FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ZETA CORPORTION
---------------
(Exact name of registrant as specified in its charter)
FLORIDA 58-2349413
- ------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
216 - 1628 West 1st Avenue, Vancouver, BC, V6J 1G1 _
- ------------------------------------------ ------- -
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 659-5018
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so registered
Common Stock
$0.001 par value
Name of each exchange on which each class is to be registered
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
100,000,000 Shares of Common Stock
<PAGE>
TABLE OF CONTENTS
Page
PART I 1
DESCRIPTION OF BUSINESS 1
DESCRIPTION OF PROPERTY 3
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 3
REMUNERATION OF DIRECTORS AND OFFICERS 4
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS 4
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS 5
SECURITIES BEING OFFERED 5
PART II 5
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS 5
LEGAL PROCEEDINGS 6
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 6
RECENT SALES OF UNREGISTERED SECURITIES 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS 6
PART F/S 6
FINANCIAL STATEMENTS 6-14
PART III 15
INDEX TO EXHIBITS 15
SIGNATURES 16
<PAGE>
PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
ITEM 6. DESCRIPTION OF BUSINESS
Zeta Corporation (The Company) is a developmental stage company. The
Company was incorporated under the laws of the State of Florida on October 21,
1997, with an authorized capital of 100,000,000 shares of common stock, par
value of $0.001 per share, and 1,000,000 preferred stock, par value of $0.10.
On October 21, 1997, the Company issued 3,000,000 restricted shares of
common stock for services rendered at $0.001 per share, or $3000. During 1997,
the Company completed an Offering Memorandum for 300,000 shares of common stock
for cash at $0.25 per share, or $75,000. On December 15, 1998, the Company
issued 4,000,000 shares of common stock for services rendered at $0.10 per
share, or $400,000. During March 1999, the Company completed an Offering
Memorandum for 3,000,000 shares of common stock, along with 3,000,000 share
purchase warrants, for cash at $0.10 per unit, or $300,000.
The Company is currently developing a new online community for
entrepreneurs and start-up companies seeking capital and accredited investors
seeking to invest. The Company's site, which will be located at
www.newcompanycapital.com will provide details for the entrepreneurs and
investors. The Company plans to charge a listing fee to clients seeking to raise
capital by posting their executive summaries in a password protected section of
the website. Investors seeking greater detail before investing will be charged a
viewing fee to access business plans. the information posted on the web site
will not be prospectuses nor will it offer or sell securities.
The Company's website will serve strictly as a conduit or meeting place.
The Company will not collect commissions or any other fees, other than a listing
fee from the client company or entrepreneur seeking capital and a viewing fee
from the investor. The Company will not be involved in any other aspect of the
client company's business, nor in the decision making process of the investor.
The market for early stage financing is a highly fragmented and
inefficient. Entrepreneurs and start up companies often find it difficult, time
consuming and costly to access and make presentations to the venture capital
community. The angel investor community, composed of some 350,000 high net worth
investors who collectively invest upwards of $25 billion, interested in their
particular industry group. Likewise, investors wishing to make early stage
investments also find it difficult to gain access to a wide variety of companies
or entrepreneurs seeking early stage capital. Additionally, large amounts of
money flowing into the venture capital market has resulted in the average
venture capital investment being made rising by $5.4 million in the third
quarter of 1998 to over $9.1 million in the third quarter of 1999 according to
PricewaterhouseCoopers. This has made it more difficult for companies seeking to
raise smaller amounts of early stage capital, often between $100,000 to
$4,000,000.
The Company expects to compete against many better capitalized and well
managed companies offering similar services. Current direct competitors include
businesspartners.com, venturehighway.com, offroadcapital.com and garage.com.
While competition is expected to intensify in the future, with many new
contenders entering the marketplace, the high growth of the Internet itself and
the continuous need for capital to finance new companies is expected to expand
the size of the marketplace in order to allow for many competitors.
In order to develop an online community of funders and those seeking
funding, the Company plans to advertise its services through opt-in email lists,
through print media catering to entrepreneurs, and to certain professional
communities, such as lawyers, accountants and investment bankers.
As of December 31, 1999, the Company had $181,884 in cash and no
liabilities. The Company expects this cash reserve to fund its operations for a
period of twelve months until december 31, 2000. During the next twelve months,
the Company expects fee revenues to be insufficient to generate a positive cash
flow. Consequently, the Company plans to raise an additional $1 million to fund
future operations in early 2001.
<PAGE>
Management's Discussion and Analysis and Plan of Operations
The Company has not had any revenues from operations in each of the last
two fiscal years. Further, the Company expects minimal, if any, revenues during
fiscal year 2000. The Company is developing an online community for
entrepreneurs and start-up companies seeking capital and accredited investors
seeking to invest. The Company's site, which will be located at
www.newcompanycapital.com, is expected to be completed in May 2000. The Company
plans to charge a listing fee to clients seeking to raise capital by posting
their executive summaries in a password protected section of the website.
Investors seeking greater detail before investing will be charged a viewing fee
to access business plans.
At present, the Company is expending $6,000 per month in the development of
its site and content. The total cost for the development of the site will be
approximately $30,000. Upon completion, the Company plans to spend approximately
$1,500 in the maintenance of its website. The Company is currently in the
process of seeking and hiring two full time website technicians and one full
time individual responsible for the development of related content for the
Company's website. These new employees are expected to add approximately $7,500
per month to the Company's monthly cost of operations. At this time the Company
has one full time and one part time employee.
As of December 31, 1999, the Company had $181,884 in cash and no
liabilities. The Company's cash reserve is sufficient to cover the operating
expenses of the Company for the next 12 months. The Company does not expect to
purchase any additional computer hardware or make any significant equipment
purchases in the next 12 months.
Results of Operations
- ---------------------
The Company has not had any revenues from operations in each of the
last two fiscal years.
For the period from inception, October 21, 1997, to December 31, 1999, the
Company's general and administrative operating expenses totaled $604,666 and
interest income totaled $11,675, resulting in a total loss of $592,991, or $0.06
per share. During this same period, the Company raised a total of $75,000
through the sale of 300,000 common shares at $0.25 per share, 3,000,000 common
shares at $0.10, and has financed its operations from cash on hand. As of
December 31, 1998, the Company had a cash balance was $3,054 and no liabilities.
For the twelve month period ending December 31, 1999, the Company's general
and administrative operating expenses totaled $130,756, a decrease of $343,149,
or 72.4%, from the fiscal 1998 total of $473,905.
The Company experienced a loss of $121,045 or $0.01 per share for the
twelve month period ended December 31, 1999, versus a $0.13 per share loss or
$471,988 for the same twelve month period in 1998. The decrease in expenses and
loss per share is primarily due to reduced expenses.
<PAGE>
During fiscal 1999, interest income totaled $9,711, or an increase of
406.6% from the $1,917 interest earned in fiscal 1998. This increase in interest
income is a result of greater cash balances earning interest throughout 1999,
versus 1998.
As of December 31, 1999, the Company had a no liabilities, equal to the nil
liabilities the prior year. As of December 31, 1999 the Company had a cash
balance of $181,884, an increase of $178,830 or 5855.6% from the Company's cash
balance as at December 31, 1998. As of December 31, 1999 the Company had a
prepaid expense of $125, versus nil the prior year at December 31, 1998. The
cash balance came from the sale of equity and not from operations.
ITEM 7. DESCRIPTION OF PROPERTY
The Company maintains its office at Suite 216, 1628 West 1st Avenue,
Vancouver, BC, V6J 1G1. These premises are owned by Tajinder Chohan and Kundan
S. Rayat, the wife and father, respectively, of the Company's President and CEO.
On June 1, 2001, the Company plans to enter into a lease for 12 months at
approximately $1000 per month, without an option to renew. At present the
Company pays no rent.
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The following information sets forth the names of the officers and
directors of the Company, their present positions with the Company and
biographical information.
HARMEL S. RAYAT, (Age 38) President & CEO, Director. Mr. Rayat has been in the
venture capital industry since 1981. Since January 1993 Mr. Rayat has been the
president of Hartford Capital Corporation, a company which specializes in
providing early stage funding and investment banking services to emerging growth
corporations. Mr. Rayat has served as a Director and the Company's President
since December 15, 1998. Mr. Rayat also serves as a Director and Chairman of the
Board for WhatsOnline.com, Inc., EquityAlert.com, Inc. and MedCare Technologies,
Inc., all publicly traded reporting issuers.
HARVINDER DHALIWAL, (Age 40) Director, Secretary Treasurer. Mr Dhaliwal is the
President and CEO of Sight & Sound Ltd., a retail audio video concern since
1985. He has been a Director of the Company and its Secretary and Treasurer
since April 6, 1999.
DAVID GAMACHE, (Age 50) Director. From 1974 to 1990, Mr. Gamache was President
and CEO of Dave's Glass Art Inc., a retail and manufacturer of stained glass
windows. Between 1990 and 1994, Mr. Gamache went on an extended sabbatical and
traveled extensively. Between 1994 and 1996, Mr. Gamache was employed by
California Inboard Inc. as a salesman. Between 1996 and 1998, Mr. Gamache worked
in the Customer Service department of Home Depot. Since 1998 to present, Mr.
Gamache has worked at California Inboard Inc. in sales and as the manager of the
company's pro shop. Mr. Gamache has served as a Director of Zeta Corporation
since its inception and its President from October 23, 1997 to December 15,
1998.
ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS
The following table shows the cash compensation paid by the Company, as
well as other compensation paid or accrued for such year, to the Company's Chief
Executive Office and the Company's other most highly compensated executive
officers. No executive office of the Company had a total annual salary and bonus
for 1998 that exceeded $100,000 for any year.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Other Restricted
All Other Annual Stock Options/ LTIP Other
Name &Title Year Salary Bonus Comp Award(s) SARs(#) payouts Comp
- ----------- ---- ------ ----- ---- -------- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harmel S. Rayat 1999 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
President & CEO, 1998 $ - 0 - - 0 - - 0 - $400,000* - 0 - - 0 - - 0 -
Director 1997 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Dave Gamache 1999 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Director 1998 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
1997 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Harvinder 1999 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Dhaliwal 1998 $ - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Director, Secretary 1997 $ - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Treasurer
</TABLE>
* the $400,000 represents 4,000,000 shares valued at $0.10 per share.
In fiscal 1999, 1998 and 1997, the aggregate amount of compensation paid to all
executive officers and directors as a group for services in all capacities was
$400,000. The Company has no stock option plans in existence.
ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY
HOLDERS
The following table sets forth, as of December 31, 1999, the beneficial
ownership of the Company's Common Stock by each person known by the Company to
beneficially own more than 5% of the Company's Common Stock outstanding as of
such date and by the officers and directors of the Company as a group. Except as
otherwise indicated, all shares are owned directly.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Name and address of Amount and Nature Percent
Title of Class Of beneficial owner of beneficial ownership of class
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Harmel S. Rayat 7,475,000 (1) 72.6%
216 - 1628 West 1st Ave
Vancouver, B.C., V6J 1G1
Common Officers/Directors as a group 7,475,000 72.6%
</TABLE>
(1) Includes 7,000,000 common shares held directly and 475,000 held by Tajinder
Chohan, Mr. Harmel S. Rayat's wife.
ITEM 11. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
<PAGE>
The Company maintains its office at Suite 216, 1628 West 1st Avenue,
Vancouver, BC, V6J 1G1. These premises are owned by Tajinder Chohan and Kundan
S. Rayat, the wife and father, respectively, of the Company's President and CEO.
On June 1, 2001, the Company plans to enter into a lease for 12 months at
approximately $1000 per month, without an option to renew. At present the
Company pays no rent.
ITEM 12. SECURITIES BEING OFFERED
Common Stock
- ------------
The Company has 100,000,000 common shares authorized with $0.001 par value.
Holders of the Common Stock are entitled to one vote for each share held by them
of record on the books of the Company in all matters to be voted on by the
stockholders. 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, and in the event of liquidation, dissolution or winding up of the
Company, to share ratably in all assets remaining after payment of liabilities.
Declaration of dividends on Common Stock is subject to the discretion of the
Board of Directors and will depend upon a number of factors, including the
future earnings, capital requirements and financial condition of the Company.
The Company has not declared dividends on its Common Stock in the past and the
management currently anticipates that retained earnings, if any, in the future
will be applied to the expansion and development of the Company rather than the
payment of dividends.
The holders of Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by the Company. There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock currently outstanding is, and the Common Stock offered by the Company
hereby will, when issued, be validly issued, fully paid and nonassessable.
Stock Options
- -------------
The Company has no stock option plans outstanding nor stock options issued.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER STOCKHOLDER MATTERS
The shares of the Company's stock are traded on the OTC Bulletin Board
under the symbol and the following have been the High and Low prices for the
times indicated:
<TABLE>
<CAPTION>
High Low
<S> <C> <C>
October - December 1999 $ 0.65 $ 0.28
July - September 1999 $ 0.57 $ 0.53
April - June 1999 $ 0.75 $ 0.53
January - March 1999 $ 0.50 $ 0.13
October - December 1998 $ 0.33 $ 0.19
</TABLE>
There are 3,000,000 warrants outstanding entitling holders to purchase 3,000,000
common shares at $0.10 up until March 22, 2003.
As of March 1, 2000, there were 45 registered shareholders of the Company
and 223,000 common shares were held by Cede and Co. as nominee on behalf of
other holders. There are no dividend restrictions on the Company. Market makers
who have posted bids or offers during the period November 1998 to March 1, 2000
include Wm. V. Frankel & Co., Incorporated, Hill Thompson Magid & Co. Inc.,
Herzog, Heine, Geduld, Inc., Knight Securities, Inc., Paragon Capital
Corporation, Sharpe Capital Inc., Public Securities, and Wein Securities Corp.
<PAGE>
ITEM 2. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against the
Corporation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company's accountants since inception have been Clancy and Co., PLLC.
There are no disagreements with Clancy and Co., PLLC.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
During March 1999, the Company completed an Offering Memorandum for
3,000,000 shares of common stock, along 3,000,000 share purchase warrants, for
cash at $0.10 per unit, or $300,000.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Directors and Officers, their heirs, executors, and administrators, of
the Company are indemnified as provided under the Florida Statutes and pursuant
to the Bylaws of the Company. This indemnification, as describe in Article VII,
Section 1 of the Bylaws, includes "as authorized by current and future
legislation or judicial or administrative decision against all fines,
liabilities, costs and expenses, including attorneys' fees."
PART F/S
FINANCIAL STATEMENTS
ZETA CORPORATION
Vancouver, British Columbia
AUDIT REPORT
DECEMBER 31, 1999 AND 1998
<PAGE>
INDEPENDENT AUDITOR' REPORT
Board of Directors
Zeta Corporation
Vancouver, British Columbia
We have audited the accompanying balance sheet of Zeta Corporation (A
Development Stage Company), (the Company), as of December 31, 1999 and 1998, and
the related statements of op erations, stockholders' equity and cash flows for
the years then ended, and for the period from Inception (October 21, 1997) to
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these finan
cial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those stan dards 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 of the financial statements provides a reasonable
basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial posi tion of the Company at December 31, 1999 and 1998,
and the results of its operations and its cash flows for the periods indicated,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is a devel opment stage Company since its inception on
October 21, 1997. The Company is devoting sub stantially all of its present
efforts in establishing a new business and planned principal operations have not
commenced. The Companys ability to meet its future financing requirements and
the success of future operations cannot be determined at this time. These
factors raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Clancy and Co., P.L.L.C.
Phoenix, Arizona
February 15, 2000
<PAGE>
CONTENTS
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . .1
Balance Sheet as of December 31, 1999 and 1998 . . . . . . . . . . . . . . . 2
Statement of Operations For The Years Ended December 31, 1999 and 1998,
And For The Period From Inception (October 21, 1997) To December 31, 1999 .. 3
Statement of Stockholders' Equity From Inception (October 21, 1997) To December
31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Cash Flows For The Years Ended December 31, 1999 and 1998,
And For The Period From Inception (October 21, 1997) To December 31, 1999 .5-6
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . 7-10
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
<S> <C> <C>
Current Assets
Cash $ 181,884 $ 3,054
Prepaid Expenses 125 0
Total Current Assets 182,009 3,054
Other Assets
Organization 3,000 3,000
Total Assets $ 185,009 $ 6,054
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ None $ None
Stockholders' Equity
Preferred Stock: $0.10 Par Value, 1,000,000 Authorized; Issued
and Outstanding Shares, None None None
Common Stock: $0.001 Par Value, 100,000,000 Authorized;
Issued and Outstanding, 10,300,000 and 7,300,000 Shares at
December 31, 1999 and 1998 10,300 7,300
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Additional Paid In Capital 767,700 470,700
Loss Accumulated During The Development Stage (592,991) (471,946)
Total Stockholders' Equity 185,009 6,054
Total Liabilities and Stockholders' Equity $ 185,009 $ 6,054
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND
FOR THE PERIOD FROM INCEPTION (OCTOBER 21, 1997)
TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
From Incep
tion (October
Year Ended Year Ended 21, 1997) to
December 31, December 31, December 31,
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
Expenses
General and Administrative 130,756 473,905 604,666
Operating Loss (130,756) (473,905) (604,666)
Other Income
Interest Income 9,711 1,917 11,675
Loss Available to Common Stockholders $ (121,045) $ (471,988) $ (592,991)
Basic Loss Per Share Common Share $ (0.01) $ (0.13) $ (0.06)
Basic Weighted Average Common Shares Outstand 9,800,000 3,633,333 9,800,000
ing
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (OCTOBER 21, 1997)
THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
Loss
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock For
Services Rendered as of October 21, 1997 0 $ 0 3,000,000 $ 3,000 $ 0 $ 0 $ 3,000
Issuance of Common Stock For Cash at
$0.25 Per Share 300,000 300 74,700 75,000
Income From Inception (October 21, 1997)
To December 31, 1997 42 42
Balance, December 31, 1997 0 0 3,300,000 3,300 74,700 42 78,042
Issuance of Common Stock For Services
Rendered at $0.10 Per Share 4,000,000 4,000 396,000 400,000
Loss, Year Ended December 31, 1998 (471,988) (471,988)
Balance, December 31, 1998 0 0 7,300,000 7,300 470,700 (471,946) 6,054
Issuance of Common Stock For Cash at
$0.10 Per Share 3,000,000 3,000 297,000 300,000
Loss, Year Ended December 31, 1999 (121,045) (121,045)
Balance, December 31, 1999 0 $ 0 10,300,000 $ 10,300 $ 767,700 (592,991) $185,009
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (OCTOBER 21, 1997) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
From Incep
tion (October
Year Ended Year Ended 21, 1997) to
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (121,045) $ (471,988) $ (592,991)
Adjustments to Reconcile Net Loss to Net Cash Used In
Operating Activities
Common Stock Issued for Services 0 400,000 403,000
Changes in Assets and Liabilities
(Increase) Decrease in Prepaid Expenses (125) 0 (125)
(Increase) Decrease in Organization Costs 0 0 (3,000)
Total Adjustments (125) 400,000 399,875
Net Cash Used In Operating Activities (121,170) (71,988) (193,116)
Cash Flows From Investing Activities 0 0 0
Net Cash Flows From Investing Activities 0 0 0
Cash Flows From Financing Activities
Proceeds From Sale of Common Stock 300,000 0 375,000
Net Cash Flows From Financing Activities 300,000 0 375,000
Increase (Decrease) in Cash and Cash Equivalents 178,830 (71,988) 181,884
Cash and Cash Equivalents, Beginning of Year 3,054 75,042 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (OCTOBER 21, 1997) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cash and Cash Equivalents, End of Year $ 181,884 $ 3,054 $ 181,884
</TABLE>
<TABLE>
<CAPTION>
From Incep
tion (October
Year Ended Year Ended 21,1997) to
December 31, December 31, December 31,
1997 1998 1999
<S> <C> <C> <C>
Supplemental Information
Cash Paid For:
Interest $ 0 $ 0 $ 0
Income taxes $ 0 $ 0 $ 0
Noncash Financing Activities:
Issuance of Common Stock For Services Rendered $ 0 $ 3,000 $ 403,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE 1 - ORGANIZATION
Zeta Corporation (the Company) was incorporated under the laws of the State of
Florida on October 21, 1997, with an authorized capital of 100,000,000 shares of
common stock, par value of $0.001 per share, and 1,000,000 shares of preferred
stock, par value $0.10 per share. The Companys objective is to serve as an
online business to business forum where entrepreneurs and start-up companies
seeking capital, and high net worth investors seeing to make investments, can
meet and transact business.
On October 21, 1997, the Company issued 3,000,000 shares of common stock for
services rendered at $0.001 per share, or $3,000.
During 1997, the Company completed an Offering Memorandum for 300,000 shares of
common stock for cash at $0.25 per share, or $75,000.
On December 15, 1998, the Company issued 4,000,000 shares of common stock for
ser vices rendered at $0.10 per share, or $400,000.
During March 1999, the Company completed an Offering Memorandum for 3,000,000
shares of common stock for cash at $0.10 per share, or $300,000.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. The continuation of the Company as a going concern
is dependent upon the Company's ability to establish itself as a profitable
business. The Company's ability to achieve these objectives cannot be determined
at this time. It is the Companys belief that it will continue to incur losses
for at least the next 12 months, and as a result will re quire additional funds
to be obtained from private or public equity investments, and pos sible future
collaborative agreements to meet such needs, in order that the Company will be a
viable entity. Management believes that actions presently taken to revise the
Com panys operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
B. Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a maturity of
three months or less when acquired to be cash and cash equivalents.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Concentration of Credit Risk
The Company maintains U.S. Dollar cash balances in Canadian banks, that are not
insured.
D. Revenue Recognition
Revenues are recognized at time of performance of services.
E. Organization Costs
Organization Costs are being amortized ratably over a period of sixty months,
beginning with the first month in which the Company is actively in business.
F. Income Taxes
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred tax liabilities and assets are determined based on
the difference
<PAGE>
ZETA CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
between the financial statement and tax bases of assets and liabilities, using
enacted tax rates in effect for the year in which the differences are expected
to reverse. See Note 3.
G. Earnings or Loss Per Share
Basic earnings or loss per share has been computed based on the weighted average
number of common shares and common share equivalents outstanding. All earnings
or loss per share amounts in the financial statements are basic earnings or loss
per share, as defined by SFAS No. 128, "Earnings Per Share." Diluted earnings or
loss per share does not differ materially from basic earnings or loss per share
for all periods presented. All per share and per share information are adjusted
retroactively to reflect stock splits and changes in par value.
H. Capital Structure
The Company has implemented SFAS No. 130, "Reporting Comprehensive Income,"
effective January 1, 1998, which requires companies to classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid in capital in the equity section of a statement of
financial position. The implementation of SFAS No. 130 had no effect on the
Companys financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Business Segment Information
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," on January 1, 1998. The implementation of
SFAS No. 131 had no effect on the Company's financial statements.
J. Stock-Based Compensation
<PAGE>
The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." Compensation cost for stock options, if any, is
measured as the excess of the quoted market price of the Company's stock at the
date of grant over the amount an employee must pay to acquire the stock.
SFAS No. 123, "Accounting for Stock-Based Compensation," established accounting
and disclosure requirements using a fair-value-based method of accounting for
stock-based employee compensation plans. The Company has elected to continue its
current method of accounting as described above, and has adopted the
disclosure-only requirements of SFAS No. 123, effective January 1, 1998.
K. Use of Estimates
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results may vary from the estimates that were assumed in
preparing the financial statements.
L. Start-up Costs
Costs of start-up activities are charged to operations as incurred, totaling
$121,039 and $471,478, for the years ended December 31, 1999 and 1998,
respectively. For income tax purposes, the Company has elected to treat these
costs as deferred expenses and amortize them over a period of sixty months,
beginning in the first month the Company is actively in business. See Note 3.
M. Pending Accounting Pronouncements
It is anticipated that current pending accounting pronouncements will not have
an adverse impact on the financial statements of the Company.
<PAGE>
NOTE 3 - INCOME TAXES
There is no current or deferred tax expense for the years ended December 31,
1999 and 1998, due to the Companys loss position. The benefits of timing
differences have not been previously recorded. The deferred tax consequences of
temporary differences in reporting items for financial statement and income tax
purposes are recognized, as appropriate. Realization of the future tax benefits
related to the deferred tax assets is dependent on many factors, including the
Companys ability to generate taxable income within the net operating loss
carryforward period. Management has considered these factors in reaching its
conclusion as to the valuation allowance for financial reporting purposes. The
income tax effect of temporary differences comprising the deferred tax assets
and deferred tax liabilities on the accompanying balance sheet is a result of
the following:
<TABLE>
<CAPTION>
Deferred Taxes 1999 1998
<S> <C> <C>
NOL Carryforwards $ 171 $ 171
Start-up Costs 201,456 160,302
Organization Costs 1,020 1,020
Total $ 202,647 $ 161,493
Valuation Allowance (202,647) (161,493)
Net Deferred Tax Assets $ 0 $ 0
</TABLE>
The Company has available net operating loss carryforwards of approximately $500
for tax purposes to offset future taxable income, and expire principally in the
year 2017. Additionally, the estimated effect of the charge-off of start-up
expenses in 2000 is a reduction in estimated income taxes of approximately
$40,000, assuming normal operations have commenced.
NOTE 4 - WARRANTS
On March 22, 1999, the Company executed a 504D Registration authorizing
3,000,000 shares of common stock at $0.10 per share with a warrant exercisable
into common shares at $0.10 per share expiring on March 22, 2003, to provide
additional working capital. As of the date of these financial statements, all of
the warrants remain outstanding.
<PAGE>
PART III
INDEX TO EXHIBITS
Exhibit 3
(i) Articles of Incorporation and Amendments
(ii) Bylaws
Exhibit 23 Consent of Independent Auditor
Exhibit 27 Financial Data Schedule
Exhibit 99
.1 Private Placement Memorandum dated March 22, 1999
<PAGE>
SIGNATURES
The issuer has duly caused this offering statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Vancouver,
Province of British Columbia, Canada, on March 1, 2000.
ZETA CORPORATION
/s/ Harmel S. Rayat
-------------------
Harmel S. Rayat, President/Director
This offering statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Harmel S. Rayat 3/3/00
- ------------------- ------
Harmel S. Rayat, Director Date
/s/ Dave Gamache 3/3/00
- ---------------- ------
Dave Gamache, Director Date
/s/ Harvinder Dhaliwal 3/3/00
- ---------------------- ------
Harvinder Dhaliwal, Director Date
Zeta Corporation
Formed in Florida
Federal Employer Identification Number (Tax ID):
58-2349413
Corporate Creations@
(305) 672-0686
<PAGE>
[SEAL}
FLORIDA DEPARTMENT OF STATE
Sandra B. Mortham
Secretary of State
October 22, 1997
ZETA CORPORATION
6805 SUNDANCE TPAIL
RIVERSIDE, CA 92506
The Articles of Incorporation for ZETA CORPORATION were filed on October 22,
1997, effective October 21, 1997, and assigned document number P97000090722.
Please refer to this number whenever corresponding with this office.
Enclosed is the certification requested. To be official, the certification for a
certified copy must be attached to the original document that was electronically
submitted and filed under FAX audit number H97000017519.
A corporation annual report will be due this office Joetween January 1 and May 1
of the year following the calendar year of the file date year. A Federal
Employer Identification (FEI) number will be required before this report can be
filed. Please apply NOW with the Internal Revenue Service by calling
1-800-829-3676 and requesting form SS-4.
Please be aware if the corporate address changes, it is the responsibility of
the corporation to notify this office.
Should you have questions regarding corporations, please contact this office at
the addxess given below.
Becky McKnight
Document Specialist
New Filings Section
Division of Corporations
Letter Number: 897AO0051499
Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314
<PAGE>
[SEAL]
I certify from the records of this office that ZETA CORPORATION is a corporation
organized under the laws of the State of Florida, filed on October 22, 1997,
effective October 21, 1997.
The document number of this corporation is P97000090722.
I further certify that said corporation has paid all fees and penalties due this
office through December 31, 1997, and its status is active.
I further certify that said corporation has not filed Articles of Dissolution.
I further certify that this is an electronically transmitted certificate
authorized by section 15.16, Florida Statutes, and authenticated by the code,
897AC0051499-102297-P97000090722-1/1, noted below.
Given under my hand and the Great Seal of the State of Florida,
at Tallahassee, the Capital, this the Twenty-second day of
October, 1997
Authentication Code: 897AO0051499-102297-P97000090722-1/1
[SEAL] /s/ Sandra B. Mortham
---------------------
Secretary of State
<PAGE>
ARTICLES OF INCORPORATION
Article 1. Name
- ---------------
The name of this Florida corporation is: Zeta Corporation
Article II. Address
- -------------------
The mailing address of the Corporation is: Zeta Corporation 6805 Sundance Trail
Riverside CA 92506
Article Ill. Registered Agent
- -----------------------------
The name and address of the registered agent of the Corporation is: Corporate
Creations Enterprises, Inc. 4521 PGA Boulevard #211 Palm Beach Gardens FL 33418
Article IV. Board of Directors
- ------------------------------
The name of each member of the Corporation's Board of Directors is:
Ken Finkelstein
David Gamache
The affairs of the Corporation shall be managed by a Board of Directors
consisting of no less than one director. The number of directors may be
increased or decreased from time to time in accordance with the Bylaws of the
Corporation. The election of directors shall be done in accordance with the
Bylaws. The directors shall be protected from personal liability to the fullest
extent pen-nitted by applicable law.
Corporate Creations International Inc.
1210 Washington Avenue - Suite 230
Miami Beach FL 33139
(305) 672-0686
<PAGE>
Article V. Capital Stock
- ------------------------
The Corporation shall have the authority to issue 100,000,000 shares of common
stock, par value $.001 per share. The Corporation shall have the authority to
issue 1,000,000 shares of preferred stock, par value $.10 per share, which may
be divided into series and with the preferences, limitations and relative rights
determined by the Board of Directors.
Article VI. Incorporator
- ------------------------
The name and address of the incorporator is:
Corporate Creations International Inc.
1210 Washington Avenue - Suite 230
Miami Beach FL 33139
Article VII Corporate Existence
- -------------------------------
These Articles of Incorporation shall become effective and the corporate
existence will begin on October 21, 1997.
The undersigned incorporator executed these Articles of Incorporation on October
22, 1997.
/s/ Greg K. Kuroda
- ------------------
CORPORATE CREATIONS INTERNATIONAL INC.
Greg K. Kuroda Vice President
Corporate Creations International Inc.
1210 Washington Avenue - Suite 230
Miami Beach FL 33139
(305) 672-0686
<PAGE>
CERTIFICATE OF DESIGNATION
REGISTERED AGENT/OFFICE
CORPORATION:
- ------------
Zeta Corporation
REGISTERED AGENT/OFFICE:
- ------------------------
Corporate Creations Enterprises, Inc.
4521 PGA Boulevard #211
Palm Beach Gardens FL 33418
I agree to act as registered agent to accept service of process for the
corporation named above at the place designated in this Certificate. I agree to
comply with the provisions of all statutes relating to the proper and complete
performance of the registered agent duties. I am familiar with and accept the
obligations of the registered agent position.
/s/ Greg K. Kuroda
- ------------------
CORPORATE CREATIONS ENTERPRISES, INC.
Greg K. Kuroda, Vice President
Date: October 22, 1997
Corporate Creations International Inc.
1210 Washington Avenue - Suite 230
Miami Beach FL 33139
(305) 672-0686
Bylaws
of
Zeta Corporation
ARTICLE I. DIRECTORS
--------------------
Section 1. Function. All corporate powers shall be exercised by or under the
authority of the Board of Directors. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. Directors must
be natural persons who are at least 18 years of age but need not be shareholders
of the Corporation. Residents of any state may be directors.
Section 2. Compensation. The shareholders shall have authority to fix the
compensation of directors. Unless specifically authorized by a resolution of the
shareholders, the directors shall serve in such capacity without compensation.
Section 3. Presumption of Assent. A director who is present at a meeting of the
Board of Directors or a committee of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the action
taken unless he objects at the beginning of the meeting (or promptly upon
arriving) to the holding of the meeting or transacting the specified business at
the meeting, or if the director votes against the action taken or abstains from
voting because of an asserted conflict of interest.
Section 4. Number. The Corporation shall have at least the minimum number of
directors required by law. The number of directors may be increased or decreased
from time to time by the Board of Directors.
Section 5. Election and Term. At each annual meeting of shareholders, the
shareholders shall elect directors to hold office until the next annual meeting
or until their earlier resignation, removal from office or death. Directors
shall be elected by a plurality of the votes cast by the shares entitled to vote
in the election at a meeting at which a quorum is present.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled by
the shareholders or by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders. If there are no remaining directors, the vacancy
shall be filled by the shareholders.
<PAGE>
Section 7. Removal of Directors. At a meeting of shareholders, any director or
the entire Board of Directors may be removed, with or without cause, provided
the notice of the meeting states that one of the purposes of the meeting is the
removal of the director. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast against removal.
Section 8. Quorum and Voting. A majority of the number of directors fixed by
these Bylaws shall constitute a quorum for the transaction of business. The act
of a majority of directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 9. Executive and-Other Committees. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members one or more committees each of which must have at least two members.
Each committee shall have the authority set forth in the resolution designating
the committee.
Section 10. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the Corporation or
at another place designated by the person or persons giving notice or otherwise
calling the meeting. Section 11. Time, Notice and Call of Meetincrs. Regular
meetings of the Board of Directors shall be held without notice at the time and
on the date designated by resolution of the Board of Directors. Written notice
of the time, date and place of special meetings of the Board of Directors shall
be given to each director by mail delivery at least two days before the meeting.
Notice of a meeting of the Board of Directors need not be given to a
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting constitutes a waiver of notice of that
meeting and waiver of all objections to the place of the meeting, the time of
the meeting, and the manner in which it has been called or convened, unless a
director objects to the transaction of business (promptly upon arrival at the
meeting) because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors must be specified in the notice or waiver of notice of
the meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of an adjourned meeting shall be given to the directors who were not present at
the time of the adjournment and, unless the time and place of the adjourned
meeting are announced at the time of the adjournment, to the other directors.
Meetings of the Board of Directors may be called by the President or the
Chairman of the Board of Directors. Members of the Board of Directors and any
committee of the Board may participate in a meeting by telephone conference or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation by these means constitutes
presence in person at a meeting.
<PAGE>
Section 12. Action By Written Consent. Any action required or permitted to be
taken at a meeting of directors may be taken without a meeting if a consent in
writing setting forth the action to be taken and signed by all of the directors
is filed in the minutes of the proceedings of the Board. The action taken shall
be deemed effective when the last director signs the consent, unless the consent
specifies otherwise.
ARTICLE II. MEETINGS OF SHAREHOLDERS
------------------------------------
Section 1. Annual Meeting. The annual meeting of the shareholders of the
corporation for the election of officers and for such other business as may
properly come before the meeting shall be held at such time and place as
designated by the Board of Directors.
Section 2. Special Meetincf. Special meetings of the shareholders shall be held
when directed by the President or when requested in writing by shareholders
holding at least 10% of the Corporation's stock having the right and entitled to
vote at such meeting. A meeting requested by shareholders shall be called by the
President for a date not less than 10 nor more than 60 days after the request is
made. Only business within the purposes described in the meeting notice may be
conducted at a special shareholders' meeting.
Section 3. Place. Meetings of the shareholders will be held at the principal
place of business of the Corporation or at such other place as is designated by
the Board of Directors.
Section 4. Notice. A written notice of each meeting of shareholders shall be
mailed to each shareholder having the right and entitled to vote at the meeting
at the address as it appears on the records of the Corporation. The meeting
notice shall be mailed not less than 10 nor more than 60 days before the date
set for the meeting. The record date for determining shareholders entitled to
vote at the meeting will be the close of business on the day before the notice
is sent. The notice shall state the time and place the meeting is to be held. A
notice of a special meeting shall also state the purposes of the meeting. A
notice of meeting shall be sufficient for that meeting and any adjournment of
it. If a shareholder transfers any shares after the notice is sent, it shall not
be necessary to notify the transferee. All shareholders may waive -notice of a
meeting at any time.
<PAGE>
Section 5. Shareholder Ouorum. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Any number of shareholders, even if less than a quorum, may
adjourn the meeting without further notice until a quorum is obtained.
Section 6. Shareholder Voting. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. An alphabetical list of all shareholders who are entitled to
notice of a shareholders, meeting along with their addresses and the number of
shares held by each shall be produced. at a shareholders, meeting upon the
request of any shareholder.
Section 7. Proxies. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof may vote in person or by proxy executed
in writing and signed by the shareholder or his attorney-in-fact. The
appointment of proxy will be effective when received by the Corporation's
officer or agent authorized to tabulate votes. No proxy shall be valid more than
11 months after the date of its execution unless a longer term is expressly
stated in the proxy.
Section 8. Validation. If shareholders who hold a majority of the voting stock
entitled to vote at a meeting are present at the meeting, and sign a written
consent to the meeting on the record, the acts of the meeting shall be valid,
even if the meeting was not legally called and noticed.
Section 9. Conduct of Business By Written Consent. Any action of the
shareholders may be taken without a meeting if written consents, setting forth
the action taken, are signed by at least a majority of shares entitled to vote
and are delivered to the officer or agent of the Corporation having custody of
the Corporation's records within 60 days after the date that the earliest
written consent was delivered. Within 10 days after obtaining an authorization
of an action by written consent, notice shall be given to those shareholders who
have not consented in writing or who are not entitled to vote on the action. The
notice shall fairly summarize the material features of the authorized action. If
the action creates dissenters' rights, the notice shall contain a clear
statement of the right of dissenting shareholders to be paid the fair value of
their shares upon compliance with and as provided for by the state law governing
corporations.
ARTICLE III. OFFICERS
---------------------
Section 1. Officers; Election; Resignation; Vacancies. The Corporation shall
have the officers and assistant officers that the Board of Directors appoint
from time to time. Except as otherwise provided in an employment agreement which
the Corporation has with an officer, each officer shall serve until a successor
is chosen by the directors at a regular or special meeting of the directors or
until removed. Officers and agents shall be chosen, serve for the terms, and
have the duties determined by the directors. A person may hold two or more
offices.
<PAGE>
Any officer may resign at any time upon written notice to the Corporation. The
resignation shall be effective upon receipt, unless the notice specifies a later
date. If the resignation is effective at a later date and the Corporation
accepts the future effective date, the Board of Directors may fill the pending
vacancy before the effective date provided the successor officer does not take
office until the future effective date. Any vacancy occurring in any office of
the Corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 2. Powers and Duties of officers. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as may be
prescribed by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
Section 3. Removal of officers. An of f icer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by the Board with
or without cause whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer, agent or member of a committee shall not of itself create contract
rights. Any officer, if appointed by another officer, may be removed by that
officer.
Section 4. Salaries. The Board of Directors may cause the Corporation to enter
into employment agreements with any officer of the Corpo ' ration. Unless
provided for in an employment agreement between the Corporation and an officer,
all officers of the Corporation serve in their capacities without compensation.
Section 5. Bank Accounts. The Corporation shall have accounts with financial
institutions as determined by the Board of Directors.
ARTICLE IV. DISTRIBUTIONS
-------------------------
The Board of Directors may, from time to time, declare distributions to its
shareholders in cash, property, or its own shares, unless the distribution would
cause (i) the Corporation to be unable to pay its debts as they become due in
the usual course of business, or (ii) the Corporation's assets to be less than
its liabilities plus the amount necessary, if the Corporation were dissolved at
the time of the distribution, to satisfy the preferential rights of shareholders
whose rights are superior to those receiving the distribution. The shareholders
and the Corporation may enter into an agreement requiring the distribution of
corporate profits, subject to the provisions of law.
<PAGE>
ARTICLE V. CORPORATE RECORDS
----------------------------
Section 1. Corporate Records. The corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time. The Corporation shall keep as permanent records minutes of all
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors on behalf of the
Corporation. The Corporation shall maintain accurate accounting records and a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by class of shares
showing the number and series of shares held by each.
The Corporation shall keep a copy of its articles or restated articles of
incorporation and all amendments to them currently in effect; these Bylaws or
restated Bylaws and all amendments currently in effect; resolutions adopted by
the Board of Directors creating one or more classes or series of shares and
fixing their relative rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding; the minutes of all shareholders,
meetings and records of all actions taken by shareholders without a meeting for
the past three years; written communications to all shareholders generally or
all shareholders of a class of series within the past three years, including the
financial statements furnished for the last three years; a list of names and
business street addresses of its current directors and officers; and its most
recent annual report delivered to the Department of State.
Section 2. Shareholders' Inspection Rights. A shareholder is entitled to inspect
and copy, during regular business hours at a reasonable location specified by
the Corporation, any books and records of the Corporation. The shareholder must
give the Corporation written notice of this demand at least five business days
before the date on which he wishes to inspect and copy the record(s). The demand
must be made in good faith and for a proper purpose. The shareholder must
describe with reasonable particularity the purpose and the records he desires to
inspect, and the records must be directly connected with this purpose. This
Section does not affect the right of a shareholder to inspect and copy the
shareholders I list described in this Article if the shareholder is in
litigation with the Corporation. In such a case, the shareholder shall have the
same rights as any other litigant to compel the production of corporate records
for examination.
<PAGE>
The Corporation may deny any demand for inspection if the demand was made
for an improper purpose, or if the demanding shareholder has within the two
years preceding his demand, sold or offered for sale any list of shareholders of
the Corporation or of any other corporation, has aided or abetted any person in
procuring any list of shareholders for that purpose, or has improperly used any
information secured through any prior examination of the records of this
Corporation or any other corporation.
Section 3. Financial Statements for Shareholders. Unless modified by resolution
of the shareholders within 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders with annual financial statements
which may be consolidated or combined statements of the Corporation and one or
more of its subsidiaries, as appropriate, that include a balance sheet as of the
end of the fiscal year, an income statement for that year, and a statement of
cash flows for that year. If financial statements are prepared for the
Corporation on the basis of generally accepted accounting principles, the annual
financial statements must also be prepared on that basis.
If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the President or the person responsible for the
Corporation's accounting records stating his reasonable belief whether the
statements were prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of preparation and describing any
respects in which the statements were not prepared on a basis of accounting
consistent with the statements prepared for the preceding year. The Corporation
shall mail the annual financial statements to each shareholder within 120 days
after the close of each fiscal year or within such additional time thereafter as
is reasonably necessary to enable the Corporation to prepare its financial
statements. Thereafter, on written request from a shareholder who was not mailed
the statements, the Corporation shall mail him the latest annual financial
statements.
Section 4. Other Reports to Shareholders. If the Corporation indemnifies or
advances expenses to any director, officer, employee or agent otherwise than by
court order or action by the shareholders or by an insurance carrier pursuant to
insurance maintained by the Corporation, the Corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next annual shareholders, meeting, or prior to the meeting if the
indemnification or advance occurs after the giving of the notice but prior to
the time the annual meeting is held. This report shall include a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
<PAGE>
If the Corporation issues or authorizes the issuance of shares for promises
to render services in the future, the Corporation shall report in writing to the
shareholders the number of shares authorized or issued, and the consideration
received by the corporation, with or before the notice of the next shareholders'
meeting.
ARTICLE VI. STOCK CERTIFICATES
------------------------------
Section 1. Issuance. The Board of Directors may authorize the issuance of some
or all of the shares of any or all of its classes or series without
certificates. Each certificate issued shall be signed by the President and the
Secretary (or the Treasurer). The rights and obligations of shareholders are
identical whether or not their shares are represented by certificates.
Section 2. Registered Shareholders. No certificate shall be issued for any share
until the share is fully paid. The Corporation shall be entitled to treat the
holder of record of shares as the holder in fact and, except as otherwise
provided by law, shall not be bound to recognize any equitable or other claim to
or interest in the shares.
Section 3. Transfer of Shares. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation of the share certificates
duly endorsed by the holder of record or attorney- in- fact. If the surrendered
certificates are canceled, new certificates shall be issued to the person
entitled to them, and the transaction recorded on the books of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. If a shareholder claims to
have lost or destroyed a certificate of shares issued by the Corporation, a new
certificate shall be issued upon the delivery to the Corporation of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed, and, at the discretion of the Board of Directors, upon the deposit
of a bond or other indemnity as the Board reasonably requires.
ARTICLE VII. INDEMNIFICATION
----------------------------
Section 1. Right to Indemnification. The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director or officer of the Corporation to the fullest
extent permitted or authorized by current or future legislation or judicial or
administrative decision against all fines, liabilities, costs and expenses,
including attorneys, fees, arising out of his or her status as a director,
officer, agent, employee or representative. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking an
indemnification may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, whether or not the Corporation would have the
legal power to indemnify them directly against such liability.
<PAGE>
Section 2. Advances. Costs, charges and expenses (including attorneys, fees)
incurred by a person referred to in Section I of this Article in defending a
civil or criminal proceeding shall be paid by the Corporation in advance of the
final disposition thereof upon receipt of an undertaking to repay all amounts
advanced if it is ultimately determined that the person is not entitled to be
indemnified by the Corporation as authorized by this Article, and upon
satisfaction of other conditions required by current or future legislation.
Section 3. Savings Clause. If this Article or any portion of it is invalidated
on any ground by a court of competent jurisdiction, the Corporation nevertheless
indemnifies each person described in Section 1 of this Article to the fullest
extent permitted by all portions of this Article that have not been invalidated
and to the fullest extent permitted by law.
ARTICLE VIII. AMENDMENT
-----------------------
These Bylaws may be altered, amended or repealed, and new Bylaws adopted,
by a majority vote of the directors or by a vote of the shareholders holding a
majority of the shares.
I certify that these are the Bylaws dopted by the Board of Directors of the
Corporation.
/s/ David Gamache
-----------------
Secretary
Date: October 23, 1997
CLANCY AND CO., P.L.L.C.
CERTIFIED PUBLIC ACCOUNTANT 2601 E.THOMAS ROAD PHOENIX, AZ 85016
(602) 266-2646 FAX (602) 224-9496
March 6, 2000
CONSENT OF INDEPENDENT AUDITOR
------------------------------
As the independent auditor for Zeta Corporation, I hereby consent to the
incorporation by reference in this Form 10SB Statement and any amendments
thereto of my report, relating to the financial statements and financial
statement schedules of Zeta Corporation for the years ended December 31, 1999
and 1998 included on Form 10SB and amendments. Reports are dated February 15,
2000 for the year ended December 31, 1999 and December 31, 1998
/s/ Clancy and Co., P.L.L.C.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 181,884 3,054
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 182,009 3,054
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 185,009 6,054
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 10,300 7,300
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 185,009 6,054
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 130,756 473,905
<LOSS-PROVISION> (130,756) (473,905)
<INTEREST-EXPENSE> 9,711 1,197
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 0
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No. ___________________
Name of Offeree : __________________________
PRIVATE PLACEMENT MEMORANDUM
Zeta Corporation
(a Florida Corporation) (" Company ")
3,000,000 Common Shares and 3,000,000 Common Share Purchase Warrants
$.001 Par Value
$0.10 Per Share
Warrant exercisable at $0.10 per Share expiring on March 22nd, 2003
MINIMUM INVESTMENT
50,000 SHARES
$5,000.00
Principal Executive Offices:
6805 Sundance Trail
Riverside, California 92506
<PAGE>
The date of this Memorandum is March 22nd, 1999
Zeta Corporation
<TABLE>
<CAPTION>
<S> <C>
Type of securities offered : Shares of the Company's common stock, $0.001
par value.
Number of Units offered : 3,000,000 Shares and 3,000,000 Warrants
Price per security : $0.10 per share. Warrants exercisable at
$0.10 per Share up until March 22nd, 2003.
Total proceeds : If all shares sold : $300,000. If all
warrants exercised $600,000.
</TABLE>
Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No
If yes , what percent is commission of price to public ?
Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No
Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No
Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No
Is this offering limited to members of a special group, such as employees of the
Company or individuals ?
[ ] Yes [ X ] No
Is transfer of the securities restricted ?
[ ] Yes [ X ] No
<PAGE>
THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL
TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR APRIL 15th, 1999. THE COMPANY
IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL SHARES IN
THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE CLOSINGS. (
SEE " DESCRIPTION OF THE OFFERING." )
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY
OTHER PURPOSE. THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND
ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE SHARES IN THE OFFERING.
THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES
HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND
SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE
JUDGE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING
DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION, THE OFFEROR DOES NOT
INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFER TO BUY THESE SECURITIES
UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH
DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE
PLACEMENT TO A LIMITED NUMBER OF INVESTORS. THIS MEMORANDUM DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT
POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), OR THE SECURITIES LAWS OF FLORIDA OR OTHER STATES, AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS NO PUBLIC MARKET FOR SECURITIES
OF THE COMPANY. EVEN IF SUCH MARKET EXISTED, PURCHASERS OF SHARES WILL BE
REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE ABLE TO
RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND QUALIFIED
UNDER THE APPLICABLE STATE STATUTES (UNLESS AN EXEMPTION FROM SUCH REGISTRATION
AND QUALIFICATION IS AVAILABLE). PURCHASERS OF THE SHARES SHOULD BE PREPARED TO
BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE
SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL
RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE
SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK
FACTORS."
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY
COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS,
MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT
ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER
PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS
CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.
NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR
ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION
WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE
PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO
HEREIN . ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION
AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD
CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.
This Company :
[ ] Has never conducted operations.
[ X ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________
( Check at one , as appropriate )
This offering has been registered for offer and sale in the following states :
<TABLE>
<CAPTION>
<S> <C> <C> <C>
State State File No Effective Date
</TABLE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Cover Page 1
Disclosure Statements 2
Table of Contents 5
Summary of the Offering 6
The Company 7
Risk Factors 8
Use of Proceeds 10
Description of Securities 11
Terms of the Offering 11
Directors, Officers and key Personnel of the Company 12
Principal Stockholders 13
Remuneration of Directors and Officers 13
Reports 13
Legal Matters 14
Litigation 14
Additional Information 14
State Restrictions 14-16
</TABLE>
<PAGE>
EXHIBITS
Exhibit A Subscription Agreement 17-22
This is an original unpublished work protected under copyright laws of the
United States and other countries. All Rights Reserved. Should publication
occur, then the following notice shall apply: Copyright 1999 Zeta Corporation.
All Rights Reserved. No part of this document may be reproduced, stored in a
retrieval system or transmitted, in any form or any means, electronic,
mechanical, photocopying, recording or otherwise, without the prior written
permission of Zeta Corporation.
SUMMARY OF THE OFFERING
The following material is intended to summarize information contained elsewhere
in this Memorandum. This summary is qualified in its entirety by express
reference to the Memorandum and the exhibits referred to therein. Each
prospective investor is urged to read this Memorandum in its entirety.
Zeta Corporation, a Florida corporation (the " Company "), is the issuer of the
Shares. The address of the Company is 6805 Sundance Trail, Riverside,
California, 92506.
The Offering. The Company is offering up to 3,000,000 of its common stock, par
value $.001 per share (the "Shares"), along with 3,000,000 common share purchase
warrants. The Minimum investment for an Investor is 50,000 Shares or $5,000.00.
The Company, in its sole discretion, may accept subscriptions for up to an
aggregate of 3,000,000 or $300,000.00 until April 15th, 1999, or until such
earlier date as the Company determines that this Offering shall be terminated.
In its sole discretion, the Company may elect to terminate this Offering even if
subscriptions for Shares have been received and accepted by the Company. See
"Terms of the Offering" and "Subscription for Shares".
<PAGE>
Company's Business: Zeta Corporation is involved in the early stages of
developing a business to business Internet portal. The Company's objective is to
serve as an online business to business forum where entrepreneurs and start-up
companies seeking capital and high net worth investors seeking to make
investments can meet and transact business.
As at December 31st , 1999, the Company had not generated any revenues and due
to the early stage nature of the Company's business, and has incurred ongoing
operating losses.
Risk Factors: The offering involves speculative investment with substantial
risks, including those associated with an unproven start-up venture, and risks
associated with the industry. Although the Company will use its best efforts to
protect the investments of the Investors, there is no assurance that the
Company's efforts will be successful. Accordingly, a prospective Investor should
not view the Company or its officers, directors, employees or agents as
guarantors of the financial success of an investment in the Shares. See "Risk
Factors".
Limited Transferability of the Shares. The Shares have not been registered under
the 1933 Act or the securities laws of any state. The Shares of common stock
purchased pursuant to this Offering will be offered under Rule 504. See "Risk
Factors" and Terms of the Offering".
Limitation of Liability. Except for the amounts paid by Investors for their
purchase of any Shares, and as required by Florida State law, no investor will
be liable for any debts of the Company or be obligated to contribute any
additional capital or funds to the Company. See " Risk Factors".
Suitability Standards. Each Investor must meet certain eligibility standards
established by the Company for the purchase of the Shares. See "Terms of the
Offering" and "Subscription for Shares".
Use of Proceeds. The Company plans to use the money received from this offering
to further develop its business, hire additional personnel and for working
capital. The funds will not be deposited into an escrow account and will be
available to the Company immediately. No minimum amount of Shares is required to
be sold.
THE COMPANY
Exact corporate name: Zeta Corporation
<PAGE>
State and date of incorporation: Florida
October 21, 1997
Street address of principal office: 6805 Sundance Trail
Riverside, California
Fiscal Year: December 31.
PRODUCTS
Zeta Corporation is involved in the early stages of developing a business to
business Internet portal. The Company's objective is to serve as an online
business to business forum where entrepreneurs and start-up companies seeking
capital and high net worth investors seeking to make investments can meet and
transact business.
As at December 31st , 1999, the Company had not generated any revenues and due
to the early stage nature of the Company's business, and has incurred ongoing
operating losses.
MATERIAL CONTRACTS
None.
MARKETING APPROACHES
The Company expects to market its online services through direct mail,
newspapers, magazines, radio and through online advertising using banner
advertisements and e-mails.
RISK FACTORS
An investment in the Shares involves a high degree of risk. No prospective
Investor should acquire the Shares unless he can afford a complete loss of his
investment. The risks described below are those which the Company deems most
significant as of the date hereof. Other factors which may have a material
impact on the operations of the Company may not be foreseen. In addition to the
other factors set forth elsewhere in this Memorandum, prospective Investors
should carefully consider the following specific risk factors:
<PAGE>
A. OPERATING RISKS
General. The economic success of an investment in the Shares depends, to a large
degree, upon many factors over which the Company has no control. These factors
include general economic, industrial and international conditions; inflation or
deflation; fluctuation in interest rates; the availability of, and fluctuations
in the money supply. The extent, type and sophistication of the Companys
competition; and government regulations.
Development Stage Company. The Company was organized in 1997 and has engaged in
minimal business operations. Accordingly, the Company is a development stage
company as defined by Statement of Financial Accounting Standards No.7.
Dependence on Key Personnel. The Company's success will depend, in large part,
upon the talents and skills of key management personnel. To the extent that any
of its management personnel is unable or refuses to continue association with
the Company, a suitable replacement would have to be found. There is no
assurance that the Company would be able to find suitable replacements for such
personnel, or that suitable person.
Lack of Adequate Capital. Additional capital will be required in the Companys
future operations. In the absence of any additional funding, the Company's
operations may be affected negatively. Therefore, the Company's management will
be careful and use its best judgement in directing the affairs of the Company in
a manner that maximizes its chances of success and, accordingly, the best
chances of raising future funding.
Inherent Business Risks. The business that the Company plans to engage in
involves substantial and inherent risks associated with a start-up and
development company with limited financial resources.
B. INVESTMENT RISKS
Speculative Investment. The Shares are a very speculative investment. There can
be no assurance that the Company will attain its objective and it is very likely
that the Company will not be able to advance any business activities and
Investors could lose their entire investments.
Arbitrary Purchase Price; No Market. The purchase price for the Shares has been
arbitrarily determined by the Company, and is not necessarily indicative of
their value. No assurance is or can be given that the Shares, although
transferable, could be sold for the purchase price, or for any amount. There
currently is no market for resale of the Shares.
<PAGE>
Restriction of Transferability. While the Company believes that no restriction
exists for the transfer of the Shares being offered by the Company, an
investment in the Shares may be a long term investment. Investors who do not
wish or who are not financially able to hold the Shares for a substantial period
of time are advised against purchasing Shares. The Shares are not registered
under the 1933 Act or under the securities laws of any state, but are being
offered by the Company under the exemption from registration provided by Rule
504 under Regulation D and related state and foreign exceptions.
"Best Efforts" Offering. The Shares are being offered on a "best efforts" basis
by the Company. No person or entity is committed to purchase or take down any of
the Shares offered pursuant to this Offering. No escrow account is maintained
and no minimum amount is required to be sold. Funds will be available to the
Company upon receipt.
Management and Operation Experience. The Company's officers, directors and other
personnel have engaged in a variety of businesses and have been involved in
business financing, operations and marketing, but their experience in these
fields is limited. There is no assurance that such experience will result in the
success of the Company.
Other Risks. No assurance can be given that the Company will be successful in
achieving its stated objectives, that the Company's business is undertaken by
the Company, will generate cash sufficient to operate the business of the
Company or that other parties entering into agreements relating to the Company's
business will meet their respective obligations.
Dividends. The Company's Board of Directors presently intends to cause the
Company to follow a policy of retaining earnings, if any, for the purpose of
increasing the net worth and reserves of the Company. Therefore, there can be no
assurance that any holder of Common Stock will receive any cash, stock or other
dividends on his shares of Common Stock. Future dividends on Common Stock, if
any, will depend on the future earnings, financing requirements and other
factors.
Additional Securities Available for Issuance. The Company's Certificate of
Incorporation authorizes the issuance of 100,000,000 shares of Common Stock. At
this time, 7,300,000 shares of common stock have been issued. Accordingly,
including those purchasing the shares offered with the sale of these units,
investors will be dependent upon the judgement of management in connection with
the future issuance and sale of shares of the Company's capital stock, in the
event purchasers can be found for such securities.
<PAGE>
USE OF PROCEEDS
The Company will incur expenses in connection with the Offering in an amount
anticipated not to exceed $1,500.00 for legal fees, accounting fees, filing
fees, printing costs and other expenses. If the maximum number of Shares are
sold, the Company anticipates that the net proceeds to it from the Offering will
be as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Maximum
Item Shares Sold
---- -----------
Gross Proceeds of Offering $300,000.00
Offering Expenses
Cost of Offering $1,500.00
TOTAL PROCEEDS RECEIVED: $298,500.00
Operating Expenses
Development of Internet assets & hiring new staff $200,000.00
Working Capital $98,500.00
TOTAL $298,500.00
</TABLE>
NET FUNDS AVAILABLE TO COMPANY
The Company estimates that the costs of the Offering will be as follows: (i)
legal fees of approximately $500.00, (ii) accounting fees of approximately
$500.00 and (iii) printing and other miscellaneous costs of approximately
$500.00. A sales commissions will be paid only to NASD broker/dealers and no
other person will receive any commissions or remuneration from the Company.
<PAGE>
The net proceeds of this offering, assuming all the Shares are sold, will be
sufficient to sustain the planned marketing and development activities of the
Company for a period of 12 months, depending upon the number of Shares sold in
the offering and other factors. Even if all the Shares offered hereunder are
sold, the Company will require additional capital in order to fund continued
development activities and capital expenditures that must be made. The Company's
business plan is based on the premise that additional funding will be obtained
through funds generated from operations, the exercising of the options and
warrants by shareholders, additional offerings of its securities, or other
arrangements. There can be no assurance that any securities offerings will take
place in the future, or that funds sufficient to meet any of the foregoing needs
or plans will be raised from operations or any other source.
DESCRIPTION OF SECURITIES
The following discussion describes the stock and other securities of the
Company.
General. The Company currently has 100,000,000 authorized common shares, par
value $.001 per share, of which 7,300,000 common shares were issued and
outstanding as of the date of this Placement. All of the outstanding common
shares of the Company are fully paid for and nonassessable.
Voting Rights. Each share of the 7,300,000 shares of the Company's common stock
held by its current shareholders is entitled to one vote at shareholders
meetings.
Dividends. The Company has never paid a dividend and does not anticipate doing
so in the near future.
Options. The Company currently has no options outstanding in relation to its
common stock.
Miscellaneous Rights and Provisions. Shares of the Company's common stock have
no pre-emptive rights. The Shares do not have any conversion rights, no
redemption or sinking fund provisions, and are not liable to further call or
assessment. The Shares, when paid for by Investors, will be fully paid and
nonassessable. Each share of the Company's common shares is entitled to a pro
rata share in any asset available for distribution to holders of equity
securities upon the liquidation of the Company.
TERMS OF THE OFFERING
The Company is offering to qualified investors a maximum of 3,000,000 Shares
(Units) at a purchase price of $0.10 per share of the Company's common stock,
with one warrant that entitles the purchaser an additional one common share when
exercised at $0.10 per share on or before March 22nd, 2003. The Company may, in
its sole discretion, terminate the offering at any time. The Offering will close
on the earliest of April 15th, 1999 or the election of the Company when all of
the Shares are sold, in no event later than April 15th, 1999. The minimum
subscription is $5,000.00 (50,000 Shares) per Investor, although the Company, in
its sole discretion, may accept subscriptions for lesser amounts.
<PAGE>
Constitution of Shares: Each Unit will consist of one fully paid and
non-assessable common share in the capital stock ( the "Share" ) of the Company
and the right to purchase one share purchase warrant ( the "Warrants" ) with
terms as described below.
Terms of Warrants: All Warrants will;
(a) be comprised in one warrant certificate ( the "Warrant Certificate" ),
registered in the name of the purchaser, representing an aggregate number
of Warrants which be equal to the number of Units being acquired hereunder
by the purchaser;
(b) be non-transferable;
(c) will be subject to the terms and conditions which are adopted by the
Company for the Warrants, which terms and conditions will, amongst other
things.
(i) provide for an adjustment in class and number of shares issuable
pursuant to any exercise thereof upon the occurrence of certain events,
including any subdivision, consolidation or re-classification of the
shares, and
(ii) not provide for any adjustment in the number of shares issuable
pursuant to any exercise thereof in event of the Company issuing any other
shares, warrants or options to acquire shares at prices either above, at or
below the exercise price of Warrants;
(d) and each Warrant will provide for the right to purchase one additional
Share. The Warrant will be exercised in whole or in part from time to time
at any time prior to 4:30 p.m. (PST) on March 22nd, 2003 at $0.10 per
Share.
The Shares are being offered and sold by the Company under the exemption from
registration contained in Rule 504 under Regulation D and related exemptions
from state registration requirements.
The Shares are being offered on a "best efforts" basis by the Company and
certain expenses of the Offering will be paid from the proceeds of the Offering.
The Company anticipates that such expenses will not exceed $1,500.00 as detailed
in the Use of Proceeds.
<PAGE>
DIRECTORS, OFFICERS AND KEY PERSONNEL OF THE COMPANY
Officers and Directors. The following information sets forth the names of the
- ----------------------- officers and directors of the Company, their present
position with the Company and biographic information:
HARMEL S. RAYAT, President, Director. Mr. Rayat has been in the venture capital
industry since 1981 and since January 1993 has been the president of Hartford
Capital Corporation, a company which specializes in providing early stage
funding and investment banking services to emerging growth corporations. Mr.
Rayat has been a director and President of the Company since December 15th,
1998.
KEN FINKELSTEIN , Director, Secretary Treasurer. Following his graduation from
law school in 1990, Mr. Finkelstein gained admission to the Bar in the Province
of Ontario and British Columbia, as well as the State of New York and
Washington. Mr. Finkelstein maintains an office in Vancouver, BC, where he is
involved in the practice of law and pursuit of business opportunities. Mr.
Finkelstein has been a director of the Company since inception.
DAVID GAMACHE, Director. Mr. Gamache has extensive sales and marketing
experience in various businesses and well versed in all aspects of the Internet.
Mr. Gamache has been a director of the Company since inception.
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the shares of Common
Stock of the Company owned of record and beneficially held as of the date of
this Memorandum by (i) each person known to the Company to own of record or
beneficially 5% or more of the 7,300,000 outstanding shares of Common Stock of
the Company, (ii) each Director of the Company, and (iii) all officers and
directors of the Company as a group, as of the date of this Memorandum and
adjusted to reflect share holdings after the sale of the maximum number of
Shares offered hereby.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Ownership No Shares % No Shares %
Name & Position Pre Issue Post Issue
Harmel S. Rayat 7,000,000 95.9% 7,000,000 67.9%
</TABLE>
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Company who are also employees of the Company receive no
additional compensation for their services as Directors. The Company intends, in
the future, to pay Directors who are not employees of the Company, compensation
of $500 per Director's Meeting, as well as reimbursements of any out of pocket
expenses incurred in the Company's behalf.
REPORTS
The books and records of the Company will be maintained by the Company. The
books of account and records shall be kept at the principal place of business of
CancerOption.com, Inc. and each shareholder, or his duly authorized
representatives, shall have upon giving ten (10) days prior notice, access
during reasonable business hours to such books and records, and the right to
inspect and copy them. Within 120 days after the close of each fiscal year,
reports will be distributed to the shareholders which will include financial
statements (including a balance sheet and statements of income, shareholder's
equity, and cash flows) prepared in accordance with generally accepted
accounting principals, with a reconciliation to the tax information
supplementary supplied, accompanied by a copy of the accountant's report.
LEGAL MATTERS
Gary R. Blume, Esquire, 11811 North Tatum Blvd, Suite 1025, Phoenix, Arizona,
85028 will pass upon certain matters for the Company.
LITIGATION
The Company is not presently involved in any material litigation or other legal
proceedings.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavour to provide the information to such persons. All
offerees are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
<PAGE>
STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS
NOTICE TO ARIZONA RESIDENTS:
These securities are being sold in reliance upon Arizona's Limited Offering
exemption from registration pursuant to A.R.S. 44-1844.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD UNLESS THEY ARE
REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS AVAILABLE.
As a purchaser of such securities hereby represent that I understand these
securities cannot be resold without registration under the Arizona Securities
Act or an exemption therefrom. I am not an underwriter within the meaning of
A.R.S 44-1801(17), and I am acquiring these securities for myself, not for other
persons. If qualifying as a non-accredited investor, I further represent that
this investment does not exceed 20% of my net worth ( excluding principal
residence, furnishings therein and personal automobiles).
NOTICE TO CALIFORNIA RESIDENTS:
These securities are being sold in reliance upon California's Limited Offering
Exemption. 25102(f) of the California Code, as amended.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
<PAGE>
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND
OR ENDORSE THE PURCHASE OF THESE SECURITIES. NOTICE TO COLORADO RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE COLORADO SECURITIES ACT OF 1981 BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE
SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON
OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION IS
REQUIRED.
NOTICE TO NEW YORK RESIDENTS:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE
ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPOSED TO BE SUMMARIZED HEREIN.
Purchaser Statement:
I understand that this Offering of Shares has not been reviewed by the Attorney
General of the State of New York because of the Offeror's representations that
this intended to be a non-public Offering pursuant to the Regulation D Rule 504
or 505, and that if all of the conditions and limitations of Regulation D are
not complied with, the Offering will be resubmitted to the Attorney General for
amended exemption. I understand that any literature used in connection with this
Offering has not been previously filed with the Attorney General and has not
been reviewed by the Attorney General. This Investment Unit is being purchased
for my own account for investment, and not for distribution or resale to others.
I agree that I will not sell or otherwise transfer these securities unless they
are registered under the Federal Securities Act of 1933 or unless an exemption
from such registration is available. I represent that I have adequate means of
providing for my current needs and possible personal contingencies of financial
problems, and that I have no need for liquidity of this investment.
<PAGE>
It is understood that all documents, records and books pertaining to this
investment have been made available to my attorney, my accountant, or my offeree
representative and myself, and that, upon reasonable notice, the books and
records of the issuer will be available for inspection by investors, at
reasonable hours at the principal place of business.
EXHIBITS
ZETA CORPORATION
SUBSCRIPTION DOCUMENT
1. The undersigned hereby subscribes for _____________ shares of common stock
(hereinafter "Shares"), as described in the Private Offering Memorandum dated
March 22nd, 1999 ("Memorandum"), of Zeta Corporation, a Florida corporation (the
"Company"), being offered by the Company for a purchase price of $0.10 per Unit
and tenders herewith the sum of $_________________ in payment therefore,
together with tender of this Subscription Document.
2. The undersigned represents and warrants that he is a bona fide resident of
the State of ______________ .
3 The undersigned acknowledges:
a. Receipt of a copy of the Private Offering Memorandum;
b. That this subscription, if accepted by the Company, is legally binding and
irrevocable;
c. That the Company has a very limited financial and operating history;
d. That the Shares have not been registered under the Securities Act of 1933, as
amended, in reliance upon exemptions contained in that Act, and that the Shares
have not been registered under the securities acts of any state in reliance upon
exemptions contained in certain state's securities laws; and
e. That the representations and warranties provided in this Subscription
Document are being relied upon by the Company as the basis for the exemption
from the registration requirements of the Securities Act of 1933 and of the
applicable state's securities laws.
4. The undersigned represents and warrants as follows:
a. That the undersigned subscriber is purchasing said Shares as an investment
and said Shares are purchased solely for the undersigned's own account.
b. That the undersigned subscriber has sufficient knowledge and experience in
financial and business matters to evaluate the merits and risks of an investment
in the Shares;
<PAGE>
c. That the undersigned subscriber is able to bear the economic risk of an
investment in the Shares;
d. That the undersigned subscriber has read and is thoroughly familiar with the
Private Offering Memorandum and represents and warrants that he is aware of the
high degree of risk involved in making investment in the Shares;
e. That the undersigned subscriber's decision to purchase the Shares is based
solely on the information contained in the Private Offering Memorandum and on
written answers to such questions as he has raised concerning the transaction;
f. That the undersigned subscriber is purchasing the Shares directly from the
Company and understands that neither the Company nor the Offering is associated
with; endorsed by nor related in any way with any investment company, national
or local brokerage firm or broker dealer. The undersigned subscriber's decision
to purchase the Shares is not based in whole or in part on any assumption or
understanding that an investment company, national or local brokerage firm or
other broker dealer is involved in any way in this Offering or has endorsed or
otherwise recommended an investment in these Shares.
g. That the undersigned subscriber has an investment portfolio of sufficient
value that he could suitably absorb a high risk illiquid addition such as an
investment in the Shares.
h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):
[ ] I am a natural person whose individual net worth, or joint worth with my
spouse at the time of purchase, exceeds $200,000;
[ ] I am a natural person who had an individual income in excess of $50,000 or
joint income with my supose in excess of $50,000 in each of the two most recent
years and who reasonably expects an income in excess of those amounts in the
current year;
i. That Regulation D requires the Company to conclude that each investor has
sufficient knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the shares, or to
verify that the investor has retained the services of one or more purchaser
representatives for the purpose of evaluating the risks of investment in the
shares, and hereby represents and warrants that he has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in the shares and of making an informed
investment decision and will not require a purchaser representative.
<PAGE>
5. The undersigned understands and agrees that this subscription is made subject
to each of the following terms and conditions:
a. The Company shall have the right to accept or reject this subscription, in
whole or part, for any reason. Upon receipt of each Subscription Document, the
Company shall have until April 15th, 1999 in which to accept or reject it. If no
action is taken by the Company within said period, the subscription shall be
deemed to have been accepted. In each case where the subscription is rejected,
the Company shall return the entire amount tendered by the subscriber, without
interest;
b. That the undersigned subscriber will, from time to time, execute and deliver
such documents or other instruments as may be requested by the Company in order
to aid the Company in the consummation of the transactions contemplated by the
Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full power
of substitution, as attorney-in-fact for the purpose of executing and
delivering, swearing to and filing, any documents or instruments related to or
required to make any necessary clarifying or conforming changes in the
Subscription Document so that such documentis correct in all respects.
7. As used herein, the singular shall include the plural and the masculine shall
include the feminine where necessary to clarify the meaning of this Subscription
Document. All terms not defined herein shall have the same meanings as in the
Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this
_____ day of ____________, 2000.
Number of Shares ___________________
Total amount tendered $___________________
INDIVIDUAL OWNERSHIP: __________________________________________
Name ( Please Type or Print )
<PAGE>
__________________________________________
Signature
Social Security Number____________________
JOINT OWNERSHIP: _____________________________________
Name ( Please Type or Print )
_____________________________________
Signature
_____________________________________
Social Security Number
OTHER OWNERSHIP _____________________________________
Name ( Please Type or Print )
By:__________________________________
( Signature )
_____________________________________
Title
_____________________________________
Employer Identification Number
<PAGE>
ADDRESS:__________________________________________________________________
Street City State Zip Phone ( Residence )_____________________ ; Phone (
Business ) ________________________
I,________________________________, do hereby certify that the representations
made herein concerning my financial status are true, and that all other
statements contained herein are true, accurate and complete to the best of my
knowledge.
Date: ___________________ , 1999.
____________________________________
Signature
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription Document to
_________________ on the _______ day of __________________ , 1999.
_____________________________________
Signature
<PAGE>
ACCEPTANCE
This Subscription is accepted by Zeta Corporation, as of the ______ day of
____________________ , 1999.
Zeta Corporation
By :_____________________________________
Director
