FORM 10-SB
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) of 12(g) of the Securities Act of 1934
Great Wall Food and Beverage Corporation
(Name of Small Business Issuer in Its Charter)
Florida 59-2624574
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
1543 Bayview Avenue, Toronto, Ontario, Canada M4G3B5
(Address of Principal Executive Offices) (Zip Code)
(416) 489-5490
Issuer's Telephone Number
Securities to be registered pursuant to 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
None
Securities to be registered pursuant to Section 12(g) of the Act:
$.0001 Per Share Par Value Common Stock
<PAGE>
PART I
The Issuer, Great Wall Food and Beverage Corporation, a Florida corporation, is
electing to furnish the information required by Items 6-12 of Model B of Form
1-A under Alternative 2 of Form 10-SB.
Item 1A. Company Risk Factors.
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The Issuer and its outstanding securities are subject to risks
including those set out in this Item 1A.
WE HAVE NO INCOME PRODUCING OPERATIONS OR ASSETS WHICH CAUSE A
CONTINUING DEPLETION OF OUR ASSETS. The Issuer presently has no material income
producing operations or assets. Unless the Issuer is successful in its efforts
to enter into a business combination or acquisition of assets resulting in
operational income, the Issuer's assets will be depleted.
WE HAVE NO PRESENT ARRANGEMENTS FOR A BUSINESS COMBINATION OR ASSET
ACQUISITION. The Issuer has no present arrangements for, or ongoing negotiations
with respect to any business combination or asset acquisition. Unless the Issuer
can enter into such an arrangement it will have to acquire additional capital or
cease operations.
THE FILING OF THIS REGISTRATION STATEMENT WILL INCREASE OUR OVERHEAD
AND ASSET DEPLETION. The cost of filing this registration statement and in
complying with the reporting requirements created by this filing will materially
increase the Issuer's administrative overhead and accelerate the depletion of
its assets.
WE HAVE NO PRESENT ARRANGEMENTS TO ACQUIRE ANY ADDITIONAL CAPITAL
NEEDED TO CONTINUE OUR EXISTENCE. The Issuer has no present arrangement under
which it might acquire any additional capital needed to continue its existence.
There is no assurance that it will be able to develop any such capital source.
WE HAVE NO ASSURANCE THAT ANY BUSINESS COMBINATION OR ASSET ACQUISITION
WE MIGHT MAKE WILL BE SUCCESSFUL. There is no assurance that any business
combination or asset acquisition entered into by the Issuer will result in
successful income producing operations.
Item 1. Description of the Business
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(Item 6 of Model B of Form 1A)
The Issuer was organized in 1980 as a Florida corporation named Ronnie
Interior Designs, Inc. (which was changed to Ronnie Systems, Inc. on 1997). It
was formed to engage in the interior design business. These business operations
became dormant in 1995.
In March of 1998, the Issuer was reorganized. Its Articles of
Incorporation were amended to: (i) change its name to Great Wall Food and
Beverage Corporation; (ii) change its authorized capital to its present
structure; and (iii) reverse split its then outstanding 100,000 shares of Common
Stock into 10,000 shares (one new share for each ten old shares). Ms. Patti
Cooke, President and a director of the Issuer, became its then sole officer and
director.
As part of the reorganization, the Issuer's Board of Directors
authorized the Issuer to acquire all of the outstanding 1,700,000 shares of Food
& Beverage Masters (China), Inc., an unaffiliated Delaware corporation in
exchange for 1,700,000 shares of the Issuer's Common Stock. It was represented
to the Issuer that the Delaware company owned 80% of a joint venture with the
Changzhou Dairy Company. This Chinese company owned and operated a dairy
processing plant. These facilities were located in Changzhou, China in the
Yangtze River Delta in the Jiangsu Province of China. The Chinese Joint Venture
was to produce and market bagged milk, yogurt, ice cream and related dairy
products in the Changzhou area. In addition, the proposed Delaware subsidiary
was exploring the formation of another venture with a different Chinese partner.
The purpose of the second proposed venture was to bottle and market low and
non-alcoholic drinks.
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The Issuer was also authorized to issue a total of 6,760,000 shares of
Common Stock to six other companies and individuals who were to furnish
assignments of intangible assets and services to the proposed Chinese
operations.
The Issuer then made a cash offering of shares of its Common Stock at
$.15 per share to raise capital for the pending Chinese operations. The offering
was made from March through August of 1998. A total of 2,666,664 shares were
sold for $399,999.60 in gross proceeds. The offering was made pursuant to the
exemption from the registration requirements of Section 5 of the Securities Act
of 1933 provided in Rule 504 of Regulation D adopted under that Act.
Following the offering the Issuer proceeded to pursue the proposed
transaction. However, during these efforts the Issuer learned that the Chinese
project, its assets and operations were not as represented. In October of 1998,
the Issuer terminated the proposed venture. None of the stock authorized for the
Chinese project was issued.
The Issuer spent approximately $315,000.00 on the Chinese project prior
to its termination. Included in these costs were $100,000.00 deposited on the
purchase of milk processing and bottling equipment which purchase was not
completed. The Issuer believes that it is entitled to a refund of substantially
all of the deposit and is in the process of instituting litigation to recover
it.
In August of 1999, Hatchment Holdings, Ltd., a company wholly owned by
Bradley R. Wilson, an officer and director of the Issuer, purchased 1,000,000
shares of the Issuer's Common Stock for cash at $.05 per share for a total of
$50,000. As of August 31, 1999, this $50,000 in additional capital,
approximately $85,000 in remaining proceeds from the Rule 504 offering and the
claim for the refund of the $100,000 deposit are the only material assets of the
Issuer. At that date it had no material liabilities.
The Issuer's present business plan is to complete the registration of
its Common Stock under Section 12(g) of the Securities Exchange Act of 1934
("Exchange Act") through the filing of this Form 10-SB and to find a new
business opportunity. The Issuer will seek and attempt to enter into a business
combination or acquisition of assets by which it will become engaged in an
active business venture. It is likely that if such a transaction is made it will
involve control of the Issuer being acquired by the other party to the
transaction.
These are no present arrangements for, or ongoing negotiations with
respect to, such a business combination with the Issuer. The Issuer has no
present knowledge of any specific candidate for a business combination. Issuer's
management believes that it has sufficient funds to pursue its search for a
potential business combination for at least the period through September of
2000. It is not presently possible to predict if any business combination
entered into by the Issuer during that period will require the raising of
additional capital.
From March of 1998 through August of 1999, the Issuer had no paid
employees. During that period, a company owned by the President of the Issuer
was paid $17,000.00 for administrative services performed for the Issuer.
Commencing September 1, 1999, the President and Vice President became part-time
employees of the Issuer at a monthly salary of $1,000.00 each. Through September
of 2000 or until the Issuer enters into a business combination, it is
anticipated that they will be the only paid employees of the Issuer. During that
period its directors will serve without compensation for their services as such.
They will be reimbursed for expenses incurred in the performance of their
duties. It is not now possible to estimate what employees the Issuer may have if
it enters into a business combination during the year commencing September 1,
1999.
Item 2. Description of Property
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(Item 7 of Model B of Form 1A)
The Issuer has no materially important physical properties. Its only
material assets are its cash or cash equivalents and its claim for a refund of
$100,000 for an equipment deposit. See Item 1. above.
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The Issuer's present operations are conducted at the residence office
of its President and through the use of a mail drop at 1543 Bayview Avenue,
Toronto, Ontario, Canada M4G3B5. The Issuer's President has not previously and
will not in the future charge the Issuer for its use of these facilities.
Item 3. Directors, Executive Officers and Significant Employees.
- ------- -------------------------------------------------------
(Item 8 of Model B of Form 1A)
The following table sets forth information regarding the directors and
executive officers of the Company.
Beginning
Name Age Positions of Term
---- --- --------- ---------
Patti Cooke 44 President and Director 3/98
Bradley R. Wilson 41 Vice President, Secretary, 8/99
And Director
There are no family relationships among any of the directors and/or
executive officers of the Issuer. The Issuer does not have any significant
employee who is not also an executive officer.
Patti Cooke has served as the President and a director of the Issuer
since March of 1998. From January of 1993 until February of 1996, Ms. Cooke was
the owner and President of Wellington Cooke Gallery, an art gallery in Toronto,
Ontario. Since February of 1996 she has been employed as the Secretary and
Administration Manager for Hatchment Holdings, Ltd., a financial services
company in Toronto, Canada and principal shareholder of the Issuer. Since March
of 1995 she has served as a director of Sagewood Resources LTD, a Toronto based
public company in the oil and gas business. Ms. Cooke has served as the
Secretary of Inet Commerce Conduit Corporation, a Florida corporation engaged in
the business of providing advice and sales and promotional services to retailers
of cosmetic products since January of 1998. Since March of 1999, she has served
as a director and the Secretary of Noble Brands, Inc., a Florida corporation
engaged in the cigar manufacturing and distribution business.
Bradley R. Wilson became an officer and director of the Issuer in
August of 1999. Since 1990, he has been the President, a director and the sole
shareholder of Hatchment Holdings, Inc., a Toronto based financial services
company. He has served as the president and a director of Sagewood Resources,
Ltd., a Toronto based public company in the oil and gas business, since March of
1995. He has been a director of Empire Alliance Properties, Inc., a Toronto
based public company in the real estate business, since February, 1998. From
September of 1986 to January of 1990, Mr. Wilson was employed as a real estate
broker for William Allan Real Estate Company. Limited in Toronto, Ontario. His
work there was concentrated in the commercial real estate area. From 1982 to
1986, Mr. Wilson worked as a registered stockbroker with E.A. Manning, Limited
in Toronto, Ontario. Upon leaving his position at E.A. Manning, Limited, Mr.
Wilson allowed his securities license to lapse to enable him to become a
registered real estate representative with Empire Alliance Properties, Inc.
Since January of 1998, Mr. Wilson has served as president and a director of Inet
Commerce Conduit Corporation, a Florida corporation engaged in the business of
providing advice and sales and promotional services to retailers of cosmetic
products. Since March of 1999, he has served as a director of Noble Brands,
Inc., a Florida corporation engaged in the cigar manufacturing and distribution
business.
It is anticipated that the present officers and directors will continue
to serve until the Issuer finds a new business opportunity. It is assumed that
upon completion of any such transaction, persons associated with the acquired
business or assets would become the Issuer's officers and directors.
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Item 4. Remuneration of Directors and Officers.
- ------- --------------------------------------
(Item 9 of Model B to Form 1A)
<TABLE>
<CAPTION>
Information with respect to the only remuneration paid to any of the
officers and directors of the Issuer during 1998 and from January 1, 1999
through August 31, 1999 is as follows:
<S> <C> <C> <C>
1998 Patti Cooke (1) Administrative Fee (1) $12,000.00
1/1/99 to 8/31/99 Patti Cooke (1) Administrative Fee (1) $ 5,000.00
----------
Total $17,000.00
</TABLE>
(1) These administrative fees were paid to Wellington Cooke Gallery for
services performed for the Issuer by Patti Cooke. She is the sole owner
of that company.
In addition, the Issuer paid cellular telephone charges for mobile
telephones used by its officers and directors during 1998 and from January 1,
1999 through August 31, 1999 as follows:
- --------------------------------------------------------------------------------
Period Name of Individual Telephone Charges (1)
- --------------------------------------------------------------------------------
1998 Patti Cooke $1,528.14
1998 Bradley R. Wilson $1,731.44
---------
Total 1998 $3,259.58
=========
- --------------------------------------------------------------------------------
1/1/99 to 8/31/99 Patti Cooke $2,248.87
1/1/99 to 8/31/99 Bradley R. Wilson $1,235.61
---------
Total 1/1/99 to 8/31/99 $3,484.48
=========
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(1) It is estimated that approximately 90% of these charges were for
calls on the Issuer's business. Accordingly, approximately $700.00
of the total paid of $6,744.06 could be deemed to be compensation
to the named officers and directors.
The arrangement under which Wellington Cooke Gallery performed
administrative services for the Issuer was terminated on August 31, 1999. On
September 1, 1999 Patti Cooke, President of the Issuer, became a part-time
employee of the Issuer at a monthly salary of $1,000.00. During the year
commencing September 1, 1999, she will devote such time as required to
administer the Issuer's activities. During that period the telephone charges to
be paid on the mobile telephone used by the Issuer's officers and directors are
estimated to be $2,000.00. The Issuer cannot now predict what remuneration will
be paid by the Issuer to its then officers and directors if it completes the new
business opportunity it is seeking and new management assumes control.
For information on an advisory and consulting fee of $40,000.00 paid to
Hatchment Holdings, Inc., a corporation owned by Bradley R. Wilson, in 1998
prior to the time he became an officer and director of the Issuer, see Item 6.
following.
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Item 5. Security Ownership of Management and Certain Securityholders.
- ------- ------------------------------------------------------------
(Item 10 to Model B of Form 1A)
The following table sets forth information as of September 24, 1999 with respect
to the ownership of the Issuer's Common Stock by each of its officers and
directors, its officers and directors as a group and any shareholder owning more
than 10% of the Issuer's Common Stock:
Title Name and Number of Percent
of Address Shares of
Class of Owner Owned Class
----- -------- --------- -------
Common Stock Patti Cooke 7,000 .2%
715 Millwood Road, #301
Toronto, Ontario M4G1V7
Canada
Common Stock Bradley R. Wilson (1) 1,000,000 (1) 27% (1)
615 Merton Street
Toronto, Ontario
Canada
All Officers & Directors as
a Group 1,007,000 27.2%
(1) These shares are held of record by Hatchment Holdings, Inc., an
Ontario corporation wholly owned by Mr. Wilson.
There are no shares of the Issuer's Preferred Stock outstanding and
there are no outstanding options warrants or other rights to acquire shares of
either its Common or Preferred Stock.
Item 6. Interest of Management and Others in Certain Transactions.
- ------- ---------------------------------------------------------
(Item 11 to Model B of Form 1A)
In August of 1999, Hatchment Holdings, Inc., a company wholly owned by
Bradley R. Wilson, an officer and director of the Issuer, purchased 1,000,000
shares of the Issuer's Common Stock for cash at $.05 per share for a total of
$50,000. The shares were acquired by the purchaser for investment and not with a
view to distribution. They were issued as "restricted securities" as defined
under the Securities Act of 1933, as amended ("Securities Act"). They were
issued in reliance upon the exemption from the registration requirements of
Section 5 of the Securities Act provided in Section 4(2) of that statute.
In the fall of 1998, the Issuer paid an advisory and consulting fee of
$40,000.00 to Hatchment Holdings, Inc. This fee was paid for services rendered
in connection with the reorganization of the Issuer and the proposed transaction
with the Chinese venture. (see Item 1 above). At the time the services were
rendered, Mr. Wilson, the owner of Hatchment Holdings, Inc., was not an officer,
director or principal shareholder of the Issuer.
Item 7. Description of Securities.
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(Item 12 of Model B of Form 1A)
The Issuer's authorized capitalization consists of 80,000,000 shares of
$.0001 par value common stock ("Common Stock") and 20,000,000 shares of $.0001
par value preferred stock ("Preferred Stock"). As of September 24, 1999, there
were 3,676,664 shares of Common Stock outstanding, no shares of Preferred Stock
outstanding and there are no outstanding options, warrants or other rights to
acquire shares of either Common or Preferred Stock. Under applicable Florida law
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and its Articles of Incorporation, the Issuer's Board of Directors may issue
additional shares of its stock up to a total amount of authorized Common and/or
Preferred Stock without approval of its shareholders.
Information is set forth in the following subsections concerning the
Common Stock, and the Preferred Stock.
COMMON STOCK. The shares of Common Stock currently outstanding are
fully paid and non-assessable. The holders of Common Stock do not have any
preemptive rights to acquire shares of any capital stock of the Company. In the
event of liquidation of the Company, assets then legally available for
distribution to the holders of Common Stock (assets remaining after payment or
provision for payment of all debts and of all preferential liquidation payments
to holders of any outstanding Preferred Stock) will be distributed in pro rata
shares among the holders of Common Stock and the holders of any outstanding
Preferred Stock with liquidation participation rights in proportion to their
stock holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if,
declared by the Board of Directors out of funds legally available therefore; and
then, only after all preferential dividends have been paid on any outstanding
Preferred Stock. The Company has not had any earnings and it does not presently
contemplate the payment of any cash dividends in the foreseeable future.
The Issuer's Common Stock does not have any mandatory redemptive
provisions, sinking fund provisions or conversion rights.
PREFERRED STOCK. The Preferred Stock of the Issuer may be issued from
time to time by the board of directors as in one or more series. The description
of shares of each series of Preferred Stock will be set forth in resolutions
adopted by the board of directors and a certificate of designation to be filed
as required by Nevada law prior to issuance of any shares of the series. The
certificate of designation will set the number of shares to be included in each
series of Preferred Stock and set the designations, preferences, conversion or
other rights, voting powers, restrictions, limitations as to distribution,
qualifications, or terms and conditions of redemption relating to the shares of
each series. However, the board of directors is not authorized to change the
right of the Common Stock to vote one vote per share on all matters submitted
for shareholder action. The authority of the board of directors with respect to
each series of preferred Stock includes, but is not limited to, setting or
changing the following:
o The designation of the series and the number of shares
constituting the series, provided that the aggregate number of
shares constituting all series of preferred shares may not exceed
20,000,000;
o The annual distribution rate on shares of the series, whether
distributions will be cumulative and, if so, from which date or
dates;
o Whether the shares of the series will be redeemable and, if so,
the terms and conditions of redemption, including the date or
dates upon and after which the shares will be redeemable, and the
amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption
dates;
o The obligation, if any, of the Issuer to redeem or repurchase
shares of the series pursuant to a sinking fund;
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o Whether shares of the series will be convertible into, or
exchangeable for, shares of stock of any other class or classes
and, if so, the terms and conditions of conversion or exchange,
including the price or prices or the rate or rates of conversion
or exchange and the terms of adjustment, if any;
o Whether the shares of the series will have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of the voting rights;
o The rights of the shares of the series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the
Issuer; and
o Any other relative rights, powers, preferences, qualifications,
limitations or restrictions thereof relating to the series which
may be authorized or permitted under Florida law.
The shares of Preferred Stock of any one series will be identical with
each other in all other respects except as to the dates from and after
which dividends thereon will cumulate, if cumulative.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Related Shareholder Matters.
- --------------------------------------------------------------------------------
The Issuer's Common Stock has been quoted on the OTC Bulletin Board
under the symbol GWFB since March of 1998. To the knowledge of the Issuer there
have been very few trading transactions in its Common Stock
The following table sets forth high and low bid prices of the Common
Stock on the OTC Bulletin Board for the periods indicated. The bid prices
represent prices between dealers, which do not indicate retail markups,
markdowns or commissions and the bid prices may not represent actual
transactions:
Quarter Ending: High Low
-------------- ---- ---
January - March, 1998 6 3/8 6 1/4
April - June, 1998 6 1/8 6 1/8
July - September, 1998 6 1/8 6 3/4
October - December, 1998 6 23/32 6 3/8
January - March, 1999 6 3/8 6 1/4
April - June, 1999 6 1/8 6 1/8
The number of record holders of Common Stock of the Issuer at September
24, 1999 was 13. Additional owners of the Common stock hold their shares at
street name with various brokerage and depository firms (there are five such
firms included in the list of record owners).
The holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors out of funds legally available; and after
payment of adequate provisions for payment of any preferential dividends due on
any then outstanding Preferred Stock. The Issuer had never had any material
earnings and does not presently have any capability to generate any such
earnings. The Issuer has never declared any dividend. It does not anticipate
declaring and paying any cash dividend in the foreseeable future. See Item 7 in
Part I.
Item 2. Legal Proceedings.
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Neither the Issuer nor any of its property is a party or subject to any
pending legal proceeding. The Issuer is not aware of any contemplated or
threatened legal proceeding against it by any governmental authority or other
party.
As set forth in Item 1 of Part 1 above, the Issuer is in the process of
attempting to recover a $100,000 cash deposit which was placed on a proposed
purchase of equipment which was terminated. The holder of the deposit has
acknowledged a responsibility to return a portion of the deposit, but has
claimed a right to offset certain expenses incurred in alleged performance under
the proposed equipment purchase. In the opinion of the Issuer's management, it
is entitled to the return of substantially all the deposit. The Issuer is in the
process of retaining counsel to pursue collection action including instigation
of litigation, if required.
Item 3. Changes in and Disagreements with Accountants.
- ------- ----------------------------------------------
No principal independent accountant of the Issuer or any subsidiary
thereof has ever resigned, been dismissed or declined to stand for re-election.
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Item 4. Recent Sales of Unregistered Securities.
- ------- ----------------------------------------
Information with respect to all securities sold by the Issuer since
September 1, 1996, the offer and sale of which was not subject to an effective
registration statement filed under the Securities Act is as follows:
1. (a) During the period from March 12, 1998 through August 30,
1998, the Issuer sold 2,669,664 shares of its $.0001 par value
Common Stock.
(b) No person acted as a principal underwriter for the sale of
these shares. The Common Stock was offered directly by the Issuer
through its officers and directors. The Common Stock was offered
in Ontario, Canada to investors meeting the qualifications and
able to make the representations set on in paragraph 2 and 3 of
Exhibit (12)(a) filed herewith; and each of whom supplied the
Issuer with a completed and executed form of Subscriber
Questionnaire filed herewith as Exhibit (12)(b).
(c) The 2,669,664 shares of the Common Stock were sold for cash
at $0.15 per share (U.S. Funds) for gross proceeds of
$399,999.60. No commissions or discounts were paid on any of the
sales.
(d) In the sale of these shares of Common Stock the Issuer relied
upon the exemption from the registration requirements of Section
5 of the Securities Act provided in Rule 504 of Regulation D
adopted by the Securities and Exchange Commission. The Issuer was
not then an Issuer of the types specified in subsection (a)(1)(2)
and (3) of Rule 504 and thus eligible to use the exemption. The
applicable provisions of Rules 501 and 502 were met by the Issuer
on offering the subject shares. The aggregate-offering price of
the offered shares was $600,000 (4,000,000 shares at $0.15 per
share). The Issuer did not sell any other securities during the
12-month period before the start of or during this Rule 504
offering.
2. (a) On August 31, 1999 the Issuer sold 1,000,000 shares of its
$.0001 par value Common Stock.
(b) No person acted as principal underwriter with respect to the
offer or sale of these shares. The Issuer sold these 1,000,000 to
Hatchment Holdings, Inc., an Ontario corporation wholly owned by
Bradley R. Wilson, a director and executive officer of the
Issuer.
(c) The 1,000,000 shares were sold for cash at $0.05 per share
for total proceeds of $50,000.00. No commission was paid on the
sale.
(d) In this sale the Issuer relied upon the exemption from the
registration requirements of Section 5 of the Securities Act
provided in Section 4(2) as a transaction by an Issuer not
involving a public offering. The purchaser of the shares is owned
by an officer or director of the Issuer and thoroughly familiar
with it and its operations. The purchaser acquired the shares for
investment and under the restrictive terms and conditions and
representations set out in the form of subscription letter
attached hereto as Exhibit 12(c). The shares were issued as
"restrictive securities" as such are defined under the Securities
Act. An appropriate restrictive legend was placed in the
certificate representing these shares and a stop transfer order
on them was placed with the Issuer's Transfer Agent.
Item 5. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Section 607.085 of the Florida Business Corporation Act provides:
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(1) A corporation shall have power to indemnify any person who was or is a
party to any proceeding (other than an action by. or in the right of the
corporation by reason of the fact that he or she is or was a director,
officer, employees, 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 liability in connection with such proceeding. including any appeal
thereof. if he or she acted in good faith and in a manner he or she
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 or her conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction
or upon a plea of nolo contendere or its equivalent shall not, in or of
itself, create a presumption that the person did not act in good faith and
in a manner which he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation or, with respect to any unlawful
action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or is
a party to any proceeding by or in the right of the corporation to procure
a judgement in its favor by reason of the fact that the person 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 and amounts paid in settlement nor
exceeding, in the judgement of the board of directors, the estimated
expenses of litigating the proceeding to the conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
cooperation, except that no indemnification shall be made under this
subsection in respect to any claim, issue or manner as to which such person
shall have been adjudged to be liable unless, and only to the extent that,
the court in which such proceeding was brought, or any other court of
competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case,
such person is fairly and reasonably entitled to indemnify 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 in the merits or otherwise in defense of
any proceeding referred to in subsection (1) or subsection (2), or in
defense of any claim, issue, or manner therein, he or she shall be
indemnified against expenses actually and reasonably incurred by him or her
in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth in subsection (1) or subsection (2). Such determination
shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by a
majority vote of a committee duly designated by the board of directors
who are parties may participate, consisting solely of two or more
directors nor at the time parties to the proceeding;
(c) By independent legal counsel:
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1. Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
2. If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designated under
paragraph (b), selected by majority vote of the full board of
directors (in which directors who are parties may participate; or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such proceeding or, if no such
quorum is obtainable, by a majority vote of the shareholders who were
not parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification be made in the same manner as the determination that
indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel person specified by
paragraph (4)(c) shall evaluate the reasonableness of expenses and may
authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation on advance on the final
disposition of such preceding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount of he or she is
ultimately found not to e entitled to indemnification by the corporation
pursuant to this section. Expenses incurred by other employees and agents
may be paid in advance upon such terms or conditions that the board of
directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and a corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his or her official capacity and as to action in another capacity while
holding such office. However, indemnification or advancement of expenses
shall not be made to or on behalf of any director, officer, employee or
agent if a judgement or other final adjudication establishes that his or
her actions, or omissions to act, were material to the cause of action so
adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his or her conduct
was lawful or had nor reasonable cause to believe his or her conduct
was unlawful.
(b) A transaction from which the director, officer, employee, or
agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of ss.607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best interest
of the corporation in a proceeding by or in the right of the
corporation to procure a judgement in its favor or in a proceeding by
or in the right of the shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee,
or agent and shall incur to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized
or ratified.
12
<PAGE>
(9) Unless the corporation's articles of incorporation provide otherwise,
notwithstanding the failure of a corporation to provide indemnification,
and despite any contrary determination of the board or of the shareholders
in the specific case, a director, officer, employee, or agent of the
corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to any other court of
competent jurisdiction. On receipt of an application, the court, after
giving any notice that it considers necessary, may order indemnification
and advancement of expenses, including expenses incurred in seeking
court-ordered indemnification or advancement of expenses, if it determines
that:
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case the
court shall also order the corporation to pay the director reasonable
expenses incurred in obtaining court-ordered indemnification or
advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7);
or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or
both, in view of all the relevant circumstances, regardless of whether
such person met the standard of conduct set forth in subsection (1),
subsection (2), or subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation
(including and constituent of a constituent) absorbed in a consolidation or
merger, so that any person who is or was a director, officer, employee, or
agent of a constituent corporation, or is or was serving at the request of
a constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, is in the same position under this section with respect to the
resulting or surviving corporation as he or she would have with respect to
such constituent corporation if its separate existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit plans:
(b) The term "expenses" includes counsel fees, including those for
appeal:
(c) The term "liability" includes obligations to pay a judgement,
settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and
reasonably incurred with respect to an proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil,
criminal, administrative, or investigative and, whether formal or
informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the corporation
that imposes duties or such persons, including duties related to an
employee benefit plan and its participants or beneficiaries; and
13
<PAGE>
(g) The term "not opposed to the best interests of the corporation"
describes the actions of a person who acts in good faith and in a
manner he or she reasonably believes to be in the best interests of
the participants and beneficiaries of an employee benefit plan.
(12) A corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or
agent of the corporation or is or was serving as the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
any liability asserted against the person and incurred by him or her in any
capacity or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify that person against such
liability under the provisions of this section.
ARTICLE VIII of the Issuer's Articles of Incorporation provides:
"DIRECTOR AND OFFICER INDEMNIFICATION
------------------------------------
(a) Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal or administrative, (hereinafter a
"Proceeding"), or is contacted by any governmental or regulatory body
in connection with any investigation or inquiry (hereinafter an
"Investigation"), by reason of the fact that such person is or was a
director or executive officer (as such term is utilized pursuant to
interpretations under Section 16 of the Securities Exchange Act of
1934) of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans
(hereinafter an "Indemnitee"), whether the basis of such Proceeding or
Investigation is alleged action in an official capacity or in any other
capacity as set forth above shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Florida
Business Corporation Act, as the same exists or may hereafter be
amended (but, in the case of any such amendment. only to the extent
that such amendment permits the corporation to provide broader
indemnification rights than such law permitted the corporation to
provide prior to such amendment), against all expense, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid in settlement) or the costs of reasonable
settlement made with a view to curtailment of the cost of litigation
reasonably incurred or suffered by such Indemnitee in connection
therewith and such indemnification shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee's heirs, personal
representatives, executors and administrators; provided, however, that
except as provided in paragraph (b) hereof with respect to Proceedings
to enforce rights to indemnification, the corporation shall indemnify
any such Indemnitee in connection with a proceeding (or part thereof)
initiated by such Indemnitee only if such proceeding (or part thereof)
was authorized by the board of directors of the corporation. The right
to indemnification conferred in this Article shall be a contract right
and shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "Advancement of Expenses"); provided,
however, that the Advancement of Expenses shall be made only upon
delivery to the corporation of a personal guarantee by or on behalf of
such Indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is
no further right to appeal that such Indemnitee is or was not entitled
to be indemnified for such expenses under this Article or otherwise
(hereinafter a "Guarantee").
(b) If a claim under paragraph (a) of this Article is not paid
in full by the corporation within sixty (60) days after a written claim
has been received by the corporation, except in the case of a claim for
14
<PAGE>
an Advancement of Expenses in which case the applicable period shall be
twenty (20) days, the Indemnitee may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim. If
successful, in whole or in part, in any such suit or in a suit brought
by the corporation to recover an Advancement of Expenses pursuant to
the terms of a Guarantee, the Indemnitee shall be entitled to be paid
also the expense of prosecuting or defending such suit. In (1) any suit
brought by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the Indemnitee to enforce a
right to an Advancement of Expenses) it shall be a defense that the
Indemnitee has not met the applicable standard of conduct set forth in
the Florida Business Corporation Act; and (2) in any suit by the
corporation to recover an Advancement of Expenses, pursuant to the
terms of a Guarantee, the corporation shall be entitled to recover such
expenses upon a final adjudication that the Indemnitee has not met the
applicable standard of conduct set forth in the Florida Business
Corporation Act, neither the failure of the corporation (including its
board of directors, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set
forth in the Florida Business Corporation Act, nor an actual
determination by the corporation (including its board of directors,
independent legal counsel, or its stockholders) that the Indemnitee has
not met such applicable standard of conduct (or in the case of such a
suit brought by the Indemnitee) shall be a defense to such suit. In any
suit brought by the Indemnitee to enforce a right hereunder, or by the
corporation to recover an Advancement of Expenses pursuant to the terms
of a Guarantee, the burden of proving that the Indemnitee is not
entitled to be indemnified or to such Advancement of Expenses under
this Section or otherwise shall be on the corporation.
(c) The right to indemnification and to the Advancement of
Expenses conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
these Articles of Incorporation, bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the corporation would have the power to indemnify such person
against such expense, liability or loss under the Florida Busincs5
Corporation Act.
(e) The corporation may, to the extent authorized from time to
time by tile Board of Directors, grant rights to indemnification and to
the Advancement of Expenses, to any employee or agent of the
corporation to the fullest extent of the provisions of this Article
with respect to the indemnification and Advancement of Expenses of
directors, and executive officers of the corporation."
ARTICLE F of the Issuers Bylaws provides:
"INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Corporation shall indemnify any person made or 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), brought
to impose a liability or penalty on such person in his capacity of
Director, officer, employee or agent of this Corporation, or of any
other corporation which such person serves as such at the request of
this Corporation, against judgments, fines, amounts paid in settlement
and expenses, including attorney's fees, actually and reasonably
incurred as a result of such action, suit or proceeding, or any appeal
thereof, if they acted in good faith in the reasonable belief that such
15
<PAGE>
action was in the best interest of this Corporation, and in criminal
actions or proceedings without reasonable ground for belief that such
action was unlawful. The termination of any such civil or criminal
action, suit or proceedings by judgment, settlement, conviction or upon
a plea of nolo contendere shall not in itself create a presumption that
any Director or officer did not act in good faith in the reasonable
belief that such action was in the best interests of this Corporation
or that they had reasonable ground for belief that such action was
unlawful. The foregoing rights of indemnification shall apply to the
heirs and personal representatives of any such Director, officer,
employee or agent and shall not be exclusive of other rights to which
they may be entitled."
Insofar as indemnification for liabilities raising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy and is therefor unenforceable.
16
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1998
DECEMBER 31, 1997
DECEMBER 31, 1996
DECEMBER 31, 1995
TABLE OF CONTENTS
Page
----
Accountants' Report on Financial Statements.............................. F-2
Financial Statements:
Balance Sheet....................................................... F-3
Statement of Operations............................................. F-4
Statement of Stockholders' Equity................................... F-5
Statement of Cash Flows............................................. F-6
Notes to Financial Statements....................................... F-7
F-1
<PAGE>
Joseph F. Janusz Certified Public Accountant
MEMBER: AMERICAN AND FLORIDA INSTITUTES OF CERTIFIED PUBLIC ACCOUNTANTS
7204 Jacaranda Lane
Miami Lakes, Florida 33014
--------
(305) 558-2272
Fax: (305)362-3118
Independent Auditors' Report
----------------------------
The Board of Directors
Great Wall Food And Beverage Corporation
I have audited the accompanying balance sheets of GREAT WALL FOOD AND BEVERAGE
CORPORATION as of December 31, 1998, 1997, 1996 and 1995, and the related
statements of operations, stockholders' equity, and cash flows for the years
then ended. 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 audits.
I conducted my audits 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 audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of GREAT WALL FOOD AND BEVERAGE
CORPORATION as of December 31, 1998, 1997, 1996 and 1995 and the results of its
operations and its cash flows for the years ended in conformity with generally
accepted accounting principles.
Miami Lakes, Florida /s/ Joseph F. Janusz
August 31, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known As Ronnie Systems, Inc.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
------
December 31, December 31, December 31, December 31,
1998 1997 1996 1995
------------ ------------ ------------ ------------
CURRENT ASSETS
- --------------
<S> <C> <C> <C> <C>
Cash $117,838 $ 0 $ 0 $ 0
-------- ------- -------
Total Current Assets $117,838 $ 0 $ 0 $ 0
-------- ------- ------- -------
OTHER ASSETS
Deposits $100,000 $ 0 $ 0 $ 0
-------- ------- ------- -------
Total Other Assets $100,000 $ 0 $ 0 $ 0
-------- ------- ------- -------
TOTAL ASSETS $217,838 $ 0 $ 0 $ 0
======== ======= ======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts Payable $ 2,121 $ 1,300 $ 550 $ 0
-------- ------- ------- -------
Total current liabilities $ 2,121 $ 1,300 $ 550 $ 0
-------- ------- ------- -------
STOCKHOLDER'S EQUITY (DEFICIT)
------------------------------
Preferred Stock - par value $.0001,
Authorized 20,000,000 shares, no
issued and outstanding shares
Common stock - par value $5.00,
authorized 100 shares, issued
and outstanding 100 shares at
December 31, 1995,
Common stock - par value $.001,
authorized 50,000,000 shares,
issued and outstanding 100,000
at December 31, 1996 and
100,000 at December 31, 1997
Common stock - par value $.0001,
authorized 80,000,000 shares,
issued and outstanding 2,676,664
at December 31,1998 $ 268 $ 100 $ 100 $ 500
Additional paid-in capital 400,232 400 400 0
Deficit accumulated during
the development stage (184,783 (1,800) (1,050) ( 500)
-------- ------- ------- -------
Total stockholder's equity
(deficit) $215,717 $(1,300) $( 550) $( 0)
-------- ------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $217,838 $ 0 $ 0 $ 0
======== ======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Period
For the Year For the Year For the Year For the Year August 1, 1980
Ended Ended Ended Ended (Inception)
December 31, December 31, December 31, December 31, to December 31,
1998 1997 1996 1995 1998
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Revenue $ 0 $ 0 $ 0 $ 0 $ 0
Total Revenue 0 0 0 0 0
--------- ------- ------- ------- ---------
Development stage
expenses 182,983 750 550 0 184,783
--------- ------- ------- ------- ---------
Total expenses 182,983 750 550 0 184,783
--------- ------- ------- ------- ---------
Net loss $(182,983) $ (750) $ (550) $ 0 $(184,783)
========= ======= ======= ======= =========
Net loss per share $ (.16) $ (.008) $ (.006) $ .000
========= ======= ======= =======
Weighted average
common shares
outstanding 1,119,218 100,000 100,000 100,000
========= ======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
------------------------- PAID-IN DEVELOPMENT STOCKHOLDERS
SHARES AMOUNT CAPITAL STAGE EQUITY (DEFICIT)
-------- -------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balance at August 5, 1980
(Date of Inception)
issuance of common stock 100 $ 500 $ 0 $ $ 500
Net loss (500) (500)
--------- ----- -------- --------- --------
Balance at December 31, 1994 100 500 0 (500) 0
Net loss
--------- ----- -------- --------- --------
Balance at December 31, 1995 100 500 0 (500) 0
Common stock changed par
value from $5.00 to $.001 (500) 500 0
Common stock forward stock
split 1,000: 1 99,900 100 (100) 0
Net loss (550) (550)
--------- ----- -------- --------- --------
Balance, December 31, 1996 100,000 $ 100 $ 400 $ (1,050) $ (550)
========= ===== ======== ========= ========
Net loss (750) (750)
--------- ----- -------- --------- --------
Balance, December 31, 1997 100,000 $ 100 $ 400 $ (1,800) $ (1,300)
========= ===== ======== ========= ========
Common stock reverse stock
split from 10 shares of $.001 to
1 share of $.0001 10,000 ( 99) 99 0
Common stock issued in connection
with 504 offering 2,666,664 267 399,733 400,000
Net loss (182,983) (182,983)
--------- ----- -------- --------- --------
Balance, December 31, 1998 2,676,664 $ 268 $400,232 $(184,783) $215,717
========= ===== ======== ========= ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the Period
For the Year Ended August 1, 1980
December 31, (Date of Inception)
1998 1997 1996 1995 to December 31, 1998
------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C>
CASH FLOW FROM
OPERATING ACTIVITIES:
Net loss $(182,983) $( 750) $(550) $ 0 $(184,783)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Change in operating assets and liabilities:
Deposits (100,000) 0 0 0 (100,000)
--------- ------ ----- ---- ---------
Accounts payable 821 750 550 0 2,121
--------- ------ ----- ---- ---------
Net cash used in
operating activities (282,162) (750) (550) 0 (282,662)
CASH FLOWS FROM INVESTING
INVESTING ACTIVITIES
Net cash used in
investing activities 0 0 0 0 0
--------- ------ ----- ---- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance of
common stock - - 0 0 500
Proceeds from sales of
common stock 400,000 - 0 - 400,000
--------- ------ ----- ---- ---------
Net cash provided
by financing activities 400,000 0 0 - 400,500
--------- ------ ----- ---- ---------
Net (decrease)increase in cash 117,838 0 0 0 117,838
Cash at Beginning of period 0 0 0 0 0
--------- ------ ----- ---- ---------
Cash at End of Period $ 117,838 $ 0 $ 0 $ 0 $ 117,838
========= ====== ===== ==== =========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-6
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND ORGANIZATION
Great Wall Food And Beverage Corporation (the Company), a development stage
company, was incorporated in the State of Florida on August 1, 1980 as Ronnie
Interior Designs, Inc for the purpose of acquiring or merging with an existing
operating company.
On October 14, 1997, Ronnie Interior Designs, Inc. changed its name to Ronnie
Systems, Inc.
On March 13, 1998, the Company amended and restated its articles of
incorporation for Ronnie Systems, Inc. which changed its name to Great Wall Food
And Beverage Corporation.
DEVELOPMENT STAGE
The Company has operated as a development stage enterprise since its inception
by devoting substantially all of its efforts with the ongoing development of the
Company.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31, year end.
LOSS PER SHARE
The computation of loss per share of common stock is based upon the weighted
average common shares outstanding during each period.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the company to
continue as a going concern. It is management's plan to seek additional capital
through a merger with an existing operating company and raising capital.
NOTE 3 - CAPITAL STOCK ACTIVITY
The Company has issued 100 shares of its common stock, par value $.10 for $500,
on August 5, 1980.
On September 16, 1996, the State of Florida approved the Company's restated
Articles of Incorporation, which increased its capitalization from 100 common
shares, $5.00 par value, to 50,000,000 common shares, $.001 par value
F-7
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK ACTIVITY (con't)
Effective September 16, 1996, the Board of Directors approved a forward stock
split of 1,000:1. Thus increasing the number of outstanding common stock shares
from 100 common shares to 100,000 common shares.
On March 6, 1998, as part of the restated articles of incorporation, the Company
combined each 10 common shares of the $.001 par value stock of the Company
outstanding as of February 28, 1998 into 1 common share of the $.0001 par value
common stock of the Company.
In November 1998, the Company completed a private offering of 2,666,664 shares
of common stock at a price of $.15 per share, amounting to gross proceeds of
$400,000.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. An officer/ stockholder
provided office services without charge. Such costs are immaterial to the
financial statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities.
F-8
<PAGE>
PART III
1. Index to Exhibits
-----------------
Exhibit No. Description of Exhibits
----------- -----------------------
2(a) Issuer's Amended and Restated Articles of Incorporation
2(b) Issuer's Bylaws
12(a) Form of Subscription Agreement for Rule 504 Offering
12(b) Form of Subscriber Questionnaire for Rule 504 Offering
12(c) Investment Letter for Sale of Restricted Securities
Signatures:
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Issuer has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized.
GREAT WALL FOOD AND BEVERAGE CORPORATION
Dated: September 27, 1999 By: /s/ Patti Cooke
-------------------------------------
Patti Cooke, President
17
10-SB Exhibit 2(a)
FILED
98 MAR 13 PM 2:56
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
RONNIE SYSTEMS, INC.
ARTICLE I
CORPORATE NAME
--------------
The name of this Corporation (the "Corporation") shall be:
GREAT WALL FOOD AND BEVERAGE CORPORATION
ARTICLE II
CORPORATE AUTHORITY
-------------------
The Corporation shall have the authority to engage in any activity or
business permitted under the laws of the United States and of the State of
Florida and any other jurisdiction wherein it may conduct business.
ARTICLE III
COMBINATION
-----------
A. Upon the filing by the Secretary of State of the State of Florida of
these Amended and Restated Articles of Incorporation, each ten (10) shares of
the $0.001 par value common stock of the Corporation outstanding as of February
28, 1998 (the "Record Date"), shall be combined into one (1) share of the
$0.0001 par value common stock of the Corporation.
B. No fractional shares of common stock or scrip certificates therefor
shall be issued to the holders of the common stock as of the Record Date by
reason of the foregoing combination; however, the Corporation shall purchase
such fractional interests from the holders of any such fractional interests
based upon a price of Fifty Six cents ($0.56) per share (the "Price"), which
Price has been determined in the good faith judgement of the Board of Directors.
The Board of Directors of the Corporation or any corporate committee thereof is
empowered to adopt further rules and regulations concerning the liquidation of
fractional interests.
ARTICLE IV
CAPITALIZATION
--------------
The aggregate number of shares of all classes that the Corporation shall have
authority to issue is one hundred million (100,000,000) shares, of which eighty
million (80,000,000) shares shall have a par value of $.0001 and shall be a
class designated as "Common Shares" and of which twenty million (20,000,000)
shares shall have a par value of $.0001 and shall be a class designated as
"Preferred Shares".
A. COMMON SHARES. Each Common Share shall entitle the holder thereof to
one vote. No holder of the Common Shares shall be entitled to any right of
cumulative voting.
B. PREFERRED SHARES.
1. Preferred Shares may be issued from time to time in one or more
series, each such series to have distinctive serial designations, as same shall
hereafter be determined in the resolution or resolutions providing for the
issuance of such Preferred Shares from time to time as adopted by the Board of
Directors pursuant to the authority to do so, which authority is hereby vested
in the Board of Directors.
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2. Each series of Preferred Shares, as stated in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of any
series of Preferred Shares, may:
(a) have such number of shares;
(b) have such voting powers, full or limited, or may be without
voting power;
(c) be redeemable or convertible at such time or times and at such
prices;
(d) entitle the holders thereof to receive distributions calculated
in any manner, including but not limited to dividends, which may be cumulative,
non-cumulative or partially cumulative; at such rate or rates, on such
conditions, from such date or dates, at such times, and payable in preference
to, or in such relation to, the dividends payable on any other class or classes
or series of shares;
(e) have such preference over any other class of shares with
respect to distributions, including but not limited to dividends and
distributions upon dissolution of the Corporation;
(f) be made convertible into, or exchangeable for, shares of any
other class or classes (except the class having prior or superior rights and
preferences as to the dividends or distribution assets upon liquidation) or of
any other series of the same or any other class or classes of shares of the
Corporation at such price or prices or at such rates of exchange, and with such
adjustments;
(g) be entitled to the benefit of a sinking fund or purchase fund
to be applied to the purchase or redemption of shares of such series in such
amount or amounts;
(h) be entitled to the benefit of conditions and restrictions upon
the creation of indebtedness of the Corporation or any subsidiary, upon the
issue of any additional shares (including additional shares of such series or of
any other series) and upon the payment of dividends or the making of other
distributions on, and the purchase, redemption or other acquisition by the
Corporation or any subsidiary of any outstanding shares of the Corporation; and
(i) have such other relative, participating, optional or other
special rights, and qualifications, limitations or restrictions;
3. Except where otherwise set forth in the resolution or resolutions
adopted by the Board of Directors providing for the issuance of any series of
Preferred Shares, the number of shares comprised in such series may be increased
or decreased (but not below the number of shares then outstanding) from time to
time by like action of the Board of Directors.
4. Shares of any series of Preferred Shares which have been redeemed
(whether through the operation of a sinking fund or otherwise) or purchased by
the Corporation, or which, if convertible, were exchangeable, have been
converted into or exchanged for shares of any other class or classes, shall have
the status of authorized and unissued Preferred Shares and may be reissued as a
part of the series of which they were originally a part or may be reclassified
and reissued as part of a new series of Preferred Shares to be created by
resolution or resolutions of the Board of Directors or as part of any other
series of Preferred Shares, all subject to the conditions or restrictions on
issuance set forth in the resolution of resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Shares and to any
filing required by law.
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ARTICLE V
INITIAL ADDRESS AND REGISTERED AGENT
------------------------------------
The initial principal office of the Corporation in the State of Florida
shall be:
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
The resident registered agent of the Corporation shall be:
E.H.G. Resident Agents, Inc.
5 100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
The Board of Directors may, from time to time, move the principal or
registered office of the Corporation to any other address, within or without the
State of Florida, as may be determined appropriate in the interests of the
Corporation.
ARTICLE VI
CORPORATE EXISTENCE
-------------------
The Corporation shall commence its existence immediately upon the
filing of these Articles of Incorporation by the Department of State of the
State of Florida and shall exist perpetually thereafter unless sooner dissolved
according to law.
ARTICLE VII
BYLAWS
------
The initial Bylaws of the corporation shall be adopted by the Board of
Directors. The Bylaws may be amended from time to time by either the
shareholders or the Board of Directors.
ARTICLE VIII
DIRECTOR AND OFFICER INDEMNIFICATION
------------------------------------
(a) Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal or administrative, (hereinafter a "Proceeding"), or is contacted
by any governmental or regulatory body in connection with any investigation or
inquiry (hereinafter an "Investigation"), by reason of the fact that such person
is or was a director or executive officer (as such term is utilized pursuant to
interpretations under Section 16 of the Securities Exchange Act of 1934) of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans (hereinafter an "Indemnitee"), whether the basis of such
Proceeding or Investigation is alleged action in an official capacity or in any
other capacity as set forth above shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the Florida Business Corporation
Act, as the same exists or may hereafter be amended (but, in the case of any
such amendment. only to the extent that such amendment permits the corporation
to provide broader indemnification rights than such law permitted the
corporation to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
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penalties and amounts paid in settlement) or the costs of reasonable settlement
made with a view to curtailment of the cost of litigation reasonably incurred or
suffered by such Indemnitee in connection therewith and such indemnification
shall continue as to an Indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the Indemnitee's heirs,
personal representatives, executors and administrators; provided, however, that
except as provided in paragraph (b) hereof with respect to Proceedings to
enforce rights to indemnification, the corporation shall indemnify any such
Indemnitee in connection with a proceeding (or part thereof) initiated by such
Indemnitee only if such proceeding (or part thereof) was authorized by the board
of directors of the corporation. The right to indemnification conferred in this
Article shall be a contract right and shall include the right to be paid by the
corporation the expenses incurred in defending any such proceeding in advance of
its final disposition (hereinafter an "Advancement of Expenses"); provided,
however, that the Advancement of Expenses shall be made only upon delivery to
the corporation of a personal guarantee by or on behalf of such Indemnitee, to
repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal that such
Indemnitee is or was not entitled to be indemnified for such expenses under this
Article or otherwise (hereinafter a "Guarantee").
(b) If a claim under paragraph (a) of this Article is not paid in full
by the corporation within sixty (60) days after a written claim has been
received by the corporation, except in the case of a claim for an Advancement of
Expenses in which case the applicable period shall be twenty (20) days, the
Indemnitee may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim. If successful, in whole or in part, in
any such suit or in a suit brought by the corporation to recover an Advancement
of Expenses pursuant to the terms of a Guarantee, the Indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(1) any suit brought by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the Indemnitee to enforce a right to an
Advancement of Expenses) it shall be a defense that the Indemnitee has not met
the applicable standard of conduct set forth in the Florida Business Corporation
Act; and (2) in any suit by the corporation to recover an Advancement of
Expenses, pursuant to the terms of a Guarantee, the corporation shall be
entitled to recover such expenses upon a final adjudication that the Indemnitee
has not met the applicable standard of conduct set forth in the Florida Business
Corporation Act, neither the failure of the corporation (including its board of
directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
Indemnitee is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the Florida Business Corporation
Act, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the Indemnitee
has not met such applicable standard of conduct (or in the case of such a suit
brought by the Indemnitee) shall be a defense to such suit. In any suit brought
by the Indemnitee to enforce a right hereunder, or by the corporation to recover
an Advancement of Expenses pursuant to the terms of a Guarantee, the burden of
proving that the Indemnitee is not entitled to be indemnified or to such
Advancement of Expenses under this Section or otherwise shall be on the
corporation.
(c) The right to indemnification and to the Advancement of Expenses
conferred in this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, these Articles of
Incorporation, bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Florida Busincs5 Corporation Act.
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(e) The corporation may, to the extent authorized from time to time by
tile Board of Directors, grant rights to indemnification and to the Advancement
of Expenses, to any employee or agent of the corporation to the fullest extent
of the provisions of this Article with respect to the indemnification and
Advancement of Expenses of directors, and executive officers of the corporation.
ARTICLE IX
AFFILIATED TRANSACTIONS
-----------------------
The corporation expressly elects not to be governed by the provisions
of Florida Statutes ss. 607.090 1. A director or officer of the corporation
shall not be disqualified by virtue of their office from dealing or contracting
with the corporation either as a vendor, purchaser or otherwise, nor shall any
transaction or contract of the corporation be void or voidable by reason of the
fact that any director or officer, or any firm of which any director or officer
is a member, or any corporation of which any director or officer is a
shareholder, officer or director is in any way interested in such transaction or
contract, no director or officer shall be liable to account to the corporation
for any profits realized by or from or through any such transaction or contract
authorized, ratified or approved as herein provided by reason of the fact that
they, or any firm or entity of which any director or officer is a member, or any
corporation of which any director or officer is a shareholder, officer or
director or in any interested in such transaction or contract, nor shall any
director or officer be liable to account to the corporation for any profits
realized by or from or through any such transaction or contract authorized,
ratified or approved as herein provided by reason of the fact that they, or any
firm of which they are a member, or any corporation of which they are a
shareholder, officer or director interested in such transaction or contract.
Said interested officer or director of this corporation may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of this corporation which shall authorize any such contract or transaction with
like force and effect as if they were not so interested. Nothing herein
contained shall create liability in the events above described or prevent the
authorized approval of such contracts in any other manner permitted by law.
IN WITNESS WHEREOF, the undersigned has made, subscribed and
acknowledged these Amended and Restated Articles of Incorporation on March 6,
1998.
RONNIE SYSTEMS, INC. (Now Known As
Great Wall Food and Beverage Corporation)
By: /s/ Patti Cooke
--------------------------------------
Patti Cooke, sole Director
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<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE
FOR THE SERVICE OF PROCESS WITHIN FLORIDA,
NAMING AGENT UPON WHOM PROCESS MAY BE SERVED
In compliance with Section 48.091, Florida Statutes, the following is
submitted:
FIRST, GREAT WALL FOOD AND BEVERAGE CORPORATION (formerly known as
Ronnie Systems, Inc.) desiring to organize or qualify under the laws of the
State of Florida, with its principal place of business in Palm Beach County,
State of Florida, has named E.H.G. Resident Agents, Inc., located at 5100 Town
Center Circle, Suite 330, Boca Raton, Florida 33486, as its agent to accept
service of process within Florida.
RONNIE SYSTEMS, INC. (Now Known As
Great Wall Food and Beverage Corporation)
By: /s/ Patti Cooke
-------------------------------------
Patti Cooke, sole Director
Date: March 6, 1998
Having been named to accept service of process for the above stated
Corporation at the place designated in this certificate, the undersigned hereby
agrees to act in such capacity, and further agrees to comply with the provisions
of all statutes relative to the proper and complete performance of the duties
associated with such designation.
E.H.G. RESIDENT AGENTS, INC.
By: /s/ Edward H. Gilbert
-------------------------------------
Edward H. Gilbert, President
<PAGE>
CERTIFICATE OF CORPORATE SECRETARY
In connection with the filing with the Florida Secretary of State of
the Amended and Restated Articles of Incorporation dated March 6, 1998 (the
"Restated Articles"), the undersigned hereby certifies as follows:
1. I am the duly authorized and acting corporate Secretary of Ronnie
Systems, Inc., a Florida corporation (the "Company") and as such I am authorized
to execute and deliver this Certificate on behalf of the Company, and in my
capacity as corporate Secretary, I have access to and I am familiar with the
corporate records of the Company.
2. The Company is in good standing and exists within the State of
Florida as a business corporation on the date hereof
3. The shareholders of the Company approved adoption of the Restated
Articles on March 6, 1998 in that certain Action by Written Consent of
Shareholders (the "Written Action"), a copy of which Written Action is attached
hereto as Exhibit A.
4. The number of votes cast for the adoption of the Restated Articles
by the shareholders was sufficient for approval of the adoption.
IN WITNESS WHEREOF, the undersigned has set his hand and the seal of
the Company this 11th day of March, 1998.
RONNIE SYSTEMS. INC., Florida corporation
By: /s/ Patti Cooke
--------------------------------------
Patti Cooke, Secretary
7
Exhibit 2(b)
BYLAWS OF
GREAT WALL FOOD AND BEVERAGE CORPORATION
ARTICLE A.
OFFICES
-------
The principal office of the Corporation shall be established and
maintained in the State of Florida. The Corporation may also have offices at
such places within or without the State of Florida as the board may, from time
to time, establish.
ARTICLE B.
SHAREHOLDERS
------------
1. ANNUAL MEETING. The annual meeting of the Shareholders of this
Corporation shall be held annually on a date and a time and place designated
from time to time by the Board of Directors of the Corporation. Business
transacted at the annual meeting shall include the election of Directors of the
Corporation and the transaction of any other proper business. If the designated
day shall fall on a Sunday or legal holiday, then the meeting shall be held on
the first business day thereafter.
2. SPECIAL MEETINGS. Special Meetings of the Shareholders shall be held
when directed by the President or the Board of Directors, or when requested in
writing by the holders of not less than ten percent (10%) of all the shares
entitled to vote at the meeting. Such written request must be signed, dated and
delivered to the Secretary of the Corporation. A meeting requested by
Shareholders shall be called for a date not less than ten (10) nor more than
sixty (60) days after the request is made unless the Shareholders requesting the
meeting designate a later date. The call for the Special Meeting shall be issued
by the Secretary, unless the President, Board of Directors, or Shareholders
requesting the Special Meeting shall designate another person to do so. Such a
request for a Special Meeting shall state the purpose of the proposed Special
Meeting. Business transacted at any Special Meeting shall be limited to the
purpose stated in the notice thereof.
3. PLACE OF MEETING. Meetings of Shareholders shall be held at the
principal place of business of the Corporation or at such other place as may be
designated by the Board of Directors.
4. NOTICE OF MEETING. Written notice to each Shareholder of record
entitled to vote stating the place, day and hour of the meeting and, in the case
of a Special Meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten (10) nor more than sixty (60) days before
the meeting either personally, by mail, telegram or overnight carrier. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the Shareholder at the Shareholder's address as it
appears on the stock transfer books of the Corporation, with postage prepaid. If
notice is given by telegram or overnight courier, such notice shall be deemed to
be delivered when the telegram or overnight carrier is delivered to the
telegraph company or overnight carrier. If any Shareholder shall transfer such
Shareholder's stock after notice, it shall not be necessary to notify the
transferee. Any Shareholder may waive notice of any meeting either before,
during or after the meeting. The attendance of a Shareholder at a meeting shall
constitute a waiver of notice of such meeting, except where a Shareholder
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
5. NOTICE OF ADJOURNED MEETING. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken; and any business may be
transacted at the adjourned meeting that might have been transacted on the
original date of the meeting. If, however, after adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in paragraph 4 of this Article to
each Shareholder of record on the new record date entitled to vote at such
meeting.
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6. VOTING LISTS. The officer or agent having charge of the stock
transfer book of the Corporation shall make, at least ten (10) days before each
meeting of Shareholders, a complete list of Shareholders entitled to vote at
such meeting, or any adjournment thereof, arranged in alphabetical order, with
the address and number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, shall be kept on file at the principal office
of the Corporation and shall be subject to inspection by any Shareholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any Shareholder during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to who are the Shareholders
entitled to examine such list or to vote at any meeting of the Shareholders.
7. TRANSFER BOOK AND RECORD DATE. For the purposes of determining
Shareholders entitled to notice of, or to vote at any meeting, or entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other purpose, the Board of Directors may close the stock
transfer book of the Corporation as provided by law.
8. QUORUM. Except as otherwise provided in these Bylaws, or as required
by the Articles of Incorporation, the majority of the shares entitled to vote
(50% + 1), represented in person or by Proxy, shall constitute a Quorum at a
meeting of Shareholders, but in no event shall a Quorum consist of less than
one-third (1/3) of the shares entitled to vote at the meeting.
After a Quorum has been established at a Shareholders' meeting, the
subsequent withdrawal of Shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a Quorum, shall
not effect the validity of any action taken at the meeting or any adjournment
thereof.
9. VOTING OF SHARES. Each Shareholder entitled to vote shall at every
meeting of Shareholders be entitled to one (1) vote for each share of voting
stock held by them.
10. PROXY. Every Shareholder entitled to vote at a meeting of
Shareholders, or to express consent or dissent without a meeting, or the
Shareholder's duly authorized attorney-in-fact, may authorize another person or
persons to act for the Shareholder by Proxy. The Proxy must be signed by the
Shareholders or their attorney-in-fact. No Proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the Proxy or by Florida law.
11. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided by law
or by the Articles of Incorporation, any action required to be taken at a
regular meeting of the Shareholders, or any other action which may be taken at
a Special Meeting of the Shareholders may be taken without a meeting if a
consent in writing setting forth the action so taken shall be signed by holders
of outstanding stock having not less than the minimum number of votes that
would be necessary to authorize such action at a meeting at which all shares
entitled to vote thereon were present and voted. Within ten (10) days after
obtaining such authorization by written consent, notice must be given to those
Shareholders who have not consented in writing. The notice shall fairly
summarize the material features of the authorized action and, if the action
shall nave been such that dissenters' rights are provided under Florida law,
the notice shall contain a clear statement of the right of Shareholders
dissenting therefrom to be paid the fair value of their shares upon compliance
with certain further provisions of such Florida law regarding the rights of
dissenting Shareholders.
ARTICLE C.
BOARD OF DIRECTORS
------------------
1. GENERAL POWERS. The business of the Corporation shall be managed and
its corporate powers exercised by its Board of Directors.
2. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors shall
consist of at least one (1) director. The number may be altered from time to
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time by either the Directors or the Shareholders. Directors shall be elected at
the annual meeting of Shareholders and each Director elected shall hold office
until such Director's successor has been elected and qualified, or until their
prior resignation or removal. It shall not be necessary for Directors to be
Shareholders.
3. VACANCIES. If the office of any Director, member of a committee or
other officer becomes vacant, the remaining Directors in office, by a majority
(50% + 1) vote, though this may constitute less than a quorum of the Board of
Directors, may appoint any qualified person to fill such vacancy, who shall hold
office for the unexpired term and until their successor shall be duly elected
and has qualified.
4. REMOVAL OF DIRECTORS. Any or all of the Directors may be removed
with or without cause by vote of a majority (50% + 1) of all of the shares
outstanding and entitled to vote at a Special Meeting of Shareholders called for
that purpose.
5. RESIGNATION. A Director may resign at any time by giving written
notice to the Board, the President or the Secretary of the Corporation. Unless
otherwise specified in the notice, the resignation shall take effect upon
receipt thereof by the Board of Directors or of such officer, and the acceptance
of the resignation shall not be necessary to make it effective.
6. QUORUM OF DIRECTORS. A majority of the Directors (50% + 1) shall
constitute a quorum for the transaction of business. If at any meeting of the
Board there shall be less than a quorum present, a majority of those present may
adjourn the meeting from time to time until a quorum is obtained, and no further
notice thereof need be given other than by announcement at the meeting which
shall be so adjourned. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
7. PLACE AND TIMING OF BOARD MEETINGS. The Board may hold its meetings
at the office of the Corporation or at such other place, either within or
without the State of Florida as it may, from time to time, determine.
8. NOTICE OF MEETINGS OF THE BOARD. A regular annual meeting of the
Board may be held without notice at such time and place as it shall, from time
to time, determine. Special Meetings of the Board shall be held upon notice to
the Directors and may be called by the President upon two (2) days, notice to
each Director, either personally or by mail or by wire. Special Meetings shall
be called by the President or by the Secretary in a like manner on written
request of a Director. Any Special Meeting may be held by telephone conference
as set forth in Section 11 hereof. Notice of a meeting need not be given to any
Director who submits a waiver of notice whether before or after the meeting, or
who attends the meeting without protesting prior thereto, or at its
commencement, the lack of notice to him.
9. ANNUAL MEETING. An annual meeting of the Board shall be held
immediately following, and at the same place as, the annual meeting of
Shareholders.
10. COMPENSATION. No compensation shall be paid to Directors, as such,
for their services, but by resolution of the Board, a fixed sum and expenses for
actual attendance, at each regular or Special Meeting of the Board may be
authorized. Nothing herein contained shall be construed to preclude any Director
authorized from serving the Corporation in any other capacity and receiving
compensation therefor.
11. ACTION BY TELEPHONIC CONFERENCE. The Directors may act at a meeting
by means of a conference by telephone or similar communications equipment by
means of which all persons participating in the meeting can communicate with
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
12. PRESUMPTION OF ASSENT. A Director of the Corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action unless he voted
against such action or abstains from voting in respect thereto because of an
asserted conflict of interest.
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<PAGE>
13. INFORMAL ACTION BY BOARD. Any action required or permitted to be
taken by any provision of law, of the Articles of Incorporation or of these
Bylaws at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be.
ARTICLE D.
OFFICERS
--------
1. OFFICERS, ELECTION AND TERM. The Board may elect or appoint a
President, one or more Vice Presidents, a Secretary, a Treasurer, and such other
officers as it may determine, who shall have such duties and powers as
hereinafter provided.
All officers shall be elected or appointed to hold office until the
meeting of the Board following the next annual meeting of Shareholders and until
their successors have been elected or appointed and qualified.
Any two (2) or more offices may be held by the same person.
2. REMOVAL, RESIGNATION, SALARY, ETC. Any officer elected or appointed
by the Board may be removed by the Board with or without cause.
In the event of the death, resignation or removal of an officer, the
Board, in its discretion, may elect or appoint a successor to fill the unexpired
term.
Any officer elected by the Shareholders may be removed only by vote of
the Shareholders unless otherwise provided by the Shareholders.
The salaries of all officers shall be fixed by the Board.
The Directors may require any officer to give security for the faithful
performance of his duties.
3. DUTIES. The officers of this Corporation shall have the following
duties:
The President shall be the chief executive officer of the Corporation
and shall have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the Shareholders and Board of Directors.
The Vice-President shall possess and may exercise, such power and
authority, and shall perform such duties as may from time to time be assigned to
him or her by the Board of Directors or the President.
The Secretary shall have custody of and maintain all of the corporate
records except the financial records; shall record the minutes of all meetings
of the Shareholders and Board of Directors, and send all notices of all meetings
and perform such other duties as may be prescribed by the Board of Directors or
the President and shall perform such duties as may from time to time be assigned
to him or her by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and maintain
all of the financial records and shall keep accurate financial records and shall
render reports thereof of the annual meetings of Shareholders and at other times
when requested to do so by the Board of Directors and shall perform such duties
as may from time to time be assigned to him or her by the Board of Directors or
the President.
4. REMOVAL OF OFFICERS. An officer or agent elected or appointed by the
Board of Directors may be removed with or without cause by the Board whenever in
the Board's judgment, the best interests of the Corporation will be served
thereby.
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Any vacancy in any office may be filled by the Board of Directors for
the unexpired term.
ARTICLE E.
EXECUTIVE AND OTHER COMMITTEES
------------------------------
1. CREATION OF COMMITTEES. The Board of Directors may, by resolution,
passed by a majority of the Board, designate an executive committee and one or
more other committees.
2. EXECUTIVE COMMITTEE. The executive committee, if there shall be one,
shall consult with and advise the officers of the Corporation in the management
of its business and shall have and may exercise, to the extent provided in the
resolution of the Board of Directors creating such executive committee, such
powers of the Board of Directors as can be lawfully delegated by the Board.
3. OTHER COMMITTEES. Such other committees shall have such functions
and may exercise the powers of the Board of Directors as can be lawfully
delegated and to the extent provided in the resolution or resolutions creating
such committee or committees.
4. MEETINGS OF COMMITTEES. Regular meetings of the executive committee
and other committees may be held without notice at such time and at such place
as shall from time to time be determined by the executive committee or such
other committees, and Special meetings of the executive committee or such other
committees may be called by any member thereof upon two (2) days' notice to each
of the other members of such committee, or on such shorter notice as may be
agreed to in writing by each of the members of such committee, given either
personally or in the manner provided in Section 8 of Article III of these Bylaws
(pertaining to notice for Directors, meetings).
5. VACANCIES ON COMMITTEES. Vacancies on the executive committee or on
such other committees shall be filled by the Board of Directors then in office
at any regular or Special meeting.
6. QUORUM ON COMMITTEES. At all meetings of the executive committee or
such other committees, a majority (50% + 1) of the committee's members then in
office shall constitute a quorum for the transaction of business.
7. MANNER OF ACTION OF COMMITTEES. The acts of a majority (50% + 1) of
the members of the executive committee or such other committees. present at any
meeting at which there is a quorum, shall be the act of such committee.
8. MINUTES OF COMMITTEES. The executive committee, if there shall be
one, and such other committees shall keep regular minutes of their proceedings
and report the same to the Board of Directors when requested.
9. COMPENSATION. Members of the executive committee and such other
committees may be paid compensation in accordance with the provisions of
Articles III, Section 10 of these bylaws (pertaining to compensation of
Directors).
ARTICLE F.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Corporation shall indemnify any person made or 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), brought to impose a liability or
penalty on such person in his capacity of Director, officer, employee or agent
5
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of this Corporation, or of any other corporation which such person serves as
such at the request of this Corporation, against judgments, fines, amounts paid
in settlement and expenses, including attorney's fees, actually and reasonably
incurred as a result of such action, suit or proceeding, or any appeal thereof,
if they acted in good faith in the reasonable belief that such action was in the
best interest of this Corporation, and in criminal actions or proceedings
without reasonable ground for belief that such action was unlawful. The
termination of any such civil or criminal action, suit or proceedings by
judgment, settlement, conviction or upon a plea of nolo contendere shall not in
itself create a presumption that any Director or officer did not act in good
faith in the reasonable belief that such action was in the best interests of
this Corporation or that they had reasonable ground for belief that such action
was unlawful. The foregoing rights of indemnification shall apply to the heirs
and personal representatives of any such Director, officer, employee or agent
and shall not be exclusive of other rights to which they may be entitled.
ARTICLE G.
CERTIFICATE OF STOCK
--------------------
1. ISSUANCE. Unless otherwise determined by the Board of Directors,
every holder of shares in this Corporation shall be entitled to have a
certificate representing all shares of which they are entitled. No certificate
shall be issued for any share until such share is fully paid.
2. FORM. Certificates representing shares in this Corporation shall be
signed by the President or Vice President and the Secretary or an Assistant
Secretary and may be sealed with the seal of this Corporation or a facsimile
thereof; or in any other manner as prescribed by law.
3. TRANSFER OF SHARES. Transfers of shares of the Corporation shall be
made upon the Corporation's books by the holder of the shares in person or by
the holder's lawfully constituted representative, upon surrender of the
certificate of stock for cancellation. The person in whose name shares stand on
the books of the Corporation shall be deemed by the Corporation to be the owner
thereof for all purposes and the Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person whether or not the Corporation shall have express or other notice
thereof, unless otherwise provided by the laws of the State of Florida. Every
certificate representing shares which are restricted as to sale, disposition or
other transfer shall state that such shares are restricted as to such transfer
or disposition and shall set forth or fairly summarize upon the certificate, or
state that the Corporation will furnish to any holder thereof, upon request and
without charge, a full statement of such restrictions.
4. FACSIMILE SIGNATURE. Where a certificate is signed (1) by a transfer
agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf
of the Corporation and a registrar, the signature of any such Chairman of the
Board, President, Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be facsimile. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been used on, any such
certificate or certificates and have ceased to be such officer or officers then
such certificate or certificates may nevertheless be adopted by the Corporation
and be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the Corporation.
5. LOST, STOLEN OR DESTROYED CERTIFICATES. If a Shareholder shall claim
to have lost or destroyed a certificate of shares issued by the Corporation, a
new certificate shall be issued upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or destroyed,
and, at the discretion of the Board of Directors, upon the deposit of a bond or
other indemnity in such amount and with such sureties, if any, as the Board may
reasonable require.
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ARTICLE H.
BOOKS AND RECORDS
-----------------
1. GENERAL. This Corporation shall keep correct and complete books and
records of account and shall keep minutes of the proceedings of its
Shareholders, Board of Directors and committees.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
2. INSPECTION. All Shareholders who are entitled to inspect the
Corporation's books and records pursuant to Florida law shall have such
inspection rights as prescribed by the most recent Florida law available when
the request is made.
ARTICLE I.
DISTRIBUTIONS
-------------
The Board of Directors of the Corporation may, from time to time,
declare, and the Corporation may make, distributions to the Shareholders,
subject to the restrictions of applicable law.
ARTICLE J.
CORPORATE SEAL
--------------
The seal of the Corporation shall be circular in form and bear the name
of the Corporation, the year of its organization and the words "CORPORATE SEAL,
FLORIDA." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be facsimile, engraved or printed.
ARTICLE K.
EXECUTION
---------
All corporate instruments and documents shall be signed or
countersigned, executed, verified or acknowledged by such officer or officers or
other person or persons as the Board may, from time to time, designate.
ARTICLE L.
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be the 12-month period
selected by the Board of Directors as the taxable year of the Corporation for
federal income tax purposes.
ARTICLE M.
NOTICE AND WAIVER OF NOTICE
---------------------------
Whenever any notice is required by these Bylaws to be given, personal
notice is not meant unless expressly so stated, and any notice so required shall
be deemed to be sufficient if given by depositing the same in the post office
box in a sealed post-paid wrapper, addressed to the person entitled thereto at
his last known post office address, and such notice shall be deemed to have been
given on the day of such mailing. Shareholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
Florida Law.
Whenever any notice is required to be given under the provisions of any
law, or under the provisions of the Articles of Incorporation of the
Corporation, or these Bylaws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
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ARTICLE N.
CONSTRUCTION
------------
Whenever a conflict arises between the language of these Bylaws and the
Articles of Incorporation, the Articles of Incorporation shall govern.
ARTICLE O.
BUSINESS
--------
1. CONDUCT OF BUSINESS WITHOUT MEETINGS. Any action of the
Shareholders, Directors and any committee may be taken without a meeting if
consent in writing setting forth the action so taken shall be signed by all
persons who would be entitled to vote on such action at a meeting and filed the
Secretary of the Corporation as part of the proceedings of the Shareholders,
Directors or committees, as the case may be.
2. MANAGEMENT BY SHAREHOLDERS. In the event the Shareholders are named
in the Articles of Incorporation and are empowered therein to manage the affairs
of the Corporation in lieu of Directors, the Shareholders of the Corporation
shall be deemed Directors for the purposes of these Bylaws, and wherever the
words "directors," "Board of Directors" or "Board" appear in these Bylaws, those
words shall be taken to mean Shareholders.
The Shareholders may, by majority vote (50% + 1), create a Board of
Directors to manage the business of the Corporation and exercise its corporate
powers.
ARTICLE P.
AMENDMENTS
----------
1. BY SHAREHOLDERS. The Bylaws shall be subject to alteration or
repeal, and new Bylaws may be made, by the affirmative vote of Shareholders
holding of record in the aggregate at least a majority of the outstanding shares
entitled to vote in the election of Directors at any annual or Special Meeting
of Shareholders, provided that the notice or waiver of notice of such meeting
shall have summarized or set forth in full therein the proposed amendment
2. BY DIRECTORS. The Board of Directors shall have the power to make,
adopt, alter, amend and repeal from time to time, the Bylaws of the Corporation.
ARTICLE Q
ELECTION OUT OF CONTROL - SHARE ACQUISION REGULATION
----------------------------------------------------
The Corporation hereby elects not to be governed by the provisions of
Florida Statutes ss. 607.0902.
CERTIFICATE
The undersigned, Secretary of Great Wall Food and Beverage Corporation, a
Florida corporation ("Corporation") does hereby certify and affirm that the
foregoing set of Bylaws are the Bylaws of the Corporation adopted on August 16,
1999.
/s/ Patti Cooke
-------------------------
Patti Cooke
8
Exhibit 12(a)
RONNIE SYSTEMS, INC.
A Florida Corporation
(To be Known As Great Wall Food and Beverage Corporation)
(the "Company")
INSTRUCTIONS FOR COMPLETION:
In connection with a prospective purchaser's (the "Purchaser") subscription
for the Shares offered by Ronnie Systems, Inc. (the "Company"), pursuant to the
Offering Memorandum dated March 12, 1998 (the "Memorandum"), each Purchaser must
complete in full, initial and/or sign where appropriate the Subscriber
Questionnaire (the "Questionnaire") and the Subscription Agreement of the
"Subscription Agreement").
The completed Questionnaire and Subscription Agreement, along with funds in
the form of a check or wire transfer (as described below) in the amount
necessary to pay in full the subscription amount (i.e. the number of Shares
subscribed for multiplied by $0.15, with a minimum purchase of 200,000 Shares
(the "Minimum Purchase"), should be returned as follows:
Ronnie Systems, Inc.
c/o Edward H. Gilbert, P.A.
5 100 Town Center Circle, Suite 330
Boca Raton, Florida
Telephone: (561) 361-9300
Facsimile: (561) 361-9369
Funds paid in the form of a check should be made payable as follows:
Ronnie Systems, Inc.
Funds paid in the form of wire transfer should be sent pursuant to the following
instructions:
Ronnie Systems, Inc.
c/o Edward H. Gilbert, P.A., Trust Account
Account No. 2153588409942
First Union National Bank of Florida
Jacksonville, Florida
ABA Routing No. 063 000 021
SUBSCRIPTIONS, ONCE RECEIVED BY THE COMPANY, ARE IRREVOCABLE BY THE PURCHASER,
AND, THEREFORE, MAY NOT BE WITHDRAWN. In the event the Company accepts the
subscription of the Purchaser, a copy of the executed Subscription Agreement and
the certificate representing the Shares will be forwarded to the Purchaser as
soon as is practical.
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NASAA UNIFORM LEGEND: IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY
ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES MAY BE SUBJECT TO RESTRICTIONS .ON TRANSFERABILITY AND RESALE
UNDER APPLICABLE STATE SECURITIES LAWS AND IF SO RESTRICTED THEN THESE
SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERM=ED UNDER THE
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT T14EY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR FLORIDA RESIDENTS:
THE SECURITIES BEING OFFERED HAVE NOT BEEN REGISTERED WITH THE FLORIDA DIVISION
OF SECURITIES AND INVESTOR PROTECTION. THE FIRM IS REGISTERED AS AN
ISSUER/DEALER TO SELL ITS OWN SECURITIES.
PURSUANT TO SECTION 517.061(11)(a)(5) OF THE FLORIDA SECURITIES AND INVESTOR
PROTECTION ACT, FLORIDA INVESTORS HAVE A THREE DAY RIGHT OF RECISION. IF A
FLORIDA RESIDENT HAS EXECUTED A PURCHASE AGREEMENT OR HAS TENDERED MONEY, SUCH
RESIDENT MAY ELECT, WITHIN THREE BUSINESS DAYS AFTER SIGNING THE PURCHASE
AGREEMENT OR TENDERING THE MONEY, TO WITHDRAW FROM THE PURCHASE AGREEMENT AND
RECEIVE A FULL REFUND AND RETURN (WITHOUT INTEREST) OF ANY MONEY PAID. A FLORIDA
RESIDENT'S WITHDRAWAL SHALL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO
ACCOMPLISH SUCH WITHDRAWAL, A FLORIDA RESIDENT NEED ONLY SEND A LETTER TELEGRAM
TO THE ISSUER AT THE ADDRESS SET FORTH HEREIN INDICATING SUCH FLORIDA RESIDENT'S
INTENTION TO WITHDRAW AND RESCIND THE TRANSACTION. THE LETTER OR TELEGRAM MUST
BE SENT AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS
DAY. IF A FLORIDA RESIDENT SENDS A LETTER, IT MAY BE PRUDENT TO SEND IT BY
CERTIFIED, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO TO
EVIDENCE THE TIME AND DATE OF THE MAILING. SHOULD A FLORIDA RESIDENT MAKE SUCH A
WITHDRAWAL AND RECISION ORALLY, WRITTEN CONFIRMATION SHOULD BE OBTAINED.
2
<PAGE>
SUBSCRIPTION AGREEMENT
RONNIE SYSTEMS, INC.
Subscription Agreement (the "Subscription Agreement") between Ronnie
Systems, Inc. (To Be Known As/Great Wall Beverage Corporation), a Florida
corporation (the "Company"), and the undersigned prospective purchaser (the
"Purchaser").
The Company is offering 4,000,000 shares of S.000 I par value common stock
(the "Shares") at a price of $0. 15 per Share (with a minimum purchase of
200,000 Shares (the "Minimum Purchase")) to purchasers who may be required to be
"Accredited Investors", as such term is defined hereinafter, in accordance with
the terms and conditions set forth in the Offering Memorandum dated March 12,
1998 (the "Offering Memorandum"), which Memorandum was furnished by the Company
to the Purchaser. The Purchaser desires to acquire the number of Shares set
forth on the signature page hereof pursuant to the Offering Memorandum and the
terms and conditions of this Subscription Agreement.
1. SUBSCRIPTION. In accordance with the terms and conditions of the
Offering Memorandum, the Purchaser, intending to be legally bound, hereby
applies for and agrees to purchase the Shares subscribed for at the price of
$0.15 per Share. Furthermore, the Purchaser agrees to pay the price therefor,
which price shall be determined by multiplying the number of Shares subscribed
for by $0.15 (the "Purchase Price"), in the form required hereby
contemporaneously with the execution and delivery of this Subscription
Agreement, All as specifically indicated on Page 8 hereof. The Purchaser
understands that acceptance or rejection, in whole or in part, by the Company of
the application and agreement of the Purchaser to purchase the Shares is within
the sole and absolute discretion of the Company. Likewise, the Purchaser
understands, acknowledges and agrees that acceptance by the Company of any
subscription of a Purchaser, in whole or in part, is predicated upon the
representations and warranties of the Purchaser as set forth hereinafter and
that SUBSCRIPTIONS, ONCE RECEIVED BY THE COMPANY, ARE IRREVOCABLE BY THE
PURCHASER, AND, THEREFORE, MAY NOT BE WITHDRAWN.
2. ACKNOWLEDGMENTS AND UNDERSTANDINGS OF THE PURCHASER. The Purchaser
acknowledges and understands as follows:
(a) The purchase of the Shares involves a high degree of risk,
which risks are more fully set forth in the Offering Memorandum furnished by the
Company to the Purchaser, in that:
(1) no public market presently exists for the Shares,
(2) an investment in the Shares offered by the Company is highly
speculative and only Purchasers that can afford the loss of the entire
investment made in the Shares should consider investing in the Shares;
(3) a Purchaser may not be able to liquidate an investment in the
Shares;
(4) a Purchaser could sustain the loss of the Purchaser's entire
investment in the Shares.
(b) The offering of the Shares by the Company (the "Offering") pursuant
to the Offering Memorandum will continue for a period commencing on the date set
forth in the Offering Memorandum and ending on August 30, 1998 (the "Offering
Period"), unless the Offering Period is extended to December 31, 1998 or sooner
terminated by the Company, in either case, in the exercise of the sole and
absolute discretion of the Company. In the event the Company accepts the
subscription of the Purchaser, a copy of the executed Subscription Agreement and
the certificate representing the Shares will be forwarded to the Purchaser as
soon as is practical.
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<PAGE>
(c) The Offering has not been reviewed by the Securities and Exchange
Commission or any state securities agency because of applicable exemptions from
the registration provisions of the Securities Act of 1933 (the "Act") and/or
applicable state securities laws (collectively, the 'Securities Laws").
(d) Neither the SEC nor any state securities agency has made any
finding or determination of the fairness or suitability for investment in or any
endorsement of the Company or the Shares.
(e) The legal counsel to the Company has not independently verified the
information concerning the Company included in the Memorandum or herein, all of
which has been provided by the Company, nor has such legal counsel passed upon
the adequacy or accuracy of the Memorandum.
(f) No independent third party, such as an investment banking firm or
other expert in evaluating businesses or securities, has made an evaluation of
the economic potential of the Company.
(g) The price of the Shares has been determined solely by the Company
and does not necessarily bear any relationship to the results of operations, net
worth or prospects of the Company or to any other recognized criteria of value,
and should not be considered as an indication of any price at which any of the
Shares of the Company may trade in the future.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
makes the following representations and warranties to the Company, jointly and
severally, which representations and warranties shall survive the acceptance, if
any, by the Company of a subscription by the Purchaser:
(a) If checked, the Purchaser is an accredited investor as such term is
defined in Rule 501 of Regulation D promulgated under the Act (an "Accredited
Investor"). Such status as an Accredited Investor is reflected in the responses
provided by the Purchaser in the investor questionnaire (the "Questionnaire")
included as a part of the Offering Memorandum.
(b) The Purchaser acknowledges receipt of the Offering Memorandum. The
Purchaser understands that the Purchaser is purchasing the Shares without being
furnished any offering literature or prospectus other than the Offering
Memorandum. Except as set forth in the Offering Memorandum or this Subscription
Agreement, no representations or warranties have been made to the Purchaser by
the Company or any agent, employee or affiliate of the Company, and in entering
into this Subscription Agreement, the Purchaser is not relying on any
information other than that which is contained in the Offering Memorandum and
the results of the independent investigation by the Purchaser.
(c) The Purchaser is able to bear the economic risk of an investment in
the Shares for an indefinite period of time.
(d) The Purchaser has prior investment experience, including investment
in non-listed securities and securities not registered under the Act, and the
Purchaser has such knowledge and expertise in financial and business matters so
that the Purchaser is capable of evaluating the merits and risks of an
investment in the Shares, or the Purchaser has employed the services of an
investment advisor, attorney or accountant to review the Offering Memorandum and
all other documents furnished or made available by the Company to Purchasers by
the Company in order to evaluate, on behalf of the Purchaser, the merits and
risks of an investment in the Shares.
(e) The Purchaser has adequate means of providing, for the Purchaser's
current needs and possible personal contingencies, and the Purchaser has no need
for liquidity of the investment in the Shares and can afford the loss of the
entire investment in the Shares.
4
<PAGE>
(f) The Purchasers personal net worth and anticipated income are as set
forth in the Questionnaire submitted by the Purchaser to the Company.
(g) The Purchaser recognizes the highly speculative nature of an
investment in the Shares.
(h) Unless checked, the Purchaser is not subscribing for the Shares as
a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media, or
broadcast over television or radio, or presented at any seminar or meeting or
any solicitation of a subscription by a person not previously known to the
Purchaser in connection with investments in securities generally.
(i) Unless checked, the Purchaser is purchasing the Shares for such
Purchaser's own account, for investment and not for distribution or resale to
others. Accordingly, the Purchaser agrees that the Purchaser will not sell or
otherwise transfer the Shares, unless such Shares are registered under the
Securities Laws or unless an exemption from such registration is available.
(j) The Purchaser understands that the Shares are being offered and
sold to the Purchaser in reliance upon specific exemptions from the registration
requirements of the Securities Laws and that the Company is relying upon the
truth and accuracy of the representation, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein and in the
Questionnaire in order to determine the applicability of such exemptions and the
suitability of the Purchaser to acquire the Shares.
(k) The Purchaser understands that there is presently no public market
for the Shares and there is no assurance that a public market will develop in
the future. The Purchaser further understands that Rule 144 (the "Rule")
promulgated under the Act requires, among other conditions, a minimum of a one
year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements of the Act. The Purchaser acknowledges that the Company makes no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934 (the "Exchange
Act") or dissemination by the Company to the public of any current financial or
other information concerning the Company, as is required by the Rule as one of
the conditions of its availability.
(l) The Company may, if the Purchaser so requests, perm it the transfer
of the Shares out of the name of the Purchaser only when a request therefor is
accompanied by an opinion of counsel reasonably satisfactory to the Company to
the effect that neither the sale nor the proposed transfer results in a
violation of the applicable Securities Laws and/or conformity with any Legend
(as defined hereinafter) placed upon any certificate representing the Shares.
(m) If required, the Purchaser consents to the placement of a legend
stating that such Shares have not been registered under the Securities Laws and
setting forth or referring to the restrictions on transferability and sale
thereof (the "Legend") upon any certificate or other document evidencing the
Shares.
(n) The address of the Purchaser furnished by the Purchaser at the end
of this Subscription Agreement is the principal residence of the Purchaser if
the Purchaser is an individual or the principal business address of the
Purchaser if the Purchaser is a corporation or other entity, and all offers to
the Purchaser have been made in the state specified in such address.
(o) The Purchaser has had a reasonable opportunity to ask questions of
and receive answers from the Company concerning the Company and the Offering,
and all such questions, if any, have been answered to the full satisfaction of
the Purchaser.
(p) The Purchaser is not engaged in part of a plan or scheme to evade
the registration provisions of the Securities Laws.
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<PAGE>
(q) The Purchaser is not an officer, director or otherwise an affiliate
(as defined in the rules promulgated under the Act) of the Company, nor is the
Purchaser purchasing the Shares for the benefit of any such person.
(r) The Purchaser understands that the Company will review this
Subscription Agreement and the Questionnaire and the Purchaser hereby grants to
the Company authority to contact the bank or place of employment of the
Purchaser or to otherwise review the financial standing of the Purchaser.
(s) The Purchaser understands that the subscription by the Purchaser is
not binding upon the Company until the Company accepts it, which acceptance is
in the sole and absolute discretion of the Company and will be evidenced by the
Company's execution of this Subscription Agreement where required. This
Subscription Agreement shall be null and void if the Company does not accept it
as aforesaid. The Purchaser understands that the Company, in its sole
discretion, may reduce the amount of Shares subscribed for by the Purchaser to
any amount deemed appropriate by the Company, whether or not pro rata reductions
are made to any other Purchaser's subscription.
(t) The Purchaser has full power and authority to execute and deliver
this Subscription Agreement and to perform the obligations of the Purchaser, and
this Subscription Agreement is a legally binding obligation of the Subscriber in
accordance with the terms hereof
(u) If the Purchaser is a corporation, partnership, trust or other
entity (collectively, an "Entity"), the party executing this Subscription
Agreement is authorized and otherwise qualified to execute this Subscription
Agreement and purchase the Shares, and such Entity has not been formed for the
specific purpose of purchasing the Shares unless all of the equity owners of
such Entity qualify as an Accredited Investor, if such qualification is
necessary.
(v) If the party executing this Subscription Agreement is executing
this Subscription Agreement on behalf of a Purchaser that is an Entity, then the
representations and warranties contained herein (and in any other written
statement or document delivered to the Company in connection herewith) shall be
deemed to have been made by such party in such party's representative capacity
on behalf of such Entity.
4. AGREEMENT TO INDEMNIFY COMPANY. The Purchaser hereby agrees to indemnify
and hold the Company and its directors, officers, controlling persons, legal
counsel and their respective heirs, representatives, successors and assigns
harmless from and to indemnify them against any and all liabilities, damages,
losses, costs and expenses that any of the foregoing parties may incur:
(a) by reason of the Purchaser's failure to fulfill any of the terms
and conditions of this Subscription Agreement; and
(b) by reason of the breach by the Purchaser of any of the agreements,
acknowledgments, understandings, representations or warranties contained in this
Subscription Agreement; and
(c) by reason of any misrepresentation by the Purchaser; and
(d) by reason of any sale or distribution by the Purchaser in violation
of the Securities Laws; and
(e) by reason of any and all claims made by or involving any person,
other than the Purchaser, claiming any interest, rig t, title, power or
authority with respect to the purchase by the Purchaser of the Shares.
The Purchaser further agrees and acknowledges that this indemnification
provision shall survive any sale or transfer or attempted sale or transfer of
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<PAGE>
all or any portion of the Shares, the dissolution or bankruptcy of the Company,
default by the Company under the Subscription Agreement, or failure of any of
the conditions stated in the Subscription Agreement.
5. REPRESENTATIONS BY THE COMPANY. The Company hereby represents and
warrants to the Purchaser that prior to the consummation of this Offering and as
of the date of acceptance by the Company of this Subscription Agreement:
(a) The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Florida and has the corporate power to
conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Subscription
Agreement by the Company will have been duly approved by the Board of Directors
of the Company and all other actions required to authorize and effect the offer
and sale of the Shares will have been duly taken and approved.
(c) The Shares will be duly authorized. The Shares, when issued and
paid for in accordance with the terms hereof, will be fully paid and
non-assessable with no personal liability attaching thereto.
(d) To the best knowledge of the Company, the Company is unaware of any
pending or threatened legal or governmental proceedings to which the Company is
a party that could materially adversely impact the business, property, financial
condition or operations of the Company.
(e) The Company is not in violation of or default under, nor will the
execution and delivery of this Subscription Agreement, the issuance of the
Shares, the incurring of obligations by the Company pursuant to this
Subscription Agreement and the consummation of the transaction herein
contemplated result in a violation of or constitute a default under the
certificate of incorporation or bylaws of the Company, or in the performance or
observance of any material obligation, agreement or condition contained in any
bond, debenture, note or other evidence of indebtedness or in any material
agreement or instrument to which the Company is a party or by which the Company
or any of the property of the Company may be bound or in violation of any
material order, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign.
(f) The financial information contained in the Offering Memorandum
furnished by the Company to the Purchaser presents fairly the financial
condition of the Company and the results of the operations of the Company as of
the date and for the periods indicated therein.
6. USE OF PURCHASE PRICE. Upon acceptance of the subscription by the
Company, the funds paid by the Purchaser in the amount of the Purchase Price
shall belong to the Company. If the subscription is not accepted by the Company
then this Subscription Agreement will be null and void and such funds will be
returned to the Purchaser without interest and without deduction.
7. MISCELLANEOUS
(a) SUBSCRIPTION AGREEMENT BINDING ON HEIRS AND ASSIGNS. This
Subscription Agreement shall be binding upon the Purchaser and the heirs,
successors, estate, legal representatives and assigns of the Purchaser.
(b) EXECUTION AUTHORIZED. If this Subscription Agreement is executed on
behalf of a Purchaser which is a corporation, partnership, trust or other
entity, the party executing this Subscription Agreement represents and warrants
that such party has been duly authorized and empowered to legally-represent such
Purchaser and to execute this Subscription Agreement and all other instruments
in connection with the purchase of the Shares and that the signature of such
party is binding upon such Purchaser.
7
<PAGE>
(c) DEFINITIONS OF TERMS. The terms used herein, if not herein defined,
shall have the meanings attributed to such terms in the Offering Memorandum.
(d) NOTICES. All notices, consents and other communications under this
Subscription Agreement shall be in writing and shall be deemed to have been duly
given:
(1) when delivered by hand; or
(2) one business day after the business day of transmission when
sent by telex or telecopier (with receipt confirmed), provided that a
copy is mailed by registered mail, return receipt requested; or
(3) one business day after the business day of deposit with the
carrier, when sent by Express Mail, Fedex or other recognized express
delivery service for overnight delivery (receipt requested), in each
case addressed as applicable to the Company at the address set forth
in the Offering Memorandum or to the Purchaser at the address set
forth herein, or to such other addresses, telex numbers or telecopier
numbers as a party may designate as to itself by notice addressed to
the other party.
(e) MODIFICATION. This Subscription Agreement shall not be changed,
modified or amended, except by a writing signed by the parties to be charged,
and this Subscription Agreement may not be discharged, except by performance in
accordance with its terms or by a writing signed by the party to be charged.
(f) ENTIRE AGREEMENT. This Subscription Agreement constitutes the
entire agreement by, between and among the parties as to the subject matter
hereof and merges and supersedes any prior discussions, understandings and
agreements of any and every nature by, between and among them.
(g) JURISDICTION AND VENUE. Notwithstanding the location at which this
Subscription Agreement may be executed by any of the parties hereto, the parties
expressly agree that all terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Florida. The parties
hereby agree that any dispute that may arise between them as a result of or in
connection with this Subscription Agreement shall be adjudicated before a court
located in Florida and such parties hereby submit to the exclusive jurisdiction
of the courts of the State of Florida and the federal courts in Florida with
respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now have or hereafter may have respecting
the venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or arising out of
this Subscription Agreement or any acts or omissions relating to the sale of the
Shares hereunder, and consent to service of process in any such action or legal
proceeding by means of registered mail or certified mail, return receipt
requested, in care of the address set forth herein or such other address as
either party may furnish in writing to the other, provided process is actually
received.
(h) COUNTERPARTS. This Subscription Agreement may be executed in
counterparts. Upon execution and delivery of this Subscription Agreement by the
Purchaser, this Subscription Agreement shall become a binding obligation of the
Purchaser with respect to the purchase of the Shares as indicated herein;
subject, however, to the right hereby reserved by the Company to enter into the
same agreements with other Purchasers, to add and/or delete other parties as
Purchasers and to modify the number of Shares to be purchased by the Purchaser.
(i) INVALIDITY. Any term or provision of this Subscription Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(j) WAIVER. A waiver by either party of a breach of any provision of
this Subscription Agreement shall not operate or be construed as a waiver of any
subsequent breach by the same party.
8
<PAGE>
(k) FURTHER DOCUMENTS. The parties agree to execute all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
8. PURCHASER DATA. The Purchaser represents and warrants to the Company
that the following information is complete, accurate and may be relied upon by
the Company. Further, the Purchaser will notify the Company of any material
change on any such information that occurs prior to termination of the Offering.
In accordance with the foregoing, the following in hereby provided:
(a) OWNERSHIP OF SHARES
-------------------
Purchaser elects to own the Shares in the following manner (please check the
appropriate box):
( ) Individually
( ) Joint Tenants, with rights of survivorship*
( ) Tenants in Common*
( ) Tenants by Entirety*
( ) Community Property*
( ) Trust (please include a copy of the Trust Agreement).
( ) Corporation (Please include certified corporate resolution authorizing
signature)
( ) Partnership (please include a copy of the Partnership Agreement or other
statement authorizing signature)
( ) Other Entity (specify)__________________________________________________
*IF THE PURCHASER IS PURCHASING SHARES WITH A SPOUSE AS CO-OWNER, BOTH THE
PURCHASER AND THE PURCHASER'S SPOUSE MUST SIGN THE SIGNATURE PAGE OF THIS
SUBSCRIPTION AGREEMENT. IF ANY PURCHASER IS NOT THE SPOUSE OF THE PURCHASER, ALL
PURCHASERS MUST SIGN THE SIGNATURE PAGE AND EACH PURCHASER MUST COMPLETE A
SEPARATE SUBSCRIPTION AGREEMENT.
(b) OWNERSHIP CERTIFICATION (PLEASE INITIAL)
----------------------------------------
Except as described below, the Purchaser's purchase of Shares will be solely for
the Purchaser's own account and not for the account of any other person or
entity.
----------
INITIAL
Exceptions:_____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(c) GENERAL INFORMATION
PLEASE PROVIDE LEGIBLE RESPONSES.
Name of Purchaser:______________________________________________________________
Date of Birth, Incorporation or Organization:___________________________________
State or County of Residence, Incorporation or Organization:____________________
Social Security, Federal Identification or Trust Identification Number:_________
9
<PAGE>
Spouse's Name (if applicable):________________________ Date of Birth:___________
If Purchaser is a corporation, partnership, trust or other entity ("Entity"),
number of equity owners of Equity:______________________________________________
Purchaser Address:______________________________________________________________
City:_________________________________ State:_____________ Zip:________________
Country:______________________________ Telephone Number: (_______) _____________
Occupation and Title:___________________________________________________________
(d) ADDITIONAL INFORMATION
(1) To your knowledge, will the Purchaser have any family or business
relationship with any other investor in this offering?
(Please check the applicable box) ( ) Yes ( ) No
If yes, please provide complete details:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Purchaser hereby subscribes for the Shares indicated below as follows:
Number of Shares Requested US$ _________________________________
Price per Share: $0.15
Total Purchase Price of Shares Requested US$ _________________________________
Amount Tendered US$ _________________________________
Form of tender of Purchase Price (Please Cash ( )
check the Appropriate box) Check ( )
Bank Check ( )
Money Order ( )
Other ____________________
In the event the Company accepts the subscription by the Purchaser and payment
in full for the Shares purchased is tendered to the Company, certificates
representing the Shares will be forwarded to the Purchaser by the Company in
accordance herewith. Subscriptions, once received by the Company, are
irrevocable may not be withdrawn by the Purchaser.
10
<PAGE>
CERTIFICATES FOR THE SHARES WILL BE ISSUED IN THE NAME OF THE PURCHASER.
IN WITNESS WHEREOF, the Purchaser hereby represents and warrants that
the Purchaser has read this entire Subscription Agreement and the Offering
Memorandum, and has executed this Subscription Agreement this ___ day of
_________, 1998, at (City) _____________, (State) ____________, (Country)
___________________
PURCHASER SIGNATURE
____________________________________________
________________________________________________________________________________
NOT FOR PURCHASER USE:
Accepted this ___ day of __________________ 199__.
RONNIE SYSTEMS, INC. (To Be Known as/Great Wall Food and Beverage Corporation)
By: _________________________________________________________________________
Title: _________________________________________________________________________
11
Exhibit 12(b)
SUBSCRIBER QUESTIONNAIRE
------------------------
(the "Questionnaire")
RONNIE SYSTEMS, INC.
(To Be Known As/Great Wall Food and Beverage Corporation)
a Florida corporation
(the "Company")
Gentlemen:
The information provided herein is being furnished in connection with
the Company's Offering Memorandum dated March 12, 1998 (the "Memorandum") and
that certain Subscription Agreement between the Company and the undersigned
prospective purchaser ("Prospective Purchaser") for the purpose of enabling the
Company to determine whether an offer and sale of the Shares, as such term is
defined in the Memorandum, may be made to the Prospective Purchaser in
compliance with certain exemptions from the registration requirements of the
Securities Act of 1933, as amended (the "Act")) and/or applicable state
securities laws (collectively, the "Securities Laws") and in accordance with the
suitability standards for "Accredited Investors" as defined and set forth in the
Securities Laws. This Questionnaire is not an offer of Shares or any other
securities to the Prospective Purchaser.
All Prospective Purchasers must complete the questions designated for
"All Subscribers" in Part I of the Questionnaire. In Addition, individuals must
complete the questions designed for "Individuals" in Part I and each and every
question in Part II. Organizations (e.g., corporations, partnerships or trusts)
must complete the questions designed for "Organizations" in Part I and each and
every question in Part III. Please answer each question and indicate, where
applicable, "none" or "not applicable" where no affirmative response is
appropriate. If necessary, attach additional pages to the Questionnaire in
answering any question. All answers should be printed or typed.
THIS QUESTIONNAIRE IS REQUIRED FOR COMPLIANCE WITH APPLICABLE LAW.
THE INFORMATION SET FORTH HEREIN WILL BE KEPT CONFIDENTIAL.
PART I
(To be filled out by all Prospective Purchasers)
1. Name of Prospective Purchaser (All Subscribers)
-----------------------------
Provide the full legal name of the Prospective Purchaser(s) in the
precise manner in which the Shares, if issued would be held. In the case of
organizations, specify the type of entity (e.g., corporation, partnership or
trust) and its state of organization.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. Revocable Trust. (Organizations)
---------------
If the Prospective Purchaser is a trust, please indicate whether the
grantor has the power to revoke the trust at any time and regain title to trust
assets.
Yes ____ No ____
1
<PAGE>
(If the answer to this question is yes, the remaining information in this
Questionnaire should be given as to the grantor(s).)
3. Residence Address and Telephone Number. (Individuals)
--------------------------------------
Please indicate your residence address and telephone number.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. Length of Residence. (Individuals)
-------------------
How long have you lived at your present address?
_______ years _______ month
If you have lived at your present address for less than one year,
please give the addresses of all other residences during the last one year
period.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. Business Address and Telephone Number. (All Subscribers)
-------------------------------------
Please indicate your business address and telephone number.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. Method of Investment Evaluation. (All Subscribers)
-------------------------------
Please select and initial one of the following alternatives:
_____ ALTERNATIVE ONE: The undersigned has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Shares and does not desire to utilize the services
of any other person in connection with evaluating such merits and risks. As
evidence of the requisite degree of knowledge and experience, the undersigned
hereby offers the information provided in this Questionnaire.
____ ALTERNATIVE TWO: The undersigned intends to utilize the services of a
purchaser representative acceptable to the Company ("Purchaser Representative")
in connection with evaluating the merits and risks of an investment in the
Shares. The undersigned hereby appoints the following named person(s) to be the
undersigned's Purchaser Representative(s) in connection with evaluating the
merits and risks of an investment in the Shares.
If applicable, list name(s), Address(es), and telephone number(s) of
Purchaser Representative(s).
2
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned hereby attaches a Subscriber Representative
Questionnaire concerning the above-named Purchaser representative(s).
The undersigned represents that the undersigned and the above-named
Purchaser Representative(s) have such knowledge and experience in financial and
business matters that together they are capable of evaluating the merits and
risks of an investment in the Shares.
PART II
(To be filled out by Individuals Only)
1. Social Security Number.
----------------------
Please indicate your social Security Number.
________________________________________________________________________________
2. Income and Net Worth.
(Note: To calculate "Income" for the purposes herein, please use
adjusted gross income as reported on the relevant federal tax return.)
(a) Is your net worth in excess of $1,000,000? (For purposes of this
question, you may include your spouse's net wroth and may include fair market
value of your home, home furnishings and automobiles.)
Yes ____ No ____
(b) Was your individual income during the past two years in excess of
$200,000 per year or your joint income with your spouse during the past two
years in excess of $300,000 per year, and do you anticipate that it will reach
the same level in the current year?
Yes ____ No ____
Note: If the answer to (a) or (b) above is yes, you may skip the rest
of Part II.
(c) Does this investment exceed ten percent (10%) of your net worth?
(For purposes of this question, you may include your spouse's net worth and may
include the fair market value of your home, home furnishings and automobiles.)
Yes ____ No ____
(d) Estimated income for 1998 (Individual ____ / Joint ____):
Less than $50,000 _____ $50,000 to $69,999 _____
$70,000 to $99,999 _____ $100,000 to $149,999 _____
$150,000 to $199,999 _____ $200,000 to $299,999 _____
$300,000 and above _____
3
<PAGE>
(e) Estimated income for 1997 (Individual ____ / Joint ____):
Less than $50,000 _____ $50,000 to $69,999 _____
$70,000 to $99,999 _____ $100,000 to $149,999 _____
$150,000 to $199,999 _____ $200,000 to $299,999 _____
$300,000 and above _____
(f) Estimated income for 1996 (Individual ____ / Joint ____):
Less than $50,000 _____ $50,000 to $69,999 _____
$70,000 to $99,999 _____ $100,000 to $149,999 _____
$150,000 to $199,999 _____ $200,000 to $299,999 _____
$300,000 and above _____
(g) Estimated net worth (exclusive of Home, home furnishings and
automobiles):
Less that $100,000 _____ $100,000 to $149,999 _____
$150,000 to $199,999 _____ $200,000 to $299,999 _____
$300,000 and above _____
3. Business.
--------
(a) Please indicate your present business affiliation and your present
title. Describe generally the nature of your duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(b) Please indicate any corporations of which you are a director or any
partnerships in which you are a general partner.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(c) Please briefly describe principal positions held during the last
five years and length of time at each position. What is sought is a sufficient
description to enable the Issuer to determine the extent of your financial and
business background.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4
<PAGE>
4. Education.
---------
Please describe any education following high school, including degrees
obtained and school attended.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. Prior Investment Experience.
---------------------------
(a) Please indicate how frequently you invest in marketable securities
(e.g., publicly traded sticks, bonds and debentures):
Often ___ Occasionally ___ Seldom ___ Never ___
(b) Please indicate how frequently you invest in unmarketable
securities (e.g., unregistered shares of stock, limited partnership interests or
securities issued by privately held companies):
Often ___ Occasionally ___ Seldom ___ Never ___
(c) Please briefly describe the nature of your investment
experience identified in your answers to (a) and (b) above,
and any other investment experience not covered above that
would indicate your ability to evaluate an investment in the
Shares. If additional space is necessary, please use the
opposite side of this page to attach additional pages.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(d) Do you make your own investment decisions with respect to the
investments listed above?
Yes ____ No ____
(e) What are the principal sources of your investment knowledge or
advice (Check all that apply.)
First-had experience _______ Financial Publications ________
Broker(s) _______ Investment Adviser(s) ________
Attorney(s) _______ Accountant(s) ________
5
<PAGE>
PART III
(To be filled out by Organizations Only)
1. Organization.
------------
(a) Date organization was formed: ____________________________________
(b) Was the organization formed for the specific purpose of entering
into the proposed transaction?
Yes ____ No ____
(c) How many equity holders does this organization have?
________________________________________________________________________________
(d) What is the Federal Employer Identification Number of the
organization?
________________________________________________________________________________
(e) Describe the type of business conducted by the organization.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. Total Assets.
------------
Are the total assets of the undersigned organization in excess of
$5,000,000?
Yes ____ No ____
3. Certain Organizations.
---------------------
The organization is one or more of the following (check each applicable
paragraph):
____ (a) A bank as defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
(Whether acting in its individual capacity or fiduciary capacity)
____ (b) A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934.
____ (c) An employee benefit plan within the meaning of Employee Retirement
Income Security Act of 1974 ("ERISA") for which the investment decision is being
made by a plan fiduciary, as defined in Section 3(21) of ERISA, that is either a
bank, savings and loan association, an insurance company or a registered
investment advisor.
____ (d) An employee benefit plan within the meaning of ERISA with total assets
in excess of $5,000,000.
____ (e) A self-directed employee benefit plan within the meaning of ERISA with
investment decisions made solely by persons who are :Accredited Investors" as
defined in Regulation D under the Act.
Note: The Accredited Investor(s) who make the investment decisions for
a self-directed plan also must complete a Questionnaire as if such Accredited
Investor was investing in the Company in an individual capacity.
6
<PAGE>
PART IV - SIGNATURE
(To be Completed by all Prospective Purchasers)
The undersigned understands that the Company will be relying on the
accuracy and completeness of the undersigned's responses to the foregoing
questions, and the undersigned represents, warrants and acknowledges that each
of the following statements are true:
1. Purchaser is willing and able to bear the economic risk of an investment in
the Shares on a amount equal to the amount set forth in the Agreement. In making
this statement, Purchaser has determined that Purchaser can afford to hold the
Shares for an indefinite period and that Purchaser can afford a complete loss of
Purchaser's investment in the Shares.
2. Except as indicated below, any purchase of the Shares will be solely for
Purchaser's own account and not for the account of any other person.
State "No exemption" or set forth exceptions and give complete details.
Attach additional pages if necessary.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3. The answers to the above questions are complete and correct and may be relied
upon by the Company in determining whether the transaction is exempt from
registration or qualification under the securities Laws or rules and regulations
promulgated by any regulatory agency in connection with the offer and sale of
the Shares.
4. The undersigned will notify the Company immediately of any material change in
any of such information occurring prior to the acceptance of the undersigned's
subscription.
5. The undersigned will provide such additional information about the
undersigned as may be requested by the Company.
7
<PAGE>
6. In order for the undersigned to purchase Shares, the Company may
require the undersigned to use a Purchaser Representative.
PROSPECTIVE PURCHASER (Individual)
---------------------------------------------
(Signature)
---------------------------------------------
(Printed Name)
---------------------------------------------
(Signature)*
---------------------------------------------
(Printed Name)*
Dated: ________________________________, 1998
*If joint ownership
PROSPECTIVE PURCHASER (Organization)
---------------------------------------------
(Name of Entity)
---------------------------------------------
(Type of Entity)
---------------------------------------------
(State of Organization)
---------------------------------------------
(Signature of Officer)
---------------------------------------------
(Printed Name and Title of Signing Officer)
Dated: ________________________________, 1998
<PAGE>
SUBSTITUTED PART II
(To be filled out by Individual Only)
1. Social Security Number
----------------------
- --------------------------------------------------------------------------------
2. Accredited Investor. I do not choose to specifically disclose any financial
information. I am aware of the nature of sworn statements and that there are
penalties associated with the giving of false information. Accordingly, I hereby
certify and affirm under other that:
(a) I am familiar with and understand the definition of an "Accredited
Investor" pursuant to Regulation D, Rule 501 under the Securities Act of 1933,
as amended. In particular, an Accredited Investor is:
(1) Any natural person who individual net worth, or joint net
worth with that person's spouse, at the time of his purchase exceeds
$1,000,000; or
(2) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching that same income level in the
current year.
(b) I am an Accredited Investor, and I hereby acknowledge and
understand that the Company will rely upon the foregoing certificate and
affirmation under oath in determining whether to accept my subscription for
Shares offered pursuant to the Memorandum.
9
Exhibit 12(c)
Great Wall Food and Beverage Corporation
651 Merton Street
Toronto, Ontario
Canada M4S 1B4
Gentlemen:
The undersigned ("Subscriber") hereby subscribes to purchase 1,000,000
shares of the $.0001 par value Common Stock ("Shares") of Great Wall Food and
Beverage Corporation, a Florida corporation ("Company") for cash at $.05 per
share for a total of $50,000 (U.S. Funds) payable upon the acceptance hereof by
the Company.
The Subscriber hereby acknowledges that the
(a) the sale or transfer of the Shares are severely restricted; and
(b) the Shares have not been registered under the securities laws of
the United States of America or the laws of any other jurisdiction. The Shares
cannot be sold or transferred by Subscriber or any other person or entity unless
they are subsequently registered under applicable laws or an exemption from
registration is then available for the proposed transaction. The Company is not
required to register the Shares or to make any exemption from registration
available, accordingly, Subscriber must bear the economic risk of his investment
for an indefinite period of time;
(c) the execution of this subscription constitutes the Subscriber's
representation and warranty that the Subscriber is requiring the Shares
hereunder for investment and not with a view to distribution and for the
Subscriber's own account and that no other person or entity will have any
interest in or the Shares;
(d) the Shares are being sold and issued by the Company as "restricted
securities" as that term is defined under the Securities Act of 1933, as
amended; and the certificates to be issued to represented the Shares will
contain a legend denoting the restrictions upon the Shares sale or transfer
under the applicable securities laws reading as follows:
"THESE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT
RAVE BEEN ACQUIRED FOR INVESTMENT, HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "ACT"), HAVE BEEN OFFERED AND
SOLD IN RELIANCE UPON THE EXEMPTION SET FORTH IN SECTION 4(2) OF THE
ACT AND HAVE BEEN SOLD AS "RESTRICTED SECURITIES" AS SUCH ARE DEFINED
UNDER THE ACT. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
1
<PAGE>
DISPOSED OF, EXCEPT UPON DELIVERY TO THE CORPORATION ON THE OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT ANY SUCH
TRANSFER WOULD NOT BE IN VIOLATION OF THE ACT, APPLICABLE STATE
SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER; and
(e) the Subscriber is owned by an officer and director of the Company.
and is thoroughly familiar with the Company.
WITNESS THE DUE EXECUTION AND DELIVERY HEREOF, as of August 19th, 1999.
Hatchment Holding, Inc.
By: /s/ Bradley R. Wilson
------------------------------------
Bradley R. Wilson
President
Accepted on August 19th, 1999 Great Wall Food and Beverage
Corporation
By: /s/ Patti Cooke
------------------------------------
Patti Cooke
President
2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GREAT WALL
FOOD AND BEVERAGE CORPORATIONS' FORM 10-SB AND IS QUALIFIED IN ITS ENTIRETY TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 117,838
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 117,838
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 217,838
<CURRENT-LIABILITIES> 2,121
<BONDS> 0
0
0
<COMMON> 268
<OTHER-SE> 215,449
<TOTAL-LIABILITY-AND-EQUITY> 217,838
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 182,983
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (182,983)
<EPS-BASIC> (.16)
<EPS-DILUTED> (.16)
</TABLE>
