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As filed with the Securities and Exchange Commission on February 25, 1999
Registration No. _______________
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
PPI CAPITAL GROUP, INC.
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(Name of Small Business Issuer in its Charter)
Utah 87-0401453
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1661 Lakeview Circle, Ogden, Utah 84403
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (801) 399-3632
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
--- ---
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
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(Title of Class)
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PPI CAPITAL GROUP, INC
FORM 10-SB
TABLE OF CONTENTS
PART 1 Page
Item 1. Description of Business ..................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation ... 10
Item 3. Description of Property...................................... 11
Item 4. Security Ownership of Certain Beneficial Owners
and Management.............................................. 11
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................... 12
Item 6. Executive Compensation....................................... 13
Item 7. Certain Relationships and Related Transactions............... 14
Item 8. Description of Securities.................................... 14
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters................. 14
Item 2. Legal Proceedings............................................ 15
Item 3. Changes in and Disagreements with Accountants................ 15
Item 4. Recent Sales of Unregistered Securities...................... 15
Item 5. Indemnification of Directors and Officers.................... 15
PART F/S
Financial Statements......................................... 16
PART III
Item 1. Index to Exhibits............................................ 24
Signatures................................................... 24
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Corporate History
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(a) Past Business Activities
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The Registrant was incorporated on October 28, 1983, under the name
Destiny Express, Incorporated ("Destiny"), in the state of Utah. Destiny
underwent a name change in November 1985 to Psychological Health Care, Inc.
("PHCI"). PHCI was in the business of contracting for and providing
psychological services and counseling to employees of corporations and in
presenting seminars and training sessions on numerous subjects. PHCI
discontinued all operations effective September 30, 1987.
On March 13, 1989, PHCI acquired the 1,000,000 issued and outstanding
shares of common stock of Pain Prevention, Inc., an Illinois corporation, in a
reverse merger transaction in exchange for 37,031,250 shares of the PHCI's
common stock. Pain Prevention, Inc. (Illinois), had been in the business of
developing and marketing of a dental device, i.e., a battery powered
transcutaneous electrical nerve stimulation wave generator, with related
apparatuses for certain dental applications.
The Board of Directors and stockholders of PHCI also approved the change
of the PHCI's name to Pain Prevention, Inc. (henceforth "Registrant"), and an
increase in the authorized shares from 50,000,000 to 200,000,000 shares of
common stock, par value $0.001 par value.
By the end of 1989, Pain Prevention, Inc. (Illinois) discontinued all
operations. Neither Pain Prevention, Inc. (Illinois) nor the Registrant have
had any subsequent operations.
In June 1997, the Registrant entered into an Agreement and Plan of
Reorganization and Corporation Separation (the "Agreement")to transfer
3,200,000 issued and outstanding shares of common stock in Pain Prevention,
Inc. (Illinois) to Meridian Enterprises, Inc., a Delaware corporation, in
consideration for the assumption by Meridian Enterprises, Inc., of any and all
obligations owing to Ronald J. Stauber, Inc., a law corporation, for legal
services performed in relation to the Agreement. At the time of the
Agreement, the total issued and outstanding shares of Pain Prevention, Inc.
(Illinois) consisted of 4,000,000 shares of common stock par value $0.00175,
owned by two shareholders, Meridian Enterprises, Inc., and the Registrant. The
Agreement was entered into by and between the Registrant, Gregory Jess
Halpern, its controlling shareholder, and Meridian Enterprises, Inc. The
obligations owing were those of Pain Prevention, Inc. (Illinois) and not those
of the Registrant.
In November, 1997, Pain Prevention, Inc. (Illinois), changed its name to
PPI Capital Corp., and its state of domicile from Illinois to Utah. On
November 15, 1997, the Registrant distributed the balance of 800,000 shares of
Pain Prevention, Inc. (Illinois)(now "PPI Capital Corp.") common stock to its
shareholders pro rata. The business purpose for the common stock distribution
was to eliminate from the Registrant the minimal assets and contingent
liabilities, if any, of Pain Prevention, Inc. (Illinois). Because the
Registrant had no interest or intention of pursuing any business purpose
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through PPI Capital Corp., the board of directors felt it was in the best
interest of the Registrant and its shareholders to distribute its remaining
shares directly to its shareholders, Any benefit from any subsequent
operations of PPI Capital Corp. will go directly to the shareholders. As
indicated in the Agreement, Gregory Jess Halpern waived the right to receive
any distribution owed to him.
In May 1998, Gregory Jess Halpern sold 12,980,831 shares of the
Registrant's common stock, which amount represented approximately 75.47% of
the total 17,198,707 issued and outstanding shares, to Mark Scharmann for
$40,000. In connection with the sale of controlling interest, Mr. Halpern
resigned as an officer and director, and Karen Stefanczyik and Earl Kohn
resigned as directors. Mark Sharmann was appointed President and Director,
Dave Knudson was appointed Vice-President and Director, and Dan Price was
appointed Secretary and Director.
The new Board proposed a recapitalization that provided a 10 for 1
reverse split of the issued and outstanding shares, and a name change to PPI
Capital Group, Inc. The reorganization was proposed to reduce the number of
outstanding shares in order to make the Registrant more attractive as a
potential merger or acquisition candidate. The name change was implemented to
make the Registrant's name more generic and less representative of its former
business operations.
The proposals were approved in a special shareholders meeting on June 1,
1998. After giving effect to the reverse split, there were approximately
1,719,870 shares of the Registrant's common stock issued and outstanding. At
present, PPI Capital Group, Inc. has no affiliation with PPI Capital Corp.
(b) Current Business Activities
----------------------------
Since the change in control in May 1998, the Registrant has been seeking
potential business acquisition or opportunities to enter in an effort to
commence business operations. The Registrant does not propose to restrict its
search for a business opportunity to any particular industry or
geographical area and may, therefore, engage in essentially any business in
any industry. The Registrant has unrestricted discretion in seeking and
participating in a business opportunity, subject to the availability of such
opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Registrant has only limited resources,
it may be difficult to find good opportunities. There can be no assurance
that the Registrant will be able to identify and acquire any business
opportunity which will ultimately prove to be beneficial to the Registrant and
its shareholders. The Registrant will select any potential business
opportunity based on management's business judgment.
The activities of the Registrant are subject to several significant risks
which arise primarily as a result of the fact that the Registrant has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which potentially could act without the
consent, vote, or approval of the Registrant's shareholders. The risks faced
by the Registrant are further increased as a result of its lack of resources
and its inability to provide a prospective business opportunity with
significant capital.
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In May 1998, the directors determined that the Registrant should
become active in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
Registrant then began to consider and investigate potential business
opportunities. Because of the Registrant's current status having no assets
and no recent operating history, in the event the Registrant does successfully
acquire or merge with an operating business opportunity, it is likely that the
Registrant's present shareholders will experience substantial dilution and
there will be a probable change in control of the Registrant.
The Registrant is voluntarily filing its registration statement on Form
10SB in order to make information concerning itself more readily available to
the public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could
provide a prospective merger or acquisition candidate with additional
information concerning the Registrant. In addition, management believes that
this might make the Registrant more attractive to an operating business
opportunity as a potential business combination candidate. As a result of
filing its registration statement, the Registrant is obligated to file with
the Commission certain interim and periodic reports including an annual report
containing audited financial statements. The Registrant intends to continue
to voluntarily file these periodic reports under the Exchange Act even if its
obligation to file such reports is suspended under applicable provisions of
the Exchange Act.
Any target acquisition or merger candidate of the Registrant will become
subject to the same reporting requirements as the Registrant upon consummation
of any such business combination. Thus, in the event that the Registrant
successfully completes an acquisition or merger with another operating
business, the resulting combined business must provide audited financial
statements for at least the two most recent fiscal years or, in the event that
the combined operating business has been in business less than two years,
audited financial statements will be required from the period of inception of
the target acquisition or merger candidate.
Sources of Business Opportunities
- ---------------------------------
The Registrant intends to use various sources in its search for potential
business opportunities including its officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists, members of
the financial community and others who may present management with unsolicited
proposals. Because of the Registrant's lack of capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. Rather, the Registrant will most likely have to rely on
outside sources, not otherwise associated with the Registrant, that will
accept their compensation only after the Registrant has finalized a successful
acquisition or merger. To date, the Registrant has not engaged nor entered
into any discussions, negotiations, agreements nor understandings regarding
retention of any consultant to assist the Registrant in its search for
business opportunities, nor is management presently in a position to actively
seek or retain any prospective consultants for these purposes.
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The Registrant does not intend to restrict its search to any specific
kind of industry or business. The Registrant may investigate and ultimately
acquire a venture that is in its preliminary or development stage, is already
in operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which the Registrant may participate. A potential venture might need
additional capital or merely desire to have its shares publicly traded. The
most likely scenario for a possible business arrangement would involve the
acquisition of, or merger with, an operating business that does not need
additional capital, but which merely desires to establish a public trading
market for its shares. Management believes that the Registrant could provide a
potential public vehicle for a private entity interested in becoming a
publicly held corporation without the time and expense typically associated
with an initial public offering.
Evaluation
- ----------
Once the Registrant has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's
knowledge and experience, or with the assistance of outside advisors and
consultants evaluating the preliminary information available to them.
Management may elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities. However, because of
the Registrant's lack of capital it may not have the necessary funds for a
complete and exhaustive investigation of any particular opportunity.
In evaluating such potential business opportunities, the Registrant will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Registrant and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development
or exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Registrant has not located or identified any specific
business opportunity as of the date hereof, there are certain unidentified
risks that cannot be adequately expressed prior to the identification of a
specific business opportunity. There can be no assurance following
consummation of any acquisition or merger that the business venture will
develop into a going concern or, if the business is already operating, that it
will continue to operate successfully. Many of the potential business
opportunities available to the Registrant may involve new and untested
products, processes or market strategies which may not ultimately prove
successful.
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Form of Potential Acquisition or Merger
- ---------------------------------------
Presently, the Registrant cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen. The particular
manner in which the Registrant participates in a specific business opportunity
will depend upon the nature of that opportunity, the respective needs and
desires of the Registrant and management of the opportunity, and the relative
negotiating strength of the parties involved. Actual participation in a
business venture may take the form of an asset purchase, lease, joint venture,
license, partnership, stock purchase, reorganization, merger or consolidation.
The Registrant may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization, however, the
Registrant does not intend to participate in opportunities through the
purchase of minority stock positions.
Because of the Registrant's current status and recent inactive status for
the prior 10 years, and its concomitant lack of assets or relevant
operating history, it is likely that any potential merger or acquisition with
another operating business will require substantial dilution of the
Registrant's existing shareholders. There will probably be a change in
control of the Registrant, with the incoming owners of the targeted merger or
acquisition candidate taking over control of the Registrant. Management has
not established any guidelines as to the amount of control it will offer to
prospective business opportunity candidates, since this issue will depend to a
large degree on the economic strength and desirability of each candidate, and
corresponding relative bargaining power of the parties. However, management
will endeavor to negotiate the best possible terms for the benefit of the
Registrant's shareholders as the case arises.
Management does not have any plans to borrow funds to compensate any
persons, consultants, promoters, or affiliates in conjunction with its efforts
to find and acquire or merge with another business opportunity. Management
does not have any plans to borrow funds to pay compensation to any prospective
business opportunity, or shareholders, management, creditors, or other
potential parties to the acquisition or merger. In either case, it is
unlikely that the Registrant would be able to borrow significant funds for
such purposes from any conventional lending sources. In all probability, a
public sale of the Registrant's securities would also be unfeasible, and
management does not contemplate any form of new public offering at this time.
In the event that the Registrant does need to raise capital, it would
most likely have to rely on the private sale of its securities or loans from
its officers and directors. Such a private sale would be limited to persons
exempt under the Commission's Regulation D or other rule or provision for
exemption, if any applies. However, no private sales are contemplated by the
Registrant's management at this time. If a private sale of the Registrant's
securities is deemed appropriate in the future, management will endeavor to
acquire funds on the best terms available to the Registrant. However, there
can be no assurance that the Registrant will be able to obtain funding when
and if needed, or that such funding, if available, can be obtained on terms
reasonable or acceptable to the Registrant. The Registrant does not
anticipate using Regulation S promulgated under the Securities Act of 1933 to
raise any funds any time within the next year, subject only to its potential
applicability after consummation of a merger or acquisition.
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Although not presently anticipated by management, there is a remote
possibility that the Registrant might sell its securities to its management or
affiliates.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of the Registrant, may be paid to persons
instrumental in facilitating the transaction. The Registrant has not
established any criteria or limits for the determination of a finder's fee,
although most likely an appropriate finder's fee will be negotiated between
the parties, including the potential business opportunity candidate, based
upon economic considerations and reasonable value as estimated and mutually
agreed at that time. A finder's fee would only be payable upon completion of
the proposed acquisition or merger in the normal case, and management does not
contemplate any other arrangement at this time. Management has not actively
undertaken a search for, nor retention of, any finder's fee arrangement with
any person. It is possible that a potential merger or acquisition candidate
would have its own finder's fee arrangement, or other similar business
brokerage or investment banking arrangement, whereupon the terms may be
governed by a preexisting contract; in such case, the Registrant may be
limited in its ability to affect the terms of compensation, but most likely
the terms would be disclosed and subject to approval pursuant to submission of
the proposed transaction to a vote of the Registrant's shareholders.
Management cannot predict any other terms of a finder's fee arrangement at
this time. It would be unlikely that a finder's fee payable to an affiliate
of the Registrant would be proposed because of the potential conflict of
interest issues. If such a fee arrangement was proposed, independent
management and directors would negotiate the best terms available to the
Registrant so as not to compromise the fiduciary duties of the affiliate in
the proposed transaction, and the Registrant would require that the proposed
arrangement would be submitted to the shareholders for prior ratification in
an appropriate manner.
Management does not contemplate that the Registrant would acquire or
merge with a business entity in which any affiliates of the Registrant have an
interest. Any such related party transaction, however remote, would be
submitted for approval by an independent quorum of the Board of Directors and
the proposed transaction would be submitted to the shareholders for prior
ratification in an appropriate manner. None of the Registrant's managers,
directors, or other affiliated parties have had any contact, discussions, or
other understandings regarding any particular business opportunity at this
time, regardless of any potential conflict of interest issues. Accordingly,
the potential conflict of interest is merely a remote theoretical possibility
at this time.
Rights of Shareholders
- ----------------------
It is presently anticipated by management that prior to consummating a
possible acquisition or merger, the Registrant will seek to have the
transaction ratified by shareholders in the appropriate manner. Most likely,
this would require a general or special shareholder's meeting called for such
purpose. Section 16-10a-704 of the Utah Revised Business Corporation Act
provides that any action which may be taken at any annual or special meeting
of the shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken, shall be signed by the holder of the outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon
were present and voted.
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However, a shareholder's meeting is normally the most expeditious procedure,
wherein all shareholder's would be entitled to vote in person or by proxy. In
the notice of such a shareholder's meeting and proxy statement, the Registrant
will provide shareholders complete disclosure documentation concerning a
potential acquisition of merger candidate, including financial information
about the target and all material terms of the acquisition or merger
transaction.
Competition
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Because the Registrant has not identified any potential acquisition or
merger candidate, it is unable to evaluate the type and extent of its likely
competition. The Registrant is aware that there are several other public
companies with only nominal assets that are also searching for operating
businesses and other business opportunities as potential acquisition or merger
candidates. The Registrant will be in direct competition with these other
public companies in its search for business opportunities and, due to the
Registrant's lack of funds, it may be difficult to successfully compete with
these other companies.
Employees
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As of the date hereof, the Registrant does not have any employees and has
no plans for retaining employees until such time as the Registrant's business
warrants the expense, or until the Registrant successfully acquires or merges
with an operating business. The Registrant may find it necessary to
periodically hire part-time clerical help on an as-needed basis.
Facilities
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The Registrant is currently using as its principal place of business the
personal residence of its President and Director located in Ogden, Utah.
Although the Registrant has no written agreement and pays no rent for the use
of this facility, it is contemplated that at such future time as an
acquisition or merger transaction may be completed, the Registrant will secure
commercial office space from which it will conduct its business. Until such
an acquisition or merger, the Registrant lacks any basis for determining the
kinds of office space or other facilities necessary for its future business.
The Registrant has no current plans to secure such commercial office space.
It is also possible that a merger or acquisition candidate would have adequate
existing facilities upon completion of such a transaction, and the
Registrant's principal offices may be transferred to such existing facilities.
Year 2000 Computer Problem
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The Year 2000, or Y2K problem concerns potential failure of certain
computer software to correctly process information because of the software's
inability to calculate dates. The Registrant has no operations or current
equipment which might be affected by the Year 2000 computer glitch. The
Registrant will make every effort to determine the Y2K preparedness of any
potential merger or acquisition candidate.
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Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
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The Registrant is considered a development stage company with no assets
or capital and with no operations or income since approximately 1989. The
costs and expenses associated with the preparation and filing of this
registration statement and other operations of the Registrant have been paid
for by shareholders of the Registrant, specifically Mark A. Scharmann (see
Item 4, Security Ownership of Certain Beneficial Owners and Management). It is
anticipated that the Registrant will require only nominal capital to maintain
the corporate viability of the Registrant and necessary funds will most likely
be provided by the Registrant's existing shareholders or its officers and
directors in the immediate future. However, unless the Registrant is able to
facilitate an acquisition of or merger with an operating business or is able
to obtain significant outside financing, there is substantial doubt about its
ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Registrant until such time as the
Registrant successfully completes an acquisition or merger. At that time,
management will evaluate the possible effects of inflation on the Registrant
as it relates to its business and operations following a successful
acquisition or merger.
Plan of Operation
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During the next twelve months, the Registrant's officers and directors
will contact business brokers, consultants, and other business professionals
in an effort to actively seek out and investigate possible business
opportunities with the intent to acquire or merge with one or more business
ventures. In its search for business opportunities, management will follow the
procedures outlined in Item 1 above. Because the Registrant lacks funds, it
may be necessary for the officers and directors to either advance funds to the
Registrant or to accrue expenses until such time as a successful business
consolidation can be made. Management intends to hold expenses to a minimum
and to obtain services on a contingency basis when possible. The Registrant's
directors may receive compensation for services provided to the Company until
such time as an acquisition or merger can be accomplished. However, if the
Registrant engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Registrant to attempt to raise
additional funds. As of the date hereof, the Registrant has not made any
arrangements or definitive agreements to use outside advisors or consultants
or to raise any capital.
In the event the Registrant does need to raise capital most likely the
only method available to the Registrant would be the private sale of its
securities. It is unlikely that it could make a public sale of securities or
be able to borrow any significant sum from either a commercial or private
lender. There can be no assurance that the Registrant will be able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Registrant.
The Registrant does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is confident that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
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ITEM 3. Description of Property
The information required by this Item 3 is not applicable to this Form
10SB due to the fact that the Registrant does not own or control any material
property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth the number of shares of the Registrant's
Common Stock, par value $0.001, held by each person who is believed to be
the beneficial owner of 5% or more of the 1,869,081 shares of the Registrant's
common stock outstanding at January 14, 1999, based on the Registrant's
transfer agent's list, and the names and number of shares held by each of the
Registrant's officers and directors and by all officers and directors as a
group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- --------------------- --------
Common Scott Corry 100,000 Direct 5.35
C/o PPI Capital Group
1661 Lakeview Circle
Ogden, UT 84403
Common David Johnson 100,000 Direct 5.35
C/o PPI Capital Group
1661 Lakeview Circle
Ogden, UT 84403
Common David Knudson 133 Direct 0.01
2331 East 1200 North
Layton, UT 84040
none Dan O. Price 0 N/A 0.00
7250 NE William Rogers Rd
Indianola, WA 98342
Common Mark A. Scharmann 1,048,082 Direct 56.07
1661 Lakeview Circle
Ogden, UT 84403
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Officers, Directors and Nominees
Common Mark A. Scharmann, President
and Director -------See Above-------
Common David Knudson, Vice
President and Director -------See Above-------
Common Dan O. Price, Secretary/
Treasurer and Director -------See Above-------
All Officers, Directors, and
Nominees as a Group (3 Persons) 1,048,215 Direct 56.08
========= =====
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ITEM 5. Directors, Executive Officers, Promoters and Control Persons
The names of the Registrant's executive officers and directors and the
positions held by each of them are set forth below:
Name Position
- ---- --------
Mark A. Scharmann President and Director
David Knudson Vice President and Director
Dan O. Price Secretary/Treasurer and Director
The term of office of each director is one year and until his successor
is elected at the Registrant's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.
Biographical Information
Set forth below is certain biographical information with respect to each
of the Registrant's officers and directors.
Mark A. Scharmann, age 39, has been president of the Company since May
1998. Mr. Scharmann had been vice-president and a director of the Company
since February 1997. Since 1979, Mr. Scharmann has been the principal owner
of Troika Capital, Inc., Ogden, Utah, a financial consulting company. Mr.
Scharmann is also an officer and director of Rexford, Inc. ("Rexford"), and
ImmunoTechnology Corporation ("ImmunoTechnology"), both Delaware corporations.
Both Rexford and ImmunoTechnology are development stage companies with no
business operations. Both Rexford and ImmunoTechnology are seeking potential
operating businesses and business opportunities with the intent to acquire or
merge with such businesses. Further, both Rexford and ImmunoTechnology are
reporting companies under the Exchange Act.
David Knudson, age 38, has been the vice-president of the Company since
May 1998. Mr. Knudson had been secretary/treasurer of the Company since
February 1997. From September 1994 to June 1996, Mr. Knudson was an adjunct
professor of Computer Information Systems at Weber State University, Ogden,
Utah. Since 1985, Mr. Knudson has been the principal of Twelve O Eight, a
business and computer consulting company, located in Layton, Utah. Mr. Knudson
is also an officer and director of ImmunoTechnology Corporation
("ImmunoTechnology"), a Delaware corporations. ImmunoTechnology is a
development stage company with no business operations. ImmunoTechnology is
seeking potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses. ImmunoTechnology is a
reporting company under the Exchange Act.
Dan O. Price, age 44, has been sectetary/treasurer and a director of the
Company since May 1998. Since February 1993, Mr. Price has served as vice-
president for corporate development of Troika Capital, Inc., Ogden, Utah, a
financial consulting company. Since October 1998, Mr. Price has also been
working as an evaluator at Learning Technics, Kirkland, Washington.
<PAGE> 13
ITEM 6. EXECUTIVE COMPENSATION
The Registrant has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors.
Except as noted below, the Registrant has not paid any salaries or other
compensation to its officers, directors or employees for the years ended
October 31, 1998, 1997 and 1996, nor at any time during 1998, 1997 or 1996.
Further, the Registrant has not entered into an employment agreement with any
of its officers, directors or any other persons and no such agreements are
anticipated in the immediate future. During the fiscal year ended October 31,
1998, the Registrant paid Dan Price, its Secretary/Treasurer, $465.00 for book
keeping and other temporary services he provided. It is intended that the
Registrant's directors may be compensated for services provided to the Company
until such time as an acquisition or merger can be accomplished. As of the
date hereof, no person has accrued any compensation from the Registrant.
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Registrant's last three completed
fiscal years to the Registrant's or its principal subsidiaries chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at October 31, 1998, the
end of the Registrant's last completed fiscal year):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mark Scharmann 1998 $ -0- -0- -0- -0- -0- -0- -0-
President and CEO 1997 $ -0- -0- -0- -0- -0- -0- -0-
1996 $ -0- -0- -0- -0- -0- -0- -0-
Gregory J. Halpern 1998 $ -0- -0- -0- -0- -0- -0- -0-
President and CEO 1997 $ -0- -0- -0- -0- -0- -0- -0-
1996 $ -0- -0- -0- -0- -0- -0- -0-
</TABLE>
Options/SAR Grants in Last Fiscal Year
None.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
Not Applicable.
Other Compensation
None.
<PAGE> 14
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mark A. Scharmann, an officer and director of the Company has loaned
money to the Company during the year ended October 31, 1998. The loans are
unsecured, bear interest at a rate of 10% per annum and have no maturity date.
At October 31, 1998, the balance of principal and accrued interest amounted to
$19,735.
ITEM 8. DESCRIPTION OF SECURITIES
General
- -------
The Registrant is authorized to issue two hundred million shares of on e
class of capital stock, consisting of 200,000,000 shares of common stock, par
value $0.001 per share (the "Common Stock"). There are 1,869,081 shares of
Common Stock issued and outstanding as of January 14, 1999.
The holders of Common Stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of Common
Stock do not carry cumulative voting rights and, therefore, a majority of the
shares of outstanding Common Stock will be able to elect the entire board of
directors and, if they do so, minority shareholders would not be able to elect
any persons to the board of directors. The Registrant's bylaws provide that a
majority of the issued and outstanding shares of the Registrant constitutes a
quorum for shareholders' meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute or the bylaws.
Shareholders of the Registrant have no preemptive rights to acquire
additional shares of Common Stock or other securities. The Common Stock is
not subject to redemption, call or assessment, and carries no subscription or
conversion rights. In the event of liquidation of the Registrant, the shares
of Common Stock are entitled to share equally in corporate assets after
satisfaction of all liabilities.
Holders of Common Stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally
available for the payment of dividends. The Registrant seeks growth and
expansion of its business through the reinvestment of profits, if any, and
does not anticipate that it will pay dividends in the foreseeable future.
PART II
ITEM 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
The Registrant's common stock is not listed for publication of
quotations and, to the best of the Registrant's knowledge, its common stock
has not received a symbol from the NASD for publication of quotations.
Since its inception, the Registrant has not paid any dividends on its
Common Stock, and the Registrant does not anticipate that it will pay
dividends in the foreseeable future.
As of January 14, 1999, there were 1,869,081 shares of common stock
outstanding held by approximately 129 stockholders of record, as reported by
the Registrant's transfer agent.
<PAGE> 15
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings and no such
action by or against it, to the best of its knowledge, has been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Registrant has not changed nor had any disagreements with its
independent certified accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has not issued any unregistered securities within the
past three years.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 16-10a-901 through 909 of the Utah Revised Business Corporation Act
provides in relevant parts as follows:
(1) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or on
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the feet that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only
<PAGE> 16
to the extent that the court in which such action or suit was brought shall
determine on application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in 1) or (2) of this subsection, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(4) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to
a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such
a person.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to the above
discussed sections of the Utah Revised Business Corporation Act.
The Registrant's certificate of incorporation and bylaws provide that the
Registrant "may indemnify" to the full extent of its power to do so, all
directors, officers, employees, and/or agents. It is anticipated that the
Registrant will indemnify its officers and directors to the full extent
permitted by the above-quoted statute.
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to officers and directors of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant
is aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
PART F/S
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements for the fiscal years ended October 31,
1998, and 1997, have been examined to the extent indicated in their
reports by Harold Y. Spector, a corporation of certified public accountants,
and have been prepared in accordance with generally accepted accounting
principles and are attached hereto and incorporated herein by this reference.
<PAGE>
<PAGE> 17
Harold Y. Spector
Certified Public Accountant
80 South Lake Avenue, Suite 723
Pasadena, California 91101
Independent Auditor's Report
To the Board of Directors and Stockholders of PPI Capital Group, Inc.
I have audited the accompanying balance sheets of PPI Capital Group, Inc., a
Utah corporation in the development stage, (FKA Pain Prevention, Inc.) as of
October 31, 1998 and 1997, and the related statements of operations and
accumulated deficit, stockholders' equity, and cash flows for the years then
ended and for the period from Inception October 28, 1983 to October 31, 1998.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted this audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provided a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial positions of PPI Capital Group, Inc.
as of October 31, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended and for the period from Inception October
28, 1983 to October 31, 1998, 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 6 to the
financial statements, the Company's significant operating losses since
inception raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/S/ Harold Y. Spector
Pasadena, CA
February 17, 1999<PAGE>
<PAGE> 18
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
October 31, 1998 and 1997
ASSETS
1998 1997
---------- ----------
Current Assets
Cash $ 1,250 $ 0
---------- ----------
Fixed Assets 0 0
---------- ----------
Other Assets 0 0
---------- ----------
TOTAL ASSETS $ 1,250 $ 0
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
1998 1997
---------- ----------
Current Liabilities
Accounts payable $ 600 $ 0
Accrued Interest 286 0
---------- ----------
Total Current Liabilities 886 0
---------- ----------
Long-term Liabilities Officers' Loans 19,735 0
---------- ----------
Total Liabilities 20,621 0
---------- ----------
Stockholders' deficit:
Common stock $.001 par value; authorized
200,000,000 shares; 1,869,081 shares
issued and outstanding 1,869 1,869
Capital Paid in Excess of Par Value 68,223 68,223
Accumulated deficit during the
development stage (89,463) (70,092)
---------- ----------
Total stockholders' Equity (Deficit) (19,371) 0
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 1,250 $ 0
========== ==========
The auditor's report and accompanying notes are an integral part of the
financial statements
<PAGE>
<PAGE> 19
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICITS
For the years ended October 31,1998 and 1997,
and the period from Inception October 28, 1983 to October 31, 1998
Inception
Oct. 28, 1983
October 31, to
1998 1997 Oct. 31, 1998
---------- ---------- ----------
REVENUE $ 0 $ 0 $ 66,249
---------- ---------- ----------
COST AND OPERATING EXPENSES 19,085 0 176,522
---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (19,085) 0 (110,273)
OTHER INCOME (EXPENSES)
Other Income 0 0 1,250
Interest Expenses (286) 0 (286)
---------- ---------- ----------
Total Other Income (Expenses) (286) 0 964
---------- ---------- ----------
INCOME (LOSS) BEFORE TAXES (19,371) 0 (109,309)
PROVISION FOR INCOME TAXES 0 0 0
---------- ---------- ----------
NET (LOSS) BEFORE EXTRAORDINARY ITEM (19,371) 0 (109,309)
EXTRAORDINARY ITEM - LIQUIDATION 0 0 81,209
---------- ---------- ----------
NET INCOME (LOSS) (19,371) 0 (28,100)
ACCUMULATED DEFICITS
BEGINNING OF PERIOD(S) (70,092) (70,092) 0
Adjustments -
Acquisition of Subsidiary 0 0 (38,146)
Issuance of stocks in lieu of salaries,
services and consultants 0 0 (23,217)
---------- ---------- ----------
ENDING OF PERIOD(S) $ (89,463) $ (70,092) $ (89,463)
========== ========== ==========
NET LOSS PER SHARE $ (.01) $ (.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,869,081 1,869,081
========== ==========
The auditor's report and accompanying notes are an integral part of the
financial statements
<PAGE>
<PAGE> 20
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the period from Inception October 28, 1983 to October 31, 1998
<TABLE>
<CAPTION>
Paid
Common in Accumulated
Shares Stock Capital Deficit Total
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at Inception October 28, 1983 0 $ 0 $ 0 $ 0 $ 0
Original issuance of common stocks 7,500,000 7,500 25,487 (41,602) (8,615)
Capital Contributed 15,000 15,000
Issuance of common stocks for Pain
Prevention, Inc. (Illinois corporation) 37,031,250 37,031 (37,031) 0
Issuance of common stocks for
commission fee 2,343,750 2,344 2,344
Paid-in Capital adjustment (3,456) 3,456 0
Net Loss during the period (89,938) (89,938)
------------ ------------ ------------ ------------- ------------
Balance at March 31, 1989 46,875,000 $ 46,875 $ 0 $ (128,084) $ (81,209)
Reverse stock split 1 to 3.75 (34,375,000)
Issuance of stocks in lieu of salaries,
services and consultants 6,191,271 23,217 (23,217) 0
Liquidation of PPLI 81,209 81,209
Net Loss from Mar. 31, 1989 to
October 31, 1996 0 0
------------ ------------ ------------ ------------- ------------
Balance at October 31, 1996 18,691,271 $ 70,092 $ 0 $ (70,092) $ 0
Net loss for the period 0 0
------------ ------------ ------------ ------------- ------------
Balance at October 31, 1997 18,691,271 $ 70,092 $ 0 $ (70,092) $ 0
Reduce par value to $.0001 (68,223) 68,223 0
Reverse stock split 1-for-10 (16,822,190) 0
Net Loss for the period (19,371) (19,371)
------------ ------------ ------------ ------------- ------------
Balance at October 31, 1998 1,869,081 $ 1,869 $ 68,223 $ (89,463) $ (19,371)
============ ============ ============ ============= ============
</TABLE>
The auditor's report and accompanying notes are an integral part of the
financial statements<PAGE>
<PAGE> 21
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the years ended October 31,1998 and 1997,
and the period from Inception October 28, 1983 to October 31, 1998
Inception
Oct. 28, 1983
October 31, to
1998 1997 Oct. 31, 1998
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (19,371) $ 0 $ (28,100)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Extraordinary item - Liquidation 0 0 (81,209)
Increase in Accounts Payable 600 0 600
Increase in Accrued Interest 286 0 286
---------- ---------- ----------
Net cash (used) by
operating activities (18,485) 0 (108,423)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Subsidiary 0 0 (38,146)
Liquidation of PPLI 0 0 81,209
---------- ---------- ----------
Net cash provided by
investing activities 0 0 43,063
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of common stocks 0 0 46,875
Net Proceeds from Officers' Loan 19,735 0 19,735
---------- ---------- ----------
Net cash provided by
financing activities 19,735 0 66,610
---------- ---------- ----------
NET INCREASE IN CASH 1,250 0 1,250
CASH AT BEGINNING OF PERIOD(S) 0 0 0
---------- ---------- ----------
CASH AT END OF PERIOD(S) $ 1,250 $ 0 $ 1,250
========== ========== ==========
SUPPLEMENTAL DISCLOSURE:
Interest paid $ 0 $ 0 $ 0
========== ========== ==========
Taxes paid $ 0 $ 0 $ 0
========== ========== ==========
NONCASH TRANSACTIONS INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in lieu of salaries, services and consultants
of $23,217
The auditor's report and accompanying notes are an integral part of the
financial statements
<PAGE>
<PAGE> 22
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
For the years ended October 31,1998 and 1997
NOTE 1 - GENERAL
PPI Capital Group, Inc., formerly known as Pain Prevention, Inc., (the
"Company") was incorporated under the laws of the state of Utah on October 28,
1983. The Company elected the fiscal year ended on October 31st.
The Company had been engaged in the business of contracting for the providing
psychological services and counseling to employees of corporations. Effective
November 30, 1989, the Company discontinued all operations. Presently, the
Company has no operations.
The Company is considered a development stage company as defined under
Financial Accounting Standards Board Statement No. 7.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual basis of accounting for financial reporting, in
accordance with generally accepted accounting principles.
Use of Estimates
- ----------------
The preparation of the accompanying financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that directly affect the results of reported assets,
liabilities, revenues and expenses. Actual results may differ from these
estimates.
Statement of Cash Flows
- -----------------------
The Company prepares its statements of cash flows using the indirect method as
defined under Financial Accounting Standards Board Statement No. 95. For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Revenue Recognition
- -------------------
The Company did not conduct any business operations since March 31, 1989, and
consequently, has not generated any operating revenue.
Fixed Assets
- ------------
As of October 31, 1998, the Company does not maintain or control any fixed
assets.
Income Taxes
- ------------
The Company accounts income taxes in accordance with Financial Accounting
standards Board Statement No. 109.
NOTE 3 - NOTE PAYABLE-RELATED PARTY
The Company had unsecured notes payable to an officer/stockholder in the
<PAGE> 23
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (continued)
For the years ended October 31,1998 and 1997
NOTE 3 - NOTE PAYABLE-RELATED PARTY (continued)
amount of $19,735. The borrowing are due on demand and bear interest at ten
percent per annum.
NOTE 4 - REVERSE STOCK SPLIT
In 1998, the Board of Directors amended its article of incorporation to reduce
the par value of its common stock to $.0001. Subsequently, they authorized a
reverse 1-for-10 stock split, thereby decreasing the number of issued and
outstanding shares to 1,869,127 and increasing the par value of each share to
$.001.
NOTE 5 - SPIN-OFF SUBSIDIARY
On June 30, 1997, the Company entered into an agreement to transfer 80% of the
common stock of its subsidiary, PPI Capital Corp ("PPI") to a third party. PPI
was originally acquired March 13, 1989 with the exchange of 37,031,250 shares
of Company common stock for 100% of the issued and outstanding stock of PPI.
The remaining 20% stock of PPI were distributed, pro rata, to the shareholders
of the Company.
PPI was inactive and had no operations in 1997.
NOTE 6 - GOING CONCERN
The accompanying financial statements are presented on the basis that the
Company will continue as a going concern. Going concern contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business over a reasonable length of time. As shown in the accompanying
financial statements, the Company has incurred net losses of $89,463 since
inception, and as of October 31, 1998, the Company has not generated
sufficient revenue to cover its operation costs.
Management intends to seek, investigate, and, if warranted, effect a business
combination with an existing, unidentified privately held company or entity,
in the interim, it has committed to meeting the Company's minimal operating
expenses. The Company continued existence depends on its ability to meet its
financing requirements and success of its future operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE 7 - YEAR 2000
The year 2000 issue concerns the ability of data sensitive software to
properly recognize the year 2000 in calculating and processing computer system
information. The Company has no hardware or software. The Company is silent as
to this issue.
<PAGE> 24
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this Form
10-SB pursuant to item 601 of regulation S-B.
SEC
Exhibit Reference
No. No. Title of Document
- ------- --------- -----------------
1 3(i) Articles of Incorporation of the Registrant and related
Amendments
2 3(ii) Bylaws of the Registrant
3 4 Specimen Stock Certificate
4 27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PPI Capital Group, Inc.
[Registrant]
Dated: February 23, 1999 By:/S/Mark A. Scharmann, President and
Director
<PAGE> 1
[Filed in the office of the Lt. Gov./Sec. of
State, of the State of Utah, on the 28th
day of Oct. A.D. 1983
DAVID S. MONSON
Lt. Gov./Sec. of State]
ARTICLES OF INCORPORATION
OF
DESTINY EXPRESS, INCORPORATED
We, the undersigned natural persons of the age of twenty-one years or
more, acting as incorporators of a corporation under the Utah Business
Corporation Act, adopt the following Articles of
Incorporation for such corporation.
ARTICLE I
Name
The name of this corporation is Destiny Express, Incorporated.
ARTICLE II
Duration
The duration of this corporation is perpetual.
ARTICLE III
Purposes
The purpose or purposes for which this corporation is organized are:
(a) To engage in any lawful act or activity for which the corporation may
be organized under the general corporation law of Utah.
(b) To engage in the business of providing motivational programs for
athletes, businessmen, sales people and to prepare and conduct seminars,
catalogues, and sales programs for utilization in the motivational program,
and to do any and all acts necessary or convenient in connection with said
business and incidental thereto.
(c) To do each and every thing necessary suitable or proper for the
accomplishment of any of the purposes or the attainment of any one or more of
the subjects herein enumerated or which at any time may appear conducive to or
expedient for the protection or benefit of this corporation and to do said
acts as fully and to the same extent as natural persons might or could do in
any part of the world as principles, agents, partners, trustees or otherwise,
either alone or in conjunction with any other person, association or
corporation.
ARTICLE IV
Stock
The Corporation shall have the authority to issue fifty million
(50,000,000) shares of common stock with a par value of $.001 per share, all
stock of the corporation shall be of the same class common and shall have the
same rights and preferences, fully paid stock of this corporation shall not be
liable to any further call or assessment.
<PAGE> 2
ARTICLE V
Amendment
These Articles of Incorporation may be amended by the affirmative vote of
a majority of the shares entitled to vote on each such amendment.
ARTICLE VI
Shareholder Rights
The authorized and treasury stock of this corporation may be issued at
such time, upon such terms and conditions and for such consideration as the
Board of Directors shall determine. Shareholders shall not have pre-emptive
rights to acquire unissued shares of the stock of this corporation and
cumulative voting is denied.
ARTICLE VII
Capitalization
This corporation will not commence business until at least $1,000.00 has
been received by it as consideration for the issuance of shares.
ARTICLE VIII
Initial Office and Agent
The address of the initial registered office of the corporation is 1092
East 75 South, Bountiful, Utah 84010 and the name of the corporation's initial
registered agent at such address is Dan Price.
ARTICLE IX
Directors
The number of Directors constituting the initial Board of Directors of
this corporation is three. The names and addresses of persons who are to serve
as directors until the first annual meeting of stockholders, or until their
successors are elected and qualified are:
Dan Price
1092 East 75 South
Bountiful, Utah 84010
Brad C. Jeanselme
2624 Taylor Avenue
Salt Lake City, Utah 84403
Lynn Strong
784 Chambers
Ogden, Utah 84403
ARTICLE X
Incorporators
The name and address of each incorporator is:
Dan Price
1092 East 75 South
Bountiful, Utah 84010
Brad C. Jeanselme
2624 Taylor Avenue
Salt Lake City, Utah 84403
<PAGE> 3
Lynn Strong
784 Chambers
Ogden, Utah 84403
ARTICLE XI
Common Directors - Transactions Between Corporations
No contract or other transaction between this corporation and one or more
of its directors or any other corporation, firm, association or entity in
which one or more of its directors are directors or officers or are
financially interested, shall be either void or voidable because of such
relation or interest, or because such director or directors are present at the
meeting of the Board of Directors, or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their
votes are counted for such purpose if: (a) the fact of such relationship or
interest is disclosed or known to the Board of Directors or committee which
authorizes, approves, or ratifies this contract or transaction by vote or
consent sufficient for the purpose without counting the votes or consents of
such interested directors; or (b) the fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they authorize,
approve, or ratify such contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable to the corporation.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or committee thereof which
authorizes, approves or ratifies such contract or transaction.
DATED this 25 day of Oct, 1983.
/S/Dan Price
/S/Brad Jeanselme
/S/Lynn Stong
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE)
I hereby certify that on the 25 day of Oct, 1983 Dan Price, Brad C.
Jeanselme and Lynn Strong personally appeared before me who, being by me first
duly sworn, severally declared that they are the incorporators and that the
statements therein contained are true.
DATED this 25 day of Oct, 1983.
/S/Sic.
-------------------------------
NOTARY PUBLIC
Residing in: Weber County
My Commission Expires:
8/5/86
<PAGE> 4
[APPROVED by the Division of Corporations [Received
and Commercial Code of the Utah State 1985 Nov 12 PM 3:35
Department of Business Regulation on the DIVISION OF CORPORATION
12th day of Nov. A.B. 1985] STATE OF UTAH]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
DESTINY EXPRESS INCORPORATED
Pursuant to the provision of Section 16-10-57 of the Utah Business
Corporation Act, the undersigned corporation hereby adopts the following
Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is DESTINY EXPRESS INCORPORATED.
SECOND: The following amendment to the Articles of Incorporation of
Destiny Express Incorporated was duly adopted by the shareholders of the
corporation at a meeting held October 11, 1985, in the manner prescribed by
the Utah Business Corporation Act, to-wit:
ARTICLE I - NAME
The name of this corporation is Psychological Health Care, Inc.
THIRD: The number of shares of the corporation outstanding at the time of
the adoption of such amendments was 3,300,000 and the number entitled to vote
thereon was 3,300,000.
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows, to-wit:
CLASS NUMBER OF SHARES
----- ----------------
Common 3,300,000
FIFTH: The number of shares voted for such amendments was 1,740,000, with
- -0- opposing and -0- abstaining.
SIXTH: These amendments do not provide for any exchange, reclassification
of cancellation of issued shares.
SEVENTH: These amendments do no effect a change in the stated capital of
the corporation.
IN WITNESS WHEREOF, the undersigned President and Secretary, having been
thereunto duly authorized have executed the foregoing Articles of Amendment
for the corporation 6 day of November, 1985.
DESTINY EXPRESS INCORPORATED
By:/S/ Kenneth M. Austin, PhD.,President
<PAGE> 5
Attest:
/S/Bonnie R. Eastwood
- ------------------------
Secretary
State of California )
) ss.
County of San Bernardino )
Subscribed and sworn to before me this 6th day of November, 1985.
[OFFICIAL SEAL
OllVIA STROBAUGH
NOTARY PUBLIC - CALIFORNIA
SAN BERNARDINO COUNTY /S/Olivia Strobaugh
My Comm. Expires Jan. 13 1987]
My Commission Expires: January 13, 1987
Residing at San Bernardino County, California
<PAGE>
<PAGE> 6
[APPROVED BY the Division of Corporation [Received
and Commercial Code of the Utah State 1989 Mar 30 PM 1:28
Department of Business Regulation DIVISION OF CORPORATIONS
on the 20th day of Mar A.D. 1989] STATE OF UTAH]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
PSYCHOLOGICAL HEALTH CARE, INC.
Pursuant to the provision of Section 16-10-57 of the Utah Business
Corporation Act, the undersigned corporation hereby adopts the following
Articles of Amendment to its Articles of Incorporation.
FIRST: Care, Inc.
The name of the corporation is Psychological Health
SECOND: The following amendment to the Articles of Incorporation of
Psychological Health Care, Inc., was duly adopted by the shareholders of the
corporation at a meeting held March 13, 1989, in the manner prescribed by the
Utah Business Corporation Act, to Wit:
Article I - Name
The name of this corporation is PAIN PREVENTION, INC.
Article IV
The Corporation shall have the authority to issue two hundred million
(200,000,000) shares of Common Stock with a par value of $.001 per share, all
stock of the Corporation shall be of the same class, designated as common
stock, and shall have the same rights and preferences, fully paid stock of
this corporation shall not be liable to any further call or assessment.
THIRD: The number of shares of the corporation outstanding at the time of
the adoption of such amendments was 7,500,000 and the number entitled to vote
thereon was 7,500,000.
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows, to
Class Number of Shares
----- ----------------
Common 7,500,000
FIFTH: The number of shares voted for such amendments was 4,742,812, with
- -0- opposing and -0- abstaining.
SIXTH: These amendments do not provide for any exchange, reclassification
or cancellation of issued shares.
SEVENTH: These amendments do effect a change in the stated capital of the
corporation as set forth above.
<PAGE> 7
IN WITNESS WHEREOF, the undersigned president and secretary, having been
thereunto duly authorized, have executed the foregoing Articles of Amendment
for the corporation this 13 day of March, 1989.
PSYCHOLOGICAL HEALTH CARE, INC.
By: /S/Larry Grossman, President
Attest:
/S/ Gregory J. Halpern, Secertary
State of Illinois )
) ss.
County of Cook )
Subscribed and sworn to before me this 13 day of February, 1989, by Larry
Grossman, President of Psychological Health Care, Inc.
/S/Dorothy Weir, Notary Public
My Commission expires: July 16, 1989
Residing at: Northbrook, IL
State of Illinois )
)ss.
County of Cook )
Subscribed and sworn to before me this 13 day of February, 1989, by
Gregory J. Halpern, Secretary of Psychological Health Care, Inc.
/S/Dorothy Weir, Notary Public
My Commission expires: July 16, 1989
Residing at: Northbrook, IL<PAGE>
<PAGE> 8
[Received Jun -2 1998
Utah Div. of Corp. & Comm. Code]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
PAIN PREVENTION, INC.
Pursuant to the provisions of Section 16-10a-1006 of the Utah Revised
Business Corporation Act, PAIN PREVENTION, INC., a Utah corporation,
hereinafter referred to as the "Corporation," hereby adopts the following
Articles of Amendment to its Articles of Incorporation:
FIRST: The name of the Corporation is PAIN PREVENTION, INC.
SECOND: Article I shall read as follows:
Article I
The name of the corporation is PPI CAPITAL GROUP, INC.
THIRD: By executing these Articles of Amendment to the Articles of
Incorporation, the president and secretary of the Corporation do hereby
certify that on June 1, 1998, the foregoing amendment to the Articles of
Incorporation of PAIN PREVENTION, INC., was authorized and approved pursuant
to section 16-10a-1003 of the Utah Revised Business Corporation Act by a vote
of the majority of the Corporation's shareholders. The number of issued and
outstanding shares entitled to vote on the foregoing amendment to the Articles
of Incorporation was 17,198,707 of which 12,980,831 shares voted for and -0-
shares voted against the foregoing amendment to the Articles of Incorporation.
No other class of shares was entitled to vote thereon as a class.
DATED this 1st day of June, 1998.
/S/Mark A. Scharmann, President
/S/Dan O. Price, Secretary
STATE OF UTAH )
:ss
COUNTY OF SALT LAKE )
On this 1st day of June, 1998, personally appeared before me, the
undersigned, a notary public, Mark A. Scharmann and Dan O. Price, who being by
me first duly sworn, declare that they are the president and secretary, of the
above-named corporation, that they signed the foregoing Articles of Amendment
to the Articles of Incorporation, and that the statements contained therein
are true.
WITNESS MY HAND AND OFFICIAL SEAL.
[NOTARY PUBLIC
ELLIOTT N. TAYLOR
3090 East 3300 South
Salt Lake City, UT 84108 /S/Elliott N. Taylor, Notary Public
My Commission Expires 3-3-2001
State of Utah]
<PAGE> 1
BY-LAWS
OF
PAIN PREVENTION, INC.
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction of
business of the corporation shall be fixed or may be changed by approval of a
majority of the authorized Directors, and additional offices may be
established and maintained at such other place or places as the Board of
Directors may from time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time
be established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the
provisions of applicable law and to any limitations in the Articles of
Incorporation of the corporation relating to action required to be approved by
the Shareholders, or by the outstanding shares, the business and affairs of
the corporation shall be managed and all corporate powers shall be exercised
by or under the direction of the Board of Directors. The Board may delegate
the management of the day-to-day operation of the business of the corporation
to an executive committee or others, provided that the business and affairs of
the corporation shall be managed and all corporate powers shall be exercised
under the ultimate direction of the Board.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of a
Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director
believes to be in the best interests of the corporation, and with such care,
including reasonable inquiry, as an ordinary prudent person in a like position
would use under similar circumstances.
Section 3. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of Directors shall be nine (9) until changed by a duly adopted amendment to
the Articles of Incorporation or by an amendment to this by-law adopted by the
vote or written consent of holders of a majority of the outstanding shares
entitled to vote.
Section 4. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the Shareholders to hold office until the
next annual meeting. Each Director, including a Director elected to fill a
vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
Section 5. VACANCIES. Vacancies in the Board of Directors may be filled
by a majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, except that a vacancy created by the removal of a
Director by the vote or written consent of the Shareholders or by court order
may be filled only by the vote of a majority of the shares entitled to vote
represented at a duly held meeting at which a quorum is present, or by the
written consent of holders of a majority of the outstanding shares entitled to
vote. Each Director so elected shall hold office until the next annual meeting
of the Shareholders and until a successor has been elected and qualified.
<PAGE> 2
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in the event of the death, resignation, or removal of any Director, or if the
Board of Directors by resolution declares vacant the office of a Director who
has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of Directors is increased, or if the
Shareholders fail, at any meeting of Shareholders at which any Director or
Directors are elected, to elect the number of Directors to be voted for at
that meeting.
The Shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any Director may resign effective on giving written notice to the
Chairman of the Board, the President, the Secretary, or the Board of
Directors, unless the notice specifies a later time for that resignation to
become effective. If the resignation of a Director is effective at a future
time, the Board of Directors may elect a successor to take office when the
resignation becomes effective.
No reduction of the authorized number of Directors shall have the effect
of removing any Director before that Directors' term of office expires.
Section 6. REMOVAL OF DIRECTORS. Subject to applicable law, the entire
Board of Directors or any individual Director may be removed from office. In
such case, the remaining Board members may elect a successor Director to fill
such vacancy for the remaining unexpired term of the Director so removed.
Section 7. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board of
Directors may be called by the Chairman of the Board, or the President, or any
Vice President, or the Secretary, or any two (2) Directors and shall be held
at the principal executive office of the corporation, unless some other place
is designated in the notice of the meeting. Members of the Board may
participate in a meeting through use of a conference telephone or similar
communications equipment so long as all members participating in such a
meeting can hear one another. Accurate minutes of any meeting of the Board or
any committee thereof, shall be maintained by the Secretary or other Officer
designated for that purpose.
Section 8. ORGANIZATIONAL MEETINGS. The organizational meetings of the
Board of Directors shall be held immediately following the adjournment of the
Annual Meetings of the Shareholders.
Section 9. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may
be designated by the Board of Directors, as follows:
Time of Regular Meeting: 9:00 A.M. Date of Regular Meeting: Last Friday of
every month
If said day shall fall upon a holiday, such meetings shall be held on the
next succeeding business day thereafter. No notice need be given of such
regular meetings.
Section 10. SPECIAL MEETINGS - NOTICES - WAIVERS.
Special meetings of the Board may be called at any time by the President or,
if he or she is absent or unable or refuses to act, by any Vice President or
the Secretary or by any two (2) Directors, or by one (1) Director if only one
<PAGE> 3
is provided.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him or her at
his or her address as it is shown upon the records of the corporation, or if
it is not so shown on such records or if not readily ascertainable, at the
place in which the meetings of the Directors are regularly held. In case such
notice is mailed, it shall be deposited in the United States mail, postage
prepaid, in the place in which the principal executive officer of the
corporation is located at least four (4) days prior to the time of the holding
of the meeting. Such mailing, telegraphing, telephoning or delivery as above
provided shall be due, legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting,
however, called or noticed, and either (i) sign a written consent thereto on
the records of such meeting, or, (ii) if a majority of the Directors is
present and if those not present sign a waiver of notice of such meeting or a
consent to holding the meeting or an approval of the minute thereof, whether
prior to or after the holding of such meeting, which said waiver, consent or
approval shall be filed with the Secretary of the corporation, or, (iii) if a
Director attends a meeting without notice but without protesting, prior
thereto or at its commencement, the lack of notice, then the transactions
thereof are as valid as if had at a meeting regularly called and noticed.
Section 11. DIRECTORS' ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken
without a meeting and with the same force and effect as if taken by a
unanimous vote of Directors, if authorized by a writing signed individually or
collectively by all members of the Board. Such consent shall be filed with the
regular minutes of the Board.
Section 12. QUORUM. A majority of the number of Directors as fixed by the
Articles of Incorporation or By-Laws shall be necessary to constitute a quorum
for the transaction of business, and the action of a majority of the Directors
present at any meeting at which there is a quorum, when duly assembled, is
valid as a corporate act; provided that a minority of the Directors, in the
absence of a quorum, may adjourn from time to time, but may not transact any
business. A meeting at which a quorum is initially present may continue to
transact business, notwithstanding the withdrawal of Directors, if any action
taken is approved by a majority of the required quorum for such meeting.
Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent Directors if the time
and place be fixed at the meeting adjourned and held within twenty-four (24)
hours, but if adjourned more than twenty-four (24) hours, notice shall be
given to all Directors not present at the time of the adjournment.
Section 14. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 15. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be
<PAGE> 4
composed of two (2) or more members of the Board and shall have such powers of
the Board as may be expressly delegated to it by resolution of the Board of
Directors, except those powers expressly made non-delegable by applicable law.
Section 16. ADVISORY DIRECTORS. The Board of Directors from time to time
may elect one or more persons to be Advisory Directors who shall not by such
appointment be members of the Board of Directors. Advisory Directors shall be
available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
Section 17. RESIGNATIONS. Any Director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or
the Board of Directors of the Corporation, unless the notice specifies a later
time for the effectiveness of such resignation. If the resignation is
effective at a future time, a successor may be elected to take office when the
resignation becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The Officers of the corporation shall be a
President, a Secretary, and a Chief Financial Officer. The corporation may
also have, at the discretion of the Board of Directors, a Chairman of the
Board, one or more Vice Presidents, one or more Assistant Secretaries, or one
or more Assistant Treasurers, and such other Officers as may be appointed in
accordance with the provisions of Section 3 of this Article. Any number of
offices may be held by the same person.
Section 2. ELECTION. The Officers of the corporation, except such
Officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold office until he or she shall resign or shall be removed or
otherwise disqualified to serve or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS. ETC. The Board of Directors may appoint
such other Officers as the business of the corporation may require, each of
whom shall hold office for such period, have such authority and perform such
duties as are provided by the By-Laws or as the Board of Directors may from
time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of any Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at any
regular or special meeting of the Board, or except in case of an Officer
chosen by the Board of Directors by any Officer upon whom such power of
removal may be conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall
not be necessary to make it effective. Any resignation is without prejudice to
the rights, if any, of the corporation under any contract to which the Officer
is a party.
Section 5. VACANCIES. A vacancy in any office because of death,
<PAGE> 5
resignation, removal, disqualification or any other cause shall be filed in
the manner prescribed in the By-Laws for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By-Laws.
If there is no President, the Chairman of the Board shall in addition be the
Chief Executive Officer of the corporation and shall have the powers and
duties prescribed in Section 7 of this Article.
Section 7. PRESIDENT/CHIEF EXECUTIVE OFFICER. Subject to such supervisory
powers, if any, as may be given by the Board of Directors to the Chairman of
the Board, if there be such an Officer, the President shall be the Chief
Executive Officer of the corporation and shall, subject to the control of the
Board of Directors, have general supervision, direction and control of the
business and Officers of the corporation. He or she shall preside at all
meetings of the Shareholders and in the absence of the Chairman of the Board,
or if there be none, at all meetings of the Board of Directors. The President
shall be ex officio a member of all the standing committees, including the
Executive Committee, if any, and shall have the general powers and duties of
management usually vested in the office of President of a corporation, and
shall have such other powers and duties as may be prescribed by the Board of
Directors or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the President,
the Vice Presidents, if any, in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all 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 Vice Presidents shall have such other powers and perform
such other duties as from time to time may be prescribed for them respectively
by the Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of Directors and Shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at Directors'
meetings, the number of shares present or represented at Shareholders'
meetings and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a share register, or
duplicate share register showing the names of the Shareholders and their
addresses, the number and classes of shares held by each, the number and date
of certificates issued for the same, and the number and date of cancellation
of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by the
By-Laws or by law to be given. He or she shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained in accordance with
generally accepted accounting principles, adequate and correct accounts of the
<PAGE> 6
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
earnings (or surplus) and shares. The books of accounts shall at all
reasonable times be open to inspection by any Director.
This Officer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated
by the Board of Directors. He or she shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
President and Directors, whenever they request it, an account of all of his or
her transactions and of the financial condition of the corporation, and shall
have such other powers and perform such other duties as may be prescribed by
the Board of Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be
held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time
to time by Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall
be held, each year, at the time and on the day following:
Time of Meeting: 10:00 A.M.
Date of Meeting: April 20th
If this day shall be a legal holiday, then the meeting shall be held on
the next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be properly brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer
by any person (other than the Board)entitled to call a special meeting of
Shareholders, such Officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the
person or persons calling the meeting, not less than thirty-five (35) nor more
than sixty (60) days after the receipt of such request. If such notice is not
given within twenty (20) days after receipt of such request, the persons
calling the meeting may give notice thereof in the same manner provided by
these By-Laws.
Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant
Secretary, or if there be no such Officer, or in the case of his or her
neglect or refusal, by any Director or Shareholder.
<PAGE> 7
Such notices or any reports shall be given personally or by mail and
shall be sent to the Shareholder's address appearing on the books of the
corporation, or supplied by him or her to the corporation for the purpose of
the notice.
Notice of any meeting of Shareholders shall specify the place, the day
and the hour of meeting, and (1) in case of a special meeting, the general
nature of the business to be transacted and no other business may be
transacted, or (2) in the case of an annual meeting, those matters which Board
at date of mailing, intends to present for action by the Shareholders. At any
meetings where Directors are to be elected notice shall include the names of
the nominees, if any, intended at date of notice to be presented by management
for election.
If a Shareholder supplies no address, notice shall be deemed to have been
given if mailed to the place where the principal executive office of the
corporation is situated, or published at least once in some newspaper of
general circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of
the adjourned meeting shall be given as in case of an original meeting. Save,
as aforesaid, it shall not be necessary to give any notice of adjournment or
of the business to be transacted at an adjourned meeting other than by
announcement at the meeting at which said adjournment is taken.
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, however called and notice, shall
be valid as through had at a meeting duly held after regular call and notice,
if a quorum be present either in person or by proxy, and if, either before or
after the meeting, each of the Shareholders entitled to vote, not present in
person or by proxy, sign a written waiver of notice, or a consent to the
holding of such meeting or an approval shall be filed with the corporate
records or made a part of the minutes of the meeting. Attendance shall
constitute a waiver of notice, unless objection shall be made as provided in
applicable law.
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING DIRECTORS. Any action
which may be taken at a meeting of the Shareholders, may be taken without a
meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with
the Secretary of the corporation, provided, further, that while ordinarily
Directors can be elected by unanimous written consent, if the Directors fail
to fill a vacancy, then a Director to fill that vacancy may be elected by the
written consent of persons holding a majority of shares entitled to vote for
the election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided for
under applicable law or the Articles of Incorporation, any action which may be
taken at any annual or special meeting of Shareholders may be taken without a
meeting and without prior notice, if a consent in writing, setting forth the
action so taken, signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize to take
such action at a meeting at which all shares entitled to vote thereon were
<PAGE> 8
present and voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval without a meeting
by less than unanimous written consent shall be given at least
ten (10) days before the consummation of the action authorized by
such approval, and
(2) Prompt notice shall be given of the taking of any
other corporate action approved by Shareholders without a meeting
be less than unanimous written consent, to each of those
Shareholders entitled to vote who have not consented in writing.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal representative of
the Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holder of a majority of the shares entitled to
vote thereat, present in person, or represented by proxy, shall constitute a
quorum at all meetings of the Shareholders for the transaction of business
except as otherwise provided by law, by the Articles of Incorporation, or by
these By-Laws. If, however, such majority shall not be present or represented
at any meeting of the Shareholders, the shareholders entitled to vote thereat,
present in person, or by proxy, shall have the power to adjourn the meeting
from time to time, until the requisite amount of voting shares shall be
present. At such adjourned meeting at which the requisite amount of voting
shares shall be represented, any business may be transacted which might have
been transacted at a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors for the
determination of Shareholders of record, and then on such other day, shall be
entitled to vote at such meeting.
Provided the candidate's name has been placed in nomination prior to the
voting and one or more Shareholders has given notice at the meeting prior to
the voting of the Shareholder's intent to cumulate the Shareholder's votes,
every Shareholder entitled to vote at any election for Directors of any
corporation for profit may cumulate their votes and give one candidate a
number of votes equal to the number of Directors to be elected multiplied by
the number of votes to which his or her shares are entitled to, or distribute
his or her votes on the same principle among as many candidates as he or she
thinks fit.
The candidates receiving the highest number of votes up to the number of
Directors to be elected are elected.
<PAGE> 9
The Board of Directors may fix a time in the future not exceeding thirty
(30) days preceding the date of any meeting of Shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment of
rights, or when any change or conversion or exchange of shares shall go into
effect, as a record date for the determination of the Shareholders entitled to
notice of and to vote at any such meeting, or entitled to receive any such
dividend or distribution, or any allotment of rights or to exercise the rights
in respect to any such change, conversion or exchange of shares. In such case
only Shareholders of record on the date so fixed shall be entitled to notice
of and to vote at such meeting, to receive such dividends, distribution or
allotment of rights, or to exercise such rights, as the case may be
notwithstanding any transfer of any share on the books of the corporation
after any record date fixed as aforesaid. The Board of Directors may close the
books of the corporation against transfers of shares during the whole or any
part of such period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute
consents, may do so, either in person or by written roxy executed in
accordance with the provisions of applicable law filed with the Secretary of
the corporation.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as Chairman of the meeting. In the absence of the
President and all of the Vice Presidents, Shareholders shall appoint a
Chairman for such meeting. The Secretary of the corporation shall act as
Secretary of all meetings of the Shareholders, but in the absence of the
Secretary at any meeting of the Shareholders, the presiding Officer may
appoint any person to act as Secretary of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Board of Directors may, if they so elect, appoint inspectors
of election to act at such meeting or any adjournment thereof. If inspectors
of election be not so appointed, or if any persons so appointed fail to appear
or refuse to act, the chairman of any such meeting may, and on the request of
any Shareholder or his or her proxy shall, make such appointment at the
meeting in which case the number of inspectors shall be either one (1) or
three (3) as determined by a majority of the Shareholders represented at the
meeting.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of
such form and device as the Board of Directors may designate and shall state
the name of the record holder of the shares represented thereby; its number;
date of issuance; the number of shares for which it is issued; a statement of
the rights, privileges preferences and restriction, if any; a statement as to
the redemption or conversion, if any; a statement of liens or restrictions
upon transfer or voting, if any; if the shares be assessable or, if
assessments are collectible by personal action, a plain statement of such
facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the Shareholder.
<PAGE> 10
Any or all of the signatures on the certificate may be facsimile. In case
any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that
Officer, transfer agent, or registrar before that certificate is issued, it
may be issued by the corporation with the same effect as if that person were
an Officer, transfer agent, or registrar at the date of issuance.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall, if the Directors so require, give the
corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued in
the same tender and for the same number of shares as the one alleged to be
lost or destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer
clerks, and one or more registrars which shall be an incorporated bank or
trust company, either domestic or foreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and
the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that the
corporation may determine the Shareholders entitled to notice of any meeting
or to vote or entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to exercise any rights in
respect to any other lawful action, the Board may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
prior to the date of such meeting nor more than sixty (60) days prior to any
other action.
If no record date is fixed; the record date for determining Shareholders
entitled to notice of or to vote at a meeting of Shareholders shall be at the
close of business on the business day next preceding the day on which notice
is given or if notice is waived, at the close of business on the business day
next preceding the day on which the meeting is held. The record date for
determining Shareholders entitled to give consent to corporate action in
writing without a meeting, when no prior action by the Board is necessary,
shall be the day on which the first written consent is given.
The record date for determining Shareholders for any other purpose shall
be at the close of business on the day on which the Board adopts the
resolution relating thereto, or the sixtieth (60th) day prior to the date of
such other action, whichever is later.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
<PAGE> 11
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office as fixed by the Board
of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records shall
be open to inspection of the Directors and Shareholders from time to time and
in the manner provided under applicable law.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a
copy of these By-Laws, as amended or otherwise altered to date, certified by
the Secretary, shall be kept at the corporation's principal executive office
and shall be open to inspection by the Shareholders at all reasonable times
during office hours.
Section 4. CHECK, DRAFTS ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person
or persons and in such manner as shall be determined from time to time by the
Board of Directors.
Section 5. CONTRACT ETC. -- HOW EXECUTED. The Board of Directors, except
as in the By-Laws otherwise provided, may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation. Such authority may be general or
confined to specific instances. Unless so authorized by the Board of
Directors, no Officer, agent or employee shall have any power or authority to
bind the corporation by any contract or agreement, or to pledge its credit, or
to render it liable for any purpose or to any amount except as may be provided
under applicable law.
ARTICLE VII
ANNUAL REPORTS
Section 1. REPORT TO SHAREHOLDERS DUE DATE. The Board of Directors shall
cause an annual report to be sent to the Shareholders not later than one
hundred twenty (120) days after the close of the fiscal or calendar year
adopted by the corporation. This report shall be sent at least fifteen (15)
days before the annual meeting of Shareholders to be held during the next
fiscal year and in the manner specified in Section 4 of the Article IV of
these By-Laws for giving notice to Shareholders of the corporation. The annual
report shall contain a balance sheet as of the end of the fiscal year and an
income statement and statement of changes in financial position for the fiscal
year, accompanied by any report of independent accountants or, if there is no
such report, the certificate of an authorized officer of the corporation that
the statements were prepared without audit from the books and records of the
corporation.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or these
By-Laws may be amended or repealed by the vote or written consent of holders
of a majority of the outstanding shares entitled to vote; provided, however,
that if the Articles of Incorporation of the corporation set forth the number
of authorized Directors of the corporation, the authorized number of Directors
may be changed only by an amendment of the Article of Incorporation.
Section 2. POWERS OF DIRECTORS. Subject to the right of the Shareholders
<PAGE> 12
to adopt, amend or repeal By-Laws, as provided in Section 1 of this Article
VIII, and the limitations, if any, under law, the Board of Directors may
adopt, amend or repeal any of these By-Laws other than a By-Law or amendment
thereof changing the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of ByLaws with the original By-Laws,
in the appropriate place. If any By-Law is repealed, the fact of repeal with
the date of the meeting at which the repeal was enacted or written assent was
filed shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
Section 1. Seal. The corporate seal shall be circular in form, and shall
have inscribed thereon the name of the corporation, the date and State of
incorporation.
ARTICLE X
MISCELLANEOUS
Section 1. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of
other corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a
subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined as a corporation, the shares of which possessing more than
25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 3. INDEMNITY. Subject to applicable law, the corporation may
indemnify any Director, Officer, agent or employee~as to those liabilities and
on those terms and conditions as appropriate. In any event, the corporation
shall have the right to purchase and maintain insurance on behalf of any such
persons whether or not the corporation would have the power to indemnify such
person against the liability insured against.
Section 4. ACCOUNTING YEAR. The accounting year of the corporation shall
be fixed by resolution of the Board of Directors.
<PAGE>
Exhibit No. 3 - SPECIMEN STOCK CERTIFICATE
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF UTAH
- --SPECIMEN---
PPI CAPITAL GROUP, INC.
Total Authorized Issue 200,000,000 Shares Common Stock
Par Value $0.001 Each
CUSIP NO. 693514 1 0 1
This Certifies that ----------SPECIMEN-------------- is the owner of
--------------------VOID-------------------- full paid and non-assessable
Shares of the Common Stock of $0.001 Par Value Each of PPI CAPITAL GROUP,
INC., transferable on the books of the Corporation in person or by duly
authorized Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and sealed with the Seal of the
Corporation,
this ----- day of ----------- A.D. 19xx.
/s/---------------------- [Corporate Seal] /s/-------------------------
Secretary President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001065191
<NAME> PPI CAPITAL GROUP, INC.
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> OCT-31-1999 OCT-31-1998
<PERIOD-END> OCT-31-1998 OCT-31-1997
<CASH> 1,250 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,250 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 1,250 0
<CURRENT-LIABILITIES> 886 0
<BONDS> 0 0
0 0
0 0
<COMMON> 70,092 70,092
<OTHER-SE> (89,463) (70,092)
<TOTAL-LIABILITY-AND-EQUITY> 1,250 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 19,085 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 286 0
<INCOME-PRETAX> (19,371) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (19,371) 0
<EPS-PRIMARY> (0.01) (0.00)
<EPS-DILUTED> (0.01) (0.00)
</TABLE>
