SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended:
December 31, 1999
Commission File Number
0-25747
BEACH COUCH, INC.
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(Name of small business issuer in its charter)
Delaware 33-0812709
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4190 Bonita Rd., Suite 105, Bonita, CA 91902
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(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (619) 297-2717 Securities registered under Section
12(b) of the Act: None Securities registered under Section 12(g) of the Act:
Common Stock $.0001 Par Value
-----------------------------
Title of Class
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]
State issuer's revenues for the most recent fiscal year. $17,786.
On ******, 2000, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $******, computed by
reference to the price at which the stock was sold on such date.
There were 4,222,750 shares of common stock $.0001 par value outstanding as of
March 29, 2000.
Documents incorporated by reference: None.
Transitional Small Business Format (check one): Yes ; No X
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<PAGE>
ITEM 1 DESCRIPTION OF BUSINESS
GENERAL
1. Beach Couch, Inc., a Delaware corporation ("the Company") was incorporated on
June 4, 1998.
2. On June 5, 1998 the Company acquired all of the stock of
California Beach Couch, Inc. ("CBC") from Edward F. Myers III, the president of
the Company in an exchange of 100,000 shares of the Company's common stock for
10,000 shares of CBC.
3. The Company has not and does not use computers in its
business and therefore does not expect to be impacted by a Y2K problem.
4. Business Description
MISSION
The mission of the Company is to create profit by selling its beach couch
product to the general public, directly, via retail outlets, and using a variety
of other marketing methods.
PRODUCT
The Company's product is a low-to-the ground, two person beach chair made of
nylon sheets and tubular aluminum. It is approximately 40 inches wide. The
product allows two people to sit next to each other. It can be folded and stored
in a typical auto back seat or trunk. It can be carried more easily than two
separate chairs and provides a 'togetherness' quality for family and loved ones.
A small child can sleep stretched out.
MANUFACTURING
An initial batch of 75 couches was produced by the end of 1998 and sold mostly
in early 1999. A second batch of 240 units was in process on June 30, 1999. All
materials for the 240 units had been purchased. One Hundred ten units were
completed as of July 15.
2
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Negotiations with the aluminum supplier recently made it possible to take
advantage of the economics of larger material orders. The next batch of 250
units should make possible savings in manufacturing costs. The minimum period of
time for a run of 250 is approximately three weeks. As production runs become
larger, modification of production techniques will provide for greater
efficiency.
MARKETING
Marketing efforts include availability of couches in the following shops in the
San Diego area: Surf Hut (Imperial Beach, CA), Emerald City (Mission Beach and
Coronado, CA), Killer Dan (Dana Point, CA), and the San Clemente Surf Co. (San
Clemente, CA). Sample chairs are also with consultants, Pocket Products in
Taiwan whose office is in San Diego, CA.
The Company also has a sales representative in Sacramento, CA.
The marketing arrangements with the entities above are oral and are net 30 days.
Company officers have had meetings with buyers for large discount stores.
Interest has been expressed in large orders for couches with imprinted company
names.
Event marketing is taking place most recently at the Over the Line Tournament
(July 8-20) in San Diego, CA. Soccer tournaments and local fairs are also
anticipated market possibilities.
The Company presently has a web site on the Internet for informational purposes
only. Products cannot be ordered directly from the site. Company has no present
plans for placement in catalogs.
Credit card charging ability is being pursued to make possible sales on the
Internet as well as placement of the product in suitable catalogs. Those
arrangements are not yet in place.
3
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SALES
As chairs came off the assembly line they were placed in shops or sold by direct
sales. As of June 30, approximately 110 chairs had been sold with requests for
more as soon as available.
SUPPLIERS
Suppliers were selected on the basis of best price and service but other
companies are available also. It is not believed there is likely to develop a
scarcity of available aluminum, steel or cloth at acceptable prices which are
the product's components.
Suppliers are:
Specialty Metals Industries of Temecula, CA (aluminum tubing); Industrial Metal
Supply of San Diego, CA (steel); Top Value Fabrics of Carson, CA (cloth); and
Boolie Seating Co. of San Diego, CA (aluminum fabrication).
The Company knows of no state or federal governmental regulations for the
product.
There was no money spent on research. Development consisted of the production of
the prototype.
The Company believes that the product will have no environmental impact.
COMPETITION
Currently, as best can be determined, there is no closely similar
product on the market today. The Southern California area is a prime location
for marketing this product. Unless and until there is another company producing
a very similar, chair, the Company should be able to capture a large market
share as the 'first' to develop such a beach 'couch'. It is unlikely that the
Company can completely prevent competition into the market and will concentrate
on early establishment of business relationships with the customers in the
Southern California region.
Although the Company has a patent on its product, substantial amounts of capital
may be required to defend the patent against competitors if competitorschoose to
market a similar product. A patent, however, may discourage others from entering
this market.
The Company as of December 31, 1999 estimates that the feasible batch size is
300 couches with a production time of 3 weeks Estimated time between the finish
of a production batch and sale of the batch depends on the time of year. The
Summer months are expected to provide greater sales activity than Winter.
Projected average sales price is $50 at an average cost of goods of $30 making a
gross profit per couch of $20.
PATENT
On November 25, 1998 Messrs. Myers (president of the Company) and Jordon ("the
Inventors") filed a patent application for a "foldable couch seat" (application
No. 29/097,015). On March 9, 1999 the patent was allowed by the U.S. Patent and
Trademark Office. The invention is owned by California Beach Couch, Inc.("CBC")
a wholly owned subsidiary of the Company. On June 10, 1998 the Inventors signed
an agreement with CBC whereby any invention of theirs made during their terms as
employees, officers and/or directors of CBC would be assigned to CBC and become
the sole property of CBC. An assignment has been filed with the US patent
office.
SUBSEQUENT EVENT
Subsequent to year end, the Company entered into an agreement to acquire e-Law,
a Beijing, China based internet company formed for the purpose of providing
information and services related to Chinese legal matters. In connection with
this change in the Comapny's business plans, the Company sold its beach products
business, contained in the Company's wholly-owned subsidiary, California Beach
Couch, Inc., to Edward F. Myers III, the Company's founder, officer and a
director, for $5,000.00. This sale took place on March 6, 2000.
The Company intends to file consolidated financial statements within 60 days.
4
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ITEM 2. DESCRIPTION OF PROPERTY
The Company owns no real property. The Company rents approximately 1000 square
feet from a non-affiliated party for $175.00 per month. This space is used to
assemble the product and is considered sufficient for the foreseeable future.
The Company rents this property on a month to month basis. The Company has no
reason to believe that it may not continue this rental for the foreseeable
future. Similar property is readily available at similar cost. The Company also
maintains an address rent free from Califia Realty at 4190 Bonita Road #105,
Bonita, CA 91902. This office is only for the delivery of mail.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no matters
were submitted to a vote of security holders.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Title of Class Number of Record Holders
- -------------- ------------------------
Common 49
There is, as of the date of the end of this reporting period, there was no
public market in any class of stock of the Company.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Plan of Operation
The Company manufactures its product in "batches". The initial batch was
manufactured in fiscal 1998 and consisted of 75 couches of which 6 were sold
prior to December 31, 1998. For the year ended December 31, 1998 the Company had
a loss of $5,93l, of which $369 was attributed to gross loss and $4,712 to
operating expenses. For the year ended December 31, 1999, the Company had a loss
of $24,199, consisting of a gross profit of $826, operating expenses of $23,921
and other expenses of $1,104.
On December 31, 1998, the Company had an inventory of $3,109, consisting of 69
finished couches, and on December 31,1999, it had inventory of $1,440.
On December 31, 1999 the Company had sales of $17,786, with gross profit of
$826. The Company had an inventory of $1,440 and an accounts receivable of
$2,225 at December 31, 1999, while it had an inventory of $3,109 and an accounts
receivable of $0 at December 31, 1998. This reflects an increase of sales over
the past year, with the attendant monies not yet collected.
For the year ended December 31, 1998, the Company had sales of $315 and a net
loss on sales of $5,081. Net loss from operations for the period was $5,931. For
the year ended December 31, 1998, the Company had sales of $17,786 and a net
loss on sales of $23,095. This was due primarily to the high cost of sales
($16,969) for the period.
As of December 31, 1999, the Company spent approximately $16,960 on marketing
and promotion of its product. The Company considers this to be attributable to
initial market recognition.
The Company's officers and directors will continue to operate the business with
no compensation.
Subsequent to year end, the Company entered into an agreement to acquire e-Law,
a Beijing, China based internet company formed for the purpose of providing
information and services related to Chinese legal matters. In connection with
this change in the Company's business plans, the Company sold its beach products
business, contained in the Company's wholly-owned subsidiary, California Beach
Couch, Inc., to Edward F. Myers III, the Company's founder, officer and a
director, for $5,000.00. This sale took place on March 6, 2000.
The Company intends to file consolidated financial statements within 60 days.
5
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ITEM 7. FINANCIAL STATEMENTS
Audited Financial Statements for the year ended December 31, 1999.
BEACH COUCH, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD YEAR ENDED
(DATE OF INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<S> <C>
INDEPENDENT AUDITOR'S REPORT F-1
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheet as of December 31, 1999 & 1998 F-2 - F-3
Consolidated Statement of Operations F-4
Consolidated Statement of Changes in Stockholders Equity for the period from
June 4, 1998 (date of inception) to December 31, 1999 F-5
Consolidated Statement of Cash Flows for the years ended
December 31, 1999 & 1998 F-6
Notes to Consolidated Financial Statements F-7 - F-9
</TABLE>
6
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To the Board of Directors of
Beach Couch, Inc. and Subsidiary:
We have audited the accompanying consolidated balance sheet of Beach Couch, Inc.
and subsidiary (collectively, the Company) as of December 31, 1999 and the
related consolidated statements of operations, changes in stockholders equity
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated statements based on our audit. The
financial statements of the Company as of December 31, 1998 were audited by
other auditors whose report dated March 4, 1999, expressed an unqualified
opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principled used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1999 and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
/s/ ARMANDO C. IBARRA, CPA
- ----------------------------
Armando C. Ibarra, CPA
Chula Vista, CA
February 29, 2000
7
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<TABLE>
<CAPTION>
BEACH COUCH INC., AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
ASSETS
- --------------------------------------------------------------------------------
1999 1998
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CURRENT ASSETS
<S> <C> <C>
Cash $ 857 $ 11,230
Accounts receivable 2,225 0
Inventory 1,440 3,109
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TOTAL CURRENT ASSETS $ 4,522 $ 14,339
MACHINERY AND EQUIPMENT NET 2,735 0
OTHER ASSETS
Patent cost 515 0
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TOTAL OTHER ASSETS 515 0
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TOTAL ASSETS $ 7,772 $ 14,339
============ ==========
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BEACH COUCH INC., AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
LIABILITIES & STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------------------
1999 1998
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CURRENT LIABILITIES
<S> <C> <C>
Accounts payable - trade $ 3,192 $ 0
Income taxes payable 0 850
Other short-term loans 1,400
Stockholder loan 2,000 1,500
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TOTAL CURRENT LIABILITIES 6,592 2,350
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TOTAL LIABILITIES $ 6,592 $ 2,350
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par value, 20,000,000 shares
authorized, none issued and outstanding 0 0
Common stock, $.0001 par value, 50,000,000 shares
authorized, 4,222,750 and 100,000 issued and 422 18,220
outstanding for 1999 and 1998, respectively.
Adittional paid-in capital 30,888 90
Stock subscriptions receivable 0 (390)
Retained earnings (deficit) (30,130) 0
Deficit accumulated in the development stage (5,931)
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TOTAL STOCKHOLDERS' EQUITY 1,180 11,989
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,772 $ 14,339
========== ============
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
BEACH COUCH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD FROM JUNE 4, 1998 TO DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------------------------
1999 1998
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REVENUES
<S> <C> <C>
Revenues $ 17,786 $ 315
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TOTAL NET REVENUES 17,786 315
COST OF SALES
COST 16,960 684
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TOTAL COST OF SALES 16,960 684
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GROSS PROFIT (LOSS) 826 (369)
OPERATING EXPENSES 23,921 4,712
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NET OPERATING INCOME (23,095) (5,081)
OTHER INCOME (EXPENSES)
Depreciation expense (304) 0
Income tax expense (800) (850)
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TOTAL OTHER INCOME (EXPENSES) (1,104) (850)
NET INCOME/ (LOSS) $ (24,199) $ (5,931)
============ ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 3,330,140 4,074,202
------------ -----------
NET LOSS PER COMMON SHARE $ (0.007) $ (0.001)
============ ===========
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
BEACH COUCH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (JUNE 4, 1998) TO DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1998 COMMON STOCK ADDITIONAL STOCK TO STOCK RETAINED TOTAL
SHARES AMOUNT PAID-IN BE ISSUED SUBSCRIPTIONS EARNINGS STOCKHOLDERS'
CAPITAL RECEIVABLE (DEFICIT) EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JUNE 4, 1998 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $0
Common stock issued for
purchases of subsidiary 100,000 10 90 0 100
Prodeeds Received on Stock
to be issuied 17,820 0 17,820
Common stock to be issued
to company directors 390 (390) 0 0
Net loss for year (5,931) (5,931)
--------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 100,000 $10 $90 $18,210 ($390) ($5,931) $11,989
Common stock issued 222,750 22 17,798 (17,820) 0
Common stock issued 3,900,000 390 (390) 390 390
Additional paid-in Capital 13,000 13,000
Net loss for year (24,199) (24,199)
--------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $4,222,750 $422 $30,888 $ 0 $ 0 $(30,130) $ 1,180
==================================================================================================
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
BEACH COUCH INC., AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
DECEMBER 31, 1999 AND 1998
- -------------------------------------------------------------------------------------------------------------------------
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss $ (24,199) $ (5,931)
Adjustments to reconcile net loss to cash used in operations:
Depreciation expense 304 0
Increase in Accounts Receivable (2,225) 0
Decrease in Inventory 1,669 (3,109)
Increase in accounts payable & income tax payable 2,342 850
Increase in Stockholder and other short-term loans 1,900 1,600
------------------ -----------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (20,209) (6,590)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (3,039) 0
Investment in Patent (515) 0
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NET CASH USED BY INVESTING ACTIVITIES (3,554) 0
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions by investors 13,390 17,820
Dividends paid 0 0
------------------ -----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 13,390 17,820
------------------ -----------------
NET INCREASE (DECREASE) IN CASH (10,373) 11,230
CASH AT BEGINNING OF YEAR 11,230 0
------------------ -----------------
CASH AT END OF YEAR $ 857 11,230
================== =================
</TABLE>
F-6
<PAGE>
BEACH COUCH, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 & 1998
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Beach Couch, Inc., a Delaware corporation (the Company) was incorporated on June
4, 1998. The Company has developed a unique, low to the ground, two-person beach
chair, and plans to sale directly to the public and through distributors.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include Beach Couch, Inc., and its wholly
owned subsidiary, California Beach Couch, Inc., which was incorporated in
California on May 19, 1998. All significant intercompany balances and
transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure or contingent
assets and liabilities, and reported amounts of revenues and expenses. Actual
results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, the Company considers all
investments with a maturity of three months or less to be cash equivalents.
INVENTORY
Inventory is stated at the lower of cost (first-in, first-out) or net realizable
value, and consists of materials and labor.
EARNINGS PER SHARE
Earnings per share are provided in accordance with Statement of Financial
Accounting Standards No.128 (FAS No. 128) Earnings Per Share. Due to the
Company's simple capital structure, with only common stock outstanding, only
basic earnings per share is presented. Basic earnings per share are computed by
dividing earnings available to common stockholders by the weighted average
number of common shares outstanding plus the weighted average of common stock to
be issued during the period. In 1998, the Company recorded a stock issuance of
3,900,000 for a receivable of $390. The receivable was paid in January 1999.
These shares were included in earnings per share for the period, ended December
31, 1998 and 1999.
F-7
<PAGE>
BEACH COUCH, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 & 1998
ACCOUNTING FOR BUSINESS COMBINATIONS
The acquisition of California Beach Couch, Inc. was recorded as a purchase in
accordance with Accounting Principle Board Opinion No. 16 (APB No. 16) Business
Combinations. The operating results of the acquired entity are included in the
Company's consolidated financial statements from the date of acquisition.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
B. ACQUISITION:
On June 5, 1998, the Company authorized the issuance of 100,000 shares of Beach
Couch, Inc. common stock at par value of $.0001 to acquire 100% of the
outstanding shares of California Beach Couch, Inc. valued at $100 by the Board
of Directors. The purchase of shares has been recorded using the purchase method
of accounting. At the date of the transaction, California Beach Couch, Inc. had
no assets or liabilities. At the date of acquisition, the President of
California Beach Couch, Inc. was also the President of the Company.
C. STOCKHOLDERS EQUITY:
On June 5, 1998, the Board of Directors authorized the issuance of 400,000
common shares at $.08 per share through a Section 504 (Reg. D) offering. As of
December 31, 1998, the Company had received cash for 222,750 shares but such
shares had not been issued. Cash received on common stock to be issued is
presented as Stock to be issued on the accompanying consolidated balance sheet.
The stock issuance was completed in 1999. Also in 1999 there was an additional
3,900,000 shares issued. Stockholders also contributed an additional 13,000 in
1999.
D. RELATED PARTY TRANSACTIONS:
A stockholder of the Company is also a stockholder of EFM Venture Group, Inc.,
(EFM). Included in other short term loans at December 31, 1999, is $800 of
expenses EFM paid on behalf of the Company.
F-8
<PAGE>
BEACH COUCH, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 & 1998
E. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes and interest during the period ended December 31,
1999 were as follows:
Income taxes $ 850
Interest -0-
F. INCOME TAXES:
The Company's total deferred tax asset at December 31, 1999 is as follows:
Net operating loss carryforward $6,901
Valuation allowance (6,901)
------
$ -0-
======
The Company has a net operating loss caryforward of $30,130 which, if not
utilized, will completely expire in 2014. It is reasonably possible that the
Company's estimate of valuation allowance will change.
G. MACHINERY & EQUIPMENT:
A summary of property and equipment and the related depreciation expense is as
follows:
Machinery & Equipment $3,039
Accumulated Depreciation (304)
--------
Net 2,735
========
Total depreciaton expense for 1999 was $304.
H. RESTATEMENT:
Subsequent to March 4, 1999, it was discovered that the date of authorization by
the Board of Directors and the subsequent signing of stock purchase agreements
by certain directors of the Company had been reported in error as December 1,
1998. On June 5, 1998, the Board of Directors authorized and purchased 3,900,000
common shares at par value of $.0001 or $390. The Company had not yet received
payment nor issued the shares as of December 31, 1998, and accordingly, had
recorded Subscriptions Receivable and Stock to be Issued for the $390. This
restatement had no effect on income taxes. Subsequent to year-end, subscription
receivables were paid in full and the common stock was issued, as reflected in
year ended December 31, 1999.
F-9
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
The Company's prior accountant retired from active practice in the
area of securities filings and, therefore, the Company was required to retain
another accountant. The Company had no disagreements with its prior accountant.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
A. The Directors and Officers of the Company, all of whose terms will expire
one year from their election, or at such a time as their successors shall be
elected and qualified are as follows:
NAME AND ADDRESS AGE POSITION DATE ELECTED
Edward F. Myers III 31 President and Director 6/5/98
9031 Rosedale Dr.
Spring Valley, Ca 91977
Dal N. R. Grauer 53 Secretary and Director 6/5/98
4190 Bonita Rd. #105
Bonita, CA 91902
J. Michael Page 53 Director 6/5/98
4190 Bonita Rd. #105
Bonita, CA 91902
Gary A. Stannell 45 Director 6/5/98
4190 Bonita Rd. #105
Bonita, CA 91902
B. Resumes of the Directors and Officers of the Company are:
MR. EDWARD F. MYERS III has served as President and a Director of the Company
since June 5, 1998. Since 1987, he has operated Myers Painting, a sole
proprietorship. Mr. Myers is a licensed contractor in the State of California.
He is an experienced hang gliding pilot whose product is of a similar tubular
construction as the Company product. . Mr. Myers is an experienced entrepreneur
who has produced many inventions and formed new companies. In 1997 he formed
Call On- Line, Inc. which developed one of the first publicly available Internet
access machines. In 1998 he formed Digital Sign Corporation which developed a
sign for parking lots which could be controlled via cellular phone.
MR. DAL N. R. GRAUER has held the position of Corporate Secretary and Director
of the Company since June 5, 1998. From January 1994 to August of 1995 he was
employed by FCN Financial Services, Inc. in the area of stockholder relations.
Between Augus 1995 and December 1998 he was employed by Airstar Technologies,
Inc. where he was also corporate secretary and a Director. Airstar Technologies
is a public company in the telecommunications field. At Airstar he was involved
in corporate finance and investors relations. Since the end of 1998 he has not
been employed. Airstar Technologies Inc. filed for a Chapter 11 reorganization
on October 13, 1998 in the U.S. Bankruptcy Court in the city of Riverside in the
County of Riverside, California. Airstar Technologies remains in Chapter 11 as
of the date of this filing.
J. MICHAEL PAGE has been a director of the Company since June 5, 1998. For the
last five years Mr. Page has been a self employed business consultant,
consulting in the area of corporate structure and finance.
GARY A. STANNELL has been a Director of the Company since June 5, 1998. Between
1993 and 1995 he was employed by Autogas Propane Ltd. He was in charge of
merchandising and supply of products for the Provence of British Columbia,
Canada. Since 1995. Mr. Stannell has been President and CEO of Stannell
Petroleum Ltd.("Stannell Ltd"). Stannell Ltd is a supplier of Marine and
Aviation fuels. Stannell Ltd operates a truck stop and fueling facility at the
Vancouver International Airport located in Richmond, B.C., Canada.
ITEM 10. EXECUTIVE COMPENSATION
A. None of the officers or directors receives or has received any remuneration
from the Company
B. There is no annuity, pension or retirements benefit proposed to be paid to
officers, directors or employees of the Company in the event of retirement at
normal retirement date pursuant to any presently existing plan provided or
contributed to by the Company or any of its subsidiaries, if any.
C. No remuneration is proposed to be paid in the future directly or indirectly
by the Company to any officer or director under any plan which is presently
existing. No options have been granted. The Company has not decided when and in
what circumstances it will start paying officers and directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the Common Stock
ownership as of December 31, 1999, of each officer, director and who is known to
the Company as management or to be the beneficial owner of more than five
percent of the Company's Common Stock.
Name and Address Amount and Nature of Percent Ownership
of Beneficial Beneficial Ownership
Owner
Edward F. Myers III 125,000 3.1
J. Michael Page 1,925,000 48.1
Edward F. Myers II 1,900,000 47.5
Dal N.R. Grauer 25,000 .6
Gary A. Stannell 25,000 .6
Unless otherwise indicated, the named party is believed to be the sole owner and
has sole voting control of the shares set forth in the above table. Based on
4,222,750 outstanding shares on December 31, 1999.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 5, 1998 the Company issued 100,000 shares of its common stock to its
president Edward F. Myers III for all the outstanding stock of California Beach
Couch, Inc. The Company's board of directors valued this transaction at $100
which was based on the out-of -pocket expenses of Mr. Myers in the formation of
the CBC.
On June 5, 1998 the company issued 25,000 shares of its common stock to Edward
F. Myers III, J. Michael Page, Dal N.R. Grauer and Gary A. Stannell,
respectively, for par value ($2.50 each).
On June 5, 1998 the Company issued 1,900,000 of its common stock to Edward F.
Myers II for $190.
On June 5, 1998 the Company issued 1,900,000 shares of its common stock to J.
Michael Page for $190.
ITEM 13. EXHIBITS , LISTS AND REPORTS ON 8-K
No reports were filed on Form 8-K during the last quarter of the period covered
by this report.
3.(i) Articles of Incorporation
3.(ii) By-Laws
23.1 Consent of Auditor
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Company has duly caused this disclosure statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
BEACH COUCH, INC.
Dated: March 29, 2000 /s/ EDWARD F. MYERS
--------------------------
EDWARD F. MYERS, III
President
Exhibit 3.(i)
CERTIFICATE OF INCORPORATION
BEACH COUCH, INC
The undersigned, a natural person, for the purpose of organizing a corporation
for conducting business and promoting the purposes hereinafter stated, under the
provisions and subject to the requirements of the laws of the State of Delaware
(particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory
thereof and supplemental thereto, and known, identified, and referred to as the
"General Corporation Law of the State of Delaware"), hereby certifies that:.
FIRST: The name of the corporation (hereinafter called "the corporation") is
BEACH COUCH, INC.
SECOND; The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington 19805, County of New Castle; and the name of the
registered agent of the corporation in the State of Delaware at such address is
Corporation Service Company.
THIRD; The nature of the business and the purpose to be conducted and promoted
by the corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
FOURTH: The total number of shares which the corporation shall have authority to
issue is 70 million, which are divided into 20 million Preferred shares of a par
value of one hundredth of a cent ($.0001) each and 50 million Common shares of a
par value of one hundredth of a cent ($.0001) each.
Pursuant to the provisions of Section 151 (g) of the Delaware General
Corporation Law, the powers, designations, preferences, and rights of the
Preferred shares, along with any qualifications, limitations, or restrictions,
shall be provided for in a resolution or resolutions adopted by the Board of
Directors of the corporation, and a certificate of designations setting forth a
copy of such resolution or resolutions shall be executed, acknowledged and filed
with the Secretary of State.
Each issued and outstanding Common share shall entitle the holder thereof to
full voting power. Except as any provision of the law may otherwise require, no
share of any series of Preferred shares shall entitle the holder thereof to any
voting power.
FIFTH: The name and the mailing address of the incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
J. E. Costelloe 5670 Wilshire Blvd., Suite 750
Los Angeles, California 90036
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SIXTH; The corporation is to have perpetual existence.
SEVENTH; Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement,, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation. EIGHTH; For the management of the business
and for the conduct of the affairs of the corporation, and in further
definition, limitation, and regulation of the powers of the corporation and of
its directors and of its stockholders or any class thereof, as the case may be,
it is further provided:
1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by, or in the
manner provided in, the Bylaws.
The phrase "whole Board" and the phrase "total numberof directors" shall be
deemed to have the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of directors need
be by written ballot.
2. After the original or other Bylaws of the corporation have been adopted,
amended, or repealed, as the case may be, in accordance with the provisions of
Section 109 of the General Corporation Law of the State of Delaware, and, after
the corporation has received any payment for any of its stock, the power to
adopt, amend, or repeal the Bylaws of the corporation may be exercised by the
Board of Directors of the corporation; provided, however, that any provision for
the classification of directors of the corporation for staggered terms pursuant
to the provisions of subsection (d) of Section 141 of the General Corporation
Law of the State of Delaware shall be set forth in an initial Bylaw or in a
Bylaw adopted by the stockholders entitled to vote of the corporation unless
provisions for such classification shall be set forth in this certificate of
incorporation.
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3. Whenever the corporation shall be authorized to issue only one class of
stock, each outstanding share shall entitle the holder thereof to notice of, and
the right to vote at, any meeting of stockholders. Whenever the corporation
shall be authorized to issue more than one class of stock, no outstanding share
of any class of stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof it the right to
vote at any meeting of stockholders except as the provisions of paragraph (2) of
subsection (b) of Section 242 of the General Corporation Law of the State of
Delaware shall otherwise require; provided, that no share of any such class
which is otherwise denied voting power shall entitle the holder thereof to vote
upon the increase or decrease in the number of authorized shares of said class.
NINTH; The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
TENTH; The corporation shall, to the fullest extent permitted by the provisions
of Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, 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.
ELEVENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on June 3, 1998.
/s/ J.E. CASTELLOE
-------------------------------------
J. E. Costelloe, Incorporator
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Exhibit 3.(ii) By-Laws
BYLAWS OF BEACH COUCH, INC.
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing stock in the
corporation shall be signed by, or in the name of, the corporation by the
Chairperson or Vice-Chairperson of the Board of Directors, if any, or by the
President or a Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person were such officer, transfer
agent, or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one class
of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares. The corporation may
issue a new certificate of stock or uncertificated shares in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of the lost, stolen,
or destroyed certificate, or such owner's legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against it on account of the alleged loss, theft, or
destruction of any such certificate or the issuance of any such new certificate
or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the General
Corporation Law, the Board of Directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
the stock of the corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
corporation shall send to the registered owner thereof any written notice
prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a
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full share upon the surrender of such scrip or warrants aggregating a full
share. A certificate for a fractional share or an uncertificated fractional
share shall, but scrip or warrants shall not unless otherwise provided therein,
entitle the holder to exercise voting rights, to receive dividends thereon, and
to participate in any of the assets of the corporation in the event of
liquidation. The Board of Directors may cause scrip or warrants to be issued
subject to the conditions that they shall become void if not exchanged for
certificates representing the full shares or uncertificated full shares before a
specified date, or subject to the conditions that the shares for which scrip or
warrants are exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by the registered holder's attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and, in the case of shares represented by
certificates, on surrender of the certificate or certificates for such shares of
stock properly endorsed and the payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining the stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
the General Corporation Law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered
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office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested. If no record date has been fixed by the Board of Directors
and prior action by the Board of Directors is required by the General
Corporation Law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the Board of Directors adopts the resolution
taking such prior action. In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion, or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty days
prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time fixed,
from time to time, by the directors, provided, that the first annual meeting
shall be held on a date within thirteen months after the organization of the
corporation, and each successive annual meeting shall be held on a date within
thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such place,
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within or without the State of Delaware, as the directors may, from time to
time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the directors
or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at such stockholder's record address or
at such other address which such stockholder may have furnished by request in
writing to the Secretary of the corporation. Notice by mail shall be deemed to
be given when deposited, with postage thereon prepaid, in the United States
Mail. If a meeting is adjourned to another time, not more than thirty days
hence, and/or to another place, and if an announcement of the adjourned time
and/or place is made at the meeting, it shall not be necessary to give notice of
the adjourned meeting unless the directors, after adjournment, fix a new record
date for the adjourned meeting. Notice need not be given to any stockholder who
submits a written waiver of notice signed by such stockholder before or after
the time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which
Page 4
place shall be specified in the notice of the meeting, or if not so specified,
at the place where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this section or the books of the
corporation, or to vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided over
by one of the following officers in the order of seniority and if present and
acting - the Chairperson of the Board, if any, the Vice-Chairperson of the
Board, if any, the President, a Vice-President, or, if none of the foregoing is
in office and present and acting, by a chairperson to be chosen by the
stockholders. The Secretary of the corporation, or in such Secretary's absence,
an Assistant Secretary, shall act as secretary of every meeting, but if neither
the Secretary nor an Assistant Secretary is present the chairperson of the
meeting shall appoint a secretary of the meeting.
- - PROXY REPRESENTATION. Every stockholder may authorize another person or
persons to act for such stockholder by proxy in all matters in which a
stockholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by such
stockholder's attorney-in-fact. No proxy shall be voted or acted upon after
three years from its date unless such proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and, if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally.
- - INSPECTORS. The directors, in advance of any meeting, may, but need not,
appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of duties of inspector, shall take and
sign an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of such inspector's ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots, or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots, or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any
Page 5
challenge, question, or matter determined by such inspector or inspectors and
execute a certificate of any fact found by such inspector or inspectors. Except
as may otherwise be required by subsection (e) of Section 231 of the General
Corporation Law, the provisions of that Section shall not apply to the
corporation.
- QUORUM. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to one vote.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. Any other action shall be authorized by a majority of the
votes cast except where the General Corporation Law prescribes a different
percentage of votes and/or a different exercise of voting power, and except as
may be otherwise prescribed by the provisions of the certificate of
incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Except as any provision of the
General Corporation Law may otherwise require, any action required by the
General Corporation Law to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meeting
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of 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. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. Action taken pursuant to this paragraph shall be
subject to the provisions of Section 228 of the General Corporation Law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation
shall be managed by or under the direction of the Board of Directors of the
corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of 7 persons. Thereafter the number of
directors constituting the whole board shall be at least one. Subject to the
foregoing limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the
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stockholders or of the directors, or, if the number is not fixed, the number
shall be. The number of directors may be increased or decreased by action of the
stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members
thereof shall have been named in the certificate of incorporation, shall be
elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. Except
as the General Corporation Law may otherwise require, in the interim between
annual meetings of stockholders or of special meetings of stockholders called
for the election of directors and/or for the removal of one or more directors
and for the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including unfilled
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon after its
election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the State
of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the time
and place have been fixed. Special meetings may be called by or at the direction
of the Chairperson of the Board, if any, the Vice-Chairperson of the Board, if
any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for
regular meetings for which the time and place have been fixed. Written, oral, or
any other mode of notice of the time and place shall be given for special
meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by such
director or member before or after the time stated therein.
Attendance of any such person at a meeting shall constitute a waiver of
notice of such meeting, except when such person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors need be specified in any written
waiver of notice.
Page 7
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board. The quorum and voting provisions herein stated
shall not be construed as conflicting with any provisions of the General
Corporation Law and these Bylaws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors. Any member or members of the Board of Directors or of
any committee designated by the Board, may participate in a meeting of the
Board, or any such committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other.
- CHAIRPERSON OF THE MEETING. The Chairperson of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Vice-
Chairperson of the Board, if any and if present and acting, or the President, if
present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the General
Corporation Law, any director or the entire Board of Directors may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote at an election of directors.
6. COMMITTEES. The Board of Directors may designate one or more committees,
each committee to consist of one or more of the directors of the corporation.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of any member of any such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
Board, shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the corporation with
the exception of any power or authority the delegation of which is prohibited by
Section 141 of the General Corporation Law, and may authorize the seal of the
corporation to be affixed to all papers which may require it.
7. WRITTEN ACTION. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken without
a meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
Page 8
<PAGE>
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a Secretary,
a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairperson of the Board, a Vice-Chairperson of the Board, an
Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing such officer, no officer other than the Chairperson or
Vice-Chairperson of the Board, if any, need be a director. Any number of offices
may be held by the same person, as the directors may determine.
Unless otherwise provided in the resolution choosing such officer, each
officer shall be chosen for a term which shall continue until the meeting of the
Board of Directors following the next annual meeting of stockholders and until
such officer's successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform such
duties in the management and operation of the corporation as shall be prescribed
in the resolutions of the Board of Directors designating and choosing such
officers and prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the corporation shall record all of the proceedings of
all meetings and actions in writing of stockholders, directors, and committees
of directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to such Secretary or Assistant
Secretary. Any officer may be removed, with or without cause, by the Board of
Directors. Any vacancy in any office may be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
Page 9
<PAGE>
ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these Bylaws and to adopt new Bylaws may be exercised by the Board of Directors
or by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of
the Bylaws of Beach Couch, Inc., a Delaware corporation, as in effect on the
date hereof.
Dated: June 5, 1998
/s/ BETTY N. MYERS
-----------------------------------
Asst -Secretary of Beach Couch, Inc. (SEAL)
Exhibit 23.1 Consent of Auditor
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use of our report included in the Annual Report on
Form 10-KSB, for the period ended December 31, 1999 relating to the financial
statements of Beach Couch Inc. and Subsidiary.
/s/ ARMANDO C. IBARRA, CPA
Chula Vista, CA
March 29, 2000
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