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As filed with the Securities and Exchange Commission on June 21, 1999
Registration No.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
PRO NET LINK CORP.
(Exact name of registrant as specified in its charter)
NEVADA 88-0333454
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
645 FIFTH AVENUE, SUITE 303, NEW YORK, NEW YORK, 10022
(Address of principal executive offices)
Registrant's telephone number, including area code (212) 688-8838
Securities to be registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of class)
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Certain statements made in this registration statement are not based on
historical facts, but are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements can be identified
by the use of forward-looking terminology such as "believes," "expects," "may,"
"will," "should," or "anticipates" or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy. These
statements reflect the reasonable judgment of Pro Net Link Corp. ("ProNetLink")
with respect to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements.
ITEM 1. BUSINESS.
INTRODUCTION
By integrating the Internet's capability with the proprietary design
and technology incorporated into its website, ProNetLink seeks to form an
interactive worldwide business-to-business trading community. As the foundation
of Internet technology grows around the world, ProNetLink believes the need for
a singular hub of trade information and resources will become more critical.
ProNetLink has designed its website, known as the Global Trade Internetwork,
located on the Internet at www.ProNetLink.com, as an e-commerce portal that
brings many global streams of international import/export information and tools
together into one location. ProNetLink's website is designed to allow the trade
professional, or even a trade beginner, to compete more efficiently on the
global level. Through the Global Trade Internetwork, ProNetLink members can not
only read about opportunities, but can also access the tools needed to complete
a trade transaction.
Importing and exporting is currently a multi-trillion dollar
international industry and ProNetLink believes that in order for companies to
remain competitive, they will have to expand into the global marketplace.
ProNetLink has designed a website that uses the Internet to provide the tools
and information that it feels is needed by these companies in order to
effectively buy, sell and market their products on a worldwide basis.
FORMATION
ProNetLink was formed and began its operations on July 25, 1997
("Inception") as Pro Net Link Corp., a Delaware corporation ("ProNet Delaware").
In September 1997, holders of the common stock of ProNet Delaware, together with
certain promoters (the "Promoters"), acquired control of Prevention Productions
Inc., a Nevada corporation ("Prevention Productions"), a publicly-held
corporation with no material operations. The acquisition of control of
Prevention Productions occurred through an exchange of securities whereby,
following a 30 to 1 reverse stock split of the outstanding common stock of
Prevention Productions (which left the shareholders of Prevention Productions
with an
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aggregate of 249,500 shares), Prevention Productions acquired 100% of the
outstanding capital stock of ProNet Delaware in exchange for 28,400,000 shares
of common stock of Prevention Productions. Prevention Productions subsequently
changed its name to "Pro Net Link Corp." and continued the operations of
ProNetLink. The principal offices of ProNetLink are located at 645 Fifth Avenue,
Suite 303, New York, New York 10022, and its phone number is (212) 688-8838.
THE GLOBAL TRADE INTERNETWORK
ProNetLink's Global Trade Internetwork website consists of three
functional areas. The first is a customized portal page that gives members
important trade information gathered from around the world about virtually any
industry. The portal includes trade leads, business news and many other trade
related data streams. The second is the trade directory and resource area where
members can search the online directory of over 2.75 million companies from over
120 countries, find products or suppliers and then communicate with the
companies online. The balance of this area features tools and resources that are
needed to complete trade transactions such as shipping forms, insurance,
compliance data, financial information, trade statistics, marketing tools, and
e-commerce. The third area is the interactive broadcast facility which has been
designed to enable members to view or participate in live cybercasts of key
trade events from around the world and to retrieve such cybercasts from
ProNetLink's archives on demand.
ProNetLink believes that one of the major benefits of the Global Trade
Internetwork is that it is a "multi-dimensional portal" rather than an industry
specific "vertical portal", allowing an extensive array of businesses, from most
countries, to get industry specific information. ProNetLink considers the Global
Trade Internetwork to be a multi-dimensional portal that offers great depth to
users because it represents a true online trade community by combining the
features of an executive business club, a trade resource center and a broadcast
network all in one easy-to-use website.
Portal Page
ProNetLink.com provides a web portal page that is custom-defined by
each member to parse through many resources for specific trade information.
These online resources include trade leads, business news, world time,
currency rates, commodity prices, stock markets, weather and discussion
rooms. When a member first joins ProNetLink, the member is prompted to add key
words that describe his or her product or service, the markets in which he or
she works and to define other trade data he or she may be looking to have
displayed on such member's personalized portal page. The ProNetLink.com portal
program then searches all of the incoming data streams for matches to the
member's requests and prints the results to the portal page. New information
gets posted to the portal 24 hours a day. A member can opt to change, expand or
limit the information he or she receives at any time. The portal allows members
to be more efficient by reducing the number of hours they would have spent
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searching the Internet or other resources for the industry specific-information
that they are looking for. The continuous usefulness of the portal also gives
members a reason to return to the website on a regular basis throughout the day,
which ProNetLink believes will result in a higher number of hits to the website,
which, it believes should lead to an increase in advertising revenue by
ProNetLink.
In addition to member-generated data, such as information posted in a
discussion room, ProNetLink.com provides its members with access to outside
authorized data streams to the site from Dow Jones & Company, Reuters, Dun &
Bradstreet Corporation, the Journal of Commerce, World Trade Magazine, The U.S.
Department of Commerce, STAT-USA, and other resources from around the world.
Trade Directory and Resources Area
ProNetLink has compiled an on-line directory that contains over 2.75
million companies from more that 120 countries. While most of such data was
purchased from Dun & Bradstreet, additional listings have been generated
directly from new ProNetLink members and associations. The directory contains
manufacturers, producers, wholesalers, distributors, importers, exporters and
service companies that include transportation, insurance, and banking. Members
can search the directory by using either a simple or advanced search function in
order to find sourcing opportunities and/or potential trading partners. A member
seeking information from the directory is able to perform a search based on a
number of different variables including: type of product or service; company
name; country of origin; type of goods or Standard Industrial Classification
Code.
Once a member finds a company that it would like to do business with,
or a company responds to a trade lead from the site, communication between the
trading partners can occur from within the site. These online communications are
private and can be encrypted by using special programs within the website. In
addition, members can communicate in real time by using the "PNL Live!" instant
chat system. Online forms which self-populate with the member's information are
designed to reduce the time and expense of producing repetitive documents such
as estimates, pro-forma invoices, shipping requests, and members can store their
digital "paperwork" in an "online file cabinet" for future reference. These
forms can be sent by email or Internet fax.
Discussion rooms, instant chat features and bulletin boards are
designed to support ProNetLink's Global Trade community. Members wishing to
participate in discussions have a number of pre-defined rooms that they may
enter, or they can start a new discussion at any time. ProNetLink also intends
to produce special live cybercasts, discussions and chats that will feature
noted guests from the world of global trade.
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Interactive Broadcast Facility
ProNetLink.com's interactive broadcast facility is designed to enable
members to view or participate in live cybercasts of key trade events from
around the world and retrieve such cybercasts from ProNetLink's archives on
demand. ProNetLink launched its interactive broadcast feature on April 21, 1999
with a live cybercast of events from the 1999 International Business Exposition
(the "IBE") presented jointly with World Trade Magazine. While the IBE was held
at the Jacob Javits Convention Center in New York City, ProNetLink members
worldwide were able to view the event by just "tuning in" to www.pronetlink.com.
Members were also able to submit questions via e-mail and have them answered by
the guests on the show.
Currently, programming is produced in rented facilities as needed.
ProNetLink is planning to build a new broadcast studio in New York City in Fall
1999, where it anticipates producing trade specific programming for the Global
Trade Internetwork, including trade news, special events, seminars and
presentations as well as interviews. ProNetLink also plans on using local
broadcast crews to bring special events from around the world to the
ProNetLink.com. ProNetLink anticipates that all programming will be available
for advertisers to sponsor and companies will also have the opportunity to
purchase "infomercial" time on the website.
ProNetLink continues to build the "global" portion of the website with
marketing missions in various regions throughout the world. Currently,
ProNetLink has opened sales and development offices in connection with local
independent representative firms in Indonesia and Israel, and expects to expand
elsewhere in Asia, the Middle East as well as Europe. As of June 9, 1999,
ProNetLink was in negotiations with businesses and organizations in seven
European markets to open sales and marketing offices, but no assurances can be
given that such negotiations will result in definitive agreements. ProNetLink is
also working directly with government representatives and Chambers of Commerce
and Trade associations in several nations to increase the amount of information
that resides directly on the ProNetLink site.
SERVICES
The ProNetLink business model is based on four primary anticipated
revenue streams: membership fees, advertising, strategic alliance commissions
and Internet broadcasting. Registration is free on the ProNetLink site for all
businesses. Companies that take advantage of the free registration receive a
full business listing in the global trade directory, a customized portal, an
online product catalog page, free trade leads and full access to the entire site
for 60 days. After the 60-day trial period, membership in the ProNetLink Global
Trade Internetwork costs $29.95 per month. Certain areas of the website will
remain free to all users in order to keep businesses that may not join right
away interested in
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returning to the website. This may also help maintain the "community"
development of the website.
ProNetLink offers a number of services and products online, some within
its website and others through direct links to provider companies' websites.
Some of these include: Aon Corporation (insurance services); United Parcel
Service (document exchange and Internet shipping); Dun & Bradstreet Corporation
(credit reports and data services); Dow Jones & Company (news data feed); AT&T
Corporation (web hosting), AT&T's SecureBuy Service (e-commerce and business
services); Reuters (news data feed); RealNetworks (cybercast software and show
hosting); Amazon.Com (books and related products); Journal of Commerce
(editorial, news and e-commerce); PIERS (statistical resources); Royal
Impressions (on-line digital printing); World Trade Magazine (cybercast
content); Unz & Co., Inc. (compliance information and forms); and The National
Customs Brokers & Forwarders Association of America, Inc. (shipping resources).
Additionally, Proxicom, Inc., Rare Medium Inc. and Comvision in New York City
and Click Online in Tel Aviv have participated in the development of
ProNetLink's Global Trade Internetwork technology.
Prior to April 16, 1999 (the "Launch Date"), although fully
operational, ProNetLink.com was in the development and testing stages of
operation. As a result, ProNetLink has experienced limited revenue, operating
losses, and generated negative operating cash flow since Inception. During the
periods from Inception through June 30, 1998 and the nine months ended March
31, 1999, ProNetLink spent approximately $236,000 and $245,000, respectively,
on website development. On the Launch Date, ProNetLink launched the current and
most advanced operational version of its website. For the remainder of its
current fiscal year and the six months thereafter, and for the foreseeable
future, ProNetLink.com plans to continue to work aggressively with its website
developers and strategic alliances to keep improving the quality and scope of
the website while aggressively marketing its products and services, including
the use of national television and radio commercials.
PERSONNEL
ProNetLink currently employs eight full time employees and one full
time consultant. It is anticipated that additional employees will be hired as
the needs of the company require. ProNetLink plans on adding five additional
full-time employees within the next three months, including a chief financial
officer and other executive officers. In addition, ProNetLink uses third-party
contractors to handle various ProNetLink needs, including operations in Asia and
the Middle East. Additionally, there are approximately 12 developers working on
ProNetLink.com in the United States and Israel. ProNetLink also relies on
support from its strategic alliances, marketing consultants, public relations
consultants, legal and accounting firms to provide manpower to the its business.
ProNetLink management believes that its current personnel programs are the most
economical way to manage the growth and business operations of ProNetLink.
ProNetLink believes that its relationship
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with its employees is satisfactory. None of ProNetLink's employees are
represented by a union.
COMPETITION
The market for a worldwide on-line commerce website is relatively new,
quickly evolving and subject to rapid change. There are few substantial barriers
to entry, and ProNetLink expects to have additional competition from existing
competitors and new entrants in the future. It is the belief of ProNetLink
management, however, that ProNetLink.com represents the leading edge of the
industry. While competition exists in the form of smaller and less advanced
sites, ProNetLink believes that none deliver the reach and scope of ProNetLink's
website.
Currently the largest business-to-business website is VerticalNet.com.
This site offers industry-specific vertical information and is comprised of
mostly editorial information. ProNetLink believes that ProNetLink.com differs
from VerticalNet.com in that ProNetLink's Global Trade Internetwork provides
on-line tools required to process the trade-related information that is
generated from within the website and to engage in the trade of products.
ProNetLink.com is also a multi-dimensional portal allowing businesses to
customize the website in a trade specific portal.
ProNetLink.com is focused entirely on trade. ProNetLink believes that
additional potentially competitive websites that exist on the Internet offer
only portions of what is included in ProNetLink's website and are regional in
design, while ProNetLink's website is global in design. Additionally, at this
time there does not appear to be any competitive site broadcasting trade
specific information on a regular basis.
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ITEM 2. FINANCIAL INFORMATION.
SELECTED FINANCIAL DATA
The following selected financial data has been extracted from the
financial statements of ProNetLink for the nine months ended March 31, 1999 and
1998, from Inception through March 31, 1999 and for period from Inception
through June 30, 1998 The statements of operations for the nine-month periods
ended March 31, 1999 and 1998 and from Inception through March 31, 1999, are
unaudited, but include all adjustments consisting only of normal recurring
adjustments which in the opinion of ProNetLink's management are necessary for a
fair presentation of the results of operations for the periods then ended. The
results of operations for any interim period are not necessarily indicative of
the results attained for a full fiscal year. This selected financial data should
be read in conjunction with the Financial Statements of ProNetLink and the Notes
thereto and "Management's Discussion and Analysis of Financial Conditions and
Results of Operations" included elsewhere herein.
SUMMARY OPERATIONS DATA
<TABLE>
<CAPTION>
July 25, 1997
Nine Months (Inception)
Ended through July 25, 1997 (Inception)
March 31, March 31, through
1999 1998 March 31, 1999 June 30, 1998
------ ------ -------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 13,199 -- $ 13.199 --
Net Loss 1,038,778 294,463 1,684,138 645,355
Net loss per share 0.02 0.01 0.05 0.02
Weighted Average Shares
Used in Computation 42,151,309 28,766,222 33,216,324 27,050,048
</TABLE>
SUMMARY BALANCE SHEET DATA
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1998
-------------- -------------
<S> <C> <C>
Total Assets $894,996 $316,075
Current Assets 742,053 270,139
Total Liabilities 144,515 650,630
Current Liabilities 144,515 335,025
Long-term notes payable - 315,605
Working Capital (Deficiency) (597,538) (64,886)
Shareholders' Equity (Deficit) 750,481 (334,555)
</TABLE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Selected Financial Data above and the Financial Statements and Notes thereto
contained elsewhere herein.
OVERVIEW
ProNetLink is a development stage corporation with a limited operating
history, formed in July 1997. ProNetLink has recently completed its development
and testing stages of operations, having launched the current and most advanced
operational version of its website, the Global Trade Internetwork. Operating
expenses have increased significantly since Inception, reflecting the costs
associated with the formation of ProNetLink, the building of operating
infrastructure, product development, solicitation of new members and the
promotion of product awareness.
ProNetLink has a limited operating history on which to base an
evaluation of its business and prospects. ProNetLink's prospects must be
considered in light of the risks frequently encountered by companies in their
early stages of development, particularly for companies in the rapidly evolving
technology industry. Certain risks for ProNetLink include, but are not limited
to, having an unproven business model, capital requirements and growth
management. To address these risks, ProNetLink must, among other things,
increase its membership base, successfully continue to develop and execute its
business and marketing plan, continue to expand and otherwise improve its
website and increase the operating infrastructure. There can be no assurances
that ProNetLink will be successful in addressing its risks, and the failure to
do so could have a material adverse effect on ProNetLink's financial condition
and results of operations. Since Inception, ProNetLink has incurred significant
losses, and as of March 31, 1999, had a deficit accumulated during the
development stage of approximately $1.7 million.
ProNetLink believes that its success depends, in large part, on its
ability to create market awareness and acceptance for its products, raise
additional operating capital to grow operations, build technology and
non-technology infrastructures and continue product research and development.
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RESULTS OF OPERATIONS
Nine months ended March 31, 1999
ProNetLink is a development stage enterprise, and accordingly, has
engaged in limited revenue generating operations. ProNetLink generated revenue
of $13,199 for the nine months ended March 31, 1999.
Operating expenses during this period were $1,051,977 which consisted
primarily of website development costs of $244,582, cost of commissions of
$37,125 and selling, general and administrative expenses of $741,571. These
expenses consisted primarily of marketing and promotional fees, professional
fees, rent and other office-related expenses and payroll expenses.
As a result of the forgoing, ProNetLink incurred a net loss in the nine
months ended March 31, 1999 of $1,038,778. The loss is primarily attributable to
the expenses incurred during the period in connection with the continued
development of ProNetLink's business.
Period from Inception though June 30, 1998
ProNetLink generated no revenue for the period from Inception through
June 30, 1998. During such period ProNetLink had cost of website development of
$235,988, cost of commissions of $112,400 and incurred selling, general and
administrative expenses of $286,369. These expenses consisted primarily of
marketing and promotional fees, professional fees, rent and other office-related
expenses and payroll expenses.
As a result, ProNetLink incurred a net loss in the period from
Inception through June 30, 1998 of $645,355. The loss is primarily attributable
to the expenses incurred during the period in connection with the development of
ProNetLink's business.
LIQUIDITY AND CAPITAL RESOURCES
ProNetLink's operations have required substantial capital investment
for the design, development and marketing of ProNetLink's website. ProNetLink
expects that it will continue to have substantial capital requirements in
connection with the continued development, implementation and marketing of
ProNetLink's products and services.
ProNetLink has funded a substantial portion of these expenditures
through the private sales of equity securities. From Inception through March 31,
1999, ProNetLink raised the net amount of approximately $2.7 million from
private sales of Common Stock.
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The substantial capital investment required to initiate ProNetLink's
services and the funding of the Company's initial operations has resulted in
negative cash flow since ProNetLink's inception. ProNetLink expects to continue
to have negative cash flow throughout 1999 due to expansion activities
associated with the development of the Company's markets. There can be no
assurance that ProNetLink will attain break-even cash flow in subsequent
periods. Until sufficient cash flow is generated, ProNetLink will be required to
utilize its current and future capital resources to meet its cash flow
requirements and may be required to issue additional debt and/or equity
securities or through securing a bank credit facility.
RECENT ACCOUNTING PRONOUNCEMENTS
In 1997, the Financial Accounting Standards Board issued Statement No.
130, "Reporting Comprehensive Income" ("SFAS 130"), which establishes standards
for reporting and display of comprehensive income and its components, and
Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"), which establishes standards for the way public
business enterprises are to report information about operating segments in
annual financial statements and requires those enterprises to report selected
information about operating segments in annual financial statements and requires
those enterprises to report selected information about operating segments in
interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosure about products and services, geographic areas
and major customers. SFAS No. 130 and SFAS No. 131 are effective for years
beginning after December 15, 1997.
In 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 132, "Employers' Disclosure about Pensions
and other Postretirement Benefits", No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and No. 134, "Accounting for Mortgage-Banked
Securities Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise".
None of the aforementioned standards will have any significant effect
on the Company's financial position or results of operations.
YEAR 2000 ISSUE
Many current installed computer systems and software products are coded
to accept only two-digit entries in the date code field and cannot reliably
distinguish dates beginning on January 1, 2000 from dates prior to the year
2000. Many companies' software and computer systems may need to be upgraded or
replaced in order to correctly process dates beginning in 2000 and to comply
with the "Year 2000" requirements. ProNetLink has reviewed its internal programs
and has determined that all products and information/non-information
technologies systems are year 2000 compliant, due in large part to the limited
operating history of ProNetLink and the emphasis on compliance during the
planning and
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development stages of ProNetLink. To date, ProNetLink has not incurred material
cost, and furthermore believes that any future actions taken will not have a
material effect on its operating results of financial condition. However,
ProNetLink works with third parties, including its strategic alliance partners
and vendors that use equipment and software that may not be Year 2000 compliant.
Failure of such third parties' equipment or software to properly process dates
for the year 2000 and thereafter could require ProNetLink to incur unanticipated
expenses to remedy any problems, which could have a material adverse effect on
the ProNetLink's business, results of operations and financial condition.
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ITEM 3. PROPERTIES.
ProNetLink occupies approximately 3,650 square feet at 645 Fifth
Avenue, Suite 303, New York, New York 10022 at a monthly rent of approximately
$13,700. ProNetLink uses the space for administrative offices and as its
corporate headquarters. ProNetLink believes that such space will provide it with
adequate space for the foreseeable future.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth, as of June 28, 1999, certain
information with respect to (i) those persons or groups known to
ProNetLink to be the beneficial owners of more than five percent of the
common stock of ProNetLink (the "Common Stock"), (ii) each of the
directors of ProNetLink, (iii) ProNetLink's executive officers and (iv)
all directors and executive officers of ProNetLink as a group. Except
as otherwise indicated, the stockholders listed in the table have sole
voting and investment power with respect to the Common Stock owned by
them. As of June 18, 1999, there were 50,068,570 shares of Common Stock
issued and outstanding.
<TABLE>
<CAPTION>
Percent of
Number of Shares Common Stock
Name of Beneficial Owner Beneficially Owned Outstanding(1)
- ------------------------ ------------------ -----------
<S> <C> <C>
Evelyne Collardeau 6,000,000(2) 11.51%
Jean Pierre Collardeau 11,662,920(3) 22.38%
David J. Walker 50,000(4) *
Glenn Zagoren 2,000,000(5) 3.84%
All executive officers and directors 13,712,920 26.31%(5)
as a group (3 persons)
</TABLE>
- ----------
*Less than 1%.
1 Calculated on a fully diluted basis assuming the exercise by
Mr. Walker of all of his options to purchase 50,000 shares of Common
Stock and by Mr. Zagoren of all of his options to purchase 2,000,000
shares of Common Stock.
2 Pursuant to a Shareholders Agreement among Jean Pierre
Collardeau, Evelyne Collardeau, Thomas Collardeau, Alvina Collardeau
and ProNetLink, dated June 23, 1998 (the "Lock-up Agreement"), Ms.
Collardeau agreed that she would not sell any of her 6,000,000 shares
of Common Stock in the public market until after June 23, 1999
(including 3,000,000 shares which were transferred to Ms. Collardeau by
Alvina Collardeau). The Lock-up Agreement was amended to restrict the
sale of the 6,000,000 shares owned by Mrs. Collardeau in the public
market until at least June 23, 2000.
3 Pursuant to the Lock-up Agreement, Mr. Collardeau agreed
that he would not sell 10,500,000 of his shares of Common Stock until
after June 23, 1999 (including 3,000,000 shares which were transferred
to Mr. Collardeau by Thomas Collardeau). The Lock-up Agreement was
amended to restrict the sale of 10,500,000 shares owned by
Mr. Collardeau in the public market until at least June 23, 2000.
4 Represents options to purchase 50,000 shares of Common Stock
which are exercisable at approximately $0.27 per share.
5 Represents options to purchase 2,000,000 shares of Common
Stock which are exercisable at (i) $0.25 per share for 500,000 shares
and (ii) $0.33 per share for 1,500,000 shares.
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ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.
The Company's executive officers and directors and their ages as of May
14, 1999 are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jean Pierre Collardeau 56 President, Treasurer and Director
David J. Walker 45 Chief Operating Officer and Vice President of
Operations
Glenn Zagoren 45 Chairman of the Board of Directors
</TABLE>
Each director will hold office until the next annual meeting of
stockholders and until his or her successor is elected and qualified or until
his or her earlier resignation or removal. Each officer serves at the discretion
of the Board of Directors.
Jean Pierre Collardeau founded ProNetLink in July 1997. He has been
President, Treasurer and a director of ProNetLink since its formation. Mr.
Collardeau has been involved in international trade and finance for more than 30
years. For the 10 years preceding the founding of ProNetLink, Mr. Collardeau was
a consultant, supervising commercial operations and foreign investments from the
European Community to African developing countries and advising on government
tenders and bids to major infrastructure projects funded by the World Bank in
Washington, D.C. and the African Development Bank in Abidjan, Ivory Coast.
David J. Walker has been the Chief Operating Officer and Vice President
of Operations as of December 1998. Prior to working for ProNetLink, Mr. Walker
served as Vice President of Operations, and then Vice President of Product
Development for Unz & Co., a leading provider of import/export publications,
software and international trade-related training programs for approximately 15
years. Mr. Walker, whose international trade experience began in 1980 when he
served as export Manager of the Burroughs Corporation, has also served two terms
as a member of the Department of Commerce is District Export Council in New
Jersey both on the Executive Committee and as Chairman of the Education
Committee. Mr. Walker earned a B.A. from Cornell University and a Masters Degree
in International Business from Fairleigh Dickenson University.
Glenn Zagoren has been a director of the Company since May 1998 and
Chairman of ProNetLink's board of directors, a non-officer position, since April
1999. Mr. Zagoren is President of Zagoren-Zozzora, Inc. ("ZZI"), a strategic
development and marketing company that has been working with ProNetLink since
ProNetLink's Inception and has served as President of ZZI since 1979. Mr.
Zagoren has been involved in international business development and marketing
programs for over 20 years. He has produced marketing projects for the
Principality
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of Monaco and the government of Israel as well as many global corporations
including JBL/Harman International and Hachette Filipacchi. In 1984, Mr. Zagoren
was named the "Billboard Magazine Trendsetter of the Year Award" for his
involvement in the launch of CD technology. Mr. Zagoren currently serves on the
board of directors of the Tribeca Performing Arts Center of Manhattan Community
College.
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ITEM 6. EXECUTIVE COMPENSATION.
For the period from Inception though June 30, 1998, no officer or
director of ProNetLink, including its Chief Executive Officer, Jean Pierre
Collardeau, received any compensation, including any deferred compensation, for
services in any capacity to ProNetLink.
Compensation of Directors
The Directors of the Company do not receive compensation for their
services as directors but may be reimbursed for their reasonable expenses for
attending Board meetings.
16
<PAGE> 18
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As of December 15, 1998, pursuant to a Securities Exchange Agreement
between ProNetLink and Jean Pierre Collardeau, the President of ProNetLink,
ProNetLink issued shares of restricted Common Stock to Mr. Collardeau in
exchange for the surrender to ProNetLink by Mr. Collardeau of a Promissory Note
of ProNetLink in favor of Mr. Collardeau, which at such time had an outstanding
principal balance plus interest of $232,584, at the exchange rate of five shares
per dollar. This exchange rate was consistent with the price per share which
ProNetLink offered investors under private placements of Common Stock in the
same time period, and as well as the exchange rate pursuant to a Securities
Exchange Agreement between ProNetLink and Micheline Baron, a non-affiliate,
which was entered into contemporaneously with Mr. Collardeau's Securities
Exchange Agreement.
Glenn Zagoren, Chairman of the Board of Directors of ProNetLink, is
president of ZZI, a strategic development and marketing company that has been
working with ProNetLink since Inception. ZZI provides on-going marketing and
business functions for ProNetLink including developing marketing plans, general
business consultation, supervision of marketing tools and investigating and
recommending strategic alliances and other business opportunities. The current
consulting agreement which expires in February 2000, provides that ZZI is paid
$10,000 per month from ProNetLink for its services. Additionally, in connection
with the services rendered by Mr. Zagoren in his capacity as President of ZZI,
he has received options to purchase 2,000,000 shares of Common Stock, (i)
500,000 of which are currently exercisable at $ 0.25 per share and (ii)
1,500,000 of which are currently exercisable at $0.33 per share.
17
<PAGE> 19
ITEM 8. LEGAL PROCEEDINGS.
In June, 1998, the Securities and Exchange Commission (the "SEC")
commenced an investigation of ProNetLink relating primarily to the alleged
manipulation of the market for securities of ProNetLink, pursuant to a formal
order issued by the SEC under the authority of Sections 20(a) and 21(a) of the
Securities Exchange Act of 1934, as amended. Pursuant to that formal order,
subpoenas for the production of books, papers, documents and other records were
served on ProNetLink and on companies doing business with ProNetLink. ProNetLink
complied with the subpoenas and all related requests of the SEC in June and July
1998, and has received no further inquiries from the SEC regarding this
investigation. ProNetLink has no information as to the results, if any, of such
investigation, whom the targets, if any, of such investigation were or may be,
or what action, if any, the SEC may take pursuant to the investigation.
18
<PAGE> 20
ITEM 9. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
ProNetLink's Common Stock, par value $0.001, has been traded on the OTC
Electronic Bulletin Board under the symbol "PNLK" since October 1997, and there
are currently 23 market makers for the Common Stock.
The following table sets forth the high and low sale prices of
ProNetLink's Common Stock as reported on the OTC Bulletin Board. These price
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.
<TABLE>
<CAPTION>
Quarter Ended High ($) Low ($)
- ------------- -------- -------
<S> <C> <C>
March 31, 1998 2.25 0.62
June 30, 1998 8.09 0.71
September 30, 1998 2.50 0.84
December 31, 1998 2.18 0.15
March 31, 1999 3.81 0.70
</TABLE>
Number of Registered Holders
The number of registered holders of ProNetLink's Common Stock as of May
14, 1999 was 163, and ProNetLink believes that there are a greater number of
beneficial owners of its shares of Common Stock.
Dividends
To date, ProNetLink has not declared or paid any cash dividends on its
Common Stock. ProNetLink currently anticipates that it will retain all available
funds for use in the operation and expansion of its business, and no cash
dividends are expected to be paid on the Common Stock in the foreseeable future.
Further, there can be no assurance that the operations of ProNetLink's business
will generate the revenue and cash flow needed to declare cash dividends in the
foreseeable future.
19
<PAGE> 21
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
In October and November 1997, ProNetLink issued a total of 7,500,000
shares of Common Stock in private placements to two foreign companies and three
foreign individuals pursuant to exemptions from registration pursuant to Rule
504 of Regulation D under the Securities Act of 1933, as amended (the "Act").
The aggregate consideration received by ProNetLink was $150,000
In October, 1997, ProNetLink issued an aggregate of 1,700,000 shares of
Common Stock in private placements to two foreign companies and one foreign
individual pursuant to exemptions from registration pursuant to Section 4(2)
under the Act. The aggregate consideration received by ProNetLink was $170,000.
In September through October 1998, ProNetLink issued 4,210,000 shares
of Common Stock in private placements to three foreign companies pursuant to
exemptions from registration pursuant to Rule 504 of Regulation D under the Act.
The consideration received by ProNetLink was $842,000.
As of December 1998, under a Securities Exchange Agreement between
ProNetLink and Jean Pierre Collardeau, the President of ProNetLink, ProNetLink
issued 1,162,920 shares of restricted Common Stock, pursuant to an exemption
from registration under Section 3(a)(9) or 4(2) of the Act, to Mr. Collardeau in
exchange for the surrender to ProNetLink by Mr. Collardeau of a Promissory Note
of ProNetLink in favor of Mr. Collardeau, which at such time had an outstanding
principal balance plus interest of $232,584.
As of December 1998, under a Securities Exchange Agreement between
ProNetLink and Micheline Baron, ProNetLink issued 1,056,150 shares of Common
Stock, pursuant to an exemption from registration under Section 3(a)(9) or 4(2)
of the Act, to Ms. Baron in exchange for the surrender to ProNetLink by Ms.
Baron of a Promissory Note of ProNetLink in favor of Ms. Baron, which at such
time had an outstanding principal balance plus interest of $211,230.
In February 1999, ProNetLink issued 790,000 shares of Common Stock in
private placements to one foreign individual pursuant to exemptions from
registration pursuant to Rule 504 of Regulation D under the Act. The
consideration received by ProNetLink was $158,000.
In February through April 1999, ProNetLink issued 5,000,000 shares of
Common Stock in private placements to three foreign individuals and one foreign
company pursuant to exemptions from registration pursuant to Rule 506 of
Regulation D or otherwise under Section 4(2) of the Act. The consideration
received by ProNetLink was $1,000,000.
20
<PAGE> 22
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The authorized capital stock of the Company consists of 150,000,000
shares of Common Stock, par value $0.001 per share. As of June 18, 1999, there
were 50,068,570 shares of Common Stock issued and outstanding.
The following brief description of the Company's Common Stock does not
purport to be complete and is subject in all respects to applicable Nevada law
and to the provisions of the Company's Amended and Restated Articles of
Incorporation, as amended (the "Articles"), and Amended and Restated Bylaws,
copies of which have been filed as exhibits to this registration statement.
Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Holders of Common Stock do not
have cumulative voting rights, and therefore holders of a majority of the shares
voting for the election of directors can elect all of the directors. In such
event, the holders of the remaining shares will not be able to elect any
directors.
Holders of Common Stock are entitled to receive such dividends as may
be declared from time to time by the Board of Directors out of funds legally
available therefor. In the event of the liquidation, dissolution or winding up
of the Company, the holders of Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities.
The Common Stock has no preemptive or conversion rights and is not
subject to further call for assessments by the Company. The Common Stock
currently outstanding is validly issued, fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, New York, New York.
RESTRICTIONS ON BUSINESS COMBINATIONS AND CORPORATE CONTROL
Chapter 78 of the General Corporation Laws of the State of Nevada (the
"GCL") contains provisions restricting the ability of a corporation to engage in
business combinations with an "interested shareholder." Under the GCL, except
under certain circumstances, business combinations are not permitted for a
period of three years following the date such shareholders became an interested
shareholder. The GCL defines an "interested shareholder," generally, as a person
who beneficially owns 10% or more of the outstanding shares of a corporation's
voting stock.
In addition, the GCL generally disallows the exercise of voting rights
with respect to "control shares" of an "issuing corporation" (as defined in the
GCL). "Control shares" are the voting shares of an issuing corporation acquired
in connection with the acquisition of a "controlling interest." is defined in
terms of threshold levels of voting share ownership, which, when crossed,
trigger application of the voting bar with respect to the newly acquired shares.
The GCL also permits directors to resist a change or potential change in control
of the corporation if the directors determine that such a change is opposed to
or not in the best interest of the corporation.
21
<PAGE> 23
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 78.751 et seq. of the GCL allow a company to indemnify its
officers, directors, employees and agents from any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative
or investigative, except under certain circumstances. Indemnification may only
occur if a determination has been made that the officer, director, employee or
agent acted in good faith and in a manner which such person believed to be in
the best interests of ProNetLink. A determination may be made by the
shareholders; by a majority of the directors who were not parties to the action,
suit, or proceeding confirmed by opinion of independent legal counsel; or by
opinion of independent legal counsel in the event a quorum of directors who were
not a party to such action, suit or proceeding does not exist.
ProNetLink's Articles provide for indemnity for all persons whom
ProNetLink may indemnify pursuant to the GCL. Under the Articles,
directors of the Company have no personal liability for monetary damages for
breach of a fiduciary duty, or failure to exercise any applicable standard of
care, of a director, to the fullest extent permitted by the GCL.
ProNetLink's By-laws provide that the ProNetLink is required, to the
fullest extent authorized by the GCL to indemnify any and all directors and
officers of ProNetLink. Under the By-laws, the personal liability of each of the
directors of ProNetLink is limited to the fullest extent permitted by the GCL.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
For the information required by this Item, refer to the Index to
Financial Statements appearing on page F-1 of the registration statement.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
22
<PAGE> 24
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
For the information required by this Item, refer to the Index to
Financial Statements appearing on page F-1 of the registration statement.
23
<PAGE> 25
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.
PRO NET LINK CORP.
By: /s/ Jean Pierre Collardeau
------------------------------
Jean Pierre Collardeau
President, Treasurer and Secretary
Dated: June 21, 1999
24
<PAGE> 26
Exhibits
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Articles of Incorporation of ProNetLink
3.2 By-laws of the ProNetLink
10.1* Material Agreements
27.1 Financial Data Schedule
- ----------------------------------------
*To be filed by amendment.
25
<PAGE> 27
PRO NET LINK CORP.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Certified Public Accountants F-2
Financial Statements
Balance Sheets F-3
Statements of Operations F-4
Shareholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7 to F-10
</TABLE>
F-1
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Pro Net Link Corp.
New York, New York
We have audited the accompanying balance sheet of Pro Net Link Corp. (A
Development Stage Enterprise) as of June 30, 1998, and the related statements of
operations, deficit in assets and cash flows for the period July 25, 1997
(inception) through 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates 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 Pro Net Link Corp. (A
Development Stage Enterprise) as of June 30, 1998, and the results of its
operations and its cash flows for the period July 25, 1997 (inception) through
June 30, 1998, in conformity with generally accepted accounting principles.
/s/ Feldman Sherb Ehrlich & Co., P.C.
Feldman Sherb Ehrlich & Co., P.C.
New York, New York Certified Public Accountants
October 1, 1998
F-2
<PAGE> 29
PRO NET LINK CORP.
(A Development Stage Enterprise)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, June 30,
1999 1998
----------- ---------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 708,227 $ 258,139
Loan receivable - shareholder 31,665 --
Prepaid expenses 2,161 12,000
----------- ---------
TOTAL CURRENT ASSETS 742,053 270,139
FIXED ASSETS, net 100,870 45,936
OTHER ASSETS 52,073 --
----------- ---------
$ 894,996 $ 316,075
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 97,830 $ 111,525
Deferred income 46,685 --
Demand loan, non interest bearing -- 23,500
Notes Payable shareholders, current portion -- 200,000
----------- ---------
TOTAL CURRENT LIABILITIES 144,515 335,025
----------- ---------
NOTES PAYABLE TO SHAREHOLDERS - non current portion -- 315,605
SHAREHOLDERS' EQUITY:
Common stock, .001 par value,
150,000,000 shares authorized, 50,068,570 and
37,849,500 shares issued and outstanding, respectively 50,069 37,850
Additional paid in capital 2,684,545 272,950
Deficit accumulated during the development stage (1,684,133) (645,355)
Stock subscriptions receivable (300,000) --
----------- ---------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 750,481 (334,555)
----------- ---------
$ 894,996 $ 316,075
=========== =========
</TABLE>
See notes to financial statements.
F-3
<PAGE> 30
PRO NET LINK CORP.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From July 25, From July 25, From July 25,
1997 (inception) 1997 (inception) 1997 (inception)
Nine Months Ended through through through
March 31, 1999 March 31, 1998 March 31, 1999 June 30, 1998
----------------- --------------- ---------------- ---------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE $ 13,199 $ -- $ 13,199 $ --
------------ ------------
EXPENSES:
Website development 244,582 117,343 480,570 235,988
Commission 37,125 33,333 149,525 112,400
Selling, general and administrative 741,571 143,417 1,027,940 286,369
Depreciation 11,972 370 16,881 4,909
Interest expense (net) 16,727 -- 22,416 5,689
------------ ------------ ------------ ------------
TOTAL EXPENSES 1,051,977 294,463 1,697,332 645,355
------------ ------------ ------------ ------------
NET LOSS $ (1,038,778) $ (294,463) $ (1,684,133) $ (645,355)
============ ============ ============ ============
BASIC LOSS PER SHARE OF COMMON STOCK $ (0.02) $ (0.01) $ (0.05) $ (0.02)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 42,151,309 28,766,222 33,216,324 27,050,048
============ ============ ============ ============
</TABLE>
See notes to financial statements.
F-4
<PAGE> 31
PRO NET LINK CORP.
(A Development Stage Enterprise)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Additional Stock
Common Stock Paid-in Accumulated Subscriptions
Shares Amount Capital Deficit Receivable Total
---------- ------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance-June 30, 1997 -- -- -- -- -- --
Issuance and sale of stock 28,400,000 $28,400 $ (4,100) $-- -- $ 24,300
Issuance of common stock for
exchange 249,500 250 (250) -- -- --
Expenses pursuant to
exchange of stock -- -- (33,500) -- -- (33,500)
Sale of stock 9,200,000 9,200 310,800 -- -- 320,000
Net loss -- -- -- (645,355) -- (645,355)
---------- ------- ----------- ----------- --------- -----------
Balance-June 30, 1998 37,849,500 $37,850 $ 272,950 $ (645,355) -- $ (334,555)
Sale of stock 12,219,070 12,219 2,411,595 -- -- 2,423,814
Stock subscriptions receivable -- -- -- -- (300,000) (300,000)
Net loss -- -- -- (1,038,778) -- (1,038,778)
---------- ------- ----------- ----------- --------- -----------
Balance-March 31, 1999 (Unaudited) 50,068,570 $50,069 $ 2,684,545 $(1,684,133) (300,000) $ 750,481
========== ======= =========== =========== ========= ===========
</TABLE>
See notes to financial statements.
F-5
<PAGE> 32
PRO NET LINK CORP.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period from July 25, Period from July 25,
Nine Months 1997 (inception) 1997 (inception)
Ended through through
March 31, 1999 March 31, 1998 March 31, 1999
----------- --------- -----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,038,778) $(294,463) $(1,684,133)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 11,972 370 16,881
Amortization of deferred income (5,388) -- (5,388)
Changes in assets and liabilities:
Increase in prepaid and other current assets 9,839 (23,037) (2,161)
Increase in other assets -- -- --
Increase (decrease) in accounts payable
and accrued expenses (13,695) 100,939 97,830
----------- --------- -----------
NET CASH USED IN OPERATING ACTIVITIES (1,036,050) (216,191) (1,576,971)
----------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (66,906) (8,960) (117,751)
----------- --------- -----------
CASH USED IN INVESTING ACTIVITIES (66,906) (8,960) (117,751)
----------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 1,680,000 349,250 2,434,614
Cost related to share exchange -- -- --
Proceeds from (repayment of) demand loan (23,500) 10,000 --
Borrowing from (repayment of) notes payable to
Shareholders (103,456) (127,600) (31,665)
----------- --------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,553,044 231,650 2,402,949
----------- --------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 450,088 6,499 708,227
CASH AT BEGINNING OF THE YEAR 258,139 -- --
----------- --------- -----------
CASH AT END OF THE PERIOD $ 708,227 $ 6,499 $ 708,227
=========== ========= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 5,883 $ -- $ 7,455
=========== ========= ===========
Issuance of stock for noncash transaction $ 443,814 $ -- $ 452,314
=========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
, Period from July 25,
1997 (inception)
through
June 30, 1998
---------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(645,355)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 4,909
Amortization of deferred income --
Changes in assets and liabilities:
Increase in prepaid and other current assets (12,000)
Increase in other assets --
Increase (decrease) in accounts payable
and accrued expenses 111,525
---------
NET CASH USED IN OPERATING ACTIVITIES (540,921)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (50,845)
---------
CASH USED IN INVESTING ACTIVITIES (50,845)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 344,300
Cost related to share exchange (33,500)
Proceeds from (repayment of) demand loan 23,500
Borrowing from (repayment of) notes payable to
Shareholders 515,605
---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 849,905
---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 258,139
CASH AT BEGINNING OF THE YEAR --
---------
CASH AT END OF THE PERIOD $ 258,139
=========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 1,572
=========
Issuance of stock for noncash transaction $ 8,500
=========
</TABLE>
See notes to financial statements.
F-6
<PAGE> 33
PRO NET LINK CORP.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ORGANIZATION
Prevention Production Ltd. ("Prevention") is a Nevada chartered
development stage corporation incorporated on March 1, 1995. Pro Net
Link Corp. was incorporated on July 25, 1997 in the state of Delaware.
In September, 1997, all of the outstanding 7,485,000 shares of common
stock of Prevention were reverse split 1 for 30 into 249,500 shares of
common stock.
Immediately after the reverse split, Prevention acquired 100% of Pro Net
Link Corp. by issuing 28,400,000 shares for all of the shares of Pro Net
Link Corp and changed its name to Pro Net Link Corp.
The exchange has been accounted for as a reverse acquisition under the
purchase method for business combinations. Accordingly, the combination
of the two companies is recorded as recapitalization of Pro Net Link
Corp., pursuant to which Pro Net Link Corp. is treated as the continuing
entity for accounting purposes and the historical financial statements
presented are those of Pro Net Link Corp. (The "Company").
The Company is developing a website which gives access to an exclusive
data base of information in order to efficiently seek and find
companies, products and services. The data base includes
manufacturers-producers, wholesalers-distributors, and
importers-exporters, of goods and services including transportation,
insurance, banking, etc., in countries throughout the world.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Property, Equipment and Depreciation: Property and equipment are
stated at cost. Depreciation and amortization are provided on
either the straight-line basis or accelerated methods over the
estimated useful lives of the assets.
b. Use of Estimates: In preparing financial statements in conformity
with generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the 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 those estimates.
F-7
<PAGE> 34
c. Development Costs: Costs related to the development of websites
are charged to expense when incurred.
d. Fair Value of Financial Instruments: The carrying amounts of
certain financial instruments, including cash, payable, and
short-term debt, approximated fair value as of June 30, 1998.
e. Earnings Per Share: The Company has adopted the provisions of
Financial Accounting Standard No. 128, "Earnings per share",
which became effective for financial statements for fiscal years
ending after December 15, 1997.
Basic earnings per share are based on the weighted average number
of common and common equivalent shares outstanding.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<S> <C>
Furniture and Fixtures $ 6,123
Office Equipment and Computer 44,722
--------
50,845
Less accumulated depreciation (4,909)
--------
$ 45,936
========
</TABLE>
4. CONSULTING AGREEMENTS
Corporate Finance Agreement: The Company entered into an agreement on
March 12, 1998 with a corporate financial consultant. The term of the
agreement is for two years subject to termination by either party upon
30 days written notice. The consultant is to be paid $50,000 payable as
follows: $20,000 upon execution of the agreement; $5,000 paid on March
27, 1998, and the balance in twenty consecutive equal monthly payments
of $1,250 commenced on July 1, 1998 and continuing until February 1,
2000.
Marketing Agreement: The Company entered into a consulting agreement on
February 18, 1998 for marketing and business consulting functions for a
fee of $7,500 per month. The term of agreement is from February 15, 1998
to February 19, 1999.
F-8
<PAGE> 35
5. NOTES PAYABLE - SHAREHOLDERS
Long-term debt consist of the following:
<TABLE>
<S> <C>
Note Payable bearing 8% interest per annum with
semiannual payments of $50,000 $ 202,000
Note Payable bearing 8% interest per annum with
semiannual payments of $50,000 313,605
-----------
515,605
Less: Current maturities of long-term debt (200,000)
-----------
$ 315,605
===========
</TABLE>
Maturities of long-term debt are as follows:
<TABLE>
<S> <C>
Year ending June 30, 2000 $202,000
2001 113,605
--------
$315,605
========
</TABLE>
6. TAXES ON INCOME
As of June 30, 1998, the Company has net operating loss carryforwards
for federal income tax purposes of approximately $645,000 expiring in
2013. The Company has established a valuation allowance equal to its
deferred tax asset.
7. SEC INVESTIGATION
In June 1998, the Company was informed that the United States Securities
and Exchange Commission (the "SEC") had commenced an investigation
involving the Company. The SEC served subpoenas on the Company for the
production of books, papers, documents and other records. The Company
complied with the subpoenas in June and July. The Company has not
received any further inquiries from the SEC regarding this
investigation. The Company has no information as to the results, if any,
of such investigation, whom the targets, if any, of such investigation
may be, or what action, if any the SEC may take pursuant to the
investigation.
F-9
<PAGE> 36
8. LINE OF CREDIT
The Company has available a $500,000 line of credit expiring April 30,
1999, subject to renewal, at 1% over the bank base rate secured by a
standby letter of credit.
9. WEBSITE DEVELOPMENT AGREEMENT
The Company entered into a Website development agreement on August 28,
1998 for the development and hosting of its website. The development
part which will cost $67,510 is be paid as follows; $24,860 on
commencement of project, $32,650 on project delivery and $10,000 ten
days after project delivery. The hosting part will cost $27,000 upon
activation of the website and $3,800 a month thereafter.
10. COMMITMENTS AND CONTINGENCIES
The Company leases its office facility under an operating sub lease at a
monthly base rental $6,000 through August 31, 1998. On October 1, 1998
Company entered into an operating lease for $164,250 per annum as base
rent. The term of lease will expire on July 31, 2003. It is the
intention of the Company to continue subletting up to half of the space.
11. SUBSEQUENT EVENTS
a. In connection with a private placement offering in September 1998
the Company sold 4,210,000 shares of common stock at $.20 per
share.
b. On September 18, 1998, the Company amended its articles of
incorporation to increase its authorized common shares to
150,000,000 and to authorize the issuance of 5,000,000 shares of
preferred stock at $1.00 par value per share.
F-10
<PAGE> 37
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Articles of Incorporation of ProNetLink
3.2 By-laws of the ProNetLink
10.1* Material Agreements
27.1 Financial Data Schedule
- ----------------------------------------
*To be filed by amendment.
<PAGE> 1
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PREVENTION PRODUCTIONS, LTD.
--------------------
Under Section 78.403 of the
General Corporation Law
--------------------
The undersigned DOES HEREBY CERTIFY as follows:
I. The name of the Corporation is PREVENTION PRODUCTIONS, LTD.
(the "Corporation").
II. The date of filing of the Corporation's original Articles
of Incorporation with the Secretary of State of the State of Nevada was March 1,
1995.
III. The Articles of Incorporation, as heretofore amended, of
the Corporation (the "Articles of Incorporation") are amended hereby as follows:
(a) Articles I through XI inclusive are deleted in their
entirety, and new provisions set forth in Articles
First through Eighth hereof are inserted in their
place, in order to effect a change in name of the
Corporation from Prevention Productions, Ltd. to Pro
Net Link Corp., to increase in the number of authorized
shares of Common Stock from 50 million to 150 million
and to authorize the issuance of five million shares of
Preferred Stock, par value $1.00 per share.
<PAGE> 2
IV. These Amended and Restated Articles of Incorporation were
duly adopted by the Board and authorized by consent of the stockholders holding
a majority of the voting power of the Corporation pursuant to Sections 78.320
and 78.390 of the General Corporation Law of the State of Nevada.
V. The Articles of Incorporation are hereby amended and
restated in their entirety to read as follows:
-2-
<PAGE> 3
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PRO NET LINK CORP.
FIRST: The previous name of the corporation was PREVENTION
PRODUCTIONS, LTD. The new name of the corporation is PRO NET LINK CORP.
(hereinafter referred to as the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Nevada is Nevada Corporate headquarters, Inc., 3132
West Post Road, Las Vegas, Nevada 89118.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of Nevada (the "GCL").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 155 million shares, 150 million of
which shares shall be classified as Common Stock, $.001 par value per share
("Common Stock"), and 5,000,000 of which shares shall be classified as Preferred
Stock, $1.00 par value per share. The Preferred Stock may be issued, from time
to time, in one or more series as authorized by the Board of Directors. Prior to
issuance of a series, the Board of Directors by resolution shall designate that
series to distinguish it from other series and classes of stock of the
Corporation, shall specify the number of shares to be included in the series,
and
-3-
<PAGE> 4
shall fix the terms, rights, restrictions and qualifications of the shares of
the series, including any preferences, voting powers, dividend rights and
redemption, sinking fund and conversion rights. Subject to the express terms of
any other series of Preferred Stock outstanding at the time, the Board of
Directors may increase or decrease the number of shares or alter the designation
or classify or reclassify any unissued shares of a particular series of
Preferred Stock by fixing or altering in any one or more respects from time to
time before issuing the shares any terms, rights, restrictions and
qualifications of the shares.
FIFTH: The Governing Board of the Corporation shall be styled
as Directors. The number of directors constituting the entire Board shall be not
less than one nor more than fifteen as determined from time to time by
resolution of the Board of Directors.
SIXTH: The Corporation shall to the fullest extent permitted
by Section 78.7502 of the GCL, as amended from time to time, indemnify all
persons whom it may indemnify pursuant thereto. Directors of the Corporation
shall have no personal liability for monetary damages for breach of a fiduciary
duty, or failure to exercise any applicable standard of care, of a director to
the fullest extent permitted by paragraph 1 of Section 78.037 of the GCL, as
amended from time to time.
-4-
<PAGE> 5
SEVENTH: For the management of the business and for
the conduct of the affairs of the Corporation, it is further
provided that:
(a) in furtherance and not in limitation of the powers
conferred by the laws of the State of Nevada, the Board of Directors is
expressly authorized and empowered to make, alter, amend or repeal the
By-laws of the Corporation in any manner not inconsistent with the laws
of the State of Nevada or these Articles of Incorporation, subject to
the power of the stockholders of the Corporation having voting power to
alter, amend or repeal the By-laws of the Corporation;
(b) unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.
EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in these Articles of Incorporation, in
the manner now or hereafter prescribed by law, and all rights and powers
conferred upon stockholders, directors and officers are subject to this
reservation.
-5-
<PAGE> 6
IN WITNESS WHEREOF, these Amended and Restated Articles of
Incorporation of the Corporation have been signed, and the statements made
herein affirmed as true under the penalties of perjury, this 17th day of
September, 1998.
ATTEST:
/s/ Alvina Collardeau /s/ Jean Pierre Collardeau
Alvina Collardeau Jean Pierre Collardeau
Secretary President
<PAGE> 7
STATE OF New York )
) ss:
COUNTY OF Kings/New York )
I, Andy Hui, a Notary Public, do hereby certify that on the
17th day of September 1998, Jean Pierre Collardeau personally appeared before
me, being first duly sworn by me, acknowledged that he signed the foregoing
document in the capacity therein set forth and declared that the statements
therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year before written.
/s/ Andy Hui
Andy Hui, Notary Public
<PAGE> 1
Exhibit 3.2
AMENDED AND RESTATED
BY-LAWS
OF
PRO NET LINK CORP.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City and County of Carson City, State of Nevada.
Section 2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of Nevada as the
Board of Directors may from time to time determine.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for
the election of directors or for any other purpose shall be held at such time
and place, either within or without the State of Nevada as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting, at which meetings the
<PAGE> 2
stockholders shall elect by a plurality vote of the stockholders present a Board
of Directors, and transact such other business as may properly be brought before
the meeting. Written notice of the Annual Meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 3. Special Meetings. Unless otherwise prescribed by
law or by the Certificate of Incorporation, Special Meetings of Stockholders,
for any purpose or purposes, may be called by either (i) the Chairman, if there
be one, or (ii) the President, (iii) any Executive Vice-President, if there be
one (iv) any Vice President, if there be one, (v) the Secretary, or (vi) any
Assistant Secretary, if there be one, and shall be called by any such officer at
the request in writing of a majority of the Board of Directors or at the request
in writing of stockholders owning a majority of the capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. Written notice of a
Special Meeting stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called 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 4. Quorum. Except as otherwise provided by law or by
the Certificate of Incorporation, the holders of a
2
<PAGE> 3
majority of the capital stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of business. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. 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. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these By-Laws, any question brought before any
meeting of stockholders shall be decided by the vote of the holders of a
plurality of the stock represented and entitled to vote thereat. Each
stockholder represented at a meeting of shareholders shall be entitled to cast
one vote for each share of the capital stock entitled to vote thereat held by
such stockholder. Such votes may be cast in person or by proxy.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his
3
<PAGE> 4
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 6. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at any Annual or Special Meeting of Stockholders of the
Corporation, 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 than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Section 7. List of Stockholders Entitled to Vote. The officer
of the Corporation 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. Such 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
4
<PAGE> 5
meeting during the whole time thereof, and may be inspected by
any stockholder of the Corporation who is present.
Section 8. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by Section 7 of this Article II or the books
of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors shall consist of not less than one nor more than fifteen members, the
exact number of which shall initially be fixed by the Incorporator and
thereafter from time to time by the Board of Directors. Except as provided in
Section 2 of this Article, directors shall be elected by a plurality of the
votes cast at Annual Meetings of Stockholders, and each director so elected
shall hold office until the next Annual Meeting and until his successor is duly
elected and qualified, or until his earlier resignation or removal. Any director
may resign at any time upon notice to the Corporation. Directors need not be
stockholders.
Section 2. Vacancies. Vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so chosen shall hold
office until the
5
<PAGE> 6
next annual election and until their successors are duly elected and qualified,
or until their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation
shall be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws directed or required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Nevada. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman, if there be one, the President, or any one (1) director. Notice
thereof stating the place, date and hour of the meetings shall be given to each
director either by mail not less than forty-eight (48) hours before the date of
the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on
such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these By-Laws, at all
meetings of the Board of Directors, a majority of
6
<PAGE> 7
the entire Board of Directors then in office shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, 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 the members of the Board of Directors 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 of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws, members
of the Board of Directors of the Corporation, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors
or such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 7 shall
constitute presence in person at such meeting.
7
<PAGE> 8
Section 8. Chairman of the Board of Directors. The Chairman of
the Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 9. Committees. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, designate one
or more committees, each committee to consist of one or more of the directors of
the Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any absent or disqualified member. Any committee, to the extent allowed by law
and provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation.
8
<PAGE> 9
Each committee shall keep regular minutes and report to the Board of Directors
when required.
Section 10. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
reimbursement of expenses for attending committee meetings.
Section 11. Interested Directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or their commit tee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative votes
9
<PAGE> 10
of a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (ii) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof or the shareholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary and a
Treasurer. The Board of Directors, in its discretion, may also choose one or
more Executive Vice-Presidents, Vice Presidents, Assistant Secretaries,
Assistant Treasurers and other officers. Any number of offices may be held by
the same person, unless otherwise prohibited by law, the Certificate of
Incorporation or these By-Laws. The officers of the Corporation need not be
stockholders of the Corporation nor need such officers be directors of the
Corporation.
10
<PAGE> 11
Section 2. Election. The Board of Directors at its first
meeting held after each Annual Meeting of Stockholders shall elect the officers
of the Corporation who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors; and all officers of the Corporation shall hold
office until their successors are chosen and qualified, or until their earlier
resignation or removal. Any officer elected by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Board of
Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers
of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed in
the name of and on behalf of the Corporation by the President or any Vice
President and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to vote
in person or by proxy at any meeting of security holders of any corporation in
which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The Board of Directors may,
11
<PAGE> 12
by resolution, from time to time confer like powers upon any other person or
persons.
Section 4. President and Chief Executive Officer. The
President shall, subject to the control of the Board of Directors, have general
supervision of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall execute
all bonds, mortgages, contracts and other instruments of the Corporation
requiring a seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except that the other
officers of the Corporation may sign and execute documents when so authorized by
these By-Laws, the Board of Directors or the President. In the absence or
disability of the Chairman of the Board of Directors, or if there be none, the
President shall preside at all meetings of the stockholders and the Board of
Directors. The President shall also perform such other duties and may exercise
such other powers as from time to time may be assigned to him by these By-Laws
or by the Board of Directors.
Section 5. Vice-Presidents and Executive Vice-Presidents. At
the request of the President or in his absence or in the event of his inability
or refusal to act the Executive Vice-President or Executive Vice-Presidents or
the Vice-President or the Vice-Presidents if there is more than one (in the
order designated by the Board of Directors) shall perform the duties of the
President, and when so acting, shall have all the powers of
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<PAGE> 13
and be subject to all the restrictions upon the President. Each Executive
Vice-President or Vice-President shall perform such other duties and have such
other powers as the Board of Directors from time to time may prescribe. If there
be no Executive Vice-President or Vice-President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President or
in the event of the inability or refusal of the President to act, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
Section 6. Secretary. The Secretary shall attend all meetings
of the Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he shall be. If the Secretary shall be unable
or shall refuse to cause to be given notice of all meetings of the stockholders
and special meetings of the Board of Directors, and if there be no Assistant
Secretary, then either the Board of Directors or the President may choose
another officer to cause such notice to be given. The Secretary shall have
custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall
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<PAGE> 14
have authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature. The Secretary shall see that all books,
reports, statements, certificates and other documents and records required by
law to be kept or filed are properly kept or filed, as the case may be.
Section 7. Treasurer. The Treasurer shall have the 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
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of
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<PAGE> 15
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 8. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, Assistant Secretaries, if there be any, shall perform
such duties and have such powers as from time to time may be assigned to them by
the Board of Directors, the President, any Vice-President, if there be one, or
the Secretary, and in the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Secretary.
Section 9. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the President, any
Vice-President, if there be one, or the Treasurer, and in the absence of the
Treasurer or in the event of his disability or refusal to act, shall perform the
duties of the Treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his
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<PAGE> 16
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 10. Other Officers. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) the President or a Vice-President and (ii) by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned
by (i) a transfer agent other than the Corporation or its employee, or (ii) a
registrar other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a
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<PAGE> 17
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these ByLaws. Transfers of
stock shall be made on the books of the Corporation only by the person named in
the certificate or by his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued.
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<PAGE> 18
Section 5. 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 entitled 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 days prior to any
such meeting or other action. 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 6. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares of the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
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ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by
law, the Certificate of Incorporation or these ByLaws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at his
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Written notice may also be given
personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required
by law, the Certificate of Incorporation or these ByLaws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed, by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Certificate of Incorporation,
if any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any
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funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and
notes of the Corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Nevada." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION AND DIRECTORS' LIABILITY
Section 1. Indemnification of Directors and Officers. The
Corporation shall be required, to the fullest extent authorized by Section
78.7502 of the General Corporation Law of the State of Nevada (the "GCL"), as
the same may be amended and
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supplemented, to indemnify any and all directors and officers of the
Corporation.
Section 2. Limitation on Liability of Directors. The personal
liability of each of the directors of the Corporation shall be limited to the
fullest extent permitted by paragraph 1 of Section 78.037 of the GCL, as the
same may be amended and supplemented.
ARTICLE IX
AMENDMENTS
Section 1. These By-Laws may be altered, amended or repealed,
in whole or in part, or new By-Laws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new By-Laws be contained in the notice of such
meeting of stock holders or Board of Directors, as the case may be. All such
amendments must be approved by either the holders of a majority of the
outstanding capital stock entitled to vote thereon or by a majority of the
entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article
IX and in these By-Laws generally, the term "entire Board of Directors" means
the total number of directors which the Corporation would have if there were no
vacancies.
21
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