in monthly
installments including interest over periods up to 15 years.
Profit is recognized on estimates of the average gross profit per
unit within each resort property after the allocation of
acquisition and development costs based upon average cost per
unit. Estimated profits are deferred until sales meet the
requirements for revenue recognition. Certain sales with
receipts less than the minimum requisite of 10% are accounted for
using the installment method, under which, gain is recognized as
principal payments on the related notes are collected.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Revenue recognition (continued):
- -------------------------------
The sales price, less provisions for loan losses and
cancellations (net of retained payments), is recorded as revenue
and the estimated average cost of the resort condominium units
and timeshare interest is charged against income in the year of
revenue recognition. Estimated profits may be deferred until the
sale meets the requirements for sales of real estate. All
payments received prior to revenue recognition are accounted for
as deposits on sales contracts. Installment notes receivable
(resulting from sales) are deemed cancelled when a delinquency is
greater than ninety days (90). If the cancellation occurs in the
year of sale, revenue on those sales are reversed. If the
cancellation occurs subsequent to a year end, the cancellation
will be charged to the allowance for cancellation.
Cash and equivalents:
- --------------------
The Company considers all highly liquid investments purchased
with original maturities of three months or less to be cash
equivalents.
Real property:
- -------------
Condominium units held for sale and other real property are
stated at the lower of cost or market. Costs include the
original acquisition, carrying costs capitalized during the
development period and the cost of improvements.
Costs incurred for the timeshare condominiums are capitalized and
include costs of acquisition, renovation and carrying costs.
Income producing property retained by the Company is stated at
cost, less accumulated depreciation. Depreciation is computed on
the straight-line method over estimated useful lives of the
assets. Estimated useful lives are as follows:
Estimated
Useful Lives
(in years)
---------
Land improvements 15
Buildings and improvements 30
Furniture, fixtures and equipment 5 - 10
The cost of the land, buildings and equipment was allocated from
the original purchase price for that portion that is being
retained by the Company.
Repairs and maintenance are charged to operations as incurred,
and expenditures for significant betterments and renewals are
capitalized. The cost of property and equipment retired or sold,
together with the related accumulated depreciation, are removed
from the appropriate asset and depreciation accounts, and the
resulting gain or loss is included in operations.
Land held for future development:
- --------------------------------
Land held for future development consists of undeveloped and
partially developed land and is carried at the lower of cost or
net realizable value.
Capitalized costs:
- -----------------
Interest and real estate taxes incurred and applicable to
property being developed are capitalized to the property. These
amounts are stated at cost not in excess of market value.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Amortization:
- ------------
Loan and organizational costs are being amortized using the
straight-line method over a period not exceeding five (5) years.
Deferred condominium conversion costs are amortized based upon
the sale of condominium units and deferred management agreement
costs are amortized over the terms of the agreements, not
exceeding 15 years.
Income taxes:
- ------------
The Company files a consolidated tax return and adheres to the
asset/liability approach for financial accounting and reporting
for income taxes. Income tax expense is provided for the tax
effects of transactions reported in the financial statements and
consists of taxes currently due plus deferred taxes related
primarily to differences between the bases of the balance sheet
for financial and income tax reporting. The deferred tax assets
and liabilities represent the future tax consequences of those
differences, which will either be taxable or deductible when they
are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable
income and tax credits that are available to offset future income
taxes. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the period that includes the
enactment date. A valuation allowance is provided on deferred
tax assets when it is more likely than not that the asset will
not be realized.
Per share amounts:
- -----------------
Income (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares outstanding
throughout the year.
Stock based compensation:
- ------------------------
The Company applies the intrinsic value method for accounting for
stock based compensation described by Accounting Principles Bound
Opinion No. 25, "Accounting for Stock Issued to Employees." Had
the Company applied the fair value method described by the
Statement of Financial Accounting Standards Board (SFAS) No. 123,
"Accounting for Stock-Based Compensation," it would report the
effect of compensation expense for stock based compensation as
pro-forma effects on income and earnings per share, if material.
Accounting for transfer of financial asset:
- ------------------------------------------
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishments of liabilities. The standard provides for
distinguishing transfers of financial assets that are sales from
transfers that are collateralized borrowings. The standards
would require that servicing assets be measured by allocating the
carrying amount between the assets sold and retained interests
based on their relative fair value. Implementation of the new
standard does not have a material impact on the consolidated
financial statements, as the book values of receivables
approximate fair value.
Accounting Pronouncements:
- -------------------------
The Company adapted Statement of Financial Accounting Standards
Board (SFAS) No. 130, "Reporting Comprehensive Income," issued in
June 1997. Comprehensive income includes net income and all
changes in an enterprise's other comprehensive income including,
among other things, foreign currency translation adjustments and
unrealized gains and losses on certain investments in debt equity
securities. The Company also adapted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." This
Statement establishes standards for reporting information about
operating segments in annual financial statements, and requires
that an enterprise report selected information about operating
segments in interim reports issued to shareholders. The Company
does not expect the adoption of these statements to have a
material impact on its financial condition or results of
operations.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Accounting Pronouncements (continued):
- -------------------------------------
The American Institute of Certified Public Accountants (AICPA)
issued Statement of Position 98-5 (SOP), "Reporting on the Costs
of Start-Up Activities," which requires that costs incurred for
start-up activities, be expensed as incurred. This SOP, is
effective in the first quarter of 1999 and is not expected to
have a material impact on the consolidated financial statements.
The Company adopted SOP 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. The
SOP defines the types of computer software project costs that may
be capitalized. All other costs must be expensed in the period
incurred. For costs to be capitalized, the computer software
project must be intended to create a new system or add
identifiable functionality to an existing system. The SOP did
not have an impact on the Company's consolidated financial
statements.
Reclassification:
----------------
In order to facilitate the comparison of financial data,
certain amounts reported in the prior periods have been
reclassified to conform with the current year's reporting format.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1. Organization, business and strategic planning:
---------------------------------------------
SunVest Resorts, Inc. (SunVest Delaware), formerly TelShare
International, Inc. was incorporated in the State of Delaware on
March 5, 1985. Prior to August 2, 1996, SunVest Delaware was a
shell corporation with no active business operations. On July
16, 1996, SunVest Delaware's shareholders approved a proposal to
acquire two Florida corporations, Colony Plaza Development, Inc.
(Colony) and Cove Development, Inc. (Cove), in exchange for
shares of SunVest Delaware's common stock. The shareholders also
approved the change in corporate name and authorized
capitalization to consist of 25,000,000 shares of common stock,
$.02 par value per share.
SunVest Resorts, Inc. (the Company), a Florida corporation was
organized on August 2, 1996 under the laws of the State of
Florida. SunVest and subsidiaries (the Company) purchases and
converts hotel properties in or near tourist destinations and
resort areas (resort properties) to condominiums and develops,
markets, operates and finances whole ownership interests
(condominiums) and vacation ownership interests (timeshares) in
condominiums in Company-owned resort properties. Condominiums
are generally purchased as a second home or vacation getaway;
whereas, timeshare units provide buyers with the exclusive right
to use a condominium unit in perpetuity, typically for a one-week
period of time each year.
SunVest Delaware issued 8,000,000 shares of its common stock,
$.02 par value in exchange for all the outstanding common stock
of Colony and Cove. On August 6, 1996, a wholly owned Florida
subsidiary also named SunVest Resorts, Inc. was created and a
downstream merger was effected in order to change the Company's
corporate domicile to Florida. The acquisitions have been
accounted for in a manner similar to the pooling of interests
method in accordance with Accounting Principles Board Opinion No.
16, Accounting For Business Combinations, since it represents an
exchange of entities under common control. Accordingly, the
Company's consolidated financial statements include the accounts
of the companies transferred, all at historical costs. No inter-
company transactions existed between the companies during the
periods presented and no adjustments were necessary to conform
the accounting policies of the companies. Costs associated with
consummating the transaction amounted to approximately $45,000
had been charged to operations in 1996.
The Company's subsidiaries and percentage owned are as follows:
Percentage State Date
Company Owned Organized Organization
Colony Plaza
Development, Inc. 100% Florida April 11, 1995
Cove Development, Inc. 100% Florida July 20, 1995
Holiday Vacation
Ventures, G.P. 66% Florida April 26, 1996
Cove Vacation Ventures, G.P. 100% Florida April 26, 1996
The Company presently owns two resort properties, Colony Plaza
Resort Condominium in Ocoee, Florida (302 units) and Pirates Cove
Resort Condominium in Daytona Beach Shores, Florida (174 units).
Each of the resort properties has been converted from a hotel
into a resort condominium in which the Company sells condominium
units. Timeshare units are not sold at the Colony Plaza Resort.
The Company and its assignees maintain an easement to the
condominium property to facilitate hotel operations.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
1. Organization, business and strategic planning (continued):
---------------------------------------------------------
In June 1996, Colony sold ninety-four (94) whole interest
condominium units to Holiday Vacation Ventures (HVV), a general
partnership in which Colony had a 50% interest and subsequently
increased to 66% (related party). HVV has since renovated and
combined twenty-five (25) of the condominium units into thirteen
(13) condominium units for sale as six hundred seventy-six (676)
timeshare units and is actively marketing them. Through 1998, HVV
sold back 47 of the remaining sixty-nine (69) condominium units
to Colony leaving a balance of 22 units which may be sold as
whole interests or renovated in the future into units for sale as
timeshare units. The Company acquired Lakeshore Club Villas, a
500-unit 110-acre rental complex plus 420 acres of undeveloped
adjoining land. The plan is to convert the units and add 200 new
units. The project will be marketed as an active adult
community. The undeveloped land has a development capacity of
2,000 additional units and a golf course.
Certain portions of the resort properties have been retained by
the Company and are not being conveyed to the buyers of either
whole interests or timeshare units nor to the condominium
associations. Retained portions consist of the resort property's
recreational and commonly used facilities such as pools, parking
areas, lobbies and restaurants, which are contiguous to the
condominium units. Owners and their guests will have rights of
access and use of such facilities subject to certain terms and
conditions. The condominium associations will be responsible for
all costs associated with the maintenance and operations of such
facilities. The Company also acquired two parcels of land
noncontiguous to the Pirates Cove Resort Condominium, which have
been recorded as land held for future development.
The costs of the property less amounts allocated to the various
components of the property acquired are based in part upon
appraisals by independent property appraisers at the time of
purchase.
2. Concentration of credit risk:
----------------------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and
equivalents, mortgage notes receivable and amounts due from
related parties. During the year, the Company had deposits with
financial institutions which exceeded federally insured limits
covered by the Federal Deposit Insurance Corporation and other
agencies. Management regularly monitors their balances and
attempts to keep this potential risk to a minimum by maintaining
their accounts with financial institutions that they believe are
of good quality.
The Company may have a concentration of credit risk with respect
to mortgage notes receivable and amounts due from related
parties. The Company has a large number of geographically
dispersed customers on which it performs ongoing credit
evaluations and has not experienced significant losses. The
Company maintains an allowance for loan losses based upon the
expected collectibility of all receivables. Therefore, no
additional credit risk beyond amounts provided for collection
losses is believed inherent in the Company's mortgage notes and
accounts receivable and to date have been within management's
expectations.
3. Mortgage notes receivable:
-------------------------
The Company provides mortgage financing to its customers in
connection with the sale of condominium and timeshare units.
Such mortgages, which are collateralized by the unit or interest
sold, bear interest at rates ranging from 9.50% to 18% a year and
are payable in monthly installments over periods ranging from 2
to 15 years. Substantially all mortgage notes receivable are
collateralized to the Company's borrowings of approximately
$1,128,500. The Company reflects its mortgage notes receivable
less an allowance for loan losses, discounts and deferred profit
on installment sales.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
3. Mortgage notes receivable (continued):
-------------------------------------
Subsequent to December 31, 1998, the Company sold, without
recourse, mortgage notes receivable for approximately $225,600
after giving effect to a discount of $11,900. The discount on
the sale of the mortgages will be charged to the allowances for
loan losses and discount. The Company utilized the proceeds from
the sale of the mortgages to pay down financing notes of $190,000
and the balance ($35,600) was utilized as working capital.
Collections of mortgage notes receivable subsequent to December
31, 1998 after giving effect to the subsequent sale of mortgage
notes are as follows:
Years Ending
December 31, Amount
------------ ------
1999 $ 382,400
2000 163,300
2001 186,300
2002 197,100
2003 162,000
Thereafter 104,000
-------
1,195,100
Less allowance for loan losses and discount 99,000
---------
$ 1,096,100
=========
4. Details of financial statement components:
-----------------------------------------
Condominium units held for sale:
1998
--------------------------------
Condominium Timeshare
Total Units Units
----- ----- -----
Land $ 83,900 $ 48,000 $ 35,900
Building, improvements,
furniture and equipment 762,700 416,700 346,000
Development costs 755,600 472,300 283,300
--------- --------- ---------
$1,602,200 $ 937,000 $ 665,200
========= ========= =========
1997
--------------------------------
Condominium Timeshare
Total Units Units
----- ----- -----
Land $ 104,800 $ 55,100 $ 49,700
Building, improvements,
furniture and equipment 1,264,100 785,100 479,000
Development costs 1,594,800 906,300 688,500
--------- --------- ---------
$2,963,700 $1,746,500 $1,217,200
========= ========= =========
All condominium units held for sale are collateralized to
mortgage notes payable.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
4. Details of financial statement components (continued):
-----------------------------------------------------
Condominium units under development:
1998
----
Land $ 231,400
Building, improvements,
furniture and equipment 2,372,200
Development costs 354,200
----------
$ 2,958,200
==========
Income producing property:
1998 1997
------ ------
Land $ 578,500 $ 347,100
Building 2,684,200 313,700
Land improvements 64,700 64,700
Building improvements 461,100 183,200
Furniture and equipment 43,700 43,700
------------ ----------
3,832,200 952,400
Less accumulated depreciation 84,400 38,000
------------ ----------
$3,747,800 $ 914,400
============ ==========
All income producing property is collateralized to mortgage notes
payable.
Deferred costs:
Loan costs $ 458,000 $ 483,800
Conversion costs 40,600 40,600
Leasing costs 52,800 121,900
Organizational costs 900 900
------------ ----------
552,300 647,200
------------ ----------
Less accumulated amortization 239,300 191,500
------------ ----------
$ 313,000 $ 455,700
============ ==========
Other:
Interest, mortgages receivable $ 31,600 $ -
Other receivables 93,100 121,600
Prepaids and other 30,200 300
------------ ----------
$ 154,900 $ 121,900
============ ==========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable: 1998 1997
--------------------------- ---- ----
Mortgage note, bank, interest at 2%
above the bank's prime lending rate
(8.5%) payable monthly, revolving
principal balance, matures June 3, 2000,
collateralized by real property, and
assignment of Cove's rents and leases
and guaranteed by the Company's officers
and their spouses. $ 317,200 $ 1,258,000
Second mortgage note, related party,
controlled by the Company's principal
shareholders, interest at 18% until
May 1, 1998, 12% after that date
collateralized by real property. 200,000 200,000
Financing note, bank, under a $2,000,000
credit line to an affiliate, collateralized
by certain mortgages receivable of the
Company and affiliates. Interest at the
bank's prime rate (8.5%) plus 1%; principal
is payable from collections of the Company's
mortgages serviced by the bank at 80% of
the reduction of such mortgages, maturing
on February 1, 1998. Loan was paid in
January, 1998 from proceeds from the
sale of certain mortgages receivable. - 178,800
Mortgage note, bank, interest at 2% above
the bank's prime lending note (8.5%)
payable monthly, maturing September 6, 1998,
collateralized by real property at Colony
and all leases affecting Colony and
guaranteed by the Company's officers
and their spouses. - 12,000
Financing note, bank, under a $1,000,000
revolving loan. Outstanding balance at
December 31, 1998 aggregates $204,000;
interest at 1% above the bank's prime
rate (8.5%); collateralized by certain
mortgages receivable; principal is
payable from collections of specific
mortgages serviced by the bank at 80%
of the reduction of such mortgages;
paid in full January 4, 1999, from
proceeds derived from sales of mortgages. 204,000 650,100
Financing note, bank, credit facility to
the Company and certain affiliates,
maturing June, 2003, interest at 8.75%
payable monthly; joint and several
liability with affiliates and
collateralized by the Company's income
producing property
and property of certain affiliates 621,600 631,500
Construction loan, bank, under a
$6,900,000 credit facility, interest
at 1.5% above bank's prime rate (7.75%)
payable monthly, matures September, 2001,
collateralized by Lakeshore property
and guarantees by the Company's officers
and their spouses. 4,800,000 -
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable (continued): 1998 1997
--------------------------------------- ---- ----
Mortgage note, interest at 8% starting
April, 1999, payable monthly, thereafter
principle and interest of $27,300 starting
May, 2004. Collateralize by Lakeshore
unimproved land. 1,350,000 -
Second mortgage note, related party,
interest at 18%, payable monthly.
Collateralized by real property. 2,500,000 -
Credit facility, financial institution
providing $2,500,000 to HVV to acquire
certain condominium units from Colony;
$715,000 revolving loan to convert and
renovate condominium units for sale as
timeshare units and up to $7,500,000
for a revolving credit loan to finance
receivables generated by the sale of
timeshare units. Outstanding balances
at December 31, 1998 and 1997 amount to
$835,400 and $1,641,400, respectively
under the acquisition loan $470,000
and $471,900, respectively under the
receivable loan. Interest at the greater
of 10.75% a year or the prime rate (8.5%)
plus 3%. Interest payable monthly, for
the revolving credit loan portion is
based on collections of the specific
mortgages generated through the sale of
timeshare units. The outstanding principal
on the acquisition and renovation portions
of the facility are due and payable based
upon the closing of sales of timeshare
units with a minimum of $1,675 for each
timeshare unit sold with the entire
outstanding principal on the acquisition
and renovation loans due and payable by
the earlier of the date that 80% of the
timeshare units are sold or December 31,
The final maturity date of the
revolving credit loan is June 30, 2001. 1,305,400 2,113,300
--------- ---------
$11,298,200 $5,043,700
=========== ==========
All outstanding mortgage notes and the acquisition portion
of the credit facility are collateralized by real estate. Lines
of credit and receivable loans are collateralized by specific
mortgages receivable collateralized by real estate.
Substantially all borrowings are guaranteed by certain principal
shareholders and officers of the Company and their spouses.
Certain principals of Colony's venture partner also guarantee the
credit facility loan.
During 1998 and 1997, the Company incurred interest costs of
$745,000 and $1,114,300, respectively, of which $84,300 in 1998
was capitalized. No interest was capitalized in 1997.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable (continued):
---------------------------------------
Principal payments due on the notes and mortgages payable for the
five years subsequent to December 31, 1998 after giving effect to
the use of proceeds from the sale of certain mortgaged
receivables disclosed in Note 4 are as follows:
Years Ending
December 31, Amount
------------ ------
1999 $ 1,643,500
2000 4,629,700
2001 2,126,500
2002 28,900
2003 519,600
Thereafter 1,350,000
-----------
$11,298,200
===========
6. Income taxes:
------------
Components of the net deferred tax asset as reflected on the
Company's consolidated balance sheets are as follows:
1998 1997
---- ----
Deferred tax assets:
Loan losses $ 168,000 $ 52,900
Net operating loss
carryforwards 343,700 360,900
-------- --------
511,700 413,800
Less valuation allowance 280,200 244,000
-------- --------
Deferred tax asset 231,500 169,800
-------- --------
Deferred tax liabilities:
Other assets - 73,400
Other - 5,600
Deferred tax liability - 79,000
-------- --------
Deferred taxes, Net $ 231,500 $ 90,800
-------- --------
The components of the provision for income tax expense (benefit)
for the years ended December 31, 1998 and 1997 are as follows:
Deferred:
Federal $ (122,600) $ 35,700
State ( 18,100) 3,700
--------- ----------
$ (140,700) $ 39,400
========= ==========
Income taxes (benefit) for the years ended December 31, 1998 and
1997 differ from that which would result from applying statutory
tax rates primarily due to certain operating expenses which are
not tax deductible. The provision for income taxes is reconciled
to the amount obtained by applying the federal statutory income
tax rate to income before provision for income taxes as follows:
Provision at statutory rate $ (121,000) $ 47,000
State taxes, net of
federal benefits ( 12,000) 4,800
Graduated tax rates and others ( 7,700) ( 12,400)
--------- ----------
$ (140,700) $ 39,400
========= ==========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
6. Income taxes (continued):
------------------------
At December 31, 1998, the Company had available federal net
operating loss carryforwards of approximately $1,005,000 which
will generally expire between 2001 and 2012.
The net operating loss carryforward of SunVest Resorts, Inc,
formerly Telshare International, Inc, of approximately $696,800
expires in varying years to 2009, which prior management had
provided a valuation allowance ($280,200) equal to any benefits
since it is more likely than not that any benefits may not be
realized.
If available evidence suggests that it is more likely than not
that some portion or all of deferred tax assets will not be
realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not to
be realized. Management has established a valuation allowance
equal to net deferred tax assets on the net operating loss
carryforward. Future changes in such a valuation would be
included in the provision for deferred income taxes in the period
of change.
7. Transactions with related parties, commitments and
contingencies:
--------------------------------------------------
In 1997, the Company made net advances amounting to approximately
$47,000 to companies owned and controlled by the Company's
principal shareholders and officers ("affiliated companies").
During 1998 the Company received net advances of $260,200 and
made net advances of approximately $335,000. Advances made and
received were unsecured. Interest of 12% per annum was charged
on inter-company advances. Interest incurred by the Company on
advances from affiliated companies amounted to approximately
$135,800 and $144,500 for the years ended December 31, 1998 and
1997, respectively.
The Company incurred interest expense of approximately
$112,500 and $217,500 during 1998 and 1997, respectively, on
second mortgages held by limited partnerships in which the
general partner is an affiliated company. The outstanding
balances due under these second mortgages aggregated $2,500,000
and $200,000 at December 31, 1998 and 1997, respectively.
The Company received unsecured net advances from shareholders
aggregating $1,237,800 through 1997. The outstanding balance of
such advances approximated $967,700 at December 31, 1998.
Interest of 12% per annum is charged on shareholder advances and
during 1998 and 1997 the Company incurred interest expense of
approximately $127,600 and $175,700, respectively, on such
advances.
In 1998, general and administrative expenses include
approximately $229,000 overhead charged by an affiliated company.
The affiliated company provided, among other services, the
overall management, purchasing, accounting and record keeping
functions for the Company, as well as its corporate office
premises. During 1998 and 1997, centralized payroll and
personnel services were provided to Colony Cove and Lakeshore by
another affiliated company. Overhead charges are determined by
management.
A summary of transactions and/or balances with related parties is
as follows:
1998 1997
Advances from shareholders $ 967,700 $1,237,800
Due to related parties 718,800 793,600
Second mortgage payable - 200,000
Interest expense 423,400 537,700
General, administrative and
marketing 322,000 322,000
--------- ---------
$2,338,900 $3,091,100
========= =========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
7. Transactions with related parties, commitments and
contingencies (continued):
--------------------------------------------------
In the opinion of management, the realization and payment of
related party amounts will occur in the normal course of
business.
Colony and Cove have each entered fifteen-year lease agreements
with unrelated parties for management ("management companies") of
their hotel and restaurant operations. The management companies
operate rental programs, which allow participating owners of
whole interests to rent their condominium units to hotel guests.
Additionally, the Company's unsold condominium and timeshare
units are rented to transients by the management companies on a
rotational basis. The lease agreements for Colony and Cove
extend through February, 2011 and September 2010, respectively.
The lease agreements provide that the Company will receive three
percent of the management companies' revenue from hotel
operations and five percent of restaurant revenues (as defined).
Additionally, the management companies remit to the Company a
percentage of the gross rental revenues earned on Company owned
units (Colony-45% and Cove-50%). Colony has waived the three
percent rent through February 28, 1997.
Colony and Cove have recorded the Declarations of Condominium
("Declaration") with respect to the 302 units and 174 units
converted to condominium effective March 4, 1996 and February 7,
1996, respectively. Cove guaranteed the condominium
associations' estimated operating budgets through February 4,
1997. Thereafter, Cove paid its prorate share of the condominium
associations' estimated operating budget on its unsold units in
the same manner as other unit owners. Colony continued to
guarantee its association's budget through December 31, 1997
("the guarantee periods"). During the guarantee periods, Colony
and Cove were not obligated to pay regular monthly assessments on
their unsold units; instead they pay common expenses incurred in
excess of maintenance assessments billed to individual unit
owners ("shortfall"). Colony, at its option, elected to extend
its guarantee period beyond December 31, 1997. The associations'
shortfalls, together with maintenance assessments accrued on
HVV's unsold timeshare units, aggregating approximately $714,000,
have been capitalized as a cost of condominium units held for
sale. The Company estimates that no additional shortfall will be
funded by Colony and that rental income will offset any
additional maintenance assessments incurred by HVV.
At December 31, 1998, property improvement and development costs
include amounts accrued for developer funded converter reserves
($165,400), capitalized interest and taxes during the development
stage ($552,300) and the condominium associations' shortfalls
($681,000). The Company has received approximately $22,500 of
deposits on sales contracts for five (5) of the whole interest
units representing an aggregate sales price of approximately
$170,000. Additionally, HVV has received approximately $38,900
of deposits on 48 timeshare units of which 21 are non-cancelable
sales contracts representing an aggregate sales price of
approximately $95,000.
The year 2000 issue is the result of computer programs being
written using two (2) digits rather than four (4) digits to
define the year. Any of the Company's computer programs that
have date-sensitive software may recognize a date using "00" as
the year 1900 rather than 2000. This problem could force
computers to either shut down or provide incorrect data or
information. The Company utilizes generic software programs
developed, maintained and upgraded by independent computer
software providers. In response to the year 2000 issue,
management is relying on the providers of these software programs
will resolve the date sensitive issue so that all critical
systems will be in compliance prior to the year 2000. There can
be no assurance that the providers of the software or the
manufacturers of chips will resolve the issue.
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET-SEPTEMBER 30, 1999
ASSETS
Cash and equivalents $ 305,400
Deposit held in escrow 216,000
Mortgage notes receivable 1,398,100
Project costs 7,179,000
income producing property 3,785,300
Land held for future development 1,842,400
Deferred cost 140,400
Deferred income taxes 168,400
Other 65,000
---------
$15,100,000
==========
LIABILITIES AND SHAREHOLDERS DEFICIT
Liabilities
Notes and mortgages payable personally
guaranteed by shareholders $12,790,200
Accounts payable and accrued liabilities 1,462,300
Deposits on sales contracts 49,700
Due to condominium associations 49,100
Advances from shareholders 679,000
Due to related parties 769,100
----------
15,799,400
----------
Minority interest 114,900
----------
Shareholders equity (deficiency)
Common stock,$.02 par, authorized
25,000,000 shares; issued and,
outstanding 8,877,532 shares 177,500
Capital in excess of par 579,600
Accumulated deficit (1,571,400)
----------
(814,300)
----------
$15,100,000
==========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30,1999
Revenue $1,546,000
---------
1,546,000
---------
Cost of sales: 1,143,000
---------
1,143,000
---------
403,000
---------
Operating expenses:
Advertising, selling and promotion 245,800
General and administrative 857,100
---------
1,102,900
---------
Loss before other income(expenses)
and income taxes (699,900)
---------
Other income(expenses)
Rents 795,600
Interest income 77,600
Other 88,600
Interest expense (216,300)
---------
745,500
---------
Income before and income taxes 45,600
Minority Interest 0
---------
Income before income tax expense 45,600
Income tax expense (18,000)
---------
Net income 27,600
Accumulated deficit, opening (1,599,000)
---------
Accumulated deficit, ending ($1,571,400)
=========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS-SEPTEMBER 30,1999 & 1998
ASSETS
1999 1998
---- ----
Cash and equivalents $305,400 $133,000
Deposit held in escrow 216,000 191,500
Mortgage notes receivable 1,398,100 2,737,100
Project costs 7,179,000 1,893,600
income producing property 3,785,300 912,500
Land held for future development 1,842,400 28,400
Deferred cost 140,400 446,400
Deferred income taxes 186,400 168,900
Other 65,000 110,300
--------- ---------
$15,118,000 $6,421,300
========== =========
LIABILITIES AND SHAREHOLDERS DEFICIT
Liabilities
Notes and mortgages payable
personally guaranteed by
shareholders $12,790,200 $4,744,000
Accounts payable and accrued
liabilities 1,462,300 560,100
Deposits on sales contracts 49,700 162,800
Due to condominium associations 49,100 55,400
Advances from shareholders 679,000 843,600
Due to related parties 813,500 760,200
---------- ---------
15,843,400 7,126,100
---------- ---------
Minority interest 104,900 99,800
---------- ---------
Shareholders deficit
Common stock, $.02 par,
authorized 25,000,000 shares;
issued and outstanding
8.877,532 shares in 1998,
9,866,032 in 1997 177,500 177,500
Capital in excess of par 579,600 579,600
Accumulated deficit (1,587,800) (1,561,700)
--------- ---------
(830,700) (804,600)
--------- ---------
$15,118,000 $5,421,300
========== =========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 & 1998
1999 1998
---- ----
Revenue $1,546,000 $2,182,300
Cost of sales: 1,143,000 1,527,600
--------- ---------
Gross Profit 403,000 654,700
--------- ---------
Operating expenses:
Advertising, selling and
promotion 245,800 154,800
General and administrative 857,100 728,000
--------- ---------
1,102,900 892,800
--------- ---------
Loss before other income(expenses)
and income taxes (699,900) (238,100)
--------- ---------
Other income(expenses)
Rents 795,600 333,300
Interest income 77,600 65,100
Other 88,600 78,900
Interest expense (216,300) (503,400)
--------- ---------
745,500 (26,100)
--------- ---------
(Loss)Income before minority
interest and income taxes 45,600 (264,200)
Minority Interest 16,400 15,100
--------- ---------
Income before income tax
expense (benefit) 29,200 (279,300)
Income tax expense (benefit) (18,000) (111,700)
--------- ---------
Net (loss) income 11,200 (167,500)
========= =========
Accumulated deficit, opening (1,599,000) (1,394,100)
--------- ---------
Accumulated deficit, ending ($1,587,800) ($1,561,700)
========= =========
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30,1999 & 1998
1999 1998
---- ----
CASH FLOWS FROM OPERATION ACTIVITIES
Net income (loss) $ 11,200 $ (167,600)
ADJUSTMENTS TO RECONCILE NET
INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
(Increase) decrease in assets:
deposits 49,600 (12,500)
Mortgage notes receivable 302,000 790,000
Project costs,
property and land 2,656,100 (1,272,000)
Deferred assets (217,800) 68,400
Other (79,900) (72,800)
cash used 2,710,000 (498,900)
Increase (decrease) in liabilities:
Notes and mortgages payable 1,492,000 (299,700)
Accounts payable 872,300 94,000
Deposits (11,700) 20,000
Due to condominium associations (7,200) (8,400)
--------- ---------
Advances (194,400) (290,400)
cash provided 2,151,400 (621,700)
--------- ---------
Cash (used) provided by
operating activities (547,400) (290,400)
--------- ---------
NET INCREASE (DECREASE) IN CASH (547,400) (290,400)
--------- ---------
CASH - BEGINNING 852,800 423,400
--------- ---------
CASH - ENDING $305,400 $133,000
========= =========
PART III
Item 1. Index to Exhibits Page
2.1 Articles of Incorporation of
Registrant, dated August 6, 1996. 42
2.2 Bylaws of Registrant 47
6(c).1 Sample of Stock Agreement relating to the
October 30, 1998, bonus plan offering. 71
10.1 Consent of Hixson, Marin, Powell &
DeSanctis, P.A., CPA's. 74
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.
SUNVEST RESORTS, INC.
(Registrant)
November 22, 1999 By: /S/ Herbert Hirsch
__________________________________
Herbert Hirsch
President and Chief
Executive Officer
________________________________________________________________
EXHIBIT 2.1 ARTICLES OF INCORPORATION OF REGISTRANT, DATED
AUGUST 6, 1996
________________________________________________________________
ARTICLES OF INCORPORATION
OF
SUNVEST RESORTS, INC.
The undersigned, for the purposes of forming a corporation
for profit under the laws of Florida, adopts the following
Articles of Incorporation:
ARTICLE 1
NAME AND ADDRESS
Section 1.1 Name. The name of the Corporation is SunVest
Resorts, Inc.
Section 1.2 Address of Principal Office. The address of
the principal office of the corporation is 307 S. 21st Avenue,
Hollywood, Florida 33020.
Section 1.3 Mailing Address. The mailing address of the
corporation is Korn & Korn, P.C., P. O. Box 8020, Hallandale,
Florida 33008.
ARTICLE 2
DURATION
Section 2.1 Duration. This corporation shall exist
perpetually. Corporate existence shall commence on the date these
Articles are executed, except that if they are not filed by the
Department of State of Florida within five business days after
they are executed, corporate existence shall commence upon filing
by the Department of State.
ARTICLE 3
PURPOSES
Section 3.1 Purposes. this corporation is organized for
the purposes of transacting any or all lawful business permitted
under the laws of the United States and of the State of Florida.
ARTICLE 4
CAPTIAL
Section 4.1 Authorized Capital. The maximum number of
shares of stock which this corporation is authorized to have
outstanding at any one time is 25,,000,000 shares of voting
common stock having a par value of $.02 per share.
ARTICLE 5
INITIAL REGISTERED OFFICE AND AGENT
Section 5.1 Name and Address. the street address of the
initial registered office of this corporation is 200 Laura
Street, Jacksonville, Florida 32202, and the name of the initial
registered agent of this corporation at that address is F&L Corp.
ARTICLE 6
DIRECTORS
Section 6.1 Number. This corporation shall have four (4)
director(s) initially, The number of directors may be increased
or diminished from time to time by the bylaws, but shall never be
less than one.
Section 6.2 Initial Directors. the name and address of
the members of the first board of directors of the corporation
are:
NAME ADDRESS
____ _______
Harvey Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Diane Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Louis Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Herbert Hirsch 307 S. 21st Avenue
Hollywood, Florida 33020
ARTICLE 7
BYLAWS
Section 7.1 Bylaws. the initial bylaws of this
corporation shall be adopted by the board of directors. Bylaws
may be amended or repealed from time to time by either the board
of directors or the shareholders, but the board of directors
shall not alter, amend or repeal any bylaw adopted by the
shareholders if the shareholders specifically provide that such
bylaw is not subject to amendment or repeal by the board of
directors.
ARTICLE 8
INCORPORATOR
Section 8.1 Name and Address. The name and street
address of the incorporator of this corporation is:
NAME ADDRESS
____ _______
Harvey Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
ARTICLE 9
INDEMNIFICATION
Section 9.1 Indemnification. The board of directors is
specifically authorized to make provision for indemnification of
directors, officers, employees and agents to the full extent
permitted by law.
ARTICLE 10
AMENDMENT
Section 10.1 Amendment. this corporation reserves the
right to amend or repeal any provision contained in these
Articles of Incorporation, and any right conferred upon the
shareholders is subject to this reservation.
IN WITNESS WHEREOF, the incorporator has executed these
Articles on August 6, 1996..
/S/ Harvey Birdman
-----------------------------------
Harvey Birdman, Incorporator
ACCEPTANCE OF APPOINTMENT AS REGISTERED AGENT
Having been named to accept service of process for the above
stated corporation, at the place designated in the above Articles
of Incorporation, I hereby agree to act in this capacity, and I
further agree to comply with the provisions of all statutes
relative to the proper and complete performance of my duties. I
am familiar with and accept the obligations of a registered
agent.
F&L CORP., Registered Agent
/S/ Charles V. Hedrick
____________________________________________
By: Charles V. Hedrick, Authorized Signatory
Date: August 13, 1996
________________________________________________________________
EXHIBIT 2.2 BYLAWS OF REGISTRANT
________________________________________________________________
BYLAWS
OF
SUNVEST RESORTS, INC.
(a Florida corporation)
TABLE OF CONTENTS
ARTICLE I
Definitions
-----------
Section 1.1 Definitions................................1
ARTICLE 2
Offices
-------
Section 2.1 Principal and Business Offices.............1
Section 2.2 Registered Office..........................1
ARTICLE 3
Shareholders
------------
Section 3.1 Annual Meeting.............................2
Section 3.2 Special Meetings...........................2
Section 3.3 Place of Meetings..........................2
Section 3.4 Notice of Meeting..........................2
Section 3.5 Waiver of Notice...........................3
Section 3.6 Fixing of Record Date......................3
Section 3.7 Shareholders' List for Meetings............4
Section 3.8 Quorum.....................................5
Section 3.9 Voting of Shares...........................5
Section 3.10 Vote Required..............................5
Section 3.11 Conduct of Meeting.........................6
Section 3.12 Inspectors of Election.....................6
Section 3.13 Proxies....................................6
Section 3.14 Action by Shareholders Without Meeting.....7
Section 3.15 Acceptance of Instruments Showing
Shareholder Action.........................8
ARTICLE 4
Board of Directors
------------------
Section 4.1 General Powers and Number..................8
Section 4.2 Qualifications.............................9
Section 4.3 Term of Office.............................9
Section 4.4 Removal....................................9
Section 4.5 Resignation................................9
Section 4.6 Vacancies..................................9
Section 4.7 Compensation...............................9
Section 4.8 Regular Meetings...........................9
Section 4.9 Special Meetings..........................10
Section 4.10 Notice....................................10
Section 4.11 Waiver of Notice..........................10
Section 4.12 Quorum and Voting.........................10
Section 4.13 Conduct of Meetings.......................10
Section 4.14 Committees................................11
Section 4.15 Action Without Meeting....................12
ARTICLE 5
Officers
--------
Section 5.1 Number....................................12
Section 5.2 Election and Term of Office...............12
Section 5.3 Removal...................................12
Section 5.4 Resignation...............................12
Section 5.5 Vacancies.................................12
Section 5.6 President.................................13
Section 5.7 Vice Presidents...........................13
Section 5.8 Secretary.................................13
Section 5.9 Treasurer.................................14
Section 5.10 Assistant Secretaries and Assistant
Treasurers................................14
Section 5.11 Other Assistants and Acting Officers......14
Section 5.12 Salaries..................................14
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
------------------------------------------------------
Section 6.1 Contracts.................................14
Section 6.2 Checks, Drafts, etc.......................15
Section 6.3 Deposits..................................15
Section 6.4 Voting of Securities Owned by Corporation.15
ARTICLE 7
Certificates for Shares; Transfer of Shares
-------------------------------------------
Section 7.1 Consideration for Shares..................15
Section 7.2 Certificates for Shares...................16
Section 7.3 Transfer of Shares........................16
Section 7.4 Restrictions on Transfer..................17
Section 7.5 Lost, Destroyed, or Stolen Certificates...17
Section 7.6 Stock Regulations.........................17
ARTICLE 8
Seal
----
Section 8.1 Seal......................................17
ARTICLE 9
Books and Records
-----------------
Section 9.1 Books and Records.........................17
Section 9.2 Shareholders' Inspection Rights...........18
Section 9.3 Distribution of Financial Information.....18
Section 9.4 Other Reports.............................18
ARTICLE 10
Indemnification
---------------
Section 10.1 Provision of Indemnification 18
ARTICLE 11
Amendments
----------
Section 11.1 Power to Amend............................19
Section 11.2 Implied Amendments........................19
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions. The following terms shall have
the following meanings for purposes of these bylaws:
"Act" means the Florida Business Corporation Act, as it may
be amended from time to time, or any successor legislation
thereto.
"Deliver" or "delivery" includes delivery by hand; United
States mail; facsimile, telegraph, teletype or other form of
electronic transmission; and private mail carriers handling
nationwide mail services.
"Distribution" means a direct or indirect transfer of money
or other property (except shares in the corporation) or an
incurrence of indebtedness by the corporation to or for the
benefit of shareholders in respect of any of the corporation's
shares. A distribution may be in the form of a declaration or
payment of a dividend; a purchase, redemption, or other
acquisition of shares; a distribution of indebtedness; or
otherwise.
"Principal office" means the office (within or without the
State of Florida) where the corporation's principal executive
offices are located, as designated in the articles of
incorporation or other initial filing until an annual report has
been filed with the Florida Department of State, and thereafter
as designated in the annual report.
ARTICLE 2
Offices
-------
Section 2.1 Principal and Business Offices. The
corporation may have such principal and other business offices,
either within or without the State of Florida, as the Board of
Directors may designate or as the business of the corporation may
require from time to time.
Section 2.2 Registered Office. The registered office of
the corporation required by the Act to be maintained in the State
of Florida may but need not be identical with the principal
office if located in the State of Florida, and the address of the
registered office may be changed from time to time by the Board
of Directors or by the registered agent. The business office of
the registered agent of the corporation shall be identical to
such registered office.
ARTICLE 3
Shareholders
------------
Section 3.1 Annual Meeting. The annual meeting of
shareholders shall be held within four months after the close of
each fiscal year of the corporation on a date and at a time and
place designated by the Board of Directors, 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
shall not be held on the day fixed as herein provided for any
annual meeting of shareholders, or at any adjournment thereof,
the Board of Directors shall cause the election to be held at a
special meeting of shareholders as soon thereafter as is
practicable.
Section 3.2 Special Meetings.
(a) Call by Directors or President. Special
meetings of shareholders, for any purpose or purposes, may be
called by the Board of Directors, the Chairman of the Board (if
any) or the President.
(b) Call by Shareholders. The corporation shall
call a special meeting of shareholders in the event that the
holders of at least ten percent of all of the votes entitled to
be cast on any issue proposed to be considered at the proposed
special meeting sign, date, and deliver to the Secretary one or
more written demands for the meeting describing one or more
purposes for which it is to be held. The corporation shall give
notice of such a special meeting within sixty days after the date
that the demand is delivered to the corporation.
Section 3.3 Place of Meeting. The Board of Directors
may designate any place, either within or without the State of
Florida, as the place of meeting for any annual or special
meeting of shareholders. If no designation is made, the place of
meeting shall be the principal office of the corporation.
Section 3.4 Notice of Meeting.
(a) Content and Delivery. Written notice
stating the date, time, and place of any meeting of shareholders
and, in the case of a special meeting, the purpose or purposes
for which the meeting, is called, shall be delivered not less
than ten days nor more than sixty days before the date of the
meeting by or at the direction of the President or the Secretary,
or the officer or persons duly calling the meeting, to each
shareholder of record entitled to vote at such meeting and to
such other persons as required by the Act. Unless the Act
requires otherwise, notice of an annual meeting need not include
a description of the purpose or purposes for which the meeting is
called. if mailed, notice of a met,-ting of shareholders shall be
deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears
on the stock record books of the corporation, with postage
thereon prepaid.
(b) Notice of Adjourned Meeting. If an annual
or special meeting of shareholders is adjourned to a different
date, time, or place, the corporation shall not be required to
give notice of the new date, time, or place if the new date,
time, or place is announced at the meeting before adjournment;
provided, however, that if a new record date for an adjourned
meeting is or must be fixed, the corporation shall give notice of
the adjourned meeting to persons who are shareholders as of the
new record date who are entitled to notice of the
meeting.
(c) No Notice Under Certain Circumstances.
Notwithstanding the other provisions of this Section, no notice
of a meeting of shareholders need be given to a shareholder if:
(a) an annual report and proxy statement for two consecutive
annual meetings of shareholders, or (b) all, and at least two
checks in payment of dividends or interest on securities during a
twelve-month period, have been sent by first-class, United States
mail, addressed to the shareholder at his or her address as it
appears on the share transfer books of the corporation, and
returned undeliverable. The obligation of the corporation to
give notice of a shareholders' meeting to any such shareholder
shall be reinstated once the corporation has received a new
address for such shareholder for entry on its share transfer
books.
Section 3.5 Waiver of Notice.
(a) Written Waiver. A shareholder may waive any
notice required by the Act or these bylaws before or after the
date and time stated for the meeting in the notice. The waiver
shall be in writing and signed by the shareholder entitled to the
notice, and be delivered to the corporation for inclusion in the
minutes or filing with the corporate records. Neither the
business to be transacted at nor the purpose of any regular or
special meeting of shareholders need be specified in any written
waiver of notice.
(b) Waiver by Attendance. A shareholder's
attendance at a meeting, in person or by proxy, waives objection
to all of the following: (a) lack of notice or defective notice
of the meeting, unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting business at
the meeting; and (b) consideration of a particular matter at the
meeting that is not within the purpose or purposes described in
the meeting, notice, unless the shareholder objects to
considering the matter when it is presented.
Section 3.6 Fixing of Record Date.
(a) General. The Board of Directors may fix in
advance a date as the record date for the purpose of determining
shareholders entitled to notice of a shareholders' meeting,
entitled to vote, or take any other action. In no event may a
record date fixed by the Board of Directors be a date preceding
the date upon which the resolution fixing the record date is
adopted or a date more than seventy days before the date of
meeting or action requiring a determination of shareholders.
(b) Special Meeting. The record date for
determining shareholders entitled to demand a special meeting
shall be the close of business on the date the first shareholder
delivers his or her demand to the corporation.
(c) Shareholder Action by Written Consent. If
no prior action is required by the Board of Directors pursuant to
the Act, the record date for determining shareholders entitled to
take action without a meeting shall be the close of business on
the date the first signed written consent with respect to the
action in question is delivered to the corporation, but if prior
action is required by the Board of Directors pursuant to the Act,
such record date shall be the close of business on the date on
which the Board of Directors adopts the resolution taking such
prior action unless the Board of Directors otherwise fixes a
record date.
(d) Absence of Board Determination for
Shareholders' Meeting.. If the Board of Directors does not
determine the record date for determining shareholders entitled
to notice of and to vote at an annual or special shareholders'
meeting, such record date shall be the close of business on the
day before the first notice with respect thereto is delivered to
shareholders.
(e) Adjourned Meeting. A record date for
determining shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the
meeting 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.
(f) Certain Distributions. If the Board of
Directors does not determine the record date for determining
shareholders entitled to a distribution (other than one involving
a purchase, redemption, or other acquisition of the corporation's
shares or a share dividend), such record date shall be the close
of business on the date on which the Board of Directors
authorizes the distribution.
Section 3.7 Shareholders' List for Meetings.
(a) Preparation and Availability. After a
record date for a meeting of shareholders has been fixed, the
corporation shall prepare an alphabetical list of the names of
all of the shareholders entitled to notice of the meeting. The
list shall be arranged by class or series of shares, if any, and
show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder for a period of ten days prior to the meeting or such
shorter time as exists between the record date and the meeting
date, and continuing through the meeting, at the corporation's
principal office, at a place identified in the meeting notice in
the city where the meeting will be held, or at the office of the
corporation's transfer agent or registrar, if any. A shareholder
or his or her agent may, on written demand, inspect the list,
subject to the requirements of the Act, during regular business
hours and at his or her expense, during the period that it is
available for inspection pursuant to this Section. The
corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may
inspect the list at any time during the meeting or any
adjournment thereof.
(b) Prima Facie Evidence. The shareholders'
list is prima facie evidence of the identity of shareholders
entitled to examine the shareholders' list or to vote at a
meeting of shareholders.
(c) Failure to Comply. If the requirements of
this Section have not been substantially complied with, or if the
corporation refuses to allow a shareholder or his or her agent or
attorney to inspect the shareholders' list before or at the
meeting, on the demand of any shareholder, in person or by proxy,
who failed to get such access, the meeting shall be adjourned
until such requirements are complied with. Refusal or failure to
prepare or make available the shareholders' list shall not affect
the validity of any action taken at a meeting of shareholders.
(d) Sale or Distribution of Information
Prohibited. A shareholder may not sell or otherwise distribute
Any information or records inspected under this Section, except
to the extent permitted by the Act.
Section 3.8 Quorum.
(a) What Constitutes a Quorum. Shares entitled
to vote as a separate voting group may take action on a matter at
a meeting only if a quorum of those shares exists with respect to
that matter. If the corporation has only one class of stock
outstanding, such class shall constitute a separate voting group
for purposes of this Section. Except as otherwise provided in
the Act, a majority of the votes entitled to be cast on the
matter shall constitute a quorum of the voting group for action
on that matter.
(b) Presence of Shares. Once a share is
represented for any purpose at a meeting, other than for the
purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the
meeting and for any adjournment of that meeting unless a new
record date is or must be set for the adjourned meeting.
(c) Adjournment in Absence of Quorum. Where a
quorum is not present, the holders of a majority of the shares
represented and who would be entitled to vote at the meeting if a
quorum were present may adjourn such meeting from time to time.
Section 3.9 Voting of Shares. Each outstanding share,
regardless of class, is entitled to one vote on each matter voted
on at a meeting of shareholders.
Section 3.10 Vote Required.
(a) Matters Other Than Election of Directors.
If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast
opposing the action, unless the Act requires a greater number of
affirmative votes.
(b) Election of Directors. Each director shall
be elected by a plurality of the votes cast by the shares
entitled to vote in the election of directors at a meeting at
which a quorum is present. Each shareholder who is entitled to
vote at an election of directors has the right to vote the number
of shares owned by him or her for as many persons as there are
directors to be elected. Shareholders do not have a right to
cumulate their votes for directors.
Section 3.11 Conduct of Meeting. The Chairman of the
Board of Directors, and if there be none, or in his or her
absence, the President, and in his or her absence, any person
chosen by the shareholders present shall call a shareholders'
meeting to order and shall act as presiding officer of the
meeting, and the Secretary of the corporation shall act as
secretary of all meetings of the shareholders, but, in the
absence of the Secretary, the presiding officer may appoint any
other person to act as secretary of the meeting. The presiding
officer of the meeting shall have broad discretion in determining
the order of business at a shareholders' meeting. The presiding
officer's authority to conduct the meeting shall include, but in
no way be limited to, recognizing shareholders entitled to speak,
calling for the necessary reports, stating questions and putting
them to a vote, calling for nominations, and announcing the
results of voting. The presiding officer also shall take such
actions as are necessary and appropriate to preserve order at the
meeting. The rules of parliamentary procedure need not be
observed in the conduct of shareholders' meetings; however,
meetings shall be conducted in accordance with accepted usage and
common practice with fair treatment to all who are entitled to
take part.
Section 3.12 Inspectors of Election. Inspectors of
election may be appointed by the Board of Directors to act at any
meeting, of shareholders at which any vote is taken. If
inspectors of election are not so appointed, the presiding
officer of the meeting may, and on the request of any shareholder
shall, make such appointment. The inspectors of election shall
determine the number of shares outstanding, the voting rights
with respect to each the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect
of proxies; receive votes, ballots, consents, and waivers; hear
and determine all challenges and questions arising in connection
with the vote; count and tabulate all votes, consents, and
waivers; determine and announce the result; and do such acts as
are proper to conduct the election or vote with fairness to all
shareholders. No inspector, whether appointed by the Board of
Directors or by the person acting as presiding officer of the
meeting, need be a shareholder.
Section 3.13 Proxies.
(a) Appointment. At all meetings of
shareholders, a shareholder may vote his or her shares in person
or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. If an
appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his or her place. A
telegraph, telex, or a cablegram, a facsimile transmission of a
signed appointment form, or a photographic, photostatic, or
equivalent reproduction of a signed appointment form is a
Sufficient appointment form.
(b) When Effective. An appointment of a proxy
is effective when received by the Secretary or other officer or
agent of the corporation authorized to tabulate votes. An
appointment is valid for up to eleven months unless a longer
period is expressly provided in the appointment form. An
appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and
the appointment is coupled with an interest.
Section 3.14 Action by Shareholders Without Meeting.
(a) Requirements for Written Consents. Any
action required or permitted by the Act to be taken at any annual
or special meeting of shareholders may be taken without a
meeting, without prior notice, and without a vote if one or more
written consents describing the action taken shall be signed and
dated by the holders of outstanding stock entitled to vote
thereon having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and
voted. Such consents must be delivered to the principal office
of the corporation in Florida, the corporation's principal place
of business, the Secretary, or another officer or agent of the
corporation having custody of the books in which proceedings of
meetings of shareholders are recorded. No written consent shall
be effective to take the corporate action referred to therein
unless, within sixty days of the date of the earliest dated
consent delivered in the manner required herein, written consents
signed by the number of holders required to take action are
delivered to the corporation by delivery as set forth in this
Section.
(b) Revocation of Written Consents. Any
written consent may be revoked prior to the date that the
corporation receives the required number of consents to authorize
the proposed action. No revocation is effective unless in writing
and until received by the corporation at its principal office in
Florida or its principal place of business, or received by the
Secretary or other officer or agent having custody of the books
in which proceedings of meetings of shareholders are recorded.
(c) Notice to Nonconsenting Shareholders.
Within ten days after obtaining such authorization by written
consent, notice must be given in writing to those shareholders
who have not consented in writing or who are not entitled to vote
on the action. The notice shall fairly summarize the material
features of the authorized action and, if the action be such for
which dissenters' rights are provided under the Act, the notice
shall contain a clear statement of the right of shareholders
dissenting therefrom to be paid the fair value of their shares
upon compliance with the provisions of the Act regarding the
rights of dissenting shareholders.
(d) Same Effect as Vote at Meeting. A consent
signed under this Section has the effect of a meeting vote and
may be described as such in any document. Whenever action is
taken by written consent pursuant to this Section, the written
consent of the shareholders consenting thereto or the written
reports of inspectors appointed to tabulate such consents shall
be filed with the minutes of proceedings of shareholders.
Section 3.15 Acceptance of Instruments Showing
Shareholder Action. If the name signed on a vote, consent,
waiver, or proxy appointment corresponds to the name of a
shareholder, the corporation, if acting in good faith, may accept
the vote, consent, waiver, or proxy appointment and give it
effect as the act of a shareholder. If the name signed on a
vote, consent, waiver, or proxy appointment does not correspond
to the name of a shareholder, the corporation, if acting in good
faith, may accept the vote, consent, waiver, or proxy appointment
and give it effect as the act of the shareholder if any of the
following apply:
(a) The shareholder is an entity and the name
signed purports to be that of an officer or agent of the entity;
(b) The name signed purports to be that of a
administrator, executor, guardian, personal representative, or
conservator representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the
corporation is presented with respect to the vote, consent,
waiver, or proxy appointment;
(c) The name signed purports to be that of a
receiver or trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation is
presented with respect to the vote, consent, waiver, or proxy
appointment;
(d) 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 is presented with respect to the vote, consent,
waiver, or proxy appointment; or
(e) 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-owners and the person signing
appears to be acting on behalf of all co-owners.
The corporation may reject a vote, consent, waiver, or proxy
appointment if the Secretary or other officer or agent of the
corporation who is 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.
ARTICLE 4
Board of Directors
------------------
Section 4.1 General Powers and Number. All corporate
powers shall be exercised by or under the authority of, and the
business and affairs of the corporation managed under the
direction of, the Board of Directors. The corporation shall have
five (5) directors initially. The number of directors may be
increased or decreased from time to time by vote of the
shareholders, but shall never be less than one nor more than ten.
Section 4.2 Qualifications. Directors must be natural
persons who are eighteen years of age or older but need not be
residents of this state or shareholders of the corporation.
Section 4.3 Term of Office. Each director shall hold
office until the next annual meeting of shareholders and until
his or her successor shall have been elected and, if necessary,
qualified, or until there is a decrease in the number of
directors which takes effect after the expiration of his or her
term, or until his or her prior death, resignation or removal.
Section 4.4 Removal. The shareholders may remove one or
more directors with or without cause. A director may be removed
by the shareholders at a meeting of shareholders, provided that
the notice of the meeting states that the purpose, or one of the
purposes, of the meeting is such removal.
Section 4.5 Resignation. A director may resign at any
time by delivering written notice to the Board of Directors or
its Chairman (if any) or to the corporation. A director's
resignation is effective when the notice is delivered unless the
notice specifies a later effective date.
Section 4.6 Vacancies.
(a) Who May-Fill Vacancies. Whenever any
vacancy occurs on the Board of Directors, including a vacancy
resulting from an increase in the number of directors, it may be
filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, or
by the shareholders. If the directors first fill a vacancy, the
shareholders shall have no further right with respect to that
vacancy, and if the shareholders first fill the vacancy, the
directors shall have no further rights with respect to that
vacancy.
(b) Prospective Vacancies. A vacancy that will
occur at a specific later date, because of a resignation
effective at a later date or otherwise, may be filled before the
vacancy occurs, but the new director may not take office until
the vacancy occurs.
Section 4.7 Compensation. The Board of Directors,
irrespective of any personal interest of any of its members, may
establish reasonable compensation of all directors for services
to the corporation as directors, officers, or otherwise, or may
delegate such authority to an appropriate committee. The Board
of Directors also shall have authority to provide for or delegate
authority to an appropriate committee to provide for reasonable
pensions, disability or death benefits, and other benefits or
payments, to directors, officers, and employees and to their
families, dependents, estates, or beneficiaries on account of
prior services rendered to the corporation by such directors,
officers, and employees.
Section 4.8 Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
bylaw immediately after the annual meeting of shareholders and
each adjourned session thereof. The place of such regular
meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as
may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the date, time, and place,
either within or without the State of Florida, for the holding of
additional regular meetings of the Board of Directors without
other notice than such resolution.
Section 4.9 Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board (if
any) the President or one-third of the members of the Board of
Directors. The person or persons calling the meeting may fix any
place, either within or without the State of Florida, as the
place for holding any special meeting of the Board of Directors,
and if no other place is fixed, the place of the meeting shall be
the principal office of the corporation in the State of Florida.
Section 4.10 Notice. Special meetings of the Board of
Directors must be preceded by at least two days' notice of the
date, time, and place of the meeting. The notice need not
describe the purpose of the special meeting.
Section 4.11 Waiver of Notice. Notice of a meeting of
the Board of Directors need not be given to any director who
signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting and waiver of any and all objections to
the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director
states, at the beginning of the meeting or promptly upon arrival
at the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened.
Section 4.12 Quorum and Voting. A quorum of the Board of
Directors consists of a majority of the number of directors
prescribed by these bylaws. If a quorum is present when a vote
is taken, the affirmative vote of a majority of directors present
is the act of the Board of Directors. A director who is present
at a meeting of the Board of Directors or a committee of the
Board of Directors when corporate action is taken is deemed to
have assented to the action taken unless: (a) he or she objects
at the beginning of the meeting (or promptly upon his or her
arrival) to holding it or transacting specified business at the
meeting; or (b) he or she votes against or abstains from the
action taken.
Section 4.13 Conduct of-Meetings.
(a) Presiding Officer. The Board of Directors
may elect from among its members a Chairman of the Board of
Directors, who shall preside at meetings of the Board of
Directors. The Chairman, and if there be none, or in his or her
absence, the President, and in his or her absence, a Vice
President in the order provided under the Section of these bylaws
titled "Vice Presidents," and in their absence, any director
chosen by the directors present, shall call meetings of the Board
of Directors to order and shall act as presiding officer of the
meeting.
(b) Minutes. The Secretary of the corporation
shall act as secretary of all meetings of the Board of Directors
but in the absence of the Secretary, the presiding officer may
appoint any other person present to act as secretary of the
meeting. Minutes of any regular or special meeting of the Board
of Directors shall be prepared and distributed to each director.
(c) Adjournments. A majority of the directors
present, whether or not a quorum exists, may adjourn any meeting
of the Board of Directors to another time and place. Notice of
any such adjourned meeting, shall be given to the directors who
are not present at the time of the adjournment and, unless the
time and place of the adjourned meeting are announced at the time
of the adjournment, to the other directors.
(d) Participation by Conference Call or Similar
Means. The Board of Directors may permit any or all directors to
participate in a regular or a special meeting by, or conduct the
meeting through the use of, any means of communication by which
all directors participating may simultaneously hear each other
during the meeting. A director participating in a meeting by
this means is deemed to be present in person at the meeting.
Section 4.14 Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors,
may designate from among its members an executive committee and
one or more other committees each of which, to the extent
provided in such resolution, shall have and may exercise all the
authority of the Board of Directors, except that no such
committee shall have the authority to:
(a) approve or recommend to shareholders actions
or proposals required by the Act to be approved by shareholders;
(b) fill vacancies on the Board of Directors or
any committee thereof;
(c) adopt, amend, or repeal these bylaws;
(d) authorize or approve the reacquisition of
shares unless pursuant to a general formula or method specified
by the Board of Directors; or
(e) authorize or approve the issuance or sale or
contract for the sale of shares, or determine the designation and
relative rights, preferences, and limitations of a voting group
except that the Board of Directors may authorize a committee (or
a senior executive officer of the corporation) to do so within
limits specifically prescribed by the Board of Directors.
Each committee must have two or more members, who shall serve at
the pleasure of the Board of Directors. The Board of Directors,
by resolution adopted in accordance with this Section, may
designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent
member or members at any meeting of such committee. The
provisions of these bylaws which govern meetings, notice and
waiver of notice, and quorum and voting requirements of the Board
of Directors apply to committees and their members as well.
Section 4.15 Action Without Meeting. Any action required
or permitted by the Act to be taken at a meeting of the Board of
Directors or a committee thereof may be taken without a meeting
if the action is taken by all members of the Board or of the
committee. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director or
committee member and retained by the corporation. Such action
shall be effective when the last director or committee member
signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section has the
effect of a vote at a meeting and may be described as such in any
document.
ARTICLE 5
Officers
--------
Section 5.1 Number. The principal officers of the
corporation shall be a President, the number of Vice Presidents,
as authorized from time to time by the Board of Directors, a
Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the
Board of Directors. The Board of Directors may also authorize
any duty appointed officer to appoint one or more officers or
assistant officers. The same individual may simultaneously hold
more than one office.
Section 5.2 Election and Term of Office. The officers
of the corporation to be elected by the Board of Directors shall
be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting
of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon
thereafter as is practicable. Each officer shall hold office
until his or her successor shall have been duly elected or until
his or her prior death, resignation, or removal.
Section 5.3 Removal. The Board of Directors may remove
any officer and, unless restricted by the Board of Directors, an
officer may remove any officer or assistant officer appointed by
that officer, at any time, with or without cause and
notwithstanding the contract rights, if any, of the officer
removed. The appointment of an officer does not of itself create
contract rights.
Section 5.4 Resignation. An officer may resign at any
time by delivering notice to the corporation. The resignation
shall be effective when the notice is delivered, unless the
notice specifies a later effective date and the corporation
accepts the later effective date. If a resignation is made
effective at a later date and the corporation accepts the future
effective date, the pending vacancy may be filled before the
effective date but the successor may not take office until the
effective date.
Section 5.5 Vacancies. A vacancy in any principal
office because of death, resignation, removal, disqualification,
or otherwise, shall be filled as soon thereafter as practicable
by the Board of Directors for the unexpired portion of the term.
Section 5.6 President. The President shall be the chief
executive officer of the corporation and, subject to the
direction of the Board of Directors, shall in general supervise
and control all of the business and affairs of the corporation.
The President shall, when present, preside at all meetings of the
shareholders and, if no Chairman of the Board has been elected,
shall preside at all meetings of the Board of Directors. The
President shall have authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he or she shall deem necessary,
to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold
office at the discretion of the President. The President shall
have authority to sign certificates for shares of the corporation
the issuance of which shall have been authorized by resolution of
the Board of Directors, and to execute and acknowledge, on behalf
of the corporation, all deeds, mortgages, bonds, contracts,
leases, reports, and all other documents or instruments necessary
or proper to be executed in the course of the corporation's
regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law
or the Board of Directors, the President may authorize any Vice
President or other officer or agent of the corporation to execute
and acknowledge such documents or instruments in his or her place
and stead. In general he or she shall perform all duties
incident to the off-ice of President and such other duties as may
be prescribed by the Board of Directors from time to time.
Section 5.7 Vice Presidents. In the absence of the
President or in the event of the President's death, inability or
refusal to act, or in the event for any reason it shall be
impracticable for the President to act personally, the Vice
President, if any (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the
Board of Directors, or in the absence of any designation, then in
the order of their election), shall perform the duties of the
President, and when so actin-, shall have all the powers of and
be subject to all the restrictions upon the President. Any Vice
President may sign certificates for shares of the corporation the
issuance of which shall have been authorized by resolution of the
Board of Directors; and shall perform such other duties and have
such authority as from time to time may be delegated or assigned
to him or her by the President or by the Board of Directors. The
execution of any instrument of the corporation by any Vice
President shall be conclusive evidence, as to third parties, of
his or her authority to act in the stead of the President.
Section 5.8 Secretary. The Secretary shall: (a) keep,
or cause to be kept, minutes of the meetings of the shareholders
and of the Board of Directors (and of committees thereof in one
or more books provided for that purpose (including records of
actions taken by the shareholders or the Board of Directors (or
committees thereof without a meeting); (b) be custodian of the
corporate records and of the seal of the corporation, if any, and
if the corporation has a seal, see that it is affixed to all
documents the execution of which on behalf of the corporation
under its seal is duly authorized; (c) authenticate the records
of the corporation; (d) maintain a record of the shareholders of
the corporation, in a form that permits preparation of a list of
the names and addresses of all shareholders, by class or series
of shares and showing the number and class or series of shares
held by each shareholder; (e) have general charge of the stock
transfer books of the corporation; and (f) in general perform all
duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be
delegated or assigned by the President or by the Board of
Directors.
Section 5.9 Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) maintain appropriate
accounting records; (c) receive and give receipts for moneys due
and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such
banks, trust companies, or other depositories as shall be
selected in accordance with the provisions of these bylaws; and
(d) in general perform all of the duties incident to the office
of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned by
the President or by the Board of Directors. If required by the
Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
Section 5.10 Assistant Secretaries and Assistant
Treasurers. There shall be such number of Assistant Secretaries
and Assistant Treasurers as the Board of Directors may from time
to time authorize. The Assistant Treasurers shall respectively,
if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The
Assistant Secretaries and Assistant Treasurers, in general, shall
perform such duties and have such authority as shall from time to
time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the President or the Board of
Directors.
Section 5.11 Other Assistants and Acting Officers. The
Board of Directors shall have the power to appoint, or to
authorize any duly appointed officer of the corporation to
appoint, any person to act as assistant to any officer, or as
agent for the corporation in his or her stead, or to perform the
duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such
assistant or acting officer or other agent so appointed by the
Board of Directors or an authorized officer shall have the power
to perform all the duties of the office to which he or she is so
appointed to be an assistant, or as to which he or she is so
appointed to act, except as such power may be otherwise defined
or restricted by the Board of Directors or the appointing
officer.
Section 5.12 Salaries. The salaries of the principal
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the corporation.
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
------------------------------------------------------
Section 6.1 Contracts. The Board of Directors may
authorize any officer or officers, or any agent or agents to
enter into any contract or execute or deliver any instrument in
the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances.
In the absence of other designation, all deeds, mortgages, and
instruments of assignment or pledge made by the corporation shall
be executed in the name of the corporation by the President or
one of the Vice Presidents, if any; the Secretary or an Assistant
Secretary, when necessary or required, shall attest and affix the
corporate seal, if any, thereto; and when so executed no other
party to such instrument or any third party shall be required to
make any inquiry into the authority of the signing officer or
officers.
Section 6.2 Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes, or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
Section 6.3 Deposits. All funds of the corporation not
other-wise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies, or
other depositories as may be selected by or under the authority
of a resolution of the Board of Directors.
Section 6.4 Voting of Securities Owned by Corporation.
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may be
voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she be
present, or in his or her absence, by any Vice President of this
corporation who may be present, and (b) whenever, in the judgment
of the President, or in his or her absence, of any Vice
President, it is desirable for this corporation to execute a
proxy or written consent in respect of any such shares or other
securities, such proxy or consent shall be executed in the name
of this corporation by the President or one of the Vice
Presidents, if any, of this corporation, without necessity of any
authorization by the Board of Directors, affixation of corporate
seal, if any, or countersignature or attestation by another
officer. Any person or persons designated in the manner above
stated as the proxy or proxies of this corporation shall have
full fight, power, and authority to vote the shares or other
securities issued by such other corporation and owned or
controlled by this corporation the same as such shares or other
securities might be voted by this corporation.
ARTICLE 7
Certificates for Shares; Transfer of Shares
-------------------------------------------
Section 7.1 Consideration for Shares. The Board of
Directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services
performed, promises to perform services evidenced by a written
contract, or other securities of the corporation. Before the
corporation issues shares, the Board of Directors shall determine
that the consideration received or to be received for the shares
to be issued is adequate. The determination of the Board of
Directors is conclusive insofar as the adequacy of consideration
for the issuance of shares relates to whether the shares are
validly issued, fully paid, and nonassessable. The corporation
may place in escrow shares issued for future services or benefits
or a promissory note, or make other arrangements to restrict the
transfer of the shares, and may credit distributions in respect
of the shares against their purchase price, until the services
are performed, the note is paid, or the benefits are received.
If the services are not performed, the note is not paid, or the
benefits are not received, the corporation may cancel, in whole
or in part, the shares escrowed or restricted and the
distributions credited.
Section 7.2 Certificates for Shares. Every holder of
shares in the corporation shall be entitled to have a certificate
representing all shares to which he or she is entitled unless the
Board of Directors authorizes the issuance of some or all shares
without certificates. Any such authorization shall not affect
shares already represented by certificates until the certificates
are surrendered to the corporation. If the Board of Directors
authorizes the issuance of any shares without certificates,
within a reasonable time after the issue or transfer of any such
shares, the corporation shall send the shareholder a written
statement of the information required by the Act to be set forth
on certificates, including any restrictions on transfer.
Certificates representing shares of the corporation shall be in
such form, consistent with the Act, as shall be determined by the
Board of Directors. Such certificates shall be signed (either
manually or in facsimile) by the President or any Vice President
or any other persons designated by the Board of Directors and may
be sealed with the seal of the corporation or a facsimile
thereof. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. Unless the Board of
Directors authorizes shares without certificates, all
certificates surrendered to the corporation for transfer shall be
canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been
surrendered and canceled, except as provided in these bylaws with
respect to lost, destroyed, or stolen certificates. The validity
of a share certificate is not affected if a person who signed the
certificate (either manually or in facsimile) no longer holds
office when the certificate is issued.
Section 7.3 Transfer of Shares. Prior to due
presentment of a certificate for shares for registration of
transfer, the corporation may treat the registered owner of such
shares as the person exclusively entitled to vote, to receive
notifications, and otherwise to have and exercise all the rights
and power of an owner. Where a certificate for shares is
presented to the corporation with a request to register a
transfer, the corporation shall not be liable to the owner or any
other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to
inquire into adverse claims or has discharged any such duty. The
corporation may require reasonable assurance that such
endorsements are genuine and effective and compliance with such
other regulations as may be prescribed by or tinder the authority
of the Board of Directors.
Section 7.4 Restrictions on Transfer. The face or
reverse side of each certificate representing shares shall bear a
conspicuous notation as required by the Act of any restriction
imposed by the corporation upon the transfer of such shares.
Section 7.5 Lost, Destroyed, or Stolen Certificates.
Unless the Board of Directors authorizes shares without
certificates, where the owner claims that certificates for shares
have been lost, destroyed, or wrongfully taken, a new certificate
shall be issued in place thereof if the owner (a) so requests
before the corporation has notice that Such shares have been
acquired by a bona fide purchaser, (b) files with the corporation
a sufficient indemnity bond if required by the Board of Directors
or any principal officer, and (c) satisfies such other reasonable
requirements as may be prescribed by or under the authority of
the Board of Directors.
Section 7.6 Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules
and regulations not inconsistent with law as they may deem
expedient concerning the issue, transfer, and registration of
shares of the corporation.
ARTICLE 8
Seal
----
Section 8.1 Seal. The Board of Directors may provide
for a corporate seal for the corporation.
ARTICLE 9
Books and Records
-----------------
Section 9.1 Books and Records.
(a) The corporation shall keep as permanent
records minutes of all meetings of the shareholders and Board of
Directors, a record of all actions taken by the shareholders or
Board of Directors without a meeting, and 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.
(b) The corporation shall maintain accurate
accounting records.
(c) The corporation or its agent shall maintain
a record of the shareholders in a form that permits preparation
of a list of the names and addresses of all shareholders in
alphabetical order by class of shares showing the number and
series of shares held by each.
(d) The corporation shall keep a copy of all
written communications within the preceding three years to all
shareholders generally or to all shareholders of a class or
series, including the financial statements required to be
furnished by the Act, and a copy of its most recent annual report
delivered to the Department of State.
Section 9.2 Shareholders' Inspection Rights.
Shareholders are entitled to inspect and copy records of the
corporation as permitted by the Act.
Section 9.3 Distribution of Financial Information. The
corporation shall prepare and disseminate financial statements to
shareholders as required by the Act.
Section 9.4 Other Reports. The corporation shall
disseminate such other reports to shareholders as are required by
the Act, including reports regarding indemnification in certain
circumstances and reports regarding the issuance or authorization
for issuance of shares in exchange for promises to render
services in the future.
ARTICLE 10
Indemnification
---------------
Section 10.1 Provision of Indemnification. The
corporation shall, to the fullest extent permitted or required by
the Act, including any amendments thereto (but in the case of any
such amendment, only to the extent such amendment permits or
requires the corporation to provide broader indemnification
rights than prior to such amendment), indemnify its Directors or
Officers against any and all Liabilities, and advance any and all
reasonable Expenses incurred in any Proceeding to which any such
Director or Officer is or is threatened to be made a Party or a
witness because he or she is or was a Director or Officer of the
corporation. The rights to indemnification granted hereunder
shall not be deemed exclusive of any other rights to
indemnification against Liabilities or the advancement of
Expenses which a Director or Officer may be entitled under any
written agreement, Board resolution, vote of shareholders, the
Act, or otherwise. The corporation may, but shall not be
required to, supplement the foregoing rights to indemnification
against Liabilities and advancement of Expenses by the purchase
of insurance on behalf of any one or more of its Directors or
Officers whether or not the corporation would be obligated to
indemnify or advance Expenses to such Director or Officer under
this Article. For purposes of this Article, the terms
"Directors" and "Officers" includes former directors or officers
and any directors or officers who are or were serving at the
request of the corporation as directors, officers, employees, or
agents of another corporation, partnership, joint venture, trust,
or other enterprise, including,, without limitation, any employee
benefit plan (other than in the capacity as agents separately
retained and compensated for the provision of goods or services
to the enterprise, including, without limitation, attorneys-at-
law, accountants, and financial consultants). All other
capitalized terms used in this Article and not otherwise defined
herein shall have the meaning set forth in Section 607.0850,
Florida Statutes, as amended. The provisions of this Article are
intended solely for the benefit of the indemnified parties
described herein, their heirs and personal representatives and
shall not create any rights in favor of third parties. No
amendment to or repeal of this Article shall diminish the rights
of indemnification provided for herein prior to such amendment or
repeal.
ARTICLE 11
Amendments
----------
Section 11.1 Power to Amend. These bylaws may be amended
or repealed by either the Board of Directors or the shareholders,
unless the Act reserves the power to amend these bylaws generally
or any particular bylaw provision, as the case may be,
exclusively to the shareholders or unless the shareholders, in
amending or repealing these bylaws generally or any particular
bylaw provision, provide expressly that the Board of Directors
may not amend or repeal these bylaws or such bylaw provision, as
the case may be.
Section 11.2 Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors which
would be inconsistent with the bylaws then in effect but which is
taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the
bylaws so that the bylaws would be consistent with such action
shall be given the same effect as though the bylaws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specific action so taken or authorized.
_____________________________________________________________________________
EXHIBIT 6(c).1 SAMPLE OF STOCK AGREEMENT RELATING TO THE OCTOBER
30, 1998 BONUS PLAN OFFERING
_____________________________________________________________________________
STOCK AGREEMENT
This Stock Agreement is entered into effective the 30th day
of October, 1998, by and between SunVest Resorts, Inc. (the
"Company"), and the undersigned individual more particularly
described as "Recipient" on Exhibit "A" attached hereto and
incorporated herein by reference (the "Recipient").
NOW, THEREFORE, based on the mutual covenants, conditions
and restrictions contained herein, the parties hereto agree as
follows:
1. Stock. The Company shall pay, as soon as practicable upon
signing this Stock Agreement, the Stock to the Recipient.
2. Nature of Stock. The Stock shall be paid, in kind, in the
form of common stock of the Company (the "Shares"). Any Shares
transferred pursuant to this Stock Agreement are intended to be
issued pursuant to Rule 701 under the Securities Act of 1933 (the
"Act").
3. Tax Effect. Recipient acknowledges to Company that (a) he/she
shall seek independent advice regarding the income tax effects of
the Stock and (b) he/she understands that the Shares received by
him/her are restricted and may be resold primarily pursuant to
Rule 144 under the Act.
4. Transfer of Shares. All Shares issued by the Company pursuant
to this Stock Agreement shall be duly authorized, fully paid and
non-assessable.
In witness whereof, the parties have caused this Stock
Agreement to be signed effective October 30, 1998.
Company: Recipient:
SunVest Resorts, Inc. ________________________________
by: ________________________________
__________________________ Print Name
Title:
_______________________
Address:
________________________________
________________________________
________________________________
Exhibit A
Recipient Stock
100 Shares of Common Stock of
SunVest Resorts, Inc.
________________________________________________________________
EXHIBIT 10.1 CONSENT OF HIXSON, MARIN, POWELL & DESANCTIS, P.A.,
CPA'S
________________________________________________________________
HIXSON, MARIN, POWELL & DESANCTIS, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
DAVID L. HIXSON, C.P.A. * RAYMOND F. MARIN, C.P.A.
DONALD F. POWELL, C.P.A. * PETER V. DeSANCTIS, C.P.A.
16100 N. E. 10th AVENUE, SUITE B 3300 PGA BOULEVARD
NORTH MIAMI BEACH, FL 33162 GARDENS PLAZA, SUITE 601
DADE: (305) 944-7001 PALM BEACH GARDENS, FL 32410
BROWARD: (854) 920-1311 TEL: (561) 824-5700
FAX: (305) 944-6637 FAX: (561) 824-5702
RESPOND TO: [] RESPOND TO: []
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SunVest Resorts, Inc.
Hollywood, Florida
We hereby consent to the use in this Registration Statement on
Form 10-SB of our report dated June 15, 1999, relating to the
financial statements of SunVest Resorts, Inc., Hollywood,
Florida, and to the reference to our Firm under the caption
"Experts" in such Registration Statement.
/s/ Hixson, Marin, Powell & DeSanctis, P.A.
- --------------------------------------------
HIXSON, MARIN, POWELL & DESANCTIS, P.A.
November 19, 1999
North Miami Beach, Florida
