DYNADAPT SYSTEM INC, 10SB12G, 1999-09-29

DYNADAPT SYSTEM INC
10SB12G, 1999-09-29

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U. S. Securities and Exchange Commission
Washington, D.C. 20549

Form 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS

Under Section 12(b) or (g) of the Securities Exchange Act of 1934

DYNADAPT SYSTEM, INC.
------------------------------------
(Name of Small Business Issuer in its charter)

CIK: 0001066551

Colorado 84-1491159
- -------- --------------------
State or other jurisdiction of IRS Employer ID Number
Incorporation or organization

10200 W. 44th Avenue, Suite #400, Wheat Ridge, CO 80033
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

(303) 422-7674
-----------------------
(Issuer's Telephone Number)

Securities to be registered under Section 12(b) of the Act: None

Securities to be registered under Section 12(g) of the Act:

Common Stock, $0.0001 par value
(Title of class)

<PAGE>

TABLE OF CONTENTS
PART I

Page

Item 1. Business.......................................................

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................

Item 3. Properties.....................................................

Item 4. Security Ownership of Certain Beneficial Owners and Management.

Item 5. Directors and Executive Officers of the Registrant.............

Item 6. Executive Compensation.........................................

Item 7. Certain Relationships and Related Transactions.................

Item 8. Description of Securities......................................

PART II

Item 1. Market for Registrant's Common Stock and Security Holder
Matters...............................................

Item 2. Legal Proceedings..............................................

Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure..................................

Item 4. Recent Sales of Unregistered Securities........................

Item 5. Indemnification of Directors and Officers......................

PART F/S

Financial Statements and Supplementary Data...............................F-1

Signature Page ...........................................................

Exhibits, Financial Statement Schedule and Reports on Form 8-K............

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

This report on Form 10-SB contains forward-looking statements within
the definition of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All forward-looking statements are
inherently uncertain as they are based on current expectations and assumptions
concerning future events or future performance of the Company. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
are only predictions and speak only as of the date hereof. Forward-looking
statements usually contain the words "estimate," "anticipate," "believe,"
"expect" or similar expressions, and are subject to numerous known and unknown
risks and uncertainties. In evaluating such statements, readers should carefully
review risks and uncertainties identified in this Report, including the matters
set forth under the caption "Risk Factors" below. These risks and uncertainties
could cause the Company's actual results to differ materially from those
indicated in the forward-looking statements. The Company undertakes no
obligation to update or publicly announce revisions to any forward-looking
statements to reflect future events or developments.

General

Dynadapt System, Inc. ("Dynadapt" or the "Company") was incorporated under
the laws of the State of Colorado on April 30, 1998 to raise capital for an
Internet website related project. Minimal capital was raised and it engaged in
no business and remained dormant until Spring 1999. During Spring 1999 the
Company raised $25,000 from an exempt Offering under Regulation D, Rule 504 of
the Securities and Exchange Commission (the "Offering").

The company business plan originally was to develop a website design
which would respond to an Internet user's computer speed and link the user to a
tier of the website which best matched the user's terminal capabilities. The
concept would theoretically have allowed more sophisticated website tiers to be
accessed by higher capacity computer terminals. After expending funds for
consulting fees to analyze the concept with Internet service providers and
computer science technicians, the company concluded that while elements of the
concept might be achievable on a limited basis, the main concept could not be
achieved at this point due to the large number of variables in the Internet
system. The company then decided to modify its business plan to look for
acquisitions in the information technology area.

At the present time the company has not identified any business
opportunity that it plans to pursue, nor has the company reached any agreement
or definitive understanding with any person concerning an acquisition. The
company is filing Form 10-SB on a voluntary basis in order to become a 12(g)
registered company under the Securities Exchange Act of 1934. As a "reporting
company," the company may be more attractive to a private acquisition target
because it may be listed to trade its shares on the OTCBB.

The Company will consider acquisitions of operating information
technology companies for stock and debt. Once this Registration Statement is
effective, the Company will become a 12(g) registered company under the
Securities Exchange Act of 1934. The Company can continue to offer to private
acquisition targets the opportunity to become a public company and establish a
public trading market for its securities.

Acquisitions may be made by purchase, merger, exchange of stock, or
otherwise, and may encompass assets or a business entity, such as a corporation,
joint venture, or partnership. In connection with a merger or acquisition, it is
possible that the Company would issue an amount of stock constituting control of
the Company to the acquisition candidate. Depending upon the nature of the
transaction, the current officers and directors of the Company may resign
management positions with the Company in connection with the Company's
acquisition of a business opportunity. See "Form of Acquisition," below, and
"Risk Factors - The Company - Lack of Continuity in Management." In the event of
such a resignation, the Company's current management would not have any control
over the conduct of the Company's business following the Company's combination
with a business opportunity.

The Company's investment strategy focuses on companies in the
information technology industry.

Business opportunities come to the Company's attention from various sources,
including its officers and directors, stockholders, professional advisors such
as attorneys and accountants, securities broker-dealers, venture capitalists,
and members of the financial community. The Company currently has no plans,
understandings, agreements, or commitments with any individual for such person
to act as a finder of opportunities for the Company.

The Company's search is directed toward small and medium-sized companies
(See "Investigation and Selection of Business Opportunities") who are (i)
recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (ii) experiencing
financial or operating difficulties; (iii) in need of funds to develop a new
product or service or to expand into new markets; (iv) relying upon an untested
product or marketing concept; or (v) a combination of the characteristics
mentioned in (i) through (iv). Given the above factors, investors can expect
that acquisition candidates may have a history of losses or low profitability.

Investigation and Selection of Investment Opportunities

The decision to investment in a specific opportunity includes the assessment
of the other company's management and personnel, the anticipated acceptability
of new products or marketing concepts, the impact of technological changes, and
the benefits derived from becoming a publicly held entity. Changes in products
and services; marketing approaches and distribution channels; management
resources; and potential cost savings and economies of scale in operations will
probably caused the historical operations of the target opportunity to not be
indicative of the potential for the future. The Company will work with and
motivate the owners of the target opportunity to identify the need for and
implement required changes. Participating in either newly organized firms or
with a firm, which is entering a new phase of growth, creates additional risk
for the Company.

The Company's management has the authority and discretion to complete
acquisitions without submitting any proposal to the stockholders for their
consideration. Management's decisions may ultimately adversely impact the
Company's shareholders. Unless required, holders of the Company's securities
should not anticipate that the Company will furnish them, prior to any merger or
acquisition, with financial statements, or any other documentation, concerning a
target company or its business.

The analysis of business opportunities will be undertaken by or under the
supervision of the Company's President. See "Management." The Company's
management may also retain outside consultants to assist in the investigation
and selection of business opportunities, and might pay a finder's fee in the
form of stock. The following factors will be considered, among other things, in
screening investment opportunities:

1. Potential for revenue and earnings growth, indicated by new technology,
anticipated market expansion, or new products;

2. Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;

3. Potential cost savings and economies of scale in operations;

4. Capitalization on distribution strength to enhance local sales and services
capabilities;

5. Expand national market presence;

6. How any particular business opportunity will be viewed by the investment
community and by the Company's stockholders;

7. Whether, following the business combination, the financial condition of the
Company would be sufficient to enable the securities of the Company, then or in
the foreseeable future, to qualify for listing on an exchange or on a national
automated securities quotation system, such as NASDAQ, so as to permit the
trading of such securities to be exempt from the requirements of Rule 15c2-6
recently adopted by the Securities and Exchange Commission. See "Risk Factors -
The Company - Regulation of Penny Stocks."

8. Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;

9. The extent to which the business opportunity can be advanced;

10. Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;

11. The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and

12. The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.

In regard to the possibility that the shares of the Company would qualify
for listing on NASDAQ, the current standards include the requirements that the
issuer of the securities that are sought to be listed have net tangible assets
of at least $4,000,000 . Many, and perhaps most, of the business opportunities
that might be potential candidates for a combination with the Company would not
satisfy the NASDAQ listing criteria.

No one of the factors described above will be controlling in the selection
of a business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's limited
capital available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.

Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents, trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions between such
company and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.

As part of the Company's investigation, the Company's executive officers
and directors would meet personally with management and key personnel, would
visit and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of management and
key personnel, and take other reasonable investigative measures, to the extent
of the Company's limited financial resources and management expertise.

It is possible that the range of business opportunities that might be
available for consideration by the Company could be limited by the impact of
Securities and Exchange Commission regulations regarding purchase and sale of
"penny stocks." The regulations would affect, and possibly impair, any market
that might develop in the Company's securities until such time as they qualify
for listing on NASDAQ or on another exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - Regulation
of Penny Stocks."

Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.

Acquisition candidates, which have a need for an immediate cash infusion, are
not likely to find a potential business combination with the Company to be an
attractive alternative.

Form of Acquisition

It is impossible to predict the manner in which the Company may participate
in a business opportunity. Specific business opportunities will be reviewed as
well as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.

It is likely that the Company will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. (See "Description of Business - General").

It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, the Company
may agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in the Company's securities may have a
depressive effect upon such market.

The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

As a general matter, the Company anticipates that it, and/or its officers
and principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.

It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision were made not to participate in a specific business opportunity, the
costs theretofore incurred in the related investigation would not be
recoverable. Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are provided, the
inability of the Company to pay until an indeterminate future time may make it
impossible to procure goods and services.

In all probability, upon completion of an acquisition or merger, there will
be a change in control through issuance of substantially more shares of common
stock.

Investment Company Act and Other Regulation

The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as an
"Investment Company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore to avoid application of the costly and restrictive
registration and other provisions of the Investment Act, and the regulations
promulgated thereunder.

Section 3(a) of the Investment Act contains the definition of an
"investment company," and it excludes any entity that does not engage primarily
in the business of investing, reinvesting or trading in securities, or that does
not engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a manner, which
will result in the availability of this exception from the definition of
"Investment Company." Consequently, the Company's participation in a business or
opportunity through the purchase and sale of investment securities will be
limited.

The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment company securities.
Since the Company will not register as an investment company, stockholders will
not be afforded these protections. Any securities, which the Company might
acquire in exchange for its Common Stock, are expected to be "restricted
securities" within the meaning of the Securities Act of 1933, as amended (the
"Act"). If the Company elects to resell such securities, such sale cannot
proceed unless the Securities and Exchange Commission has declared a
registration statement effective or an exemption from registration is available.
Section 4(1) of the Act, which exempts sales of securities not involving a
distribution, would in all likelihood be available to permit a private sale.
Although the plan of operation does not contemplate resale of securities
acquired, if such a sale were to be necessary, the Company would be required to
comply with the provisions of the Act to effect such resale.

An acquisition made by the Company may be in an industry, which is regulated
or licensed by federal, state or local authorities. Compliance with such
regulations can be expected to be a time-consuming and expensive process.

Competition

The Company expects to encounter substantial competition in its efforts to
locate attractive opportunities, primarily from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies, and
wealthy individuals. Many of these entities will have significantly greater
experience, resources and managerial capabilities than the Company and will
therefore be in a better position than the Company to obtain access to
attractive business opportunities. The Company also will experience competition
from other public "blank check" companies, many of, which may have more funds
available than does the Company.

No Rights of Dissenting Shareholders

The Company does not intend to provide Company shareholders with complete
disclosure documentation including audited financial statements, concerning a
possible target company prior to acquisition, because Colorado Business
Corporation Act vests authority in the Board of Directors to decide and approve
matters involving acquisitions; however, share exchanges by Board authority are
limited to where not more than 20% of the Company's equity is issued in a share
exchange, otherwise, a vote of shareholders is required. Any transaction would
be structured as an acquisition, not a merger, with the Registrant being the
parent company and the acquiree being a wholly owned subsidiary. Therefore, a
shareholder will have no right of dissent under Colorado law.

Administrative Offices

The Company current business address is 10200 W. 44th Avenue, Suite 400,
Wheat Ridge, Colorado 90033. The Company's telephone number is (303) 422-7674.
Employees

The Company is a development stage company and currently has no employees.
Management of the Company expects to use consultants, attorneys and accountants
as necessary, and does not anticipate a need to engage any full-time employees
so long as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities. See "Executive Compensation" and under "Certain Relationships and
Related Transactions."

Risk Factors

1. Conflicts of Interest. Certain conflicts of interest may exist between the
Company and its officers and directors. They have other business interests to
which they devote their attention, and may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with fiduciary duties to the Company.
See "Management," and "Conflicts of Interest."

2. Need For Additional Financing. Most of the Company proceeds received from the
Offering used for consulting about its business plan to exploit other business
opportunities the Company must seek additional financing, which may or may not
be available. The Company has not investigated the availability, source, or
terms that might govern the acquisition of additional capital and will not do so
until it determines a need for additional financing. If not available, the
Company's operations will be limited to those that can be financed with its
available capital.

3. Regulation of Penny Stocks. The Company's securities are subject to a
Securities and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons other than
established customers or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms, institutions with assets
in excess of $5,000,000, or individuals having a net worth in excess of
$1,000,000 or having an annual income that exceeds $200,000 (or that, when
combined with a spouse's income, exceeds $300,000). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that might
develop therefore.

In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities Exchange Act
of 1934, as amended. Because the securities of the Company may constitute "penny
stocks" within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules may further affect the ability of owners of
Shares to sell the securities of the Company in any market that might develop
for them.

Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.

4. Lack of Operating History. The Company was organized in April 1998 and
remained dormant until Spring 1999. The Company is not profitable, And the only
revenue earned was the accrued interest in the Notes Receivable to UAI The
Company has no successful operating history . The Company faces all of the risks
of a new business and the special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. The Company must be
regarded as a new or "start-up" venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject.

5. No Assurance of Success or Profitability. There is no-assurance that the
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance that it
will generate revenues or profits, or that the market price of the Company's
Common Stock will be increased thereby.

6. Possible Business - Highly Risky. An investor can expect a potential business
opportunity to be quite risky. The Company's acquisition of or participation in
a business opportunity will likely be highly illiquid and could result in a
total loss to the Company and its stockholders if the business or opportunity
proves to be unsuccessful.

7. Type of Business Acquired. The type of business to be acquired may be one
that desires to avoid effecting its own public offering and the accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect investors. Moreover, any business opportunity acquired may be
currently unprofitable or present other negative factors.

8. Impracticability of Exhaustive Investigation. The Company's limited resources
and the lack of full-time management will likely make it impracticable to
conduct a complete and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or other resources thereto.
Management decisions, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys and the like which, if
the Company had more funds available to it, would be desirable. The Company will
be particularly dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business opportunity
seeking the Company's participation. A portion of the Company's available funds
may be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.

9. Lack of Diversification. Because of the limited financial-resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

10. Reliance upon Financial Statements. The Company generally will require
audited financial statements from companies that it proposes to acquire. Given
cases where audited financials are available, the Company will have to rely upon
interim period unaudited information received from target companies' management
that has not been verified by outside auditors. The lack of the type of
independent verification which audited financial statements would provide,
increases the risk that the Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and accurate information about
the financial condition and recent interim operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company or the holders of the
Company's securities.

Moreover, the Company will be subject to the reporting-provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Should the Company, during the time it remains subject to the
reporting provisions of the Exchange Act, complete an acquisition of an entity
for which audited financial statements prove to be unobtainable, the Company
would be exposed to enforcement actions by the Securities and Exchange
Commission (the "Commission") and to corresponding administrative sanctions,
including permanent injunctions against the Company and its management. The
legal and other costs of defending a Commission enforcement action would have
material, adverse consequences for the Company and its business. The imposition
of administrative sanctions would subject the Company to further adverse
consequences.

In addition, the lack of audited financial statements would-prevent the
securities of the Company from becoming eligible for listing on NASDAQ, or on
any existing stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to serve as
market makers in the securities of the Company. Without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Securities Act of 1933, and the
ability of the Company to raise capital would be significantly limited until
such financial statements were to become available.

11. Other Regulation. An acquisition made by the Company may be of a business
that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit other investment
opportunities of the Company.

12. Dependence upon Management; Limited Participation of Management. The Company
currently has only three individuals who are serving as its officers and
directors. The Company will be heavily dependent upon their skills, talents, and
abilities to implement its business plan, and may, from time to time, find that
the inability of the officers and directors to devote their full time attention
to the business of the Company results in a delay in progress toward
implementing its business plan. See "Management." Because investors will not be
able to evaluate the merits of possible business acquisitions by the Company,
they should critically assess the information concerning the Company's officers
and directors.

13. Lack of Continuity in Management. The Company does not have an employment
agreement with its officers and directors, and as a result, there is no
assurance they will continue to manage the Company in the future. In connection
with acquisition of a business opportunity, it is likely the current officers
and directors of the Company may resign subject to compliance with Section 14f
of the Securities Exchange Act of 1934. A decision to resign will be based upon
the identity of the business opportunity and the nature of the transaction, and
is likely to occur without the vote or consent of the stockholders of the
Company.

14. Indemnification of Officers and Directors. Colorado Revised Statutes provide
for the indemnification of its directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures by the Company, which it will be unable to recoup.

15. Director's Liability Limited. Colorado Revised Statutes exclude personal
liability of its directors to the Company and its stockholders for monetary
damages for breach of fiduciary duty except in certain specified circumstances.
Accordingly, the Company will have a much more limited right of action against
its directors than otherwise would be the case. This provision does not affect
the liability of any director under federal or applicable state securities laws.

16. Dependence upon Outside Advisors. To supplement the business experience of
its officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
Company's President without any input from stockholders will make the selection
of any such advisors. Furthermore, it is anticipated that such persons may be
engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the President of the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.

17. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.

18. Competition. The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.

19. No Foreseeable Dividends. The Company has not paid dividends on its Common
Stock and does not anticipate paying such dividends in the foreseeable future.

20. Loss of Control by Present Management and Stockholders. The Company may
consider an acquisition in which the Company would issue as consideration for
the business opportunity to be acquired an amount of the Company's authorized
but unissued Common Stock that would, upon issuance, represent the great
majority of the voting power and equity of the Company. The result of such an
acquisition would be that the acquired company's stockholders and management
would control the Company, and persons unknown could replace the Company's
management at this time. Such a merger would result in a greatly reduced
percentage of ownership of the Company by its current shareholders.

21. Volatility of Stock Price. Recent history relating to the market price of
the Company's stock, indicates the market price is highly volatile. Factors such
as those discussed in this "Risk Factors" section may have a significant impact
upon the market price of the securities. Owing to the low price of the
securities, many brokerage firms may not be willing to effect transactions in
the securities. Further, many lending institutions will not permit the use of
such securities as collateral for any loans.

22. Blue Sky Considerations. Because the securities registered hereunder have
not been registered for resale under the blue sky laws of all states, the
holders of such shares and persons who desire to purchase them in any trading
market, should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and of
purchasers to purchase the securities in any particular state. Some
jurisdictions may not under any circumstances allow the trading or resale of
blind-pool or "blank-check" securities. Accordingly, investors should consider
the secondary market for the Company's securities to be a limited one.

23. Blue Sky Restrictions. Many states have enacted statutes or rules, which
restrict or prohibit the sale or resale of securities of "blank check" companies
to residents so long as they remain shell companies. To the extent any current
shareholders or subsequent purchaser from a shareholder may reside in a state,
which restricts or prohibits resale of shares in a "blank check" company,
warning is hereby given that the shares may be "restricted" from resale as long
as the company is a shell company.

In the event of a violation of state laws regarding resale, the Company
could be liable for civil and criminal penalties, which would be a substantial
impairment to the Company.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS OR PLAN OF
OPERATIONS.

Liquidity and Capital Resources

The Company remains in the development stage. Since inception to April 30,
1998, the Company has financed operations financing through an Offering that
raised $25,000.

The company is limited to a total of $8,291 in cash on hand as of July
31, 1999. Such cash is insufficient for any significant business operations, and
any business operations will need to be funded through loans or private
placement of stock, and the Company has no commitment or source for either debt
or equity funding.

The Company has no capital resources other than its common stock for
which there is no market or market value.

The Company cannot predict to what extent its liquidity and capital
resources will be diminished prior to the consummation of a business combination
or whether its capital will be further depleted by the operating losses (if any)
of the business entity which the Company may eventually acquire.

Results of Operations for Year Ended April 30, 1999

During the period from April 30, 1998 (inception) through April 30, 1999,
the Company has engaged in no significant operations other than organizational
and capital raising operating activities.

The Company had no revenues in 1998 or 1999. The Company incurred
$8,095 in expenses in year ended April 30, 1999 as compared to $0 in expenses in
any prior year. In the year ended April 30, 1999, $5,000 of such expenses were
cost incurred for consulting services related to the business plan and $3,000
for management fees and $95 for miscellaneous. The Company had interest income
of $79 for the year

The net operating loss in year ended April 30, 1999 was ($8,016) as
compared to $0 in 1998. The net loss per share was less than ($.01) per share.

Comparison of Operating Results for the three month period ended July 31, 1999
compared to same period in 1998

In the three month period ended July 31, 1999, the Company had no operating
revenues. No revenues were recorded in the period ended 1998. In the period
ended 1999 the Company incurred $7,247 in expenses compared to $0 in 1998. The
Company had a net operating loss of ($7,247) in the quarter ended July 31, 1999,
compared to no profit/loss in the same period in 1998.

For the current fiscal year, the Company anticipates incurring a loss
as a result of legal and accounting expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses associated
with locating and evaluating acquisition candidates. The Company anticipates
that until a business combination is completed with an acquisition candidate, it
will not generate revenues other than interest income, and may continue to
operate at a loss after completing a business combination, depending upon the
performance of the acquired business.

Need for Additional Financing

The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. In the event the
Company is able to complete a business combination during this period, lack of
its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of completing a business combination. There is no
assurance, however, that the available funds will ultimately prove to be
adequate to allow it to complete a business combination. And once a business
combination is completed, the Company's needs for additional financing is likely
to increase substantially.

No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses.

Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.

Year 2000 Issues

Year 2000 problems result primarily from the inability of some computer
software to property store, recall, or use data after December 31, 1999. These
problems may affect many computers and other devices that contain embedded
computer chips. The Company's operations, however, do not rely on information
technology (IT) systems. Accordingly, the Company does not believe it will be
material affected by Year 2000 problems.

The Company relies on non-IT systems that may suffer from Year 2000
problems, including telephone systems and facsimile and other office machines.
Moreover, the Company relies on third-parties that may suffer from Year 2000
problems that could affect the Company's operations, including banks, oil field
operators, and utilities. In light of the Company's substantially reduced
operations, the Company does not believe that such non-IT systems or third-party
Year 2000 problems will affect the Company in a manner that is different or more
substantial than such problems affect other similarly situated companies or
industry generally. Consequently, the Company does not currently intend to
conduct a readiness assessment of Year 2000 problems or to develop a detailed
contingency plan with respect to Year 2000 problems that may affect the Company.

ITEM 3. DESCRIPTION OF PROPERTY

The Company has no property. The Company currently maintains a mailing
address at 10200 W. 44th Avenue, Suite 400, Wheat Ridge, Colorado 80033. The
Company pays no rent for offices.

<PAGE>

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the date of this Registration
Statement, the number of shares of Common Stock owned of record and beneficially
by executive officers, directors and persons who hold 5.0% or more of the
outstanding Common Stock of the Company. Also included are the shares held by
all executive officers and directors as a group.

NUMBER OF
SHAREHOLDERS BENEFICIAL OWNERS SHARES PERCENTAGE

Wesley F. Whiting,
President 25,000 5.1%

Reginald T. Green,
Secretary 25,000 5.1%

50,000 shares of common stock are owned by Officers and Directors as a group
(10.2%).

TOTAL OUTSTANDING SHARES COMMON STOCK: 485,500 common shares

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The directors and executive officers currently serving the Company are as
follows:

Name Position Term

Wesley F. Whiting President and Director Annual

Reginald T. Green Secretary and Director Annual

The directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.

The directors and officers of the Company will devote such time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time, which they will devote to the Company's affairs, is unknown and is likely
to vary substantially from month to month.

Biographical Information

Wesley Whiting, age 65, has been President and director of the Company
since inception. Mr. Whiting has been President, director, and Secretary of
Berge Exploration, Inc. (1978-88) and President, Vice President, and director of
NELX, Inc. (1994-1997), and was Vice President and director of Intermountain
Methane Corporation (1988-91), and President of Westwind Production, Inc.
(1997-1998). He has been a director and Secretary of Utilitect, Inc. since early
1999.

Redgie Green, age 45. Mr. Green has been Secretary and Director of the
Company since inception. Mr. Green has been co-owner and operator of Green's B&R
Enterprises, a wholesale donut baker since 1983. He has been an active investor
in small capital and high tech adventures since 1987. Mr. Green has been a
director of Colorado Gold & Silver, Inc. since Spring 1999.

Management will devote necessary time to the operations of the Company,
and any time spent will be devoted to screening and assessing and, if warranted,
negotiating to acquire business opportunities.

None of the Company's directors receives any compensation for their
respective services rendered to the Company, nor have they received such
compensation in the past. They all have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations after consummation of a merger or
acquisition. No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.

It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors were
offered compensation in any form from any prospective merger or acquisition
candidate, the proposed transaction would not be approved by the Company's Board
of Directors as a result of the inability of the Board to affirmatively approve
such a transaction.

It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted Common Stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. The amount of such finder's fee cannot be determined as of the
date of filing this report, but is expected to be comparable to consideration
normally paid in like transactions.

Indemnification of Officers and Directors

As permitted by Colorado Revised Statutes, the Company may indemnify its
directors and officers against expenses and liabilities they incur to defend,
settle, or satisfy any civil or criminal action brought against them on account
of their being or having been Company directors or officers unless, in any such
action, they are adjudged to have acted with gross negligence or willful
misconduct. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.

Exclusion of Liability

The Colorado Corporation Code excludes personal liability for its directors
for monetary damages based upon any violation of their fiduciary duties as
directors, except as to liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, acts in violation of the Colorado Corporation Act, or any
transaction from which a director receives an improper personal benefit. This
exclusion of liability does not limit any right, which a director may have to be
indemnified, and does not affect any director's liability under federal or
applicable state securities laws.

Conflicts of Interest

The officers and directors of the Company will not devote more than a
portion of their time to the affairs of the Company. There will be occasions
when the time requirements of the Company's business conflict with the demands
of their other business and investment activities. Such conflicts may require
that the Company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.

Conflicts of Interest - General. Officers and directors of the Company may
participate in business ventures, which could be deemed to compete directly with
the Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or directors
are involved in the management of any firm with which the Company transacts
business. The Company's Board of Directors has adopted a policy that the Company
will not seek a merger with, or acquisition of, any entity in which management
serve as officers or directors, or in which they or their family members own or
hold a controlling ownership interest. Although the Board of Directors could
elect to change this policy, the Board of Directors has no present intention to
do so.

<PAGE>

ITEM 6. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE OF EXECUTIVES & DIRECTORS

Annual Compensation Awards
Name and Principal Year Salary ($) Bonus ($) Other Annual Restricted Stock Securities
Position Compensation ($) Award(s) Underlying
($) Options/
SARs (#)
<S> <C> <C> <C> <C> <C> <C>
Wesley F. Whiting, 1998 0 0 0 0 0
President(1)
1999 0 0 0 0 0
Reginald T. Green, 1998 0 0 0 0 0
Secretary
1999 0 0 0 0 0

</TABLE>

Option/SAR Grants Table (None)

Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR
value (None)

Long Term Incentive Plans - Awards in Last Fiscal Year (None)

See "Certain Relationships and Related Transactions." The Company has no
stock option, retirement, pension, or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Prior to the date of this Registration Statement, the Company issued to its
founders, officers, and directors, and to other shareholders, a total of 250,000
shares of Common Stock for a total of $25 in services. Each officer/Director
owns 25,000 shares received for services at inception. M.A. Littman and Jarrold
D. Bachman were issued 100,000 shares each @ $.0001 per share for services in
organizing the Company.

No officer, director, or affiliate of the Company has any direct or indirect
material interest in any asset proposed to be acquired by the Company through
security holdings, contracts, options, or otherwise.

The Company has adopted a policy under which any consulting or finder's fee
that may be paid to a third party or affiliate for consulting services to assist
management in evaluating a prospective business opportunity would be paid in
stock or in cash. Any such issuance of stock would be made on an ad hoc basis.
Accordingly, the Company is unable to predict whether or in what amount such a
stock issuance might be made.

Although there is no current plan in existence, it is possible that the
Company will adopt a plan to pay or accrue compensation to its officers and
directors for services related to seeking business opportunities and completing
a merger or acquisition transaction.

ITEM 8. DESCRIPTION OF SECURITIES

Common Stock

The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock $0.0001 par value. Each record holder of
Common Stock is entitled to one vote for each share held on all matters properly
submitted to the stockholders for their vote. The Articles of Incorporation do
not permit cumulative voting for the election of directors. As of September 29,
1999 a total of 485,500 common shares are issued and outstanding.

Preferred Stock

The Company's Articles of Incorporation authorize the issuance of
10,000,000 shares of preferred stock. The Board of Directors of the Company is
authorized to issue the preferred stock from time to time in classes and series
and is further authorized to establish such classes and series, to fix and
determine the variations in the relative rights and preferences as between
series, to fix voting rights, if any, for each class or series, and to allow for
the conversion of preferred stock into common stock. No Preferred Stock has been
issued by the Company. Preferred Stock may be utilized in making acquisitions.

Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out of
legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common Stock
have no preemptive, conversion or redemptive rights. All of the issued and
outstanding shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and nonassessable. To
the extent that additional shares of the Company's Common Stock are issued, the
relative interests of then existing stockholders may be diluted.

Shareholders

Each shareholder has sole investment power and sole voting power over
the shares owned by such shareholder.

No shareholder has entered into or delivered any lock up agreement or
letter agreement regarding their shares or options thereon.

Transfer Agent

The Company's transfer agent is Mountain Share Transfer, Inc., 1625
Abilene Drive, Broomfield, CO 80020.

Reports to Stockholders

The Company plans to furnish its stockholders with an annual report for
each fiscal year containing financial statements audited by its independent
certified public accountants. In the event the Company enters into a business
combination with another company, it is the present intention of management to
continue furnishing annual reports to stockholders. Additionally, the Company
may, in its sole discretion, issue unaudited quarterly or other interim reports
to its stockholders when it deems appropriate. The Company intends to comply
with the periodic reporting requirements of the Securities Exchange Act of 1934
for so long as it is subject to those requirements.

<PAGE>

PART II

Item 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS

The Company's shares of common stock have never been traded on the
Over-the-Counter Bulletin Board or "Pink Sheets." No bid or ask has ever has
ever been quoted.

At September 10, 1999, there were 30 holders of records of the
Company's stock, respectively. No dividends have been paid to date and the
Company's Board of Directors does not anticipate paying dividends in the
foreseeable future.

ITEM 2. LEGAL PROCEEDINGS

The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.

No director, officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
any litigation.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

None. There have been no changes of accountants nor disagreements with any
prior accountant since there have been no prior accountants.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES In the prior three years the
Company has sold its Common Stock to the persons listed in the table below in
transactions summarized as follows:

CONSID-
ERATION
PER
NAME & ADDRESS PURCHASE DATE SHARES SHARE
<S> <C> <C> <C> <C> <C> <C>
M.A. Littman April 1998 100,000 .0001 services
10200 W. 44th Ave., #400
Wheat Ridge, CO 80033

Jarrold D. Bachman April 1998 100,000 .0001 services
32950 Inverness Dr.
Evergreen, CO 80439

Wesley F. Whiting April 1998 25,000 .0001 services
10200 W. 44th Ave., #400
Wheat Ridge, CO 80033

Reginald T. Green April 1998 25,000 .0001 services

Patricia Overton February 1999 90,000 $.10 cash
102 N. 8th Street, #24
Aspen, CO 801612

MGM Siding (Steve Swan) February 1999 4,000 $.10 cash
7921 W. Mansfield Pkwy, 102
Lakewood, CO 80235

David Gregarek February 1999 5,000 $.10 cash
71 Spyglass Drive
Littleton, CO 80162

Rebecca Gregarek February 1999 5,000 $.10 cash
71 Spyglass Drive
Littleton, CO 80160

Sara Lee Blankenheim February 1999 10,000 $.10 cash
12182 W. 27th Drive
Lakewood, CO 80215

Debra Rivera February 1999 20,000 $.10 cash
1487 City Road 117
Glenwood Springs, CO 81601

Diana Dean February 1999 2,500 $.10 cash
33519 Inverness Drive
Evergreen, CO 80439

Bernard Meinerz February 1999 10,000 $.10 cash
8725 W. 14th Ave., Suite 212
Lakewood, CO 80215

R. Douglas Yajko February 1999 25,000 $.10 cash
622 19th Street, #301
Glenwood Springs, CO 81601

Ann Stadler February 1999 1,500 $.10 cash
7787 Osceola Street
Westminster, CO 80030

Robert C. Johnson, Jr. February 1999 60,000 $.10 cash
5500 Preston Road, Suite 370
Dallas, TX 75205

Bill Ellingston March 15, 1999 2,500 $.10 cash
1939 Interlocken Drive
Evergreen, CO 80439

</TABLE>

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Colorado Revised Statutes provide that the Company may indemnify its
officers and directors for costs and expenses incurred in connection with the
defense of actions, suits, or proceedings where the officer or director acted in
good faith and in a manner he reasonably believed to be in the Company's best
interest and is a party by reason of his status as an officer or director,
absent a finding of negligence or misconduct in the performance of duty.

<PAGE>

SIGNATURES:

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

DATED: ____________________

By:-----------------------------
Wesley F. Whiting,
President

-----------------------------
Reginald T. Green, Secretary

Directors:

-----------------------------
Wesley F. Whiting, Director

-----------------------------
Reginald T. Green, Director

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
For the Period May 1, 1998 (Inception) to April 30, 1999

<PAGE>

Michael Johnson & Co., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237

Michael B. Johnson, CPA Telephone: (303) 796-0099
Member: AICPA Fax: (303) 796-0137
Colorado Society of CPAs

INDEPENDENT AUDITORS' REPORT

Board of Directors
Dynadapt System, Inc.
Denver, Colorado

We have audited the accompanying balance sheet of Dynadapt System, Inc., (A
Development Stage Company) as of April 30, 1999 and the related statements of
operations, stockholders' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dynadapt System, Inc., as of
April 30, 1999 and the results of their operations and their cash flows for the
year then ended in conformity with generally accepted accounting principles.

/s/ Michael Johnson & Co., LLC

Denver, Colorado
June 29, 1999

F-1

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Balance Sheet
April 30

ASSETS: 1999

Current Assets:
Cash $15,538

Total Current Assets 15,538

TOTAL ASSETS $15,538

LIABILITIES & STOCKHOLDERS' EQUITY

Stockholders Equity (Note 2)
Preferred Stock @ $.01 par value, 10,000,000
shares authorized, none outstanding
100,000,000 shares authorized
$.0001 par value, 485,500 shares
issued and 48
outstanding in 1999
Additional Paid-In capital 23,506
Deficit accumulated during the development stage (8,106)

------------
TOTAL STOCKHOLDERS' EQUITY $15,538

-------------

The accompanying notes are an integral part of these financial statements.

F-2

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Statement of Operations
For the Year Ended April 30, 1999

1999
Revenue:
Interest Income $79
--------

Total Income 79

Cost and Expenses:
Consulting 8,000
Filing Fees 75
Bank Charges 20
--------

Total Expenses 8,095

Net Loss (8,016)
========

Per Share Information:

Weighted average number of common
shares outstanding 390,800
--------

Net Loss per common share (0.02)
========

The accompanying notes are an integral part of these financial statements.

F-3

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Balance Sheet
April 30

COMMON STOCKS Additional Retained Total Stockholders'
Paid-In Capital Earnings Equity
Shares Amount (Deficit)
------------- ------- ----------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
Issuance of Stock for Services
5/1/98 250,000 25 - - 25

Issuance 2/26/99 for Cash
233,000 23 23,277 - 23,300

Issuance 3/15/9 for Cash
2,500 - 229 - 229

Net Deficit 4/30/99 - - - (8,016) (8,016)
--------------- ------------ ----------------- --------------- ---------------------

Balance April 30, 1999 485,500 $48 $23,506 ($8,016) $15,538
=============== ============ ================= =============== =====================

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Year Ended April 30, 1999

1999
Cash Flows from Operating Activities:

Net Loss ($8,016)

Net Cash Provided by Operating Activities (8,016)

Cash Flows from Financing Activities:

Proceeds from stock issuance 23,554

Net Cash Provided by Financing Activities 23,554

Net Increase in Cash & Cash Equivalents 15,538

Beginning Cash & Cash Equivalents -

Ending Cash & Cash Equivalents $15,538

The accompanying notes are an integral part of these financial statements.

F-5

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period May 1, 1998 (Inception) to April 30, 1999

Note 1 - Organization and Summary of Significant Accounting Policies:

Organization:

The Company was incorporated on April 30, 1998 in the state of Colorado. The
Company is in the development stages and was organized for the purpose of
Internet Acquisitions. The Company's fiscal year end is April 30.

The accompanying financial statements have been prepared on the going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The company's continuation as a
going concern is dependent on its ability to generate sufficient cash flows to
meet its obligation on a timely basis, to raise additional capital as may be
required, and ultimately to attain successful operations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Basis of Presentation:

The Company is primarily engaged in general investing. The authorized capital
stock of the corporation is 100,000,000 shares of common stock $.0001 and
10,000,000 shares of preferred stock at $.01 par value. No preferred stock has
been issued.

Cash and Cash Equivalents:

The Company considers all highly-liquid debt instruments, purchased with an
original maturity of three months, to be cash equivalents.

Revenue Recognition:

Revenue is recognized when earned and expenses are recognized when they occur.

Use of estimates:

The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Net Loss Per Share:

Net loss per share is based on the weighted average number of common shares and
common shares equivalents outstanding during the period.

F-6

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period May 1, 1998 (Inception) to April 30, 1999

Note 2 - Federal Income Taxes:

The Company adopted statement of financial Accounting Standards No. 109,
"Accounting For Income Taxes." FAS 109 requires the recognition of deferred tax
liabilities and assets for the anticipated future tax effects of temporary
differences in the carrying amounts and tax bases of assets and liabilities.
There was no material effect on the financial statements as a result of adopting
FAS 109.

Note 3 - Stockholders' Equity

During the period, the Company issued 485,500 shares of its $.0001 par value
common stock. 250,000 shares were issued for services. 235,500 shares were sold
to 12 people for $.10 per share for a cash payment of $23,550 in February, 1999.

Note 4 - Related Party Transactions

The officers and directors of this company are also officers and directors of
other companies.

F-7

<PAGE>

Dynadapt System, Inc.
Interim Financial Statements
For Period Ended July 31, 1999
(unaudited)

F-8

<PAGE>

Part I: FINANCIAL INFORMATION

DYNADAPT SYSTEM, INC.
(a Development Stage Company)
(Unaudited)
BALANCE SHEET (Unaudited -
See Note 1)

ASSETS

July 31, 1999 April 30, 1999
<S> <C> <C>
Current $0 $15,538
----------- ---------
Cash $8,291 15,538
=========== =========
LIABILITIES

Current Accounts Payable $0 $0

Total Liabilities $0 $0

STOCKHOLDERS' EQUITY

Preferred stock @ $.01 par value, 10,000,000 shares
authorized, none outstanding

Common stock, no par value
100,000,000 shares authorized;
485,500 issued & outstanding
48 48

Additional Paid-in Capital 23,506 23,506

Deficit accumulated during the development stage (15,348) (8,106)
------------ ----------
Total Stockholders' Equity 8,206 15,538

</TABLE>

SEE ACCOMPANYING NOTES
F-9

<PAGE>

DYNADAPT SYSTEM, INC.
(a Development Stage Company)
STATEMENT OF OPERATIONS
for the three month period ended July 31, 1999 and 1998
(Unaudited - See Note 1

Three months ending
July 30,

1999 1998
---- ----
<S> <C> <C>
Expenses

Amortization $0 $0

General & Admin. Expenses $7,247 $0
--------- ---------
Net income (loss) for the period (7,247) 0
========= =========
Net income per share ($.01) 0
========= =========
Weighted average number of commons shares outstanding 485,500 250,000
========= =========
</TABLE>

SEE ACCOMPANYING NOTES
F-10

<PAGE>

DYNADAPT SYSTEM, INC.
(a Development Stage Company)
STATEMENT OF CASH FLOWS
for the three months ended July 31, 1999 and 1998
(Unaudited - See Note 1)

Three months ended

July 31, 1999 July 31, 1998
<S> <C> <C>
Cash flow to operating activities:

Net gain (loss) (7,247) 0

Adjustments to reconcile net loss to net cash used in operations 0 0

Accounts payable 0 0

Management fees 0 0

Amortization 0 0

Changes in non-cash items:

Accounts payable 0 0

Net cash used in operating activities (7,247) -

Cash flows to investing activities

Organization costs - -

Net cash used in investing activities: - -

Cash flows to financing activities:

Proceeds from issuance of common stock - -

Payment of offering costs - -

Contributed Capital - -

Net cash provided by financing activities - -

Net increase/(decrease) in cash (7,247) -

Cash, beginning of period 15,538 -

Cash, end of period $8,291 $0

</TABLE>

SEE ACCOMPANYING NOTES
F-11

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period May 1, 1999 (Inception) to July 31, 1999

Note 1 - Organization and Summary of Significant Accounting Policies:

Organization:

Basis of Presentation:

Unaudited Statements:

The interim financial statements have been prepared by management and have no
been audited.

Cash and Cash Equivalents:

The Company considers all highly-liquid debt instruments, purchased with an
original maturity of three months, to be cash equivalents.

Revenue Recognition:

Revenue is recognized when earned and expenses are recognized when they occur.

Use of estimates:

Net Loss Per Share:

Net loss per share is based on the weighted average number of common shares and
common shares equivalents outstanding during the period.

F-12

<PAGE>

DYNADAPT SYSTEM, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period May 1, 1999 (Inception) to July 31, 1999

Note 2 - Federal Income Taxes:

Note 3 - Stockholders' Equity

During the year ended April 30, 1999, the Company issued 485,500 shares of its
$.0001 par value common stock. 250,000 shares were issued for services. 235,500
shares were sold to 12 people for $.10 per share for a cash payment of $23,550
in February, 1999.

F-13

ARTICLES OF INCORPORATION
OF
DYNADAPT SYSTEM, INC.

The undersigned hereby amends and restates its Articles of
Incorporation pursuant to Colorado Revised Statutes as follows:

ARTICLE I

The name of the corporation is: DYNADAPT SYSTEM, INC., and its initial
principal place of business shall be: 10200 W. 44th Ave., #400, Wheat Ridge, CO
80033.

ARTICLE II

DURATION. The corporation shall have perpetual existence.

ARTICLE III

PURPOSE. The purposes for which the corporation is organized are: shall be
to transact all lawful business for which corporations may be organized pursuant
to the Colorado Corporation Code.

ARTICLE IV
CAPITAL STOCK
AUTHORIZED SHARES

Section 1. Classes and Shares Authorized. The authorized capital stock
of the corporation shall be 100,000,000 shares of Common Stock $.0001 par value
and 10,000,000 shares of Preferred Stock, $.01 par value.

Section 2. Preferred Stock. Shares of Preferred Stock may be divided
into such classes and series as may be established, from time to time, by the
Board of Directors. The Board of Directors, from time to time, may fix and
determine the relative rights and preferences of the shares of any series or
class so established. The Board of Directors may fix the preferred shares of any
series or class established as either voting, or non-voting, in the sole
discretion of the Board, and may determine dividends, cumulative or not, in the
sole discretion of the Board.

Section 3. Common Stock Dividends.

(a) After the requirements with respect to preferential dividends on
the classes or series of Preferred Stock, if any, shall have been met and after
the corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or purchase
accounts, and subject further to any other conditions which may be fixed in
accordance with the provisions of Section 2 of this Article IV, then, and not
otherwise, the holders of the Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board of Directors of the
corporation paid out of funds legally available therefor.

(b) After distribution in full of the preferential amount, if any, to
be distributed to the holders of the Preferred Stock of the various classes or
series in the event of voluntary or involuntary liquidation and distribution or
sale of assets, dissolution, or winding-up of the corporation, the holders of
the Common Stock shall be entitled to receive all of the remaining assets of the
corporation, tangible and intangible, of whatever kind available for
distribution to stockholders ratably in proportion to the number of shares of
the Common Stock held by them respectively.

(c) Except as may otherwise be required by law, each holder of the
Common Stock shall have one vote in respect of each share of the Common Stock
held by him on all matters voted upon by the stockholders.

Section 4. General Provisions.The capital stock of the Corporation may
be issued for money, property, services rendered, labor done, cash advanced for
the corporation, or for any other assets of value in accordance with the action
of the Board of Directors, whose judgment as to the value of the assets received
in return

<PAGE>

INITIAL PLACE OF BUSINESS, REGISTERED AGENT AND INCORPORATOR. The address
of the initial registered office of the corporation is 10200 W. 44th Ave., #400,
Wheat Ridge, CO 80033, and the name of the initial registered agent and
incorporator at such address is Michael A. Littman. Either the registered office
or the registered agent may be changed in the manner permitted by law.

PLACE OF BUSINESS. Part or all of the business of the corporation may
be conducted in any place in the State of Colorado or outside of the State of
Colorado, in other states or territories of the United States, and in foreign
countries.

ARTICLE VIII
BOARD OF DIRECTORS

Section 1. Board of Directors; Number. The governing board of the
corporation shall be known as the Board of Directors, and the number of
directors may from time to time be increased or decreased in such manner as
shall be provided in the By-laws of the corporation, provided that the number of
directors shall not be reduced to less than three except that there need be only
as many directors as there are shareholders in the event that the outstanding
shares are held of record by fewer than three shareholders.

Section 2. Classification of Directors. The Board of Directors shall be
divided into three classes, Class 1, Class 2, and Class 3, each class to be as
nearly equal in number as possible, the term of office of Class 1 directors to
expire at the first annual meeting of shareholders after their election, that of
Class 2 directors to expire at the second annual meeting after their election,
and that of Class 3 directors to expire at the third annual meeting after their
election. At each annual meeting after such classification, the number of
directors equal to the number of the class whose term expires at the time of
such meeting shall be elected to hold office until the third succeeding annual
meeting. No classification of directors shall be effective prior to the first
annual meeting of shareholders or at any time when the Board of Directors
consists of less than six members. Notwithstanding the foregoing, and except as
otherwise required by law, whenever the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a class, to elect one
or more directors of the company, the terms of the directors or directors
elected by such holders shall expire at the next succeeding annual meeting of
stockholders.

Section 3. Directors. The names and addresses of the persons who are to
serve as directors until the next annual meeting of shareholders or until their
successors shall be elected and shall qualify are as follows:

Wesley F. Whiting 10200 W. 44th Ave., #400
Wheat Ridge, CO 80033

Redgie Green 10200 W. 44th Ave., #400
Wheat Ridge, CO 80033

Section 4. Nomination of Directors.

a. Nominations for the election of directors may be made by the board
of Directors, by a committee of the Board of Directors, or by any shareholder
entitled to vote for the election of directors. Nominations by shareholders
shall be made by notice in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the corporation not less than
14 days nor more than 50 days prior to any meeting of the shareholders called
for the election of directors; provided, however, that if less than 21 days
notice of the meeting is given to shareholders, such written notice of the
meeting is given to shareholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the corporation not later than the
close of the seventh day following the day on which notice of the meeting was
mailed to shareholders.

b. Each notice under subsection (a) shall set forth (i) the name, age,
business address and, if known residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
and (iii) the number of shares of stock of the corporation which are
beneficially owned by each such nominees.

c. The chairman of the shareholders' meeting may, if the facts warrant,
determine, and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.

Section 5. Certain Powers of the Board of Directors. In furtherance and not
in limitation of the powers conferred by statute, the Board is expressly
authorized:

a. to manage and govern the corporation by majority vote of members
present at any regular or special meeting at which a quorum shall be present, to
make, alter, or amend the By-laws of the corporation at any regular or special
meeting, to fix the amount to be reserved as working capital over and above its
capital stock paid in, to authorize and cause to be executed mortgages and liens
upon the real and personal property of the corporation, and to designate one or
more committees, each committee to consist of two or more of the directors of
the corporation, which, to the extent provided in the resolution or in the
By-laws of the corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the corporation
(such committee or committees shall have such name or names as may be stated in
the By-laws of the corporation or as may be determined from time to time by
resolution adopted by the Board of Directors);

b. to sell, lease, exchange or otherwise dispose of all or
substantially all of the property and assets of the corporation in the ordinary
course of its business upon such terms and conditions as the Board of Directors
may determine without vote or consent of the shareholders.

c. to sell, pledge, lease, exchange, liquidate or otherwise dispose of
all or substantially all the property or assets of the corporation, including
its goodwill, if not in the ordinary course of its business, upon such terms and
conditions as the Board of Directors may determine; provided, however, that such
transaction shall be authorized or ratified by the affirmative vote of the
holders of at least a majority of the shares entitled to vote thereon at a
shareholders' meeting duly called for such purpose, or is authorized or ratified
by the written consent of the holders of all of the shares entitled to vote
thereon; and provided, further, that any such transaction with any substantial
shareholder or affiliate of the corporation shall be authorized or ratified by
the affirmative vote of the holders of at least 51% of the shares entitled to
vote thereon at a shareholders' meeting duly called for that purpose, unless
such transaction is with any subsidiary of the corporation, or is approved by
the affirmative vote of a majority of the continuing disinterested directors of
the corporation, in which case no vote of the shareholders is necessary.

d. to merge, consolidate, or exchange all of the issued or outstanding
shares of one or more classes of the corporation upon such terms and conditions
as the Board of Directors may authorize; provide, however, that such merger,
consolidation, or exchange is approved or ratified by the affirmative vote of
the holders of at least a majority of the shares entitled to vote thereon at a
shareholders' meeting duly called for that purpose, or is authorized or ratified
by the written consent of the holders of all of the shares entitled to vote
thereon; and, provided, further, that any such merger, consolidation, or
exchange with any substantial shareholder or affiliate of the corporation shall
be authorized or ratified by the affirmative vote of the holders of at least 51%
of the shares entitled to vote thereon at a shareholders' meeting duly called
for that purpose, unless such merger, consolidation, or exchange is with any
subsidiary of the corporation or is approved by the affirmative vote of a
majority of the continuing disinterested directors of the corporation, in which
case no vote of shareholders is necessary.

e. to distribute to the shareholders of the corporation, without the
approval of the shareholders, in partial liquidation, out of stated capital or
capital surplus of the corporation, a portion of its assets, in cash or in
property, so long as the partial liquidation is in compliance with the Colorado
Corporation Code.

f. as used in this Section 5, the following terms shall have the following
meanings:

(i) an "affiliate" shall mean any person or entity which
is an affiliation within the meaning of Rule 12b-2 of
the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended;

(ii) a "continuing disinterested director" shall mean: a
director who was elected before the proposed
transaction comes before the Board for approval
within the scope of subsections (c) and (d) of this
Section 5, and who has no interest in the proposed
transaction except as it benefits the corporation, in
their judgment.

(iii) a "subsidiary" shall mean any corporation in which
the corporation owns the majority of each class of
equity security; and

(iv) a "substantial shareholder" shall mean any person or
entity which is the beneficial owner, within the
meaning of Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of
1934, as amended, of 10% or more of the outstanding
capital stock of the corporation.

g. The Board of Directors shall have the power to approve acquisitions
of assets, business, or corporations by the company in exchange for stock and
debt, so long as any such proposed transaction would not result in issuance of
more than the equivalent of 51% of the outstanding stock to any one shareholder.

h. The Board of Directors shall have the power to determine and set the
Classes of Preferred Stock and to set the rights and privileges thereof without
further shareholder approval.

ARTICLE IX
CONFLICTS OF INTEREST

Section 1. Related Party Transaction. No contract or other transaction
of the corporation with any other person, firm or corporation, or in which this
corporation is interested, shall be affected or invalidated by (a) the fact that
any one or more of the directors or officers of this corporation is interested
in or is a director or officer of such other firm or corporation; or (b) the
fact that any director or officer of this corporation, individually or jointly
with others, may be party to or may be interested in any such contract or
transaction, so long as the contract or transaction is authorized, approved or
ratified at a meeting of a Board of Directors by sufficient vote thereon by
directors not interested therein, to which such fact of relationship or interest
has been disclosed, or the contract or transaction has been approved or ratified
by vote or written consent of the shareholders entitled to vote, to whom such
fact of relationship or interest has been disclosed, or so long as the contract
or transaction is fair and reasonable to the corporation. Each person who may
become a director or officer of the corporation is hereby relieved from any
liability that might otherwise arise by reason of his contracting with the
corporation for the benefit of himself or any firm or corporation in which he
may be in any way interested.

Section 2. Corporate Opportunities. The officers, directors and other
members of management of this corporation shall be subject to the doctrine of
corporate opportunities only insofar as it applies to business opportunities in
which this corporation has expressed and interest as determined from time to
time by resolution of the Board of Directors. When such areas of interest are
delineated, all such business opportunities within such areas of interest which
come to the attention of the officers, directors and other members of management
of this corporation shall be disclosed promptly to this corporation and made
available to it. The Board of Directors may reject any business opportunity
presented to it, and thereafter any officer, director or other member of
management may avail himself of such opportunity. Until such time as this
corporation, through its Board of Directors, has designated an area of interest,
the officers, directors and other members of management of this corporation
shall be free to engaged in such areas of interest on their own and the
provisions hereof shall not limit the rights of any officer, director or other
member of management of this corporation to continue a business existing prior
to the time that such area of interest is designated by this corporation. This
provision shall not be construed to release any employee of the corporation
(other than officer, directors or member of management) from any duties which
such employee may have to the corporation.

ARTICLE X
INDEMNIFICATION

Section 1. Direct Actions. As fully as set forth in Colorado Revised
Statutes, and not limited hereby, the Corporation shall indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that such person is or was a director,
officer, employee, fiduciary, or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary,
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including Attorney fees), judgments, fines and
amounts paid in settlement, actually and reasonably incurred by such person in
connection with such action, suit or proceeding, if such person acted in good
faith and in a manner such person 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 such person's conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that such person did not
act in good faith and in a manner such person reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
persons' conduct was unlawful.

Section 2. Derivative Actions. The Corporation shall indemnify any
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee, fiduciary, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary, or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorney fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, if such person
believed it to be in, or not opposed to, the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's duty to the
Corporation, unless, and only to the extent that, the court in which such action
or suit was brought 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 indemnification for such expenses
which such court deems proper.

Section 3. Expenses. To the extent that a director, officer, employee,
fiduciary, or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections 1
and 2 of this Article X, or in defense of any claims, issue or matter therein,
such person shall be indemnified against expenses (including attorney fees)
actually and reasonably incurred by him in connection therewith.

Section 4. Determination. Any indemnification under Sections 1 or 2 of
this Article X (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the officer, director and employee, fiduciary, or agent is proper in the
circumstances, because such person has met the applicable standard of conduct
set forth in Sections 1 or 2 of this Article X. Such determination shall be made
(i) by the Board of Directors by a majority vote of a quorum, consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if a
quorum is not obtainable or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(iii) by the affirmative vote of the holders of a majority of the shares of
stock entitled to vote and represented at a meeting called for such purpose.

Section 5. Advance of Expenses. Expenses (including attorney fees)
incurred in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding as authorized in Section 4 of this Article X, upon receipt of an
undertaking by or on behalf of the director, officer, employee, fiduciary, or
agent to repay such amount unless it shall be ultimately determined that such
person is entitled to be indemnified by the Corporation as authorized in this
Article X.

Section 6. Insurance. The Board of Directors may exercise the
Corporation's power to purchase and maintain insurance on behalf of any person
who is or was a director, office, employee, fiduciary, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary, or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity

person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, fiduciary, of agent and shall insure
to the benefit of the heirs and personal representatives of such person.

ARTICLE XI
ARRANGEMENTS WITH CREDITORS

Whenever a compromise or arrangement is proposed by the Corporation
between it and its creditors or any class of them, and/or between said
Corporation and its shareholders or any class of them, any court of equitable
jurisdiction may, on summary application by the Corporation, or by a majority of
its shareholders, or on the application of any receiver or receivers appointed
for the Corporation, or on the application of trustees in dissolution, order a
meeting of the creditors or class of creditors and/or of the shareholders or
class of shareholders of the Corporation, as the case may be, to be notified in
such manner as the court decides. If a majority in number representing at least
three-fourths in amount of the creditors or class of creditors, and/or the
holders of the majority of the stock or class of stock of the Corporation, as
the case may be, agree to any compromise or arrangement and/or to any
reorganization of the Corporation, as a consequence of such compromise or
arrangement, then said compromise or arrangement and/or said reorganization
shall, if sanctioned by the court to which the application has been made, be
binding upon all the creditors or class of creditors, and/or on all the
shareholders of class of shareholders of the Corporation, as the case may be,
and also on the Corporation.

ARTICLE XII
SHAREHOLDERS' MEETINGS

Shareholders' meetings may be held at such time and place as may be
stated or fixed in accordance with the By-Laws. At all shareholders' meetings
one-third of all shares entitled to vote shall constitute a quorum.

ARTICLE XIII
SHAREHOLDER VOTE

Whenever the laws of the State of Colorado require the vote or
concurrence of the holders of two-thirds of the outstanding shares entitled to
vote thereon, with respect to any action to be taken by the shareholders of the
Corporation, such action may be taken by vote or concurrence of the holders of
at least a majority of the shares entitled to vote. These Articles of
Incorporation may be amended by the affirmative vote of the holders of at least
a majority of the shares entitled to vote thereon at a meeting duly called for
that purpose, or, when authorized, when such action is ratified by the written
consent of all the shareholders entitled to vote thereon.

ARTICLE XIV
DISSOLUTION

Section 1. Procedure. The Corporation shall be dissolved upon the
affirmative vote of the holders of at least a majority of the shares entitled to
vote thereon at a meeting duly called for that purpose, or when authorized or
ratified by the written consent of the holders of all of the shares entitled to
vote thereon.

Section 2. Revocation. The Corporation shall revoke voluntary
dissolution proceedings upon the affirmative vote of the holders of at least a
majority of the shares entitled to vote at a meeting duly called for that
purpose, or when authorized or ratified by the written consent of the holders of
all of the shares entitled to vote thereon.

IN WITNESS WHEREOF, the undersigned, has executed said Articles of
Incorporation as of this 27th day of April, 1998.

ARTICLE XV
CERTIFICATION

I hereby certify that the foregoing Articles of Incorporation of
Dynadapt System, Inc. were duly adopted on April 27, 1998, by the Incorporator.

---------------------------
Michael A. Littman, Incorporator
and Registered Agent
STATE OF COLORADO ) 10200 W. 44th Ave., #400
) SS. Wheat Ridge, CO 80033
COUNTY OF JEFFERSON )

Before me, Candi M. Cole, a Notary Public, in and for said County and
State, personally appeared Michael A. Littman as Incorporator and Registered
Agent, and that he signed the foregoing instrument as his free and voluntary act
for the uses and purposes therein set forth, and that the facts contained
therein are true.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
27th day of April, 1998.

My Commission expires: 2/24/2002 ______________________
Notary Public
10200 W. 44th Ave., #400
Wheat Ridge, CO 80033

BY-LAWS

Dynadapt System, Inc.

a Colorado Corporation

ARTICLE I

The initial principal office of the Corporation shall be in Lafayette,
Colorado. The Corporation may have offices at such other places within or
without the State of Colorado as the Board of Directors may from time to time
establish.

ARTICLE II

CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken in
connection with corporate action, by any provisions of the statutes of the
Certificate of Incorporation, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who should have been entitled to vote
upon the action if such meeting were held, shall consent in writing to such
corporate action being taken.

ARTICLE III

Board of Directors

Section 1. GENERAL POWERS. The business of the Corporation shall be managed
by the Board of Directors, except as otherwise provided by statute or by the
Certificate of Incorporation.

Section 2. NUMBER AND QUALIFICATIONS. The Board of Directors shall
consist of up to three (3) members. Except as provided in the Certificate of
Incorporation, this number can be increased only by the vote or written consent
of the holders of ninety (90) percent of the stock of the Corporation
outstanding and entitled to vote. The current number of Directors shall be
determined by the Board of Directors at its annual meeting.
No Director need be a stockholder.

Section 3. ELECTION AND TERM OF OFFICE. The Directors shall be elected
annually by the stockholders, and shall hold office until their successors are
respectively elected and qualified.

Election of Directors need not be by ballot.

Section 4. COMPENSATION. The members of the Board of Directors shall be
paid a fee of $10.00 for attendance at all annual, regular, special and
adjourned meetings of the Board. No such fee shall be paid any director if
absent. Any director of the Corporation may also serve the Corporation in any
other capacity, and receive compensation therefor in any form. Members of
special or standing committees may be allowed like compensation for attending
committee meetings.

Section 5. REMOVAL AND RESIGNATIONS. The stockholders may, at any
meeting called for the purpose, by vote of two-thirds of the capital stock
issued and outstanding, remove any directors from office, with or without cause;
provided however, that no director shall be removed in case the vote of a
sufficient number of shares are cast against his removal, which if cumulatively
voted at any election of directors would be sufficient to elect him, if
cumulative voting is allowed by the Articles of Incorporation.

The stockholders may, at any meeting, by vote of a majority of such
stock represented at such meeting accept the resignation of any director.

Section 6. VACANCIES. Any vacancy occurring in the office of director
may be filled by a majority of the directors then in office, though less than a
quorum, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and qualified, unless
sooner displaced.

When one or more directors resign from the Board, effective at a future
date, a majority of the directors then in office, including those who have so
resigned, shall have powers to fill such vacancy or vacancies, the vote thereon
to take effect when such resignation or resignations become effective.

ARTICLE IV

Meetings of Board of Directors

Section 1. REGULAR MEETINGS. A regular meeting of the Board of
Directors may be held without call or formal notice immediately after and at the
same place as the annual meeting of the stockholders or any special meeting of
the stockholders at such places within or without the State of Colorado and at
such times as the Board may by vote from time to time determine.

Section 2. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held at any place whether within or without the State of Colorado at any
time when called by the President, Treasurer, Secretary or two or more
directors. Notice of the time and place thereof shall be given to each director
at least three (3) days before the meeting if by mail or at least twenty-four
hours if in person or by telephone or telegraph. A waiver of such notice in
writing, signed by the person or persons entitled to said notice, either before
or after the time stated therein, shall be deemed equivalent to such notice.
Notice of any adjourned meeting of the Board of Directors need not be given.

Section 3. QUORUM. The presence, at any meeting, of one-third of the
total number of directors, but in no case less than two (2) directors, shall be
necessary and sufficient to constitute a quorum for the transaction of business
except as otherwise required by statute or by the Certificate of Incorporation,
the act of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a quorum,
a majority of the directors present at the time and place of any meeting may
adjourn such meeting from time to time until a quorum be present.

Section 4.a. CONSENT OF DIRECTORS IN LIEU OF MEETING. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board or committee, and such written
consent is filed within the minutes of the Corporation.

b. The Board of Directors may hold regular or special meetings
by telephone conference call, provided that any resolutions adopted shall be
recorded in writing within 3 days of such telephone conference, and written
ratification of such resolutions by the directors shall be provided within 10
days thereafter.

ARTICLE V

Committees of Board of Directors

The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which, to the extent provided in
the resolution, shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.

The committees of the Board of Directors shall keep regular minutes of
their proceedings and report the same to the Board of Directors when required.

ARTICLE VI

Officers

Section 1. NUMBER. The Corporation shall have a President, one or more
Vice Presidents, a Secretary and a Treasurer, and such other officers, agents
and factors as may be deemed necessary. One person may hold any two offices
except the offices of President and Vice President and the offices of President
and Secretary.

Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The officers
specifically designated in Section 1 of this Article VI shall be chosen annually
by the Board of Directors and shall hold office until their successors are
chosen and qualified. No officer need be a director.

Section 3. SUBORDINATE OFFICERS. The Board of Directors from time to
time may appoint other officers and agents, including one or more Assistant
Secretaries and one or more Assistant Treasurers, each of whom shall hold office
for such period, have such authority and perform such duties as are provided in
these By-Laws or as the Board of Directors from time to time may determine. The
Board of Directors may delegate to any office the power to appoint any such
subordinate officers, agents and factors and to prescribe their respective
authorities and duties.

Section 4. REMOVALS AND RESIGNATIONS. The Board of Directors may at any
meeting called for the purpose, by vote of a majority of their entire number,
remove from office any officer or agent of the Corporation, or any member of any
committee appointed by the Board of Directors.

The Board of Directors may at any meeting, by vote of a majority of the
directors present at such meeting, accept the resignation of any officer of the
Corporation.

Section 5. VACANCIES. Any vacancy occurring in the office of President,
Vice President, Secretary, Treasurer or any other office by death, resignation,
removal or otherwise shall be filled for the expired portion of the term in the
manner prescribed by these By-Laws for the regular election or appointment to
such office.

Section 6. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation and, subject to the direction and under the
supervision of the Board of Directors, shall have general charge of the
business, affairs and property of the Corporation, and control over its
officers, agents and employees. The President shall preside at all meetings of
the stockholders and of the Board of Directors at which he is present. The
President shall do and perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.

Section 7. THE VICE PRESIDENT. At the request of the President or in
the event of his absence or disability, the Vice President, or in case there
shall be more than one Vice President, the Vice President designated by the
President, or in the absence of such designation, the Vice President designated
by the Board of Directors, shall perform all the duties of the President, and
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the President. Any Vice President shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-Laws or by the Board of Directors, or the President.

Section 8. THE SECRETARY. The Secretary shall:

a. Record all the proceedings of the meetings of the Corporation and
directors in a book to be kept for that purpose;

b. Have charge of the stock ledger (which may, however, be kept by any
transfer agent or agents of the Corporation under the direction of the
Secretary), an original or duplicate of which shall be kept at the principal
office or place of business of the Corporation in the State of Colorado;

c. Prepare and make, at least ten (10) days before every election of
directors, a complete list of the stockholders entitled to vote at said
election, arranged in alphabetical order;

d. See that all notices are duly given in accordance with the provisions of
these By-Laws or as required by statute;

e. Be custodian of the records of the Corporation and the Board of
Directors, and of the seal of the Corporation, and see that the seal is affixed
to all stock certificates prior to their issuance and to all documents, the
execution of which on behalf of the Corporation under its seal have been duly
authorized;

f. See that all books, reports, statements, certificates and the other
documents and records required by law to be kept or filed are properly kept or
filed; and

g. In general, perform all duties and have all powers incident to the
office of Secretary and perform such other duties and have such powers as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors or the President.

Section 9. THE TREASURER. The Treasurer shall:

a. Have supervision over the funds, securities, receipts, and disbursements
of the Corporation;

b. Cause all monies and other valuable effects of the Corporation to be
deposited in its name and to its credit, in such depositories as shall be
selected by the Board of Directors or pursuant to authority conferred by the
Board of Directors.

c. Cause the funds of the Corporation to be disbursed by checks or
drafts upon the authorized depositories of the Corporation, when such
disbursements shall have been duly authorized;

d. Cause to be taken and preserved proper vouchers for all monies
disbursed;

e. Cause to be kept at the principal office of the Corporation correct
books of account of all its business and transactions;

f. Render to the President or the Board of Directors, whenever requested,
an account of the financial condition of the Corporation and of his transactions
as Treasurer;

g. Be empowered to require from the officers or agents of the
Corporation reports or statements giving such information as he may desire with
respect to any and all financial transactions of the Corporation; and

h. In general, perform all duties and have all powers incident to the
office of Treasurer and perform such other duties and have such power as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors or President.

Section 10. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries and Assistant Treasurers shall have such duties as from
time to time may be assigned to them by the Board of Directors or the President.

Section 11. SALARIES. The salaries of the officers of the Corporation
shall be fixed from time to time by the Board of Directors, except that the
Board of Directors may delegate to any person the power to fix the salaries or
other compensation of any officers or agents appointed in accordance with the
provisions of Section 3 of this Article VI. No officer shall be revented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.

Section 12. SURETY BOND. The Board of Directors may secure the fidelity of
any or all of the officers of the Corporation by bond or otherwise.

ARTICLE VII

Execution of Instruments

Section 1. EXECUTION OF INSTRUMENTS GENERALLY. All documents or
writings of any nature shall be signed, executed, verified, acknowledged and
delivered by such officer or officers or such agent of the Corporation and in
such manner as the Board of Directors from time to time may determine.

Section 2. CHECKS, DRAFTS, ETC. All notes, drafts, acceptances, checks,
endorsements, and all evidence of indebtedness of the corporation whatsoever,
shall be signed by such officer or officers or such agent or agents of the
Corporation and in such manner as the Board of Directors from time to time may
determine. Endorsements for deposit to the credit of the Corporation in any of
its duly authorized depositories shall be made in such manner as the Board of
Directors from time to time may determine.

Section 3. PROXIES. Proxies to vote with respect to shares of stock of
other corporations owned by or standing in the name of the Corporation may be
executed and delivered from time to time on behalf of the Corporation by the
President or Vice President and the Secretary or Assistant Secretary of the
Corporation or by any other person or persons duly authorized by the Board of
Directors.

ARTICLE VIII

Section 1. CERTIFICATES OF STOCK. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed in the name of the
Corporation by the Chairman or Vice President of the Board of Directors, the
President or a Vice President and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation; provided, however, that where
such certificate is signed by a transfer agent or an assistant transfer agent or
by a transfer clerk acting on behalf of the Corporation and a registrar, the
signature of any such Chairman of the Board of Directors, President, Vice
President, Treasurer, Assistant Treasurer, Secretary, or Assistant Secretary may
be facsimile. In case any officer or officers who shall have signed, or whole
facsimile signature or signatures shall have been used thereon, any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, 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 shall
have been used thereon, had not ceased to be such officer or officers of the
Corporation, and any such delivery shall be regarded as an adoption by the
Corporation of such certificate or certificates.

Certificates of stock shall be in such form as shall, in conformity to
law, be prescribed from time to time by the Board of Directors.

Section 2. TRANSFER OF STOCK. Shares of stock of the Corporation shall
only be transferred on the books of the Corporation by the holder of record
thereof or by his attorney duly authorized in writing, upon surrender to the
Corporation of the certificates for such shares endorsed by the appropriate
person or persons, with such evidence of the authenticity of such endorsement,
transfer, authorization and other matters as the Corporation may reasonably
require, and accompanied by all necessary stock transfer tax stamps. In that
event, it shall be the duty of the Corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate, and record the transaction
on its books.

Section 3. RIGHTS OF CORPORATION WITH RESPECT TO REGISTERED OWNERS.
Prior to the surrender to the Corporation of the certificates for shares of
stock with a request to record the transfer of such shares, the Corporation may
treat the registered owner as the person entitled to receive dividends, to vote,
to receive notifications, and otherwise to exercise all the rights and powers of
an owner.

Section 4. CLOSING STOCK TRANSFER BOOK. The Board of Directors may
close the Stock Transfer Book of the Corporation for a period not exceeding
fifty (50) days preceding the date of any meeting of the stockholders or the
date for payment of any dividend or the date for the allotment of rights or the
date when any change or conversion or exchange of capital stock shall go into
effect or for a period of not exceeding (50) days in connection with obtaining
the consent of stockholders for any purpose. However, in lieu of closing the
Stock Transfer Book, the Board of Directors may fix in advance a date, not
exceeding fifty (50) days preceding the date of any meeting of stockholders or
the date for the payment of any dividend or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such consent, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights or to exercise
the rights in respect of any such change, conversion or exchange of capital
stock, or to give such consent, and in such case such stockholders, and only
such stockholders as shall be stockholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.

Section 5. LOST, DESTROYED AND STOLEN CERTIFICATES. Where the owner of
a Certificate for shares claims that such certificate has been lost, destroyed
or wrongfully taken, the Corporation shall issue a new certificate in place of
the original certificate if the owner (a) so requests before the Corporation has
notice that the shares have been acquired by a bona fide purchaser; (b) files
with the Corporation a sufficient indemnity bond; and (c) satisfies such other
reasonable requirements, including evidence of such loss, destruction, or
wrongful taking, as may be imposed by the Corporation.

ARTICLE IX

Dividends

Section 1. SOURCES OF DIVIDENDS. The directors of the Corporation,
subject to any restrictions contained in the statutes and Certificate of
Incorporation, may declare and pay dividends upon the shares of the capital
stock of the Corporation either (a) out of its new assets in excess of its
capital, or (b) in case there shall be no such excess, out of its net profits
for the fiscal year then current or the current and preceding fiscal year.

Section 2. RESERVES. Before the payment of any dividend, the directors
of the Corporation may set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose, and the
directors may abolish any such reserve in the manner in which it was created.

Section 3. RELIANCE ON CORPORATE RECORDS. A director shall be fully
protected in relying in good faith upon the books of account of the Corporation
or statements prepared by any of its officials as to the value and amount of the
assets, liabilities and net profits of the Corporation, or any other facts
pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid.

Section 4. MANNER OF PAYMENT. Dividends may be paid in cash, in property,
or in shares of the capital stock of the Corporation at par.

ARTICLE X

Seal

The Corporate seal, subject to alteration by the Board of Directors,
shall be in the form of a circle and shall bear the name of the Corporation and
shall indicate its formation under the laws of the State of Colorado. Such seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

ARTICLE XI

Fiscal Year

Except as from time to time otherwise provided by the Board of
Directors, the fiscal year of the Corporation shall be the calendar year.

ARTICLE XII

Amendments

Section 1. BY THE STOCKHOLDERS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws may be amended
or repealed, or new By-Laws may be made and adopted by a majority vote of all
the stock of the Corporation issued and outstanding and entitled to vote at any
annual or special meeting of the stockholders, provided that notice of intention
to amend shall have been contained in the notice of meeting.

Section 2. BY THE DIRECTORS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws, including
amendments adopted by the stockholders, may be amended or repealed by a majority
vote of the whole Board of Directors at any regular or special meeting of the
Board, provided that the stockholders may from time to time specify particular
provisions of the By-Laws which shall not be amended by the Board of Directors.

ARTICLE XIII

Indemnification

The Board of Directors hereby adopt the provision of C.R.S. 7-3-101 S
(as it may be amended from time to time) relating to Indemnification and in
corporate such provisions by this reference as fully as if set forth herein.

<ARTICLE> 5

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