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GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE 1934 ACT
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
NuOncology Labs, Inc.
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(Name of Small Business Issuer in its charter)
FLORIDA 65-0019376
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4870 HAYGOOD ROAD, SUITE 107, VIRGINIA BEACH, VIRGINIA 23455
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (757) 554-0926
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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 $.001 par value
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(Title of class)
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PART I
ITEM ONE. DESCRIPTION OF THE BUSINESS
A. BUSINESS DEVELOPMENT
NuOncology Labs, Inc. (the "Company" or the "Registrant") is a Florida
Corporation. The Company's principal business address is 4870 Haygood Road,
Suite 107, Virginia Beach, Virginia 23455, and its telephone number is (757)
554-0926.
The Company was incorporated under the laws of the State of Florida on November
6, 1994 as "Choice Book & Video, Inc." but conducted no business under that
name. On April 9, 1998, the Company was renamed Littman Resources, Inc. ("LRI").
LRI's stated business objective was merger with or acquisition of an
existing operating company or companies.
In June 1998, a preliminary agreement was reached to merge with NuOncology Labs,
Inc., a Virginia privately held corporation ("NuLabs Virginia"). The name of LRI
was changed to NuOncology Labs, Inc. effective June 26, 1998 in anticipation of
the merger. In August 1998, the two companies merged through a tax-free
one-to-one conversion of common shares.
NuLabs Virginia's Recent Business Combinations
NuLabs Virginia was incorporated in February 1998 to acquire interests in
corporations in the cancer treatment research and clinical oncology laboratory
industries. These corporations had been founded (with others) by the founders of
NuLabs Virginia. The founders wished to consolidate the cancer treatment
compound research, laboratory operations, proprietary intellectual property and
technologies and scientific resources into a single corporation.
Prior to the merger with the Company, NuLabs Virginia shareholders participated
in a share exchange with the shareholders of Paracure, Inc. ("Paracure") and
International Phytochemistry Research Laboratory, Ltd. ("IPRLL"). The founders
of NuLabs Virginia were also the founders and controlling shareholders of
Paracure and IPRLL. Paracure, with its affiliate intellectual property holding
company, IPRLL, owns the controlling patents and worldwide (outside the former
Soviet Union) manufacturing and marketing rights for a cancer treatment compound
called Arglabin.
Immediately after the share exchanges between NuLabs Virginia, Paracure and
IPRLL, NuLabs Virginia purchased substantially all of the assets of Baker
Sanger, Inc. ("BSI"), including BSI's clinical testing laboratory in Houston,
Texas. BSI is a corporation in the field of predictive chemosensitivity testing
of cancer biopsies.
Following the completion of these business combinations, NuLabs Virginia owned
fifty percent (50%) of the outstanding stock of Paracure, eighty point thirty
nine percent (80.39%) of the outstanding shares of IPRLL, and substantially all
of the financial, physical and intellectual property assets of BSI.
The Company has never been a party to any bankruptcy, receivership or similar
proceeding.
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B. BUSINESS OF THE ISSUER
1. General
NuOncology Labs, Inc. has two primary business activities: (1) operation of a
commercial laboratory which provides predictive chemosensitivity and
immunotherapy predictive tests (assays) on biopsy tissues and other oncological
laboratory testing services and products; and, (2) research, development,
identification, testing and licensing of cancer treatment compounds. The
company's lead anti-cancer compound is a Farnesyl Transferase Inhibitor ("FTI"),
Arglabin.
Predictive Oncology Testing
The Company's clinical laboratory, in Houston, Texas, provides "predictive"
tests (assays) designed to provided information that will help an oncologist
(physician cancer treatment specialist) plan cancer treatment. These include
immunohistochemical and flow cytometric tests on fixed tissue for those proteins
that bear predictive value such as tumor aggression, and response to certain
hormonal or immuno-therapies. Tissue culture based tests on living cancer cells
determine growth characteristics and sensitivity to chemotherapy. Overall these
tests deduce which available chemotherapy treatment is most likely to be
beneficial for a specific patient's cancer. The Company plans to implement
certain additional tests to characterize the status of the patient's immune
system to determine whether a patient may be a candidate for certain
immunotherapy approaches. In addition, the Company plans to implement an
anti-viral sensitivity assay to optimize the treatment of HIV patients.
Each patient's laboratory report is delivered over a secure Internet site to the
attending physician. The Company's web site contains links to conventional
therapies that will provide the local practitioner instant descriptions of new,
potentially unfamiliar, treatments as well as links to clinical trial sites.
Development, Testing and Licensing of Cancer Treatment Drugs
The Company's other primary business activity is development, testing and
licensing of Arglabin and other cancer treatment, medical and agricultural
compounds which have been, or are being, developed by the Company's research
partners. Arglabin, the Company's leading cancer treatment drug, is a
plant-derived compound which was developed in Kazakstan and is approved for
cancer treatment in special clinics in Kazakstan and other republics of the
former Soviet Union. Over three hundred (300) patients with a variety of cancers
have been treated with Arglabin with promising results and virtually no toxic
side effects.
The Company's inventions are protected in Kazakstan by eight (8) patents and
five (5) pending patent applications; and, in the United States by nine (9)
pending patent applications. The U.S. Patent and Trademark Office has allowed
claims in two of these U.S. applications. International patent protection is
being pursued via the World Intellectual Property Organization under the Patent
Cooperation Treaty ("PCT"). A number of PCT filings have been submitted and the
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Company's inventions will be filed in various countries throughout the world in
1999. Additional patent applications based on recent molecular research are
under preparation and will be filed as soon as practicable.
Laboratory studies have shown that Arglabin inhibits the enzyme farnesyl
transferase ("Ftase") from triggering a wide range of cancers. Ftase activates a
protein called Ras. About one-fourth of all human cancers are caused by genetic
malfunctions in the Ras biochemical pathway that result in the uncontrolled
growth of cancer. Arglabin prevents Ftase from activating a Ras protein and the
cancers that depend on the Ras oncogene cannot grow and eventually die.
Plans have been initiated to develop registration for Arglabin as an ethical
pharmaceutical in the United States and other countries outside the former
Soviet Union. Plans are also being developed for clinical trials aimed at
securing FDA approval of Arglabin for cancer treatment in the United States. The
Company then intends to license the technology to a major pharmaceutical company
for formal FDA testing, manufacturing, sales and distribution.
2. Organization
The Company presently comprises one corporation with two subsidiaries:
International Phytochemistry Research Laboratory, Ltd. ("IPRLL") and Paracure,
Inc. ("Paracure"). The Company owns 80.4% of IPRLL and 50% of Paracure.
3. Raw Materials
The use of raw materials is not now a material factor in the Company's
operations.
4. Competition
While there are only a few companies offering clinical oncology predictive
testing services similar to those offered by the Company at this time, in
general, competition in the clinical laboratory industry is intense. Although
the high complexity of in vitro predictive assays prohibits their execution by
the large clinical laboratories, the Company competes with at least four other
laboratories that provide chemosensitivity testing services and with several
large academic institutions for the provision of in vitro predictive testing and
with several large specialty testing laboratories for the provision of
immunohistochemical and flow cytometric predictive analyses. Some of the
Company's competitors are larger and have greater financial resources than the
Company. The Company may encounter more intense and varying levels of
competition from other independent clinical laboratory companies in the future.
In addition, changes in the regulatory environment in which the Company operates
could affect the basis for competition in the industry, and could thereby have a
material adverse effect on the Company's results of operations. There is also
competition in the industry for acquisition candidates, and there can be no
assurance that the proposed candidates will be available to the Company on
favorable terms, or at all.
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In addition, the medical/pharmaceutical, agricultural and commercial chemical
industries are characterized by intense competition. Many companies, research
institutes and universities are working in a number of biotechnology disciplines
similar to the Company's fields of research interest. Numerous companies are
engaged in the development of traditional medical/pharmaceutical health care,
agricultural and commercial products which may be competitive with the Company's
proposed products. Many of these entities have substantially greater financial,
technical, manufacturing, marketing, distribution or other resources than the
Company. Furthermore, the Company's proposed products may be subject to
competition from other products using techniques other then those developed by
the Company or based on advances that may render the Company's emerging products
obsolete. The field of biotechnology is subject to rapid and significant
technological changes, and the Company's future success will depend in large
part on its ability to maintain a competitive position with respect to its
technology. Compounds, products or applications developed by the Company may
become obsolete before the Company is able to generate significant revenues or
earnings from Arglabin or other products it may attempt to bring to market. In
the area of human care, the Company will be competing with companies that have
significantly more experience in undertaking pre-clinical testing and human
clinical trials of new or improved therapeutic products and obtaining FDA and
other regulatory approvals of such products. Some of these companies may be in
advanced phases of clinical testing of various drugs that may be competitive
with the Company's products.
5. Reliance on Key Customers
The Company does not intend to rely on any specific key customer or group of
customers. The ultimate customer for predictive testing is the cancer patient.
As cancer patients typically do not order their own testing (although that
phenomenon is occurring more frequently with cancer patients), for the
foreseeable future the de facto customers are surgeons, oncologists,
pathologists, hospitals, health maintenance organizations (HMOs), community
health centers, and third party insurance companies. To illustrate the size of
these market segments, note that in the United States, there are: over 16,000
physicians who treat cancer patients; over 20,000 general surgeons who remove
tumors in surgery; and, approximately 1,300 community hospitals with approved
cancer treatment programs. The Company's services are primarily provided to
oncologists, oncological surgeons, and hospital pathologists who submit their
patients' tumor specimens for testing.
Over 1.1 million Americans are diagnosed with cancer annually. Over 2.2 million
previously treated cancer patients fail primary chemotherapy treatment each
year. Approximately 80% of these cases are solid tumors, of which approximately
25% are treated with chemotherapy. In the USA, there are every year over 600,000
new potential customers for a predictive profile, featuring a chemosensitivity
test.
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6. Backlog
There are no current backlogs.
7. Proprietary Information, Trademarks and Patents
The Company does not own any patents or trademarks. However, as a result of
recent business combinations, the Company does own controlling stock interests
in Paracure and IPRLL, the current owners of the issued, allowed and pending
patent applications and trademarks for Arglabin and its derivatives. The Company
will continue to house its intellectual property, patent and trademark assets in
these subsidiaries, primarily IPRLL going forward.
8. Need for Government Approval
Plans are being developed for clinical trials aimed at securing FDA approval of
Arglabin for cancer treatment in the United States. Although certain members of
management and consultants have had experience in conducting and supervising
pre-clinical and clinical testing and human clinical trials for human drug
products, the Company itself has no experience in designing clinical protocols
on its own behalf and has not prepared an FDA submission. The process of
obtaining required regulatory approvals from the FDA and other United States
regulatory authorities often takes years and can vary substantially based on the
type, complexity and novelty of the product. As with any new drug, additional
governmental regulations may be promulgated which could impose additional costly
testing procedures necessary to obtain regulatory approval and delay regulatory
approval of the Company's pharmaceutical products. There can be no assurance
that, even after investment of time and expenditures, regulatory approval in the
USA will be obtained for any of the Company's proposed pharmaceutical products.
9. Government Regulation
The Stark Bill and Other Referral Restrictions
The Company will be subject to certain self-referral prohibitions of Federal
law, commonly known as the "Stark Bill". The Stark Bill, which became law
January 1, 1992, generally prohibits the Company from billing the Medicare
program if the physician ordering the test (or an immediate family member of
such physician, as defined by the Stark Bill) has an ownership or investment
interest in the Company or a compensation arrangement with the Company.
Ownership interests include ownership of shares of Common Stock purchased in the
open market or otherwise. In the event that a significant number of the
Company's referring physicians who, in the aggregate, refer to the Company a
significant portion of their respective Medicare-billed testing were to acquire
and maintain ownership or investment interests in the Company, or enter into
compensation agreements with the Company, and in such case, the Company were to
continue to perform testing services for such physicians comprising a
significant portion of the Company's Medicare-billed testing, then the Company's
inability to bill the Medicare program for tests ordered by such physicians
would have a material adverse effect on their respective revenues. There can be
no assurance that physicians have complied or in the future will comply with
these requests or accurately represent ownership of any Common Stock.
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The Stark Bill requires the Company to comply with certain reporting
requirements relating to physicians who have an ownership interest in the
Company and physicians who order tests from, and have a compensation arrangement
with, the Company. Proposed regulations implementing the Stark Bill prohibit the
Company from offering a physician price discounts for laboratory services as an
inducement for obtaining Medicare referrals. The regulations also prohibit the
purchase by the Company of a physician-owned laboratory unless, for a period of
one year before and one year after the transaction, the physician had not had
any other financial relationship with the Company. There can be no assurance
that either the Company will be able to obtain adequate information concerning
its physician stockholders to enable it fully to comply with these reporting
obligations. Violation of the Stark Bill could subject the Company to civil
penalties or exclusion from the Medicare program.
The Omnibus Budget Reconciliation Act of 1993 ("OBRA '93") amended certain
important provisions of the Stark Bill. OBRA '93 extended the prohibition on
physician self-referrals to all Medicare- and Medicaid-billable clinical
laboratory services, prohibiting the billing of such services to Medicare,
Medicaid or any other State plan. Under the amendments, physician ownership of
shares in a publicly-traded corporation in which the average stockholder equity,
either at the end of the corporations' most recent fiscal year or an average
over the prior three fiscal years, exceeds $75 million will not be considered
ownership or an investment interest subject to the prohibition. While this
exception is not relevant to the Company at present, it may apply in the future.
In July, 1993, California implemented a comprehensive workers' compensation
reform package. One of the statutes prohibits the referral by a physician of
workers' compensation medical services to a clinical laboratory in which the
physician or his or her family has a financial interest. The term "financial
interest" is defined very broadly, covering many forms of direct or indirect
payments, and includes interests which are created or transferred to avoid the
prohibition. The law also requires disclosure to the patient of any financial
interest of the physician in the facility to which the referral is made.
Violation of law, which is a misdemeanor, could subject the Company to fines and
disciplinary action, including license revocation.
Prohibitions Relating to the Mark-up of Laboratory Services.
Clinical laboratories, physicians, hospitals and other health care providers in
California are subject to Section 655.5 of the California Business and
Professions Code. This statute prohibits those subject to the statute, including
the Company, in billing patients or third-party payers, from marking up charges
for any clinical laboratory services actually not rendered by the provider. A
significant portion of the Company revenues are subject to these regulations. In
the event that the Company is found in violation of these regulations, it may be
subject to fines and/or sanctions. However, at this time the Company sells only
its own laboratory services and does not sell laboratory services rendered by
any other laboratory service provider.
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Antikickback Laws
The Medicare/Medicaid antikickback statute prohibits laboratories from paying
remuneration as inducement for referrals of patients or specimens to third
parties for testing and contains severe penalties for violating testing services
reimbursed by the Medicare or Medicaid (referred to in California as "MediCal")
programs. The Company believes that its existing business relationships do not
violate this statute. Court decisions and an administrative decision suggest
that any direct or indirect payment conferred upon one who refers Medicare or
Medicaid patients by, or on behalf of, the referral recipient may violate the
statute if any part of the purpose of such benefits is to provide an incentive
for such referrals. In addition, a provider convicted of violating such laws
would be excluded from participation in the Medicare and MediCal programs. The
Office of Inspector General of the United States Department of Health and Human
Services has issued "safe harbor" regulations, which identify certain payment
practices which do not violate the antikickback statute. Although these
regulations protect certain types of investment interests, they do not protect
investments by physicians or hospitals in the Company or the purchase of
clinical laboratories from persons in a position to refer business to the
laboratory after the purchase occurs.
California law also prohibits the receipt or acceptance by licensed physicians
of various forms of consideration, including rebates, refunds, discounts or
preferences as compensation or inducement for referring patients, clients or
customers to any other person (including a clinical laboratory), irrespective of
any ownership which the physician may have in the entity to which the referral
is made or the source of payment of other services. Laboratories that violate
the California antikickback laws may be subject to loss of licensure and
substantial fines. In addition, a provider convicted of violating such laws
would be excluded from participation in the Medicare and MediCal programs. The
Company believes that it satisfies the requirements of California law with
respect to its relationship with its physician-owners.
Medicare/MediCal Reimbursement
Laboratories are required to bill Medicare or MediCal directly for services and
supplies provided to patients under these programs, and to accept Medicare or
MediCal reimbursements as payment in full. In 1984, Congress established a
reimbursement fee schedule for clinical laboratory testing performed for
Medicare beneficiaries (excluding hospital in-patients). State Medicaid
programs, including MediCal, are prohibited from paying more than the Medicare
fee schedule stipulates for testing for Medicaid beneficiaries. When initially
established, the Medicare fee schedules were set at 60% of prevailing local
charges. Medicare reimbursement rates for clinical laboratory testing
subsequently have been reduced several times pursuant to Congressional mandate.
The reductions in Medicare reimbursement rates have been offset to some extent
by increases in both the national cap and the local fee schedules tied to the
Consumer Price Index ("CPI"). Further decreases in such fee schedules, however,
could have a material adverse effect on businesses and operations of the
Company. Proposals that would reduce the amounts reimbursable to and other
independent testing laboratories under the Medicare program are continuously
under consideration by Congress and the Executive Branch.
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The Clinical Laboratories Improvement Act of 1988
The Company is subject to regulation by the Health Care Financing Administration
("HCFA"), a division of the United States Department of Health and Human
Services, under the Clinical Laboratories Improvement Act of 1988 ("CLIA").
These regulations mandate that all clinical laboratories be certified to perform
testing on human specimens and provide specific conditions for certification.
These regulations also contain guidelines for the qualification,
responsibilities, training, working conditions and oversight of clinical
laboratory employees. In addition, specific standards are imposed for each type
of test which is performed in a laboratory. CLIA and the regulations promulgated
thereunder are enforced through quality inspections of test methods, equipment,
instrumentation, materials and supplies on a biennial and "spot" basis. Any
change in CLIA or these regulations or in the interpretation thereof could have
a materially adverse effect on the Company's business, prospects, financial
condition or results of operations. To its knowledge, the Company is in
compliance with the currently applicable regulations of HCFA. At the present
time, the United States Food and Drug Administration ("FDA") does not regulate
the CSA. In addition, the extent of potentially adverse government regulations
that might arise from future legislation or administrative action cannot be
predicted.
10. Research and Development
The Company incurred $58,420 in direct expenses for R&D during the last fiscal
year. This number excludes associated indirect costs and one time research
related expenditures such as the provision of equipment and support to research
partners in Kazakstan. Including these research related items, expenditures in
the broad category were approximately $450,000 for R&D during the last fiscal
year. In addition, the Company expects to spend approximately $750,000 on R&D in
the current fiscal year. The 1999 expenditures will be largely in areas of
molecular modeling of compounds, support for the company's research associates
in the United States and Kazakstan in the on-going development of the Company's
product pipeline, and improvement and expansion of laboratory testing and
analytical techniques and services.
11. Environmental Compliance
There are no material environmental compliance issues or costs facing the
company. Its laboratory operations in Houston are regulated under the Clinical
Laboratory Improvement Act (CLIA), CFR 488.28 administered by the U.S.
Department of Health and Human Services, Health Care Financing Administration.
The new laboratory facility was inspected November 23, 1998, and found to be in
full compliance with zero deficiencies.
12. Employees
The Company currently employs ten employees of which seven are full time. The
Company expects to hire nine additional employees in the next fiscal year.
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13. Year 2000 Compliance
The Company is Year 2000 compliant.
ITEM TWO. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
A. GENERAL
Since the merger and acquisition transactions of July and August 1998 the
Company has devoted it efforts to research and development with regard to its
lead anticancer compound, the compound's mechanism of action and potential
derivatives; perfecting and expanding its patent positions with respect to the
completed research; developing a significantly improved clinical and research
laboratory facility in Houston; and, hiring personnel and implementing operating
and management systems to support the consolidated and expanded enterprise. The
Company had only modest revenues of $34,173 during this period, generated
entirely from laboratory operations and interest on cash balances. The Company
anticipates that these revenues will grow significantly in 1999 but may not
achieve break even levels at current expenditure levels for several months. The
Company anticipates that its revenues for the foreseeable future will be from
clinical laboratory fees, research grants and contracts, and possible licensing
fees for its lead compound and other compounds under development. No assurance
can be given as to the rate of increase of revenues, if any, from laboratory
operations; timing or amounts of revenues which may be generated through
research grants or contracts; or the success of the Company in securing
licensing fees for any of its compounds.
The Company anticipates conducting animal trials in the spring and summer of
1999 and initiating Phase 1 human trials directed toward FDA approval of
Arglabin immediately thereafter. The Company is now positioned to initiate
discussions with major pharmaceutical companies which may be candidates as
strategic partners in the completion of the human trials and eventual
manufacture and marketing of the compound should FDA approval be secured.
However, the Company, if necessary, is prepared to initiate the animal trials in
the absence of such a strategic partner. The Company is currently in discussions
with sources of investment capital with the intent of securing sufficient
additional equity capital or financing to assure the Company's ability to
conduct FDA-protocol human trials in the absence of a major pharmaceutical
company strategic partner. No assurance can be given that the Company will be
successful in securing such equity capital or financing or attracting such a
strategic partner.
B. TRENDS, EVENTS OR UNCERTAINTIES IMPACTING LIQUIDITY, NET SALES OR REVENUES
Now that the Company has substantially completed the development, equipping and
launch phase operations of its new clinical and research laboratory facility,
management will focus substantially on the marketing and sales of its laboratory
services and products. This activity
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includes the hiring of senior staff and consultants experienced in the marketing
of oncological predictive testing assays and other related laboratory services.
It is anticipated that the deployment of these added personnel will positively
impact laboratory revenues and gross margins.
The Company's peer-reviewed research has demonstrated that its lead anticancer
compound, Arglabin, is a Farnesyl Transferase ("Ftase") Inhibitor ("FTI") -
inhibition of FTase is the compound's mechanism of action. A substantial number
of major pharmaceutical companies (at least twelve to management's knowledge)
have undertaken programs to develop, or acquire rights to, FTI's. The existence
of this active search by major pharmaceutical companies for potentially
effective FTI's improves the prospects that the Company will be able to license
its compound and secure appropriate licensing fees.
Without a substantial increase in laboratory revenues, receipt of licensing
fees, and/or an additional infusion of equity capital and/or debt financing, the
Company will not be able to sustain laboratory operations for more than a period
of several months. There can be no assurance given at this time that the Company
will be successful in increasing laboratory revenues, or securing additional
equity capital or debt financing. Core executive and management functions,
particularly as they apply to the licensing of cancer treatment compounds can be
sustained indefinitely. The Company's research partners in Kazakstan are not
dependent on Company resources to support on-going basic research on additional
compounds. Therefore, a significant portion of the on-going pipeline research
would continue regardless of the financial condition of the Company.
C. LIQUIDITY AND CAPITAL RESOURCES
The Company has, between January and April 1999, raised $406,000 in new equity
capital through a Regulation S private placement of stock priced at $7.00 per
share. The Company is in discussions with a number of sources for investment
capital seeking an additional minimum capital investment of $1,000,000. At this
time the Company has less than $150,000 in debt, largely in the form of a
short-term loan from the CEO. Future fundings could include convertible debt
instruments. At this time, the Company has a verbal commitment for an additional
minimum $600,000 in funding from Coleraine Holdings, LLC, secured in part by
shares of executive officers of the Company. Details and terms of the funding
transaction are under negotiation. As of April 30, Coleraine Holdings has
advanced $350,000 to the company under the terms of a short term renewable note,
pending resolution of the final terms of the equity investment. Coleraine
Holdings currently has 225,218 investment shares of the Company, and its manager
members hold 146,673 investment shares personally. The Company has a consulting
agreement with Coleraine Co., LLC (common ownership with Coleraine Holdings)
which owns 2,000 investment shares and, as of April 30, 1999, has accrued
123,750 five year options exercisable at $3.00 under the terms of its consulting
agreement
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D. COMMITMENTS FOR CAPITAL EXPENDITURE & SOURCE OF FUNDS
The Company has no plans for significant or material capital expenditures for
its U.S. operations. It does provide support to its research partners in
Kazakstan and anticipates allocating resources for the improvement of facilities
and provision of equipment to them. No unfunded capital expenditure commitments
or liabilities exist with regard to this ongoing support. Funds are only
allocated as they are received by the Company and within the context of the
Company's other operating requirements.
E. ELEMENTS OF INCOME OR LOSS NOT ARISING FROM OPERATIONS
No material elements.
F. CAUSES OF PERIOD TO PERIOD CHANGES IN FINANCIAL LINE ITEMS
The first relevant, quarterly period-to-period comparisons will not be available
until the third quarter of 1999. The Company had no business operations until
the third quarter of 1998.
G. SEASONAL ASPECTS EFFECTING FINANCIAL CONDITIONS OR RESULTS
None.
ITEM THREE. DESCRIPTION OF PROPERTIES
The Company's executive offices are housed in a 1,600 square foot facility
located at 4870 Haygood Road, Suite 107, Virginia Beach, Virginia. On August 1,
1998 the Company signed a one-year lease for these premises. Additionally, on
September 1, 1998, the Company leased a 7,500 square foot laboratory facility,
located in Houston, Texas, for a three-year term where the Company's clinical
laboratory services and some laboratory research are conducted. The laboratory
facility is comprised of laboratories, clinical space, conference rooms,
administrative offices and reception.
Approximately half of the facility is laboratory space segregated into the
following major areas: a tissue culture suite (a class P2 clean room of some 200
square feet for clinical testing); a biochemistry suite (some 700 square feet
consisting of four labs dedicated to the development of anti-cancer compounds;
an histology laboratory (some 179 square feet to perform flow cytometric an
immunohistochemical predictive tests); a darkroom with an automated film
developer; a manufacturing suite (composed of four laboratories totaling some
600 square feet for the manufacture of test kits and other consumables used I
predictive testing); and the main laboratory (some 1,300 square feet containing
ten lab benches with furnished cubicles for each R&D technician). There are
administrative and operations offices for twelve support staff in addition to
the reception and conference facilities. The facility also houses the companies
internet/intranet servers and computers. The laboratory facility is fully
equipped with state-of-the-art laboratory equipment including digital imaging
microscopes which are used in analyzing and reporting predictive profile data.
The laboratory has self-contained water filtration and purification systems and
emergency power back-up. The laboratory portion of the facility can
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support the completion of one thousand comprehensive biopsy chemosensitivity and
immunotherapy profiles per month as well as providing areas for drug development
and general R&D.
ITEM FOUR. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following sets forth the number of shares of the Registrant's $.001 par
value common stock beneficially owned by (i) each person who, as of the date
hereof, was known by the Company to own beneficially more than five percent (5%)
of its issued and outstanding common stock; (ii) each of the Named Executive
Officers; (iii) the individual Directors of the Registrant; and (iv) the
Officers and Directors of the Registrant as a group. As of the date hereof,
there were 18,859,333 common shares issued and outstanding.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Title of Class Name and Address of Beneficial Amount of Beneficial Percent of Class
Owner Ownership
- --------------------------------------------------------------------------------------------------------------------
Common
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Philip F. Enlow (officer, 2,558,336 13.57%
director) - 4870 Haygood Road,
Suite 107, Virginia Beach,
Virginia 23455
- --------------------------------------------------------------------------------------------------------------------
Robert Thomas (officer, director) 2,558,336 13.57%
(1) - 4870 Haygood Road, Suite
107, Virginia Beach, Virginia
23455
- --------------------------------------------------------------------------------------------------------------------
R. Michael Williams (director) - 2,558,337 13.57%
P.O. Box 802, Island Lake,
Illinois 60042
- --------------------------------------------------------------------------------------------------------------------
Fraser L. Baker (officer, 1,350,000 7.16%
director) - 8000 El Rio, Houston,
Texas 77054
- --------------------------------------------------------------------------------------------------------------------
David Simonetti (director) (2)- 9,000 .05%
1862 Mintwood Place NW, Suite
104, Washington, DC 20009-1947
- --------------------------------------------------------------------------------------------------------------------
Officers and Directors as a group 9,025,009 47.92%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This number includes 1,554,168 shares held by Robert Thomas. Of the
remainder of the shares, 1,004,168 are held in the name of Mr. Thomas's
wife, Evelyn, and 500,000 shares were allocated by voluntary obligation to
the Company's Kazak research partners.
12
<PAGE>
(2) Mr. Simonetti owns his shares through a corporation which he controls.
ITEM FIVE. DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS
The following information sets forth the names of the officers and directors of
the Company, their present positions and responsibilities and biographical
information.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
NAME POSITION
- ---------------------------------------------------------------------------------------------
<S> <C>
Philip F. Enlow Chairman, Chief Executive Officer & Director
- ---------------------------------------------------------------------------------------------
Robert Thomas Senior Vice President Business Development &
Director
- ---------------------------------------------------------------------------------------------
Fraser L. Baker, Ph.D. Senior Vice President Clinical Testing &
Research, & Director
- ---------------------------------------------------------------------------------------------
R. Michael Williams, M.D., Ph.D. Director
- ---------------------------------------------------------------------------------------------
David J. Simonetti Director
- ---------------------------------------------------------------------------------------------
Anne C. Enlow Director
- ---------------------------------------------------------------------------------------------
</TABLE>
Philip F. Enlow, 72, Chairman, CEO and Director, received his B.Sc. degree from
John B. Stetson University, Deland, Florida. He joined the F.B.I. as a Special
Agent and over a period of 27 years held various administrative positions in FBI
Headquarters, Washington, D.C. and a number of Field Offices through out the
United States. After leaving the F.B.I., he became a vice president of a large
regional bank which ultimately became NationsBank. He presently owns an
international commodity brokerage & trading company and is the executive
vice-president of Paracure, Inc.
Robert Thomas, 54, Senior Vice President Business Development and Director,
earned his degree in mathematics in the class of 1966 from the Virginia Military
Institute. He has had extensive experience in sales and marketing in accounting
systems and real estate. He became a stock-broker and joined Dean Witter in
1983. He began to develop business opportunities in the former Soviet Union
through the Moscow Aviation Institute and a Russian-American joint venture in
housing. In 1992, he developed business ventures as a member of the Karaganda,
Kazakstan, inter-regional commodity exchange. He formed a joint venture with
Tabigat Laboratories and acquired the worldwide marketing rights (except the
former Soviet Union) to a new class of anti cancer compounds derived from plants
indigenous to that area. He is presently the Founder, President, and CEO of
Paracure, Inc.
Fraser L. Baker, Ph.D., 58, Senior Vice President Clinical Testing & Research
and Director, received his M.Sc., degree in physical chemistry in 1969 and his
Ph.D. in mammalian physiology
13
<PAGE>
from Queen's University in 1973. He entered a career in medical science
utilizing cell culture techniques. He has over 24 years of hands-on experience
with a variety of cell culture methods. In 1979, he established a clinical
laboratory for predictive testing at the Loma Linda Medical Center in California
and developed the Adhesive Tumor Cell Culture System (ATCCS). To resolve the
problem of low growth of primary tumor cells in culture, he developed an
enriched monolayer culture system while at Loma Linda University in 1981. While
at the University of Texas Anderson Cancer Center validated a chemosensitivity
assay based on this enriched monolayer culture methodology between 1983 and
1986. In 1993, he co-founded the Baker Sanger Clinical Laboratory, a diagnostic,
immunohistochemistry clinical laboratory which commercialized the
chemosensitivity assay. He was the President of Baker Sanger from founding
through its acquisition by the Company. He has published 33 peer reviewed
scientific articles.
R. Michael Williams, MD, Ph.D., 52, Director, received his B.A. degree from Yale
College in 1969 and his MS degree in 1970 from Yale University. In 1974, he
received his M.D. degree from Harvard Medical School and a Ph.D. degree from
Harvard graduate school. He was the Chief of Medical NuOncology and Professor of
Medicine at Northwestern University from 1979 to 1981. He was also was in
private medical oncology and internal medicine practice while holding various
academic positions. He founded the Cancer Consulting Group in 1984 which
provides consultations directly to cancer patients. In 1989, Dr. Williams
co-founded Cancer Treatment Centers of America and was the Senior Medical
Director and Chief Medical Officer until he left CTCA to devote more time to the
development of NuOncology Labs. He has over 22 years of experience as a medical
oncology practitioner, laboratory scientist and administrator. He has published
nearly 100 articles concerning effective cancer treatments.
David J. Simonetti, 31, has served as a Director of the Company since August
1998. Since October of 1998, Mr. Simonetti has served as Co-Chairman and Chief
Executive Officer of VentureNow, Inc., a private venture capital concern. From
August 1997 to December 1998, Mr. Simonetti was Chief Executive Officer of
Invoke Distribution, LLC, a marketing and advertising company. From February
1997 to October 1998, Mr. Simonetti was Chief Executive Officer of Projix
Corporation, and Internet software company. From October 1994 through February
1997, Mr. Simonetti served as Vice President and Chief Operating Officer of
Edmar, Inc., a construction management company. Mr. Simonetti also serves on the
Board of Directors of Streamedia Communications, Inc., a privately-held Internet
broadcasting company. Mr. Simonetti holds a Bachelor of Arts degree from
Marlboro College, Vermont.
Anne C. Enlow, is the spouse of Chairman & CEO, Philip F. Enlow, she serves on
the board pro tem, pending the appointment of another candidate to that seat.
Such appointment is anticipated in the second quarter 1999.
14
<PAGE>
ITEM SIX. EXECUTIVE COMPENSATION
A. DIRECTORS' COMPENSATION
Directors currently receive no compensation for their services to the Company,
but are reimbursed for out-of-pocket expenses incurred while attending board
meetings.
B. COMPENSATION OF EXECUTIVE OFFICERS
Philip F. Enlow, Robert S. Thomas, and Fraser L. Baker signed employment
agreements with the Company beginning on April 15, 1998 for a five-year period.
The officers' initial base salaries under those contracts are each set at
$100,000 per year.
The following table sets forth all compensation awarded or to be paid by the
Company during the period ending December 31, 1998 to its executive officers:
<TABLE>
<CAPTION>
Capacity in Which Cash Long Term
Name Employee Serves Compensation Compensation
- ---- --------------- ------------ ------------
<S> <C> <C> <C>
Philip F. Enlow Chairman, Chief Executive
Officer & Director $100,000 base salary 60% deferred.
Fraser L. Baker Senior Vice President
Clinical Testing & Research,
& Director $100,000 base salary 60% deferred.
Robert Thomas Senior Vice President
Business Development
& Director $100,000 base salary 60% deferred.
</TABLE>
ITEM SEVEN. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
R. Michael Williams, M.D., Ph.D., a founder and director of the Company,
provides medical direction and other services to the Company through Cancer
Consulting Group, P.C., a consulting firm, of which he is 100% owner. Dr.
Williams is not an officer of the Company.
Anne C. Enlow is the spouse of Chairman & CEO, Philip F. Enlow, she serves on
the board pro tem, pending the appointment of another candidate to that seat.
Such appointment is anticipated in the second quarter of 1999.
The Company is currently in the process of negotiating the repurchase of 900,000
shares of common stock which are currently owned by Tidewater Enterprise.
On January 7, 1999, the Company issued a promissory note to Philip F. Enlow,
Chairman and Chief Executive Officer of the Company. Under the terms of this
note, Mr. Enlow will advance money from time to time as needed. Interest shall
accrue at the rate of .75% per month on
15
<PAGE>
outstanding principal and accrued interest. Mr. Enlow has advanced $120,100 to
the Company to date.
On April 1, 1999, the Company issued a promissory note to Coleraine Holdings,
LLC, a shareholder of the Company, in consideration for an investment of no less
than $600,000 and no more than $1,000,000. The note bears interest at the rate
of one percent (1%) per month on outstanding balances, including principal and
previously accrued but unpaid interest.
There have been no other related party transactions, or any other transactions
or relationships required to be disclosed pursuant to Item 404 of Regulation
S-B.
ITEM EIGHT. DESCRIPTION OF SECURITIES
The total number of shares which the Company shall have the authority to issue
is 50,000,000 shares of Common stock at $.001 par value. As of the date hereof,
the Company had a total of 18,859,333 Common Shares issued and outstanding.
There are no other classes of shares issued or outstanding. The holders of
Common Stock have one vote per share on all matters without provision for
cumulative voting. The Common Stock is not redeemable and has no conversion or
preemptive rights.
The Common Stock currently outstanding is validly issued, fully paid and
non-assessable. The Company may pay dividends, in cash or in securities or other
property when and as declared by the Board of Directors from funds legally
available therefor, but has paid no cash dividends on its Common Stock.
16
<PAGE>
PART II
ITEM ONE. MARKET FOR COMMON EQUITY & RELATED STOCKHOLDER MATTERS
A. PRINCIPAL MARKET OR MARKETS
NASDAQ Bulletin Board
The Company's securities began trading on the NASDAQ Bulletin Board under the
symbol "NLAB" on July 9, 1998. During the prior two fiscal years the low and
high bid prices as reflected by interdealer quotations were:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
QUARTER Low Bid High Bid
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Period 3rd Quarter '97 through 2nd Quarter '98 No Trading No Trading
- --------------------------------------------------------------------------------------------------
3rd Quarter '98 5 3/4 7 1/2
- --------------------------------------------------------------------------------------------------
4th Quarter '98 4 12 3/8
- --------------------------------------------------------------------------------------------------
1st Quarter '99 5 5/8 12 1/4
- --------------------------------------------------------------------------------------------------
2nd Quarter '99 to date 6 1/8 8 3/8
- --------------------------------------------------------------------------------------------------
</TABLE>
Berlin Stock Exchange
The Company's common stock began trading over the counter on the Berlin Stock
Exchange on March 3, 1999. The Company's trading symbol on this exchange is
"NLA" (ISIN number 916415).
A. APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK
As of the date hereof, a total of 18,859,333 shares of the Company's common
stock were outstanding. Of these, 3,100,000 are free trading and 15,759,333 are
investment shares.
The number of holders of record of the Company's common stock at that date was
estimated to be in excess of 300. Of these 240 are listed by the Company's
transfer agent and the balance are thought to hold shares purchased in the
market and held in brokerage accounts.
B. DIVIDENDS
Holders of common stock are entitled to receive such dividends as may be
declared by the Company's Board of Directors. No dividends on the Common Stock
were paid by the Company during the periods reported herein nor does the Company
anticipate paying dividends in the foreseeable future.
17
<PAGE>
ITEM TWO. LEGAL PROCEEDINGS
The Securities and Exchange Commission is conducting an informal non-public
inquiry concerning the Company. The Company has voluntarily cooperated with all
of the SEC's requests associated with the inquiry.
At this time the Company is not involved in any litigation and is not aware of
any pending litigation or the possibility of future litigation which could
adversely affect the Company or its Shareholders.
ITEM THREE. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company did not have any disagreements on accounting and financial
disclosures with its accounting firm during the reporting period or during the
preparation of its audited financial statements for the year ending December 31,
1998.
ITEM FOUR. RECENT SALES OF UNREGISTERED SECURITIES
The Company has issued the following unregistered common stock in the three-year
period preceding the date of this Registration Statement:
On December 20, 1998, the Company initiated a Regulation S Offering, pursuant to
which the Company offered 1,000,000 shares of common stock at $7.00 per share.
As of the closing date of the offering, 58,000 shares were subscribed.
In October, 1998, the Company initiated a Regulation S Offering, pursuant to
which the Company offered 20,000 shares of common stock at $5.00 per share. The
offering was fully subscribed and closed.
On August 15, 1998, the Company initiated a Regulation D 506 offering of 653,333
shares of common stock at $0.75 per share.
The offering was fully subscribed and closed.
In August, 1998, the Company merged (effective August with NuOncology Labs,
Inc., a Virginia privately held corporation. The shareholders of NuOncology
Labs, Inc. (Virginia) exchanged 14,170,014 shares of NuOncology Labs (Virginia)
stock, representing 100 percent of the issued and outstanding shares of
NuOncology Labs (Virginia) for a equal number of shares of the Company's stock.
The shares issued represented 72% of the issued and outstanding securities of
the Company, assuming exercise of 3,000,000 outstanding half warrants
convertible to 1,500,000 shares.
On June 27, 1998, the Company issued 3,000,000 stock Units at $0.17 per Unit in
reliance upon Rules 504 and 506 of Regulation D promulgated under the Securities
Act of 1933.
18
<PAGE>
ITEM FIVE. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation limit, to the maximum extent permitted
by law, the personal liability of directors and officers for damages for breach
of any duty owed to the Company or its shareholders. The Articles of
Incorporation provide further that the Company shall have the power, in its
By-Laws or in any resolution of its stockholders or directors, to undertake to
indemnify the officers and directors of the Company against any contingency or
peril as may be determined to be in the best interests of the Company, and in
conjunction therewith, to procure, at the Company's expense, policies of
insurance.
The Company has secured such a policy of insurance in the Limit of Liability
amount of $1,000,000 aggregate for Directors & Officers Insurance and Company
Reimbursement Insurance.
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
NUONCOLOGY LABS, INC.
Date: May 14, 1999
By:
----------------------------------------
Philip F. Enlow, Chief Executive Officer
20
<PAGE>
PART III
FINANCIAL INFORMATION
21
<PAGE>
PART IV
INDEX TO EXHIBITS
99.1 Articles of Incorporation ....................................
99.2 Amendments to Articles of Incorporation ......................
99.3 By-laws .......................................................
22
<PAGE>
---------------
NuOncology Labs
---------------
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
Consolidated Financial Report
December 31, 1998
TABLE OF CONTENTS
Independent Auditor's Report F-2
Consolidated Balance Sheet F-3
Consolidated Statement of Income F-4
Consolidated Statement of Cash Flows F-5
Notes to Consolidated Financial Statements F-6-10
F-1
<PAGE>
[LETTERHEAD]
999 Waterside Drive, Suite 2200
Dominion Tower
Norfolk, Virginia 23510-3302
May 5, 1999
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Boards of Directors and Stockholders
NuOncology Labs, Inc. and subsidiary
Virginia Beach, Virginia
We have audited the accompanying consolidated balance sheet of
NuOncology Labs, Inc., and subsidiary (a Development Stage Company) as of
December 31, 1998, and the related consolidated statements of income and cash
flows for the period then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of NuOncology
Labs, Inc., and subsidiary (a Development Stage Company) and subsidiary at
December 31, 1998, and the results of its operations and its cash flows for the
period then ended, in conformity with generally accepted accounting principles.
As discussed in the accompanying notes to consolidated financial
statements, a valuation of the companies involved in the formation of NuOncology
Labs, Inc., and subsidiary (a Development Stage Company) has not been obtained.
The basis upon which the transactions were recorded for purposes of the
accompanying financial statements is as explained in the accompanying notes to
the financial statements.
/s/ Edmondson, LedBetter & Ballard LLP
757-627-2100 757-627-0412 fax www.elbcpa.com
American Institute of CPAs o Division for CPA Firms o Virginia Society of
CPAs o Virginia Group of CPA Firms
F-2
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
December 31, 1998
ASSETS
<TABLE>
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 114,967
Accounts receivable, trade 11,986
Contract advances 59,602
----------
TOTAL CURRENT ASSETS $ 186,555
PLANT AND EQUIPMENT 227,320
Less allowance for depreciation and amortization (16,687)
----------
TOTAL PLANT AND EQUIPMENT 210,633
OTHER ASSETS
Investment in Paracure, Inc. 5,400,000
Patent costs 6,506
Goodwill 4,434,350
Due from related parties 124,315
Refundable deposits 31,279
----------
TOTAL OTHER ASSETS 9,996,450
-----------
TOTAL ASSETS $10,393,638
===========
</TABLE>
See Independent Auditor's Report and
Accompanying Notes to Consolidated Financial Statements
F-3
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term liabilities $ 4,175
Accounts payable, trade 246,703
Payroll taxes payable and accrued 10,087
Due to related parties 8,500
-----------
TOTAL CURRENT LIABILITIES $ 269,465
LONG-TERM LIABILITIES
Installment note payable, net of current portion 20,007
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 50,000,000 shares
authorized, 17,522,509 issued and outstanding 17,523
Additional paid-in capital 10,916,827
-----------
Total common stock 10,934,350
Registration costs (232,405)
Deficit accumulated during the development stage (597,779)
-----------
TOTAL STOCKHOLDERS' EQUITY 10,104,166
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,393,638
===========
</TABLE>
F-4
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
CONSOLIDATED STATEMENT OF INCOME
For the Period April 1, 1998 through December 31, 1998
<TABLE>
<S> <C> <C>
REVENUE
Clinical services, net of discounts $ 29,350
Interest income 4,823
--------
TOTAL REVENUE $ 34,173
EXPENSE
Consultant and professional fees 118,207
Contract labor 30,158
Depreciation 16,687
Office expense 12,836
Organization and start-up costs 17,450
Rent 37,760
Research and development 58,420
Salaries, wages and payroll taxes 162,298
Supplies 12,395
Telephone and communications 16,800
Travel 88,535
All other expenses 60,406
--------
TOTAL EXPENSE 631,952
---------
NET LOSS $(597,779)
=========
</TABLE>
See Independent Auditor's Report and
Accompanying Notes to Consolidated Financial Statements
F-5
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Period April 1, 1998 through December 31, 1998
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (597,779)
Adjustments to reconcile net loss to net cash from
operating activities
Depreciation 16,687
(Increase) decrease in operating assets
Accounts receivable, trade (11,986)
Contract advances (59,602)
Refundable deposits (31,279)
Increase (decrease) in operating liabilities
Accounts payable, trade 246,703
Payroll taxes payable and accrued 10,087
----------
NET CASH USED BY OPERATING ACTIVITIES $ (427,169)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of plant, equipment and computer software (202,584)
Patent costs (6,506)
Increase in amounts due from related parties (124,315)
Increase in amounts due to related parties 8,500
----------
NET CASH USED BY INVESTING ACTIVITIES (324,905)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 1,100,000
Repayments of installment note payable (554)
Registration costs incurred (232,405)
----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 867,041
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 114,967
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -
----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 114,967
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 42
==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Asset acquired using installment note payable $ 24,736
==========
Investments and goodwill acquired using issuance of common
stock $9,834,350
==========
</TABLE>
See Independent Auditor's Report and
Accompanying Notes to Consolidated Financial Statements
F-6
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NATURE OF BUSINESS
NuOncology Labs, Inc., (NuLabs, the Company) is a Florida corporation
involved in the cancer research and clinical testing laboratories
industries. It currently supports the research, development, testing, and
licensing of promising cancer treatments and the delivery of predictive
chemosensitivity tests for the optimization of contemporary cancer
treatment, both of which could improve clinical outcomes while reducing
treatment costs. Its two primary business activities are a research activity
working towards commercializing cancer treatment compounds and a commercial
activity providing clinical laboratory oncology testing services and
products. The Company to date has been primarily a development stage
enterprise, with limited revenue from its intended business activities.
GOING CONCERN
The Company's consolidated financial statements have been prepared in
conformity with principles of accounting applicable to a development stage
company and presuming the Company to be a going concern. However, without a
substantial increase in laboratory revenues, receipts of licensing fees,
and/or an additional infusion of equity capital and/or debt financing, the
Company will not be able to sustain laboratory operations for more than a
period of several months. Core executive and management functions,
particularly as they apply to the licensing of cancer treatment compounds
can, however, be sustained for an extended period of time.
CORPORATE FORMATION AND BUSINESS COMBINATIONS
NuOncology Labs, Inc., was formed in 1998, as the final transaction in a
series of tax-free merger and acquisition events. Prior to that series of
transactions, NuLabs was a dormant public "shell" corporation.
NuOncology Labs, Inc. resulted from the following business combinations:
o A shareholder group representing 50% of the ownership in Paracure, Inc.,
a Delaware corporation, exchanged their shares in that corporation for
7,200,000 shares of NuOncology Labs, Inc., of Virginia. This transaction
was completed July 20, 1998.
o NuOncology Labs, Inc., of Virginia acquired an 80.39% ownership in
International Phytochemistry Research Laboratory, Ltd. (IPRLL) in
exchange for 1,057,524 shares of capital stock. This transaction was
effective July 22, 1998.
o NuOncology Labs, Inc., of Virginia acquired the assets of Baker Sanger,
Inc. (BSI), a clinical testing laboratory located in Houston, Texas, for
$40,000 cash and 1,500,000 shares of capital stock. This transaction was
effective July 23, 1998.
o Following these transactions, NuOncology Labs, Inc., of Virginia
exchanged its stock in a one-to-one tax-free exchange with NuOncology
Labs, Inc. This transaction was effective August 10, 1998.
As previously stated, prior to this series of transactions NuOncology Labs,
Inc., was a dormant public "shell" corporation. At delivery of this entity
to the founders of NuLabs, $500,000 of initial paid-in capital was provided.
Those shares were sold with one-year warrants attached, exercisable through
(Continued on Next Page)
See Independent Auditor's Report
F-7
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CORPORATE FORMATION AND BUSINESS COMBINATIONS (Continued from preceding page)
July 8, 1999. None have been exercised to date. An additional $600,000 of
restricted common stock was sold through December 31, 1998.
The exchange of stock of NuOncology Labs, Inc., of Virginia for shares of
NuOncology Labs, Inc., was the final step in the formation process. The
recorded valuations of the transactions was based on the eventual issuance
of 14,169,991 shares issued to former shareholders of NuOncology Labs, Inc.,
of Virginia, using an estimated value of $0.75 per share. The per share
value of $0.75 was based solely on a simultaneously active private placement
offering of similar shares at that price per share, which offering was fully
subscribed for 653,333 shares. At the time of the transactions which
consummated the formation of the Company, a limited number of free-trading
shares were trading at $7.50 per share. Subsequent to the completion of
these transactions and through December 31, 1998, a larger but still limited
number of shares of NuLabs' common stock traded in the range of from $4.00
to $12.38 per share. Subsequent to December 31, 1998 and through the date of
issuance of the accompanying financial statements, shares have sold in the
range of from approximately $5.63 to $12.25 per share. A formal valuation of
the Company has not been obtained.
However, based on using the value of $0.75 per share, the various phases of
the corporate formation previously described are valued as follows. Also,
see INVESTMENTS on page 8.
<TABLE>
<S> <C>
Acquisition of Paracure, Inc., 50% interest (equity method
investment) $5,400,000
===========
Acquisition of International Phytochemistry Research
Laboratory, Ltd., 80.39% interest (consolidated subsidiary) $ -
===========
Goodwill associated with acquisition of Baker Sanger, Inc.,
asset acquisition $1,125,000
===========
Goodwill associated with one-to-one exchange of shares
of NuOncology Labs, Inc., of Virginia for shares of
NuOncology Labs, Inc. $3,309,350
===========
</TABLE>
At December 31, 1998, 3,100,000 of the outstanding common shares issued by
the Company were freely tradable shares.
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation The accompanying consolidated financial
statements include the accounts of NuOncology Labs, Inc. and International
Phytochemistry Research Laboratories, Ltd., its 80.39%-owned subsidiary. All
significant intercompany accounts and transactions have been eliminated.
(Continued on Next Page)
See Independent Auditor's Report
F-8
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES (Continued from preceding page)
Estimates Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported assets and
liabilities and the reported revenues and expenses. Actual results could
vary from the estimates that were used.
Cash Equivalents The Company considers its purchases of certificates of
deposit with an original maturity of three months or less to be cash
equivalents. Cash equivalents at December 31, 1998 includes a certificate of
deposit with a balance of $107,140, which is pledged to secure a letter of
credit in an equal amount from NationsBank.
Equipment Equipment consists primarily of laboratory and computer equipment
and office furniture and equipment. Equipment is recorded at its original
cost and is being depreciated using the straight-line method and an
estimated useful life of three to five years.
Goodwill and Patent Costs Neither goodwill nor patent costs are being
amortized since the Company is currently considered a development stage
company. In addition, patent costs are associated primarily with pending
patent applications.
Registration Costs In accordance with generally accepted accounting
principles, registration costs associated with the offering of stock of
NuOncology Labs, Inc., are presented as a reduction of paid-in capital in
the stockholders' equity section of the accompanying balance sheet.
Research and Development Costs Direct research and development costs related
to both future and present products are expensed as incurred. Expenses
associated with research and development activities such as salaries,
occupancy, consulting, etc., are presented as expenses in the accompanying
income statement according to their natural classification.
INVESTMENTS
As previously stated, the Company owns 50% of Paracure, Inc., which is
currently involved in a joint venture with a foreign partner to conduct
further research related to the potential efficacy and use of identified
compounds to improve healthcare and to identify and isolate other compounds
which may have commercial application in pharmaceutical and agricultural
markets. Paracure has the world marketing and manufacturing rights,
excluding those in the countries of the former Soviet Union, to certain
patents, patents pending, and products resulting from the joint venture.
Other patents pending not held in the name of Paracure are held by NuLabs'
subsidiary, IPRLL. Paracure has incurred net losses in excess of $700,000
since its formation in 1993 and through December 31, 1997. NuLabs'
investment in Paracure is accounted for using the equity method. Its
allocable portion of net income or loss since July 20, 1998, the date it
acquired a 50% ownership interest in Paracure, is not available at this time
but is not considered to be material in relation to the accompanying
financial statements.
(Continued on Next Page)
See Independent Auditor's Report
F-9
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INVESTMENTS (Continued from preceding page)
The Company's 80.39% ownership interest in IPRLL represents an ownership
interest requiring consolidated financial statements. At December 31, 1998,
IPRLL was the owner of certain pending patent applications in the United
States but is otherwise substantially inactive. Costs of approximately
$6,500 have been incurred and capitalized with respect to these patent
applications. Because of its inactivity through December 31, 1998, there was
no significant minority interest in this consolidated subsidiary.
The Company's acquisition of Baker Sanger, Inc., was an asset acquisition
for $40,000 cash and 1,500,000 shares, valued in the accompanying statements
at $0.75 per share. The net assets acquired were valued at $40,000, with the
excess consideration being presented as goodwill in the accompanying
financial statements.
LONG-TERM LIABILITIES
The installment loan payable is related to the purchase of an automobile.
Payments are $510 per month, including interest at 8.75%, through October
2003. The loan is secured by the vehicle, with a net book value of
approximately $26,200 at December 31, 1998.
STOCK OPTIONS AND WARRANTS
Under consulting contracts effective August 11, 1998, two corporate
consulting firms entered into one-year contracts with NuLabs and in
accordance with which each will accrue 150,000 options at $3 per share. At
the effective dates of the contracts, 45,000 options accrued to each firm,
with the balance accruing monthly from the effective date, pro rata at 8,750
per month, over the one-year term of the agreements. Accordingly, as of
December 31, 1998, each firm had earned 80,000 options.
In June of 1998, the Company issued stock units with 3 million half warrants
attached, providing for the purchase of one common share of NuOncology Labs,
Inc. for $0.33 for each two warrants owned. The warrants are exercisable
through July 8,1999. None have been exercised to date.
OPERATING LEASES
The Company leases various properties and equipment through noncancellable
operating leases with terms that range from one to five years with renewal
options thereafter. Rent expense includes $37,730 for the period ended
December 31, 1998, attributable to operating leases.
Minimum future annual rent commitments under these agreements for the next
five years and thereafter are:
After
1999 2000 2001 2002 2003 2003 Total
---- ---- ---- ---- ---- ---- -----
$151,057 $128,417 $ 92,172 $ 6,889 $ 4,706 - $383,241
See Independent Auditor's Report
F-10
<PAGE>
NuOncology Labs, Inc.
and Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONCENTRATION OF CREDIT RISK
As of and at various times during the period ended December 31, 1998, the
Company had on deposit with a single financial institution more than
$100,000, which is the limit currently insured by the Federal Deposit
Insurance Corporation.
CONTINGENCIES AND COMMITMENTS
At December 31, 1998, the Company is obligated under five-year employment
agreements with three owner/officers. The agreements are for $100,000 per
year to each of the three owner/officers and include provision for
adjustment by the Board of Directors. Furthermore, the agreements indicate
that each of the covered employees has agreed to accept 60% of the base
salary amount until such time as the Company has two continuous quarters of
profitability.
Also at December 31, 1998, approximately $59,600 had been advanced to an
owner/officer in connection with on-going research and development. The
advance is expected to be fully earned by the owner/officer in 1999.
EARNINGS PER SHARE INFORMATION
Weighted-average loss per share for the period ended December 31, 1998 was
$.06 per share based upon weighted average shares outstanding during the
period of 9,452,335 shares. Fully diluted loss per share has not been
calculated. The effect of such a calculation would likely reduce the per
share loss by approximately one-half of one cent.
See Independent Auditor's Report
F-11
Exhibit 99.1
ARTICLES OF INCORPORATION
OF
CHOICE BOOK AND VIDEO, INC.
The undersigned subscriber to these Articles of Incorporation, a
natural person competent to contract, hereby forms a corporation under the laws
of the State of Florida.
ARTICLE I
NAME
The name of this corporation is Choice Book and Video, Inc.
ARTICLE II
NATURE OF THE BUSINESS
This corporation shall have the power to transact or engage in any
business permitted under the laws of the United States and of the State of
Florida.
ARTICLE III
AUTHORIZED SHARES
The capital stock of this corporation shall consist of 1,000 share of
common stock having a par value of $.01 per share.
ARTICLE IV
INITIAL CAPITAL
The amount of capital with which this corporation shall commence
business shall be not less than One Hundred ($100.00) Dollars.
<PAGE>
ARTICLE V
TERM OF EXISTENCE
This corporation shall have perpetual existence.
ARTICLE VI
INITIAL ADDRESS
The initial address of the principal place of business of this
corporation in the State of Florida shall be 1428 Brickell Avenue, Suite 202,
Miami, Florida 33131. The Board of Directors may at any time and from time to
time move the principal office of this corporation to any location within or
without the State of Florida.
ARTICLE VII
DIRECTORS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall be not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws. The number of persons constituting the initial
Board of Directors shall be 1.
ARTICLE VIII
INITIAL DIRECTORS
The names and addresses of the initial Board of Directors and officers
are as follows:
Eric P. Littman, Trustee
1428 Brickell Avenue
8th Floor
Miami, Florida 33131
<PAGE>
ARTICLE IX
SUBSCRIBER
The name and address of the person signing these Articles of
Incorporation as subscriber is:
Eric P. Littman
8th Floor
1428 Brickell Avenue
Miami, Florida 33131
ARTICLE X
The Board of Directors shall be elected by the Stockholders of the
corporation at such time and in such manner as provided in the By-Laws.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any
person, firm or corporation shall be affected by the fact that any officer or
director of this corporation is such other party or is, or at some time in the
future becomes, an officer, director or partner of such other contracting party,
or has now or hereafter a direct or indirect interest in such contract.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
This corporation shall have the power, in its By-Laws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this
<PAGE>
corporation against any contingency or peril as may be determined to be in the
best interests of this corporation, and in conjunction therewith, to procure, at
this corporation's expense, policies of insurance.
ARTICLE XIII
RESIDENT AGENT
The name and address of the initial resident agent of this corporation
is:
Eric P. Littman
1428 Brickell Avenue
8th Floor
Miami, Florida 33131
IN WITHNESS WHEREOF, I have hereunto subscribed to and executed these
Articles of Incorporation this on November 18, 1994.
------------------------------
Eric P. Littman, Subscriber
Subscribed and Sworn on November 18, 1994.
Before me:
- --------------------------------------
Isabel Cantera, Notary Public
My Commission Expires:
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE
FOR SERVICE OF PROCESS WITHIN THIS STATE NAMING THE AGENT
UPON WHOM PROCESS MAY BE SERVED
Having been named to accept service of process for Choice Book and
Video, Inc., the place designated in the Articles of Incorporation, the
undersigned is familiar with and accepts the obligations of that position
pursuant to F.S. 607.0501(3).
-------------------------------
Eric P. Littman
Exhibit 99.2
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION OF
LITTMAN RESOURCES, INC.
Pursuant to the provisions of Section 607.1003 of the Florida Business
Corporation Act, LITTMAN RESOURCES, INC. (the "Corporation") adopts the
following Articles of Amendment to the Articles of Incorporation:
1. Article I of the Articles of Incorporation shall be deleted and the
following Article I shall be inserted in its place:
ARTICLE I
CORPORATE NAME
The name of this corporation shall be NuOncology Labs, Inc.
2. The Amendment was duly adopted by unanimous written consent of the
directors of the Corporation on June 19, 1998 and by the shareholders
owning a majority of the outstanding voting stock of the corporation and
such majority of votes was sufficient approval.
3. The effective date of these Articles of Amendment is June 26, 1998.
Dated: June 19, 1998
-------------------------------
CHRISTOS KOUMBIS, DIRECTOR/PRESIDENT
<PAGE>
APPLICATION FLORIDA DEPARTMENT OF STATE
FOR Sandra B. Mortham
REINSTATEMENT Secretary of State
Division of Corporations
DOCUMENT # P94000088085
Corporation Name
CHOICE BOOK AND VIDEO, INC.
Principal Place of Business
7695 SW 104 ST.
Suite 210
MIAMI FL 33156
If above address is incorrect in any way, line through incorrect information and
enter correct below.
<TABLE>
<S> <C> <C>
2. New Principal Office Address, If Applicable 3. New Mailing Address, If Applicable 4. Date Incorporated or Qualified
To Do Business in Florida
7695 SW 104 ST 11/06/94
Suite 210 5. FEI Number
Miami FL
33156 USA
6. Certificate of Status Desired
</TABLE>
7. Names and Street Addresses of Each Officer and/or Director (Florida nonprofit
corporations must list at least 3 directors)
<TABLE>
<CAPTION>
Name of Officers Street Address of Each
Title and/or Director Officer and/or Director City/State/Zip
1. 2. 3. 4.
<S> <C> <C> <C>
P/D Eric P. Littman 7695 SW 104 ST. Miami FL 33156
</TABLE>
8. Name and Address of Current Registered Agent 9. Name and Address of
New Registered Agent
Eric P. Littman
7695 SW 104 ST
Suite 210
MIAMI, FL 33156
10. I, being appointed the registered agent of the above named corporation,
am familiar with and accept the obligations of Section 607.0505.F.S.
Signature of
Registered Agent Date 4/13/98
-------------------------------- -------
REGISTERED AGENT MUST SIGN
<PAGE>
11. Does this corporation pay any intangible tax to the
Dept. of Revenue under S. 199.032, Florida Statutes. YES NO
SIGNATURE
Exhibit 99.3
BYLAWS
OF
NUONCOLOGY LABS, INC.
(A FLORIDA CORPORATION)
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
ARTICLE ONE - OFFICES
Section 1. Principal Office............................................................................1
Section 2. Other Offices...............................................................................1
ARTICLE TWO - MEETINGS OF SHAREHOLDERS
Section 1. Place ......................................................................................1
Section 2. Time of Annual Meeting......................................................................1
Section 3. Call of Special Meetings....................................................................1
Section 4. Conduct of Meetings.........................................................................1
Section 5. Notice and Waiver of Notice.................................................................2
Section 6. Business and Nominations for Annual and Special Meetings....................................2
Section 7. Quorum......................................................................................2
Section 8. Voting Rights Per Share.....................................................................3
Section 9. Voting of Shares............................................................................3
Section 10. Proxies.....................................................................................3
Section 11. Shareholder List............................................................................4
Section 12. Action Without Meeting......................................................................4
Section 13. Fixing Record Date..........................................................................5
Section 14. Inspectors and Judges.......................................................................5
Section 15. Voting for Directors........................................................................5
ARTICLE THREE - DIRECTORS
Section 1. Number; Term; Election; Qualification.......................................................5
Section 2. Resignation; Vacancies; Removal.............................................................6
Section 3. Powers......................................................................................6
Section 4. Place of Meetings...........................................................................6
Section 5. Annual Meetings.............................................................................6
Section 6. Regular Meetings............................................................................6
Section 7. Special Meetings and Notice.................................................................6
Section 8. Quorum and Required Vote....................................................................7
Section 9. Action Without Meeting......................................................................7
Section 10. Conference Telephone or Similar Communications Equipment Meetings...........................7
Section 11. Committees..................................................................................7
Section 12. Compensation of Directors...................................................................8
ARTICLE FOUR - OFFICERS
Section 1. Positions...................................................................................8
Section 2. Election of Specified Officers by Board.....................................................8
Section 3. Election or Appointment of Other Officers...................................................8
Section 4. Compensation................................................................................8
Section 5. Term; Resignation; Removal; Vacancies.......................................................8
Section 6. Chairman of the Board.......................................................................9
Section 7. Chief Executive Officer.....................................................................9
Section 8. President...................................................................................9
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 9. Vice Presidents.............................................................................9
Section 10. Secretary..................................................................................10
Section 11. Chief Financial Officer....................................................................10
Section 12. Treasurer..................................................................................10
Section 13. Other Officers; Employees and Agents.......................................................10
ARTICLE FIVE - CERTIFICATES FOR SHARES
Section 1. Issue of Certificates......................................................................10
Section 2. Legends for Preferences and Restrictions on Transfer.......................................11
Section 3. Facsimile Signatures.......................................................................11
Section 4. Lost Certificates..........................................................................11
Section 5. Transfer of Shares.........................................................................12
Section 6. Registered Shareholders....................................................................12
Section 7. Redemption of Control Shares...............................................................12
ARTICLE SIX - GENERAL PROVISIONS
Section 1. Dividends..................................................................................12
Section 2. Reserves...................................................................................12
Section 3. Checks.....................................................................................12
Section 4. Fiscal Year................................................................................12
Section 5. Seal.......................................................................................13
Section 6. Gender.....................................................................................13
ARTICLE SEVEN - AMENDMENT OF BYLAWS..............................................................................13
</TABLE>
<PAGE>
BYLAWS
OF
NUONCOLOGY LABS, INC.
ARTICLE ONE
OFFICES
Section 1. Principal Office. The principal office of NuOncology Labs,
Inc., a Florida corporation (the "Corporation"), shall be located at such place
determined by the Board of Directors of the Corporation (the "Board of
Directors") in accordance with applicable law.
Section 2. Other Offices. The Corporation may also have offices at such
other places, either within or without the State of Florida, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE TWO
MEETINGS OF SHAREHOLDERS
Section 1. Place. All annual meetings of shareholders shall be held at
such place, within or without the State of Florida, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Time of Annual Meeting. Annual meetings of shareholders
shall be held on such date and at such time fixed, from time to time, by the
Board of Directors, provided, that there shall be an annual meeting held every
calendar year at which the shareholders shall elect a board of directors and
transact such other business as may properly be brought before the meeting.
Section 3. Call of Special Meetings. Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Corporation's Articles of Incorporation (the "Articles of Incorporation")
for the call of a special meeting of shareholders.
Section 4. Conduct of Meetings. The Chairman of the Board of Directors
(or in his absence, the President, or in his absence, such other designee of the
Chairman of the Board of Directors) shall preside at the annual and special
meetings of shareholders and shall be given full discretion in establishing the
rules and procedures to be followed in conducting the meetings, except as
otherwise provided by law or in these Bylaws.
<PAGE>
Section 5. Notice and Waiver of Notice. Except as otherwise provided by
law, written or printed notice stating the place, date and time of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by first-class
mail or other legally sufficient means, by or at the direction of the Chairman
of the Board, President, or the persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at the address appearing on the stock transfer books of the
Corporation, with postage thereon prepaid. If a meeting is adjourned to another
time and/or place, and if an announcement of the adjourned time and/or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting unless the Board of Directors, after adjournment, fixes a new record
date for the adjourned meeting. Whenever any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether signed before, during or after the time of the
meeting stated therein, and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records, shall constitute an effective
waiver of such notice. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the shareholders need be specified in any
written waiver of notice. Attendance of a person at a meeting shall constitute a
waiver of (a) lack of or defective notice of such meeting, unless the person
objects at the beginning to the holding of the meeting or the transacting of any
business at the meeting, or (b) lack of or defective notice of a particular
matter at a meeting that is not within the purpose or purposes described in the
meeting notice, unless the person objects to considering such matter when it is
presented.
Section 6. Business and Nominations for Annual and Special Meetings.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice thereof. At any annual meeting of shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting in accordance with the requirements and procedures set forth in the
Articles of Incorporation. Only such persons who are nominated for election as
directors of the Corporation in accordance with the requirements and procedures
set forth in the Articles of Incorporation shall be eligible for election as
directors of the Corporation.
Section 7. Quorum. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, shares representing a majority of the votes
pertaining to outstanding shares which are entitled to be cast on the matter by
the voting group constitute a quorum of that voting group for action on that
matter. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time. After a quorum has been established at any shareholders' meeting,
the subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
2
<PAGE>
Section 8. Voting Rights Per Share. Each outstanding share, regardless
of class, shall be entitled to vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of the
shares of any class are limited or denied by or pursuant to the Articles of
Incorporation or the Florida Business Corporation Act.
Section 9. Voting of Shares. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy. Shares standing
in the name of another corporation, domestic or foreign, may be voted by the
officer, agent or proxy designated by the bylaws of such corporate shareholder
or, in the absence of any applicable bylaw, by such person or persons as the
board of directors of the corporate shareholder may designate. In the absence of
any such designation, or, in case of conflicting designation by the corporate
shareholder, the chairman of the board, the president, any vice president, the
secretary and the treasurer of the corporate shareholder, in that order, shall
be presumed to be fully authorized to vote such shares. Shares held by an
administrator, executor, guardian, personal representative, or conservator may
be voted by such person, either in person or by proxy, without a transfer of
such shares into his name. Shares standing in the name of a trustee may be voted
by such person, either in person or by proxy, but no trustee shall be entitled
to vote shares held by such person without a transfer of such shares into his
name or the name of his nominee. Shares held by or under the control of a
receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of
creditors may be voted by such person without the transfer thereof into his
name. If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the Corporation
is given notice to the contrary and is furnished with a copy of the instrument
or order appointing them or creating the relationship wherein it is so provided,
then acts with respect to voting shall have the following effect: (a) if only
one votes, in person or by proxy, his act binds all; (b) if more than one vote,
in person or by proxy, the act of the majority so voting binds all; (c) if more
than one vote, in person or by proxy, but the vote is evenly split on any
particular matter, each faction is entitled to vote the share or shares in
question proportionally; or (d) if the instrument or order so filed shows that
any such tenancy is held in unequal interest, a majority or a vote evenly split
for purposes hereof shall be a majority or a vote evenly split in interest. The
principles of this paragraph shall apply, insofar as possible, to execution of
proxies, waivers, consents, or objections and for the purpose of ascertaining
the presence of a quorum.
Section 10. Proxies. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholder's shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
such person by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or
3
<PAGE>
equivalent reproduction of an appointment form, shall be deemed a sufficient
appointment form. An appointment of a proxy is effective when received by the
Secretary of the Corporation (the "Secretary") or such other officer or agent
which is authorized to tabulate votes, and shall be valid for up to 11 months,
unless a longer period is expressly provided in the appointment form. The death
or incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy authority under the appointment is exercised. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 11. Shareholder List. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of the names
of all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or such person's agent or attorney is entitled on written demand to
inspect the shareholders' list (subject to the requirements of law), during
regular business hours and at his expense, during the period it is available for
inspection. The Corporation shall make the shareholders' list available at the
meeting of shareholders, and any shareholder or agent or attorney of such
shareholder is entitled to inspect the list at any time during the meeting or
any adjournment. The shareholders' list is prima facie evidence of the identity
of shareholders entitled to examine the shareholders' list or to vote at a
meeting of shareholders.
Section 12. Action Without Meeting. Any action required or permitted by
law to be taken at a meeting of shareholders may be taken without a meeting or
notice if a consent, or consents, in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted with respect to the subject matter thereof, and
such consent shall be delivered to the Corporation, within the period required
by Section 607.0704 of the Florida Business Corporation Act, by delivery to its
principal office in the State of Florida, its principal place of business, the
Secretary or another officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. Within ten
(10) days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action, in accordance with the requirements of Section
607.0704 of the Florida Business Corporation Act.
Section 13. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of
4
<PAGE>
shareholders for any other proper purposes, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than seventy (70) days, and, in case of a
meeting of shareholders, not less than ten (10) days, before the meeting or
action requiring such determination of shareholders. If no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders or the determination of shareholders entitled to receive
payment of a dividend, the date before the day on which the first notice of the
meeting is mailed or the date on which the resolutions of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this Section, such determination shall apply to any adjournment thereof, except
where the Board of Directors fixes a new record date for the adjourned meeting.
Section 14. Inspectors and Judges. The Board of Directors in advance of
any meeting may, but need not, appoint one or more inspectors of election or
judges of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If any inspector or inspectors, or judge or judges, are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
thereat. The inspectors or judges, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate votes, ballots and consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all shareholders.
On request of the person presiding at the meeting, the inspector or inspectors
or judge or judges, if any, shall make a report in writing of any challenge,
question or matter determined by him or them, and execute a certificate of any
fact found by him or them.
Section 15. Voting for Directors. Unless otherwise provided in the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present.
ARTICLE THREE
DIRECTORS
Section 1. Number; Term; Election; Qualification. The number of
directors of the Corporation shall be fixed from time to time, within the limits
specified by the Articles of Incorporation, by resolution of the Board of
Directors. Directors shall be elected in the manner and hold office for the term
as prescribed in the Articles of Incorporation. Directors must be natural
persons who are 18 years of age or older but need not be residents of the State
of Florida, shareholders of the Corporation or citizens of the United States.
5
<PAGE>
Section 2. Resignation; Vacancies; Removal. A director may resign at
any time by giving written notice to the Board of Directors or the Chairman of
the Board. Such resignation shall take effect at the date of receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. In the event the notice of resignation specifies a later effective
date, the Board of Directors may fill the pending vacancy (subject to the
provisions of the Articles of Incorporation) before the effective date if they
provide that the successor does not take office until the effective date.
Director vacancies shall be filled, and directors may be removed, in the manner
prescribed in the Corporation's Articles of Incorporation.
Section 3. Powers. The business and affairs of the Corporation shall be
managed by the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised and done by the shareholders.
Section 4. Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Florida.
Section 5. Annual Meetings. Unless scheduled for another time by the
Board of Directors, the first meeting of each newly elected Board of Directors
shall be held, without call or notice, immediately following each annual meeting
of shareholders.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
may also be held without notice at such time and at such place as shall from
time to time be determined by the Board of Directors.
Section 7. Special Meetings and Notice. Special meetings of the Board
of Directors may be called by the President or Chairman of the Board and shall
be called by the Secretary on the written request of any two directors. At least
forty-eight (48) hours' prior written notice of the date, time and place of
special meetings of the Board of Directors shall be given to each director.
Except as required by law, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. Notices to
directors shall be in writing and delivered to the directors at their addresses
appearing on the books of the Corporation by personal delivery, mail or other
legally sufficient means. Subject to the provisions of the preceding sentence,
notice to directors may also be given by telegram, teletype or other form of
electronic communication. Notice by mail shall be deemed to be given at the time
when the same shall be received. Whenever any notice is required to be given to
any director, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before, during or after the meeting, shall
constitute an effective waiver of such notice. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting and a waiver of any
and all objections to the place of the meeting, the time of the meeting and the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon
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arrival at the meeting, any objection to the transaction of business because the
meeting is not lawfully called or convened.
Section 8. Quorum and Required Vote. A majority of the prescribed
number of directors determined as provided in the Articles of Incorporation
shall constitute a quorum for the transaction of business and the act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless a greater number is required
by the Articles of Incorporation. Whenever, for any reason, a vacancy occurs in
the Board of Directors, a quorum shall consist of a majority of the remaining
directors until the vacancy has been filled. If a quorum shall not be present at
any meeting of the Board of Directors, a majority of the directors present
thereat may adjourn the meeting to another time and place, without notice other
than announcement at the time of adjournment. At such adjourned meeting at which
a quorum shall be present, any business may be transacted that might have been
transacted at the meeting as originally notified and called.
Section 9. Action Without Meeting. Any action required or permitted to
be taken at a meeting of the Board of Directors or committee thereof may be
taken without a meeting if a consent in writing, setting forth the action taken,
is signed by all of the members of the Board of Directors or the committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting. Action taken under this Section 9 is effective when
the last director signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section 9 shall have the effect of a
meeting vote and may be described as such in any document.
Section 10. Conference Telephone or Similar Communications Equipment
Meetings. Directors and committee members may participate in and hold a meeting
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground the
meeting is not lawfully called or convened.
Section 11. Committees. The Board of Directors, by resolution adopted
by a majority of the whole Board of Directors, may designate from among its
members an executive committee and one or more other committees, each of which,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation except where the action of the full Board of Directors is required
by applicable law. Each committee must have two or more members who serve at the
pleasure of the Board of Directors. The Board of Directors, by resolution
adopted in accordance with this Article Three, may designate one or more
directors as alternate members of any committee, who may act in the place and
stead of any absent member or members at any meeting of such committee.
Vacancies in the membership of a committee may be filled only by the Board of
Directors at a regular or special meeting of the Board of Directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the Board of Directors when required. The designation of any such
committee and the delegation thereto of authority shall not
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operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or such member by law.
Section 12. Compensation of Directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Similarly, members of special or standing committees may be allowed
compensation for attendance at committee meetings or a stated salary as a
committee member and payment of expenses for attending committee meetings.
Directors may receive such other compensation as may be approved by the Board of
Directors.
ARTICLE FOUR
OFFICERS
Section 1. Positions. The officers of the Corporation may consist of a
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (any one or more of whom may be given the additional designation of
rank of Executive Vice President or Senior Vice President), a Secretary, a Chief
Financial Officer and a Treasurer. Any two or more offices may be held by the
same person. Officers other than the Chairman of the Board need not be members
of the Board of Directors. The Chairman of the Board must be a member of the
Board of Directors.
Section 2. Election of Specified Officers by Board. The Board of
Directors at its first meeting after each annual meeting of shareholders shall
elect a Chairman of the Board, a Chief Executive Officer, a President, one or
more Vice Presidents (including any Senior or Executive Vice Presidents), a
Secretary, a Chief Financial Officer and a Treasurer.
Section 3. Election or Appointment of Other Officers. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors, or, unless otherwise specified
herein, appointed by the Chairman of the Board. The Board of Directors shall be
advised of appointments by the Chairman of the Board at or before the next
scheduled Board of Directors meeting.
Section 4. Compensation. The salaries, bonuses and other compensation
of the Chairman of the Board and all officers of the Corporation to be elected
by the Board of Directors pursuant to Section 2 of this Article Four shall be
fixed from time to time by the Board of Directors or pursuant to its direction.
The salaries of all other elected or appointed officers of the Corporation shall
be fixed from time to time by the Chairman of the Board or pursuant to his
direction.
Section 5. Term; Resignation; Removal; Vacancies. The officers of the
Corporation shall hold office until their successors are chosen and qualified.
Any officer
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or agent elected or appointed by the Board of Directors or the Chairman of the
Board may be removed, with or without cause, by the Board of Directors, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Any officer or agent appointed by the Chairman of the Board pursuant
to Section 3 of this Article Four may also be removed from such office or
position by the Board of Directors or the Chairman of the Board, with or without
cause. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise shall be filled by the Board of Directors, or,
in the case of an officer appointed by the Chairman of the Board, by the
Chairman of the Board or the Board of Directors. Any officer of the Corporation
may resign from his respective office or position by delivering notice to the
Corporation, and such resignation shall be effective without acceptance. Such
resignation shall be effective when delivered unless the notice specifies a
later effective date. If a resignation is made effective at a later date and the
Corporation accepts the future effective date, the Board of Directors may fill
the pending vacancy before the effective date if the Board provides that the
successor does not take office until such effective date.
Section 6. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the shareholders and the Board of Directors. The
Chairman of the Board shall also serve as the chairman of any executive
committee.
Section 7. Chief Executive Officer. Subject to the control of the Board
of Directors, the Chief Executive Officer, in conjunction with the President,
shall have general and active management of the business of the Corporation,
shall see that all orders and resolutions of the Board of Directors are carried
into effect and shall have such powers and perform such duties as may be
prescribed by the Board of Directors. In the absence of the Chairman of the
Board or in the event the Board of Directors shall not have designated a
Chairman of the Board, the Chief Executive Officer shall preside at meetings of
the shareholders and the Board of Directors. The Chief Executive Officer shall
also serve as the vice-chairman of any executive committee.
Section 8. President. Subject to the control of the Board of Directors,
the President, in conjunction with the Chief Executive Officer, shall have
general and active management of the business of the Corporation and shall have
such powers and perform such duties as may be prescribed by the Board of
Directors. In the absence of the Chairman of the Board and the Chief Executive
Officer or in the event the Board of Directors shall not have designated a
Chairman of the Board and a Chief Executive Officer shall not have been elected,
the President shall preside at meetings of the shareholders and the Board of
Directors. The President shall also serve as the vice-chairman of any executive
committee.
Section 9. Vice Presidents. The Vice Presidents, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President and the Chief Executive Officer, perform
the duties and exercise the powers of the President. They shall perform such
other duties and have such other powers as the Board of Directors, the Chairman
of the Board or the Chief Executive Officer shall prescribe or as the President
may from time to time delegate. Executive Vice Presidents shall be senior to
Senior Vice Presidents, and Senior Vice Presidents shall be senior to all other
Vice Presidents.
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Section 10. Secretary. The Secretary shall attend all meetings of the
shareholders and all meetings of the Board of Directors and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Board of Directors and shall keep in safe custody the seal of the Corporation
and, when authorized by the Board of Directors, affix the same to any instrument
requiring it. The Secretary shall perform such other duties as may be prescribed
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President.
Section 11. Chief Financial Officer. The Chief Financial Officer shall
be responsible for maintaining the financial integrity of the Corporation, shall
prepare the financial plans for the Corporation and shall monitor the financial
performance of the Corporation and its subsidiaries, as well as performing such
other duties as may be prescribed by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer or the President.
Section 12. Treasurer. The Treasurer shall have the custody of
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board and the Board of
Directors at its regular meetings or when the Board of Directors so requires an
account of all his transactions as Treasurer and of the financial condition of
the Corporation. The Treasurer shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President.
Section 13. Other Officers; Employees and Agents. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to such person by the Board of Directors, the officer so
appointing such person or such officer or officers who may from time to time be
designated by the Board of Directors to exercise such supervisory authority.
ARTICLE FIVE
CERTIFICATES FOR SHARES
Section 1. Issue of Certificates. The shares of the Corporation shall
be represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder
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of stock represented by certificates (and upon request every holder of
uncertificated shares) shall be entitled to have a certificate signed by or in
the name of the Corporation by the Chairman of the Board or a Vice Chairman of
the Board, or the Chief Executive Officer, President or Vice President, and by
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, representing the number of shares registered in
certificate form.
Section 2. Legends for Preferences and Restrictions on Transfer. The
designations, relative rights, preferences and limitations applicable to each
class of shares and the variations in rights, preferences and limitations
determined for each series within a class (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder a full statement of this information on request and without charge.
Every certificate representing shares that are restricted as to the sale,
disposition, or transfer of such shares shall also indicate that such shares are
restricted as to transfer, and there shall be set forth or fairly summarized
upon the certificate, or the certificate shall indicate that the Corporation
will furnish to any shareholder upon request and without charge, a full
statement of such restrictions. If the Corporation issues any shares that are
not registered under the Securities Act of 1933, as amended, or not registered
or qualified under the applicable state securities laws, the transfer of any
such shares shall be restricted substantially in accordance with the following
legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1)
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE
STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION (SATISFACTORY
TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION)
THAT REGISTRATION IS NOT REQUIRED."
Section 3. Facsimile Signatures. Any and all signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 4. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Corporation may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum
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as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.
Section 5. Transfer of Shares. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. Registered Shareholders. The Corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Florida.
Section 7. Redemption of Control Shares. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.
ARTICLE SIX
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
cash, property, stock (including its own shares) or otherwise pursuant to law
and subject to the provisions of the Articles of Incorporation.
Section 2. Reserves. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
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Section 5. Seal. The Board of Directors may adopt a corporate seal by
resolution. The corporate seal, if adopted, shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
Section 6. Gender. All words used in these Bylaws in the masculine
gender shall extend to and shall include the feminine and neutral genders.
ARTICLE SEVEN
AMENDMENT OF BYLAWS
Except as otherwise set forth herein, these Bylaws may be altered,
amended or repealed or new Bylaws may be adopted at any meeting of the Board of
Directors at which a quorum is present, by the affirmative vote of a majority of
the directors present at such meeting.
PRESIDENT'S CERTIFICATE OF ADOPTION OF
THE BYLAWS OF NUONCOLOGY LABS, INC.
I hereby certify:
That I am the duly elected President of NuOncology Labs, Inc., a
Florida corporation;
That the foregoing Bylaws comprising thirteen (13) pages, constitute
the Bylaws of said corporation as duly adopted by the Board of Directors of the
Corporation on June 26th, 1998.
IN WITNESS WHEREOF, I have hereunder signed my name this 26th day of
June, 1998.
Christos Koumbis, President
