SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A2
- --------------------------------------------------------------------------------
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant To Section 12(g) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------------------
DP Charters, Inc.
- --------------------------------------------------------------------------------
Nevada 88-0381258
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
34700 Pacific Coast Highway, Capistrano Beach CA 92624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-9561
The following Securities are to be registered pursuant to Section 12(g) of the
Act:
Class-A Common Voting Equity Stock
27,656,000 Shares Issued and Outstanding
DECEMBER 23, 1999
The EXHIBIT INDEX is located at page 25 of this Registration Statement
1
<PAGE>
- --------------------------------------------------------------------------------
PART I
- --------------------------------------------------------------------------------
2
<PAGE>
Unnumbered Item: Introduction
This registration statement is voluntarily filed pursuant to Section 12(g)
of the Securities Exchange Act of 1934, in order to comply with the requirements
of National Association of Securities Dealers for submission for quotation on
the Over the Counter Bulletin Board, often called "OTCBB". This Registrant's
common stock is not presently quoted on the OTCBB. The Registrant's common stock
is qualified for listing over the counter in the "Pink Sheets"; however the
Registrant does not believe that any of its shares ever traded in brokerage
transactions. The requirements of the OTCBB are that the financial statements
and information about the Registrant be reported periodically to the Commission
and be and become information that the public can access easily. This Registrant
wishes to report and provide disclosure voluntarily, and will file periodic
reports in the event that its obligation to file such reports is suspended under
the Exchange Act. If and when this 1934 Act Registration is effective and clear
of comments by the staff, this Registrant will be eligible for consideration for
the OTCBB upon submission of one or more NASD members for permission to publish
quotes for the purchase and sale of the shares of the common stock of the
Registrant.
This Registrant may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
company, by which the private company's shareholders acquire control of the
public company. While no negotiations are in progress, and no potential targets
have been identified, the business plan of this Registrant is to find such a
target or targets, and attempt to acquire them for stock. While no such
arrangements or plans have been adopted or are presently under consideration, it
would be expected that a reverse acquisition of a target company or business
would be associated with some private placements and/or limited offerings of
common stock of this Registrant for cash. Such placements, or offerings, if and
when made or extended, would be made with disclosure and reliance on the
businesses and assets to be acquired, and not upon the present condition of this
Registrant.
- --------------------------------------------------------------------------------
Item 1. Description of Business.
- --------------------------------------------------------------------------------
(a) Business Development.
(1) Form and Year of Organization. This Corporation ("the Registrant") was
duly incorporated in Nevada on December 18, 1997, as DP Charters, Inc., with the
intention of initiating a charter yacht service from the Dana Point Harbor,
Orange County, California. The Registrant later expanded its business plan to
include the organization of SCUBA dive tours at various world locations. After
some unsuccessful efforts to launch operations, the original business plan was
abandoned, on or about May 15, 1999.
During October, November and December of 1997, the conceptual idea of
establishing a charter boat operation in Southern California was discussed among
the Registrant's Management, and with various friends and acquaintances. The
decision to form a company to be funded by those in discussion was taken, based
upon the expressed desire of the those founders to fund the Registrant
initially, pursuant to a private placement in reliance on Rule 504. The formal
funding by founders was memorialized about January of 1998.
Specifically, 20,000,000 shares were issued at par value to the Principal
Shareholder, pursuant to ss.4(2) of the Securities Act of 1933. 6,400,000 shares
(with warrants) were placed among 19 accredited investors, pursuant to
Regulation D, Rule 504, promulgated by the Commission pursuant to ss.3(b) of the
1933 Act. All warrants have expired or been cancelled and are no longer of any
further force or effect. Thereafter, in January and April 1999, 6,000 shares and
1,250,000 shares, respectively, were
3
<PAGE>
placed pursuant to Rule 504, in each case to a single sophisticated and
knowledgeable investor. Each of the foregoing issuances were made, were
applicable, to specific exemptions from registration pursuant to State Law. In
the judgement of Management, there is no unresolved issue or potential issue of
non-compliance with State Laws or regulation.
The Registrant had ambitious plans, at that time, to network through travel
agencies, upon observing that none of the notable competitors were so networked.
The Registrant's plans included the development of networking with firms
marketing tour packages or tour clubs and firms which could utilize the
Registrant's charter services as a value-added supplement to their Southern
California operations. Emphasis was to be placed on identifying easy access to
Dana Point Harbor, twenty minutes from Orange County Airport, one hour from San
Diego Airport or from Los Angeles International Airport. Arrangements with Dana
Point were investigated and the feasibility of its use determined. Management
further planned to make its services known to the American Association of
Retired Persons, which organization accounts nearly 500,000 members touring
Southern California during the off-season. Plans were made to join the Dana
Point Chamber of Commerce, which would provide a cost-free listing in the
California tourism magazine and information data-base, with circulation of just
under one million copies in six counties and automatic posting with all major
hotels throughout the State of California. Plans were made for an Internet
web-page, linked to that of the Dana Point Chamber of Commerce.
All of these intentions, and the best laid plans of Management, were
dependant, however, upon securing boats and/or participating boat owners or
providers, so that the services could be offered.
On or about March 5, 1998 and continuing through September, tentative
arrangements were reached to acquire boats from a provider in Norway, which had
acquired them in foreclosure of a lien, but had no profitable operation in which
to use them. The concept was to acquire the boats for stock, but the arrangement
called for the common stock of the Registrant's achieving acceptance for
quotation on the OTC Bulletin Board. During 1998, the Registrant paid a
consulting fee to the Norwegian group for a joint marketing, advertising and
referral program to bring northern European tourists to Southern California's
sport fishing market. During 1998 arrangements were made with SCUBA diving tour
group leaders in Florida and Mexico, for possible dive tours in the Florida
Keys, the Great Barrier Reef of Australia, the Island of Cozumel off the Yucatan
Peninsula of Mexico, and the seas off Egypt.
By the end of June, 1998, the Registrant's then current unaudited financial
statements, indicated a net loss from operations of $155,544.00, $102,470.00 of
which represented consulting fees directed to Norway. The Registrant's ability
to launch was yet dependent upon OTC Bulletin Board acceptance, and comments
between the NASD Staff and NASD submitting members were on-going. Delay due to
NASD Commenting period for start-up companies was not deemed unusual by
management, but shortly before the review of the last set of Comments, the NASD
changed its rules for acceptability for new applicant submitter to the effect
that the class of common stock to be quoted must have been registered under the
Securities Exchange Act of 1934 Act, or the Registrant must have made an
offering under the Securities Act of 1933, such that the applicant have a
Commission file number and actually file and remain current in filing its
financial statements with the Commission, and be accessible to the public.
Accordingly, the NASD responded to the final set of Comments by qualifying the
Registrant's common stock for quotation on the Pink Sheets, but not on the
OTCBB.
As a result of the poor timing of events, from the Registrant's point of
view, the Registrant was unable to consummate the acquisition of the boats and
was forced to abandon its original business plan. After abandoning its business
plan, it became a company whose business plan was to find a profitable business
combination. As a practical matter, the Registrant is required to register its
common stock pursuant to ss.12(g) of the 1934 Act and to pursue acceptance for
quotation on the OTCBB if it is to have any chance to compete with other issuers
or registrants, for business combinations by reverse acquisition. Substantially
all of its non-affiliate owned shares have become or were from issuance free
4
<PAGE>
of restriction in conformity with Rule 144, and might be resold in brokerage
transactions, in compliance with that Rule, if and when the common stock of this
Registrant might become qualified for quotation and trading on the OTCBB. There
are no lock-up or shareholder pooling agreements between or among shareholders
of this Registrant. All shares are owned and controlled independently by the
persons to whom they are issued. This Registrant has no Internet address.
(2) Bankruptcy, Receivership or Similar Proceeding. None from inception to
date.
(b) Business of the Registrant. The Registrant has no present business or
business plan. It is a potential candidate for business combination, most likely
in the form of a reverse acquisition or similar transaction.
Consultants. This Registrant has only a single consultant, namely its the
United States subsidiary of its principal shareholder, Intrepid International
Ltd., a Nevada Corporation. Information about the Principal Shareholder, and its
Nevada United States subsidiary is found later in this Registration Statement.
The U.S. management of that subsidiary serves as the management of this
Registrant. No other consultants are presently engaged nor are there any plans
to retain any consultants currently or for the foreseeable future. The Norwegian
consultants previously mentioned were specific to the previous business plan,
now abandoned, and maintain no relationship to the Registrant or any of its
affiliates. It is, of course, conceivable that should a target business be
acquired, one or more consultants may be sought out by the management of the
acquired entity, following a change of control. As of this time, there is no
basis upon which Management could base anything more than mere speculation as to
what manner of consultant, what criteria for seeking or selecting consultants,
or what term of service any such consultant might require; for the reason that
all such consideration would be matters before the Management of the Registrant
only after a change of control which would result from a reverse acquisition.
Neither Management of this Registrant, nor the Principal Shareholder, nor
Officers, nor Directors or affiliates of this Registrant have regularly used any
particular consultants on a regular basis.
No Present Acquisition Activities. This Registrant is not presently
pursuing its business plan, for the reason that such activities are not timely.
They are not timely because this Registrant must qualify itself for quotation on
the Over the Counter Bulletin Board ("OTCBB") before it can enter the arena of
seeking any business combination by reverse acquisition. The process of
qualifying for OTCBB requires first that this registrant become a reporting
company pursuant to this 1934 Act Registration Statement. The process next
requires that a Broker/Dealer make a submission to the National Association of
Securities Dealers ("NASD") for permission to publish quotations for the
purchase and sale of the common stock of this Registrant on the OTCBB. It would
be the policy of this Registrant to employ a consultant to seek a broker/dealer
to become such a submitting market-maker in the common stock of this Registrant.
Neither this Registrant, nor any of its affiliates, are Broker/Dealers or NASD
members. Since this Registrant's common stock is presently quoted on the Pink
Sheets, it is likely that one or more existing Market-Makers would apply for
up-grade from the Pink Sheets to the OTCBB, without the necessity of this
Registrant's employing any consultants therefor. When and if an NASD member
Broker/Dealer might make such a submission to NASD, the Staff of NASD would
evaluate the submission and the due diligence investigation and would make
comments and requests for further information, deemed appropriate to that Staff,
over a period of some months, before granting permission for the submitting
Market-Maker to begin publishing quotations. Until such time as permission may
be granted, no quotations would be published on the OTCBB. While quotations
might be published on the Pink Sheets, such quotations do not, in the judgment
of Management, constitute the basis for the creation or development of an
orderly trading market for the common stock of this Registrant. In arriving at
this opinion, that the Pink Sheets do not constitute the equivalent of OTCBB,
Management must consider not only its own opinion, but its assessment of the
opinions of those with whom it might evaluate a reverse acquisition.
Accordingly, Management reports its
5
<PAGE>
conclusion that a search for an acquisition target is premature, and that it
would remain premature for some months, until and unless the common stock of
this Registrant may be quoted on the OTCBB.
General Information about Probable Future Acquisitions. Notwithstanding the
conclusion and report that searching for possible acquisition targets is
premature, the Registrant can and will now disclose and report its general
intentions and policies, with respect to probable future acquisitions.
Limited Scope and Number of Possible Acquisitions: The Registrant does not
intend to restrict its consideration to any particular business or industry
segment, and the Registrant may consider, among others, finance, brokerage,
insurance, transportation, communications, research and development, service,
natural resources, manufacturing or high-technology. Of course, because of the
Registrant's limited resources, the scope and number of suitable candidate
business ventures available will be limited accordingly, and most likely the
Registrant will not be able to participate in more than a single business
venture. Accordingly, it is anticipated that the Registrant will not be able to
diversify, but may be limited to one merger or acquisition because of limited
financing. This lack of diversification will not permit the Registrant to offset
potential losses from one business opportunity against profits from another. To
a large extent, a decision to participate in a specific business opportunity may
be made upon management's analysis of the quality of the other firm's management
and personnel, the anticipated acceptability of new products or marketing
concepts, the merit of technological changes and numerous other factors which
are difficult, if not impossible, to analyze through the application of any
objective criteria. In many instances, it is anticipated that the historical
operations of a specific firm may not necessarily be indicative of the potential
for the future because of the necessity to substantially shift a marketing
approach, expand operations, change product emphasis, change or substantially
augment management, or make other changes. The Registrant will be dependent upon
the management of a business opportunity to identify such problems and to
implement, or be primarily responsible for the implementation of, required
changes. Because the Registrant may participate in a business opportunity with a
newly organized firm or with a firm which is entering a new phase of growth, it
should be emphasized that the Registrant may incur further risk due to the
failure of the target's management to have proven its abilities or
effectiveness, or the failure to establish a market for the target's products or
services, or the failure to prove or predict profitability.
Loan Financing not anticipated. There are no foreseeable circumstances
under which loan financing will be sought or needed by this Registrant, other
than possible advances by its Principal Shareholder, at any time before it may
identify and commit itself to an acquisition candidate. At such time, if any,
such loan financing would be secured on the basis of the that acquisition by and
with the owners of the acquisition target. In the absence of any present
probability of acquisition, no further information can be offered at this time.
Reporting under the 1934 Act. Following the effectiveness of this 1934 Act
Registration of the common stock of this Registrant, certain periodic reporting
requirements will be applicable. First and foremost, a 1934 Registrant is
required to file an Annual Report on Form 10-K or 10-KSB, 90 days following the
end of its fiscal year. The key element of such annual filing is Audited
Financial Statements prepared in accordance with standards established by the
Commission. A 1934 Act Registrant also reports on the share ownership of
affiliates and 5% owners, initially, currently and annually. In addition to the
annual reporting, a Registrant is required to file quarterly reports on Form
10-Q or 10-QSB, containing audited or un-audited financial statements, and
reporting other material events. Some events are deemed material enough to
require the filing of a Current Report on Form 8- K. Any events may be reported
currently, but some events, like changes or disagreements with auditors,
resignation of directors, major acquisitions and other changes require
aggressive current reporting. All reports are filed and become public
information.
The practical effects of the foregoing requirements on the criteria for
selection of a target company are two-fold: first, the target must have audited
or auditable financial statements, and the
6
<PAGE>
target must complete an audit for filing promptly upon the consummation of any
acquisition; and, second, that the target management must be ready, willing and
able to carry forth those reporting requirements or face de-listing from the
OTCBB, if listed, and delinquency and possible liability for failure to report.
Probable Industry Segments for Acquisition. While the Registrant may
consider proposals from a wide variety of business segments, Management reports
that the proposals it has been receiving involve high-technology and new
communication technologies, internet and information services. Management feels
that it is most likely that a business combination candidate will be selected in
these industry segments. Due to circumstances unique to this Registrant, it is
not in a position to consider any specific proposal for the use of this
Registrant in reverse merger transactions, for the reason that it is not now
qualified for quotation on the OTC Bulletin Board, and will not be, if at all,
for an indeterminant number of months. There is no present or foreseeable
potential that this Registrant will acquire a target business or company in
which its present management or principal shareholder, or affiliates, have an
ownership interest. Consideration has been given to corporate policy in this
regard, and it has been determined not to permit any transaction in other than
an arm's length acquisition of business assets owned and controlled by unrelated
third party interests. The basis for this policy is two fold: first, that
related party transactions are unnecessary in the judgment of management and
involve risks not necessary to invite; and second that related party
transactions do not offer the potential profitability for shareholders, that
management believes exists presently in the market place for public issuers
amenable to reverse merger transactions.
Finders fees for Management. No finder's fees will be payable to Management
in connection with any forseeable reverse acetin. Management is identified with
the principal shareholder. The Principal Shareholder's remaining share ownership
following any reverse acquisition, and the Principal Shareholder might be
expected to sell its controlling interest for consideration from the acquiring
shareholders of the acquisition target. Depending on the quality of the target
company, the principal shareholder may sell all, some or none of the control
block, as matters for arm's length deal-making, when it comes to that stage.
Additionally, the Principal Shareholder is the Principal Consultant and
provides, has provided and may provide corporate services to the Registrant,
billable hourly in an established and customary manner. No finders fees,
commissions or other bonuses to Management, Principal Shareholder, or
affiliates, for securing or in connection with any acquisition, will be paid or
payable, as a matter of both current economic conditions and corporate policy.
Management has determined that in its view of the current market for such
transactions, such fees or bonuses are not justifiable.
Discretion to allocate opportunities. It is disclosed here and elsewhere,
that the Management of this Registrant is also the Management of its Principal
Shareholder, and that the Principal Shareholder has other businesses than the
Management of this Registrant. Accordingly, it is inherent in this relationship
that Management and the Principal Shareholder may be in a position to direct one
or more business opportunities to this Registrant, or to direct such
opportunities to other business interests. This is an inherent potential
conflict of interest which may or may not become material in the future. At
present, no acquisition is probable or reasonably practical.
(1) Principal Products or Services and their Markets. None.
(2) Distribution Methods of the products or services. None.
(3) Status of any publicly announced new product or service. None.
(4) Competitive business conditions and the small business Registrant's
competitive position in the industry. Other better capitalized firms are engaged
in the search for acquisitions or business combinations which firms may be able
to offer more and may be more attractive to acquisition
7
<PAGE>
candidates. This Registrant has not yet become a present candidate for reverse
acquisition transactions, for the reasons previously stated. It may become so in
the future, and becoming so when it can is its business plan. It is doubtful
whether any such transaction could be anticipated in the next twelve months.
There is no compelling reason why this Registrant should be preferred over other
reverse- acquisition public corporation candidates. It has no significant pool
of cash can offer no capital formation incentive for its selection. It has a
limited shareholder base insufficient for acquisition target wishing to proceed
for application to NASDAQ. In comparison to other "public shell companies" this
Registrant is unimpressive, in the judgement of management, and totally lacking
in unique features which would make it more attractive or competitive that other
"public shell companies". While management believes that the competition of
other "public shell companies" is intense and growing, it has no basis on which
to quantify its impression. Please See the Item 2 of this part, MANAGEMENT
DISCUSSION AND ANALYSIS, for more information and disclosure.
(5) Sources of and availability of raw Materials and the names of principal
suppliers. Not Applicable.
(6) Dependance on one or a few major customers. Not Applicable.
(7) Patents, Trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts. None.
(8) Need for any government approval of principal products or services and
status. Not applicable.
(9) Effect of existing or probable governmental regulations on the
business. Not applicable. However, this Registrant would expect to maintain its
corporate status with the State of its incorporation, and would file its tax
returns and reports required to be filed with the Commission. This Registrant
wishes to report and provide disclosure voluntarily, and will file periodic
reports in the event that its obligation to file such reports is suspended under
the Exchange Act. If and when this 1934 Act Registration is effective and clear
of comments by the staff, this Registrant will be eligible for consideration for
the OTCBB upon submission of one or more NASD members for permission to publish
quotes for the purchase and sale of the shares of the common stock of the
Registrant. In connection with such submission and any continuation on the
OTCBB, this Registrant would expect to comply with NASD regulations, to the
extent that any such regulations are applicable to the conduct of the
Registrant's affairs.
(10) Estimate of amount spent on research and development in each of last
two years. None.
(11) Costs and effects of compliance with environmental laws. None at this
time.
(12) Number of total employees and full-time employees. None.
(13) Year 2000 compliance issues. None. The Registrant has no computers or
digital equipment of its own, no suppliers or customers. Accordingly, the
Registrant has determined that it is faced with no year 2000 compliance issues
other than those shared by the public in general.
- --------------------------------------------------------------------------------
Item 2. Managements Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
(a) Plan of Operation. This Registrant was duly incorporated in Nevada on
December 18, 1997, as DP Charters, Inc., with the intention of initiating a
charter yacht service from the Dana Point Harbor, Orange County, California. The
Registrant later expanded its business plan to include the organization of SCUBA
dive tours at various world locations. After some unsuccessful efforts to launch
operations, the original business plan was abandoned, on or about May 15, 1999.
The Registrant has no present business or business plan other than to seek a
profitable business combination, most likely in a reverse
8
<PAGE>
acquisition or similar transaction. Accordingly, its plan is to seek one or more
profitable business combinations or acquisitions to secure profitability for
shareholders.
Plan of Operation for the next twelve months. This Registrant's Management,
Mr. James and Mr. Sifford, are the Officers and Directors of Intrepid
International Ltd. a Nevada corporate subsidiary of Intrepid International, S.A.
a Panama corporation. These two Intrepid are referred to collectively as the
"Principal Shareholder" of this Registrant.
This Registrant is not presently pursuing its business plan, for the reason
that such activities are not timely. They are not timely because this Registrant
must qualify itself for quotation on the Over the Counter Bulletin Board
("OTCBB") before it can enter the arena of seeking any business combination by
reverse acquisition. The process of qualifying for OTCBB requires first that
this Registrant become a reporting company pursuant to this 1934 Act
Registration Statement. The process next requires that a Broker/Dealer make a
submission to the National Association of Securities Dealers ("NASD") for
permission to publish quotations for the purchase and sale of the common stock
of this Registrant on the OTCBB. It would be the policy of this Registrant to
employ a consultant to seek a broker/dealer to become such a submitting
market-maker in the common stock of this Registrant. Neither this Registrant,
nor any of its affiliates, are Broker/Dealers or NASD members. Since this
Registrant's common stock is presently quoted on the Pink Sheets, it is likely
that one or more existing Market-Makers would apply for up-grade from the Pink
Sheets to the OTCBB, without the necessity of this Registrant's employing any
consultants therefor. When and if an NASD member Broker/Dealer might make such a
submission to NASD, the Staff of NASD would evaluate the submission, and the due
diligence investigation, and would make comments and requests for further
information, deemed appropriate to that Staff, over a period of some months,
before granting permission for the submitting Market-Maker to begin publishing
quotations. Until such time as permission may be granted, no quotations would be
published on the OTCBB. While quotations might be published on the Pink Sheets,
such quotations do not, in the judgment of Management, constitute the basis for
the creation or development of an orderly trading market for the common stock of
this Registrant. In arriving at this opinion, that the Pink Sheets do not
constitute the equivalent of OTCBB, Management must consider not only its own
opinion, but its assessment of the opinions of those with whom it might evaluate
a reverse acquisition. Accordingly, Management reports its conclusion that a
search for an acquisition target is premature, and that it would remain
premature for some months, until and unless the common stock of this Registrant
may be quoted on the OTCBB.
This Registrant is not ready to search for or to consider any specific
acquisition target. It does not expect to be able to begin consideration of any
acquisitions for four to six months. It cannot expect to identify or commit
itself to any acquisition within the next twelve months, or perhaps longer for
the following reasons. It is not the policy or practice of the Registrant, its
Management or Principal Shareholder to advertise, or travel in search of
possible targets. This Registrant does not command the capital or liquidity with
which to conduct such a search, and does not expect to be able to engage in any
capital formation or loan funding activities for that purpose. While incidental
advances by the Principal Shareholder for corporate maintenance, filing fees,
legal and professional, and auditing are foreseeable, the Principal Shareholder
has no intention of general funding or funding search, advertising or other
promotion of this Registrant. Accordingly, the future prospects of this
Registrant is likely to await such serendipitous referral or introduction as may
lead to conversations with potential target businesses. The search for a
profitable business combination, accordingly, must be understood as an
essentially passive one, relying mostly on word of mouth. It is possible that
business brokers or promoters may at some point approach management with a
proposal. No estimate can be made when and if such a passive search might yield
an acquisition target.
When and if a probable acquisition target may be identified, or may
identify itself, Management will conduct extensive due diligence and evaluation
of the target, based upon the financial statements of an acquisition target, its
forseeable requirements for capital, and realistic potential of the target to
9
<PAGE>
attract the capital it may require, and management's evaluation of its ability
to achieve its plan for profitability. No acquisition would be made if
Management were not satisfied that its plan for profitability and viability were
sound and in the interests of shareholders. The Registrant will continue its
evaluation of opportunities until an attractive business combination is
accomplished, no matter how long it may take.
Cash Requirements and of Need for additional funds, twelve months. This
Registrant has no immediate need for current capital formation in its present
stage from outside sources. This means that the Registrant expects to maintain
its corporate and other filings and reports during the next twelve months.
Reference is made to Note 2, GOING CONCERN, of the Registrant's Audited
Financial Statements: "The Registrant is dependant upon raising capital to
continue operations. The financial statements do not include any adjustments
that might arise from the outcome of this uncertainty. It is management's plan
to raise additional funds to begin its operations." The Registrant would be
dependent on the acquisition of assets and businesses to commence business
operations. The Registrant is not dependant on additional funds to conduct its
investigation and selection of a profitable business combination. Management
cannot plan such capital formation as may be appropriate for an acquired
business before selection of and combination with such a business. It is to be
expected that following the firm agreement to combine, some capital raising
program would be necessary, but any such program would be offered to investors
based upon the assets and businesses to be acquired, and not on this Registrant
in its present condition, without businesses, revenues, or income producing
assets.
Reference is made to Note 3, DEVELOPMENT STAGE COMPANY, of the Registrant's
Audited Financial Statements: "The Registrant is a development stage company, as
defined in Financial Accounting Standards Board Statement 7. It is concentrating
substantially all of its efforts in raising capital and developing its business
operations in order to generate significant revenues." After some unsuccessful
efforts to launch operations, the original business plan was abandoned, on or
about May 15, 1999. The Registrant has no present business or business plan
other than to seek a profitable business combination, most likely in a reverse
acquisition or similar transaction. Accordingly, its plan is to seek one or more
profitable business combinations or acquisitions to secure profitability for
shareholders. The Registrant is not presently concentrating on selecting a
business combination candidate. No current fund raising programs are being
conducted or contemplated before merger, acquisition or combination is
announced, and then any such capital formation would be offered to investors
based upon the assets and businesses to be acquired, and not on this Registrant
in its present condition, without businesses, revenues, or income producing
assets.
In the event, contrary to the expectation of management, that no
combination is made within the next twelve to eighteen months, this Registrant
may be forced to effect some advances from its Principal Shareholder, for costs
involved in maintenance of corporate franchise and filing reports as may be
required, when and if this 1934 Act registration is effective. Should this
become necessary, the maximum amount of such advances is estimated not to exceed
$20,000.00. No agreement by the Principal shareholder to make such advances is
in place, and no guarantee can presently be given that additional funds, if
needed, will be available. It is by far more likely that advances will take the
form of providing services on a deferred compensation basis. Should further
auditing be required, such services by the Independent Auditor may not be the
subject of deferred compensation.
As reflected in the Financial Statements of this Registrant, provided with
this Registration Statement, it has not been necessary for any shareholder to
advance operational funds to this Registrant.
(i) Summary of Product Research and Development. None.
(ii) Expected purchase or sale of plant and significant equipment. None.
10
<PAGE>
(iii) Expected significant change in the number of employees. None.
(b) Discussion and Analysis of Financial Condition.
(i) Operations and Results for the past two fiscal years. This
Corporation has had no revenues since its inception in December of 1997.
Its attempt to commence operations failed and was abandoned on May 15,
1999. Its expenses of $156,559, for the five months ended May 31, 1998,
$191,679 for the twelve months ended December 31, 1998, are not considered
indicative of maintenance expenses for the next six to twelve months, but
reflect attempts to secure rights and assets for its former and abandoned
business plan, and unusual legal expenses in connection with due diligence
investigation and disclosure in connection with submission to the NASD for
quotation on the Bulletin Board, the OTCBB, in the context of the NASD rule
changes. As an incidental result of the NASD Rule changes this Registrant's
common stock is allowed to be quoted over the counter in the "Pink Sheets",
but will not be qualified for the OTCBB until this 1934 Registration has
been effective in proper form.
It is noted that the total expenses for the tree months ended March
31, 1999, and the six months ended June 30, 1999, are the same figure,
$7,325; and for the nine months ended September 30, 1999 are $27,325; and
it is further noted, that figure includes the amortization of
organizational expenses of $16,000. Management estimates that the expenses
needed to carry the Registrant through an ultimate reorganization, over and
above current cash, to be not more than $20,000.00, which funding, if
needed, would be used to defer legal and auditing and accounting, and
incidental filings with the Commission, and with any States in which the
parties are domiciled.
This Registrant retained a firm named Capital Relations and Management
to assist in initial submission to the OTCBB, paying a fixed fee of $2,500
for that service. Capital Relations and Management is not an affiliate of
the Registrant or of its Principal Shareholder. Capital Relations submitted
the Registrant's disclosure documents to National Capital, LLC, which
market maker duly submitted for permission to quote to the NASD. Before
clearing comments, the NASD effected its rule changes, with the result that
the Registrant's common stock was cleared for the Pink Sheets, but cannot
be cleared for the OTCBB until its 1934 Act Registration shall have become
effective, and cleared comments. The Registrant has not, and this
Registrant will not, take other affirmative steps to encourage or request
any broker-dealer to act as a market maker for the its securities.
(ii) Future Prospects. The Registrant has predicted that it will
participate in a business opportunity within the next twelve months,
notwithstanding its limited resources, and competitive disadvantages with
respect to other public or semi-public Registrants. Such a forward looking
statement must be recognized as such. Unexpected events, changes in market
conditions, loss of experienced management personnel, and the like,
certainly require that management's expectations be evaluated in the light
of the basis for such forward looking statements. There are no guaranties
of success at any stage.
(c) Reverse Acquisition Candidate. The Registrant is searching for a profitable
business opportunity. The acquisition of such an opportunity could and likely
would result in some change in control of the Registrant at such time. This
would likely take the form of a reverse acquisition. That means that this
Registrant would likely acquire businesses and assets for stock in an amount
that would effectively transfer control of this Registrant to the acquisition
target company or ownership group. It is called a reverse-acquisition because it
would be an acquisition by this Registrant in form, but would be an acquisition
of this Registrant in substance. Capital formation issues for the future of this
Registrant would arise only when targeted business or assets have been
identified. Until such time, this Registrant has no basis upon which to propose
any substantial infusion of capital. While no such
11
<PAGE>
arrangements or plans have been adopted or are presently under consideration, it
would be expected that a reverse acquisition of a target company or business
would be associated with some private placements and/or limited offerings of
common stock of this Registrant for cash. Such placements, or offerings, if and
when made or extended, would be made with disclosure and reliance on the
businesses and assets to be acquired, and not upon the present condition of this
Registrant.
- --------------------------------------------------------------------------------
Item 3. Description of Property.
- --------------------------------------------------------------------------------
The Registrant has no property and enjoys the non-exclusive use of offices
and telephone of its officers and attorneys, without charge or written
agreement. The Registrant pays for outside copying and Federal Express, U.P.S
and other messenger services. The Registrant does not pay for routine telephone,
in-house copying or United States Mail. The Registrant's address for mail and
deliveries is 24843 Del Prado, Dana Point CA, 92629. The affairs of the
Registrant are conducted a 34700 Pacific Coast Highway, Suite 303, Capistrano
Beach CA 92624. This latter suite is the Office of Intrepid International Ltd.,
the United States Office of the Principal Shareholder.
This Registrant has adopted no policies with respect to real estate
investment. While it has no intention of investing in real estate, it is not
prevented from doing so by any corporate policy or action. Management disclaims
any special knowledge or skill with respect to real estate investment, and
cannot presently foresee any circumstances which would make such an investment
attractive to this Registrant.
- --------------------------------------------------------------------------------
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners. To the best of Registrant's
knowledge and belief the following disclosure presents the total security
ownership of all persons, entities and groups, known to or discoverable by
Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. More than one person, entity or group
could be beneficially interested in the same securities, so that the total of
all percentages may accordingly exceed one hundred percent of some or any
classes. Please refer to explanatory notes if any, for clarification or
additional information. The Registrant has only one class of stock; namely
Common Stock.
(b) Security Ownership of Management. To the best of Registrant's knowledge and
belief the following disclosure presents the total beneficial security ownership
of all Directors and Nominees, naming them, and by all Officers and Directors as
a group, without naming them, of Registrant, known to or discoverable by
Registrant. More than one person, entity or group could be beneficially
interested in the same securities, so that the total of all percentages may
accordingly exceed one hundred percent of some or any classes. Please refer to
explanatory notes if any, for clarification or additional information.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
12
<PAGE>
OFFICERS AND DIRECTORS AND OWNERS OF 5% OR MORE
<TABLE>
<CAPTION>
=======================================================================================================================
Name and Address of Beneficial Owner Actual % Attributed %
Shares Shares
Owned Owned
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kirt W. James (1) 2,500,000 9.04 20,000,000 72.32
24843 Del Prado #318
Dana Point CA 92629
- -----------------------------------------------------------------------------------------------------------------------
J. Dan Sifford, Jr. (1) 2,500,000 9.04 20,000,000 72.32
62 Bay Heights Drive
Miami, Florida 33133
=======================================================================================================================
All Officers and Directors as a Group 5,000,000 18.08 20,000,000 72.32
=======================================================================================================================
Laurencio Jaen O. (2) 0 0.00 20,000,000 72.32
Torre Universal
Ave Federico Boyd
Piso No. 12 (Penthouse)
Panama, Republic of Panama
- -----------------------------------------------------------------------------------------------------------------------
Teodoro F. Franco L. (2) 0 0.00 20,000,000 72.32
Torre Universal
Ave Federico Boyd
Piso No. 12 (Penthouse)
Panama, Republic of Panama
- -----------------------------------------------------------------------------------------------------------------------
Leopoldo Kennion G (2) 0 0.00 20,000,000 72.32
Torre Universal
Ave Federico Boyd
Piso No. 12 (Penthouse)
Panama, Republic of Panama
- -----------------------------------------------------------------------------------------------------------------------
Intrepid International S.A. (1) (2) 15,000,000 54.24 20,000,000 72.32
Torre Universal
Ave Federico Boyd
Piso No. 12 (Penthouse)
Panama, Republic of Panama
- -----------------------------------------------------------------------------------------------------------------------
Total "Other 5% Owners" of the Registrant 15,000,000 54.24 20,000,000 72.32
=======================================================================================================================
Total Shares Issued and Outstanding 27,656,000 100.00 27,656,000 100.00
=======================================================================================================================
</TABLE>
(1) The Officers and Directors of this Registrant are affiliates of the
Principal Shareholder. For this reason the attribution of all shares to
each is shown in the table. Please see Item 5 of this Part, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS for further information.
The shares listed as issued to them are were in fact issued to them, as
individuals, and are beneficially owned by them as indicated.
(2) The Ownership of the 15,000,000 is held by Intrepid International as a
corporate asset and is not the personal asset of any of its Officers,
Directors or shareholders. These Officers, Directors and Shareholders of
the Panamanian Principal shareholders are the same three persons. Their
names and percentage of ownership are Laurencio Jaen O. (50%), Teodoro F.
Franco L. (50%), Leopoldo Kennion G. (0%). Please see Item 7 of this Part,
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS for further information.
(1) (2) Each of the shareholders shown in the foregoing table have sole
voting power with respect to their actual legal ownership, Mr. James, Mr.
Sifford, and the Panama Corporation. There are no legal or contractual
arrangements which require these affiliates to act in concert with respect
to their share ownership. However, legal obligations aside, it is
reasonable to expect the Officers of the Registrant and the Principal
shareholder to cooperate and to act in their common interest until a change
of control shall have
13
<PAGE>
occurred. Should a change of control result in the present affiliates
ceasing to be affiliates for a period of ninety days or more, each of the
individual Directors and the Panama Corporation would be at liberty to
direct their own management of their respective share ownerships.
(c) Changes in Control. There are no arrangements, including any pledge by any
persons, of securities of Registrant, which may at a subsequent date result in a
change of control of Registrant. In as much as the Registrant is searching for a
profitable business opportunity, it is to be expected that a change of control
would be contemplated when such a target is identified.
- --------------------------------------------------------------------------------
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- --------------------------------------------------------------------------------
The following persons are the Directors of Registrant, having taken office
from the inception of the Registrant, to serve until their successors might be
elected or appointed. The time of the next meeting of shareholders has not been
determined and is not likely to take place before a targeted acquisition or
combination is determined.
Kirt W. James, the Registrant's President, has a lifelong background in
marketing and sales. From 1972 to 1987, Mr. James was responsible for sales and
business administrative matters for Glade N. James Sales Co., Inc. and from 1987
to 1990 Mr. James built retail markets for American International Medical Supply
Co., a publicly traded company. In 1990 he formed and became President of HJS
Financial Services, Inc., and was responsible for the day to day business
operations of the firm as well as consultation with Clients concerning their
business and Product Development. He remains the President and Sole Shareholder
of HJS, which is presently substantially in active. During the past five years
Mr. James has been involved in the valuation of private companies for internal
purposes, and as a consultant to private companies engaged in the private sale
and acquisition of other private businesses. He has also assisted private and
public companies in planning for entry into the public market place. Mr. James
is not and has never been a broker-dealer. He has acted primarily as consultant,
and in some cases has served as an interim officer and director of public
companies in their development stage. The following disclosure identifies those
public companies with which he has been involved during the past five years:
Earth Industries, Inc., EditWorks, Ltd., Market Formulation & Research, Inc.,
Mex Trans Seafood Consulting, Inc., and North American Security & Fire. He is
also an Officer and Director of Oasis 4th Movie Project, an operating
non-trading company.
J. Dan Sifford, Jr., has been Secretary-Treasurer of the Registrant since
its inception, grew up in Coral Gables, Florida, where he attended Coral Gables
High School and the University of Miami. After leaving the University of Miami,
Mr. Sifford formed a wholesale consumer goods distribution company which
operated throughout the southeastern United States and all of Latin America. In
1965, as an extension of the operations of the original company, he founded
Indiasa Corporation (Indiasa), a Panamanian company which was involved in supply
and financing arrangements with many of the Latin American Governments, in
particular, their air forces and their national airlines. As customer
requirements dictated, separate subsidiaries were established to handle specific
activities. During each of the past five years he has served as President of
Indiasa, which serves only as a holding company owning: 100% of Indiasa Aviation
Corp. (a company which owns aircraft but has no operations); 100% of Overseas
Aviation Corporation (a company which owns Air Carrier Certificates but has no
operations); 50% of Robmar International, S.A. (a company operates a
manufacturing plant in Argentina and Brazil, but in which Mr. Sifford holds no
office). In addition to his general aviation experience, Mr. Sifford, an Airline
Transport rated pilot, has twenty two years experience in the airline business,
and is currently the President of Airline of the Virgin Islands, Ltd. a commuter
passenger airline operating in the Caribbean, and has been its president
continuously during each of the past five years.
14
<PAGE>
Mr. Sifford is not and has never been a broker-dealer. He has acted
primarily as consultant, and in some cases has served as an interim officer and
director of public companies in their development stage. The following
disclosure identifies those public companies: Air Epicurean, Inc., All American
Aircraft, Earth Industries, Ecklan Corporation, EditWorks, Ltd., Market .,
Market Formulation & Research, Inc., NetAir.com, Inc., NSJ Mortgage Capital
Corporation, Inc., North American Security & Fire, Oasis 4th Movie Project,
Professional Recovery Systems, Inc., Richmond Services, Inc., Telecommunications
Technologies, Ltd., and World Staffing II, Inc.
Of these last mentioned companies, he is currently serving in this
Registrant, in Ecklan Corporation, in Oasis 4th Movie Project, in Richmond
Services, Inc, and in NetAir.com, Inc.
There are no persons who are officers or directors, other than the
foregoing, whose activities have been or are material to the operations of this
Registrant. The present Officers and Directors spend an insubstantial amount of
time on the activities of this Registrant. There are no arrangements, agreements
or understandings between non-management shareholders and management, under
which non- management shareholders or other persons may directly or indirectly
participate in or influence the management of the affairs of this Registrant.
There are no agreements or understandings for any officer or director to resign
at the request of another person.
The Officers and Directors of this Registrant are the Officers and
Directors of Intrepid International Ltd. of Nevada, the United States Subsidiary
of Intrepid International S.A. of Panama, the Principal Shareholder. The
principal business of the United States Subsidiary is the performance of
Corporate Services on a time-fee basis. It is foreseeable, but not presently
intended, nor is it the normal practice, that these Officers and Directors may
serve as interim management of other companies in their development stage.
Intrepid does participate from time to time in the organization of companies
intending to make offerings of unregistered securities, in connection with
actual businesses ventures. It is not the policy and has not been the practice,
of Intrepid International, either of Panama or Nevada, or its officers or
directors, to create "Blind Pools" or engage in "Blank Check" offerings.
- --------------------------------------------------------------------------------
Item 6. Executive Compensation.
- --------------------------------------------------------------------------------
Each of the two Officer/Directors have been issued 2,500,000 new investment
shares of common stock, each for present service and incentive purposes, in
connection with, and as a part of the initial issuance of 20,000,000 shares to
founders for organizational costs, and valued at $20,000.00 (par value). As
indicated in Items 4 and 5 immediately preceding, the names of those officers
and directors receiving these shares are Kirt W. James, and J. Dan Sifford, Jr.
No other compensation, or plan of compensation, has been made, authorized or
contemplated at the present time and for the present period of corporate
inactivity and ill-liquidity. There is no market for the shares of this
Registrant. It is not possible to derive a "fair market value" for this share
ownership based upon any market. The Management shares were issued in 1997 at
par value. The actual value of this ownership would ripen if, and only if, this
Registrant could achieve profitability by acquisition of assets or businesses.
It was not the intention of this Registrant for its shares to trade on the Pink
Sheets. During the period of comments for the OTC Bulletin board, the rules
having changed, the common stock of this Registrant was cleared for the Pink
Sheets by default. This Registrant believes that no actual quotations of bid or
ask are current. It is, however useful to the Registrant to remain qualified for
the Pink Sheets, in as much as the procedure for moving from the Pink Sheets to
the OTCBB is less taxing than an original submission. Accordingly, the shares of
common stock of this Registrant owned by officers and directors is deemed to
have no present public trading, nor have ever had any public trading value.
Inasmuch as the 20,000,000 shares were issued in October 1997 for organizational
services valued at $20,000.00, the value attributed to the shares provided to
the Officers therefore would be $2,500.00 each.
15
<PAGE>
- --------------------------------------------------------------------------------
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------------------------------
Intrepid International, S. A. ("Intrepid-Panama") is the principal
shareholder of this Registrant. The Officers and Directors of this Registrant
are affiliates of Intrepid-Panama. The principal shareholder was incorporated in
the Republic of Panama in 1984 to offer financial services to natural resource
companies, primarily those engaged in the production of oil and gas. Following
the world wide collapse of oil prices in the mid-eighties, Intrepid-Panama
broadened the focus of its universe of support services to include a wider range
of companies, with an emphasis on public companies and private companies,
companies engaged in the transition from privately held to publicly held, and
development stage companies, whether public or private, requiring professional
business and corporate guidance. In August of 1997 Intrepid-Panama sought a
United States Representative and entered into a relationship with a group of
corporate and business specialists who, after contracting with Intrepid-Panama,
incorporated as Intrepid International, Ltd. ("Intrepid US") to provide the
required representation and agency for Intrepid-Panama in North America and
Europe. Intrepid US is incorporated in the State of Nevada. Intrepid
International (US and/or Panama) is not an investment banker, nor a broker or
dealer in securities. Intrepid is a provider of technical support services to
client companies, generally, and an occasional investor for its own account.
The following persons are not Officers or Directors of this Registrant.
They are the owners, Officers and Directors of the Principal Shareholder. The
following persons do not engage in direct control of the affairs of the
Registrant, and their activities are not material to the operations of this
Registrant. While the following three persons, acting as a Board of Directors of
the Panama Corporation could exercise direct control, as majority shareholder,
they have delegated United States operations to the Officers and Directors of
this Registrant, and to the United States subsidiary of which they two
constitute the Management.
Laurencio Jaen O., an original incorporator who has served as President and
Director of Intrepid-Panama since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world's largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of Intrepid-Panama, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, a Panama law firm with offices around the world.
In addition to his law practice he has served as Panamanian Consul to Liverpool,
England and for the past five years as Ambassador to Great Britain. The firm of
Franco and Franco is regarded with the highest degree of integrity and
professionalism in the business and political community in Panama with its
partners and several of its associates holding or having held public office in
Panama. The firm practices maritime, aviation and commercial law and currently
is the legal firm for: IBERIA (the Spanish national airline), KLM (the Dutch
national airline), VIASA (the Venezuelan national airline), Aeroflot (the
Russian national airline) and various smaller Latin American national airlines
as well as being the registered agents for thousands of ocean going ships around
the world flying the Panamanian flag. Mr. Franco brings to Intrepid-Panama a
wealth of international legal, commercial and diplomatic experience.
16
<PAGE>
Leopoldo Kennion G., Treasurer and a Director of Intrepid-Panama, is, and
has for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found under Item 5 of this Part, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of Intrepid International, Ltd. (Nevada)
(Intrepid US) are two individuals; KIRT W. JAMES, and J. DAN SIFFORD, JR., which
two individuals are the officers and directors of this Registrant. Their
biographical information is found under Item 5 of this Part, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS. These two persons are only
persons in direct, day to day control of the affairs of this Registrant. The
Officers, Owners and Directors of the Panama parent do not direct or participate
in the management of this Registrant.
- --------------------------------------------------------------------------------
Item 8. Description of Securities.
- --------------------------------------------------------------------------------
The Registrant's Capital Authorized and Issued. The Registrant is authorized to
issue 100,000,000 shares of a single class of Common Voting Stock, of par value
$0.001, of which 27,656,000 are issued and outstanding.
Common Stock. All shares of Common Stock when issued were fully paid for and
nonassessable. Each holder of Common Stock is entitled to one vote per share on
all matters submitted for action by the stockholders. All shares of Common Stock
are equal to each other with respect to the election of directors and cumulative
voting is not permitted; therefore, the holders of more than 50% of the
outstanding Common Stock can, if they choose to do so, elect all of the
directors. The terms of the directors are not staggered. Directors are elected
annually to serve until the next annual meeting of shareholders and until their
successor is elected and qualified. There are no preemptive rights to purchase
any additional Common Stock or other securities of the Registrant. The owners of
a majority of the common stock may also take any action without prior notice or
meeting which a majority of shareholders could have taken at a regularly called
shareholders meeting, giving notice to all shareholders thereafter of the action
taken. In the event of liquidation or dissolution, holders of Common Stock are
entitled to receive, pro rata, the assets remaining, after creditors, and
holders of any class of stock having liquidation rights senior to holders of
shares of Common Stock, have been paid in full. All shares of Common Stock enjoy
equal dividend rights. There are no provisions in the Articles of Incorporation
or By-Laws which would delay, defer or prevent a change of control.
Secondary Trading refers to the marketability to resell the securities of this
Registrant in brokerage transactions, and that marketability is generally
governed by Rule 144, promulgated by the Securities and Exchange Commission
pursuant to ss.3 of the Securities Act of 1933. Securities which have not been
registered pursuant to the Securities Act of 1933, but were exempt from such
registration when issued, are generally "Restricted Securities" as defined by
Rule 144(a). The impact of the restrictions of Rule 144 are (a) a basic one year
holding period from purchase; and (b) a limitation of the amount any shareholder
may sell during the second year, as to non-affiliates of the Registrant;
however, as to shares owned by affiliates of the Registrant, the second-year
limitation of amounts attaches and continues indefinitely, at least until such
person has ceased to be an affiliate for 90 days or more. The limitation of
amounts is generally 1% of the total issued and outstanding in any 90 day
period.
Unrestricted Shares of Common Stock. 27,656,000 are issued and outstanding.
20,000,000 shares are held by affiliates of the Registrant. 7,656,000 shares are
owned by non-affiliates of the Registrant and are believed to be unrestricted
securities which could be sold in brokerage transaction in compliance
17
<PAGE>
with Rule 144. These 7,656,000 shares were issued pursuant to Rule 504 on or
before April 6, 1999, and were not, when issued Restricted Securities, as
defined by Rule 144(a). The 27,656,000 affiliate shares were issued at the end
of December, 1998, pursuant to ss.4(2) of the 1933 Act, and are more than one
year, and almost two years old. Rule 144 would permit affiliate sales in limited
amounts, commonly called "dribbling".
Options and Derivative Securities. There are no outstanding options or
derivative securities of this Registrant. There are no shares issued or reserved
which are subject to options or warrants to purchase, or securities convertible
into common stock of this Registrant.
Risks of "Penny Stock." The Registrant's common stock may be deemed to be "penny
stock" as that term is defined in Reg.Section 240.3a51-1 of the Securities and
Exchange Commission. Penny stock share stocks (i) with a price of less than five
dollars per share; (ii) that are not traded on a "recognized" national exchange;
(iii) whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ) listed stocks must still meet requirement (i) above); or (iv) in
issuers with net tangible assets less than $2,000,000 (if the issuer has been in
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years), or with average revenues of less than
$6,000,000 for the last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Registrant's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker--dealer
made the determination in (ii) above; and (iv) receive a signed and dated copy
of such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Registrant's common stock to resell their shares to third parties or to
otherwise dispose of them.
Risks of State Blue Sky Laws. In addition to other risks, restrictions and
limitations which may affect the resale of the existing shares of the common
stock of this Registrant, consideration must be given to the "Blue Sky" laws and
regulations of each State or jurisdiction in which a shareholder wishing to
re-sell may reside. Some States may distinguish between companies with active
businesses and companies whose only business is to seek to secure business
opportunities, and may restrict or limit resales of otherwise free-trading and
unrestricted securities of companies, like this Registrant, whose business is to
seek an uncertain profitable business combination at some future time. This
Registrant has taken no action to register or qualify its common stock for
resale pursuant to the "Blue Sky" laws or regulations of any State or
jurisdiction. Accordingly offers to buy or sell the existing securities of this
Registrant may be unlawful in certain States and may be subject to civil or
criminal penalties.
18
<PAGE>
- --------------------------------------------------------------------------------
PART II
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
Item 1.
Market Price of and Dividends on
Registrant's Common Equity and Shareholder Matters.
- --------------------------------------------------------------------------------
(a) Market Information. The Common Stock of this Registrant is cleared for
quotation Over the Counter in the Pink Sheets, only recently. To the best of the
Registrant's knowledge and belief, there has been no market activity, buying or
selling, of the common stock of this Registrant, in brokerage transactions.
(b) Holders. There are presently 53 shareholders of the common stock of this
Registrant.
(c) Dividends. No cash dividends have been paid by the Registrant on its Common
Stock or other Stock and no such payment is anticipated in the foreseeable
future.
(d) Reverse Acquisitions. A reverse acquisition of a target business or company
would be expected to involve a change of control of the Registrant, and the
designation of new management. The financial statements of this Registrant would
become largely unreflective of the true condition of the Registrant after such
an acquisition. Shareholder approval would be solicited, pursuant to the laws of
the State of Nevada, to approve the acquisition, change of control, and any
material corporate changes incidental to the reorganization of this Registrant.
In connection with the solicitation of shareholder approval, whether or not
proxies are solicited, the Registrant would provide shareholders with the
fullest possible disclosure of all information material to shareholder
consideration, and such disclosure would include audited financial statements of
the target entity, if available. If shareholder approval is sought in advance of
audited financial statements of an acquisition target, the authority of
management to consummate any transaction would be contingent on a proper audit
of the target meeting the criteria of any un-audited information relied upon by
shareholders.
- --------------------------------------------------------------------------------
Item 2. Legal Proceedings.
- --------------------------------------------------------------------------------
There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Registrant.
- --------------------------------------------------------------------------------
Item 3. Changes in and Disagreements with Accountants.
- --------------------------------------------------------------------------------
There have been no disagreements of any sort or kind with Auditors or
Accountants respecting any matter or item reflected in the financial statements
of this Registrant.
- --------------------------------------------------------------------------------
Item 4. Recent Sales of Unregistered Securities.
- --------------------------------------------------------------------------------
The following disclosure presents: (a) The date, title and amount of securities
sold. (b) There were no Underwriters or Underwriting, and no discounts or
commissions. (c) For securities sold for cash, the total offering price and the
total underwriting discounts or commissions is provided. For securities sold
other than for cash, the transaction and the type and amount of consideration
received is described. (d) The Section of the Securities Act or the rule of the
Commission under which the Registrant claimed exemption from registration and
the facts relied upon to make the exemption available are provided, and (e) No
securities sold are convertible or exchangeable into equity securities, nor are
there currently any warrants or options representing equity securities.
At or near inception, the founders' 20,000,000 shares of common stock were
issued at par value, for organizational costs, to the Principal Shareholder and
the Officers and Directors of this Registrant.
20
<PAGE>
These were new investment shares issued pursuant to ss.4(2) of the Securities
Act of 1933. These 20,000,000 shares were issued as shown in Item 4, of Part I.
Each of the two Officer/Directors were issued 2,500,000 new investment shares of
common stock, each for present service and incentive purposes, in connection
with, and as a part of the initial issuance of 20,000,000 shares to founders for
organizational costs, and valued at $20,000.00 (par value). As indicated in
Items 4 and 5 of Part I, the names of those officers and directors receiving
these shares are Kirt W. James, and J. Dan Sifford, Jr.
On January 2, 1998, the Registrant offered 6,400,000 shares of common
stock, and 6,400,000 warrants, in the form of 200 Units of 32,000 shares and
32,000 warrants each, for $1,000.00 per Unit, pursuant to Regulation D, Rule
504, as then in force. These shares and warrants were placed among sophisticated
investors with pre-existing relationships with the Registrant or management.
Accordingly the Unit price of $1,000.00 equates to $0.03125 per share/warrant.
The 32,000 warrants were made exercisable at any time with eighteen months from
issuance at an exercise price of $0.125. The offering closed formally about
March 31, 1998, the maximum 200 Units having been placed for $200,000.00 cash.
The placement was made to and among 19 accredited investors.No warrants have
been exercised to date, and no time remains until the end of August for their
exercise.
On or about January 5, 1999, the Registrant placed 6,000 shares of common
stock, pursuant to Rule 504, to a single sophisticated investor, Vegas
Publications, Inc., with a pre-existing relationship with management, for
$600.00, or $0.10 per share.
On April 6, 1999, the Registrant placed 1,250,000 shares of common stock,
pursuant to Rule 504, to a single sophisticated investor, Marshall Worldwide
Limited, PO Box 2047-100, San Jose, Costa Rica, for $12,500.00, paid for in cash
at $0.01 per share.
- --------------------------------------------------------------------------------
Item 5. Indemnification of Officers and Directors.
- --------------------------------------------------------------------------------
There is no provision in the Articles of Incorporation, now the By-Laws of
the Corporation, nor any Resolution of the Board of Directors, providing for
indemnification of Officers or Directors. The Registrant is aware of no
provision of Nevada Corporate Law which creates or imposes any provision for
indemnity of Officers or Directors.
21
<PAGE>
- --------------------------------------------------------------------------------
PART F/S
- --------------------------------------------------------------------------------
22
<PAGE>
Selected Financial Information
================================================================================
9/30/99 12/31/98 12/31/97
================================================================================
Total Assets $14,096 $28,321 $ 138,848
- --------------------------------------------------------------------------------
Revenues -0- -0- -0-
- --------------------------------------------------------------------------------
Operating Expenses 11,325 187,257 152
- --------------------------------------------------------------------------------
Net Earnings or (Loss) (27,325) (191,257) (152)
- --------------------------------------------------------------------------------
Per Share Earnings
or (Loss) (0.00103) (0.0725) (0.00)
- --------------------------------------------------------------------------------
Average Common
Shares Outstanding 26,405,834 26,400,000 20,904,000
================================================================================
Financial Statements
Audited Financial Statements: for the three months ended March 31, 1999,
and for the years ended December 31, 1998 and 1997, are provided as FINANCIAL
STATEMENT: ATTACHMENT F-1, following the body of filing.
Un-Audited Financial Statements: for the nine months ended September 30,
1999, are provided as FINANCIAL STATEMENT: ATTACHMENT F-2, following ATTACHMENT
F-1, in the body of the filings, and incorporated herein by this reference as
though fully set forth on this page as well.
The financial statements interrupt the sequential numbering of pages. The
next sequentially numbered page, following the financial statements is page 25.
It is Part III and the Index to Exhibits.
23
<PAGE>
- --------------------------------------------------------------------------------
Financial Statements: Attachment F-1
Audited Financial Statements:
for the three months ended March 31, 1999, and
for the years ended December 31, 1998 and 1997.
- --------------------------------------------------------------------------------
24
<PAGE>
C O N T E N T S
Independent Auditors' Report .............................................. 3
Balance Sheets ............................................................. 4
Statements of Operations ................................................... 5
Statements of Stockholders' Equity ......................................... 6
Statements of Cash Flows ................................................... 7
Notes to the Financial Statements .......................................... 8
25
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
D P Charters, Inc.
We have audited the accompanying balance sheets of D P Charters, Inc. (a
Development Stage Company) as of March 31, 1999 and December 31, 1998 and 1997
and the related statements of operations, stockholders' equity and cash flows
for the three months ended March 31, 1999 and the years ended December 31, 1998
and 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of D P Charters, Inc. (a
Development Stage Company) as of March 31, 1999 and December 31, 1998 and 1997
and the results of its operations and cash flows for the three months ended
March 31, 1999 and the years ended December 31, 1998 and 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no operations and is dependent upon
financing to continue operations. These factors raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in the Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Todd Chisholm
----------------------
Todd Chisholm
Salt Lake City, Utah
July 8, 1999
26
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Balance Sheets
Assets
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Current assets
Cash $ 5,996 $ 12,321 $ 118,848
--------- --------- ---------
Total Current Assets 5,996 12,321 118,848
--------- --------- ---------
Other Assets
Organizational Costs (Net of
Amortization)(Note 1) -- 16,000 20,000
--------- --------- ---------
Total Other Assets -- 16,000 20,000
--------- --------- ---------
Total Assets $ 5,996 $ 28,321 $ 138,848
========= ========= =========
Liabilities and Stockholders' Equity
Current Liabilities $ -- $ -- $ --
--------- --------- ---------
Stockholders' Equity
Common Stock, authorized
100,000,000 shares of $.001 par value,
issued and outstanding 26,400,000,
26,400,000 and 23,808,000 shares,
respectively 26,400 26,400 23,808
Additional Paid in Capital 193,600 193,600 115,192
Deficit Accumulated During the
Development Stage (214,004) (191,679) (152)
--------- --------- ---------
Total Stockholders' Equity 5,996 28,321 138,848
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 5,996 $ 28,321 $ 138,848
========= ========= =========
</TABLE>
27
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From inception
For the Three For the on December Deficit
Months Year 18, 1997 Accumulated
Ended Ended through during the
March 31, December 31, December 31, development
1999 1998 1997 Stage
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues: $ -- $ -- $ -- $ --
Expenses:
General & Administrative (7,325) (191,527) (152) (199,004)
------------ ------------ ------------ ------------
Total Expenses (7,325) (191,527) (152) (199,004)
------------ ------------ ------------ ------------
Net (Loss) Before Cumulative
Effect of Accounting Change (7,325) (191,527) (152) (199,004)
------------ ------------ ------------ ------------
Cumulative Effect of Accounting Change (15,000) -- -- (15,000)
------------ ------------ ------------ ------------
Net (Loss) $ (22,325) $ (191,527) $ (152) $ (214,004)
============ ============ ============ ============
Net (Loss) Per Share:
Loss before cumulative effect
of accounting change -- -- -- (0.01)
Cumulative Effect of Accounting Change -- -- -- --
------------ ------------ ------------ ------------
Net (Loss) Per Share $ -- $ -- $ -- $ (0.01)
============ ============ ============ ============
Weighted average shares outstanding 26,400,000 26,272,000 21,904,000 25,960,123
============ ============ ============ ============
</TABLE>
28
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Additional Deficit
Paid-in Accumulated
Capital During the
Common Stock (Discount on Development
Shares Amount Stock) Stage
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance at beginning of development
stage - December 18, 1997 -- $ -- $ -- $ --
Shares issued for organizational costs 20,000,000 20,000 -- --
Shares issued for cash at $.03125 per share 3,808,000 3,808 115,192 --
Net loss December 31, 1997 -- -- -- (152)
---------- ---------- ---------- ----------
Balance, December 31, 1997 23,808,000 23,808 115,192 (152)
Shares issued for cash at $.03125 per share 2,592,000 2,592 78,408 --
Net loss December 31, 1998 -- -- -- (191,527)
---------- ---------- ---------- ----------
Balance, December 31, 1998 26,400,000 26,400 193,600 (191,679)
Net loss for the three months
ended March 31, 1999 -- -- -- (22,325)
---------- ---------- ---------- ----------
Balance, March 31, 1999 26,400,000 $ 26,400 $ 193,600 $ (214,004)
========== ========== ========== ==========
</TABLE>
29
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Statement of Cash Flows
<TABLE>
<CAPTION>
December 18,
1997 (inception
For the three of the
Months development
Ended stage) to
March 31, December 31, March 31,
1999 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash Flows form Operating
Activities
Net loss $ (22,325) $(191,527) $ (152) $(214,004)
Adjustments to reconcile
net loss to net cash
provided by operations
Amortization 16,000 4,000 -- 20,000
--------- --------- --------- ---------
Net Cash Flows used in
Operating Activities (6,325) (187,527) (152) (194,004)
--------- --------- --------- ---------
Cash Flows from Investment
Activities: -- -- -- --
--------- --------- --------- ---------
Cash Flows from Financing
Activities:
Proceeds from Issuance of stock -- 81,000 119,000 200,000
--------- --------- --------- ---------
Net increase (decrease) in cash (6,325) (106,527) 118,848 5,996
Cash, beginning of year 12,321 118,848 -- --
--------- --------- --------- ---------
Cash, end of year $ 5,996 $ 12,321 $ 118,848 $ 5,996
========= ========= ========= =========
Supplemental Cash Flow Information
Cash Paid for:
Interest $ -- $ -- $ -- $ --
Taxes $ -- $ -- $ -- $ --
</TABLE>
Supplemental Non-cash Disclosure:
In 1997, the shareholders paid $20,000 of organizational costs for the Company.
The Company reimbursed the $20,000 by issuing 20,000,000 shares of common stock.
30
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Notes to The Financial Statements
March 31, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
D P Charters, Inc., ("the Company") is a Nevada corporation organized
on December 18, 1997. The Company was formed to provide a charter yacht
service from the Dana Point harbor located in Dana Point, Orange County,
California but operations never commenced. It is the intent of management
to seek a viable business operation to acquire or to merge with.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
losses totaling approximately $199,004 that will be offset against future
taxable income. These NOL carryforwards begin to expire in the year 2012.
No tax benefit has been reported in the financial statements because the
Company believes there is a 50% or greater chance the carryforward will
expire unused. Accordingly, per FASB 109 the potential tax benefits of the
loss carryforward are offset by the valuation of the same amount.
Deferred tax assets and the valuation account is as follows at March
31, 1999 and December 31, 1998 and 1997.
March 31, December 31,
1999 1998 1997
-------- -------- ----
NOL carrryforward $ 60,860 $ 58,005 $ 23
Valuation allowance (60,860) (58,005) (23)
-------- -------- ----
Total $ -- $ -- $ --
======== ======== ====
f. Organizational Costs
In 1997, the shareholders paid $20,000 in organizational costs. The
Company reimbursed the shareholders by issuing 20,000,000 shares of common
stock at $.001 par value. These costs were being amortized on a
straight-line method over a 60 month period beginning January 1, 1998,
however, during January 1999 the remaining balance was written off in
connection with a change in accounting principle (See Note 5). These costs
will be recovered only if the Company is able to generate a positive cash
flow from operations.
31
<PAGE>
D P Charters, Inc.
(a Development Stage Company)
Notes to The Financial Statements
March 31, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies (continued)
g. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period.
In these financial statements and other assets involve extensive reliance
on management's estimates. Actual results could differ from those
estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company is dependent upon
raising capital to continue operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to raise additional funds to begin its
intended operations.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and developing its
business operations in order to generate significant revenues.
NOTE 4 - Related Party Transactions
During 1999 and 1998, $5,000 and $58,500, respectively was paid in
consulting fees to a company owned by shareholders of the Company.
NOTE 5 - Change in Accounting Principles
During the three months ended March 31, 1999, the Company changed its
method of amortization of organizational costs in accordance with SOP 98-5
and expensed the remaining balance. The effect of this change was to
decrease net income for the three months ended March 31, 1999 by $15,000
($0.00 per share).
32
<PAGE>
- --------------------------------------------------------------------------------
Financial Statements: Attachment F-2
Un-Audited Financial Statements:
for the nine months ended September 30, 1999
- --------------------------------------------------------------------------------
32
<PAGE>
DP CHARTERS, INC.
BALANCE SHEET (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
December 31,
September 30, ------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 996 $ 12,321 $ 118,848
TOTAL CURRENT ASSETS 996 12,321 118,848
--------- --------- ---------
OTHER ASSETS
Organizational Costs 16,000 20,000
Accounts receivable 13,100
TOTAL OTHER ASSETS 13,100 16,000 20,000
--------- --------- ---------
TOTAL ASSETS $ 14,096 $ 28,321 $ 138,848
========= ========= =========
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 20,000,000 shares,
26,400,000 and 27,656,000 shares respectively 27,656 26,400 23,808
Additional Paid-In Capital 205,444 193,600 115,192
Accumulater Equity (Deficit) (219,004) (191,679) (152)
--------- --------- ---------
Total Stockholders' Equity 14,096 28,321 138,848
--------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 14,096 $ 28,321 $ 138,848
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-2
33
<PAGE>
DP CHARTERS, INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
December 31,
September 30, --------------------------
1999 1998 1997
---------- ---------- ----------
Revenues $ -0- $ -0- $ -0-
---------- ---------- ----------
Amortization (4,000) -0-
Organizational costs (16,000)
Net Loss from Operations (11,325) (187,527) (152)
Net Income (Loss) $ (27,325) $ (191,527) $ (152)
========== ========== ==========
Loss per Share $ (.00103) $ (.00725) $ -0-
========== ========== ==========
Weighted Average
Shares Outstanding 26,405,834 26,400,000 20,000,000
========== ========== ==========
The accompanying notes are an integral part
of these financial statements.
page F-3
34
<PAGE>
DP CHARTERS, INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
December 31,
September 30, ------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Operating Activities
Net Income (Loss) $ (27,325) $(191,527) $ (152)
Less items not effecting cash:
organization costs 16,000
amortization 4,000 -0-
--------- --------- ---------
Net Cash from Operations (11,325) (187,527) (152)
Cash Increase (Decrease) sale of Common Stock 13,100 81,000 119,000
Cash Increase (Decrease) accounts receivable (13,100)
--------- --------- ---------
Net increase (decrease) in cash (11,325) (106,527) 118,848
Beginning Cash 12,321 118,848 -0-
Cash as of Statement Date $ 996 $ 12,321 $ 118,848
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-5
35
<PAGE>
DP CHARTERS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
for the period from inception of the Development Stage
on December 18, 1997, through December 31, 1997
for the year ended December 31, 1998
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Common Stock issued at inception 20,000,000 $ 20,000 $ 0 $ 0 $ 20,000
Sale of Common Stock 3,808,000 3,808 115,192
Loss during 1997 (152)
----------- ----------- ----------- ----------- -----------
Balance at December 31, 1997 23,808,000 23,808 115,192 (152) 138,848
Sale of Common Stock 2,592,000 2,592 78,408
Loss during 1998 (191,679)
----------- ----------- ----------- ----------- -----------
Balance at December 31, 1998 26,400,000 $ 26,400 $ 193,600 $ (191,679) $ 28,321
Sale of Common Stock 1,256,000 1,256 11,844
Loss during period ended
September 30,1999 (27,325)
----------- ----------- ----------- ----------- -----------
Balance at September 30, 1999 27,656,000 $ 27,656 $ 205,444 $ (219,004) $ 14,096
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-4
36
<PAGE>
DP CHARTERS, INC.
NOTES TO FINANCIAL STATEMENTS
for the years ended December 31, 1997 and 1998
and for the six months ended September 30, 1999
1-FORMATION AND OPERATIONS OF THE COMPANY
DP Charters, Inc. (the "Company") was incorporated on December 18, 1997 in
the State of Nevada with the intent of initiating a charter yacht service
from the Dana Point harbor located in Dana Point, Orange County,
California. The Company is authorized to issue 100,000,000 Common Shares
each with a par value of $0.001. Since inception it has been the intent of
management to acquire and operate small to medium sized fishing and
pleasure motor yachts. As of the date of these statements the Company has
not yet begun any operations and is a development stage company according
to Financial Accounting Standards Board Statement No. 7. The Board of
Directors and Shareholders of the Company have authorized the issuance of
7,656,000 of its Common Shares in Regulation D, 504 offerings.
2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
Accounting records of the Company and financial statements are
maintained and prepared on an accrual basis.
(b) FISCAL YEAR
The Company's proposed fiscal year for accounting and tax purposes is
December 31.
(c) ORGANIZATION COSTS
The Company incurred $20,000 of organization costs in 1997. These
costs, which were paid by shareholders of the Company and which were
exchanged for 20,000,000 shares of common stock having a par value of
$20,000. On January 1, 1999, due to changes in accounting principals,
remaining organization costs were expensed.
(d) CASH EQUIVALENTS
For Financial Accounting Standards purposes, the Statement of Cash
Flows, Cash Equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less. Whenever cash amount are to be
included on the Company's Statements of Cash Flow, however, they will
be comprised exclusively of cash.
page F-6
37
<PAGE>
DP Charters, Inc.
Notes to Financial Statements
for the years ended December 31, 1997 and 1998
and for the period ended September 30, 1999
continued
3-PROPERTY AND EXECUTIVE COMPENSATION
(a) PROPERTY:
The Company's offices and all of its records are located at 24843 Del
Prado, Suite 318, Dana Point, California 92629.
(b) EXECUTIVE COMPENSATION:
Since inception, the Company has paid no cash compensation to its
officers or directors. Officers of the Company will be reimbursed for
out-of-pocket expenses and may be compensated for the time they devote
to the Company. In addition, Officers may receive compensation for
services performed on behalf of the Company. The terms of any such
compensation will be determined on the basis of the nature and extent
of the services which may be required and will be no less favorable to
the Company than the charges for similar services made by independent
third parties who are similarly qualified. No officer or director is
required to make any specific amount or percentage of his business
time available to the Company.
5-STOCKHOLDERS' EQUITY.
The Company is authorized to issue 100,000,000 shares of common stock
having a par value of $0.001. In October 1997, 20,000,000 shares of Common
Stock, were issued in exchange for organizational costs which were valued
by management at a total of $20,000. In 1997 and 1998, 6,400,000 shares of
Common Stock, were issued in exchange for cash in the amount of $200,000.
In January 1999, 6,000 shares of Common Stock, were issued in exchange for
cash in the amount of $600. In April 1999, 1,250,000 shares of Common
Stock, were issued in exchange for cash in the amount of $12,500.
page F-7
38
<PAGE>
- --------------------------------------------------------------------------------
PART III
- --------------------------------------------------------------------------------
40
<PAGE>
- --------------------------------------------------------------------------------
Item 1. Index to Exhibits.
- --------------------------------------------------------------------------------
Exhibit Index
================================================================================
Exhibit Table Category/Description of Exhibit Page
Table Number
#
- --------------------------------------------------------------------------------
[2] Articles/Certificates of Incorporation, and By-Laws
- --------------------------------------------------------------------------------
2.1 Articles of Incorporation: DP Charters, Inc., a Nevada Corporation
- --------------------------------------------------------------------------------
2.2 By-Laws: DP Charters, Inc.
================================================================================
40
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to signed on its behalf by the undersigned, thereunto
authorized.
dated: December 23, 1999
DP Charters, Inc.
by
/s/ Kirt W. James /s/ J. Dan Sifford, Jr.
- --------------------------- ----------------------------
Kirt W. James J. Dan Sifford, Jr.
PRESIDENT/DIRECTOR SECRETARY/DIRECTOR
41
- --------------------------------------------------------------------------------
Exhibit 2.1
Articles of Incorporation:
DP Charters, Inc., a Nevada Corporation
- --------------------------------------------------------------------------------
<PAGE>
ARTICLES OF INCORPORATION
OF
DP Charters, Inc.
Article I. The name of the Corporation is DP Charters, Inc.
Article II. Its principal and registered office in the State of Nevada is
774 Mays Boulevard, Suite 10, Incline Village NV 89451. The initial registered
agent for services of process at that address is N&R Ltd. Group, Inc. a Nevada
Corporation.
Article III. The purposes for which the corporation is organized are to
engage in any activity or business not in conflict with the laws of the State of
Nevada or of the United States of America. The period of existence of the
corporation shall be perpetual.
Article IV. The corporation shall have authority to issue an aggregate of
One Hundred Million (100,000,000) shares of common voting equity stock of par
value one mil ($0.001) per share, and no other class or classes of stock, for a
total capitalization of $100,000. The corporation's capital stock may be sold
from time to time for such consideration as may be fixed by the Board of
Directors, provided that no consideration so fixed shall be less than par value.
Article V. No shareholder shall be entitled to any preemptive or
preferential rights to subscribe to any unissued stock or any other securities
which the corporation may now or hereafter be authorized to issue, nor shall any
shareholder possess cumulative voting rights at any shareholders meeting, for
the purpose of electing Directors, or otherwise.
Article VI. The affairs of the corporation shall be governed by a Board of
Directors of not less than one (1) nor more than (7) persons. The Incorporator
WILLIAM STOCKER ATTORNEY AT LAW, 219 Broadway Suite 261, Laguna Beach CA 92651
shall serve as sole initial director.
Article VII. The Capital Stock, after the amount of the subscription price
or par value, shall not be subject to assessment to pay the debts of the
corporation, and no stock issued, as paid up, shall ever be assessable or
assessed.
Article VIII. The initial By-laws of the corporation shall be adopted by
its Board of Directors. The power to alter, amend or repeal the By-laws, or
adopt new By-laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided in the By-laws.
Article IX. The name and address of the Incorporator (Initial Director) of
the corporation is WILLIAM STOCKER ATTORNEY AT LAW, 219 Broadway Suite 261,
Laguna Beach CA 92651.
<PAGE>
ARTICLES OF INCORPORATION OF
DP Charters, Inc.
December 16, 1997 Page 45
I THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a corporation pursuant the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have set my hand hereunto this Day, December 16, 1997.
WILLIAM STOCKER
ATTORNEY AT LAW
INCORPORATOR
- --------------------------------------------------------------------------------
Exhibit 2.2
By-Laws: DP Charters, Inc.
- --------------------------------------------------------------------------------
<PAGE>
By-Laws
OF
DP Charters, Inc.
A NEVADA CORPORATION
Article I
CORPORATE OFFICES
The principal office of the corporation in the State of Nevada shall be
located at 774 Mays Blvd. Suite 10, Incline Village NV 89451. The corporation
may have such other offices, either within or without the State of incorporation
as the board of directors may designate or as the business of the corporation
may from time to time require.
Article II
SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings
The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the State unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.
Section 2. Annual Meetings
The time and date for the annual meeting of the shareholders shall be set
by the Board of Directors of the Corporation, at which time the shareholders
shall elect a Board of Directors and transact any other proper business. Unless
the Board of Directors shall determine otherwise, the annual meeting of the
shareholders shall be held on the second Monday of March in each year, if not a
holiday, at Ten o'clock A.M., at which time the shareholders shall elect a Board
of Directors and transact any other proper business. If this date falls on a
holiday, then the meeting shall be held on the following business day at the
same hour.
Section 3. Special Meetings
Special meetings of the shareholders may be called by the President, the
Board of Directors, by the holders of at least ten percent of all the shares
entitled to vote at the proposed special meeting, or such other person or
persons as may be authorized in the Articles of Incorporation.
47
<PAGE>
Section 4. Notices of Meetings
Written or printed notice stating the place, day and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
the direction of the president, or secretary, or the officer or persons calling
the meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the stockholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid.
Closing of Transfer Books or Fixing Record Date.
(a) For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case twenty (20) days. If the stock transfer books be
closed for the purpose of determining stockholders entitled to notice or to vote
at a meeting of stockholders, such books shall be closed for at least twenty
(20) days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the directors may
prescribe a day not more than sixty (60) days before the holding of any such
meeting as the day as of which stockholders entitled to notice of the and to
vote at such meeting must be determined. Only stockholders of record on that day
are entitled to notice or to vote at such meeting
(c) The directors may adopt a resolution prescribing a date upon which the
stockholders of record are entitled to give written consent to actions in lieu
of meeting. The date prescribed by the directors may not precede nor be more
than ten (10) days after the date the resolution is adopted by directors.
Section 5. Voting List.
The officer or agent having charge of the stock transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of stockholders, a complete list of stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, shall be kept on file at the principal office
of the corporation and shall be subject to inspection by any stockholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any stockholder during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to who are the stockholders
entitled to examine such list or transfer books or to vote at the meeting of
stockholders.
48
<PAGE>
Section 6. Quorum.
At any meeting of stockholders, a majority of fifty percent plus one vote,
of the outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders. If
less than said number of the outstanding shares are represented at a meeting, a
majority of the outstanding shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting originally notified. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
Section 7. Proxies.
At all meetings of the stockholders, a stockholder may vote by proxy
executed in writing by the stockholder or by his duly authorized attorney in
fact. Such proxy shall be filed with the secretary of the corporation before or
at the time of the meeting. Such proxies may be deposited by electronic
transmission.
Section 8. Voting.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such shareholder. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of Nevada.
Section 9. Order of Business.
The order of business at all meetings of the stockholders, shall be as
follows:
a. Roll Call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting.
d. Reports of Officers.
e. Reports of Committees.
f. Election of Directors.
g. Unfinished Business.
h. New Business.
Section 10. Informal Action by Stockholders.
Unless otherwise provided by law, any action required to be taken, or any
other action which may be taken, at a meeting of the stockholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof. Unless otherwise provided by law, any action required to
be taken, or any other action which
49
<PAGE>
may be taken, at a meeting of the stockholders, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by a
Majority of all of the stockholders entitled to vote with respect to the subject
matter thereof at any regular meeting called on notice, and if written notice to
all shareholders is promptly given of all action so taken.
Section 11. Books and Records.
The Books, Accounts, and Records of the corporation, except as may be
otherwise required by the laws of the State of Nevada, may be kept outside of
the State of Nevada, at such place or places as the Board of Directors may from
time to time appoint. The Board of Directors shall determine whether and to what
extent the accounts and the books of the corporation, or any of them, other than
the stock ledgers, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any account or book or document of
this Corporation, except as conferred by law or by resolution of the
stockholders or directors. In the event such right of inspection is granted to
the Stockholder(s) all fees associated with such inspection shall be the sole
expense of the Stockholder(s) demanding the inspection. No book, account, or
record of the Corporation may be inspected without the legal counsel and the
accountants of the Corporation being present. The fees charged by legal counsel
and accountants to attend such inspections shall be paid for by the Stockholder
demanding the inspection.
Article III
BOARD OF DIRECTORS
Section 1. General Powers.
The business and affairs of the corporation shall be managed by its board
of directors. The directors shall in all cases act as a board, and they may
adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
Section 2. Number, Tenure, and Qualifications.
The number of directors of the corporation shall be a minimum of one (l)
and a maximum of nine (7), or such other number as may be provided in the
Articles of Incorporation, or amendment thereof. Each director shall hold office
until the next annual meeting of stockholders and until his successor shall have
been elected and qualified.
Section 3. Regular Meetings.
A regular meeting of the directors, shall be held without other notice than
this by- law immediately after, and at the same place as, the annual meeting of
stockholders.
50
<PAGE>
The directors may provide, by resolution, the time and place for holding of
additional regular meetings without other notice than such resolution.
Section 4. Special Meetings.
Special meetings of the directors may be called by or at the request of the
president or any two directors. The person or persons authorized to call special
meetings of the directors may fix the place for holding any special meeting of
the directors called by them.
Section 5. Notice.
Notice of any special meeting shall be given at least one day previously
thereto by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum.
At any meeting of the directors fifty (50) percent shall constitute a
quorum for the transaction of business, but if less than said number is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
Section 7. Manner of Acting.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
Section 8. Newly Created Directorships and Vacancies.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of the majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
Section 9. Removal of Directors.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
51
<PAGE>
Section 10. Resignation.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
Section 11. Compensation.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance at
each regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 12. Executive and Other Committees.
The board, by resolution, may designate from among its members an executive
committee and other committees, each consisting of one (l) or more directors.
Each such committee shall serve at the pleasure of the board.
Article IV
OFFICERS
Section 1. Number.
The officers of the corporation shall be the president, a secretary and a
treasurer, each of whom shall be elected by the directors. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the directors.
Section 2. Election and Term of Office.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided. In the event that no election of officers be held by the directors at
that time, the existing officers shall be deemed to have been confirmed in
office by the directors.
Section 3. Removal.
Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgement the best interest of the
corporation would be served thereby, but such removal shall be without prejudice
to contract rights, if any, of the person so removed.
52
<PAGE>
Section 4. Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
Section 5. President.
The president shall be the principal executive officer of the corporation
and, subject to the control of the directors, shall in general supervise and
control all of the business and affairs of the corporation. He shall, when
present, preside at all meetings of the stockholders and of the directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the directors have authorized to be executed, except in cases where the
directors or by these by-laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the directors from time to time.
Section 6. Chairman of the Board.
In the absence of the president or in the event of his death, inability or
refusal to act, the chairman of the board of directors shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The chairman of the board of
directors shall perform such other duties as from time to time may be assigned
to him by the directors.
Section 7. Secretary.
The secretary shall keep the minutes of the stockholders' and of the
directors' meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
the duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the president or by the directors.
Section 8. Treasurer.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by-laws and in general perform all of the duties
53
<PAGE>
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the president or by the directors.
Section 9. Salaries.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of fact that he is also a director of the corporation.
Article V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts.
The directors may authorize any officer or officers, agent or agents to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.
Section 2. Loans.
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.
Section 3. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the directors.
Section 4. Deposits.
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the directors may select.
Article VI
FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of January in
each year, or on such other day as the Board of Directors shall fix.
54
<PAGE>
Article VII
DIVIDENDS
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
Article VIII
SEAL
The directors may provide a corporate seal which shall have inscribed
thereon the name of the corporation, the state of incorporation, year of
incorporation and the words, "Corporate Seal".
Article IX
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these by-laws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
Article X
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted in the same manner as their adoption, by the Board of Directors if so
adopted; by a vote of the stockholders representing a majority of all the shares
issued and outstanding, if so adopted or adopted by the Board of Directors; or,
in any case, at any annual stockholders' meeting or at any special stockholders'
meeting when the proposed amendment has been set out in the notice of such
meeting.
CERTIFICATION
The Secretary of the Corporation hereby certifies that the foregoing is a
true and correct copy of the By-Laws of the Corporation named in the title
thereto and that such By-Laws were duly adopted by the Board of Directors of
said Corporation on the date set forth below.
55
<PAGE>
Executed, and Corporate Seal affixed, this day of December 16, 1997.
/s/ J. Dan Sifford
-----------------------------
J. Dan Sifford
Secretary
56
