U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[ X ] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
-----------------
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from______________ to _________________
Commission file no. 33-41809-D
----------
Osteo Systems, Inc. (formerly Jewelnique Designs, Inc.)
-------------------------------------------------------
(Name of small business issuer in its charter)
Colorado 84-1385900
-------- ----------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) (Identification No.)
2449 Lyric Avenue, Los Angeles, California 90027
------------------------------------------ -----
Address of principal executive offices) (Zip Code)
Issuer's telephone number (323) 660-8665
--------------
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: None
Name of each exchange on which registered: Not applicable
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
-----------------------------
(title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes No X
----- -----
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year None
----
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which such common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in rule
12b-2 of the Exchange Act.)
$1,502,083 as of April 7, 2000
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
(Issuers involved in bankruptcy proceedings during the past five years)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes _____ No_____
(Applicable only to corporate registrants)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date 6,150,000 shares, Common Stock, $.001
par value, April 7, 2000
Documents incorporated by reference
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The list
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
Transitional Small Business Disclosure Format (check one): Yes No X
----- -----
2
<PAGE>
PART I
Item 1. Description of business.
a. Business Development. Osteo Systems, Inc. (hereinafter referred to as the
"Company") was incorporated under the laws of the State of Colorado on
March 6, 1997 as Blue Mountain Capital, Inc. The Company has generally been
inactive and has conducted no business operations since its inception
except for organizational and fund raising activities.
The Company received $20,000 from a public offering under Rule 504 of
Regulation D in March 1997 and a further $5,000 thereunder in March 1998.
The name was changed to Jewelnique Designs, Inc. on June 20, 1997. The
Company had hoped to design, manufacture, market and distribute a
specialized line of jewelry products.
On June 17, 1998 the name was changed to Osteo Systems, Inc. and the
capitalization was restructured through the cancellation of 223,000 shares
and a 30 for one forward stock split. The Company then hoped to develop and
commercialize several biotech technologies related to bone healing for
medical, dental and surgical applications.
The above plans were unsuccessful and the Company is presently seeking a
merger partner.
b. Business of Issuer. The Company has generally been inactive and has
conducted no business operations since its inception except for
organizational and fund raising activities. The Company's previous plans
were unsuccessful and the Company is presently seeking a merger partner.
The Company has no employees at present.
Item 2. Description of Property.
The Company owns no real or personal property. The Company's limited operations
are carried out in the offices of its executive officers at no charge to the
Company.
Item 3. Legal proceedings.
The Company knows of no legal proceeding to which it is a party or to which its
property is subject pending, threatened or contemplated or of any judgements
against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fiscal years ended December 31, 1999 or
1998 to a vote of the Company's shareholders through the solicitation of proxies
or otherwise.
3
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
a. Market Information. The Company's shares on traded on the OTC Bulletin
Board. The following table shows the high and low bid information for each
quarter within the last two fiscal years as reported to the Company by the
OTC Bulletin Board. Such quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
High Bid Low Bid
-------- -------
1999:
-----
First Quarter $ .375 $ .20
Second Quarter .20 .20
Third Quarter .50 .1563
Fourth Quarter .1875 .1563
1998:
-----
First Quarter -- --
Second Quarter -- --
Third Quarter 1.5625 .45
Fourth Quarter .51 .375
b. The Company has approximately 28 shareholders of record as of April 7,
2000.
c. The Company has never declared or paid any dividends, and although there
are no restrictions limiting its ability to do so, it is unlikely to pay
any dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
a. Plan of Operation. The Company has generally been inactive and has
conducted no business operations since its inception except for
organizational and fund raising activities. The Company's previous plans
were unsuccessful and the Company is presently seeking a merger partner.
The Company's auditor has noted in her opinion that there is substantial
doubt about the Company's ability to continue as a going concern (see
financial statements attached hereto). Management believes that in order to
continue in business it will be required to find a merger partner or raise
additional capital. No potential capital resources exist at this time. The
Company's directors and executive officers have been personally absorbing
the cost of maintaining the Company's corporate existence, but there can be
no assurance they will continue to do so. Management currently intends to
find a merger partner, but there can be no assurance this will occur.
4
<PAGE>
Item 7. Financial Statements. The Financial Statements of the Company for the
Years Ended December 31, 1999 and 1998, together with Independent Auditor's
Report thereon, are contained in on pages F-1 through F-8 attached and are
incorporated herein by this reference.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
5
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
Directors, Executive Officers, Promoters and Control Persons
- ------------------------------------------------------------
a. Identify directors and executive officers.
Roland W. Fink, 44. Mr. Fink has been President and a director of the Company
since its inception. Since March 1997 Mr. Fink has been a partner in Fink &
Dorsett, Glendale, California, a mergers & acquisitions and corporate finance
firm. From October 1995 to March 1997 he was proprietor of Fink & Associates,
Glendale, California, an accounting and financial consulting enterprise. From
May 1992 to October 1995 he was managing executive of Greenberg & Jackson An
Accountancy Corporation, Los Angeles, California.
Kendall L. Dorsett, 57. Mr. Dorsett has served as Secretary, Treasurer and a
director of the Company since its inception. Since March 1997 he has been a
partner in Fink & Dorsett, Glendale, California, a mergers & acquisitions and
corporate finance firm. From January 1995 to March 1997 Mr. Dorsett engaged in
part-time commission sales for Earthlink Network, Inc., Pasadena, California, an
internet service provider, and managed his investments.
Suzanne Sorensen, 52. Ms. Sorensen has served as Executive Vice President of the
Company since April 1, 1997. Ms. Sorensen has managed Suzanne Designs, Los
Angeles, California, a family-owned jewelry business, since 1976.
b. Identify significant employees.
None.
c. Family relationships.
None.
d. Involvement in certain legal proceedings.
None.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company under Rule 16a-3(d) during its most recent two fiscal years, and
Forms 5 and amendments thereto furnished to the Company with respect to its most
6
<PAGE>
recent two fiscal years, and any written representations received by the
Company, the Company has not identified any person who, at any time during the
two preceding fiscal years, was a director, officer, beneficial owner of more
than ten percent of the Company's outstanding common stock that failed to file
on a timely basis any reports required by Section 16(a) during the most recent
two fiscal years or any prior years.
Item 10. Executive Compensation.
None of the Company's executive officers and directors received any
compensation, cash or non-cash, during the fiscal years ended December 31, 1999
or 1998. During 1998 the Company paid $1,543 in management fees to a company
owned by two of its executive officers and directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information as of April 7, 2000, regarding the
ownership of the Company's common stock by each shareholder known to the Company
to be the beneficial owner of more than five percent of its outstanding shares
of common stock, each director and all executive officers and directors as a
group. Except as otherwise indicated, each of the shareholders has sole voting
and investment power with respect to the shares of common stock beneficially
owned.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class(3)
- -------------- ---------------- -------------------- ------------
<S> <C> <C> <C>
Common Roland W. Fink(1)(2) 1,532,640 shares 24.92%
1201 N. Pacific Ave., Suite 104
Glendale, CA 91202
" Kendall L. Dorsett(1)(2) 1,532,640 shares 24.92%
1201 N. Pacific Ave., Suite 104
Glendale, CA 91202
" Patricia Cudd 767,320 shares 12.47%
1120 Lincoln St., Suite 703
Denver, CO 80203
" Suzanne Sorensen(2) 8,400 shares 0.14%
2449 Lyric Avenue
Los Angeles, CA 90027
" Grey Point Capital, Inc. 494,890 shares 8.05%
c/o M. Richard Cutler, Esq.
610 Newport Center Dr., Suite 800
Newport Beach, CA 92660
" All directors and executive officers
as a group (three persons) 3,073,680 shares 49.98%
- --------------------
Footnotes on following page.
7
</TABLE>
<PAGE>
Footnotes from prior page.
(1) Member of the Board of Directors of the Company.
(2) Executive Officer of the Company.
(3) Based on 6,150,000 shares outstanding as of April 3, 2000.
Item 12. Certain Relationships and Related Transactions.
None.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Item
Number Description
------ -----------
3.1 Articles of Incorporation of Blue Mountain Capital, Inc., filed
March 6, 1997. (1)
3.2 Articles of Amendment to the Articles of Incorporation of Blue Mountain
Capital, Inc., filed June 20, 1997. (2)
3.3 Articles of Amendment to the Articles of Incorporation of Jewelnique
Designs, Inc., filed June 17, 1998.
3.4 Bylaws of Blue Mountain Capital, Inc. (3)
- ------------------
(1) Previously filed as Exhibit 2.1 to the registration statement on
Form 10-SB12G filed July 1, 1997.
(2) Previously filed as Exhibit 2.2 to the registration statement on
Form 10-SB12G filed July 1, 1997.
(3) Previously filed as Exhibit 2.3 to the registration statement on
Form 10-SB12G filed July 1, 1997.
(b) Reports on Form 8-K.
There were no Reports on Form 8-K filed during fiscal 1999 or 1998.
8
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
OSTEO SYSTEMS, INC.
(Registrant)
Date: April 10, 2000 By: /s/ Roland W. Fink
----------------------------------
Roland W. Fink, President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date Signature Title
April 10, 2000 By: /s/ Roland W. Fink President and Director
-------------------
Roland W. Fink
April 10, 2000 By: /s/ Kendall L. Dorsett Secretary, Treasurer
----------------------- and Director
Kendall L. Dorsett
9
<PAGE>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
Page No.
--------
Auditor's Report ................................................... F-2
Balance Sheets as of December 31, 1999 and 1998 .................... F-3
Statements of Operations for the Years Ended
December 31, 1999 and 1998 ...................................... F-4
Statements of Stockholders' Equity for the Years Ended
December 31, 1999 and 1998 ..................................... F-5
Statements of Cash Flows for the Years Ended
December 31, 1999 and 1998 ..................................... F-6
Notes to Financial Statements ...................................... F-7
F-1
<PAGE>
Janet Loss, CPA, P.C.
Certified Public Accountant
1780 South Bellaire Street, Suite 500
Denver, CO 80222
303-782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Osteo Systems, Inc.
I have audited the accompanying balance sheet of Osteo Systems, Inc. (formerly
Jewelnique Designs, Inc.) (a development stage company) as of December 31, 1999
and 1998, and the related statements of operations, stockholders' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
These standards require that I 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 a evaluating the overall financial statement preparation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Osteo Systems, Inc. (formerly
Jewelnique Designs, Inc.) (a development stage company) as of December 31, 1999
and 1998, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is a development stage enterprise,
and its ability to continue in business is dependent upon obtaining future
financing and the success of future operations, the outcome of which cannot be
determined at this time, which raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in this regard are
described in Note 4. The financial statements do not include any adjustments
which might result from the outcome of this uncertainty.
Janet Loss, CPA, P.C.
April 3, 2000
F-2
<PAGE>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
Balance Sheets
As of December 31, 1999 and 1998
Assets
------
1999 1998
---- ----
Other Assets:
Organization Costs, less accumulated
amortization of $281 and $181,
respectively $219 $319
---- ----
Total Assets $219 $319
==== ====
Liabilities and Stockholders' Equity
------------------------------------
Stockholders' Equity:
Preferred Stock, par value $0.01, 10,000,000
shares authorized, none issued and outstanding $ -- $ --
Common stock, par value $0.001,
100,000,000 shares authorized,
6,150,000 shares issued and outstanding 6,150 6,150
Additional paid-in capital 17,145 17,145
Deficit accumulated during development stage (23,076) (22,976)
------- -------
Total Stockholders' Equity 219 319
------- -------
Total Liabilities and Stockholders' Equity $ 219 $ 319
======= =======
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
Statements of Operations
For the Years Ended December 31, 1999 and 1998
1999 1998
----------- -----------
Revenues $ -- $ --
----------- -----------
Operating Expenses:
Amortization 100 100
Bank charges -- 16
Legal & professional fees -- 425
Management fees -- 1,543
Printing -- 329
Transfer Agent fees -- 2,220
Miscellaneous -- 547
----------- -----------
Total Operating Expenses 100 5,180
----------- -----------
Loss Before Income Taxes (100) (5,180)
Income Tax Benefit -- --
----------- -----------
Net Loss $ (100) $ (5,180)
=========== ===========
Earnings (loss) per share:
Net loss $ -- $ --
=========== ===========
Weighted Average Number of
Common and Common Equivalent
Shares Outstanding 6,150,000 6,150,000
=========== ===========
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
Statements of Stockholders' Equity
For the Years Ended December 31, 1999 and 1998
Deficit
Accumulated
Common Stock Additional During Total
------------ Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 408,000 $ 408 $ 17,887 $ (17,796) $ 499
Issuance of Stock for Cash 20,000 4,980 -- 5,000
20
To reflect cancellation of
shares (223,000) (223) 223 -- --
To reflect 30 for 1 forward
stock split 5,945,000 5,945 (5,945) -- --
Net Loss for Period -- -- -- (5,180) (5,180)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1998 6,150,000 6,150 17,145 (22,976) 319
Net Loss for Period -- -- -- (100) (100)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1999 6,150,000 $ 6,150 $ 17,145 $ (23,076) $ 219
========== ========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
F-5
</TABLE>
<PAGE>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
Statement of Cash Flows
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
Operating Activities:
Net Loss $ (100) $(5,180)
Adjustments to reconcile net
loss to cash used in operating activities:
Amortization 100 100
------- -------
Net Cash used in Operating Activities -- (5,080)
------- -------
Investing Activities: -- --
------- -------
Financing Activities:
Proceeds from issuance of common stock -- 5,000
------- -------
Net Cash Provided by Financing Activities -- 5,000
------- -------
Net Decrease in Cash -- (80)
Cash, Beginning of Period -- 80
------- -------
Cash, End of Period $ -- $ --
======= =======
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
OSTEO SYSTEMS, INC.
(FORMERLY JEWELNIQUE DESIGNS, INC.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
NOTE 1 - GENERAL
Osteo Systems, Inc. (the "Company") was originally incorporated March 6,
1997 as Blue Mountain Capital, Inc. The name was changed to Jewelnique Designs,
Inc. on June 20, 1997 and to Osteo Systems, Inc., on June 17, 1998. The Company
is in the development stage; it has had no operations to date; its earlier plans
were unsuccessful and the Company is currently seeking a merger partner.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage - The Company is a Development Stage Enterprise and has
had no operations to date.
Fiscal Year - The Company has elected the calendar year.
Accounting Method - The Company prepares its financial statements under the
accrual method of accounting.
Organizational Costs - Costs incurred in organizing the Company are being
amortized over a sixty month period.
Public Offering - The Company completed a public offering wherein it sold
20,000 shares of Common Stock for $5,000 under Rule 504 of Regulation D on March
27, 1998. The price per share was fixed arbitrarily by the Board of Directors.
Earnings Per Share - Earnings per share is calculated by dividing the net
income or loss for the period by the weighted average number of common and
common equivalent shares outstanding during the period. At December 31, 1999 and
1998 the Company had no options, warrants or any other common equivalents
outstanding.
Cash Flow Statement - For purposes of reporting cash flows, the Company
considers all funds with original maturities of three months or less to be cash
equivalents.
No cash was paid for interest or income taxes for the years ended December
31, 1999 and 1998.
F-8
<PAGE>
Total cash inflows for the years ended December 31, 1999 and 1998 were $0
and $5,000 respectively, and the total cash outflows for the years were $0 and
$5,080, respectively.
Fair Value of Financial Instruments - The carrying amounts of cash, and any
accounts receivable, prepaid expenses, accounts payable or accrued expenses
approximate their fair value because of the short maturity of these items.
Income Taxes - Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," requires the use of the asset and liability
method of accounting for income taxes. Under this method, deferred income taxes
are recorded to reflect the tax consequences in future years of temporary
differences between the tax bases of those assets and liabilities and their
financial statement amounts at the end of each reporting period. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax payable for the
current period plus or minus the change during the period in deferred tax assets
and liabilities. Deferred tax assets and liabilities are netted to reflect the
tax impact of temporary differences.
The Company has net operating loss carryforwards available to offset future
taxable income of approximately $23,000 as of December 31, 1999, expiring
$17,800 in 2012, $5,100 in 2018 and $100 in 2019. No related income tax benefits
or deferred tax assets have been recorded.
Use of Estimates in the Preparation of Financial Statements - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from these estimates.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 1998, the Company paid a total of $1,543
in management fees to a company owned by two of its officers and directors.
NOTE 4 - UNCERTAINTIES
The Company is in the development stage. Management believes that in order
to continue in business it will be required to find a merger partner or raise
additional capital. No potential capital resources exist at this time. The
Company's directors and executive officers have been personally absorbing the
cost of maintaining the Company's corporate existence, but there can be no
assurance they will continue to do so. Management currently intends to find a
merger partner, but there can be no assurance this will occur.
F-9
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF JEWELNIQUE DESIGNS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the Corporation is Jewelnique Designs, Inc.
SECOND: The following amendment to the Articles of Incorporation was
adopted on June 9, 1998, as prescribed by the Colorado Business Corporation Act,
in the manner marked with an X below:
__________ No shares have been issued or Directors Elected - Action by
Incorporators
__________ No shares have been issued but Directors Elected - Action by
Directors
__________ Such amendment was adopted by the board of directors where
shares have been issued.
X Such amendment was adopted by a vote of the shareholders. The
__________ number of shares voted for the amendment was sufficient for
approval.
Article I of the Articles of Incorporation of the Corporation shall be
amended so that, as amended, Article I will read in its entirety as follows:
ARTICLE I
The name of the corporation shall be OSTEO SYSTEMS, INC.
The first paragraph of Article III of the Corporation's Articles of
Incorporation shall be amended so that, as amended, the first paragraph of
Article III will read in its entirety as set forth below and, except as amended
in the manner provided below, the remainder of Article III of the Articles of
Incorporation will remain in full force and effect.
ARTICLE III
The total number of shares of all classes of capital stock
which the corporation shall have authority to issue is
110,000,000, of which 10,000,000 shall be shares of
preferred stock, $.01 par value per share, and 100,000,000
shall be shares of common stock, $.001 par value per share,
and the designations, preferences, limitations and relative
rights of the shares of each class shall be as set forth in
paragraphs (1) and (2) below.
<PAGE>
(1) At the time this Amendment becomes effective, each one share of common
stock, $.001 par value per share, of the Corporation issued and outstanding at
such time shall be, and hereby is, changed and reclassified into thirty
fully-paid and nonassessable shares of common stock, $.001 par value per share,
of the Corporation authorized by such Amendment, with the result that the number
of shares of common stock of the Corporation issued and outstanding immediately
prior to the taking of effect of this Amendment is 205,000 shares of common
stock, $.001 par value per share, and the number of shares of common stock of
the Corporation issued and outanding immediately following the taking of effect
of this Amendment is 6,150,000 shares of common stock, $.001 par value per
share. At any time after this Amendment becomes effective, each certificate
representing any shares of common stock, $.001 par value per share, of the
Corporation outstanding immediately prior to the taking of effect of this
Amendment (collectively, the "Old Certificates") shall be exchangeable for a
certificate representing shares of common stock, $.001 par value per share, of
the Corporation authorized by such Amendment (collectively, the "New
Certificates"), in the ratio for such reclassification stated above (i.e., 30:1)
through the surrender of such Old Certificates by the holders of record thereof
to the Secretary of this Corporation at the principal office of the Corporation.
(2) Upon surrender for exchange by each shareholder of an Old Certificate,
the Corporation shall issue and deliver to each such shareholder a New
Certificate representing thirty shares of common stock, $.001 par value per
share, of the Corporation for each one share of common stock, $.001 par value
per share, of the Corporation issued and outstanding immediately prior to the
taking of effect of this Amendment. The reclassification of issued and
outstanding shares of common stock, $.001 par value per share, of the
Corporation into shares of common stock, $.001 par value, of the Corporation
shall be deemed to occur when this Amendment becomes effective and neither the
surrender of the Old Certificates nor the issuance of the New Certificates shall
be a necessary condition for the effectiveness of such reclassification. Each
Old Certificate shall be canceled upon its surrender and the issuance of a New
Certificate evidencing such shares as so reclassified. Consequently, the stated
capital of this Corporation shall remain unchanged following the taking of
effect of this Amendment.
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: None.
If these amendments are to have a delayed effective date, please list that
date: Not applicable.
(Not to exceed ninety (90) days from the date of filing)
JEWELNIQUE DESIGNS, INC.
By: /s/ Kendall L. Dorsett
-----------------------------
Kendall L. Dorsett, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 219
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 6,150
<OTHER-SE> (5,831)
<TOTAL-LIABILITY-AND-EQUITY> 219
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (100)
<INCOME-TAX> 0
<INCOME-CONTINUING> (100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (100)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
