UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
CORPORATE TOURS & TRAVEL, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0306099
(State of organization) (I.R.S. Employer Identification No.)
8452 Boseck Street, Suite 272, Las Vegas, NV 89128
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 228-4688
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
Preferred Stock, par value
$0.001 per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
Corporate Tours & Travel, Inc. (the "Company") is a Nevada
corporation formed on September 23, 1993. Its principal place of
business is located at 8452 Boseck Street, Suite 272, Las Vegas,
NV 89128. The Company was organized to engage in any lawful
corporate business, including but not limited to, participating
in mergers with and acquisitions of other companies. The Company
has been in the developmental stage since inception and has no
operating history other than organizational matters.
The Company was formed for the purpose of being a travel agency.
The incorporators were Mr. Lewis Eslick, and Mr. Henry Richard
Vicencio. Mr. Eslick and his then wife each purchased stock in
the Company, Mr. Eslick purchasing 2,300,000 shares, Ms. Eslick,
1,800,000 shares. Mr. Eslick sold or gifted a total of 2,000,000
of his shares to three business acquaintances, including Andrew
Berney. These three individuals sold or gifted 1,660,000 of the
2,000,000 shares to a total of 31 of their friends and business
associates. Ms. Eslick sold or gifted a total of 1,620,000 of her
shares to a total of nine business acquaintances. All such sales
or transfers were made in reliance on section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). The
Company was unable to secure financing to achieve its objective,
and the original business plan was abandoned. The primary
activity of the Company currently involves seeking a company or
companies that it can acquire or with whom it can merge. The
Company has not selected any company as an acquisition target or
merger partner and does not intend to limit potential candidates
to any particular field or industry, but does retain the right to
limit candidates, if it so chooses, to a particular field or
industry. The Company's plans are in the conceptual stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item
2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to file
periodic reports is suspended pursuant to the Exchange Act, the
Company anticipates that it will continue to voluntarily file
such reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it completes a business combination. This may result
in the Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will identify a business opportunity or complete
a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the identified business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete
with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no
arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be
no assurance the Company will successfully identify and evaluate
suitable business opportunities or conclude a business
combination. Management has not identified any particular
industry or specific business within an industry for evaluations.
The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its
original shareholders, the Company never commenced any
operational activities. There is no assurance the Company will be
able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target business
opportunity to have achieved, and without which the Company would
not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth, or other
negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and
non "arms-length" transactions may also arise in the event the
Company's officers or directors are involved in the management of
any firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this
policy could be changed while current management is in control of
the Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act") must provide certain information about
significant acquisitions, including certified financial
statements for the company acquired, covering one or two years,
depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. If
there is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within
a particular business or industry, thereby increasing the risks
associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors
of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a
public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business
combination with the Company. The perceived adverse consequences
may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders, and
the inability or unwillingness to comply with various federal and
state securities laws enacted for the protection of investors.
These securities laws primarily relate to registering securities
and full disclosure of the Company's business, management, and
financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize
the federal and state tax consequences to both the Company and
the target entity. Management cannot assure that a business
combination will meet the statutory requirements for a tax-free
reorganization, or that the parties will obtain the intended tax-
free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes, which may have an adverse effect on both
parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than incur
the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. As a
result of recent changes in federal law, non-issuer trading or
resale of the Company's securities is exempt from state
registration or qualification requirements in most states.
However, some states may continue to restrict the trading or
resale of blind-pool or "blank-check" securities. Accordingly,
investors should consider any potential secondary market for the
Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation.
At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any
specific business or company, and the Company has not identified
any specific business or company for investigation and
evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under
this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict the Company's
virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common
stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid
technological advances being made in some industries, and
shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statues) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to benefit from
the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds to
acquire a target company and, therefore, could commit those funds
to the operations of the business, to combinations with other
target companies, or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the
assets of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender
would be able to exercise the remedies provided by law or by
contract. These leveraging techniques, while reducing the amount
of funds that the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the Company. No
assurance can be given as to the terms or availability of
financing for any acquisition by the Company. During periods when
interest rates are relatively high, the benefits of leveraging
are not as great as during periods of lower interest rates,
because the investment in the business held on a leveraged basis
will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders
from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company.
It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the
Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of any
acquired business opportunity until such time as the Company has
successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management, while not especially experienced in matters relating
to the new business of the Company, will rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants
or advisors, other than the Company's legal counsel and
accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In
the past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary in the industry, the Company may pay a finder's
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors and
will be in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably
down to 1% in a $4,000,000 transaction. Management has adopted a
policy that such a finder's fee or real estate brokerage fee
could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such
person plays a material role in bringing a transaction to the
Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Management"). Management intends to concentrate on
identifying prospective business opportunities which may be
brought to its attention through present associations with
management. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may
be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel
of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate
the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business
in its development stage (in that it has not generated
significant revenues from its principal business activities prior
to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in control
of the Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity,
which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event
the Company acquires a target company with substantial assets.
Any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares
held by the Company's then shareholders, including purchasers in
this offering.
Management has advanced, and will continue to advance, funds
which shall be used by the Company in identifying and pursuing
agreements with target companies. Management anticipates that
these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment
company" as an issuer which is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities. While the Company does not intend to engage
in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space from, Mr. Eslick, a director and officer, at no cost to the
Company, and Management expects this arrangement to continue. The
Company pays its own charges for long distance telephone calls
and other miscellaneous secretarial, photocopying, and similar
expenses. This is a verbal agreement between Mr. Eslick, a
director and officer and the Board of Directors.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
As of May 6, 1998, there were no individuals known by management
to own 5% or more of the Company's common stock. The following
table sets forth the stock held by current management.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Paul B. Eslick 1,000 0.02%
P.O. Box 1769
Paradise, CA 95967
Common Patsy Harting 1,000 0.02%
14133 Elmira Circle
Magalia, CA 95954
Common All officers and 2,000 0.05%
directors (2
individuals)
</TABLE>
Note: Mr. Lewis Eslick, the Company's President, and Ms. Leslie
Eslick, a former officer and director, were previously married.
Ms. Eslick owns 180,000 shares of the Company's common stock. Mr.
and Ms. Eslick are no longer married, and disclaim beneficial
ownership of the shares held by each other.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Lewis M. Eslick 60 President /
8452 Boseck Street, Director
#272
Las Vegas, NV 89128
Paul B. Eslick 64 Secretary / Director
P.O. Box 1769
Paradise, CA 95967
Patsy Harting 58 Treasurer / Director
14133 Elmira Circle
Magalia, CA 95954
</TABLE>
Lewis M. Eslick; President/Director
Mr. Lewis M. Eslick has been President and a Director of the
Registrant since its inception. Since August of 1995, he has been
an owner and served as Geschaeftsfuehrer (Assistant Managing
Director) of Xaxon Immobilien und Anlagen Consult GmbH. Under Mr.
Eslick's direction, the company was awarded a full 34-C License,
which allows every business except banking operations. The
company consults with major development companies of the European
Economic Community and the United States of America.
From April, 1994, through December, 1994, Mr. Eslick was CEO of
Travel Masters, where he developed strategy and a business plan
for the company, and the structure to establish a central
reservation complex to replace Airline City Ticketing Offices in
Reno and Las Vegas, Nevada using Electronic Ticket Delivery
Networks (ETDN) which led to ticketless travel.
From 1986 to the Present, Mr. Eslick has been CEO of Mirex, Inc.,
an international consulting firm. He was responsible for several
successful negotiations on behalf of Bechtel Engineering and
Minerals, including:
A twelve-berth harbor to accommodate ocean cargo vessels of
up to 50,000 DTW at Mawan Harbor, the mouth of the Pearl
River
The Shenzhen Petro-Chemical Refinery, with an operating
capacity of 68,000 barrels per day.
Arranged financing for the Mawan Port Facility with the
assistance of Triad Enterprises S.A. Banco Arabe de Espanole
secured a bank commitment for $375,000,000 (US) with very
favorable interest rates and set-off principal payments.
From 1983 to 1986, Mr. Eslick conceptualized and delivered to EF
Hutton the plan for what is now known as "Reservoir Inadequacy
Insurance," the methods by which investors are protected against
inadequate oil reserves or dry wells. He developed and co-
authored with Lloyds of London syndication that backed the
policies.
From 1981 to 1983, Mr. Eslick was the project manager for
Rosendin Electric, overseeing the complete wiring of the building
that tracks the Space Shuttle for Lockheed. For 1979 to 1981, Mr.
Eslick served as the Managing Director of Interface Idrocaruare,
Inc. S.A., a corporation with offices in Geneva, Switzerland, and
Konigswinter, West Germany, that actively traded in the
international spot oil market.
From 1954 to 1958, Mr. Eslick served in the US Navy as an
Aviation Electronics technician.
Paul B. Eslick; Secretary/Director
Mr. Paul Eslick has been an officer and director of the Company
since April 9, 1999. He had been retired since 1980 due to spinal
cord injuries incurred in a job-related accident. He has been
active, during that time, in purchasing and selling antique
furniture and glassware, and other antique collectibles. He has
also dealt in antique art, particularly early American art. Prior
to 1980, Mr. Eslick was a Chief Maintenance Mechanic for the
United States Naval Air Station in Alameda, CA.
Patsy Harting; Treasurer/Director
Ms. Harting has been an officer and director of the Company since
April 9, 1999. She is a Phlebotomist who has worked in the
Intensive Care Unit and Laboratory at Inlow Hospital, Chico, CA,
since 1996. From 1983 to 1996, she was the owner of a restaurant
in Paradise, CA, and a business that supplied specialty pies to
large restaurants in Chico and Orville, CA. Ms. Harting sold her
business interests in the early part of 1996.
Blank Check Experience
Neither Mr. Paul Eslick or Ms. Harting have experience as
officers or directors of any public company. In addition to the
experience described above, Mr. Lewis Eslick is or has been an
officer and/or director of the blank check companies:
Triumph International Foods, Inc. - Officer and Director.
Was Officer and Director of LPI, Inc. from June, 1991
through April, 1997. He resigned as part of the merger
agreement with Triumph in April, 1997. Mr. Eslick
received no compensation as part of the merger, other
than shares in Triumph which were granted in the same
amount as all other shareholders received. In 1998, the
previous officers and directors of Triumph had not
filed necessary papers to keep the company current with
the Nevada Secretary of State. At a special meeting of
shareholders, Mr. Eslick was re-elected to the Board of
Directors, and was reappointed as President.
American Flintlock Company - Previously the President and
Director.
Facade Systems, Inc. - Officer and Director since June,
1997.
Glucose Tech, Inc. - Officer and Director since September,
1997.
Vista Medical Terrace, Inc. - Currently President and
Director.
Winecup Lands & Cattle Company - Officer and Director since
December, 1991.
The three officers and directors of the Company are all siblings.
The Company's Board of Directors has not established any
committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates that they will devote
only a minor amount (approximately 5%) of their time to the
Company's affairs. The officers and directors of the Company may
in the future become shareholders, officers or directors of other
companies which may be formed for the purpose of engaging in
business activities similar to those conducted by the Company.
The Company does not currently have a right of first refusal
pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph, if a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company have no preference as to which company
will merge or acquire such target company, the company of which
the President first became an officer and director will be
entitled to proceed with the transaction. Except as set forth
above, the Company has not adopted any other conflict of interest
policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They both have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to
occur until the Registrant has generated revenues from operations
after consummation of a merger or acquisition. As of the date of
this registration statement, the Company has no funds available
to pay directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will receive
any finders fee, either directly or indirectly, as a result of
their respective efforts to implement the Company's business plan
outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is quoted on the over-the-counter
market in the United States under the symbol CTOR. Management has
not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities and
management does not intend to initiate any such discussions until
such time as the Company has consummated a merger or acquisition.
There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of
the Company's officers and directors will most likely be the
persons to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
As of May 6, 1999, there were 58 holders of the Company's Common
Stock. Andrew Berney received his stock directly from Mr. Lewis
Eslick, as did two of the other shareholders. The remaining
shareholders received their stock from Mr. Berney and the other
two shareholders who received stock from Mr. Eslick. All of the
issued and outstanding shares of the Company's Common Stock were
issued in accordance with the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the transfers made by the founders and the
officers and directors, the Registrant relied on Section 4(2) of
the Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the shares. The securities
were offered for investment only and not for the purpose of
resale or distribution, and the transfer thereof was
appropriately restricted.
Even after the business plan is completed, 151,000 shares of the
Company's common stock will be restricted from trading freely,
other than in accordance with Rule 144 enacted under the
Securities Act. In general, under Rule 144, a person (or persons
whose shares are aggregated) who has satisfied a one year holding
period, under certain circumstances, may sell within any three-
month period a number of shares which does not exceed the greater
of one percent of the then outstanding Common Stock or the
average weekly trading volume during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation
by a person who has satisfied a two-year holding period and who
is not, and has not been for the preceding three months, an
affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, par value $0.001 per share,
of which 4,100,000 are issued and outstanding. The shares are non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance
of 10,000,000 shares of preferred stock, $0.01 par value per
share, none of which have been issued. The Company currently has
no plans to issue any preferred stock. The Company's Board of
Directors has the authority, without action by the shareholders,
to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting
rights, preferences as to dividends and liquidation, conversion
rights, and other rights of such series. The preferred stock, if
and when issued, may carry rights superior to those of common
stock; however no preferred stock may be issued with rights equal
or senior to the preferred stock without the consent of a
majority of the holders of then-outstanding preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring
possible future acquisitions and financings, and in meeting
corporate needs which may arise. If opportunities arise that
would make the issuance of preferred stock desirable, either
through public offering or private placements, the provisions for
preferred stock in the Company's Certificate of Incorporation
would avoid the possible delay and expense of a shareholder's
meeting, except as may be required by law or regulatory
authorities. Issuance of the preferred stock could result,
however, in a series of securities outstanding that will have
certain preferences with respect to dividends and liquidation
over the common stock which would result in dilution of the
income per share and net book value of the common stock. Issuance
of additional common stock pursuant to any conversion right which
may be attached to the terms of any series of preferred stock may
also result in dilution of the net income per share and the net
book value of the common stock. The specific terms of any series
of preferred stock will depend primarily on market conditions,
terms of a proposed acquisition or financing, and other factor
existing at the time of issuance. Therefore it is not possible at
this time to determine in what respect a particular series of
preferred stock will be superior to the Company's common stock or
any other series of preferred stock which the Company may issue.
The Board of Directors does not have any specific plan for the
issuance of preferred stock at the present time, and does not
intend to issue any preferred stock at any time except on terms
which it deems to be in the best interest of the Company and its
shareholders.
The issuance of preferred stock could have the effect of making
it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. Further, certain
provisions of Nevada law could delay or make more difficult a
merger, tender offer, or proxy contest involving the Company.
While such provisions are intended to enable the Board of
Directors to maximize shareholder value, they may have the effect
of discouraging takeovers which could be in the best interests of
certain shareholders. There is no assurance that such provisions
will not have an adverse effect on the market value of the
Company's stock in the future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditor Barry L. Friedman, dated
February 4, 1999.
Balance Sheet as of March 31, 1999 (unaudited) and
December 31, 1998 (audited).
Statement of Operation for the three months ended March
31, 1999 and March 31, 1998 (unaudited), for the
year ended December 31, 1998 (audited), and for the
period from inception through March 31, 1999
(unaudited).
Statement of Stockholders' Equity
Statement of Cash Flows for the three months ended
March 31, 1999 and March 31, 1998 (unaudited), for
the year ended December 31, 1998 (audited), and for
the period from inception through March 31, 1999
(unaudited).
Notes to Financial Statements
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
To Whom It May Concern:
February 4, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of February 4, 1999, on
the Financial Statements of Corporate Tours & Travel, Inc., as of
December 31, 1998, in any filings that are necessary now or in
the near future with the U.S. Securities and Exchange Commission.
Very Truly Yours,
s/Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors February 4, 1999
Corporate Tours & Travel, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Corporate Tours
& Travel, Inc., (A Development Stage Company), as of December 31,
1998, December 31, 1997, and December 31, 1996, and the related
statements of operations, stockholders' equity and cash flows for
the three years ended December 31, 1998, December 31, 1997, and
December 31, 1996. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on my
audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Corporate Tours & Travel, Inc., as of December 31, 1998, December
31, 1997, and December 31, 1996, and the results of its
operations and cash flows for the three years ended December 31,
1998, December 31, 1997, and December 31, 1996, 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 #5 to the financial statements, the Company has suffered
recurring losses from operations and has no established source of
revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regard to these
matters are also described in Note #5. The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
/S/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
CORPORATE TOURS & TRAVEL, INC.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<S> <C> <C>
March 31, 1999 Year Ended Dec.
31, 1998
ASSETS
CURRENT ASSETS: $ 0 $ 0
OTHER ASSETS:
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: $ 4,860 $ 4,060
Accounts Payable
TOTAL CURRENT LIABILITIES $ 4,860 $ 4,060
STOCKHOLDERS' EQUITY: (Note 1)
Preferred stock, par value, $.001
authorized 10,000,000 shares issued
and outstanding at December 31, 1998
- - NONE
Common stock, par value, $.00l
authorized 50,000,000 shares issued
and outstanding at December 31, 1996;
4,100,000 shares
December 31, 1997; 4,100,000 shares $ 4,100
September 30, 1998; 4,100,000 shares $ 4,100
Additional paid in Capital 0 0
Accumulated loss $ -8,960 $ -8,160
TOTAL STOCKHOLDERS' EQUITY $ -4,860 $ -4,060
TOTAL LIABILITIES AND STOCKHOLDERS' $ 0 $ 0
EQUITY
</TABLE>
See accompanying notes to financial statements & audit report
CORPORATE TOURS & TRAVEL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C>
3 Mos. Ended 3 Mos. Ended Year Ended Dec. Sept. 23, l993
3/31/99 3/31/98 31, 1998 (inception) to
Dec. 31, 1998
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
EXPENSES:
General Selling and $ 800 $ 2,575 $ 0 $ 8,960
Administrative
Total Expenses $ 800 $ 2,575 $ 0 $ 8,960
Net Profit/Loss(-) $ -800 $ -2,575 $ -0 $ -8,960
Net Profit/Loss(-) $ -.0002 $ -.0006 $ NIL $ -.0022
per weighted share
(Note 1)
Weighted average 4,100,000 4,100,000 4,100,000 4,100,000
number of common
shares outstanding
</TABLE>
See accompanying notes to financial statements & audit report
CORPORATE TOURS & TRAVEL, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Common Shares Stock Amount Additional paid- Accumulated
in capital Deficit
Balance, December 31, 4,100,000 $4,100 $0 -4,100
1995
Net Income/ Loss year 0
ended December 31, 1996
Balance, December 31, 4,100,000 $4,100 $0 $-4,100
1996
Net Income/ Loss year -900
ended December 31, 1997
Balance, December 31, 4,100,000 $4,100 $0 $-5,000
1997
Net Income/ Loss year -3,160
ended December 31, 1998
Balance, December 31, 4,100,000 $4,100 $0 $-8,160
1998
</TABLE>
See accompanying notes to financial statements & audit report
CORPORATE TOURS & TRAVEL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C>
3 Mos. Ended 3 Mos. Ended Year Ended Dec. Sept. 23, l993
3/31/99 3/31/98 31, 1998 (inception) to
Dec. 31, 1998
Cash Flows from Operating
Activities:
Net Loss $ -800 $ -2,575 $-3,160 $ 8,960
Adjustment to reconcile net 0 0 0 0
loss to net cash provided by
operating activities
Issued common stock for +4,100
services
Changes in assets and
liabilities:
Increase in current $ +800 $ +2,575 +3,160 $ +4,860
liabilities:
Advances Payable
Net cash used in operating 0 0 0 0
activities
Cash Flows from investing 0 0 0 0
activities
Cash Flows from Financing 0 0 0 0
Activities
Net increase (decrease) in $0 $0 $0 $0
cash
Cash, beginning of period 0 0 0 0
Cash, end of period $0 $0 $0 $0
</TABLE>
See accompanying notes to financial statements & audit report
CORPORATE TOURS & TRAVEL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999, December 31, 1998, and March 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized September 23, 1993, under laws of the
State of Nevada, as Corporate Tours & Travel, Inc.. The company
currently has no operations and, in accordance SFAS #7, is
considered a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. They're no cash equivalents as
of March 31, 1999.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109, (SFAS #109), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Organization Costs
Costs incurred to organize the Company are being amortized on a
straight-line basis over a sixty-month period
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128, (SFAS #128), "Earnings
Per Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of December 31, 1998, the Company had no dilative
common stock equivalents such as stock options.
Year End
The Company has selected December 31, as its year-end
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
Based on a recent and ongoing assessment, the Company has
determined that it will require only off-the-shelf software
utilizing a Microsoft Windows platform for all of its computing
requirements. The Company presently believes that with
modifications to existing off-the-shelf software or conversions
to new software, the Year 2000 issue will not pose a significant
operational problem and will not materially affect future
financial results.
The Company currently anticipates purchasing new off-the-shelf
Year 2000 compatible software within the near future, which is
prior to any anticipated impact on its operating systems. The
total cost of this new software is not anticipated to be a
material expense to the Company at this time. However, there can
be no guarantee that these new off-the-shelf software products
will be adequately modified, which could have a material adverse
effect on the Company's results of operations.
NOTE 3- INCOME TAXES
There is no provision for income taxes for the period ended
December 31, 1998, due to the net loss and no state income tax in
the state of the Company's domicile and operations, Nevada. The
Company's total deferred tax asset as of December 31, 1998 is as
follows:
Net operation loss carry forward $8,160
Valuation allowance 8,160
Net deferred tax asset $0
The federal net operating loss carry forward will expire various
amounts from 2013 to 2018.
This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
NOTE 4- SHAREHOLDERS' EQUITY
Common Stock
The authorized common stock of Corporate Tours & Travel, Inc.
consists of 50,000,000 shares with a par value of $.001 per
share.
Preferred Stock
The authorized Preferred Stock of Corporate Tours & Travel, Inc.
consists of 10,000,000 shares with a par value of $0.001 per
share.
On September 27, 1993, the Company issued 4,100,000 shares of
it's $.00l par value common stock for services of $ 4,100.
On September 7, 1996, the Company restated its Articles of
Incorporation. The Company increased its capitalization from
5,000,000 common shares to 50,000,000 common shares. The par
value was unchanged at $0.001. Also, the Company approved the
authority to issue 10,000,000 shares of preferred shares, par
value $0.001.
NOTE 5- GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the
Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek a merger with an
existing, operating company. Until that time, the
stockholders/officers and/or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6-RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal
property. Office services are provided without charge by a
director. Such costs are immaterial to the financial statements
and, accordingly, have not been reflected therein. The officers
and directors of the Company are involved in other business
opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between
the Company and their other business interests. The Company has
not formulated a policy for the resolution of such conflicts.
NOTE 7- WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional shares of common or preferred stock.
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Corporate Tours & Travel, Inc.
By: /s/ Lewis Eslick
Lewis M. Eslick, President
ARTICLES OF INCORPORATION
OF
CORPORATE TOURS & TRAVEL, INC.
KNOW BY ALL THESE PRESENTS:
That we, the undersigned, Directors being all natural persons of
the age of eighteen years or more and desiring to form a body
corporate under the laws of the State of Nevada do hereby sign,
verify and deliver in duplicate to the Secretary of State of the
State of Nevada, these Articles of Incorporation:
ARTICLE I NAME The name of the Corporation shall be: CORPORATE
TOURS & TRAVEL, INC.
ARTICLE II That the registered office of this corporation and
resident agent are both located at 6425 Meadow Country Dr., Reno,
Nevada 89509; but the corporation may maintain an office in such
towns, cities, and places within and without the State of Nevada
as the Board of Directors may from time to time determine, or as
may be designated by the ByLaws of the said corporation. The
Corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of
State of the State of Nevada, unless dissolved according to law.
The resident agent of the corporation will be: Lewis M. Eslick,
6425 Meadow Country Dr. Reno, Nevada 89509.
ARTICLE III PURPOSES AND POWERS 1. Purposes: Except as restricted
by these Articles of Incorporation, the Corporation is organized
for the purpose of transacting all lawful business for which
corporations may be incorporated pursuant to the Nevada
Corporation Code.
2. General Powers: Except as restricted by these Articles of
Incorporation, the Corporation shall have and may exercise all
powers and rights which a corporation may exercise legally
pursuant to the Nevada Corporation Code.
3. Issuance of Shares: The Board of Directors of the Corporation
may divide and issue any class of stock of the Corporation in
series pursuant to a resolution properly filed with the Secretary
of State of Nevada. Such stock may be issued from time to time
without action by the stockholders, for such consideration as may
by fixed from time to time by the Board of Directors, and shares
so issued, shall be deemed fully paid stock, and the holder of
such shares shall not be liable for any further payment thereon.
ARTICLE IV CAPITAL STOCK
1. Classes and Number of Shares. The total number of shares of
all classes of stock which the corporation shall have authority
to issue is Sixty Million (60,000,000), consisting of Fifty
Million (50,000,000) shares of Common Stock, par value of $0.001
per share (The "Common Stock") and Ten Million (10,000,000)
shares of Preferred Stock, which have a par value of $0.001 per
share (the "Preferred Stock").
2. Powers and Rights of Common Stock
(a) Preemptive Right. No shareholders of the Corporation holding
common stock shall have any preemptive or other right to
subscribe for any additional un-issued or treasury shares of
stock or for other securities of any class, or for rights,
warrants or options to purchase stock, or for scrip, or for
securities of any kind convertible into stock or carrying stock
purchase warrants or priveleges unless so authorized by the
Corporation;
(b) Voting Rights and Powers. With respect to all matters upon
which stockholders are entitled to vote or to which stockholders
are entitled to give consent, the holders of the outstanding
shares of the Common Stock shall be entitled to cast thereon one
(1) vote in person or by proxy for each share of the Common Stock
standing in his/her name;
(c) Dividends and Distributions
(i) Cash Dividends. Subject to the rights of holders of Preferred
Stock, holders of Common Stock shall be entitled to receive such
cash dividends as may be declared thereon by the Board of
Directors from time to time out of assets of funds of the
Corporation legally available therefor;
(ii) Other Dividends and Distributions. The Board of Directors
may issue shares of Common Stock in the form of a distribution or
distributions pursuant to a stock dividend or split-up of the
shares of the Common Stock;
(iii) Other Rights. Except as otherwise required by the Nevada
Revised Statutes and as may otherwise be provided in these
Restated Articles of Incorporation, each share of the Common
Stock shall have identicle powers, preferences and rights,
including rights in liquidation;
3. Preferred Stock. The powers, preferences, rights,
qualifications, limitations and restrictions pertaining to the
Preferred Stock, or any series thereof, shall be such as may be
fixed, from time to time, by the Board of Directors in it's sole
discretion, authority to do so being hereby expressly vested in
such board.
4. Issuance of the Common Stock and the Preferred Stock. The
Board of Directors of the Corporation may from time to time
authorize by resolution the issuance of any or all shares of the
Common Stock and the Preferred Stock herein authorized in
accordance with the terms and conditions set forth in these
Restated Articles of Incorporation for such purposes, in such
amounts, to such persons, corporations, or entities, for such
consideration and in the case of Preferred Stock, in one or more
series, all as the Board of Directors in it's discretion may
determine and without any vote or other action by the
stockholders, except as otherwise required by law. The Board of
Directors, from time to time, also may authorize, by resolution,
options, warrants and other rights convertible into Common or
Preferred Stock (collectively "securities.") The securities must
be issued for such consideration, including cash, property, or
services, as the Board of Directors may deem appropriate, subject
to the requirement that the value of such consideration be no
less than the par value if the shares issued. Any shares issued
for which the consideration so fixed has been paid or delivered
shall be fully paid stock and the holder of such shares shall not
be liable for any further call or assessment or any other payment
thereon, provided that the actual value of such consideration is
not less than the par value of the shares so issued. The Board of
Directors may issue shares of Common Stock in the form of a
distribution or distributions pursuant to a stock divided or
split-up of the shares of the Common Stock only to the then
holders of the outstanding shares of the Common Stock.
5. Cumulative Voting. Except as otherwise required by applicable
law, there shall be no cumulative voting on any matter brought to
a vote of stockholders of the Corporation.
ARTICLE V GOVERNING BOARD OF DIRECTORS
The business and affairs of the Corporation shall be managed by
and under the direction of the Board of Directors. Except as may
otherwise be provided pursuant to Section 4 or Article Fourth
hereof in connection with rights to elect additional directors
under specified circumstances, which may be granted to the
holders of any class or series of Preferred Stock, the exact
number of directors of the Corporation shall be determined from
time to time by a bylaw or amendment thereto, providing that the
number of directors shall not be reduced to less than three (3).
The directors holding office at the time of the filing of these
Restated Articles of Incorporation shall continue as directors
until the next annual meeting and/or until their successors are
duly chosen.
ARTICLE VI
The capital stock of this corporation shall not be subject to
assessment to pay debts of the corporation, and no paid up stock
and no stock issued as fully paid shall ever be assessable or
assessed. The Articles of Incorporation shall not be amended in
this particular.
ARTICLE VII
The period of existence of this corporation shall be perpetual,
subject only to termination by action of its stockholders or by
the effect of law. During the time of the existence of this
corporation the following shall be the doctrine for corporate
opportunities:
The officers, directors and other members of management of the
Corporation shall be subject to the doctrine of corporate
opportunities only insofar as it applies to business
opportunities in which the Corporation has expressed an interest
as determined from time to time by the Corporation's Board of
Directors as evidenced by resolutions appearing in the
Corporation's minutes. When such areas of interest are
delineated, all such business opportunities within such areas of
interest which come to the attention of the officers, directors
and other members of management of the Corporation shall be
disclosed promptly to the Corporation and made available to it.
The Board of Directors may reject any business opportunity
presented to it and thereafter any officer, director or other
management may avail himself of such opportunity. Until such time
as the Corporation, through its Board of Directors, has
designated an area of interest, the officers, directors and other
members of management of the Corporation shall be free to engage
in such areas of interest on their own and the provisions hereof
shall not limit the rights of any officer, director or other
member of management of the Corporation to continue a business
existing prior to the time that such area of interest is
designated by the Corporation. This provision shall not be
construed to release any employee of the Corporation. This
provision shall not be construed to release any employee of the
Corporation (other than an officer, director or member of
management) from any duties which he may have to the Corporation.
ARTICLE VIII
The directors shall have the power to make and alter the By-Laws
of the corporation. By-Laws make by the Board of Directors under
the powers so conferred may be altered, amended or repealed by
the Board of Directors or by the stockholders at any meeting
called and held for that purpose.
ARTICLE IX
Any shareholder, or shareholders, may sell, assign, or otherwise
transfer their shares and certificate or certificates of stock,
or any part thereof.
The aforesaid changes and amendments have been consented to and
approved by a majority vote of the stockholders holding at least
a majority of each class of stock outstanding and entitled to
vote thereon.
ARTICLE X INDEMNIFICATION The officers and directors of this
corporation shall not be liable to the shareholders or any
creditors of the corporation for any alleged breach of fiduciary
duty as such officer and director unless it be established that
the director or officer has committed acts or is personally
responsible for omissions which involve intentional misconduct,
fraud or knowing violation of the law, or the payment of
dividends in violation of N.R.S. 78,300.
Further, the corporation does indemnify to the full extent
authorized or permitted by the Nevada Corporation Code any person
made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that he, his testator or
interstate is or was a director, officer, employee, fiduciary, or
agent of the Corporation or serves or served any other enterprise
at the request of the Corporation.
ARTICLE XI AMENDMENTS The Corporation reserves the right to amend
its Articles of Incorporation from time to time in accordance
with the Nevada Corporation Code. Any proposed amendment shall be
adopted upon receiving the affirmative vote of holders of a
majority of the shares entitled to vote thereon.
ARTICLE XII ADOPTION AND AMENDMENT OF BYLAWS The initial Bylaws
of the Corporation shall be adopted by its Board of Directors.
The power to alter of amend or repeal the Bylaws or adopt new
Bylaws shall be vested in the Board of Directors, but the holders
of Common Stock may also alter, amend or repeal the Bylaws or
adopt new Bylaws. The Bylaws may contain any provisions for the
regulation and management of the affairs of the Corporation not
inconsistent with law or these Articles of Incorporation.
ARTICLE XIII REGISTERED OFFICE AND REGISTERED AGENT The address
of the initial registered office of the Corporation is 6425
Meadow Country Dr., Reno, Nevada 89509 and the name of the
registered agent at such address is Lewis M. Eslick. Either the
registered office or the registered agent may be changed in the
manner provided by law.
ARTICLE XIV
The name and post office addresses of the incorporators are: NAME
ADDRESS Lewis M. Eslick 6425 Meadow Country Dr. Reno, Nevada
89509
NAME ADDRESS Henry Richard Vicencio, 216 Lemmon Dr. Suite 234
Reno, Nevada 89506
IN WITNESS WHEREOF, the above-named Incorporators have signed
these Articles of Incorporation on September 21, 1993.
/s/ Lewis M. Eslick
BYLAWS OF CORPORATE TOURS AND TRAVEL
ARTICLE I
Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders
of this Company, for the purpose of fixing or changing the
number of directors of the Company, electing directors and
transacting such other business as may come before the
meeting, shall be held on such date, at such time and at
such place as may be designated by the Board of Directors.
Section 2. Special Meetings. Special meetings of the
shareholders
may be called at any time by the president or a vice-
president or a majority of the Board of Directors acting
with or without a meeting, or the holder or holders of
10% of all the shares outstanding and entitled to vote
thereat.
Section 3. Place of Meetings. Meetings of shareholders
shall be held at the principal office of the Company,
unless the Board of Directors decides that a meeting
shall be held at some other place within or without the
State of Nevada and causes the notice thereof to so state.
Section 4. Notices of Meetings. Unless waived, a
written, printed, or typewritten notice of each annual or
special meeting, stating the day, hour and place and the
purpose of purposes thereof shall be served upon or
mailed to each shareholder of record entitled to vote or
entitled to notice, not more than sixty (60) days nor
less than ten (10) days before any such meeting. If
mailed, it shall be directed to a shareholder at his or her
address as the same appears on the records of the Company.
If a meeting is adjourned to another time and place, no
further notice as to such adjourned meeting need be given if
the time and place to which it is adjourned are fixed and
announced at such meeting. In the event of a transfer of
shares after notice has been given and prior to the
holding of the meeting, it shall not be necessary to
serve notice on the transferee. Nothing herein contained
shall prevent the setting of a record date in the
manner provided by law for the determination of the
shareholders who are entitled to receive notice of or to
vote at any meeting of shareholders or for any purpose
permitted by law.
Section 5. Waiver of Notice. Notice of the time, place
and purpose of any meeting of shareholders may be waived in
writing, either before or after the holding of such
meeting, by any shareholder.
Section 6. Quorum. At any meeting of shareholders, the
holders of
a majority in amount of the shares of the Company
then outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum
for such meeting but no action required by law, the
Articles of Incorporation or these Bylaws to be
authorized or taken by the holders of a designated
proportion of the shares of any particular class, or of
each class, may be authorized or taken by a lesser
proportion. The holders of a majority of the voting shares
represented at a meeting in person or by proxy may adjourn
such meeting from time to time, and at such adjourned
meeting any business may be transacted as if the meeting
had been held as originally called.
Section 7. Organization. At each meeting of the
shareholders, the
president, or, in the absence of the president, a chairman
chosen by a majority in interest of the shareholders
present in person
or by proxy and entitled to vote, shall act as chairman,
and the secretary of the Company, or, if the secretary of
the Company not be present, the assistant secretary, or if
the secretary and the assistant secretary not be present,
any person whom the chairman of the meeting shall
appoint, shall act as secretary of the meeting.
Section 8. Shareholders Entitled to Vote. Every
shareholder of
record shall be entitled at each meeting of shareholders to
one vote for each share standing in his name on the books
of the Company.
A corporation owning shares in this Company may vote the
same by its president or its secretary or its treasurer, and
such officer shall conclusively be deemed to have
authority to vote such shares and to secure any proxies
and written waivers and consents in relation thereto,
unless, before a vote is taken or a consent or waiver is
acted upon, it shall be made to appear by a certified
copy of the regulations, by-laws or resolution of the
Board of Directors of the corporation owning such shares
that such authority does not exist or is vested in some
other officer or person.
Section 9. Shareholder Voting. At each meeting of the
shareholders for the election of directors at which a
quorum is present, the persons receiving the greatest
number of votes shall be the directors. Such election may be
by ballot or viva voce, as the shareholders may determine.
All other questions shall be determined by a majority
vote of the shares entitled to vote and represented at the
meeting in person or by proxy, unless for any particular
purpose the vote of a greater proportion of the
shares, or of any particular class of shares, or of each
class, is otherwise required by law, the Articles of
Incorporation or these Bylaws.
Section 10. Proxies. At meetings of the shareholders any
shareholder of record entitled to vote thereat may be
represented and may vote by a proxy or proxies appointed by
an instrument in writing, but such instrument shall be
filed with the secretary of the meeting before the person
holding such proxy shall be allowed to vote thereunder. No
proxy shall be valid after the expiration of six (6) months
after the date of its execution, unless coupled with an
interest of the shareholder executing it shall have
specified therein the length of time it is to continue in
force, which in no case shall exceed seven (7) years from
the date of its execution.
Section 11. Order of Business and Procedure. The
order of business at all meetings of the shareholders
and all matters relating to the manner of conducting
the meeting shall be determined by the chairman of the
meeting, whose decisions may be overruled only by majority
vote of the shareholders present and entitled to vote at
the meeting in person or by proxy. Meetings shall be
conducted in a manner designed to accomplish the
business of the meeting in a prompt and orderly fashion and
to be fair and equitable to all shareholders, but it
shall not be necessary to follow any manual of
parliamentary procedure.
ARTICLE II
Board of Directors
Section 1. General Powers of Board. The powers of the
Company
shall be exercised, its business and affairs conducted, and
its property controlled by the Board of Directors,
except as
otherwise provided by the law of Nevada or in the
Articles of
Incorporation.
Section 2. Number and Qualification. The number of
directors of the Company, none of whom need be
shareholders or residents of Nevada, shall be at least
three. Without amendment of these Bylaws, the number
of directors may be fixed or changed by resolution
adopted by the vote of the majority of directors in office
or by the vote of holders of shares representing a
majority of the voting power at any annual meeting, or
any special meeting called for that purpose; but not
reduction of the number of directors shall have the
effect of removing any director prior to the expiration
of his term of office.
Section 3. Term of Office. Unless he shall earlier
resign, be removed as hereinafter provided, die, or be
adjudged mentally incompetent, each director shall hold
office until the sine die adjournment of the annual
meeting of shareholders for the election of directors
next succeeding his election, or the taking by the
shareholders of an action in writing in lieu of such
meeting, or, if for any reason the election of directors
shall not be held at such annual meeting or any
adjournment thereof, until the sine die election of
directors held thereafter as provided for in Section 4 of
Article I of these Bylaws, or the taking by the
shareholders of an action in writing in lieu of such
meeting, and until his successor is elected and qualified.
Section 4. Removal. Any director may be removed without
cause at
any special meeting of shareholders called for such
purpose by the vote of the holders of two-thirds of
the voting power entitling them to elect directors in
place of those to be removed, provided that unless all
the directors, or all the directors of a particular
class are removed no individual director shall be
removed if the votes of a sufficient number of shares are
cast against his removal which, if cumulatively voted at
on election of directors, or of all directors of a
particular class, as the case may be, would be sufficient to
elect at least one director. In case of any such removal, a
new director may be elected at the same meting for the
unexpired term of each director removed. Failure to
elect a director to fulfill the unexpired term of any
director removed shall be deemed to create a vacancy in the
Board.
Section 5. Resignations. Any director of the company may
resign at any time by giving written notice to the
president or the secretary of the Company. Such
resignation shall take effect at the time specified
therein, and unless otherwise specified therein, the
acceptance of such resignation shall not be
necessary to make it effective.
Section 6. Vacancies. Vacancies in the Board of Directors
may be
filled by a majority vote of the remaining directors, even
though they be less than a quorum of the entire number
of directors constituting a full Board, until an
election to fill such vacancies is had. Within the
meaning of this Section, a vacancy exists if the board of
directors increases the authorized number of directors or
if the shareholders increase the authorized number of
directors but fail at the meeting at which such
increase is authorized, or an adjournment thereof, to elect
the additional directors provided for, or if the
shareholders fail at any time to elect the whole authorized
number of directors. Any director elected under the
provisions of this Section 6 shall serve until the next
annual election of directors and until their successors are
elected and qualified.
Section 7. Meetings. The directors shall hold such meetings
from
time to time as they may deem necessary and such meetings as
may
from time to time be called by the president or the
chairman of the board. Meetings shall be held at the
principal office of the Company or at such other place
within or without the State of Nevada as the president
or a majority of the directors may determine. A regular
meeting of the Board of Directors shall be held each
year at the same place as and immediately after the annual
meeting of shareholders, or at such other place and time as
shall theretofore have been determined by the Board
of Directors and notice thereof need not be given. At its
regular annual meeting, the Board of Directors shall
organize itself and elect the officers of the Company for
the ensuing year, and may transact any other business.
Section 8. Notice of Meetings. Notice of each special
meeting or, where required, each regular meeting, of the
Board of Directors shall be given to each director either
by being mailed on at least the third day prior to the
date of the meeting or by being telegraphed or given
personally or by telephone on at least twenty-four (24)
hours notice prior to the date of meeting. Such notice
shall specify the date and time of the meeting, the
purpose or purposes for which the meeting is called. At
any meeting of the Board of Directors at which every
director shall be present, even though without such
notice, any business may be transacted. Any acts or
proceedings taken at a meeting of the Board of Directors
not validly called or constituted may be made valid and
fully effective by ratification at a subsequent meeting
which shall be legally and validly called or constituted.
Notice of any regular meting of the Board of Directors
need not state the purpose of the meeting and, at any
regular meeting duly held, any business may transacted. If
the notice of a special meeting shall state as a purpose
of the meeting the transaction of any business that may
come before the meeting, then at the meeting any business
may be transacted, whether or not referred to in the notice
thereof. A written waiver of notice of a special or
regular meeting, signed by the person or person entitled to
such notice, whether before or after the time stated therein
shall be deemed the equivalent of such notice, and
attendance of a director at a meeting shall constitute a
waiver of notice of such meeting except when the director
attends the meeting and prior to or at the commencement
of such meeting protests the lack of proper notice.
Section 9. Quorum and Voting. At all meetings of the
directors fifty percent of all of the authorized directors
of the company shall constitute a quorum, but less than
fifty percent of the authorized directors may adjourn a
meeting of the directors from time to time, and at
adjourned meetings any business may be transacted as if
the meeting had been held as originally called. The act
of a majority of Directors present at any meeting at
which there is a quorum shall be the act of the
Board of Directors, except as otherwise provided by law,
the Articles of Incorporation or these Bylaws.
Section 10. Compensation. Directors shall be entitled to
receive
for services and expenses such reasonable compensation as
the Board of Directors may determine by affirmative
vote of a majority of those directors in office. The Board
of Directors may also delegate its authority to establish
reasonable compensation for directors to one or more
officers or directors by an affirmative vote of a
majority of those directors in office. Any vote taken by
the Board of Directors with respect to director
compensation shall be effective irrespective of the
financial or personal interest of any of the directors
involved.
Section 11. Committees. The Board of Directors may create
any
committee of directors, to be composed of one or more
directors,
and may delegate to any such committee any of the authority
and powers of the Board of Directors, however conferred.
Each such committee
shall serve at the pleasure of the Board of Directors
shall act only in the intervals between meetings of the
Board of
Directors and shall be subject to all times to the control
and
direction of the Board of Directors. Any such committee may
act by a majority of its members. Any such committee
shall keep written minutes of its meetings and report same
to the Board of
Directors prior to or at the next regular meeting of the
Board of Directors. Any act or authorization of an act
by any such committee
within the authority delegated to it shall be as
effective for all purposes as the act or authorization of
the
Board of Directors.
ARTICLE III
Officers
Section 1. General Provisions. The officers of the Company
shall
be a president, such number of vice-presidents as the Board
may from time to time determine, a secretary, a treasurer
and such other officers as the directors may elect. The
Company may also have, at the discretion of the Board of
Directors, a Chairman of
the Board or Vice Chairman who shall have the duties
prescribed by the Board of Directors. Except as
specifically provided in
these Bylaws, the directors shall determine the duties and
term of each of the officers of the Company and shall be
responsible for the designation of the Company's chief
executive officer. Officers need not be shareholders of the
Company and may be paid such compensation as the Board of
Directors may determine. Any person may hold any two or
more officers and perform the duties thereof. If one person
is chosen to hold the offices of secretary and treasurer,
he shall be known as secretary-treasurer if one person be
elected to both of these offices.
Section 2. Election, Term of Office, and Qualification.
The officers of the Company named in Section 1 of this
Article III shall be elected by a majority of the Board of
Directors present and constituting a quorum for an
indeterminate term and shall hold office during the
pleasure of the Board of Directors. The qualifications of
all officers shall be such as the Board of
Directors may see fit to impose.
Section 3. Additional Officers, Agents, etc. In addition to
the
officers mentioned in Section 1 of this Article III, the
Company may have such other officers, committees, agents,
and factors as
the Board of Directors may deem necessary and may appoint,
each of whom or each member of which shall hold office
for such period, have such authority, and perform such
duties as may be
provided in these Bylaws, or as the Board of Directors may
from time to time determine. The Board of Directors may
delegate to
any officer or committee the power to appoint any
subordinate officers,
committees, agents or factors. In the absence of any
officer of the Company, or for any other reason the
Board of
Directors may deem sufficient, the Board of Directors
may
delegate, for the time being, the powers and duties, or
any of
them, of such officer to any other officer, or to any
director.
Section 4. Removal. Any officer of the Company may be
removed either with or without cause, at any time, by
resolution adopted by the Board of Directors at any
meeting of the Board, the notices (or waivers of notice)
of which shall have specified that such removal action was
to be considered. Any officer appointed not by the Board
of Directors but by an officer or committee to
which the Board shall have delegated the power of
appointment may be removed, with or without cause, by the
committee or superior
officer (including successors) who made the appointment,
or by any committee or officer upon whom such power of
removal may be conferred by the Board of Directors.
Section 5. Resignations. Any officer may resign at any
time by giving written notice to the Board of
Directors, or to the president, or to the secretary
of the Company. Any such resignation shall take effect
at the time specified therein, and unless otherwise
specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 6. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification, or
otherwise, shall be filled in the manner prescribed in
these Bylaws for regular appointments or elections to
such office.
ARTICLE IV
Duties of the Officers
Section 1. The President. The president shall manage and
have general supervision over the business of the Company
and over its several officers, subject, however, to the
control of the Board of Directors. He shall, if present,
preside at all meetings of shareholders and of the Board
of Directors. He shall see that all orders and resolutions
of the Board of Directors are carried into effect, and
shall from time to time report to the Board of
Directors all matters within his knowledge which the
interests of the corporation may require to be brought to
the notice of the Board. He may sign with the
secretary, the treasurer, or any other proper officer of
the company thereunto authorized by the Board of Directors,
certificates for share in the Company. He may sign, execute
and deliver in the name of the Company all deeds,
mortgages, bonds, contracts, or other instruments either
when specially authorized by the Board of Directors or when
required or deemed necessary or advisable by him in the
ordinary conduct of the Company's normal business,
except in cases where the signing and execution thereof
shall be expressly delegated by these Bylaws to some
other officer or agent of the Company or shall be required
by law or otherwise to be signed or executed by some other
officer or affixed to any instrument requiring the same;
and, in general, perform all duties as from time to time
may be assigned to him by the Board of Directors. In case
the president for any reason shall be unable to attend to
any of his duties, such duties may be performed by a vice-
president of the Company.
Section 2. Vice-Presidents. The vice-presidents shall
perform such duties as are conferred upon them by these
Bylaws or as may from time to time be assigned to them by
the Board of Directors or the president. At the request of
the president (or in his or her absence or disability, the
vice-president designated by the Board) shall perform
all the powers of the president. The authority of vice-
presidents to sign in the name of the Company all
certificates for shares and authorized deeds, mortgages,
bonds, contracts, notes and other instruments, shall be
coordinate with like authority of the president.
Section 3. The Treasurer. The treasurer shall:
(a) Have charge and custody of, and be responsible for,
all funds, securities, notes, contracts, deeds, documents,
and all other indicia of title in the Company and valuable
effects of the Company; receive and give receipts for moneys
due and payable to the name of the Company in such banks,
trust companies, or other depositories as shall be
selected by or pursuant to
the
directions of the Board of Directors; cause such funds
to be discharged by checks or drafts on the authorized
depositories of the Company, signed as the Board of
Directors may require; and be responsible for the accuracy
of the amounts of, and cause to be preserved proper
vouchers for, all moneys to be disbursed;
(b) Have the right to require from time to time
reports or statements giving such information as he may
desire with respect to any and all financial transactions
of the Company from the officers or agents transacting the
same;
(c) Keep or cause to be kept at the principal office or
such other office or offices of the Company as the Board of
Directors shall from time to time designate correct records
of the business and transactions of the Company and exhibit
such records to any of the directors of the Company upon
application at such office;
(d) Have charge of the audit and statistical departments of
the Company;
(e) Render to the president or the Board of Directors
whenever they shall require him so to do an account of
the financial condition of the company and of all his
transactions as treasurer and as soon as practicable after
the close of each fiscal year, make and submit to the
Board of Directors a like report for such fiscal year; and
(f) Exhibit at all reasonable times his cash books and
other records to any of the directors of the Company upon
application.
Section 4. The Secretary. The secretary shall:
(a) Keep the minutes of all meetings of the shareholders
and of the Board of Directors in one or more books
provided for that purpose;
(b) See that all notices are duly given in accordance with
the provisions of these Bylaws or as required by law;
(c) Be custodian of the corporate records and, if
one is provided, of the seal of the Company, and see that
such seal is affixed to all certificates for shares prior
to the issue thereof and to all other documents to which
the seal is required to be affixed and the execution of
which on behalf of the Company under its seal is duly
authorized in accordance with the provisions of these
Bylaws;
(d) Have charge, directly or through such transfer
agent or transfer agents and registrar or registrars as
the Board of Directors shall appoint, of the issue,
transfer and registration of certificates for shares in
the Company and of the records thereof, such records to
be kept in such manner as to show at any time the number of
shares in the Company issued and outstanding, the manner in
which and time when such stock was paid for, the names
and addresses of the holders of record thereof, the number
of classes of shares held by each, and the time when each
became such holder of record;
(e) Exhibit at all reasonable times to any directors,
upon application, the aforesaid records of the issue,
transfer, and registration of such certificates;
(f) Sign (or see that the treasurer or other proper
officer of the Company thereunto authorized by the Board
of Directors shall sign), with the president or vice-
president, certificates for shares in the Company;
(g) See that the books, reports, statements, certificates,
and all other documents and records required by law are
properly kept and filed; and
(h) In general, perform all duties incident to the
office of secretary, he shall perform such duties as are
conferred upon him by the officers of the Company, or the
Board of Directors, and in the absence or the inability
of the secretary to act, shall perform all the duties of
the secretary and when so acting shall have all the powers
of the secretary.
In the event the Board of Directors shall elect an
assistant secretary, he shall perform such duties as are
conferred upon him by the officers of the Company, or the
Board of Directors, and in the absence or inability of the
secretary to act, shall perform all the duties of the
secretary and when so acting shall have all the powers of
the secretary.
ARTICLE V
Indemnification of Directors and Officers
Section 1. Indemnification. The Company shall indemnify
any person who was or is a party or is threatened to be made
a party to any threatened or pending action, suit, or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he, his
testator, or intestate is or was a director or officer of
the Company, or is or was serving at the request of the
Company as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust
or other
enterprise, or as a member of any committee or similar
body against all expenses (including attorneys' fees),
judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding
(including appeals) or the defense or settlement thereof
or any claim, issue, or matter therein, to the fullest
extent permitted by the laws of Nevada as they may exist
from time to time.
Section 2. Insurance. The proper officers of the Company
without further authorization by the Board of Directors,
may in their discretion purchase and maintain insurance
on behalf of any person who is or was a director,
officer, employee or agent of the Company, or is or was
serving at the request of the Company as a
director, officer, employee or agent for
another
corporation, partnership, joint venture, trust or
other
enterprise, against any liability.
Section 3. ERISA. To assure indemnification under this
provision of all such persons who are or were "fiduciaries"
of an employee benefit plan governed by the Act of Congress
entitled "Employee Retirement Income Security Act of 1974",
as amended from time to time, this Article shall, for the
purposes hereof, be interpreted as follows: an "other
enterprise" shall be deemed to include an employee benefit
plan; the Company shall be deemed to have requested a
person to serve an employee benefit plan where the
performance by such person of his duties to the Company
also imposes duties on, or otherwise involves services by,
such person to the plan or participants or beneficiaries of
the plan; excise taxes assessed on a person with respect
to an employee benefit plan pursuant to said Act of
Congress shall be deemed "fines"; and action taken or
omitted by a person with respect to an employee benefit
plan in the performance of such person's duties for a
purpose reasonably believed by such person to be in the
interest of the participants and beneficiaries of the plan
shall
be deemed to be for a purpose which is not opposed to the
best interests of the Company.
Section 4. Contractual Nature. The foregoing provisions of
this Article shall be deemed to be a contract between the
Company and each director and officer who serves in such
capacity at any time while this Article is in effect, and
any repeal or modification thereof shall not affect any
rights or obligations then existing with respect to any
state of facts then or theretofore existing or any
action, suit or proceeding theretofore or thereafter
brought based in whole or in part upon any such state of
facts.
Section 5. Construction. For the purposes of this
Article, references to "the Company" include in addition to
the resulting corporation, any constituent
corporation (including any
constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence
had continued, would have had power and authority to
indemnify its directors, officers and employees or agents,
so that any person who is or was a director or officer of
such constituent corporation or is or was serving at the
request of such constituent corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise or as
a member of any committee or similar body shall stand in
the same position under the provisions of this Article
with respect to the resulting or surviving corporation as
he would have with respect to such constituent
corporation if its separate existence had continued.
Section 6. Non-Exclusive. The Company may indemnify, or
agree to indemnify, any person, and pay any expenses,
including attorney's fees in advance of final disposition
of any action, suit or proceeding, if such
indemnification and/or payment is approved by the vote of
the shareholders, disinterested directors, or is in the
opinion of independent legal counsel selected by the Board
of Directors for an indemnitee who acted in good faith in a
manner he reasonably believed to be in, or not opposed
to, the best interest of the Company.
ARTICLE VI
Seal
The Board of Directors may provide a corporate seal, which
shall be in the form of a circle and shall bear the full
name of the Company, and the words "Seal" and "Nevada".
ARTICLE VII
Amendment of Bylaws
These Bylaws may be amended or added to, or repealed
and superseded by new Bylaws, at any annual or special
meeting of shareholders in the notice (or waivers of
notice) of which the intention to consider such
amendment, addition, or repeal is stated, by the
affirmative vote of the holders of record of shares
entitling them to exercise a majority of the voting power
on such proposal, or at anytime, by the affirmative vote of
the Board of Directors.
ARTICLE VIII
Shares and Their Transfer
Section 1. Certificate for Shares. Every owner of one or
more shares in the Company shall be entitled to a
certificate, which shall be in such form as the Board of
Directors shall prescribe,
certifying the number and class of paid-up shares in the
Company owned by him. The certificates for the respective
classes of such shares shall be numbered in the order in
which they shall be
issued and shall be signed in the name of the Company by
the president or vice-president and by the secretary, or
any other proper officer of the Company thereunto
authorized by the Board of Directors, or the treasurer,
and the seal of the Company, if
any, may be affixed thereto. A record shall be kept of the
name of the person, firm, or corporation owning the shares
represented by each such certificate and the number of
shares represented by each such certificate and the
number of shares represented thereby, the date thereof,
and in case of cancellation, the date of cancellation.
Every certificate surrendered to the Company for exchange or
transfer shall be cancelled and no new certificate or
certificates until such existing certificates shall have
been so
cancelled, except in cases provided for in Section 2 of
this Article.
Section 2. Lost, Destroyed and Mutilated Certificates. If
any certificates for shares in this Company become worn,
defaced, or
mutilated but are still substantially intact and
recognizable, the directors, upon production and surrender
thereof, shall order the same cancelled and shall issue a
new certificate in lieu of
same. The holder of any shares in the Company shall
immediately notify the Company if a certificate therefor
shall be lost, destroyed, or mutilated beyond
recognition, and the Board of
Directors may, in its discretion, require the owner of
the certificate which has been lost, destroyed, or
mutilated beyond recognition, or his legal surety or
sureties as it may direct, not exceeding double the
value of the stock, to indemnify the Company against any
claim that may be made against it on account of the
alleged loss, destruction, or mutilation of any such
certificate. The Board of Directors may, however, in its
discretion, refuse to issue any such new certificate
except pursuant to legal proceedings, under the laws of
the State of
Nevada in such case made and provided.
Section 3. Transfers of Shares. Transfers of shares in
the Company shall be made only on the books of the Company
by the registered holder thereof, his legal guardian,
executor, or
administrator, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the
secretary of the Company or with a transfer agent
appointed by the Board of
Directors, and on surrender of the certificate or
certificates for such shares. The person in whose name
shares stand on the books of the Company shall, to the
full extent permitted by law, be deemed the owner
thereof for all purposes as regards the Company.
Section 4. Regulations. The Board of Directors may make
such rules and regulations as it may deem expedient, not
inconsistent with these Bylaws, concerning the issue,
transfer, and
registration of certificates for shares in the Company. It
may appoint one or more transfer agents or one or more
registrars or
both, and may require all certificates for shares to bear
the signature of either or both.
ARTICLE IX
Depositories, Contracts and Other Instruments
Section 1. Depositories. The president and any vice-
president of
the Company are each authorized to designate depositories
for the funds of the Company deposited in its name and the
signatories and conditions with respect thereto in each
case, and from time to time, to change such depositories,
signatories and conditions,
with the same force and effect as if each such depository,
the signatories and conditions with respect thereto and
changes therein had been specifically designated or
authorized by the Board of Directors or by the president,
or any vice-president of the Company, shall be entitled
to rely upon the certificate of the secretary or any
assistant secretary of the Company setting forth the fact
of such designation and of the appointment of the officers
of the Company or of both or of other persons who are to be
signatories with respect to the withdrawal of funds
deposited with such depository, or from time to time the
fact of any change in any depository or in the signatories
with respect thereto.
Section 2. Execution of Instruments Generally. Except as
provided
in Section 1 of this Article IX, all contracts and
other instruments requiring execution by the Company may
be executed and delivered by the president or any
vice-president and authority to sign any such contracts or
instruments, which may be general or confined to specific
instances, may be conferred by the Board of Directors
upon any other person or persons. Any person having
authority to sign on behalf of the Company may delegate,
from time to time, by instrument in writing, all or any part
of such authority to any person or persons if authorized so
to do by the Board of Directors.
