UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-12g/A
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
ASCOT GROUP INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 113375915
-------- ---------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CITY CENTER BELLEVUE, STE 730
500 108TH AVENUE. BELLEVUE,WA 98004
- ---------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (425) 990-6477
--------------
Securities to be registered pursuant to Section 12(g) of the Act:
Voting Common Stock of Company, $.001 par value
<PAGE>
<PAGE>
INDEX
ITEMS PAGE
Item 1. BUSINESS 3
Item 2. FINANCIAL INFORMATION 8
Item 3. PROPERTIES 10
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 10
Item 5. DIRECTORS AND EXECUTIVE OFFICERS 11
Item 6. EXECUTIVE COMPENSATION 13
Item 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 14
Item 8. LEGAL PROCEEDINGS 15
Item 9. MARKET PRICE OF AND DIVIDENDS ON THE
REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTER 15
Item 10. RECENT SALES OF UNREGISTERED SECURITIES 15
Item 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO
BE REGISTERED 15
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS 15
Item 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 15
Item 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 22
Item 15. FINANCIAL STATEMENTS AND EXHIBITS 22
SIGNATURES 24
<PAGE>
<PAGE>
Item 1. DESCRIPTION OF THE BUSINESS
HISTORY AND ORGANIZATION
ASCOT GROUP INC. (the "Company") was organized on August 16,
1996 as Express Finance Inc., under the laws of the State of
Delaware, having the stated purpose of engaging in any lawful act
or activity for which corporations may be organized. On August
26, 1998, the Company changed its name from Express Finance Inc.,
to Ascot Group Inc.
The Company was formed to act as the United States holding
company for Mayhem Ltd. a UK corporation. Mayhem is a young
persons department store designed to be visually exciting and
fashionable without being frivolous. Mayhem intended to open its
first store in Summer 1996 with further openings geared to the
success of the launch with a maximum of 20 stores in the whole UK
to maintain exclusivity.
By a Private Placement Memorandum under Rule 504 dated September,
10, 1996 the company raised $29,000 through the sale of 2,900,000
shares of common stock to fund expansion and refund existing
indebtedness. In the event the company found suitable premises
but was unable to attract a satisfactory standard of management
to develop the concept and decided to investigate other
opportunities in the retail sector. An offer was made for a
group trading in southern and central England with four main Post
Office franchises and agreement with the a post office for a
further four main offices in 1997. The election of a Labor
government in May 1997 resulted in a change of policy away from
further franchising and it was decided not to pursue this
opportunity. As a result the Company is now being made available
by the major shareholders for merger or acquisition. The company
has not engaged in active trade or business throughout the period
1996 to 1998.
The present promoters of the Company acquired the majority of the
shares in April 1997 and are, the President of the Company, L J
Boyne, and a major shareholder, namely Wing Capital Ltd. The
company is currently inactive and the directors are now
determined that the Company should become active in seeking
potential operating businesses and business opportunities with
the intent to acquire or merge with such businesses. The Company
has began to consider and investigate potential business
opportunities.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is a development stage company and its principal
business purpose is to locate and consummate a merger or
acquisition with a private entity. Because of the Company's
current status having no assets and no recent operating history,
in the event the Company does successfully acquire or merge with
an operating business opportunity, it is likely that the
Company's present shareholders will experience substantial
dilution and there will be a probable change in control of the
Company.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any such business combination. Thus, in the
event that the Company successfully completes an acquisition or
merger with another operating business, the resulting combined
business must provide audited financial statements for at least
the two most recent fiscal years or, in the event that the
combined operating business has been in business less than two
years, audited financial statements will be required from the
period of inception of the target acquisition or merger
candidate.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully. Further, there
can be no assurance that the Company will have the ability to
acquire or merge with an operating business, develop sustaining
business opportunities or acquire property that will be of
material value to the Company. In the opinion of management,
inflation has not and will not have a material affect on the
operations of the Company as it does not currently have any
significant assets, debt or income.
Because the Company lacks funds, it may be necessary for the
officers and directors to either advance funds to the Company or
to accrue expenses until such time as the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the<PAGE>
<PAGE>
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.
In the event the Company consummates a merger transaction or
acquisition, the Company believes that there will be a change in
control in the Company. The Company believes that any merger
would include the new issuance of common stock in the Corporation
to a potential merger candidate followed by a reverse split of
the Company's issued common stock thereby effectively passing
control of the Company to the merged candidate.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
The Company does not foresee that any terms of sale of the shares
presently held by officers and/or directors of the Company will
also be afforded to all other shareholders of the Company on
similar terms and conditions.
Management does not anticipate actively negotiating or otherwise
consenting to the purchase of any portion of their common stock
as a condition to or in connection with a proposed merger or
acquisition. In such an instance, all shareholders are to be
treated equally. This policy is upheld by the inclusion of a
resolution of the Board of Director's of the Company, contained
in the Company's minutes. In the event management wishes to
actively negotiating or otherwise consenting to the purchase of
any portion of their common stock as a condition to or in
connection with a proposed merger or acquisition, this would need
to be disclosed to the Board of Directors and entered into the
Company's minutes. The company's shareholders will be afforded
an opportunity to approve or consent to any particular stock buy-
out transaction or merger.
<PAGE>
<PAGE>
LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company established its office in Crowhthorne, UK in early
1997 when it began the initial development of its business plan.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to June 30,
1998 no revenue and a net loss from operations of $55,450. As of
June 30, 1998, the Company had a net capital deficiency of
$12,450.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
start up and trading of retail outlets. It is not anticipated
that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. Ascot
Group, Inc. does not have a working capital line of credit with
any financial institution. Therefore, future sources of
liquidity will be limited to the Company's ability to obtain
additional debt or equity funding. The Company anticipates that
its existing capital resources will enable it to maintain its
current implemented operations for at least 12 months, however,
full implementation of its business plan is dependent upon its
ability to raise substantial funding. Management's plan is to
find and consummate a merger or business acquisition in order to
maximize the benefit of ownership by shareholders in the Company.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Because the Company lacks funds, it may be necessary for the
officers and directors to either advance funds to the Company or
to accrue expenses until such time as the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
YEAR 2000 DISCLOSURE
The Company is aware of the Year 2000 issue and states that it
currently does not maintain any material active operations which
it foresees will be impacted by the Year 2000 problem.
Management therefore does not anticipate that the company will be
affected by this issue, financially or otherwise. This
disclosure complies with the directives of the Securities and
Exchange Commission, specifically Staff Legal Bulletin No. 5
(CF/IM), regarding Year 2000 issues.
<PAGE>
<PAGE>
Item 2. FINANCIAL INFORMATION
ASCOT GROUP, INC.
(A Development Stage Company)
SELECTED FINANCIAL DATA SCHEDULE
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
For the Year From Inception
Ended To
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
Cash and Cash Items $ 0 $ 0
Marketable Securities 0 0
Notes and Accounts Receivable 0 0
Allowances for doubtful accounts 0 0
Inventory 0 0
Total Current Assets 0 0
Property, plant and equipment 0 0
Accumulated depreciation 0 0
Total assets 0 0
Total current liabilities 13,650 0
Bonds, mortgages and debt 0 0
Preferred stock - redemption 0 0
Common stock 3,450 3,450
Other stockholders' equity (17,100) (3,450)
Total Liabilities and
Stockholders' equity 0 0
Net Sales of Tangible Products 0 0
Total Revenues 0 0
Cost of Tangible Goods Sold 0 0
Total Costs and Expenses applicable
To sales and revenues 0 0
Other costs and expenses 17,250 38,200
Provision for doubtful accounts 0 0
Interest and amortization of
Debt discount 0 0
Income before taxes and other items 0 0
Income tax expenses 0 0
Income/loss continuing operations 0 0
Discontinued operations 0 0
Extraordinary items 0 0
Cumulative Effect - changes in
Accounting principles 0 0
Net Income or loss 17,250 38,200
/TABLE
<PAGE>
<PAGE>
There have been no accounting changes, business combinations or
dispositions of business operations by the Company that
materially affect the comparability of the information reflected
in the selected financial data. The Company is a developmental
stage company which has no operating history and no assets. The
Company's expenses and liabilities have been incurred solely for
administrative expenses.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully. Further, there
can be no assurance that the Company will have the ability to
acquire or merge with an operating business, develop sustaining
business opportunities or acquire property that will be of
material value to the Company. In the opinion of management,
inflation has not and will not have a material affect on the
operations of the Company as it does not currently have any
significant assets, debt or income.
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
start up and trading of retail outlets. <PAGE>
<PAGE>
Item 3. DESCRIPTION OF PROPERTY
The company's administrative offices are located at Talbot House,
High Street, Crowthorne, Berks, United Kingdon and also in
Bellevue, Washington. The Company's office in Bellevue, WA is
utilized as a base to contact potential merger and acquisition
candidates and to service the Company's administrative needs.
The United Kingdom office is also utilized as a base to identify
potential merger and acquisition candidates and to service the
Company's administrative needs.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets for the information, to the best
knowledge of the Company as of June 30, 1998, with respect to
each person known by the Company to own beneficially more than 5%
of the Company's outstanding common stock, each director of the
Company and all directors and officers of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ---------------- -------------------- --------
Wing Capital Ltd.
Talbot House High Street
Crowthorne, UK 530,582 15.4%
Channing Investments Ltd.
S8 Int. Business Center
Casemates Main Street
Gibraltar 249,000 7.2%
Bradwall
S8 Int. Business Center
Casemates Main Street
Gibraltar 223,500 6.5%
Win Capital Corp
26 Ludlum Avenue
Bayville, NY 11709 200,000 5.8%
The Company has been advised that the persons listed above have
sole voting, investment, and dispositive power over the shares
indicated above. Percent of Class (third column above) is based
on 3,450,000 shares of common stock outstanding on June 30, 1998.
L.J. Boyne, director and president of the Company, holds 85,225
shares of common stock, and is also a beneficial owner of 20% of
the common stock of Bradwall Ltd., which is a shareholder of the
Company. Alan G.R. Bowen, the Company's secretary, treasurer and
director, holds 82,300 shares of common stock and is a beneficial
owner of 30% of the common stock of Bradwall Ltd., which is a
shareholder of the Company.<PAGE>
<PAGE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
Position(s) Held and
Name Age Duration of Service Family Relation
- ---------------- --- ------------------- ---------------
Linden J H Boyne 54 President and Director None
Alan G R Bowen 54 Secretary-Treasurer
and Director None
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected
and qualified. There are no agreements with respects to the
election of directors.
Set forth below is certain biographical information regarding the
Company's executive officers and directors:
Linden J H Boyne has been President and director of the Company
since 1997. Prior to working with the Company, he spent 10 years
with Unigate starting as a Management Trainee and becoming Group
Buyer and Retail General Manager for that company's retail group
in Scotland. He joined NSS Newsagents in 1973 as a Regional
Director and was subsequently appointed to the Board and became
Retail Managing Director two years before the Group was taken
over by Gallahers Tobacco. L.J. Boyne has been a secretary in
Alexander Wolfe, Inc., and Medic Media, Inc. during the past five
years.
Alan G.R. Bowen, the Company's secretary, treasurer and director
since 1997, is a graduate in Mathematics from Birmingham
University and worked as a graduate trainco for Unilever before
moving into retailing with British Shoe Corporation, part of the
Sears Group. In 1971, he joined NSS Newsagents and progressed to
become Retail Director and then Group Managing Director. He left
NSS Newsagents after it was taken over by Gallahers Tobacco and
formed an independent Mayfair Cards, a greetings card company,
which subsequently led him to found Ascot Group. Alan G.R. Bowen
is also a director of Mayfair Cards (Waterlooville) Limited, a
United Kingdom Corporation.
To the knowledge of management, during the past five years, no
present or former director or executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any
state insolvency law, nor had a receiver, fiscal agent or similar
officer appointed by a court for the business or present of such
a person, or any partnership in which he was a general partner at
or within two years before the time of such filing, or any
corporation or business association of which he was an executive
officer within two years before the time of such filing;<PAGE>
<PAGE>
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and
other minor
offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him
form or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director of any
investment company, or engaging in or continuing any conduct or
practice in connection with such activity; (ii) engaging in any
type of business practice; or (iii) engaging in any activity in
connection with the purchase or sale of any security or commodity
or in connection with any violation of federal or state
securities laws or federal commodity laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or
state authority barring, suspending, or otherwise limiting for
more than 60 days the right of such person to engage in any
activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the judgment in
subsequently reversed, suspended, or vacate;
(6) was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
The Company's Common Stock is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in connection therewith, directors,
officers, and beneficial owners of more than 10% of the Company's
Common Stock are required to file on a timely basis certain
reports under Section 16 of the Exchange Act as to their
beneficial ownership of the Company's Common Stock. The
following table sets forth, as of the date of this report, the
name and relationship of each person who is required to file on
a timely basis any reports required pursuant to Section 16 of
the Exchange Act:<PAGE>
<PAGE>
Name Position Report to be filed
- ---- -------- ------------------
Wing Capital Ltd. 10% or greater Form 3
beneficial owner
Item 6. EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. The Company has not paid any salaries or other
compensation to its officers, directors or employees for the year
ended April 30,1998, nor at any of its officers, directors or any
other persons and no such agreements are anticipated in the
immediate future. It is intended that the Company's directors
will forego any compensation until such time as an accusation or
merger can be accomplished and will strive to have the business
opportunity provide their remuneration. As of the date hereof,
no person has accrued any compensation from the Company.
COMPENSATION TABLE: None; no form of compensation was paid to any
officer or director at any time during the last two fiscal years.
CASH COMPENSATION
There was no cash compensation paid to any director or executive
officer of the Company during the two fiscal years ended June 30,
1998.
BONUSES AND DEFERRED COMPENSATION: None.
COMPENSATION PURSUANT TO PLANS: None.
PENSION TABLE: None.
OTHER COMPENSATION: None.
COMPENSATION OF DIRECTORS: None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT:
There are no compensatory plans or arrangements of any kind,
including payments to be received from the Company, with respect
to any person which would in any way result in payments to any
such person because of his or her resignation, retirement, or
other termination of such person's employment with the Company or
its subsidiaries, or any change in control of the Company, or a
change in the person's responsibilities following a change in
control of the Company.
<PAGE>
<PAGE>
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
To the best of Management's knowledge, during the fiscal year
ended December 31, 1996 and 1997, there were no material
transactions, or series of similar transactions, since the
beginning the Company's last fiscal year, or any currently
proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount
involved exceeds $60,000, and in which any director or executive
officer, or any security holder who is known by the Company's
common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
The Company has obtained an advance of funds from Wing Capital
Limited which is utilized to cover the statutory obligations and
administrative expenses of the Company. The terms of advancement
allow Wing Capital Limited to advance to the Company funds to
enable the Company to comply with statutory filings and to enable
the Company to pursue the consummation of a potential merger or
business acquisition. These funds will be repayable either in
cash or securities upon the consummation of a potential merger or
business acquisition. To date, Wing Capital has advanced $34,000
to cover the Company's statutory and administrative expenses and
will advance additional funds if it deems necessary.
The Company uses 1,000 square feet of space for its executive
offices at Talbot House, High Street, Crowthorne, Berks, United
Kingdom which it receives from one of its shareholders at no
cost. This office space is used by management to operate from to
identify and to communicate with possible merger or business
acquisition candidates. The Company's United Kingdom
administration needs are also conducted from this office. The
Company also utilizes similar space in Bellevue, Washington to
address administrative needs in the United States. Once a merger
or business acquisition has taken place, alternative arrangements
will be sought.
CERTAIN BUSINESS RELATIONSHIPS:
During the fiscal years ended June 30, 1997 and 1998, there were
no material transactions between the Company and its management.
INDEBTEDNESS OF MANAGEMENT:
To the best of Management's knowledge, during the fiscal years
ended June 30, 1996 and 1997, there were no material
transactions, or series of similar transactions, since the
beginning of the Company's last fiscal year, or any currently
proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount
involved exceeds $60,000, and in which any director or executive
officer, or any security holder who is known by the Company to
<PAGE>
<PAGE>
own of record or beneficially more than 5% of any class of the
company's common stock, or any member of the immediate family of
any of the foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS:
To the best Knowledge of management, no such transactions exist.
Item 8. LEGAL PROCEEDINGS
No legal proceedings are pending at this time.
Item 9. MARKET PRICE OF AND DIVIDENDS FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company is not aware of any quotations for its common stock,
now or at any time within the past two years. At June 30, 1998,
there were approximately 153 holders of record of the issued and
outstanding shares of Issuer's common stock. Issuer has never
paid a dividend on its outstanding equity. The Company currently
has no established public trading market for its common stock.
Item 10. RECENT SALES OF UNREGISTERED SECURITIES
No recent sales of unregistered securities at this time.
Item 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
The only class of securities of the registrant are 25,000,00
authorized shares of voting common stock, $.001 par value,
3,450,000 issued and outstanding, no dividend. There are no
restrictions on the alienability of the voting common stock and
the rights of the common stockholders may only be modified by a
vote of a majority of the shareholders.
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
No indemnification of directors and officers at this time.
Item 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Ascot Group, Inc. (A Development Stage Company)
<PAGE>
<PAGE>
We have audited the accompanying balance sheet of Ascot Group,
Inc. as of June 30, 1998, and the related statements of income,
cash flows and stockholders' equity, for the year then ended, and
for the period from August 16, 1996 (inception) to June 30, 1998.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Ascot Group Inc. as of June 30, 1998, and the results of its
operations and its cash flows for the year then ended and for the
period from August 16, 1996 (inception) to June 30, 1998 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 3 to the financial statements, the Company has losses
form operations and a net capital deficiency, which raise
substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters also are
described in Note 3. The financial statements do not include any
adjustments that might result form the outcome of this
uncertainty.
Peter J. Repetti
New York, New York
August 22, 1998
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash $ 0
Other Current Assets 0
----------
Total Current Assets 0
Other Assets 0
----------
Total Assets $ 0
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 0
Accrued Expenses 12,450
-----------
Total Current Liabilities $12,450
Other Liabilities 0
-----------
Total Liabilities $12,450
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding 3,450,000
Shares 3,450
Additional Paid in Capital 39,550
Deficit Accumulated During
the Development Stage (55,450)
-----------
Total Stockholders' Equity (12,450)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 0
The accompanying notes are an integral part of these financial
statements
/TABLE
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
CONDENSED STATEMENT OF LOSS
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
TOTAL REVENUES: $ 0 $ 0
---------- ----------
OPERATING EXPENSES:
Accounting 2,400 2,400
Legal 10,000 10,000
Rent 4,800 9,000
Filing Fee 50 50
Other Start Up Costs 0 34,000
---------- ----------
Total Operating Expenses 17,250 55,450
---------- ----------
Operating Loss $(17,250) $(55,450)
---------- ----------
OTHER INCOME (EXPENSES):
Other Income 0 0
---------- ----------
NET LOSS $(17,250) $(55,450)
NET LOSS PER SHARE $ (0.01) $(0.02)
---------- ----------
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,450,000 3,535,137
---------- ----------
The accompanying notes are an integral part of these financial
statements.
/TABLE
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $(17,250) $(55,450)
-------- --------
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Changes in Assets and
Liabilities Increase in
Accounts Payable and Accrued
Expenses 12,450 12,450
-------- --------
Total Adjustments 12,450 12,450
-------- --------
Net Cash Used in
Operating Activities (4,800) (43,000)
-------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Additional Paid In Captial
(Note 2) 4,800 9,000
Proceeds from Insurance of
Common Stock 0 34,000
-------- --------
Net Cash Provided by
Financing Activities 0 43,000
-------- --------
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 $ 0
-------- --------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash Paid During the Period
for Interest Expense $ 0 $ 0
-------- --------
Corporate Taxes $ 0 $ 0
-------- --------
The accompanying notes are an integral part of these financial
statements.
/TABLE
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Total
COMMON STOCK ISSUED Additional
Accumulated Shareholders'
SHARES PAR VALUE Paid in Cap Deficit
Equity
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
ISSUANCE OF
5,000,000
SHARES
AUGUST 29, 1996 5,000,000 $ 5,000 $ 0 $ 0
$ 5,000
ISSUANCE OF
2,900,000
SHARES
OCTOBER
25, 1996 2,900,000 2,900 26,100 0
29,000
REVERSE
STOCK SPLIT
JANUARY
20, 1997 (3,400,000) (3,400) 3,400 0
0
CANCELLATION
OF 1,050,000
SHARES
JANUARY
20, 1997 (1,050,000) (1,050) 1,050 0
0
NET LOSS
FOR THE
PERIOD FROM
INCEPTION TO
JUNE 30, 1997 0 0 4,200
(38,200) (38,200)
- -----------------------------------------------------------
BALANCE
JULY 1, 1997 3,450,000 3,450 34,750
(38,000) 0
NET LOSS
FOR THE
YEAR ENDED
JUNE 30, 1998 0 0 4,800
(17,250) (12,450)
- -----------------------------------------------------------
BALANCE
JUNE 30, 1998 3,450,000 $3,450 $39,550
$(55,450) $(12,450)
The accompanying notes are an integral part of these financial
statements.
/TABLE
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
SELECTED FINANCIAL DATA
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
For the Year
From
Ended
Inception to
June 30, 1998
June30, 1998
-------------
- -------------
<S> <C> <C>
OPERATING REVENUE $ 0 $
0
(Loss) from continuing operations (17,250)
(38,200)
(Loss) from continuing operations
per common share (0.01)
(0.01)
Total Assets $ 0 $
0
Long-term obligations and redeemable
Preferred stock $ 0 $
0
Cash Dividends declared per
Common share $ 0 $
0
The accompanying notes are an integral part of these financial
statements.
/TABLE
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. DESCRIPTION OF COMPANY: Ascot Group Inc. ("the Company") is a
for-profit corporation incorporated under the laws of the State
of Delaware on August 16, 1996. Ascot Group Inc.'s principle
objective is to develop a retail company in Europe using
developed North American concepts which have commonly been five
years ahead of Europe. The mission will be realized by using a
range of master franchises and local franchises to develop high
quality retail outlets using the best available management in the
country concerned. Strategic partnerships with leading retailers
are being investigated.
B. BASIS OF PRESENTATION: Financial statements are prepared on
the accrual basis of accounting. Accordingly revenue is
recognized when earned and expenses when incurred.
C. CASH AND CASH EQUIVALENTS: For purposes of the statements of
cash flows, the Company considers all short-term investments with
maturity of three months or less to be cash equivalents.
D. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results
could differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company
will continue as a going concern. See Note 3.
NOTE 2 - USE OF OFFICE SPACE
The Company uses 1,000 square feet of space for its executive
offices at Talbot House, High Street, Crowthorne, Berks, UK which
it receives from one of its shareholders at no cost. The company
also used 1,000 square feet of office space for executive offices
in Belleview, WA which it also receives from one of its
shareholders at no cost. The fair market value of each of these
offices is $200 per month, which is reflected as an expense with
a corresponding credit to contributed capital.
NOTE 3 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company established its office in Crowhthorne, UK in early
1997 when it began the initial development of its business plan.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.<PAGE>
<PAGE>
As a result, the Company had from time of inception to June 30,
1998 no revenue and a net loss from operations of $55,450. As of
June 30, 1998, the Company had a net capital deficiency of
$12,450.
The company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
start up and trading of retail outlets. It is not anticipated
that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. Ascot
Group, Inc. does not have a working capital line of credit with
any financial institution. Therefore, future sources of
liquidity will be limited to the Company's ability to obtain
additional debt or equity funding. The Company anticipates that
its existing capital resources will enable it to maintain its
current implemented operations for at least 12 months, however,
full implementation of its business plan is dependent upon its
ability to raise substantial funding. Management's plan is to
find and consummate a merger or business acquisition in order to
maximize the benefit of ownership by shareholders in the Company.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Because the Company lacks funds, it may be necessary for the
officers and directors to either advance funds to the Company or
to accrue expenses until such time as the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.<PAGE>
<PAGE>
NOTE 4 - EARNINGS PER SHARE
For the Year From Inception
Ended To
June 30, 1998 June 30, 1998
--------------------------------------
Net Loss per share $(0.01) $(0.02)
NOTE 5 - CANCELLATION OF SHARES
After the Company completed a Regulation D 504 Offering,
Technology Finance, the holder of 2,844,830 shares of common
stock, surrendered 1,044,830 shares back to the Company on
January 20, 1997. Technology Finance and the Company believed
that by canceling this amount of shares, the shareholders of the
Company who subscribed to the 504 Offering would own a greater
percentage of the Company. Both Technology Finance and the
Company agreed that this would make the Company more attractive
to potential investors and would increase the Company's potential
to consummate a successful merger or business acquisition.<PAGE>
<PAGE>
Item 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
No changes in and disagreements with accountants on accounting
and financial disclosure.
Item 15. FINANCIAL STATEMENTS, EXHIBITS AND
REPORTS ON FORM 8-K
(A) FINANCIAL STATEMENTS
The Following financial statements are filed as part of this
registration statement:
Balance Sheet
Statement of Loss
Statement of Cash Flows
Statement of Shareholders' Equity (Deficit)
Selected Financial Data
(B) EXHIBITS AND INDEX OF EXHIBITS
The following exhibits are included in Item 13(c). Other
exhibits have been omitted since the required information is not
applicable to the registrant.
EXHIBIT
3 Certificate of incorporation and by-laws
11 Statement regarding computation of per share
earnings
27 Financial Data Schedule
(C) REPORTS ON FORM 8-K
No Report on Form 8-K was filed during the fourth quarter of the
period for which this Annual Report is filed.
The Company filed a From 10-K through a filing agent,
Merrill/Corporate New York. The filing agent incorrectly termed
the Form 10-K as a "Form 10-12g" during its filing.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Ascot Group, Inc.
- -----------------
(Registrant)
Date: October 31, 1998
By: /s/ L.J. Boyne
--------------
President
ARTICLE I - OFFICES
Section 1. The registered office of the corporation in the
State of Delaware shall be at 1050 South State
Street, Dover, Delaware 19901. The registered agent in charge
thereof shall be Corp. America Inc.
Section 2. The corporation may also have offices at such other
places as the Board of Directors may from time to time appoint or
the business of the corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the
words "Corporate Seal, Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the
registered office of the corporation in this state or at such
place, either within or without this state, as may be selected
from time to time by the Board of Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the
stockholders shall be held on the 30th day of December in each
year if not a legal holiday, and if a legal holiday, then on the
next secular day following at 11 o'clock a.m, when they shall
elect a Board of Directors and transact such other business as
may properly be brought before the meeting. If the annual
meeting for election of directors is not held on the date
designated therefor, the directors shall cause the meeting to be
held as soon thereafter as convenient.
Section 3. ELECTION OF DIRECTORS: Elections of the directors of
the corporation will be by written ballot.
Section 4. SPECIAL MEETINGS: Special meetings of the
stock-holders may be called at any time by the President, or the
Board of Directors, or stockholders entitled to cast votes at the
particular meeting. At any time, upon written request of any
person or persons who have duly called a special meeting, it
shall be the duty of the Secretary to fix the date of the
meeting, to be held not more than sixty days after receipt of the
request, and to give due notice thereof. If the Secretary shall
neglect or refuse to fix the date of the meeting and give notice
thereof, the person or persons calling the meeting may do so.
Business transacted at all special meetings shall be confined to
the objects stated in the call and matters germane thereto,
unless all stockholders entitled to vote are present and consent.
Written notice of a special meeting of stockholders stating the
time and place and object thereof, shall be given to each
stockholder entitled to vote thereat at least 14 days before such
meeting, unless a greater period of notice is required by statute
in a particular case.
Section 5. QUORUM: A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders. If
less than a majority of the outstanding shares entitled to vote
is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
noticed. The stockholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave
less than a quorum.
Section 6. PROXIES: Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize
another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable proxy
regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation
generally. All proxies shall be filed with the Secretary of the
meeting before being voted upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders are
required or permitted to take any action at a meeting, a written
notice of the meeting shall be given which shall state the place,
date and hour of the meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called.
Unless otherwise provided by law, written notice of any meeting
shall be given not less than ten nor more than sixty days before
the date of the meeting to each stockholder entitled to vote at
such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action required to
be taken at any annual or special meeting of stockholders of a
corporation, or any action which may be taken at any annual or
special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less that the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not
consented in writing.
Section 9. LIST OF STOCKHOLDERS: The officer who has charge of
the stock ledger of the corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of
each stockholder. No share of stock upon which any installment
is due and unpaid shall be voted at any meeting. The list shall
be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall
be managed by its Board of Directors, three in number. The
directors need not be residents of this state or stockholders in
the corporation. They shall be elected by the stockholders at
the annual meeting of stockholders of the corporation, and each
director shall be elected for the term of one year, and until his
successor shall be elected and shall qualify or until his earlier
resignation or removal.
Section 2. REGULAR MEETINGS: Regular meetings of the Board
shall be held without notice at the registered office of the
corporation, or at such other time and place as shall be
determined by the Board.
Section 3. SPECIAL MEETINGS: Special Meetings of the Board may
be called by the President on 14 days notice to each director,
either personally or by mail or by telegram; special meetings
shall be called by the President or Secretary in like manner and
on like notice on the written request of a majority of the
directors.
Section 4. QUORUM: A majority of the total number of directors
shall constitute a quorum for the transaction of business.
Section 5. CONSENT IN LIEU OF MEETING: Any action required or
permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting if
all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee. The
Board of Directors may hold its meetings, and have an office or
offices, outside of this state.
Section 6. CONFERENCE TELEPHONE: One or more directors may
participate in a meeting of the Board, of a committee of the
Board or of the stockholders, by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other; participation
in this manner shall constitute presence in person at such
meeting.
Section 7. COMPENSATION: Directors, as such, shall not receive
any stated salary for their services, but by resolution of the
Board, a fixed sum and expenses of attendance, if any, may be
allowed for attendance at each regular or special meeting of the
Board PROVIDED, that nothing herein contained shall be construed
to preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 8. REMOVAL: Any director or the entire Board of
Directors may be removed, with or without cause, by the holders
of a majority of the shares then entitled to vote at an election
of directors, except that when cumulative voting is permitted, if
less than the entire Board is to be removed, no director may be
removed without cause if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an
election of the entire Board of Directors, or, if there be
classes of directors, at an election of the class of directors of
which he is a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be
chosen by the directors and shall be a President, Secretary and
Treasurer. The Board of Directors may also choose a Chairman,
one or more Vice Presidents and such other officers as it shall
deem necessary. Any number of offices may be held by the same
person.
Section 2. SALARIES: Salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 3. TERM OF OFFICE: The officers of the corporation
shall hold office for one year and until their successors are
chosen and have qualified. Any officer or agent elected or
appointed by the Board may be removed by the Board of Directors
whenever, in its judgment, the best interest of the corporation
will be served thereby.
Section 4. PRESIDENT: The President shall be the chief
executive officer of the corporation; he shall preside at all
meetings of the stockholders and directors; he shall have general
and active management of the business of the corporation, shall
see that all orders and resolutions of the Board are carried into
effect, subject, however, to the right of the directors to
delegate any specific powers, except such as may be by statute
exclusively conferred on the President, to any other officer or
officers of the corporation. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the
corporation. He shall be EX-OFFICIO a member of all committees,
and shall have the general power and duties of supervision and
management usually vested in the office of President of a
corporation.
Section 5. SECRETARY: The Secretary shall attend all sessions
of the Board and all meetings of the stockholders and act as
clerk thereof, and record all the votes of the corporation and
the minutes of all its transactions in a book to be kept for that
purpose, and shall perform like duties for all committees of the
Board of Directors when required. He shall give, or cause to
be given, notice of all meetings of the stockholders and of the
Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or President, and under
whose super-vision he shall be. He shall keep in safe custody
the corporate seal of the corporation, and when authorized by the
Board, affix the same to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation, and shall keep the moneys of the corporation in a
separate account to the credit of the corporation. He shall
disburse the funds of the corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall
render to the President and directors, at the regular meetings of
the Board, or whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the
corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, shall be
filled by the Board of Directors. Vacancies and newly created
directorships resulting from an increase in the authorized number
of directors may be filled by a majority of the directors then in
office, although less than a quorum, or by a sole remaining
director. If at any time, by reason of death or resignation or
other cause, the corporation should have no directors in office,
then any officer or any stockholder or an executor,
administrator, trustee or guardian of a stockholder, or other
fiduciary entrusted with like responsibility for the person or
estate of a stockholder, may call a special meeting of
stockholders in accordance with the provisions of these By-law's.
Section 2. RESIGNATIONS EFFECTIVE AT FUTURE DATE: When one or
more directors shall resign from the Board, effective at a future
date, a majority of the directors then in office, including those
who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney
or other agent, shall, upon written demand under oath stating the
purpose thereof, have the right during the usual hours for
business to inspect for any proper purpose the corporation's
stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper
purpose shall mean a purpose reasonably related to such person's
interest as a stockholder. In every instance where an attorney
or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney
or other agent to so act on behalf of the stockholder. The
demand under oath shall be directed to the corporation at its
registered office in this state or at its principal place of
business.
ARTICLE VIII - STOCK CERTIFICATES, D@END, ETC.
Section 1. The stock certificates of the corporation shall be
numbered and registered in the share ledger and transfer books of
the corporation as they are issued. They shall bear the
corporate seal and shall be signed by the President and
Secretary.
Section 2. TRANSFERS: Transfers of shares shall be made on the
he books of the corporation upon surrender of the certificates
therefor, endorsed by the person named in the certificate or by
attorney, lawfully constituted in writing. No transfer shall be
made which inconsistent with law.
Section 3. LOST CERTIFICATE: The corporation may issue a new
certificate of stock in the place of any certificate signed by
it, alleged to have been lost, stolen or destroyed, and the
corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss, theft
or destruction of any such certificate or the issuance of such
new certificate.
Section 4. RECORD DATE: In order that the corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
If no record date is fixed:
(a) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which
notice is given, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary,
shall be the day on which the first written consent is expressed.
(c) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 5. DIVIDENDS: The Board of Directors may declare and
pay dividends upon the outstanding shares of the corporation,
from time to time and to such extent as they deem advisable, in
the manner and upon the terms and conditions provided by statute
and the Certificate of Incorporation.
Section 6. RESERVES: Before payment of any dividend there may
be set aside out of the net profits of the corporation such sum
or sums as the directors, from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the
directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in
the manner in which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. CHECKS: All checks or demands for money and notes of
the corporation shall be signed by such officer or officers as
the Board of Directors may from time to time designate.
Section 2. FISCAL YEAR: The fiscal year shall begin on the first
day of January.
Section 3. NOTICE: Whenever written notice is required to be
given to any person, it may be given to such person, either
personally or by sending a copy thereof through the mail, or by
telegram, charge prepaid, to his address appearing on the books
of the corporation, or supplied by him to the corporation for the
purpose of notice. If the notice is sent by mail or by
telegraph, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail or with
a telegraph office for transmission to such person. Such notice
shall specify the place, day and hour of the meeting and, in the
case of a special meeting of stockholders, the general nature of
the business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written notice is
required by statute, or by the Certificate or the By-law's of
this corporation, a waiver thereof in writing, signed by the
person or persons entitle to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving
of such notice. Except in the case of a special meeting of
stockholders, neither the business to be transacted at nor the
purpose of the meeting need be specified in the waiver of notice
of such meeting. Attendance of a person either in person or
by proxy, at any meeting shall constitute a wavier of notice of
such meeting, except where a person attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting was not lawfully called or convened.
Section 5. DISALLOWED COMPENSATION Any payments made to an
officer or employee of the corporation such as a salary,
commission, bonus, interest, rent, travel or entertainment
expense incurred by him, which shall be disallowed in whole or in
part as a deductible expense by the Internal Revenue Service,
shall be reimbursed by such officer or employee to the
corporation to the full extent of such disallowance. It shall be
the duty of the directors, as a Board, to enforce payment of each
such amount disallowed. In lieu of payment by the officer or
employee, subject to the determination of the directors,
proportionate amounts may be withheld from his future
compensation payments until the amount owed to the corporation
has been recovered.
Section 6. RESIGNATIONS: Any director or other officer may
resign at any time, such resignation to be in writing and to take
effect from the time of its receipt by the corporation, unless
some time be fixed in the resignation and then from that date.
The acceptance of a resignation shall not be required to make it
effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall present
at each annual meeting a full and complete statement of the
business and affairs of the corporation for the preceding year.
Such statement shall be prepared and presented in whatever manner
the Board of Directors shall deem advisable and need not be
verified by a Certified Public Accountant.
ARTICLE XI - INDEMNIFICATION AND INSURANCE:
Section 1. (a) RIGHT TO INDEMNIFICATION. Each person who was or
is made a party or is threatened to be made a party or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigation (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a
director or officer, of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee
or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a
director, officer, employee or agent, shall be indemnified and
held harmless by the Corporation to the fullest extent authorized
by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as
provided in paragraph (b) hereof, the Corporation shall indemnify
any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its
disposition: provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred
by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer), to repay
all amounts so advanced if it shall ultimately be determined that
such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of its
Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) RIGHT OF CLAIMANT TO BRING SUIT: If a written claim under
paragraph (a) of this Section has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim.
It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware Corporation
law for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable
standard or conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable
standard or conduct.
(c) Notwithstanding any limitation to the contrary contained in
sub-paragraphs (a) and (b) of this section, the corporation
shall, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as the same may
be amended and supplemented, indemnify any and all persons whom
it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters
referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive
of any other rights to which those indemnified may be entitled
under any By-law, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be director, officer, employee or agent and shall inure
to the benefit of the heirs, executors and administrators of such
a person.
(d) INSURANCE: The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership,
joint venture, trust or other enterprise against any such
expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ARTICLE XIII - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the vote
of stockholders entitled to cast at least a majority of the votes
which all stockholders are entitled to cast thereon, at any
regular or special meeting of the stockholders, duly convened
after notice to the stockholders of that purpose.
