U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BOULDER CAPITAL OPPORTUNITIES II, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1356898
State or other jurisdiction of IRS Employer ID Number
incorporation or organization
4750 Table Mesa Drive, Boulder, Colorado 80303
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 442-1021
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
PART I
Item 1. Description of Business.
General
The Company was incorporated under the laws of the State of
Colorado on August 8, 1996, and is in the early developmental and
promotional stages. To date the Company's only activities have been
organizational ones, directed at developing its business plan and
raising its initial capital. The Company has not commenced any
commercial operations. The Company has no full-time employees and
owns no real estate.
The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to pursue
other related activities intended to enhance shareholder value. The
acquisition of a business opportunity may be made by purchase,
merger, exchange of stock, or otherwise, and may encompass assets
or a business entity, such as a corporation, joint venture, or
partnership. The Company has very limited capital, and it is unlikely
that the Company will be able to take advantage of more than one
such business opportunity. The Company intends to seek
opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings.
At the present time the Company has not identified any busi-
ness opportunity that it plans to pursue, nor has the Company reached
any agreement or definitive understanding with any person concerning
an acquisition. The Company's officer and director has previously
been involved in transactions involving a merger between an
established company and a blind pool or blank check entity, and has
a number of contacts within the field of corporate finance. As a
result, he has had preliminary contacts with representatives of
numerous companies concerning the general possibility of a merger or
acquisition by a blind pool or blank check company. However, none
of these preliminary contacts or discussions involved the possibility of
a merger or acquisition transaction with the Company.
It is anticipated that the Company's officer and director will
contact broker-dealers and other persons with whom he is acquainted
who are involved in corporate finance matters to advise them of the
Company's existence and to determine if any companies or businesses
they represent have an interest in considering a merger or acquisition
with the Company. No assurance can be given that the Company will
be successful in finding or acquiring a desirable business opportunity,
given the limited funds that are expected to be available for
acquisitions, or that any acquisition that occurs will be on terms that
are favorable to the Company or its stockholders.
The Company's search will be directed toward small and
medium-sized enterprises which have a desire to become public
corporations and which are able to satisfy, or anticipate in the
reasonably near future being able to satisfy, the minimum asset
requirements in order to qualify shares for trading on NASDAQ (See
"Investigation and Selection of Business Opportunities"). The
Company anticipates that the business opportunities presented to it will
(i) be recently organized with no operating history, or a history of
losses attributable to under-capitalization or other factors; (ii) be
experiencing financial or operating difficulties; (iii) be in need of
funds to develop a new product or service or to expand into a new
market; (iv) be relying upon an untested product or marketing concept;
or (v) have a combination of the characteristics mentioned in (i)
through (iv). The Company intends to concentrate its acquisition
efforts on properties or businesses that it believes to be undervalued.
Given the above factors, investors should expect that any acquisition
candidate may have a history of losses or low profitability.
The Company does not propose to restrict its search for in-
vestment opportunities to any particular geographical area or industry,
and may, therefore, engage in essentially any business, to the extent
of its limited resources. This includes industries such as service,
finance, natural resources, manufacturing, high technology, product
development, medical, communications and others. The Company's
discretion in the selection of business opportunities is unrestricted,
subject to the availability of such opportunities, economic conditions,
and other factors.
As a consequence of this registration of its securities, any
entity which has an interest in being acquired by, or merging into the
Company, is expected to be an entity that desires to become a public
company and establish a public trading market for its securities. In
connection with such a merger or acquisition, it is highly likely that
an amount of stock constituting control of the Company would be
issued by the Company or purchased from the current principal
shareholders of the Company by the acquiring entity or its affiliates.
If stock is purchased from the current shareholders, the transaction is
very likely to result in substantial gains to them relative to their
purchase price for such stock. In the Company's judgment, none of
its officers and directors would thereby become an "underwriter"
within the meaning of the Section 2(11) of the Securities Act of 1933,
as amended. The sale of a controlling interest by certain principal
shareholders of the Company could occur at a time when the other
shareholders of the Company remain subject to restrictions on the
transfer of their shares.
Depending upon the nature of the transaction, the current sole
officer and director of the Company may resign his management
positions with the Company in connection with the Company's
acquisition of a business opportunity. See "Form of Acquisition,"
below, and "Risk Factors - The Company - Lack of Continuity in
Management." In the event of such a resignation, the Company's
current management would not have any control over the conduct of
the Company's business following the Company's combination with
a business opportunity.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officer and
director, its other stockholders, professional advisors such as attorneys
and accountants, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited
proposals. The Company has no plans, understandings, agreements,
or commitments with any individual for such person to act as a finder
of opportunities for the Company.
The Company does not foresee that it would enter into a
merger or acquisition transaction with any business with which its sole
officer or director is currently affiliated. Should the Company
determine in the future, contrary to foregoing expectations, that a
transaction with an affiliate would be in the best interests of the
Company and its stockholders, the Company is in general permitted
by Colorado law to enter into such a transaction if:
1. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or are
known to the Board of Directors, and the Board in good faith
authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even though the disinterested
directors constitute less than a quorum; or
2. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or
3. The contract or transaction is fair as to the Company as of the
time it is authorized, approved or ratified, by the Board of Directors
or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality
of the other company's management and personnel, the anticipated
acceptability of new products or marketing concepts, the merit of
technological changes, the perceived benefit the company will derive
from becoming a publicly held entity, and numerous other factors
which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is antici-
pated that the historical operations of a specific business opportunity
may not necessarily be indicative of the potential for the future
because of the possible need to shift marketing approaches
substantially, expand significantly, change product emphasis, change
or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business opportunity
to identify any such problems which may exist and to implement, or
be primarily responsible for the implementation of, required changes.
Because the Company may participate in a business opportunity with
a newly organized firm or with a firm which is entering a new phase
of growth, it should be emphasized that the Company will incur fur-
ther risks, because management in many instances will not have
proved its abilities or effectiveness, the eventual market for such
company's products or services will likely not be established, and such
company may not be profitable when acquired.
It is anticipated that the Company will not be able to diversify, but
will essentially be limited to one such venture because of the
Company's limited financing. This lack of diversification will not
permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's
securities.
It is emphasized that management of the Company may effect
transactions having a potentially adverse impact upon the Company's
shareholders pursuant to the authority and discretion of the Company's
management to complete acquisitions without submitting any proposal
to the stockholders for their consideration. Holders of the Company's
securities should not anticipate that the Company necessarily will
furnish such holders, prior to any merger or acquisition, with financial
statements, or any other documentation, concerning a target company
or its business. In some instances, however, the proposed participation
in a business opportunity may be submitted to the stockholders for
their consideration, either voluntarily by such directors to seek the
stockholders' advice and consent or because state law so requires.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's President, who is not a professional
business analyst. See "Management." Although there are no current
plans to do so, Company management might hire an outside consultant
to assist in the investigation and selection of business opportunities,
and might pay a finder's fee. Since Company management has no
current plans to use any outside consultants or advisors to assist in the
investigation and selection of business opportunities, no policies have
been adopted regarding use of such consultants or advisors, the criteria
to be used in selecting such consultants or advisors, the services to be
provided, the term of service, or regarding the total amount of fees
that may be paid. However, because of the limited resources of the
Company, it is likely that any such fee the Company agrees to pay
would be paid in stock and not in cash. Otherwise, the Company
anticipates that it will consider, among other things, the following
factors:
1. Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
2. The Company's perception of how any particular business
opportunity will be received by the investment community and by the
Company's stockholders;
3. Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a
significant prospect in the foreseeable future of becoming sufficient to
enable the securities of the Company to qualify for listing on an
exchange or on a national automated securities quotation system, such
as NASDAQ, so as to permit the trading of such securities to be
exempt from the requirements of Rule 15c2-6 recently adopted by the
Securities and Exchange Commission. See "Risk Factors - The
Company - Regulation of Penny Stocks."
4. Capital requirements and anticipated availability of required funds,
to be provided by the Company or from operations, through the sale
of additional securities, through joint ventures or similar arrangements,
or from other sources;
5. The extent to which the business opportunity can be advanced;
6. Competitive position as compared to other companies of similar
size and experience within the industry segment as well as within the
industry as a whole;
7. Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
8. The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
9. The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
In regard to the possibility that the shares of the Company
would qualify for listing on NASDAQ, the current standards include
the requirements that the issuer of the securities that are sought to be
listed have total assets of at least $4,000,000 and total capital and
surplus of at least $2,000,000. Many, and perhaps most, of the
business opportunities that might be potential candidates for a
combination with the Company would not satisfy the NASDAQ listing
criteria.
No one of the factors described above will be controlling in
the selection of a business opportunity, and management will attempt
to analyze all factors appropriate to each opportunity and make a
determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur
in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited
experience in business analysis, the Company may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in
a business opportunity. It expects, however, that the analysis of
specific proposals and the selection of a business opportunity may take
several months or more.
Prior to making a decision to participate in a business
opportunity, the Company will generally request that it be provided
with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections, with
related assumptions upon which they are based; an explanation of
proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions
between such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or if they are not
available, unaudited financial statements, together with reasonable
assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 60 days
following completion of a merger transaction; and other information
deemed relevant.
As part of the Company's investigation, the Company's
executive officers and directors may meet personally with management
and key personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information provided,
check references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
It is possible that the range of business opportunities that
might be available for consideration by the Company could be limited
by the impact of Securities and Exchange Commission regulations
regarding purchase and sale of "penny stocks." The regulations would
affect, and possibly impair, any market that might develop in the
Company's securities until such time as they qualify for listing on
NASDAQ or on another exchange which would make them exempt
from applicability of the "penny stock" regulations. See "Risk Factors
- - Regulation of Penny Stocks."
Company management believes that various types of potential
merger or acquisition candidates might find a business combination
with the Company to be attractive. These include acquisition
candidates desiring to create a public market for their shares in order
to enhance liquidity for current shareholders, acquisition candidates
which have long-term plans for raising capital through the public sale
of securities and believe that the possible prior existence of a public
market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of
development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a need
for an immediate cash infusion are not likely to find a potential
business combination with the Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company
may participate in a business opportunity. Specific business op-
portunities will be reviewed as well as the respective needs and desires
of the Company and the promoters of the opportunity and, upon the
basis of that review and the relative negotiating strength of the
Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may
include, but is not limited to leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements. The
Company may act directly or indirectly through an interest in a
partnership, corporation or other form of organization. Implementing
such structure may require the merger, consolidation or reorganization
of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the
Company would be the surviving entity. In addition, the present
management and stockholders of the Company most likely will not
have control of a majority of the voting shares of the Company
following a reorganization transaction. As part of such a transaction,
the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in
a business opportunity through the issuance of Common Stock or
other securities of the Company. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisi-
tion is a so-called "tax free" reorganization under the Internal Revenue
Code of 1986, depends upon the issuance to the stockholders of the
acquired company of a controlling interest (i.e. 80% or more) of the
common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under
the Internal Revenue Code, the Company's current stockholders would
retain in the aggregate 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution in the
equity of those who were stockholders of the Company prior to such
reorganization. Any such issuance of additional shares might also be
done simultaneously with a sale or transfer of shares representing a
controlling interest in the Company by the current officers, directors
and principal shareholders. (See "Description of Business - General").
It is anticipated that any new securities issued in any
reorganization would be issued in reliance upon exemptions, if any are
available, from registration under applicable federal and state securities
laws. In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities either
at the time the transaction is consummated, or under certain conditions
or at specified times thereafter. The issuance of substantial additional
securities and their potential sale into any trading market that might
develop in the Company's securities may have a depressive effect
upon such market.
The Company will participate in a business opportunity only
after the negotiation and execution of a written agreement. Although
the terms of such agreement cannot be predicted, generally such an
agreement would require specific representations and warranties by all
of the parties thereto, specify certain events of default, detail the terms
of closing and the conditions which must be satisfied by each of the
parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default,
and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its
officers and principal shareholders will enter into a letter of intent
with the management, principals or owners of a prospective business
opportunity prior to signing a binding agreement. Such a letter of
intent will set forth the terms of the proposed acquisition but will not
bind any of the parties to consummate the transaction. Execution of
a letter of intent will by no means indicate that consummation of an
acquisition is probable. Neither the Company nor any of the other
parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the ac-
quisition as described in the preceding paragraph is executed. Even
after a definitive agreement is executed, it is possible that the
acquisition would not be consummated should any party elect to
exercise any right provided in the agreement to terminate it on
specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for
accountants, attorneys and others. If a decision is made not to
participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are
provided, the inability of the Company to pay until an indeterminate
future time may make it impossible to procure goods and services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity by
purchasing, trading or selling the securities of such business. The
Company does not, however, intend to engage primarily in such
activities. Specifically, the Company intends to conduct its activities
so as to avoid being classified as an "investment company" under the
Investment Company Act of 1940 (the "Investment Act"), and
therefore to avoid application of the costly and restrictive registration
and other provisions of the Investment Act, and the regulations
promulgated thereunder.
Section 3(a) of the Investment Act contains the definition of
an "investment company," and it excludes any entity that does not
engage primarily in the business of investing, reinvesting or trading in
securities, or that does not engage in the business of investing,
owning, holding or trading "investment securities" (defined as "all
securities other than government securities or securities of
majority-owned subsidiaries") the value of which exceeds 40% of the
value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a
manner which will result in the availability of this exception from the
definition of "investment company." Consequently, the Company's
participation in a business or opportunity through the purchase and
sale of investment securities will be limited.
The Company's plan of business may involve changes in its
capital structure, management, control and business, especially if it
consummates a reorganization as discussed above. Each of these areas
is regulated by the Investment Act, in order to protect purchasers of
investment company securities. Since the Company will not register
as an investment company, stockholders will not be afforded these
protections.
Any securities which the Company might acquire in exchange
for its Common Stock will be "restricted securities" within the
meaning of the Securities Act of 1933, as amended (the "Act"). If the
Company elects to resell such securities, such sale cannot proceed
unless a registration statement has been declared effective by the
Securities and Exchange Commission or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales
of securities not involving a distribution, would in all likelihood be
available to permit a private sale. Although the plan of operation does
not contemplate resale of securities acquired, if such a sale were to be
necessary, the Company would be required to comply with the
provisions of the Act to effect such resale.
An acquisition made by the Company may be in an industry
which is regulated or licensed by federal, state or local authorities.
Compliance with such regulations can be expected to be a
time-consuming and expensive process.
Competition
The Company expects to encounter substantial competition in
its efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies,
small investment companies, and wealthy individuals. Many of these
entities will have significantly greater experience, resources and
managerial capabilities than the Company and will therefore be in a
better position than the Company to obtain access to attractive
business opportunities. The Company also will experience competition
from other public "blind pool" companies, many of which may have
more funds available than does the Company.
Administrative Offices
The Company currently maintains a mailing address at 4750
Table Mesa Drive, Boulder, Colorado 80303, which is the office
address of its legal counsel. The Company's telephone number is
(303) 442-1021. Other than this mailing address, the Company does
not currently maintain any other office facilities, and does not
anticipate the need for maintaining office facilities at any time in the
foreseeable future. The Company pays no rent or other fees for the
use of this mailing address.
Employees
The Company is a development stage company and currently
has no employees. Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does not anti-
cipate a need to engage any full-time employees so long as it is
seeking and evaluating business opportunities. The need for em-
ployees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities. Although there is no current plan with respect to its
nature or amount, remuneration may be paid to or accrued for the
benefit of, the Company's sole officerprior to, or in conjunction with,
the completion of a business acquisition. The Company's sole
shareholder has received a fee of $2,000 for organizing the
corporation, seeking merger candidates and evaluating these
candidates. See "Executive Compensation" and under "Certain
Relationships and Related Transactions."
Risk Factors
A. Conflicts of Interest. Certain conflicts of interest exist
between the Company and its sole officer and director. He has other
business interests to which he devotes his attention, and he may be
expected to continue to do so although management time should be
devoted to the business of the Company. As a result, conflicts of
interest may arise that can be resolved only through his exercise of
such judgment as is consistent with his fiduciary duties to the
Company. See "Management," and "Conflicts of Interest."
The Company's President and all current shareholders own all
of the issued and outstanding stock of another corporation (Boulder
Capital Opportunities, Inc.) which is a blind pool and has accepted a
deposit for a future merger. (See "Item 5. Directors, Executive
Officers, Promoters, and Control Persons - Other Blind Pool
Activities.") Should that merger not be completed, the Company
would be in competition with Boulder Capital Opportunities, Inc.,in
seeking merger candidates. However, since both entities have the
same shareholders, no conflict of interest exists. Since they all own
an equal amount of shares, no conflict exists.
The Company's President may elect, in the future, to form
one or more additional blind pool or blank check companies with a
business plan similar or identical to that of the Company. Any such
additional blind pool or blank check companies would also be in
direct competition with the Company for available business
opportunities. (See Item 5 - "Directors, Executive Officers, Promoters
and Control Persons - Conflicts of Interest.")
It is anticipated that Company's President may actively
negotiate or otherwise consent to the purchase of a portion of his
common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction. In this process, the Company's
President may consider his own personal pecuniary benefit rather than
the best interests of other Company shareholders, and the other
Company shareholders are not expected to be afforded the opportunity
to approve or consent to any particular stock buy-out transaction. See
"Conflicts of Interest."
POSSIBLE NEED FOR ADDITIONAL FINANCING. The Company
has very limited funds, and such funds may not be adequate to take
advantage of any available business opportunities. Even if the
Company's funds prove to be sufficient to acquire an interest in, or
complete a transaction with, a business opportunity, the Company may
not have enough capital to exploit the opportunity. The ultimate
success of the Company may depend upon its ability to raise
additional capital. The Company has not investigated the availability,
source, or terms that might govern the acquisition of additional capital
and will not do so until it determines a need for additional financing.
If additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on
terms acceptable to the Company. If not available, the Company's
operations will be limited to those that can be financed with its
modest capital.
1. Regulation of Penny Stocks. The Company's
securities, when available for trading, will be subject to a Securities
and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons
other than established customers or accredited investors. For purposes
of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having
a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the broker-
dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior
to the sale. Consequently, the rule may affect the ability of broker-
dealers to sell the Company's securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that
might develop therefor.
In addition, the Securities and Exchange Commission has
adopted a number of rules to regulate "penny stocks." Such rules
include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and
15g-7 under the Securities Exchange Act of 1934, as amended.
Because the securities of the Company may constitute "penny stocks"
within the meaning of the rules, the rules would apply to the
Company and to its securities. The rules may further affect the ability
of owners of Shares to sell the securities of the Company in any
market that might develop for them.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one
or a few broker-dealers that are often related to the promoter or issuer;
(ii) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differentials and markups by selling broker-
dealers; and (v) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a
desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses. The Company's
management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to
be in a position to dictate the behavior of the market or of broker-
dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns
from being established with respect to the Company's securities.
2. No Operating History. The Company was formed in
August of 1996 for the purpose of registering its common stock under
the 1934 Act and acquiring a business opportunity. The Company has
no operating history, revenues from operations, or assets other than
cash from private sales of stock. The Company faces all of the risks
of a new business and the special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. The
Company must be regarded as a new or "start-up" venture with all of
the unforeseen costs, expenses, problems, and difficulties to which
such ventures are subject.
c. No Assurance of Success or Profitability. There is no
assurance that the Company will acquire a favorable business op-
portunity. Even if the Company should become involved in a business
opportunity, there is no assurance that it will generate revenues or
profits, or that the market price of the Company's Common Stock will
be increased thereby.
d. Possible Business - Not Identified and Highly Risky.
The Company has not identified and has no commitments to enter into
or acquire a specific business opportunity and therefore can disclose
the risks and hazards of a business or opportunity that it may enter
into in only a general manner, and cannot disclose the risks and
hazards of any specific business or opportunity that it may enter into.
An investor can expect a potential business opportunity to be quite
risky. The Company's acquisition of or participation in a business
opportunity will likely be highly illiquid and could result in a total
loss to the Company and its stockholders if the business or
opportunity proves to be unsuccessful. See Item 1 "Description of
Business."
e. Type of Business Acquired. The type of business to
be acquired may be one that desires to avoid effecting its own public
offering and the accompanying expense, delays, uncertainties, and
federal and state requirements which purport to protect investors.
Because of the Company's limited capital, it is more likely than not
that any acquisition by the Company will involve other parties whose
primary interest is the acquisition of control of a publicly traded
company. Moreover, any business opportunity acquired may be
currently unprofitable or present other negative factors.
f. Impracticability of Exhaustive Investigation. The
Company's limited funds and the lack of full-time management will
likely make it impracticable to conduct a complete and exhaustive
investigation and analysis of a business opportunity before the
Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility
studies, independent analysis, market surveys and the like which, if the
Company had more funds available to it, would be desirable. The
Company will be particularly dependent in making decisions upon
information provided by the promoter, owner, sponsor, or others
associated with the business opportunity seeking the Company's
participation. A significant portion of the Company's available funds
may be expended for investigative expenses and other expenses related
to preliminary aspects of completing an acquisition transaction,
whether or not any business opportunity investigated is eventually
acquired.
g. Lack of Diversification. Because of the limited
financial resources that the Company has, it is unlikely that the
Company will be able to diversify its acquisitions or operations. The
Company's probable inability to diversify its activities into more than
one area will subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks
associated with the Company's operations.
h. Possible Reliance upon Unaudited Financial Statements.
The Company generally will require audited financial statements from
companies that it proposes to acquire. No assurance can be given,
however, that audited financials will be available to the Company. In
cases where audited financials are unavailable, the Company will have
to rely upon unaudited information received from target companies'
management that has not been verified by outside auditors. The lack
of the type of independent verification which audited financial
statements would provide, increases the risk that the Company, in
evaluating an acquisition with such a target company, will not have
the benefit of full and accurate information about the financial
condition and operating history of the target company. This risk
increases the prospect that the acquisition of such a company might
prove to be an unfavorable one for the Company or the holders of the
Company's securities.
Moreover, the Company will be subject to the reporting
provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and thus will be required to furnish certain
information about significant acquisitions, including audited financial
statements for any business that it acquires. Consequently, acquisition
prospects that do not have, or are unable to provide reasonable
assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate
for acquisition so long as the reporting requirements of the Exchange
Act are applicable. Should the Company, during the time it remains
subject to the reporting provisions of the Exchange Act, complete an
acquisition of an entity for which audited financial statements prove
to be unobtainable, the Company would be exposed to enforcement
actions by the Securities and Exchange Commission (the
"Commission") and to corresponding administrative sanctions,
including permanent injunctions against the Company and its
management. The legal and other costs of defending a Commission
enforcement action are likely to have material, adverse consequences
for the Company and its business. The imposition of administrative
sanctions would subject the Company to further adverse consequences.
In addition, the lack of audited financial statements would
prevent the securities of the Company from becoming eligible for
listing on NASDAQ, the automated quotation system sponsored by the
National Association of Securities Dealers, Inc., or on any existing
stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to
serve as market makers in the securities of the Company. Without
audited financial statements, the Company would almost certainly be
unable to offer securities under a registration statement pursuant to the
Securities Act of 1933, and the ability of the Company to raise capital
would be significantly limited until such financial statements were to
become available.
i. Other Regulation. An acquisition made by the
Company may be of a business that is subject to regulation or
licensing by federal, state, or local authorities. Compliance with such
regulations and licensing can be expected to be a time-consuming,
expensive process and may limit other investment opportunities of the
Company.
j. Dependence upon Management; Limited Participation
of Management. The Company currently has a single individual who
is serving as its sole officer and director. The Company will be
heavily dependent upon his skills, talents, and abilities to implement
its business plan, and may, from time to time, find that the inability
of the sole officer and director to devote his full time attention to the
business of the Company results in a delay in progress toward
implementing its business plan. Furthermore, since one individual is
serving as the sole officer and director of the Company, it will be
entirely dependent upon his experience in seeking, investigating, and
acquiring a business and in making decisions regarding the Company's
operations. See "Management." Because investors will not be able to
evaluate the merits of possible business acquisitions by the Company,
they should critically assess the information concerning the Company's
sole officer and director.
k. Lack of Continuity in Management. The Company
does not have an employment agreement with its sole officer and
director, and as a result, there is no assurance that he will continue to
manage the Company in the future. In connection with acquisition of
a business opportunity, it is likely the current officer and director of
the Company may resign. A decision to resign will be based upon the
identity of the business opportunity and the nature of the transaction,
and is likely to occur without the vote or consent of the stockholders
of the Company.
l. Indemnification of Officers and Directors. The
Company's Articles of Incorporation provide for the indemnification
of its directors, officers, employees, and agents, under certain cir-
cumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The
Company will also bear the expenses of such litigation for any of its
directors, officers, employees, or agents, upon such person's promise
to repay the Company therefor if it is ultimately determined that any
such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by the
Company which it will be unable to recoup.
m. Director's Liability Limited. The Company's Articles
of Incorporation exclude personal liability of its directors to the
Company and its stockholders for monetary damages for breach of
fiduciary duty except in certain specified circumstances. Accordingly,
the Company will have a much more limited right of action against its
directors than otherwise would be the case. This provision does not
affect the liability of any director under federal or applicable state
securities laws.
n. Dependence upon Outside Advisors. To supplement
the business experience of its sole officer and director, the Company
may be required to employ accountants, technical experts, appraisers,
attorneys, or other consultants or advisors. The selection of any such
advisors will be made by the Company's President without any input
from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to the Company. In the event the
President of the Company considers it necessary to hire outside
advisors, he may elect to hire persons who are affiliates, if they are
able to provide the required services.
o. Leveraged Transactions. There is a possibility that any
acquisition of a business opportunity by the Company may be lever-
aged, i.e., the Company may finance the acquisition of the business
opportunity by borrowing against the assets of the business oppor-
tunity to be acquired, or against the projected future revenues or
profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired
through a leveraged transaction is profitable only if it generates
enough revenues to cover the related debt and expenses. Failure to
make payments on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all of the assets
acquired. There is no assurance that any business opportunity
acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
p. Competition. The search for potentially profitable bus-
iness opportunities is intensely competitive. The Company expects to
be at a disadvantage when competing with many firms that have
substantially greater financial and management resources and capa-
bilities than the Company. These competitive conditions will exist in
any industry in which the Company may become interested.
q. No Foreseeable Dividends. The Company has not paid
dividends on its Common Stock and does not anticipate paying such
dividends in the foreseeable future.
r. Loss of Control by Present Management and
Stockholders. The Company may consider an acquisition in which the
Company would issue as consideration for the business opportunity to
be acquired an amount of the Company's authorized but unissued
Common Stock that would, upon issuance, represent the great majority
of the voting power and equity of the Company. The result of such
an acquisition would be that the acquired company's stockholders and
management would control the Company, and the Company's
management could be replaced by persons unknown at this time.
Such a merger would result in a greatly reduced percentage of
ownership of the Company by its current shareholders. In addition, the
Company's President could sell his control block of stock at a
premium price to the acquired company's stockholders.
s. No Public Market Exists. There is no public market
for the Company's common stock, and no assurance can be given that
a market will develop or that a shareholder ever will be able to
liquidate his investment without considerable delay, if at all. If a
market should develop, the price may be highly volatile. Factors such
as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered
hereby. Owing to the low price of the securities, many brokerage
firms may not be willing to effect transactions in the securities. Even
if a purchaser finds a broker willing to effect a transaction in these
securities, the combination of brokerage commissions, state transfer
taxes, if any, and any other selling costs may exceed the selling price.
Further, many lending institutions will not permit the use of such
securities as collateral for any loans.
t. Rule 144 Sales. All of the outstanding shares of
Common Stock held by present stockholders are "restricted securities"
within the meaning of Rule 144 under the Securities Act of 1933, as
amended. As restricted shares, these shares may be resold only
pursuant to an effective registration statement or under the re-
quirements of Rule 144 or other applicable exemptions from regis-
tration under the Act and as required under applicable state securities
laws. Rule 144 provides in essence that a person who has held
restricted securities for a prescribed period may, under certain
conditions, sell every three months, in brokerage transactions, a
number of shares that does not exceed the greater of 1.0% of a
company's outstanding common stock or the average weekly trading
volume during the four calendar weeks prior to the sale. There is no
limit on the amount of restricted securities that may be sold by a
nonaffiliate after the restricted securities have been held by the owner
for a period of three years. A sale under Rule 144 or under any other
exemption from the Act, if available, or pursuant to subsequent
registrations of shares of Common Stock of present stockholders, may
have a depressive effect upon the price of the Common Stock in any
market that may develop. Of the total 1,010,00 shares of common
stock held by present stockholders of the Company 710,000 shares
will become available for resale under Rule 144 ninety (90) days after
the Company registers its common stock under Section 12(g) of the
Securities and Exchange Commission, all of which will be subject to
applicable volume restrictions under the Rule, and the remaining
300,000 shares will become available for resale starting in
August, 1998.
v. Blue Sky Considerations. Because the securities
registered hereunder have not been registered for resale under the blue
sky laws of any state, the holders of such shares and persons who
desire to purchase them in any trading market that might develop in
the future, should be aware that there may be significant state blue-sky
law restrictions upon the ability of investors to sell the securities and
of purchasers to purchase the securities. Some jurisdictions may not
under any circumstances allow the trading or resale of blind-pool or
"blank-check" securities. Accordingly, investors should consider the
secondary market for the Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
Liquidity and Capital Resources
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of net cash
proceeds in the amount of $4,250, plus subscriptions receivable of
$2,000,000 from its inside capitalization funds. Consequently, the
Company's balance sheet for the period of August 8, 1996 (inception)
through August 31, 1996, reflects a current asset value of $4,250 and
a total asset value of $9.995, primarily in the form of cash.
The Company will carry out its plan of business as discussed
above. The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations
During the period from August 8, 1996 (inception) through
August 31, 1996, the Company has engaged in no significant
operations other than organizational activities, acquisition of capital
and preparation for registration of its securities under the Securities
Exchange Act of 1934, as amended. No revenues were received by
the Company during this period.
For the current fiscal year, the Company anticipates incurring
a loss as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues other than
interest income, and may continue to operate at a loss after completing
a business combination, depending upon the performance of the
acquired business.
Need for Additional Financing
The Company believes that its existing capital will be
sufficient to meet the Company's cash needs, including the costs of
compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended, for a period of
approximately one year. Accordingly, in the event the Company is
able to complete a business combination during this period, it
anticipates that its existing capital will be sufficient to allow it to
accomplish the goal of completing a business combination. There is
no assurance, however, that the available funds will ultimately prove
to be adequate to allow it to complete a business combination, and
once a business combination is completed, the Company's needs for
additional financing are likely to increase substantially.
No commitments to provide additional funds have been made
by management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to the Company
to allow it to cover its expenses.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company
might seek to compensate providers of services by issuances of stock
in lieu of cash. For information as to the Company's policy in regard
to payment for consulting services, see "Certain Relationships and
Transactions."
Item 3. Description of Property.
The Company does not currently maintain an office or any
other facilities. It does currently maintain a mailing address at 4750
Table Mesa Drive, Boulder, Colorado 80303, which is the office
address of its legal counsel. The Company pays no rent for the use
of this mailing address. The Company does not believe that it will
need to maintain an office at any time in the foreseeable future in
order to carry out its plan of operations described herein. The
Company's telephone number is (303) 442-1021.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date of this
Registration Statement, the number of shares of Common Stock owned
of record and beneficially by executive officers, directors and persons
who hold 5.0% or more of the outstanding Common Stock of the
Company. Also included are the shares held by all executive officers
and directors as a group.
<TABLE>
<CAPTION>
<S>
<C> <C> <C>
Name and Address Number of Percent of
Shares Owned Class Owned
Beneficially
Robert Soehngen<F1>
2434 Vine Place
Boulder, Colorado 80304 660,000 65.35%
All directors and executive
officers as a group (1 person) 660,000 65.35%
<FN>
<F1> The person listed is the sole officer and director of the
Company.
</FN>
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers currently serving the
Company are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Positions Held and Tenure
Robert Soehngen 45 President and Director since
April, 1996
</TABLE>
The director named above will serve until the first annual
meeting of the Company's stockholders. Thereafter, directors will be
elected for one-year terms at the annual stockholders' meeting.
Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding
between the sole director and officer of the Company and any other
person pursuant to which any director or officer was or is to be
selected as a director or officer.
The sole director and officer of the Company will devote his
time to the Company's affairs on an "as needed" basis. As a result,
the actual amount of time which he will devote to the Company's
affairs is unknown and is likely to vary substantially from month to
month.
Biographical Information
Robert Soehngen. Mr. Soehngen, who is the Company's
President, has served as the sole officer and director of the Company
since its inception.
Mr. Soehngen is currently self-employed as a business
consultant, providing consulting services relating to mergers and
acquisitions and is engaged in the real estate business as a licensed
broker associate with Century 21. From 1980 to 1995 he was a
partner in Sawyer/Soehngen Partnership, a real estate partnership
which owned commercial property in downtown Boulder, Colorado.
Mr. Soehngen has also been engaged in the securities business in
various capacities from 1975 to the present. From 1984 through 1990
he was President of National Securities Network, Inc. From 1991
through 1994 he was Director of Corporate Finance for Spencer
Edwards, Inc., Nutmeg Securities, Inc., and Brookstreet Securities
Corporation, and from 1994 through 1995 was an Account Executive
with Toluca Pacific Securities. From 1989 through 1995, Mr.
Soehngen was President of National Securities Holding Corporation
and in that capacity maintained the books and records of a publicly-
held subsidiary corporation until it was merged with an operating
business in September 1995. Mr. Soehngen graduated from the
University of Colorado in 1972, with a B.S. in Finance.
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of In-
corporation provide that the Company will indemnify its directors and
officers against expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action brought against them on account
of their being or having been Company directors or officers unless, in
any such action, they are adjudged to have acted with gross negligence
or willful misconduct. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Colorado Business Corporation Act, the
Company's Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any breach of the
duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, acts in violation
of Section 7-106-401 of the Colorado Business Corporation Act, or
any transaction from which a director receives an improper personal
benefit. This exclusion of liability does not limit any right which a
director may have to be indemnified and does not affect any director's
liability under federal or applicable state securities laws.
Other Blind Pool Activities
Mr. Soehngen and all the current shareholders own exactly the
same number of shares and the same relative percentage interests in
another blind pool corporation, Boulder Capital Opportunities, Inc.
The shareholders of that company have signed a letter of intent and
have received a cash deposit of $10,000 as non-refundable earnest
money for sale of a controlling interest in the Company in order to
facilitate a merger transaction. The Closing of the sale of such shares
is scheduled to occur on or before December 3,1 1996. Mr. Soehngen
may elect, in the future, to form, or to seek to become affiliated with
one or more such entities.
Conflicts of Interest
The sole officer and director of the Company will not devote
more than a portion of his time to the affairs of the Company. There
will be occasions when the time requirements of the Company's
business conflict with the demands of his other business and
investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be obtained
upon terms favorable to the Company.
The Company's President may elect, in the future, to form one
or more additional blind pool or blank check companies with a
business plan similar or identical to that of the Company. Any such
additional blind pool or blank check companies would also be in
direct competition with the Company for available business
opportunities.
There is no procedure in place which would allow Mr.
Soehngen to resolve potential conflicts in an arms-length fashion.
Accordingly, he will be required to use his discretion to resolve them
in a manner which he considers appropriate.
The Company's sole officer and director may actively
negotiate or otherwise consent to the purchase of a portion of his
common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction. It is anticipated that a substantial
premium over the initial cost of such shares may be paid by the
purchaser in conjunction with any sale of shares by the Company's
officer and director which is made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a
substantial premium may be paid to the Company's sole officer and
director to acquire his shares creates a potential conflict of interest for
him in satisfying his fiduciary duties to the Company and its other
shareholders. Even though such a sale could result in a substantial
profit to him, he would be legally required to make the decision based
upon the best interests of the Company and the Company's other
shareholders, rather than his own personal pecuniary benefit.
Item 6. Executive Compensation.
At inception of the Company, its sole Director, Robert
Soehngen, received 560,000 shares of Common Stock valued at
$.0025 per share in consideration of pre-incorporation services
rendered to the Company related to investigating and developing the
Company's proposed business plan and capital structure, and
completion of the incorporation and organization of the Company.
Three other persons each received a total of 50,000 shares valued at
$0.0025 per share in consideration of pre-incorporation services
rendered to the Company related to investigating and developing the
Company's proposed business plan and capital structure. Mr.
Soehngen also received a fee of $2,000 for services relating to
organizing the Company, seeking merger candidates and evaluating
those candidates. No officer or director has received any other
remuneration. Although there is no current plan in existence, it is
possible that the Company will adopt a plan to pay or accrue
compensation to its sole officer and director for services related to
seeking business opportunities and completing a merger or acquisition
transaction. See "Certain Relationships and Related Transactions."
The Company has no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of
one or more such programs in the future.
Item 7. Certain Relationships and Related Transactions.
Prior to the date of this Registration Statement, the Company
issued to its officer and director, and to other shareholders, a total of
1,010,000 shares of Common Stock for a total of $8,250.00 in cash
and $1,775.00 in services. Certificates evidencing the Common Stock
issued by the Company to these persons have all been stamped with
a restrictive legend, and are subject to stop transfer orders by the
Company. For additional information concerning restrictions that are
imposed upon the securities held by current stockholders, and the
responsibilities of such stockholders to comply with federal securities
laws in the disposition of such Common Stock, see "Risk Factors -
Rule 144 Sales."
No officer, director, promoter, or affiliate of the Company has
or proposes to have any direct or indirect material interest in any asset
proposed to be acquired by the Company through security holdings,
contracts, options, or otherwise.
The Company has adopted a policy under which any
consulting or finder's fee that may be paid to a third party for
consulting services to assist management in evaluating a prospective
business opportunity would be paid in stock or in cash. Any such
issuance of stock would be made on an ad hoc basis. Accordingly,
the Company is unable to predict whether or in what amount such a
stock issuance might be made.
Although there is no current plan in existence, it is possible
that the Company will adopt a plan to pay or accrue compensation to
its sole officer and director for services related to seeking business
opportunities and completing a merger or acquisition transaction.
The Company maintains a mailing address at the office of its
legal counsel, but otherwise does not maintain an office. As a result,
it pays no rent and incurs no expenses for maintenance of an office
and does not anticipate paying rent or incurring office expenses in the
future. It is likely that the Company will establish and maintain an
office after completion of a business combination.
Although management has no current plans to cause the
Company to do so, it is possible that the Company may enter into an
agreement with an acquisition candidate requiring the sale of all or a
portion of the Common Stock held by the Company's current
stockholders to the acquisition candidate or principals thereof, or to
other individuals or business entities, or requiring some other form of
payment to the Company's current stockholders, or requiring the
future employment of specified officers and payment of salaries to
them. It is more likely than not that any sale of securities by the
Company's current stockholders to an acquisition candidate would be
at a price substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the context of
an acquisition involving the Company would be determined entirely
by the largely unforeseeable terms of a future agreement with an
unidentified business entity.
Item 8. Description of Securities.
Common Stock
The Company's Articles of Incorporation authorize the issu-
ance of 100,000,000 shares of Common Stock. Each record holder of
Common Stock is entitled to one vote for each share held on all
matters properly submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not permitted by the
Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled
to such dividends as may be declared from time to time by the Board
of Directors out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of the Company,
holders are entitled to receive, ratably, the net assets of the Company
available to stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights upon liquidation.
Holders of outstanding shares of Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares when offered
and sold will be, duly authorized, validly issued, fully paid, and
nonassessable. To the extent that additional shares of the Company's
Common Stock are issued, the relative interests of then existing
stockholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation authorize the issu-
ance of 10,000,000 shares of preferred stock. The Board of Directors
of the Company is authorized to issue the preferred stock from time
to time in series and is further authorized to establish such series, to
fix and determine the variations in the relative rights and preferences
as between series, to fix voting rights, if any, for each series, and to
allow for the conversion of preferred stock into Common Stock. No
preferred stock has been issued by the Company. The Company anti-
cipates that preferred stock may be utilized in making acquisitions.
Transfer Agent
The Company is currently serving as its own transfer agent,
and plans to continue to serve in that capacity until such time as
management believes it is necessary or appropriate to employ an
independent transfer agent in order to facilitate the creation of a public
trading market for the Company's securities. Since the Company does
not currently expect any public market to develop for its securities
until after it has completed a business combination, it does not
currently anticipate that it will seek to employ an independent transfer
agent until it has completed such a transaction.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual
report for each fiscal year containing financial statements audited by
its independent certified public accountants. In the event the
Company enters into a business combination with another company,
it is the present intention of management to continue furnishing annual
reports to stockholders. Additionally, the Company may, in its sole
discretion, issue unaudited quarterly or other interim reports to its
stockholders when it deems appropriate. The Company intends to
comply with the periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to those
requirements.
<PAGE>
PART II
Item 1. Market Price and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
No public trading market exists for the Company's securities
and all of its outstanding securities are restricted securities as defined
in Rule 144. There were nine (9) holders of record of the Company's
common stock on August 31, 1996. No dividends have been paid to
date and the Company's Board of Directors does not anticipate paying
dividends in the foreseeable future.
Item 2. Legal Proceedings
The Company is not a party to any pending legal proceedings,
and no such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner
of record or beneficial owner of more than 5.0% of the securities of
the Company, or any associate of any such director, officer or security
holder is a party adverse to the Company or has a material interest
adverse to the Company in reference to pending litigation.
Item 3. Changes in and Disagreements with Accountants.
Not applicable.
Item 4. Recent Sales of Unregistered Securities.
Since August 8, 1996 (the date of the Company's formation),
the Company has sold its Common Stock to the persons listed in the
table below in transactions summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Date of Shares Aggregate Purchase
Sale Purchase Price
Price per Share
Robert Soehngen 04/22/96 560,000 $1,400.00<F1> $0.0025
Gary S. Joiner 04/22/96 50,000 $ 125.00<F2> $0.0025
Grant W. Peck 04/22/96 50,000 $ 125.00<F2> $0.0025
Dean F. Sessions 04/22/96 50,000 $ 125.00<F2> $0.0025
Robert Soehngen 04/23/96 100,000 $ 250.00 $0.0025
Steven C. Signer 04/26/96 50,000 $2,000.00 $0.04
Dev K. Mahanti 04/26/96 50,000 $2,000.00 $0.04
Thomas Soehngen 04/28/96 40,000 $1,600.00 $0.04
John F. O'Neil 04/29/96 30,000 $1,200.00 $0.04
Douglas L. Ray 04/29/96 30,000 $1,200.00 $0.04
<FN>
<F1>Consideration consisted of pre-incorporation consulting services
rendered to the Registrant related to investigating and developing the
Registrant's proposed business plan and capital structure and
completing the organization and incorporation of the Registrant.
<F2>Consideration consisted of pre-incorporation consulting services
rendered to the Registrant related to investigating and developing the
Registrant's proposed business plan and capital structure.
</FN>
</TABLE>
Each of the sales listed above was made for cash or services.
All of the listed sales were made in reliance upon the exemption from
registration offered by Section 4(2) of the Securities Act of 1933, as
amended. Based upon Purchaser Questionnaires completed by each
of the subscribers and the pre-existing relationship between the
subscribers of the Company's sole officer and director, the Company
had reasonable grounds to believe immediately prior to making an
offer to the private investors, and did in fact believe, when such
subscriptions were accepted, that such purchasers (1) were purchasing
for investment and not with a view to distribution, and (2) had such
knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of their investment and
were able to bear those risks. The purchasers had access to pertinent
information enabling them to ask informed questions. The shares
were issued without the benefit of registration. An appropriate
restrictive legend is imprinted upon each of the certificates
representing such shares, and stop-transfer instructions have been
entered in the Company's transfer records. All such sales were
effected without the aid of underwriters, and no sales commissions
were paid.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company,
filed as Exhibits 3.1 and 3.2, respectively, provide that the Company
will indemnify its officers and directors for costs and expenses
incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a
manner he reasonably believed to be in the Company's best interest
and is a party by reason of his status as an officer or director, absent
a finding of negligence or misconduct in the performance of duty.<PAGE>
FINANCIAL STATEMENTS
(A Development Stage Company)
BOULDER CAPITAL OPPORTUNITIES
II, INC.
August 31, 1996<PAGE>
BOULDER CAPITAL OPPORTUNITIES
II, INC.
(A Development Stage Company)
Index to Financial Statements
Balance Sheet 4
Statement of Operations 6
Statement of Changes in
Stockholders' Equity 7
Statement of Cash Flows 8
Notes to Financial Statements 10
BOULDER CAPITAL OPPORTUNITIES
II, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF AUGUST 31, 1996
The following financial statements include a balance sheet as of
August 31, 1996, and a statement of operations for the period from
August 8, 1996, (inception) through August 31, 1996.
BOULDER CAPITAL OPPORTUNITIES II, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET AS OF AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS
Cash 4,250
TOTAL CURRENT
ASSETS 4,250
ORGANIZATIONAL COSTS 1,775
less accumulated amortization 30
SUBSCRIPTIONS RECEIVABLE 4,000
TOTAL ASSETS 9,995
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 2,225
TOTAL CURRENT
LIABILITIES 2,225
STOCKHOLDERS' EQUITY
Preferred Stock, no par value,
10,000,000 shares authorized -
Common Stock, no par value,
100,000,000 shares authorized,
1,010,000 shares issued and
outstanding. 10,025
Deficit accumulated
during the
development stage (2,255)
/TABLE
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 8, 1996 (Inception) to
AUGUST 31, 1996
<TABLE>
<CAPTION> Period from
Inception
(8/8/96)
thru 8/31/96
<S> <C>
REVENUES -
COSTS AND EXPENSES:
General and administrative 2,225
Amortization 30
NET LOSS 2,255
PER SHARE INFORMATION:
Weighted average number of
common shares outstanding 1,010,000
NET LOSS PER SHARE .0022
/TABLE
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM
AUGUST 8, 1996 (INCEPTION) TO AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES -
CASH FLOWS FROM
INVESTING ACTIVITIES -
CASH FLOWS FROM
FINANCING ACTIVITIES:
Capital contributions 4,250
NET CASH PROVIDED BY
FINANCING ACTIVITIES 4,250
NET INCREASE IN CASH AND
CASH EQUIVALENTS 4,250
BEGINNING CASH AND CASH
EQUIVALENTS -
ENDING CASH AND CASH
EQUIVALENTS 4,250
RECONCILIATION OF NET LOSS
TO NET CASH USED IN
OPERATING ACTIVITIES:
Net loss 2,255
Amortization (30)
Increase in accounts payable (2,225)
Net cash used in operating
activities -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
ACTIVITIES:
On August 8, 1996, professional services capitalized as
organizational costs valued at $1,775 were exchanged for
710,000 shares of common stock.
/TABLE
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM AUGUST 8, 1996 (INCEPTION)
THROUGH AUGUST 31, 1996
<TABLE>
<CAPTION>
Deficit Accumulated
During the
Common Stock Development Stage
Shares Amount Total
<S> <C> <C> <C> <C>
Shares issued at
inception for services
at $0.0025 per share 710,000 1,775 1,775
Shares issued for
cash at $0.0025
per share 100,000 250 250
Shares issued for
cash at $0.04
per share 100,000 4,000 4,000
Shares subscribed
at $0.04 per share 100,000 4,000 4,000
NET LOSS FOR THE
PERIOD - - (2,255) (2,255)
TOTAL 1,010,000 10,025 (2,255) (7,770)
/TABLE
<PAGE>
BOULDER CAPITAL OPPORTUNITIES
II, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF AUGUST 31, 1996
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization
The Company was incorporated on August 8,
1996, in the State of Colorado. The Company is in
the development stage and its intent is to operate as a
capital market access corporation and to acquire one or
more existing businesses through merger or
acquisition. The Company has had no significant
business activity to date. The Company has not yet
selected a fiscal year end.
Organizational costs
Organizational costs include costs for
professional fees and are amortized using the straight-
line method over five years.
Net loss per share
The net loss per share is computed by dividing
the net loss for the period by the weighted average
number of common shares outstanding for the period.
Estimates
The preparation of the Company's financial
statements in conformity with generally accepted
accounting principles requires the Company's
management to make estimates and assumptions that
affect the amounts reported in these financial
statements and accompanying notes. Actual results
could differ from those estimates.
2. STOCKHOLDERS' EQUITY
On August 8, 1996, the Company issued
710,000 shares of its no par value common stock to
affiliates for services valued at their fair market value
of $1,775.
On August 8, 1996, the Company issued
100,000 shares of its no par value common stock to its
President at $0.0025 per share, $250 in total.
On August 31, 1996, the Company issued
100,000 shares of its no par value common stock to
various investors for $4,000; 100,000 additional shares
remain subscribed for at August 31, 1996. These were
collected in September, 1996.
3. RELATED PARTY TRANSACTIONS
At August 31, 1996, the Company owed $2,000
in consulting fees and $225 in attorney's fees to
officers who are shareholders of the Company.
<PAGE>
PART III
Item 1. Index to Exhibits
The Exhibits listed below are filed as part of
this Registration Statement.
<TABLE>
<CAPTION>
<S> <C>
Exhibit
No. Document
2.1 Articles of Incorporation
2.2 Bylaws
3.1 Specimen Stock Certificate
Item 2. Description of Exhibits.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the registrant caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BOULDER CAPITAL OPPORTUNITIES II, INC.
By: /S/
Robert Soehngen, President and Director
(Principal Executive Officer)
Date:
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the registrant caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BOULDER CAPITAL OPPORTUNITIES II, INC.
By: /s/ Robert Soehngen
Robert Soehngen, President and Director
(Principal Executive Officer)
Date:
<PAGE>
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
BOULDER CAPITAL OPPORTUNITIES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1341980 (State or
other jurisdiction of (I.R.S. Employer ID Number)
incorporation or organization)
4750 Table Mesa Drive, Boulder, Colorado 80303
(Address of principal executive offices) (Zip
Code)
Issuer's telephone number: (303) 442-1021
EXHIBIT INDEX
Exhibit Page Number in
No. Document Sequentially Numbered System
2.1 Articles of Incorporation
2.2 Bylaws
3.1 Specimen Stock Certificate
<PAGE>
EXHIBIT 2.1
ARTICLES OF INCORPORATION
OF
BOULDER CAPITAL OPPORTUNITIES II, INC.
The undersigned, who, if a natural person, is
eighteen years of age or older, hereby establishes a
corporation pursuant to the Colorado Business
Corporation Act as amended and adopts the following
Articles of Incorporation:
FIRST: The name of the corporation is Boulder
Capital Opportunities II, Inc.
SECOND: The corporation shall have and
may exercise all of the rights, powers and privileges
now or hereafter conferred upon corporations
organized under the laws of Colorado. In addition, the
corporation may do everything necessary, suitable or
proper for the accomplishment of any of its corporate
purposes. The corporation may conduct part or all of
its business in any part of Colorado, the United States
or the world and may hold, purchase, mortgage, lease
and convey real and personal property in any of such
places.
THIRD: The aggregate number of shares
which the corporation shall have authority to issue is
one hundred ten million (110,000,000) shares of which
a portion shall be common stock and a portion shall be
preferred stock, all as described below.
A. Common Stock. The aggregate number
of common shares which the corporation shall have the
authority to issue is one hundred million
(100,000,000), which shares shall be designated
"Common Stock." Subject to all the rights of the
Preferred Stock as expressly provided herein, by law
or by the Board of Directors pursuant to this Article,
the Common Stock of the corporation shall possess all
such rights and privileges as are afforded to capital
stock by applicable law in the absense of any express
grant of rights or privileges in these Articles of
Incorporation, including, but not limited to, the
following rights and privileges:
(a) dividends may be declared and paid or
set apart for payment on the Common Stock
out of any assets or funds of the corporation
legally available for the payment of dividends;
(b) the holders of Common Stock shall
have unlimited voting rights, including the right
to vote for the election of directors and on all
other matters requiring stockholder action.
Each holder of Common Stock shall have one
vote for each share of Common Stock standing
in his name on the books of the corporation
and entitled to vote, except that in the election
of directors each holder of Common Stock
shall have as many votes for each share of
Common Stock held by him as there are
directors to be elected and for whose election
the holder of Common Stock has a right to
vote. Cumulative voting shall not be permitted
in the election of directors or otherwise.
(c) on the voluntary or involuntary
liquidation, dissolution or winding up of the
corporation, and after paying or aduquately
providing for the payment of all of its
obligations and amounts payable in liquidation,
dissolution or winding up, and subject to the
rights of the holders of Preferred Stock, if any,
the net assets of the corporation shall be
distributed pro rata to the holders of the
Common Stock.
B. Preferred Stock. The aggregate number
of preferred shares which this corporation shall have
the authority to issue is ten million (10,000,000)
shares, each with no par value, which shares shall be
designated "Preferred Stock." Shares of Preferred
Stock may be issued from time to time in one or more
series as determined by the Board of Directors. The
Board of Directors is hereby authorized, by resolution
or resolutions, to provide from time to time, out of the
unissued shares of Preferred Stock not then allocated
to any series of Preferred Stock, for a series of the
Preferred Stock. Each such series shall have
distinctive serial designations. Before any shares of
any such series of Preferred Stock are issued, the
Board of Directors shall fix and determine, and is
hereby expressly empowered to fix and determine, by
resolution or resolutions, the voting powers, full or
limited, or no voting powers, and the designations,
preferences and relative, participating, optional or
other special rights, and the qualifications, limitations
and restrictions thereof as provided by Colorado law.
Before issuing any shares of a class or series, the
corporation shall deliver to the secretary of state for
filing articles of amendment to these articles of
incorporation that set forth information required by
Colorado law, including but not limited to, the
designations, preferences, limitations, and relative
rights of the class or series of shares.
C. Voting. Unless otherwise ordered by a
court of competent jurisdiction, at all meetings of
shareholders one-third of the shares of a voting group
entitled to vote at such meeting, represented in person
or by proxy, shall constitute a quorum of that voting
group.
FOURTH: The number of directors of the
corporation shall be fixed by the bylaws, or if the
bylaws fail to fix such a number, then by resolution
adopted from time to time by the board of directors,
provided that the number of directors shall not be
more than five (5) nor less than one (1). One (1)
director shall constitute the initial board of directors.
The following person is elected to serve as the
corporation's initial director until the first annual
meeting of shareholders or until his successors are
duly elected and qualified:
Name Address
Robert Soehngen 2434 Vine Place
Boulder, Colorado 80304
FIFTH: The street address of the initial
registered office of the corporation is 4750 Table Mesa
Drive, Boulder, Colorado 80303. The name of the
initial registered agent of the corporation at such
address is Gary S. Joiner.
SIXTH: The address of the initial
principal office of the corporation is 4750 Table Mesa
Drive, Boulder, Co 80303.
SEVENTH: The following provisions are
inserted for the management of the business and for
the conduct of the affairs of the corporation, and the
same are in furtherance of and not in limitation or
exclusion of the powers conferred by law.
(a) Conflicting Interest Transactions. As
used in this paragraph, "conflicting interest
transaction" means any of the following: (i) a loan or
other assistance by the corporation to a director of the
corporation or to an entity in which a director of the
corporation is a director or officer or has a financial
interest; (ii) a guaranty by the corporation of an
obligation of a director of the corporation or of an
obligation of an entity in which a director of the
corporation is a director or officer or has a financial
interest; or (iii) a contract or transaction between the
corporation and a director of the corporation or
between the corporation and an entity in which a
director of the corporation is a director or officer or
has a financial interest. No conflicting interest
transaction shall be void or voidable, be enjoined, be
set aside, or give rise to an award of damages or other
sanctions in a proceeding by a shareholder or by or in
the right of the corporation, solely because the
conflicting interest transaction involves a director of
the corporation or an entity in which a director of the
corporation is a director or officer or has a financial
interest, or solely because the director is present at or
participates in the meeting of the corporation's board
of directors or of the committee of the board of
directors which authorized, approves or ratifies a
conflicting interest transaction, or solely because the
director's vote is counted for such purpose if: (A) the
material facts as to the director's relationship or
interest and as to the conflicting interest transaction are
disclosed or are known to the board of directors or the
committee, and the board of directors or committee in
good faith authorizes, approves or ratifies the
conflicting interest transaction by the affirmative vote
of a majority of the disinterested directors, even
though the disinterested directors are less than a
quorum; or (B) the material facts as to the director's
relationship or interest and as to the conflicting interest
transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the
conflicting interest transaction is specifically
authorized, approved or ratified in good faith by a vote
of the shareholders; or (C) a conflicting interest
transaction is fair as to the corporation as of the time
it is authorized, approved or ratified by the board of
directors, a committee thereof, or the shareholders.
Common or interested directors may be counted in
determining the presence of a quorum at a meeting of
the board of directors or of a committee which
authorizes, approves or ratifies the conflicting interest
transaction.
(b) Loans and Guaranties for the Benefit of
Directors. Neither the board of directors nor any
committee thereof shall authorize a loan by the
corporation to a director of the corporation or to an
entity in which a director of the corporation is a
director or officer or has a financial interest, or a
guaranty by the corporation of an obligation of a
director of the corporation or of an obligation of an
entity in which a director of the corporation is a
director or officer or has a financial interest, until at
least ten days after written notice of the proposed
authorization of the loan or guaranty has been given to
the shareholders who would be entitled to vote thereon
if the issue of the loan or guaranty were submitted to
a vote of the shareholders. The requirements of this
paragraph (b) are in addition to, and not in substitution
for, the provisions of paragraph (a) of Article
SEVENTH.
(c) Indemnification. The corporation shall
indemnify, to the maximum extent permitted by law,
any person who is or was a director, officer, agent,
fiduciary or employee of the corporation against any
claim, liability or expenses arising against or incurred
by such person made party to a proceeding because he
is or was a director, officer, agent, fiduciary or
employee of the corporation or because he was a
director, officer, agent, fiduciary or employee of the
corporation or because he is or was serving another
entity as a director, officer, partner, trustee, employee,
fiduciary or agent at the corporation's request. The
corporation shall further have the authority to the
maximum extent permitted by law to purchase and
maintain insurance providing such indemnification.
(d) Limitation on Director's Liability. No
director of this corporation shall have any personal
liability for monetary damages to the corporation or its
shareholders for breach of his fiduciary duty as a
director, except that this provision shall not eliminate
or limit the personal liability of a director to the
corporation or its shareholders for monetary damages
for: (i) any breach of the director's duty of loyalty to
the corporation or its shareholders; (ii) acts or
omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) voting for or assenting to a distribution in
violation of Colorado Revised Statutes Section 7-106-401 or
the articles of incorporation if it is established that the
director did not perform his duties in compliance with
Colorado Revised Statutes Section 7-108-401, provided that
the personal liability of a director in this circumstance
shall be limited to the amount of the distribution
which exceeds what could have been distributed
without violation of Colorado Revised Statutes Section 7-106-
401 or the articles of incorporation; or (iv) any
transaction from which the director directly or
indirectly derives an improper personal benefit.
Nothing contained herein will be construed to deprive
any director of his right to all defenses ordinarily
available to a director nor will anything herein be
construed to deprive any director of any right he may
have for contribution from any other director or other
person.
(e) Negation of Equitable Interests in
Shares or Rights. Unless a person is recognized as a
shareholder through procedures established by the
corporation pursuant to Colorado Revised Statutes Section
7-107-204 or any similar law, the corporation shall be
entitled to treat the registered holder of any shares of
the corporation as the owner thereof for all purposes
permitted by the Colorado Business Corporation Act,
including without limitation all rights deriving from
such shares, and the corporation shall not be bound to
recognize any equitable or other claim to, or interest
in, such shares or rights deriving from such shares on
the part of any other person including without
limitation, a purchaser, assignee or transferee of such
shares, unless and until such other person becomes the
registered holder of such shares or is recognized as
such, whether or not the corporation shall have either
actual or constructive notice of the claimed interest of
such other person. By way of example and not of
limitation, until such other person has become the
registered holder of such shares or is recognized
pursuant to Colorado Revised Statutes Section 7-107-204 or
any similar applicable law, he shall not be entitled: (i)
to receive notice of the meetings of the shareholders;
(ii) to vote at such meetings; (iii) to examine a list of
the shareholders; (iv) to be paid dividends or other
distributions payable to shareholders; or (v) to own,
enjoy and exercise any other rights deriving from such
shares against the corporation. Nothing contained
herein will be construed to deprive any beneficial
shareholder, as defined in Colorado Revised Statutes
Section 7-113-101(1), of any right he may have pursuant to
Article 113 of the Colorado Business Corporation Act
or any subsequent law.
<PAGE>
EIGHTH: The name and address of the
incorporator is:
Gary S. Joiner
4750 Table Mesa Drive
Boulder, Colorado 80303
DATED the 8th day of August, 1996.
Gary S. Joiner /s/
Incorporator
Gary S. Joiner hereby consents to the
appointment as the initial registered agent for Boulder
Capital Opportunities II, Inc.
Gary S. Joiner /s/
Initial Registered Agent<PAGE>
EXHIBIT 2.2
BYLAWS
OF
BOULDER CAPITAL OPPORTUNITIES II, INC.
ARTICLE I
Offices
The principal office of the corporation shall be
designated from time to time by the corporation and
may be within or outside of Colorado.
The corporation may have such other offices,
either within or outside Colorado, as the board of
directors may designate or as the business of the
corporation may require from time to time.
The registered office of the corporation required
by the Colorado Business Corporation Act to be
maintained in Colorado may be, but need not be,
identical with the principal office, and the address of
the registered office may be changed from time to
time by the board of directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual
meeting of the shareholders shall be held during the
month of September of each year on a date and at a
time fixed by the board of directors of the corporation
(or by the president in the absence of action by the
board of directors), beginning with the year 1997, for
the purpose of electing directors and for the
transaction of such other business as may come before
the meeting. If the election of directors is not held on
the day fixed as provided herein for any annual
meeting of the shareholders, or any adjournment
thereof, the board of directors shall cause the election
to be held at a special meeting of the shareholders as
soon thereafter as it may conveniently be held.
A shareholder may apply to the district court in
the county in Colorado where the corporation's
principal office is located or, if the corporation has no
principal office in Colorado, to the district court of the
county in which the corporation's registered office is
located to seek an order that a shareholder meeting be
held (i) if an annual meeting was not held within six
months after the close of the corporation's most
recently ended fiscal year or fifteen months after its
last annual meeting, whichever is earlier, or (ii) if the
shareholder participated in a proper call of or proper
demand for a special meeting and notice of the special
meeting was not given within thirty days after the date
of the call or the date the last of the demands
necessary to require calling of the meeting was
received by the corporation pursuant to C.R.S. Section
7-107-102(1)(b), or the special meeting was not held in
accordance with the notice.
Section 2. Special Meetings. Unless
otherwise prescribed by statute, special meetings of the
shareholders may be called for any purpose by the
president or by the board of directors. The president
shall call a special meeting of the shareholders if the
corporation receives one or more written demands for
the meeting, stating the purpose or purposes for which
it is to be held, signed and dated by holders of shares
representing at least ten percent of all the votes
entitled to be cast on any issue proposed to be
considered at the meeting.
Section 3. Place of Meeting. The board of
directors may designate any place, either within or
outside Colorado, as the place for any annual meeting
or any special meeting called by the board of directors.
A waiver of notice signed by all shareholders entitled
to vote at a meeting may designate any place, either
within or outside Colorado, as the place for such
meeting. If no designation is made, or if a special
meeting is called other than by the board, the place of
meeting shall be the principal office of the
corporation.
Section 4. Notice of Meeting. Written
notice stating the place, date, and hour of the meeting
shall be given not less than ten nor more than sixty
days before the date of the meeting, except that (i) if
the number of authorized shares is to be increased, at
least thirty days' notice shall be given, or (ii) any
other longer notice period is required by the Colorado
Business Corporation Act. Notice of a special meeting
shall include a description of the purpose or purposes
of the meeting. Notice of an annual meeting need not
include a description of the purpose or purposes of the
meeting except the purpose or purposes shall be stated
with respect to (i) an amendment to the articles of
incorporation of the corporation, (ii) a merger or share
exchange in which the corporation is a party and, with
respect to a share exchange, in which the corporation's
shares will be acquired, (iii) a sale, lease, exchange or
other disposition, other than in the usual and regular
course of business, of all or substantially all of the
property of the corporation or of another entity which
this corporation controls, in each case with or without
the goodwill, (iv) a dissolution of the corporation, or
(v) any other purpose for which a statement of purpose
is required by the Colorado Business Corporation Act.
Notice shall be given personally or by mail, private
carrier, telegraph, teletype, electronically transmitted
facsimile or other form of wire or wireless
communication by or at the direction of the president,
the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote
at such meeting. If mailed and if in a comprehensible
form, such notice shall be deemed to be given and
effective when deposited in the United States mail,
addressed to the shareholder at his address as it
appears in the corporation's current record of
shareholders, with postage prepaid. If notice is given
other than by mail, and provided that such notice is in
a comprehensible form, the notice is given and
effective on the date received by the shareholder.
If requested by the person or persons lawfully
calling such meeting, the corporation shall give notice
thereof at corporation expense. No notice need be sent
to any shareholder if three successive notices mailed to
the last known address of such shareholder have been
returned as undeliverable until such time as another
address for such shareholder is made known to the
corporation by such shareholder. In order to be
entitled to receive notice of any meeting, a shareholder
shall advise the corporation in writing of any change
in such shareholder's mailing address as shown on the
corporation's books and records.
When a meeting is adjourned to another date,
time or place, notice need not be given of the new
date, time or place if the new date, time or place of
such meeting is announced before adjournment at the
meeting at which the adjournment is taken. At the
adjourned meeting the corporation may transact any
business which may have been transacted at the
original meeting. If the adjournment is for more than
120 days, or if a new record date is fixed for the
adjourned meeting, a new notice of the adjourned
meeting shall be given to each shareholder of record
entitled to vote at the meeting as of the new record
date.
A shareholder may waive notice of a meeting
before or after the time and date of the meeting by a
writing signed by such shareholder. Such waiver shall
be delivered to the corporation for filing with the
corporate records. Further, by attending a meeting
either in person or by proxy, a shareholder waives
objection to lack of notice or defective notice of the
meeting unless the shareholder objects at the beginning
of the meeting to the holding of the meeting or the
transaction of business at the meeting because of lack
of notice or defective notice. By attending the
meeting, the shareholder also waives any objection to
consideration at the meeting of a particular matter not
within the purpose or purposes described in the
meeting notice unless the shareholder objects to
considering the matter when it is presented.
Section 5. Fixing of Record Date. For the
purposes of determining shareholders entitled to (i)
notice of or vote at any meeting of shareholders or any
adjournment thereof, (ii) receive distributions or share
dividends, or (ii) demand a special meeting, or to
make a determination of shareholders for any other
proper purpose, the board of directors may fix a future
date as the record date for any such determination of
shareholders, such date in any case to be not more
than seventy days, and, in case of a meeting of
shareholders not less than ten days, prior to the date
on which the particular action requiring such
determination of shareholders is to be taken. If no
record date is fixed by the directors, the record date
shall be the date on which notice of the meeting is
mailed to shareholders, or the date on which the
resolution of the board of directors providing for a
distribution is adopted, as the case may be. When a
determination of shareholders entitled to vote at any
meeting of shareholders is made as provided in this
Section, such determination shall apply to any
adjournment thereof unless the board of directors fixes
a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date
fixed for the original meeting.
Notwithstanding the above, the record date for
determining the shareholders entitled to take action
without a meeting or entitled to be given notice of
action so taken shall be the date a writing upon which
the action is taken is first received by the corporation.
The record date for determining shareholders entitled
to demand a special meeting shall be the date of the
earliest of any of the demands pursuant to which the
meeting is called.
Section 6. Voting Lists. The secretary
shall make, at the earlier of ten days before each
meeting of shareholders or two business days after
notice of the meeting has been given, a complete list
of the shareholders entitled to be given notice of such
meeting or any adjournment thereof. The list shall be
arranged by voting groups and within each voting
group by class or series of shares, shall be in
alphabetical order within each class or series, and shall
show the address of and the number of shares of each
class or series held by each shareholder. For the
period beginning the earlier of ten days prior to the
meeting or two business days after notice of the
meeting is given and continuing through the meeting
and any adjournment thereof, this list shall be kept on
file at the principal office of the corporation, or at a
place (which shall be identified in the notice) in the
city where the meeting will be held. Such list shall be
available for inspection on written demand by any
shareholder (including for the purpose of this Section
6 any holder of voting trust certificates) or his agent or
attorney during regular business hours and during the
period available for inspection. The original stock
transfer books shall be prima facie evidence as to the
shareholders entitled to examine such list or to vote at
any meeting of shareholders.
Any shareholder, his agent or attorney may
copy the list during regular business hours and during
the period it is available for inspection, provided (i)
the shareholder has been a shareholder for at least
three months immediately preceding the demand or
holds at least five percent of all outstanding shares of
any class of shares as of the date of the demand, (ii)
the demand is made in good faith and for a purpose
reasonably related to the demanding shareholder's
interest as a shareholder, (iii) the shareholder describes
with reasonable particularity the purpose and the
records the shareholder desires to inspect, (iv) the
records are directly connected with the described
purpose and (v) the shareholder pays a reasonable
charge covering the costs of labor and material for
such copies, not to exceed the estimated cost of
production and reproduction.
Section 7. Recognition Procedure for
Beneficial Owners. The board of directors may adopt
by resolution a procedure whereby a shareholder of the
corporation may certify in writing to the corporation
that all or a portion of the shares registered in the
name of such shareholder are held for the account of
a specified person or persons. The resolution may set
forth (i) the types of nominees to which it applies, (ii)
the rights or privileges that the corporation will
recognize in a beneficial owner, which may include
rights and privileges other than voting; (iii) the form
of certification and the information to be contained
therein, (iv) if the certification is with respect to a
record date, the time within which the certification
must be received by the corporation, (v) the period for
which the nominee's use of the procedure is effective,
and (vi) such other provisions with respect to the
procedure as the board deems necessary or desirable.
Upon receipt by the corporation of a certificate
complying with the procedure established by the board
of directors, the persons specified in the certification
shall be deemed, for the purpose or purposes set forth
in the certification, to be the registered holders of the
number of shares specified in place of the shareholder
making the certification.
Section 8. Quorum and Manner of Acting.
One-third of the votes entitled to be cast on a matter
by a voting group shall constitute a quorum of that
voting group for action on the matter. If less than
one-third of such votes are represented at a meeting, a
majority of the votes so represented may adjourn the
meeting from time to time without further notice, for
a period not to exceed 120 days for any one
adjournment. If a quorum is present at such adjourned
meeting, any business may be transacted which might
have been transacted at the meeting as originally
noticed. The shareholders present at a duly organized
meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum,
unless the meeting is adjourned and a new record date
is set for the adjourned meeting.
If a quorum exists, action on a matter other
than the election of directors by a voting group is
approved if the votes cast within the voting group
favoring the action exceed the votes cast within the
voting group opposing the action, unless the vote of a
greater number or voting by classes is required by law
or the articles of incorporation.
Section 9. Proxies. At all meetings of
shareholders, a shareholder may vote by proxy by
signing an appointment form or similar writing, either
personally or by his duly authorized attorney-in-fact.
A shareholder may also appoint a proxy by
transmitting or authorizing the transmission of a
telegram, teletype, or other electronic transmission
providing a written statement of the appointment to the
proxy, a proxy solicitor, proxy support service
organization, or other person duly authorized by the
proxy to receive appointments as agent for the proxy,
or to the corporation. The transmitted appointment
shall set forth or be transmitted with written evidence
from which it can be determined that the shareholder
transmitted or authorized the transmission of the
appointment. The proxy appointment form or similar
writing shall be filed with the secretary of the
corporation before or at the time of the meeting. The
appointment of a proxy is effective when received by
the corporation and is valid for eleven months unless
a different period is expressly provided in the
appointment form or similar writing.
Any complete copy, including an electronically
transmitted facsimile, of an appointment of a proxy
may be substituted for or used in lieu of the original
appointment for any purpose for which the original
appointment could be used.
Revocation of a proxy does not affect the right
of the corporation to accept the proxy's authority
unless (i) the corporation had notice that the
appointment was coupled with an interest and notice
that such interest is extinguished is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment, or (ii) other notice of the
revocation of the appointment is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment. Other notice of revocation
may, in the discretion of the corporation, be deemed
to include the appearance at a shareholders' meeting of
the shareholder who granted the proxy and his voting
in person on any matter subject to a vote at such
meeting.
The death or incapacity of the shareholder
appointing a proxy does not affect the right of the
corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the
secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority
under the appointment.
The corporation shall not be required to
recognize an appointment made irrevocable if it has
received a writing revoking the appointment signed by
the shareholder (including a shareholder who is a
successor to the shareholder who granted the proxy)
either personally or by his attorney-in-fact,
notwithstanding that the revocation may be a breach of
an obligation of the shareholder to another person not
to revoke the appointment.
Subject to Section 11 and any express limitation
on the proxy's authority appearing on the appointment
form, the corporation is entitled to accept the proxy's
vote or other action as that of the shareholder making
the appointment.
Section 10. Voting of Shares. Each
outstanding share, regardless of class, shall be entitled
to one vote, except in the election of directors, and
each fractional share shall be entitled to a
corresponding fractional vote on each matter submitted
to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class
or classes are limited or denied by the articles of
incorporation and by the resolution of the board of
directors authorizing the issuance of the shares of any
particular class, as permitted by the Colorado Business
Corporation Act. Cumulative voting shall not be
permitted in the election of directors or for any other
purpose. Each record holder of shares of common
stock shall be entitled to vote in the election of
directors and shall have as many votes for each of the
shares owned by him as there are directors to be
elected and for whose election he has the right to vote.
At each election of directors, that number of
candidates equaling the number of directors to be
elected, having the highest number of votes cast in
favor of their election, shall be elected to the board of
directors.
Except as otherwise ordered by a court of
competent jurisdiction upon a finding that the purpose
of this Section would not be violated in the
circumstances presented to the court, the shares of the
corporation are not entitled to be voted if they are
owned, directly or indirectly, by a second corporation,
domestic or foreign, and the first corporation owns,
directly or indirectly, a majority of the shares entitled
to vote for directors of the second corporation except
to the extent the second corporation holds the shares
in a fiduciary capacity.
Redeemable shares are not entitled to be voted
after notice of redemption is mailed to the holders and
a sum sufficient to redeem the shares has been
deposited with a bank, trust company or other financial
institution under an irrevocable obligation to pay the
holders the redemption price on surrender of the
shares.
Section 11. Corporation's Acceptance of
Votes. If the name signed on a vote, consent, waiver,
proxy appointment, or proxy appointment revocation
corresponds to the name of a shareholder, the
corporation, if acting in good faith, is entitled to
accept the vote, consent, waiver, proxy appointment or
proxy appointment revocation and give it effect as the
act of the shareholder. If the name signed on a vote,
consent, waiver, proxy appointment or proxy
appointment revocation does not correspond to the
name of a shareholder, the corporation, if acting in
good faith, is nevertheless entitled to accept the vote,
consent, waiver, proxy appointment or proxy
appointment revocation and to give it effect as the act
of the shareholder if:
(i) the shareholder is an entity and the
name signed purports to be that of an officer or agent
of the entity;
(ii) the name signed purports to be that of
an administrator, executor, guardian or conservator
representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the
corporation has been presented with respect to the
vote, consent, waiver, proxy appointment or proxy
appointment revocation;
(iii) the name signed purports to be that of
a receiver or trustee in bankruptcy of the shareholder
and, if the corporation requests, evidence of this status
acceptable to the corporation has been presented with
respect to the vote, consent, waiver, proxy
appointment or proxy appointment revocation;
(iv) the name signed purports to be that of
a pledgee, beneficial owner or attorney-in-fact of the
shareholder and, if the corporation requests, evidence
acceptable to the corporation of the signatory's
authority to sign for the shareholder has been
presented with respect to the vote, consent, waiver,
proxy appointment or proxy appointment revocation;
(v) two or more persons are the
shareholder as co-tenants or fiduciaries and the name
signed purports to be the name of at least one of the
co-tenants or fiduciaries, and the person signing
appears to be acting on behalf of all the co-tenants or
fiduciaries; or
(vi) the acceptance of the vote, consent,
waiver, proxy appointment or proxy appointment
revocation is otherwise proper under rules established
by the corporation that are not inconsistent with this
Section 11.
The corporation is entitled to reject a vote,
consent, waiver, proxy appointment or proxy
appointment revocation if the secretary or other officer
or agent authorized to tabulate votes, acting in good
faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority
to sign for the shareholder.
Neither the corporation nor its officers nor any
agent who accepts or rejects a vote, consent, waiver,
proxy appointment or proxy appointment revocation in
good faith and in accordance with the standards of this
Section is liable in damages for the consequences of
the acceptance or rejection.
Section 12. Informal Action by
Shareholders. Any action required or permitted to be
taken at a meeting of the shareholders may be taken
without a meeting if a written consent (or counterparts
thereof) that sets forth the action so taken is signed by
all of the shareholders entitled to vote with respect to
the subject matter thereof and received by the
corporation. Such consent shall have the same force
and effect as a unanimous vote of the shareholders and
may be stated as such in the document. Action taken
under this Section 12 is effective as of the date the last
writing necessary to effect this action is received by
the corporation, unless all of the writings specify a
different effective date, in which case such specified
date shall be the effective date for such action. If any
shareholder revokes his consent as provided for herein
prior to what would otherwise be the effective date,
the action proposed in the consent shall be invalid.
The record date for determining shareholders entitled
to take action without a meeting is the date the
corporation receives a writing upon which the action
is taken.
Any shareholder who has signed a writing
describing and consenting to action taken pursuant to
this Section 12 may revoke such consent by a writing
signed by the shareholder describing the action and
stating that the shareholder's prior consent thereto is
revoked, if such writing is received by the corporation
before the effectiveness of the action.
Section 13. Meetings by Telecommunication.
Any or all of the shareholders may participate in an
annual or special shareholders' meeting by, or the
meeting may be conducted through the use of, any
means of communication by which all persons
participating in the meeting may hear each other
during the meeting. A shareholder participating in a
meeting by this means is deemed to be present in
person at the meeting.
<PAGE>
ARTICLE III
Board of Directors
Section 1. General Powers. All corporate
powers shall be exercised by or under the authority of,
and the business and affairs of the corporation shall be
managed under the direction of its board of directors,
except as otherwise provided in the Colorado Business
Corporation Act or the articles of incorporation.
Section 2. Number, Qualifications and
Tenure. The number of directors of the corporation
shall be fixed from time to time by the board of
directors, within a range of no less than one or more
than five. A director shall be a natural person who is
eighteen years of age or older. A director need not be
a resident of Colorado or a shareholder of the
corporation.
Directors shall be elected at each annual
meeting of shareholders. Each director shall hold
office until the next annual meeting of shareholders
following his election and thereafter until his successor
shall have been elected and qualified. Directors shall
be removed in the manner provided by the Colorado
Business Corporation Act.
Section 3. Vacancies. Any director may
resign at any time by giving written notice to the
corporation. Such resignation shall take effect at the
time the notice is received by the corporation unless
the notice specifies a later effective date. Unless
otherwise specified in the notice of resignation, the
corporation's acceptance of such resignation shall not
be necessary to make it effective. Any vacancy on
the board of directors may be filled by the affirmative
vote of a majority of the shareholders or the board of
directors. If the directors remaining in office
constitute fewer than a quorum of the board, the
directors may fill the vacancy by the affirmative vote
of a majority of all the directors remaining in office.
If elected by the directors, the director shall hold
office until the next annual shareholder's meeting at
which directors are elected. If elected by the
shareholders, the director shall hold office for the
unexpired term of his predecessor in office; except
that, if the director's predecessor was elected by the
directors to fill a vacancy, the director elected by the
shareholders shall hold office for the unexpired term
of the last predecessor elected by the shareholders.
Section 4. Regular Meetings. A regular
meeting of the board of directors shall be held without
notice immediately after and at the same place as the
annual meeting of shareholders. The board of
directors may provide by resolution the time and place,
either within or outside Colorado, for the holding of
additional regular meetings without other notice.
Section 5. Special Meetings. Special
meetings of the board of directors may be called by or
at the request of the president or chief executive
officer, or any director. The person or persons
authorized to call special meetings of the board of
directors may fix any place, either within or outside
Colorado, as the place for holding any special meeting
of the board of directors called by them, provided that
no meeting shall be called outside the State of
Colorado unless a majority of the board of directors
has so authorized.
Section 6. Notice. Notice of any special
meeting shall be given at least two days prior to the
meeting by written notice either personally delivered
or mailed to each director at his business address, or
by notice transmitted by telegraph, telex, electronically
transmitted facsimile or other form of wire or wireless
communication. If mailed, such notice shall be
deemed to be given and to be effective on the earlier
of (i) three days after such notice is deposited in the
United States mail, properly addressed, with postage
prepaid, or (ii) the date shown on the return receipt, if
mailed by registered or certified mail return receipt
requested. If notice is given by telex, electronically
transmitted facsimile or other similar form of wire or
wireless communication, such notice shall be deemed
to be given and to be effective when sent, and with
respect to a telegram, such notice shall be deemed to
be given and to be effective when the telegram is
delivered to the telegraph company. If a director has
designated in writing one or more reasonable addresses
or facsimile numbers for delivery of notice to him,
notice sent by mail, telegram, telex, electronically
transmitted facsimile or other form of wire or wireless
communication shall not be deemed to have been
given or to be effective unless sent to such addresses
or facsimile numbers, as the case may be.
A director may waive notice of a meeting
before or after the time and date of the meeting by a
writing signed by such director. Such waiver shall be
delivered to the corporation for filing with the
corporate records. Further, a director's attendance at
or participation in a meeting waives any required
notice to him of the meeting unless at the beginning of
the meeting, or promptly upon his arrival, the director
objects to holding the meeting or transacting business
at the meeting because of lack of notice or defective
notice and does not thereafter vote for or assent to
action taken at the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in
the notice or waiver of notice of such meeting.
Section 7. Quorum. A majority of the
number of directors fixed by the board of directors
pursuant to Section 2 or, if no number is fixed, a
majority of the number in office immediately before
the meeting begins, shall constitute a quorum for the
transaction of business at any meeting of the board of
directors. If less than such majority is present at a
meeting, a majority of the directors present may
adjourn the meeting from time to time without further
notice, for a period not to exceed sixty days at any one
adjournment.
Section 8. Manner of Acting. The act of
the majority of the directors present at a meeting at
which a quorum is present shall be the act of the board
of directors. No director may vote or act by proxy at
any meeting of directors.
Section 9. Compensation. By resolution of
the board of directors, any director may be paid any
one or more of the following: his expenses, if any, of
attendance at meetings, a fixed sum for attendance at
each meeting, a stated salary as director, or such other
compensation as the corporation and the director may
reasonably agree upon. No such payment shall
preclude any director from serving the corporation in
any other capacity and receiving compensation
therefor.
Section 10. Presumption of Assent. A
director of the corporation who is present at a meeting
of the board of directors or committee of the board at
which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless
(i) the director objects at the beginning of the meeting,
or promptly upon his arrival, to the holding of the
meeting or the transaction of business at the meeting
and does not thereafter vote for or assent to any action
taken at the meeting, (ii) the director
contemporaneously requests that his dissent or
abstention as to any specific action taken be entered in
the minutes of the meeting, or (iii) the director causes
written notice of his dissent or abstention as to any
specific action to be received by the presiding officer
of the meeting before its adjournment or by the
corporation promptly after the adjournment of the
meeting. A director may dissent to a specific action at
a meeting, while assenting to others. The right to
dissent to a specific action taken at a meeting of the
board of directors or a committee of the board shall
not be available to a director who voted in favor of
such action.
Section 11. Committees. By resolution
adopted by a majority of all the directors in office
when the action is taken, the board of directors may
designate from among its members an executive
committee and one or more other committees, and
appoint one or more members of the board of directors
to serve on them. To the extent provided in the
resolution, each committee shall have all the authority
of the board of directors, except that no such
committee shall have the authority to (i) authorize
distributions, (ii) approve or propose to shareholders
actions or proposals required by the Colorado Business
Corporation Act to be approved by shareholders, (iii)
fill vacancies on the board of directors or any
committee thereof, (iv) amend articles of
incorporation, (v) adopt, amend or repeal the bylaws,
(vi) approve a plan of merger not requiring
shareholder approval, (vii) authorize or approve the
reacquisition of shares unless pursuant to a formula or
method prescribed by the board of directors, or (viii)
authorize or approve the issuance or sale of shares, or
contract for the sale of shares or determine the
designations and relative rights, preferences and
limitations of a class or series of shares, except that
the board of directors may authorize a committee or
officer to do so within limits specifically prescribed by
the board of directors. The committee shall then have
full power within the limits set by the board of
directors to adopt any final resolution setting forth all
preferences, limitations and relative rights of such
class or series and to authorize an amendment of the
articles of incorporation stating the preferences,
limitations and relative rights of a class or series for
filing with the Secretary of State under the Colorado
Business Corporation Act.
Sections 4, 5, 6, 7, 8 and 12 of Article III,
which govern meetings, notice, waiver of notice,
quorum, voting requirements and action without a
meeting of the board of directors, shall apply to
committees and their members appointed under this
Section 11.
Neither the designation of any such committee,
the delegation of authority to such committee, nor any
action by such committee pursuant to its authority
shall alone constitute compliance by any member of
the board of directors or a member of the committee
in question with his responsibility to conform to the
standards of care set forth in Article III, Section 14 of
these bylaws.
Section 12. Action Without a Meeting. Any
action required or permitted to be taken at a meeting
of the directors or any committee designated by the
board of directors may be taken without a meeting if
a written consent (or counterparts thereof) that sets
forth the action so taken is signed by all of the
directors entitled to vote with respect to the action
taken. Such consent shall have the same force and
effect as a unanimous vote of the directors or
committee members and may be stated as such in any
document. Unless the consent specifies a different
effective date, action taken under this Section 12 is
effective at the time the last director signs a writing
describing the action taken, unless, before such time,
any director has revoked his consent by a writing
signed by the director and received by the president or
secretary of the corporation.
Section 13. Telephonic Meetings. The board
of directors may permit any director (or any member
of a committee designated by the board) to participate
in a regular or special meeting of the board of
directors or a committee thereof through the use of
any means of communication by which all directors
participating in the meeting can hear each other during
the meeting. A director participating in a meeting in
this manner is deemed to be present in person at the
meeting.
Section 14. Standard of Care. A director
shall perform his duties as a director, including,
without limitation his duties as a member of any
committee of the board, in good faith, in a manner he
reasonably believes to be in the best interests of the
corporation, and with the care an ordinarily prudent
person in a like position would exercise under similar
circumstances. In performing his duties, a director
shall be entitled to rely on information, opinions,
reports or statements, including financial statements
and other financial data, in each case prepared or
presented by the persons herein designated. However,
he shall not be considered to be acting in good faith if
he has knowledge concerning the matter in question
that would cause such reliance to be unwarranted. A
director shall not be liable to the corporation or its
shareholders for any action he takes or omits to take
as a director if, in connection with such action or
omission, he performs his duties in compliance with
this Section 14.
The designated persons on whom a director is
entitled to rely are (i) one or more officers or
employees of the corporation whom the director
reasonably believes to be reliable and competent in the
matters presented, (ii) legal counsel, public accountant,
or other person as to matters which the director
reasonably believes to be within such person's
professional or expert competence, or (iii) a committee
of the board of directors on which the director does
not serve if the director reasonably believes the
committee merits confidence.
ARTICLE IV
Officers and Agents
Section 1. General. The officers of the
corporation shall be as determined by the board of
directors from time to time, and may include a
president, one or more vice presidents, a secretary, a
treasurer, and such other officers, assistant officers,
committees and agents, including a chairman of the
board, assistant secretaries and assistant treasurers, as
the board may consider necessary. Each officer shall
be a natural person eighteen years of age or older.
The board of directors or the officer or officers
authorized by the board shall from time to time
determine the procedure for the appointment of
officers, their term of office, their authority and duties
and their compensation. One person may hold more
than one office. In all cases where the duties of any
officer, agent or employee are not prescribed by the
bylaws, or by the board of directors, such officer,
agent or employee shall follow the orders and
instructions of the president of the corporation.
Section 2. Appointment and Term of
Office. The officers of the corporation shall be
appointed by the board of directors at each annual
meeting of the board held after each annual meeting
of the shareholders. If the appointment of officers is
not made at such meeting or if an officer or officers
are to be appointed by another officer or officers of
the corporation, such appointment shall be made as
soon thereafter as conveniently may be. Each officer
shall hold office until the first of the following occurs:
his successor shall have been duly appointed and
qualified, his death, his resignation, or his removal in
the manner provided in Section 3.
Section 3. Resignation and Removal. An
officer may resign at any time by giving written notice
of resignation to the corporation. The resignation is
effective when the notice is received by the
corporation unless the notice specifies a later effective
date.
Any officer or agent may be removed at any
time with or without cause by the board of directors or
an officer or officers authorized by the board. Such
removal does not affect the contract rights, if any, of
the corporation or of the person so removed. The
appointment of an officer or agent shall not in itself
create contract rights.
Section 4. Vacancies. A vacancy in any
office, however occurring, may be filled by the board
of directors, or by the officer or officers authorized by
the board, for the unexpired portion of the officer's
term. If an officer resigns and his resignation is made
effective at a later date, the board of directors, or
officer or officers authorized by the board, may permit
the officer to remain in office until the effective date
and may fill the pending vacancy before the effective
date if the board of directors or officer or officers
authorized by the board provide that the successor
shall not take office until the effective date. In the
alternative, the board of directors, or officer or officers
authorized by the board of directors, may remove the
officer at any time before the effective date and may
fill the resulting vacancy.
Section 5. President. Subject to the
direction and supervision of the board of directors, and
unless otherwise determined by the board of directors
in its designation of officers from time to time, the
president shall be the chief executive officer of the
corporation, and shall have general and active control
of its affairs and business and general supervision of
its officers, agents and employees. Unless otherwise
directed by the board of directors, the president shall
attend in person or by substitute appointed by him, or
shall execute on behalf of the corporation written
instruments appointing a proxy or proxies to represent
the corporation, at all meetings of the stockholders of
any other corporation in which the corporation holds
any stock. On behalf of the corporation, the president
may in person or by substitute or by proxy execute
written waivers of notice and consents with respect to
any such meetings. At all such meetings and
otherwise, the president, in person or by substitute or
proxy, may vote the stock held by the corporation,
execute written consents and other instruments with
respect to such stock, and exercise any and all rights
and powers incident to the ownership or said stock,
subject to the instructions, if any, of the board of
directors. The president shall have custody of the
treasurer's bond, if any.
Section 6. Vice Presidents. Any vice
presidents designated by the board of directors as
officers of the corporation shall assist the president and
shall perform such duties as may be assigned to them
by the president or by the board of directors. In the
absence of the president, the vice president, if any (or,
if more than one, the vice presidents in the order
designated by the board of directors, or if the board
makes no such designation, then the vice president
designated by the president, or if neither the board nor
the president makes any such designation, the senior
vice president as determined by first election to that
office), shall have the powers and perform the duties
of the president.
Section 7. Secretary. In the event a
secretary is designated by the board of directors as an
officer of the corporation, the secretary shall (i)
prepare and maintain as permanent records the minutes
of the proceedings of the shareholders and the board
of directors, a record of all actions taken by the
shareholders or board of directors without a meeting,
a record of all actions taken by a committee of the
board of directors in place of the board of directors on
behalf of the corporation, and a record of all waivers
of notice of meetings of shareholders and of the board
of directors or any committee thereof, (ii) see that all
notices are duly given in accordance with the
provisions of these bylaws and as required by law, (iii)
serve as custodian of the corporate records and of the
seal of the corporation and affix the seal to all
documents when authorized by the board of directors,
(iv) keep at the corporation's registered office or
principal place of business a record containing the
names and addresses of all shareholders in a form that
permits preparation of a list of shareholders arranged
by voting group and by class or series of shares within
each group, that is alphabetical within each class or
series and that shows the address of, and the number
of shares of each class or series held by each
shareholder, unless such a record shall be kept at the
office of the corporation's transfer agent or registrar,
(v) maintain at the corporation's principal office the
originals or copies of the corporation's articles of
incorporation, bylaws, minutes of all shareholders'
meetings and records of all action taken by
shareholders without a meeting for the past three
years, all written communications within the past three
years to shareholders as a group or to the holders of
any class or series of shares as a group, a list of the
name and business addresses of the current directors
and officers, a copy of the corporation's most recent
corporate report filed with the Secretary of State, and
financial statements showing in reasonable detail the
corporation's assets and liabilities and results of
operations for the last three years, (vi) have general
charge of the stock transfer books of the corporation,
unless the corporation has a transfer agent, (vii)
authenticate records of the corporation, and (vii) in
general, perform all duties incident to the office of
secretary and such other duties as from time to time
may be assigned to him by the president or by the
board of directors. Assistant secretaries, if any, shall
have the same duties and powers subject to supervision
by the secretary. The directors and/or shareholders
may however respectively designate a person other
than the secretary or assistant secretary to keep the
minutes of their respective meetings.
Any books, records, or minutes of the
corporation may be in written form or in any form
capable of being converted into written form within a
reasonable time.
Section 8. Treasurer. In the event a
treasurer is designated by the board of directors as an
officer of the corporation, the treasurer shall be the
principal financial officer of the corporation, shall
have the care and custody of all funds, securities,
evidences of indebtedness and other personal property
of the corporation and shall deposit the same in
accordance with the instructions of the board of
directors. He shall receive and give receipts and
acquittances for money paid in on account of the
corporation, and shall pay out of the corporation's
funds on hand all bills, payrolls and other just debts of
the corporation of whatever nature upon maturity. He
shall perform all other duties incident to the office of
the treasurer and, upon request of the board, shall
make such reports to it as may be required at any
time. He shall, if required by the board, give the
corporation a bond in such sums and with such
sureties as shall be satisfactory to the board,
conditioned upon the faithful performance of his duties
and for the restoration to the corporation of all books,
papers, vouchers, money and other property of
whatever kind in his possession or under his control
belonging to the corporation. He shall have such other
powers and perform such other duties as may from
time to time be prescribed by the board of directors or
the president. The assistant treasurers, if any, shall
have the same powers and duties, subject to the
supervision of the treasurer.
The treasurer shall also be the principal
accounting officer of the corporation. He shall
prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and
records of account as required by the Colorado
Business Corporation Act, prepare and file all local,
state and federal tax returns, prescribe and maintain an
adequate system of internal audit and prepare and
furnish to the president and the board of directors
statements of account showing the financial position of
the corporation and the results of its operations.
ARTICLE V
Stock
Section 1. Certificates. The board of
directors shall be authorized to issue any of its classes
of shares with or without certificates. The fact that the
shares are not represented by certificates shall have no
effect on the rights and obligations of shareholders. If
the shares are represented by certificates, such shares
shall be represented by consecutively numbered
certificates signed, either manually or by facsimile, in
the name of the corporation by one or more persons
designated by the board of directors. In case any
officer who has signed or whose facsimile signature
has been placed upon such certificate shall have ceased
to be such officer before such certificate is issued,
such certificate may nonetheless be issued by the
corporation with the same effect as if he were such
officer at the date of its issue. Certificates of stock
shall be in such form and shall contain such
information consistent with law as shall be prescribed
by the board of directors. If shares are not represented
by certificates, within a reasonable time following the
issue or transfer of such shares, the corporation shall
send the shareholder a complete written statement of
all of the information required to be provided to
holders of uncertificated shares by the Colorado
Business Corporation Act.
Section 2. Consideration for Shares.
Certificated or uncertificated shares shall not be issued
until the shares represented thereby are fully paid.
The board of directors may authorize the issuance of
shares for consideration consisting of any tangible or
intangible property or benefit to the corporation,
including cash, promissory notes, services performed
or other securities of the corporation. Future services
shall not constitute payment or partial payment for
shares of the corporation. The promissory note of a
subscriber or an affiliate of a subscriber shall not
constitute payment or partial payment for shares of the
corporation unless the note is negotiable and is secured
by collateral, other than the shares being purchased,
having a fair market value at least equal to the
principal amount of the note. For purposes of this
Section 2, "promissory note" means a negotiable
instrument on which there is an obligation to pay
independent of collateral and does not include a non-
recourse note.
Section 3. Lost Certificates. In case of the
alleged loss, destruction or mutilation of a certificate
of stock, the board of directors may direct the issuance
of a new certificate in lieu thereof upon such terms
and conditions in conformity with law as the board
may prescribe. The board of directors may in its
discretion require an affidavit of lost certificate and/or
a bond in such form and amount and with such surety
as it may determine before issuing a new certificate.
Section 4. Transfer of Shares. Upon
surrender to the corporation or to a transfer agent of
the corporation of a certificate of stock duly endorsed
or accompanied by proper evidence of succession,
assignment or authority to transfer, and receipt of such
documentary stamps as may be required by law and
evidence of compliance with all applicable securities
laws and other restrictions, the corporation shall issue
a new certificate to the person entitled thereto, and
cancel the old certificate. Every such transfer of stock
shall be entered on the stock books of the corporation
which shall be kept at its principal office or by the
person and at the place designated by the board of
directors.
Except as otherwise expressly provided in
Article II, Sections 7 and 11, and except for the
assertion of dissenters' rights to the extent provided in
Article 113 of the Colorado Business Corporation Act,
the corporation shall be entitled to treat the registered
holder of any shares of the corporation as the owner
thereof for all purposes, and the corporation shall not
be bound to recognize any equitable or other claim to,
or interest in, such shares or rights deriving from such
shares on the part of any person other than the
registered holder, including without limitation any
purchaser, assignee or transferee of such shares or
rights deriving from such shares, unless and until such
other person becomes the registered holder of such
shares, whether or not the corporation shall have either
actual or constructive notice of the claimed interest of
such other person.
Section 5. Transfer Agent, Registrars and
Paying Agents. The board may at its discretion
appoint one or more transfer agents, registrars and
agents for making payment upon any class of stock,
bond, debenture or other security of the corporation.
Such agents and registrars may be located either within
or outside Colorado. They shall have such rights and
duties and shall be entitled to such compensation as
may be agreed.
ARTICLE VI
Indemnification of Certain Persons
Section 1. Indemnification. For purposes
of Article VI, a "Proper Person" means any person
who was or is a party or is threatened to be made a
party to any threatened, pending, or complete action,
suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or
informal, by reason of the fact that he is or was a
director, officer, employee, fiduciary or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any foreign or
domestic profit or nonprofit corporation or of any
partnership, joint venture, trust, profit or nonprofit
unincorporated association, limited liability company,
or other enterprise or employee benefit plan. The
corporation shall indemnify any Proper Person against
reasonably incurred expenses (including any attorneys'
fees), judgments, penalties, fines (including any excise
tax assessed with respect to an employee benefit plan)
and amounts paid in settlement reasonably incurred by
him in connection with such action, suit or proceeding
if it is determined by the groups set forth in Section 4
of this Article that he conducted himself in good faith
and that he reasonably believed (i) in the case of
conduct in his official capacity with the corporation,
that his conduct was in the corporation's best interests,
or (ii) in all other cases (except criminal cases), that
his conduct was at least not opposed to the
corporation's best interests, or (iii) in the case of any
criminal proceeding, that he had no reasonable cause
to believe his conduct was unlawful. A Proper Person
will be deemed to be acting in his official capacity
while acting as a director, officer, employee or agent
on behalf of this corporation and not while acting on
this corporation's behalf for some other entity.
No indemnification shall be made under this
Article VI to a Proper Person with respect to any
claim, issue or matter in connection with a proceeding
by or in the right of a corporation in which the Proper
Person was adjudged liable to the corporation or in
connection with any proceeding charging that the
Proper Person derived an improper personal benefit,
whether or not involving action in an official capacity,
in which he was adjudged liable on the basis that he
derived an improper personal benefit. Further,
indemnification under this Section in connection with
a proceeding brought by or in the right of the
corporation shall be limited to reasonable expenses,
including attorneys' fees, incurred in connection with
the proceeding.
Section 2. Right to Indemnification. The
corporation shall indemnify any Proper Person who
was wholly successful, on the merits or otherwise, in
defense of any action, suit, or proceeding as to which
he was entitled to indemnification under Section 1 of
this Article VI against expenses (including attorneys'
fees) reasonably incurred by him in connection with
the proceeding without the necessity of any action by
the corporation other than the determination in good
faith that the defense has been wholly successful.
Section 3. Effect of Termination of Action.
The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the person seeking
indemnification did not meet the standards of conduct
described in Section 1 of this Article VI. Entry of a
judgment by consent as part of a settlement shall not
be deemed an adjudication of liability, as described in
Section 2 of this Article VI.
Section 4. Groups Authorized to Make
Indemnification Determination. Except where there is
a right to indemnification as set forth in Sections 1 or
2 of this Article or where indemnification is ordered
by a court in Section 5, any indemnification shall be
made by the corporation only as authorized in the
specific case upon a determination by a proper group
that indemnification of the Proper Person is
permissible under the circumstances because he has
met the applicable standards of conduct set forth in
Section 1 of this Article. This determination shall be
made by the board of directors by a majority vote of
those present at a meeting at which a quorum is
present, which quorum shall consist of directors not
parties to the proceeding ("Quorum"). If a Quorum
cannot be obtained, the determination shall be made by
a majority vote of a committee of the board of
directors designated by the board, which committee
shall consist of two or more directors not parties to the
proceeding, except that directors who are parties to the
proceeding may participate in the designation of
directors for the committee. If a Quorum of the board
of directors cannot be obtained and the committee
cannot be established, or even if a Quorum is obtained
or the committee is designated and a majority of the
directors constituting such Quorum or committee so
directs, the determination shall be made by (i)
independent legal counsel selected by a vote of the
board of directors or the committee in the manner
specified in this Section 4, or, if a Quorum of the full
board of directors cannot be obtained and a committee
cannot be established, by independent legal counsel
selected by a majority vote of the full board (including
directors who are parties to the action) or (ii) a vote of
the shareholders.
Section 5. Court-Ordered Indemnification.
Any Proper Person may apply for indemnification to
the court conducting the proceeding or to another court
of competent jurisdiction for mandatory
indemnification under Section 2 of this Article,
including indemnification for reasonable expenses
incurred to obtain court-ordered indemnification. If
the court determines that such Proper Person is fairly
and reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not he met
the standards of conduct set forth in Section 1 of this
Article or was adjudged liable in the proceeding, the
court may order such indemnification as the court
deems proper except that if the Proper Person has been
adjudged liable, indemnification shall be limited to
reasonable expenses incurred in connection with the
proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.
Section 6. Advance of Expenses.
Reasonable expenses (including attorneys' fees)
incurred in defending an action, suit or proceeding as
described in Section 1 may be paid by the corporation
to any Proper Person in advance of the final
disposition of such action, suit or proceeding upon
receipt of (i) a written affirmation of such Proper
Person's good faith belief that he has met the
standards of conduct prescribed by Section 1 of this
Article VI, (ii) a written undertaking, executed
personally or on the Proper Person's behalf, to repay
such advances if it is ultimately determined that he did
not meet the prescribed standards of conduct (the
undertaking shall be an unlimited general obligation of
the Proper Person but need not be secured and may be
accepted without reference to financial ability to make
repayment), and (iii) a determination is made by the
proper group (as described in Section 3 of this Article
VI) that the facts as then known to the group would
not preclude indemnification. Determination and
authorization of payments shall be made in the same
manner specified in Section 4 of this Article VI.
Section 7. Witness Expenses. The sections
of this Article VI do not limit the corporation's
authority to pay or reimburse expenses incurred by a
director in connection with an appearance as a witness
in a proceeding at a time when he has not been a
named defendant or respondent in the proceeding.
Section 8. Report to Shareholders. Any
indemnification of or advance of expenses to a director
in accordance with this Article VI, if arising out of a
proceeding by or on behalf of the corporation, shall be
reported in writing to the shareholders with or before
the notice of the next shareholders' meeting. If the
next shareholder action is taken without a meeting at
the instigation of the board of directors, such notice
shall be given to the shareholders at or before the time
the first shareholder signs a writing consenting to such
action.
ARTICLE VII
Provision of Insurance
By action of the board of directors,
notwithstanding any interest of the directors in the
action, the corporation may purchase and maintain
insurance, in such scope and amounts as the board of
directors deems appropriate on behalf of any person
who is or was a director, officer, employee, fiduciary
or agent of the corporation, or who, while a director,
officer, employee, fiduciary or agent of the
corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any other foreign or
domestic corporation or of any partnership, joint
venture, trust, profit or nonprofit unincorporated
association, limited liability company or other
enterprise or employee benefit plan, against any
liability asserted against, or incurred by, him in that
capacity arising out of his status as such, whether or
not the corporation would have the power to
indemnify him against such liability under the
provisions of Article VI or applicable law. Any such
insurance may be procured from any insurance
company designated by the board of directors of the
corporation, whether such insurance company is
formed under the laws of Colorado or any other
jurisdiction of the United States or elsewhere,
including any insurance company in which the
corporation has an equity interest or any other interest,
through stock ownership or otherwise.
ARTICLE VIII
Miscellaneous
Section 1. Seal. The corporate seal of the
corporation shall be circular in form and shall contain
the name of the corporation and the words, "Seal,
Colorado."
Section 2. Fiscal Year. The fiscal year of
the corporation shall be as established by the board of
directors.
Section 3. Amendments. The board of
directors shall have power, to the maximum extent
permitted by the Colorado Business Corporation Act,
to make, amend and repeal the bylaws of the
corporation at any regular or special meeting of the
board unless the shareholders, in making, amending or
repealing a particular bylaw, expressly provide that the
directors may not amend or repeal such bylaw. The
shareholders also shall have the power to make, amend
or repeal the bylaws of the corporation at any annual
meeting or at any special meeting called for that
purpose.
Section 4. Gender. The masculine gender
is used in these bylaws as a matter of convenience
only and shall be interpreted to include the feminine
and neuter genders as the circumstances indicate.
Section 5. Conflicts. In the event of any
irreconcilable conflict between these bylaws and either
the corporation's articles of incorporation or applicable
law, the latter shall control.
Section 6. Definitions. Except as otherwise
specifically provided in these bylaws, all terms used in
these bylaws shall have the same definition as in the
Colorado Business Corporation Act.
THE FOREGOING BYLAWS, consisting of
eighteen (18) pages, including this page, constitute the
bylaws of Boulder Capital Opportunities II, Inc.,
adopted by the board of directors of the corporation as
of August 8, 1996.
Robert Soehngen /s/
President
<PAGE>
EXHIBIT 3.1
SPECIMEN STOCK CERTIFICATE
Contents:
State of Incorporation
Name of Company
Number of authorized shares of common stock
Name of Individual Shareholder
Number of shares owned by individual shareholder
Fully paid and non-assessable shares
Date of issuance of certificate
Signature of President
Restrictive transfer legend
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<CASH> 4,250
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,250
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,995
<CURRENT-LIABILITIES> 2,225
<BONDS> 0
0
0
<COMMON> 10,025
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,995
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,225)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
