--------------------------------------------------------------------------------
Kirt W. James
PRESIDENT
Oasis Entertainement's Fourth Movie Project, Inc.
24843 Del Prado, #326 Dana Point, CA 92629
(Name and Address of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
--------------------------------------------------------------------------------
WITH A COPY TO:
KARL E. RODRIGUEZ, ESQ
34700 Pacific Coast Highway, Suite 300
Capistrano Beach, CA 92624
(949) 248-9561
fax (949) 248-1688
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FORM 10-K-SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended September 30, 2000
Commission File Number: 000-28881
Oasis Entertainment's Fourth Movie Project, Inc.
(Exact name of Registrant as specified in its charter)
Nevada 76-0528600
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
24843 Del Prado, Suite 326 Dana Point, California 92629
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 488-0736
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 14,810,000
Yes [] No [X] (Indicate by check mark whether the Registrant (1) has filed
all report required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.)
As of September 30, 2000, the number of shares outstanding of the Registrant's
Common Stock was 14,810,000.
[] (Indicate by check mark if disclosure of delinquent filers ( 229.405) is not
and will not to the best of Registrant's knowledge be contained herein, in
definitive proxy or information statements incorporated herein by reference or
any amendment hereto.)
As of 9/30/00
the aggregate number of shares held by non-affiliates was approximately
2,810,000.
the number of shares outstanding of the Registrant's Common Stock was
14,810,000.
Exhibit Index is found on page 30
1
<PAGE>
PART I 3
Item 1. Description of Business 3
(a) Business Development 3
(b) Business of the Issuer 4
(c) Quotability Contingency 5
(d) Consultants 5
(e) Number of total employees and full-time employees 6
(f) Year 2000/2001 Compliance 6
(g) Financing Plans 6
(h) Government Regulation 6
(i) Planned Acquisitions 6
(j) Reverse Acquisition Contingency 6
Item 2. Description of Property 7
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II 8
Item 5. Market for Common Equity and Stockholder Matters 8
(a) Market Information 8
(b) Holders 8
(c) Dividends 8
(d) Sales of Unregistered Common Stock 8
Item 6. Management's Discussion and Analysis or Plan of Operation 8
(a) Plan of Operation for the next twelve months 8
(b) Discussion and Analysis of Financial Condition and Results of
Operations 9
Item 7. Financial Statements 11
Item 8. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure 13
PART III 14
Item 9. Directors and Executive Officers, Promoters and Control Persons 14
Item 10. Executive Compensation 16
Item 11. Security Ownership of Certain Beneficial Owners and Management 16
(a) Security Ownership of Certain Beneficial Owners 16
(b) Security Ownership of Management 17
(c) Changes in Control 17
Item 12. Certain Relationships and Related Transactions 18
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 19
(a) Financial Statements 19
(b) Form 8-K Reports 19
(c) Exhibits 19
2
<PAGE>
UNNUMBERED ITEM: INTRODUCTION
Our 1934 Act Registration Statement (effective but not yet clear of
SEC comments) was filed voluntarily 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 quotation on the Over-the-Counter Bulletin
Board, often called OTCBB . Our common stock is not presently quoted on any
exchange at the present time. 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 our 1934 Act Registration is clear of comments by the staff of
the Commission, we 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.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT.
(1) FORM AND YEAR OF ORGANIZATION. This Corporation Oasis Entertainment's
Fourth Movie Project, Inc. was duly incorporated in Nevada on April 9, 1998. We
have on file with the Securities and Exchange Commission an Amended Form
1-A/Regulation A Offering Statement (File No. 24-3948) under the Securities Act
of 1933, as amended. In that Offering Statement our business was described to be
the production of low-budget films for theatrical, cable and video release. As a
practical matter, we are required to register our common stock pursuant to
12(g) of the 1934 Act, and to pursue continued acceptance for quotation on the
OTCBB. There are no lock-up or shareholder pooling agreements between or among
our shareholders. All shares are owned and controlled independently by the
persons to whom they are issued. We have no Internet address.
FOUNDERS SHARES: On April 9, 1998 5,000,000 shares of
common stock were issued to each of the Registrant's two founders (recorded at
predecessor cost of $-0-).
FURTHER ISSUANCES: On September 30, 1998, 1,500,000 shares of common stock
were issued, and on April 20, 1999, 3,310,000 shares of common stock were
issued, both at $0.10 per share for a total of $481,000 pursuant to an exemption
from registration in an offering made in reliance upon the exemption provided by
Regulation A of the Securities Act of 1933 to a total of 41 accredited
investors. The total shares placed pursuant to Reg A, at $0.10 per share was
4,810,000. Please see Item 5(d), Sales of Unregistered Common Stock for more
invormation.
(2) BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING. None from inception
to date.
(B) BUSINESS OF THE ISSUER. Pursuant to our original business plan, we
produced one full-length movie entitled "The Blood Game" intended for adult
video and cable release. Its subject matter is adventure, and it contains nudity
and violence. It was completed in November of 1999. The movie was produced for a
cost of $168,430. We have as yet been unsuccessful in our efforts to sell or
distribute this movie. While we have not abandoned our intention to market our
production, there are no assurances that we will be able to sell or distribute
this movie. If we are unsuccessful in these efforts, or if there is only limited
distribution of the movie, then all or a part of the investment in production
3
<PAGE>
cost may be lost. For accounting purposes the capitalized costs for this movie
were written off as an impairment loss during the year ended September 30, 1999.
We do not presently enjoy sufficient funds to attempt another production. We are
evaluating the feasibility of seeking new funding for that purpose.
BLOOD GAME. The subject of the movie is an erotic action thriller based
upon a man's struggle to rescue a woman from a gang of weekend warriors and
winds up having to rescue himself. The movie was completed in November 1999. The
distribution efforts began in late December 1999 when over sixty preview copies
were sent to distributors accepting this type of genre. The distribution
consisted of media packets containing copies of the film and trailer, a one
sheet on the movie and stars, and a personalized letter to the individual
distributors. The media packets were received on or around January 10, 2000.
There were two responses that proposed purchasing and/or distributing options,
Troma Films and Victory Multimedia. These negotiations are currently in
progress, however, they have been slow and unassuring of a profitable
distribution and/ or purchase agreement.
As a practical matter, the marketing of Blood Game may require and
indefinite period. Tastes, trends and interests of distributors change over
time. Should preset discussions fail to result in marketing the project, we
would continue to promote its availability, periodically.
Due to the distribution problems encountered with the "Blood Game" and due
to recent changes in the entertainment industry regarding the technological
demands of producing, the Officers and Directors of Registrant have reviewed and
analyzed the current business plan of "producing low budget movies." The
business analysis concluded that the current business plan projected diminishing
returns and great margins of risk. The technology in the movie industry was
changing so rapidly that the cost for production may exceed gross revenue for
"made-for-cable and video features." The industry trade publications predicted
that the following two years would see an emergence of the major movie studios
into the smaller markets such as "made-for-cable and video features,"
independent films, and Internet programming due to the changes in market demands
for content, medium and genre. The Registrant also lacks the capital resources
presently to fund multiple productions in one period, which is a growing
necessity to compete in the industry. Accordingly, we may seek additional
funding from our existing shareholders or the public, to attempt further
production, but we have not determined whether such a course is in the best
interests of our shareholders.
INFOMERCIALS. Meanwhile, an opportunity to produce and finance direct
response television programs arose. An emerging "Direct Response" company,
Reliant Interactive Media Corp. ("Reliant") approached the Registrant to finance
and co-produce direct-response television and electronic retailing programs.
Reliant is a full reporting public company trading under the symbol "RIMC" on
the OTCBB. After extensive due diligence, we concluded that the potential for
profit and growth in this new opportunity is attractive. We have accordingly
expanded the scope of our business to include and emphasize direct-response
retailing production. We invested with Reliant for financing and co-producing
three (3) direct-response television programs. In the Agreement between Reliant
and Registrant, dated March 24, 1999, we provided $250,000 to Reliant for
production of three infomercials. In consideration of this financing, we
received 250,000 shares of common stock of Reliant and royalties equal to 2% of
the adjusted gross revenues defined as sales less returns, shipping and handling
charges, received by Reliant up to a maximum of $625,000. Thereafter, the
royalty will be reduced to 1%. The first of the three projects did not test well
and was abandoned. The second was aired but was not well received by the
purchasing public. The remaining project tested more favorably and is airing
currently. The three infomercial products were Cactus Jack's Laundry Vitamins,
Daniel Rogers Laboratories, Inc.'s Natural Hair Product, and Worldwide Sports
Nutrition's Pure Protein Bar. Two were unsuccessful. The third project is
producing revenues to Reliant. We expect to accrue revenues from this investment
in early 2001. Our active participation in Reliant's Infomercials was limited to
financing, some artistic and technical consulting, and some production
assistance for the "Natural Hair project.
4
<PAGE>
We are presently engaged in discussion with Reliant for further investment
and/or co-production opportunities. No agreement had been reached as of the
December 31, 2000.
LOANS TO RELIANT. In a separate transaction we made a loan of $300,000 to
Reliant. The note included interest at 10% per annum. As of December 31, 1999,
principal and accrued interest owing to us stood at $116,906. As additional
consideration for this loan and forbearance as to prompt repayment, Reliant
issued us an additional 5,000 shares of its common stock.
We continue to correspond with Reliant with a view to participation in
future projects as may become attractive for our investment. Accordingly, the
status of our relationship with Reliant is as follows: (1) we are a shareholder
of Reliant (we own 4% of the common stock of Reliant); (2) we have a loan
partially unpaid owing to us from Reliant; (3) we expect to be receiving royalty
payments in 2001 from the third project covered by our investment in 2001; (4)
Reliant is not a shareholder of our corporation.
(C) QUOTABILITY CONTINGENCY. We are not in a position to engage in new capital
formation until our common stock may become qualified for quotation on the OTC
Bulletin Board or the NQB Pink Sheets. Management has determined that it must so
qualify itself by this 1934 Act Registration of its common stock, as a class,
pursuant to 12(g) of the Securities Act of 1934. There are no present plans to
abandon our current business or pursue any search or evaluation of a business
combination.
(D) CONSULTANTS. We have only a single consultant, namely Intrepid
International Ltd., a Nevada Corporation. Our three Officers and Directors are
affiliates of Intrepid. Information about Intrepid is found in Item 12 of Part
III. Information about our Officers and Directors is found in Items 4 and 5 of
this Part I. Intrepid is a corporate service provider. It provides us with
management services, by which its affiliates serve as our management and various
corporate services including coordination of our auditing. Its counsel provides
us with services as our special securities counsel for the preparation of this
filing, and other securities related matters. Intrepid bills us monthly for its
management and other services, on a time-fee basis. Intrepid is also a
shareholder of our common stock. In the event we should pursue a reverse
acquisition at some future time, Intrepid, and its affiliates would not receive
any compensation in connection with such an acquisition, other than its normal
time-fees for services performed. Our Agreement with Intrepid is public
information provided as Exhibit 10.1. to our Form 10-SB-A3 and Form 10-SB-A4
Registration Statement. It is not incorporated by reference herein, but is
identified and referred to only.
No other consultants are presently engaged nor are there any plans to
retain any consultants currently or for the foreseeable future. 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 if
the reverse acquisition contingency might arise, and after a change of control
which would result from a reverse acquisition.
LOAN FINANCING NOT ANTICIPATED. There are no foreseeable circumstances
under which loan financing will be sought or needed during Registrant's present
development stage. This statement should not be deemed to preclude additional
investment or funding by our existing shareholders.
DEPENDENCE ON MANAGEMENT. This Company is required to rely on Management's
skill, experience and judgment, both in regard to extreme selectivity and in
any final decision to pursue any particular business venture, as well as the
form of any business combination, should agreement be reached at some uncertain
5
<PAGE>
time to acquire or combine. Please see Item 6 of Part II, Managements Discussion
and Analysis or Plan of Operation, and also Item 12 of Part III, Certain
Relationships and Related Transactions for additional information and
disclosure.
COMPETITIVE BUSINESS CONDITIONS. Other better capitalized firms are engaged
in the business of low-cost, direct-TV production. Competition is intense and
favors established larger producers with established distribution relationships.
We are at a significant competitive disadvantage in our industry, and can
compete only by producing a superior and attractive product. There can be no
assurance that we would prove competitively attractive to the kinds of
transactions we seek. Please See the Item 6 of part II, Management Discussion
and Analysis, for more information and disclosure.
(E) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES. We have three officers
who devote an insubstantial amount of time to our affairs who serve without
compensation. They are officers and affiliates of our principal shareholder.
(F) YEAR 2000/2001 COMPLIANCE. We have encountered no year 2000 or 2001
compliance issues or problems.
(G) FINANCING PLANS. For more information, please see Item 6 of Part II,
Management's Discussion and Analysis.
(H) GOVERNMENT REGULATION. There are no issues of government regulation unique
to this Registrant or its business.
(I) PLANNED ACQUISITIONS. There are no planned acquisitions.
(J) REVERSE ACQUISITION CONTINGENCY. We have not abandoned our business plan
to achieve profitable distribution of Blood Game, nor our interest in further
participation in direct media advertising. We recognize, however, the
contingency that our present business activities may fail to achieve the
profitability for our shareholders to which we are committed. Accordingly, a
mature and sober analysis of our present business and assets requires us to
recognize the possibility of such failure, and the contingency that we would be
required, in such a case, to pursue the acquisition of other profitable
businesses or assets, by some form of business combination. The most likely form
of such a combination would be by a reverse acquisition transaction.
Accordingly, the following additional disclosure is presented as to the nature
of such a contingency.
In the event that we determine to pursue a Reverse Acquisition transaction,
we would most likely proceed as follows. We would most likely spin-off our
assets to our shareholders, that is create a new wholly-owned subsidiary, place
our existing assets into that subsidiary and then distribute the ownership of
that subsidiary to our existing shareholders in proportion to their then
existing share ownership. We would likely issue a news release indicating our
interest in reverse acquisition target candidates. We would not travel or engage
in extensive or expensive advertising, but would wait for responses and
proposals to others. We would engage in no capital formation activities in
connection with such a transaction. While it is forseeable that a Target
acquisition program may involve fund raising, such fund raising would not be
conducted by our present management, but rather would concern the acquisition
target and its management.
ITEM 2. DESCRIPTION OF PROPERTY.
We have no significant property of our own, other than the "Blood Game".
Our office services are provided by our principal consultant and are included in
its billings as a part of our cost of doing business. All equipment involved or
which may be involved in future productions will be rented for the days actually
needed. We have an insubstantial inventory of copies of Blood Game. Copies can
be produced economically if required.
6
<PAGE>
ITEM 3. LEGAL PROCEEDINGS.
There are no legal proceedings pending, threatened or suspected, against
the Company, as of the preparation of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
7
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.
(A) MARKET INFORMATION. The Common Stock of this Issuer is not quoted on any
trading exchange. To the best of the Registrant's knowledge and belief, there
has been no market activity, buying or selling, of our common stock, or trading
in any security of ours at any time.
(B) HOLDERS. There are presently approximately 42 shareholders of the common
stock of this Registrant.
(C) DIVIDENDS. We have not paid any cash dividends on our Common Stock, and
do not anticipate paying cash dividends on its Common Stock in the next year. We
anticipate that any income generated in the foreseeable future will be retained
for the development and expansion of our business. Future dividend policy is
subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, debt service, capital
requirements, business conditions, the financial condition of the Company and
other factors that the Board of Directors may deem relevant.
(D) SALES OF UNREGISTERED COMMON STOCK. The following disclosure includes all
sales of common stock from inception to date.
------------------------------
Issuance:
Reference Number. Original
Exemptions. . . . Issuances
------------------------------
1- 4(2). . . . . 10,000,000
2- Reg. A . . . . 1,500,000
3- Reg. A . . . . 3,310,000
Totals. . . . . . 14,810,000
------------------------------
On April 9, 1998, we made our initial issuance of 10,000,000 shares of
common stock, and recorded at predecessor cost of $-0-, pursuant to Section 4(2)
of the Securities Act of 1933. The prices was $0.001 per share. The shares were
issued 5,000,000 each to each of our two founders: Intrepid International S.A.
and Giovanni Trivella. Both of our founders were known to us to be accredited
investor/founders, and both were afforded and had full access to our corporate
condition and affairs, of the kind of information which registration would have
disclosed, at their time of their investment and founding of our corporation.
During the period from September 30, 1998 to April 22, 1999 we sold 481,000
shares of our common stock, pursuant to Regulation A, promulgated by the
Commission under authority of Section 3(b) of the Securities Act of 1933. There
were 41 subscribers. The price was $0.10 per shares. The purchasers were each
individually determined by us to be accredited investors, based upon their
experience in investments of this speculative nature, and by their respective
incomes and net worth.
8
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We are considering
another more mainstream production. To do this we need not less than $250,000
nor more than $500,000. We are interested in
further investment or co-production with Reliant. Based upon past experience, in
which we invested $250,000 in three projects, we would anticipate requiring a
similar sum to proceed with another group of infomercial projects. It is
Management's view that these two programs should be funded separately.
We would expect to make a registered (no underwriting) offering of $500,000
for the purpose of funding another movie. We would expect to conduct a
private limited offering among accredited investors with pre-existing
relationships of $250,000 for the purpose of investing further in
infomercial projects. Our best guess is that these funding programs will be
opened during the next twelve months.
Neither of these concepts have addressed the continuing need for working
capital, and deficit reduction. Management is inclined to seek an additional
$100,000 in funding, for this purpose. These requirements will be phased and
allocated appropriately in such offerings as previously described. It is highly
forseeable that existing shareholders, or some of them, will invest further to
cover current losses, and limit the dilutive effects of such past losses on new
investors.
There can be no assurance that we will be successful in raising capital
through private placements or otherwise. Even if we are successful in raising
capital through the sources specified, there can be no assurances that any such
financing would be available in a timely manner or on terms acceptable to us and
our current shareholders. Additional equity financing could be dilutive to our
then existing shareholders, and any debt financing (if any) could involve
restrictive covenants with respect to future capital raising activities and
other financial and operational matters.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(1) BALANCE SHEET SEPTEMBER 30, 2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------
Cash and Equivalents. . . . . . . . . 495 Notes Payable (Note 6) 146,183
--------------------------------------------------------------------------------------
Current Assets. . . . . . . . . . . . 495 Total Liabilities 146,183
--------------------------------------------------------------------------------------
Note receivable (Note 4). . . . . . . 127,030 Common Stock 14,810
--------------------------------------------------------------------------------------
Investment Securities (Note 4). . . . 143,437 Paid-in Capital 483,398
--------------------------------------------------------------------------------------
Notes Receivables
Other Assets. . . . . . . . . . . . . 270,467 (Related Party) (Note 5) (46,300)
--------------------------------------------------------------------------------------
Other Comprehensive Loss
(Note 4) (111,563)
--------------------------------------------------------------------------------------
Accumulated Deficit . . . .(215,566)
--------------------------------------------------------------------------------------
Total Equity. . . . . . . . 124,779
--------------------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . 270,962 Total Liabilities/Equity 270,962
--------------------------------------------------------------------------------------
</TABLE>
Note 4 of our financial statements discusses our $250,000 funding agreement
with Reliant of March 24, 1999, included the issuance of 250,000 shares of
common stock of Reliant (see Note 3) and our acquisition of an additional 5,000
shares on May 25, 1999, in connection with the $200,000 loan. As of September
30, 2000, the outstanding principal balance of the loan was $100,000 plus
$27,030 in accrued interest. This loan has been reclassified as a non-current
asset.
Note 4 of our financial statements also discusses the charge against
capital for the decrease in the trading value of our Reliant shares, from
$255,000 originally recorded to $143,437.
9
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Note 5 of our financial statements discloses that, as of September 30,
2000, we had $46,300 in notes receivable from related parties, all unsecured,
and non-interest bearing, recorded as a charge on capital until paid.
Note 6 of our financial statements discusses our payables to related
parties. As of September 30, 2000 we had $146,183 in such notes. Of these loans
$56,183 is payable to Intrepid our affiliate consultant.
Note 2 of our financial statements provides the cautionary disclosure that
we do not have significant cash or other material assest, nor do we have an
established source of revenues sufficient to cover our operating costs and allow
us to continue as a going concern. It is our intent to produce revenues from the
sales of "B genre" movies. Until this occurs, shareholders of the Company have
committed to meeting the Company's operating expenses.
(2) PROFIT AND LOSS.
Inception
April 9,
1998
To
Operations . . . . . . . September 30 Sept 30,
2000 1999 2000
----------------------------------------------------------------
Revenues:. . . . . . . . $ 0 $ 0 $ 0
General & Administrative (20,395) (45,966) (66,361)
Net Loss Operations . . (20,395) (45,966) (66,361)
Impairment Loss. . . . . (168,430) (168,430)
Interest Expense . . . . (12,580) (4,628) (17,208)
Interest Income. . . . . 11,548 24,885 36,433
Net Other . . . . . . . (1,032) (148,173) (149,205)
Income/(Loss
================================================================
Net Loss . . . . . . . . (21,427) (194,139) (215,566)
We have recorded no revenues to date. We expect to record revenues from
Reliant in 2001. Our operating expenses for the past two years have included
substantial non-recurring legal and professional expenses in connection with our
1934 Act Registration of our common stock. Together with auditing expense, these
costs reflect most of year 2000 expenses, and a large portion of year 1999
expenses. We would expect that $20,000 would be a minimal budget for continuing
audit and reporting in 2001.
Effective, September 30, 1999, our investment in the Blood Game was written
off as an impairment loss. While we continue to treat the Blood Game project as
one yet in progress, we accept that better accounting practices favors this
charge, to reflect the substantial doubt as to whether and when it may, if ever,
become a revenue producing item. Please see Note 1g of our financial statements:
"The Company capitalized the costs incurred in connection with production
of the movie 'The Blood Game'. The Company evaluates the recoverability of the
10
<PAGE>
capitalized costs whenever events arise that may effect recoverability, but at
least annually. On September 30, 1999, the Company allowed for the movie costs
in full due to its inability to find a buyer for the movie."
Inception
April 9,
1998
To
Comprehensive (loss). . . . September 30 Sept 30,
2000 1999 2000
------------------------------------------------------------------
Holding Loss on Securities. (111,563) 0 (111,563)
Available for Sale
We are not in the business of buying and selling securities. Our
investment in common shares of Reliant were recorded at $1.00 per share when
acquired. As of September 30, 2000, the fair market value of these shares was
$0.5625 per share. Accordingly, this unrealized decline in the value of the
investment is disclosed; however, it is not included in the following per share
loss calculations. Please see Note 4 of our financial statements. Please note
the item "Investment in available for sale securities" in our Balance Sheet,
under Assets, Other Assets, of $143,437. That is the present value of the common
shares as so reduced.
Inception
April 9,
1998
To
Operations September 30 Sept 30,
2000 1999 2000
--------------------------------------------------------------
Net Loss Operations . . (20,395) (45,966) (66,361)
Net Other Income/(Loss) (1,032) (148,173) (149,205)
Net Loss . . . . . . . (21,427) (194,139) (215,566)
--------------------------------------------------------------
Loss per share. . . . . (0.00) (0.01)
Weighted Average. . . . 14,810,000 14,393,116
Shares Outstanding
As previously indicated, current losses reflect corporate maintenance,
legal and accounting, and public reporting.
ITEM 7. FINANCIAL STATEMENTS.
Our Board of Directors, serving as its own Audit Committee, has made the
required reviews as imposed upon the Audit Committee by the Securities and
Exchange Commission rules and regulations. The attached financial statements
have been approved for content and accuracy as discussed in the following Audit
Committee report.
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FK-00 Audited Financial Statements for the years ended September 30, 2000,
1999, and from inception April 9, 1998. 13
--------------------------------------------------------------------------------
11
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Oasis Entertainment's Fourth Movie Project, Inc.
24843 Del Prado, Suite 326
Dana Point, California 92629
Form Type: 10-KSB
Filing Date: January 12, 2001
AUDIT COMMITTEE REPORT
The Audit Committee of Oasis Entertainment's 4th Movie Project ("Oasis") is
composed of the Corporation's Board of Directors. The members of the Committee
are Kirt W. James, J. Dan Sifford, and Karl E. Rodriguez. The Committee
recommended, subject to stockholder ratification, the selection of the
Corporation's independent accountants.
Management is responsible for the Corporation's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with the generally accepted auditing standards and to
issue a report thereon. The Committee's responsibility is to monitor and
oversee these processes.
In this context, the Committee has met and held discussions with management and
the independent accountants. Management represented to the Committee that the
Corporation's financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee has reviewed and discussed the
consolidated financial statements with management and the independent
accountants. The Committee discussed with the independent accountants matters
required to be discussed by the Statement on Auditing Standards No. 61.
The Corporation's independent accountants also provided to the Committee the
written disclosures required by Independence Standards Board Standard No. 1, and
the Committee discussed with the independent accountant that firms independence.
Based upon Committee's discussion with management and the independent
accountants and the Committee's review of the representation of management and
the report of the independent accountants to the Committee, the Committee
recommended that the audited consolidated financial statements be included in
the Corporation's Annual Report on Form 10-KSB for the year ended September 30,
1999 filed with the Securities and Exchange Commission.
/s/Kirt W. James /s/J. Dan Sifford /s/Karl E. Rodriguez
Kirt W. James J. Dan Sifford Karl E. Rodriguez
12
<PAGE>
OASIS ENTERTAINMENT'S FOURTH
MOVIE PROJECT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
13
<PAGE>
C O N T E N T S
Independent Auditors' Report 15
Balance Sheet 16
Statements of Operations 17
Statements of Stockholders' Equity 18
Statements of Cash Flows 19
Notes to the Financial Statements 20
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Oasis Entertainment's Fourth Movie Project, Inc.
(A Development Stage Company)
Dana Point, California
We have audited the accompanying balance sheet of Oasis Entertainment's Fourth
Movie Project, Inc. (a development stage company) as of September 30, 2000, and
the related statements of operations, stockholders' equity and cash flows for
the years ended September 30, 2000 and 1999, and from inception on April 9, 1998
through September 30, 2000. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Oasis Entertainment's Fourth
Movie Project, Inc. (a development stage company) as of September 30, 2000 and
the results of its operations and its cash flows for the years ended September
30, 2000 and 1999 and from inception on April 9, 1998 through September 30, 2000
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 had limited operations and no operating
revenues which together raise substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/HJ & Associates, LLC
HJ & Associates, LLC
Salt Lake City, Utah
December 19, 2000
15
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
September 30,
2000
--------------
CURRENT ASSETS
Cash and cash equivalents $ 495
--------------
Total Current Assets 495
--------------
OTHER ASSETS
Movie production costs, net (Note 1) 0
Note receivable (Note 4) 127,030
Investments in available-for-sale securities (Note 4) 143,437
--------------
Total Long-Term Assets 270,467
--------------
TOTAL ASSETS $ 270,962
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related parties (Note 6) $ 146,183
--------------
Total Current Liabilities 146,183
--------------
STOCKHOLDERS' EQUITY
Common stock; 100,000,000 shares authorized of $0.001
par value, 14,810,000 shares issued and outstanding 14,810
Additional paid-in capital 483,398
Notes receivable - related parties (Note 5) (46,300)
Accumulated other comprehensive income (loss) (111,563)
Deficit accumulated during the development stage (215,566)
--------------
Total Stockholders' Equity 124,779
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 270,962
==============
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
For the Years Ended April 9,
September 30,September 30, 1998 Through
2000 1999 2000
--------------------------------------------------------------------------------
REVENUES $ 0 $ 0 $ 0
---------- ---------- ------------
EXPENSES
General and administrative 20,395 45,966 66,361
---------- ---------- ------------
Total Expenses 20,395 45,966 66,361
---------- ---------- ------------
NET LOSS BEFORE OTHER INCOME
(EXPENSE) (20,395) (45,966) (66,361)
---------- ---------- ------------
OTHER INCOME (EXPENSE)
Impairment loss (Note 1) 0 (168,430) (168,430)
Interest expense (12,580) (4,628) (17,208)
Interest income 11,548 24,885 36,433
---------- ---------- ------------
Total Other Income (Expense) (1,032) (148,173) (149,203)
NET LOSS (21,427) (194,139) (215,566)
---------- ---------- ------------
OTHER COMPREHENSIVE INCOME (LOSS)
Holding loss on securities available-
for-sale (111,563) 0 (111,563)
---------- ---------- ------------
Total Other Comprehensive Income
(Loss) (111,563) 0 (111,563)
---------- ---------- ------------
NET COMPREHENSIVE (LOSS) $ (132,990) $ (194,139) $ (327,129)
========== ========== ============
BASIC LOSS PER SHARE $ (0.00) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 14,810,000 14,393,116
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Accumulated Deficit
Other Accumulated
Additional Stock Comprehensive During the
Common Stock Paid-In Subscription Income Development
Shares Amount Capital Receivable (Loss) Stage
-------------------------------------------------------------------------------------------------------------
Balance at inception on
April 9, 1998 0 $ 0 $ 0 $ 0 $ 0 $ 0
--------- -------- ---------- ---------- ---------- ----------
Common stock issued to
founders recorded at
predecessor cost of $0.00
10,000,000 10,000 (10,000) 0 0 0
Common stock issued for
cash at $0.10 per share 1,500,000 1,500 148,500 (150,000) 0 0
Net loss from inception on
April 9, 1998 through
September 30, 1998 0 0 0 0 0 0
--------- -------- ---------- ---------- ---------- ----------
Balance, September 30, 1998
11,500,000 11,500 138,500 (150,000) 0 0
Receipt of stock subscription 0 0 0 150,000 0 0
Common stock issued for cash
at $0.10 per share 3,310,000 3,310 327,690 0 0 0
Accrued interest on notes to
related parties recorded as
contributed capital 0 0 4,628 0 0 0
Net loss for the year ended
September 30, 1999 0 0 0 0 0 (194,139)
--------- -------- ---------- ---------- ---------- ----------
Balance, September 30, 1999
14,810,000 14,810 470,818 0 0 (194,139)
Holding loss on securities
available-for-sale 0 0 0 0 (111,563) 0
Accrued interest on notes to
related parties recorded as
contributed capital 0 0 12,580 0 0 0
Net loss for the year ended
September 30, 2000 0 0 0 0 0 (21,427)
--------- -------- ---------- ---------- ---------- ----------
Balance, September 30, 2000
14,810,000 $ 14,810 $ 483,398 $ 0 $ (111,563) $ (215,566)
========== ======== ========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
April 9,
For the Years Ended 1998 Through
September 30, September 30,
2000 1999 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (21,427) $ (194,139) $ (215,566)
Changes in assets and liabilities:
(Increase) in interest receivable (11,548) (15,482) (27,030)
Increase (decrease) in accounts payable (2,644) 2,644 0
-------------- ------------- -----------
Net Cash (Used) by Operating Activities (35,619) (206,977) (242,596)
-------------- ------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for investments 0 (255,000) (255,000)
-------------- ------------- -----------
Net Cash (Used) by Investing Activities 0 (255,000) (255,000)
-------------- ------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds paid on notes
receivable-related parties 0 (246,300) (246,300)
Principal received on notes receivable-related
parties 0 100,000 100,000
Proceeds received on notes
payable-related party 20,383 125,800 146,183
Common stock issued for cash 0 481,000 481,000
Contributed capital 12,580 4,628 17,208
-------------- ------------- -----------
Net Cash Provided by
Financing Activities 32,963 465,128 498,091
-------------- ------------- -----------
NET INCREASE (DECREASE) IN CASH (2,656) 3,151 495
CASH AT BEGINNING OF PERIOD 3,151 0 0
-------------- ------------- -----------
CASH AT END OF PERIOD $ 495 $ 3,151 $ 495
============== ============= ===========
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ 0 $ 0 $ 0
Income taxes $ 0 $ 0 $ 0
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 1-ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Oasis Entertainment's Fourth Movie Project, Inc. (the Company) was incorporated
on April 9, 1998 under the laws of the State of Nevada, primarily for the
purpose of producing film and video for theatrical, cable and televised
releases.
The Company has limited operations, assets and liabilities. Accordingly, the
Company is dependent upon management and/or significant shareholders to provide
sufficient working capital to preserve the integrity of the corporate entity
during this phase. It is the intent of management and significant shareholders
to provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a September 30 year end.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
d. Basic Loss Per Share
Basic loss per common share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.
September 30,
2000 1999
-----------------------
Numerator-loss $ (21,427) $ (194,139)
Denominator-weighted average number of
shares outstanding 14,810,000 14,393,116
-----------------------------
Loss per share $ (0.00) $ (0.01)
=============================
20
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 1-ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
e. Provision for Taxes
The income tax benefit differs from the amount computed at federal statutory
rates as follows:
For the Years ended
September 30,
2000 1999
Income tax benefit at statutory rate $ 3,200 $ 21,000
Change in valuation allowance (3,200) (21,000)
------------------------------
$ 0 $ 0
==============================
Deferred tax assets (liabilities) at September 30, 2000 are comprised of
the following:
Net operating loss carryforward $ 215,566
Depreciation 0
------------
Valuation allowance (215,566)
$ 0
=============
At September 30, 2000, the Company has a net operating loss carryforward
available to offset future taxable income of approximately $215,000, which will
expire in 2020. If substantial changes in the Company's ownership should occur,
there would also be an annual limitation of the amount of NOL carryforwards
which could be utilized. No tax benefit had been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. The tax benefits of the loss carryforwards
are offset by a valuation allowance of the same amount.
f. Additional Accounting Policies
Additional accounting policies will be established once planned principal
operations commence.
g. Movie Production Costs
The Company capitalized the costs incurred in connection with producing the
movie "The Blood Game". The Company evaluates the recoverability of the
capitalized costs whenever events arise that may effect recoverability, but at
least annually. On September 30, 1999, the Company allowed for the movie costs
in full due to its inability to find a buyer for the movie.
21
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
g. Movie Production Costs (Continued)
The movie production costs and related allowance breakdown are as follows:
September 30,
2000
Movie production costs $ 168,430
Less: allowance for unsecurable costs (168,430)
--------------
Net Movie Production Costs $ 0
==============
h. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
i. Investments in Available-for-Sale Securities
The Company has a limited portfolio of investments in marketable equity
securities. Management determines the appropriate classification of all
securities at the time they are acquired and evaluates the appropriateness of
such classifications at each balance sheet date.
Available-for-sale securities consist of marketable securities not classified as
either trading or held-to-maturity. Available-for-sale securities are stated at
fair market value, and all unrealized holding gains and losses, net of the
related deferred tax effect, are reported as a separate component of
stockholders' equity under the subheading "Accumulated other comprehensive
income (loss)."
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to produce and earn revenues from the sale of "B genre"
movies. Until this occurs, shareholders of the Company have committed to
meeting the Company's operating expenses.
22
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 3 - ROYALTY AGREEMENT - RELATED PARTY
On March 24, 1999, the Company entered into an agreement with Reliant
Interactive Media Corporation ("Reliant"), a company in which the Company holds
shares as an investment, under which the Company committed to provide funding
for three "infomercials" Reliant was to produce. Under the terms of this
agreement, the Company provided a total of $250,000 for this purpose. As
consideration for this funding, Reliant was to issue 250,000 restricted,
post-split shares of its common stock to the Company (see Note 4). Also,
Reliant agreed to pay the Company a royalty equal to two percent of the adjusted
gross revenues created by the infomercials until the Company had received
$625,000. The royalty would be reduced to one percent of the revenues
thereafter.
As of September 30, 2000, Reliant had produced the three infomercials. The
first two were unprofitable, and have produced no royalties for the Company.
The third project is producing revenues for Reliant. The Company expects to
accrue revenues from this investment in early 2001.
NOTE 4 - INVESTMENT AND NOTE RECEIVABLE
On March 24, 1999, the Company entered into an agreement with Reliant
Interactive Media Corporation ("Reliant") under which the Company provided
funding of $250,000 to Reliant (see Note 3). As consideration for this
funding, Reliant contracted to issue 250,000 restricted, post-split shares of
its common stock to the Company upon completion of the funding. The investment
was originally recorded at its cost of $250,000.
On May 25, 1999, the Company agreed to lend another $200,000 to Reliant. This
loan accrues interest at 10% per annum and was due on September 1, 1999. As
part of the consideration for this loan, Reliant agreed to issue 5,000 shares of
its restricted common stock to the Company. The 5,000 shares were originally
recorded at a cost of $1.00 per share, based on the determination of the
previous agreement. As of September 30, 2000, the outstanding principal balance
of this loan was $100,000, plus $27,030 in accrued interest. The Company's
management is currently pursuing the collection of this note, and expects to
collect the remaining balance in full during the coming year. To be
conservative, however, the receivable has been recorded as a non-current asset
until it is collected.
The 255,000 shares of Reliant owned by the Company at September 30, 2000
represent approximately 4% of Reliant's outstanding common shares at that date.
Management has determined to classify the shares as "available-for-sale" as they
are restrictive shares. Consequently, the shares are stated at market value.
At September 30, 2000, the fair market value of the shares was $0.5625 per
share, making the total value of the 255,000 shares $143,437.
23
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 5 - NOTES RECEIVABLE - RELATED PARTIES
As of September 30, 2000, the Company had a total of $46,300 in notes receivable
from related parties. All of the notes are unsecured. Each of the notes is
non-interest bearing and has no specific payback terms. Because the loans were
to significant shareholders, they have been accounted for as a reduction of
stockholders' equity until repaid.
NOTE 6 - NOTES PAYABLE - RELATED PARTIES
As of September 30, 2000, the Company had a total of $146,183 in notes payable
to related parties. All of the notes are non-interest bearing, and have no
specific payback terms. All the notes are unsecured. A 10% interest rate has
been imputed for these loans, which has been recorded as contributed capital in
the financial statements.
Of these notes, $56,183 is payable to Intrepid International, Ltd. ("Intrepid").
Intrepid is a significant shareholder with whom the Company shares office space,
office equipment, and certain officers and directors. Intrepid loaned the
Company $35,800 and $20,383 during the years ending September 30, 1999 and 2000,
respectively, as operating capital. As of September 30, 2000, the Company had
not yet made any payments on the note, and Intrepid had made no demands for
payment.
NOTE 7 - COMMON STOCK TRANSACTIONS
In 1998, the Company issued 1,500,000 shares of its common stock under a stock
subscription at $0.10 per share. The stock subscription was collected in 1999
for $150,000 in cash. In 1999, the Company also issued an additional 3,310,000
shares of its common stock for cash at $0.10 per share for proceeds of $331,000.
NOTE 8-OTHER RELATED PARTY TRANSACTIONS
Common Officer
Mr. Karl Rodriquez serves as general counsel and corporate secretary for both
the Company and Reliant.
24
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following persons are the Officers/Directors of Registrant, having
served from inception of our corporation, to continue to serve until their
successors might be elected or appointed. The time of the next meeting of
shareholders has not been determined.
--------------------------------------------------------------------------------
Executive Officers DIRECTOR'S NAME AGE OFFICE/POSITION
--------------------------------------------------------------------------------
Kirt W. James . . . . . . . . . . 42 President/Director
24843 Del Prado, Suite 318
Dana Point CA 92629
--------------------------------------------------------------------------------
J. Dan Sifford. . . . . . . . . . . 63 Treasurer/Director
62 Bay Heights Drive
Miami FL 33133
--------------------------------------------------------------------------------
Karl E. Rodriguez . . . . . . . . . 52 General Counsel/
24843 Del Prado, Suite 313. . . . . Corporate Secretary/
Dana Point CA 92629 . . . . . . . . Director
--------------------------------------------------------------------------------
Kirt W. James, President and Director, 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 Public Company. In 1990 he formed and become President of HJS
Financial Services, Inc., and is responsible for day to day business of the firm
and consults Client's business and product development. 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.
Currently, Mr. James is an Officer/Director of Oasis Entertainment
Corporation (a private corporation currently involved in the promotion of
entertainment projects. Mr. James is a principal officer and entrepreneur with
respect to this corporation. This corporation never made any offerings or
received any investors money. Its shares have never traded publicly or
privately); EditWorks, Ltd. (incorporated in the State of Nevada on August 20,
1998, for the purpose of establishing a computer aided, post-production editing
service for various media businesses. It is an active operating company. This
company trades actively on the OTCBB;) North American Security & Fire (an
operating company, in the business of fire prevention, and the installation of
alarm and security systems. This company is not currently quoted on the OTCBB or
NQB Pink sheets, and its shares are not trading;) DP Charters, Inc. (a business
venture incorporated in Nevada on December 18, 1997 with the intention of
initiating a charter yacht service from the Dana Point Harbor, Orange County,
California. The Issuer later expanded its business plan to include the
organization of scuba dive tours at various world locations. It is now
25
<PAGE>
investigating the possibility of new capital formation, following its 1934 Act
Registration. During the past five years, Mr. James has served as an interim
officer or director of the following public, or semi-public companies. Earth
Industries, Inc.; HomeTeach.com; NSJ Mortgage Capital Corporation, Inc.; Market
Formulation & Research; PNG Ventures, Inc. (Paper Computer.com, Inc.); and Last
Company Clothing, Inc.
J. Dan Sifford, Jr., Treasurer, 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.
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, DP Charters, Inc., 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 DP Charters, in Ecklan Corporation, and in NetAir.com, Inc.
Karl E. Rodriguez, Corporate Secretary, General Counsel and Director,
received his Juris Doctor degree in 1972 from Louisiana State University Law
School. He has practiced business and corporate law since 1972, emphasizing
securities and entertainment matters, and has been self-employed in that
capacity for the past five years. He has served as a director of Oasis
Entertainment's Fourth Movie Project, Inc., since April 1998. He is also a
Director, Corporate Secretary, and General Counsel for Reliant Interactive Media
Corp. During his law practice he has also been involved in a variety of dynamic
business experiences. From 1975 to 1982, he was active in real estate
development in the Baton Rouge, Louisiana area. From 1980 until 1985, he
specialized in the sale of businesses and franchises as the owner and operator
of VR Business Brokers. In 1986, he became the Project Manager for Bluffs
Limited Partnership, where he structured the development of an Arnold Palmer
Design Golf Course and in 1992, Mr. Rodriguez was the Managing Director for
MedAmerica, LLC., medicine clinics for children. From 1993 through 1998, he was
the Director, Corporate Secretary and General Counsel for Telco Communications,
Inc., which is a long distance reseller company. From 1992 until 1996, he was
the President of Healthcare Financial and Management Services, Inc., providing
billing services to three Louisiana hospitals. Mr. Rodriguez is also corporate
Secretary and General Counsel to Reliant Interactive Media Corp. We have
identified certain transactions between us and Reliant. We own 4% of Reliant's
common stock and have investments in reliant as previously disclosed.
26
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.
INTREPID INTERNATIONAL, LTD. The officers and directors of Intrepid
International, Ltd. (Nevada) are comprised of two individuals; Kirt W. James,
and J. Dan Sifford, Jr. They are both our principal officers and directors. Karl
Rodriguez is our third director. He is of Counsel to Intrepid. Their biographies
are found in Item 9, Part III. Our officers and directors are presently provided
to us by Intrepid. They receive no direct compensation from us, but are
understood to be compensated by Intrepid. Intrepid is compensated by us on
time/hour/fee basis, pursuant to its billings for services actually rendered and
costs actually incurred. We believe that the true cost of doing business is
properly reflected by the inclusion of Intrepid billings in our expenses.
The following table discloses Intrepid billings to Oasis 4th from August 7,
1998 through September 30, 2000:
-----------------------------------------------------------------
Fees. . . Costs Interest Payments Total Due
34,412.30 18,270.37 2,725.83 -6,087.15 49,321.35
-----------------------------------------------------------------
ITEM 11. 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. These following 5% or more shareholders
are unrelated to Management or to its sole consultant. Neither management, nor
any affiliate of management, or of the consultant to management, has any
interest in any of the following shareholders, nor do any of the following
shareholders possess any interest or affiliation with either management or its
consultant, except as disclosed in the Notes which follow Tables (a) and (b).
5% Owners # Shares % of Total
-----------------------------------------------------------
5% Owners
498534 Alberta, Inc. (1) . . . . 1,000,000 6.75
5127 Pineridge
Peachland BC Canada V0H 1Y0
-----------------------------------------------------------
Baycove Capital Corporation (2). 1,000,000 6.75
73 Front Street, 3rd Floor
Hamilton, Bermuda HM 12
-----------------------------------------------------------
Intrepid International S.A. (3). 5,000,000 33.76
PO Box 8807
Panama 5, Panama
-----------------------------------------------------------
Giovanni Trivella. . . . . . . . 5,000,000 33.76
Letzigraben 89
Zurich, Switzerland CH8040
-----------------------------------------------------------
Total 5% Owners. . . . . . . . . 12,000,000 81.03
-----------------------------------------------------------
Total Issued and Outstanding . . 14,810,000 100.00
-----------------------------------------------------------
(1) Mr. Rob Taylor is individual with dispositive control of the shares of
498534 Alberta, Inc.
27
<PAGE>
(2) Ms. Rene Poole is individual with dispositive control of the shares of
Baycove Capital Corporation.
(3) The 5,000,000 Intrepid International shares disclosed in Table (a) are
attributed to our Officers and Directors, as shown in Table (b) because our
officers are affiliates of Intrepid, and their services are provided to us by
Intrepid. For information about Intrepid please see Item 7, Relationships and
Transactions. Mr. James and Mr. Sifford are the persons with dispositive control
of the shares of Intrepid International S.A.
(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. The share ownership disclosed in Table (b) is
attributed ownership. Please see Notes following Table (b).
Ownership of Management . . . . . . . . . Attributed %
Name and Address of. . . . . . . . . . . Ownership
Beneficial Owner
---------------------------------------------------------------
Kirt W. James President/Director . . . . 5,000,000 33.76
24843 Del Prado Suite 318
Dana Point CA 92629
---------------------------------------------------------------
J. Dan Sifford Jr. Treasurer . . . . . . 5,000,000 33.76
62 Bay Heights Drive
Miami, Florida 33133
---------------------------------------------------------------
Karl E. Rodriguez Secretary. . . . . . . 5,000,000 33.76
24843 Del Prado Suite 318
Dana Point CA 92629
---------------------------------------------------------------
All Officers and Directors as a Group (3) 5,000,000 0.00
---------------------------------------------------------------
Total Shares Issued and Outstanding . . . 14,810,000 100.00
---------------------------------------------------------------
(3) The 5,000,000 Intrepid International shares disclosed in Table (a) are
attributed to our Officers and Directors, as shown in Table (b) because our
officers are affiliates of Intrepid, and their services are provided to us by
Intrepid. For information about Intrepid please see Item 12, Part III,
Relationships and Transactions. Mr. James and Mr. Sifford are the persons with
dispositive control of the shares of Intrepid International S.A.
(C) CHANGES IN CONTROL. There are no arrangements known to Registrant,
including any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Issuer. The Issuer is
searching for a profitable business opportunity. The Issuer 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 Issuer at such time.
This would likely take the form of a reverse acquisition. That means that this
issuer would likely acquire businesses and assets for stock in an amount that
would effectively transfer control of this issuer to the acquisition target
company or ownership group. It is called a reverse-acquisition because it would
be an acquisition by this issuer in form, but would be an acquisition of this
issuer in substance.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(A) INTREPID INTERNATIONAL. We have indicated that the services of our
officers and directors have been provided by Intrepid International, Ltd., and
that Intrepid is one of our principal shareholders and our sole consultant.
There are two Intrepid entities, the Panama parent corporation and its
wholly-owned United States operating subsidiary, incorporated in Nevada.
Disclosure is now provided about the Intrepid entities.
INTREPID INTERNATIONAL, S.A. The officers and directors of Intrepid
International, S. A. (Panama) are comprised of three individuals; Laurencio Jaen
O., Teodoro F. Franco L. and Leopoldo Kennion G. All three of these individuals
are Panamanian citizens and each serves as an officer and a director of Intrepid
International, S. A. (Panama).
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company 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. Ja n 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 the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, one of the most prestigious law firms in Panam
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 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 the Company a wealth of international legal, commercial and diplomatic
experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, 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 below.
INTREPID INTERNATIONAL, LTD. The officers and directors of Intrepid
International, Ltd. (Nevada) are comprised of two individuals; Kirt W. James,
and J. Dan Sifford, Jr. They are both our officers and directors, and their
biographies are found in Item 9, Part III.
(B) RELIANT INTERACTIVE MEDIA. We have disclosed our relationship with Reliant,
throughout this Report. Some additional and repetitive disclosure concerning
that relationship is provided here as follows: We are an investor in Reliant
Interactive Media, Inc. We own 4% of Reliant's common stock. Reliant is not a
shareholder of our Corporation. In an Agreement between us and Reliant, dated
29
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March 24, 1999, we provided $250,000 to Reliant for production of three
infomercials. In consideration of this financing, we received 250,000 shares of
common stock of Reliant and royalties equal to 2% of the adjusted gross revenues
defined as sales less returns, shipping and handling charges, received by
Reliant up to a maximum of $625,000. Thereafter, the royalty will be reduced to
1%. The first of the three infomercial products did not test well and was
abandoned. The second was aired but was not well received by the purchasing
public. The remaining project tested more favorably and is generating royalty
revenues to us. It is airing currently. The three infomercial products were
Cactus Jack's Laundry Vitamins, Daniel Rogers Laboratories, Inc.'s Natural Hair
Product, and Worldwide Sports Nutrition's Pure Protein Bar.
In a separate transaction, on May 25, 1999, we made a loan of $100,000 to
Reliant. The note included interest at 10% per annum. In a separate transaction,
on May 26, 1999, we made loans of $200,000 to Reliant. The note included 10% per
annum and provided for the issuance of 5,000 shares as additional consideration
for this loan and forbearance as to prompt repayment, Reliant duly issued us an
additional 5,000 shares of its common stock. As of September 30, 2000, principal
and accrued interest owing to us stood at approximately $127,030.
These transactions are classified as "related party" transactions for the
reason that our Counsel and Secretary, Karl Rodriguez, is also Counsel and
Secretary to Reliant. Although Mr. Rodriguez is a director of both Reliant and
our corporation, Oasis Entertainment's Fourth Movie Project, Inc., and although
the transactions are deemed related-party transactions for that reason, Mr.
Rodriguez has no financial interest in the Oasis funding arrangement and is not
a shareholder of Oasis. He serves as its Secretary and General Counsel only to
both corporations Counsel, and is not engaged in the management decisions of
either corporation except in his professional capacity.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) FINANCIAL STATEMENTS. Please see Exhibit Index following.
(B) FORM 8-K REPORTS. None.
(C) EXHIBITS. Please see Exhibit Index following.
--------------------------------------------------------------------------------
Exhibit Page
Number Table Category / Description of Exhibit Number
--------------------------------------------------------------------------------
[3] ARTICLES OF INCORPORATION AND BY-LAWS
--------------------------------------------------------------------------------
3.1 ARTICLES OF INCORPORATION 32
3.2 BY-LAWS 34
--------------------------------------------------------------------------------
30
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the individual capacities and on the date
indicated.
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
A NEVADA CORPORATION
Dated: January 10, 2001
/s/Kirt W. James /s/J. Dan Sifford /s/Karl E. Rodriguez
Kirt W. James J. Dan Sifford Karl E. Rodriguez
President/Director Secretary-Treasurer General Counsel
/Director /Director
31
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--------------------------------------------------------------------------------
EXHIBIT 3.1
ARTICLES OF INCORPORATION: OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
--------------------------------------------------------------------------------
32
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Filed in the Office of the
Secretary of State of Nevada
April 9, 1998
ARTICLES OF INCORPORATION
OF
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
ARTICLE I. The name of the Corporation is OASIS ENTERTAINMENT'S FOURTH
MOVIE PROJECT, INC.
ARTICLE II. Its principal office in the State of Nevada is 774 Mays Blvd, #
10. Incline Village NV 89451,. The initial resident 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 Shares (100,000,000) 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 $100,000.00. 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 consisting of one to ten persons. The Initial Director of the
Corporation, whose name and address is J. Dan Sifford, Jr., 33481 Spinnaker,
Dana Point, California 92629, to serve until the next regular meeting of
shareholders or until their successors are elected.
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 of the corporation is
J. Dan Sifford, Jr., 33481 Spinnaker, Dana Point, California 92629.
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, March 31, 1998.
/s/J. Dan Sifford Jr.
J. Dan Sifford Jr.
Incorporator
33
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 3.2
BY-LAWS
--------------------------------------------------------------------------------
34
<PAGE>
BY-LAWS
OF
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
A NEVADA CORPORATION
ARTICLE X
CORPORATE OFFICES
The principal office of the corporation in the State of Nevada shall be
located at 774 Mays Blvd. #10, Incline Village NV 89452. 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 XI
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 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.
Notices of Meetings
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
twenty (20) 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.
SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
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<PAGE>
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. In lieu of closing the stock
transfer books, the directors may fix in advance a date as the record date for
and such determination of stockholders, such date in any case to be not more
than twenty (20) days and, in case of a meeting of stockholders, not less than
ten (10) days prior to the date on which the particular action requiring such
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders, or stockholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the directors declaring such dividend is adopted, as the case may
be, shall be the record date for such determination of stockholders. When a
determination of stockholders entitled to vote at any meeting of stockholders
has been made as provided in this section, such determination shall apply to any
adjournment thereof.
SECTION 6. 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.
SECTION 7. QUORUM.
At any meeting of stockholders fifty-one (51) percent 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 8. 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.
SECTION 9. 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.
36
<PAGE>
SECTION 10. 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 11. 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 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 12. 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 XII
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 (9). Each director shall hold office until the next annual
meeting of stockholders and until his successor shall have been elected and
qualified.
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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. 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.
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
38
<PAGE>
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 therefore.
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 XIII
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.
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.
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.
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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 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 XIV
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.
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ARTICLE XV
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.
ARTICLE XVI
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 XVII
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 XVIII
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 XIX
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by a vote of the stockholders representing a majority of all the shares
issued and outstanding, 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.
EXECUTED, AND CORPORATE SEAL AFFIXED, this day of April 6, 1998.
/s/Karl E. Rodriguez
Karl E. Rodriguez
Secretary
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