U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
PACIFIC CMA, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1474992
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7331 S. Meadow Court,
Boulder, Colorado 80301
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 530-3353
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered - N/A
Name of each exchange on which each class is to be
registered - N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
PART I -
Item 1. DESCRIPTION OF BUSINESS
General
The Company was incorporated under the laws of the State of
Colorado on December 30, 1994, and is in the early developmental
and promotional stages. To date the Company's only activities have
been organizational ones, directed at developing its business plan and
raising its initial capital. The Company has not commenced any
commercial operations. The Company has no full-time employees and
owns no real estate.
The Company has elected to file this Form 10-SB registration
statement on a voluntary basis in order to become a reporting
company under the Securities Exchange Act of 1934. The Company
is a "blind pool" or "blank check" company, whose business plan is to
seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be
made by purchase, merger, exchange of stock, or otherwise, and may
encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company has very limited capital, and it
is unlikely that the Company will be able to take advantage of more
than one such business opportunity. The Company intends to seek
opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings.
At the present time the Company has not identified any
business opportunity that it plans to pursue, nor has the Company
reached any agreement or definitive understanding with any person
concerning an acquisition. The Company's officers, directors and
non-management principal shareholders named herein, have previously
been involved in several transactions involving mergers between an
established company and a blind pool or blank check entity, and they
have numerous contacts within the field of corporate finance (See Item
5 "Directors, Executive Officers, Promoters and Control Persons -
Other Blind Pool Activities"). As a result, they have had preliminary
contacts with representatives of numerous companies concerning the
general possibility of a merger or acquisition with a blind pool or
blank check company. However, none of these preliminary contacts
or discussions involved the possibility of a merger or acquisition
transaction with the Company.
Prior to the effective date of this registration statement, it is
anticipated that the Company's officers, directors, and
non-management principal shareholders named herein will contact
broker-dealers and other persons with whom they are acquainted who
are involved in corporate finance matters to advise them of the
Company's existence and to determine if any companies or businesses
they represent have a general interest in considering a merger or
acquisition with a blind pool or blank check entity. No direct
discussions regarding the possibility of a merger with the Company
are expected to occur until after the effective date of this registration
statement. However, no assurance can be given that the Company
will be successful in finding or acquiring a desirable business
opportunity, given the limited funds that are expected to be available
for acquisitions, or that any acquisition that occurs will be on terms
that are favorable to the Company or its stockholders.
The Company's search will be directed toward small and
medium-sized enterprises which have a desire to become public
corporations and which are able to satisfy, or anticipate in the
reasonably near future being able to satisfy, the minimum asset
requirements in order to qualify shares for trading on NASDAQ or on
an exchange such as the American Stock Exchange. (See
"Investigation and Selection of Business Opportunities"). The
Company anticipates that the business opportunities presented to it will
(i) either be in the process of formation or, be recently organized with
limited operating history, or a history of losses attributable to
under-capitalization or other factors; (ii) be experiencing financial or
operating difficulties; (iii) be in need of funds to develop a new
product or service or to expand into a new market; (iv) be relying
upon an untested product or marketing concept; or (v) have a
combination of the characteristics mentioned in (i) through (iv). The
Company intends to concentrate its acquisition efforts on properties or
businesses that it believes to be undervalued or that it believes may
realize a substantial benefit from being publicly owned. Given the
above factors, investors should expect that any acquisition candidate
may have little or no operating history, or a history of losses or low
profitability.
The Company does not propose to restrict its search for
investment opportunities to any particular geographical area or
industry, and may, therefore, engage in essentially any business, to
the extent of its limited resources. This includes industries such as
service, finance, natural resources, manufacturing, high technology,
product development, medical, communications and others. The
Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.
As a consequence of this registration of its securities, any
entity which has an interest in being acquired by, or merging into the
Company, is expected to be an entity that desires to become a public
company and establish a public trading market for its securities. In
connection with such a merger or acquisition, it is highly likely that
an amount of stock constituting control of the Company would either
be issued by the Company or be purchased from the current principal
shareholders of the Company by the acquiring entity or its affiliates.
If stock is purchased from the current shareholders, the transaction is
very likely to be a private transaction rather than a public distribution
of securities, but is also likely to result in substantial gains to the
current shareholders relative to their purchase price for such stock. In
the Company's judgment, none of its officers and directors would
thereby become an "underwriter" within the meaning of the Section
2(11) of the Securities Act of 1933, as amended as long as the
transaction is a private transaction rather than a public distribution of
securities. The sale of a controlling interest by certain principal
shareholders of the Company could occur at a time when the other
shareholders of the Company remain subject to restrictions on the
transfer of their shares.
Depending upon the nature of the transaction, the current
officers and directors of the Company may resign their management
positions with the Company in connection with a change in control of
the Company or its acquisition of a business opportunity (See "Form
of Acquisition," below, and "Risk Factors - The Company - Lack of
Continuity in Management"). In the event of such a resignation, the
Company's current management would not have any control over the
conduct of the Company's business following the change in control or
the Company's combination with a business opportunity.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and
directors, its other stockholders, professional advisors such as
attorneys and accountants, securities broker-dealers, venture
capitalists, members of the financial community, and others who may
present unsolicited proposals. The Company has no plans,
understandings, agreements, or commitments with any individual for
such person to act as a finder of opportunities for the Company.
The Company does not foresee that it would enter into a
merger or acquisition transaction with any business with which its
officers or directors are currently affiliated. Should the Company
determine in the future, contrary to the foregoing expectations, that a
transaction with an affiliate would be in the best interests of the
Company and its stockholders, the Company is in general permitted
by Colorado law to enter into such a transaction if:
(1) The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or are
known to the Board of Directors, and the Board in good faith
authorizes, approves or ratifies the contract or transaction by the
affirmative vote of a majority of the disinterested directors, even
though the disinterested directors constitute less than a quorum; or
(2) The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically authorized, approved or ratified in good
faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the Company as of
the time it is authorized, approved or ratified, by the Board of
Directors or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis of the
quality of the other company's management and personnel, the
anticipated acceptability of new products or marketing concepts, the
merit of technological changes, the perceived benefit the business
opportunity will derive from becoming a publicly held entity, and
numerous other factors which are difficult, if not impossible, to
analyze through the application of any objective criteria. In many
instances, it is anticipated that the historical operations of a specific
business opportunity may not necessarily be indicative of the potential
for the future because of the possible need to shift marketing
approaches substantially, expand significantly, change product
emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the owners of a
business opportunity to identify any such problems which may exist
and to implement, or be primarily responsible for the implementation
of, required changes. Because the Company may participate in a
business opportunity with a newly organized firm or with a firm
which is entering a new phase of growth, the Company will incur
further risks, because management in many instances will not have
proven its abilities or effectiveness, the eventual market for the
products or services of the business opportunity will likely not be
established, and the business opportunity may not be profitable when
acquired.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to one such venture because of the
Company's limited financing. This lack of diversification will not
permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's
securities.
It is emphasized that management of the Company may effect
transactions having a potentially adverse impact upon the Company's
shareholders pursuant to the authority and discretion of the Company's
management to complete acquisitions without submitting any proposal
to the stockholders for their consideration. Holders of the Company's
securities should not anticipate that the Company necessarily will
furnish such holders, prior to any merger or acquisition, with financial
statements, or any other documentation, concerning a target company
or its business. In some instances, however, the proposed
participation in a business opportunity may be submitted to the
stockholders for their consideration, either voluntarily by such
directors to seek the stockholders' advice and consent or because state
law so requires.
The analysis of business opportunities will be undertaken by or
under the supervision of the Company's officers, directors and
non-management principal shareholders, none of whom are
professional business analysts (See "Management"). Although there
are no current plans to do so, Company management might hire an
outside consultant to assist in the investigation and selection of
business opportunities, and might pay a finder's fee. Since Company
management has no current plans to use any outside consultants or
advisors to assist in the investigation and selection of business
opportunities, no policies have been adopted regarding use of such
consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of the Company, it is likely
that any such fee the Company agrees to pay would be paid in stock
and not in cash. Otherwise, the Company anticipates that it will
consider, among other things, the following factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) The Company's perception of how any particular business
opportunity will be received by the investment community and by the
Company's stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a
significant prospect in the foreseeable future of becoming sufficient to
enable the securities of the Company to qualify for listing on an
exchange or on a national automated securities quotation system, such
as NASDAQ, so as to permit the trading of such securities to be
exempt from the requirements of Rule 15c2-6 adopted by the
Securities and Exchange Commission (See "Risk Factors - The
Company - Regulation of Penny Stocks").
(4) Capital requirements and anticipated availability of
required funds, to be provided by the Company or from operations,
through the sale of additional securities, through joint ventures or
similar arrangements, or from other sources;
(5) The extent to which the business opportunity can be
advanced;
(6) Competitive position as compared to other companies of
similar size and experience within the industry segment as well as
within the industry as a whole;
(7) Strength and diversity of existing management, or
management prospects that are scheduled for recruitment;
(8) The cost of participation by the Company as compared to
the perceived tangible and intangible values and potential; and
(9) The accessibility of required management expertise,
personnel, raw materials, services, professional assistance, and other
required items.
In regard to the possibility that the shares of the Company
would qualify for listing on NASDAQ, the current standards for initial
listing include, among other requirements, that the Company (i) have
net tangible assets of at least $4,000,000, or a market capitalization of
$50,000,000, or net income of not less than $750,000 in its latest
fiscal year or in two of the last three fiscal year; (ii) have a public
float (i.e. shares that are not held by any officer, director or 10%
shareholder) of at least 1,000,000 shares; (iii) have a minimum bid
price of at least $4.00; (iv) have at least 300 round lot shareholders
(i.e. shareholders who own not less than 100 shares); and (v) have an
operating history of at least one year or a market capitalization of at
least $50,000,000. Many, and perhaps most, of the business
opportunities that might be potential candidates for a combination with
the Company would not satisfy the NASDAQ listing criteria.
No one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt to
analyze all factors appropriate to each opportunity and make a
determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur
in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited
experience in business analysis, the Company may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a
business opportunity. It expects, however, that the analysis of specific
proposals and the selection of a business opportunity may take several
months or more.
Prior to making a decision to participate in a business
opportunity, the Company will generally request that it be provided
with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections,
with related assumptions upon which they are based; an explanation of
proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions
between such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or if they are not
available, unaudited financial statements, together with reasonable
assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 60 days
following completion of a merger transaction; and other information
deemed relevant.
As part of the Company's investigation, the Company's
executive officers and directors may meet personally with management
and key personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information provided,
check references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
It is possible that the range of business opportunities that might
be available for consideration by the Company could be limited by the
impact of Securities and Exchange Commission regulations regarding
purchase and sale of "penny stocks." The regulations would affect,
and possibly impair, any market that might develop in the Company's
securities until such time as they qualify for listing on NASDAQ or on
an exchange which would make them exempt from applicability of the
"penny stock" regulations. See "Risk Factors - Regulation of Penny
Stocks."
Company management believes that various types of potential
merger or acquisition candidates might find a business combination
with the Company to be attractive. These include acquisition
candidates desiring to create a public market for their shares in order
to enhance liquidity for current shareholders, acquisition candidates
which have long-term plans for raising capital through the public sale
of securities and believe that the possible prior existence of a public
market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of
development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a need
for an immediate cash infusion are not likely to find a potential
business combination with the Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company
may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs and
desires of the Company and the promoters of the opportunity and,
upon the basis of that review and the relative negotiating strength of
the Company and such promoters, the legal structure or method
deemed by management to be suitable will be selected. Such structure
may include, but is not limited to leases, purchase and sale
agreements, licenses, joint ventures and other contractual
arrangements. The Company may act directly or indirectly through an
interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of
business organization. In addition, the present management and
stockholders of the Company most likely will not have control of a
majority of the voting shares of the Company following a merger or
reorganization transaction. As part of such a transaction, the
Company's existing directors may resign and new directors may be
appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other
securities of the Company. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an
acquisition is a so-called "tax free" reorganization under the Internal
Revenue Code of 1986, depends upon the issuance to the stockholders
of the acquired company of a controlling interest (i.e. 80% or more)
of the common stock of the combined entities immediately following
the reorganization. If a transaction were structured to take advantage
of these provisions rather than other "tax free" provisions provided
under the Internal Revenue Code, the Company's current stockholders
would retain in the aggregate 20% or less of the total issued and
outstanding shares. This could result in substantial additional dilution
in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might
also be done simultaneously with a sale or transfer of shares
representing a controlling interest in the Company by the current
officers, directors and principal shareholders. (See "Description of
Business - General").
It is anticipated that any new securities issued in any
reorganization would be issued in reliance upon exemptions, if any are
available, from registration under applicable federal and state
securities laws. In some circumstances, however, as a negotiated
element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated, or under
certain conditions at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any trading
market that might develop in the Company's securities may have a
depressive effect upon such market.
The Company will participate in a business opportunity only
after the negotiation and execution of a written agreement. Although
the terms of such agreement cannot be predicted, generally such an
agreement would require specific representations and warranties by all
of the parties thereto, specify certain events of default, detail the
terms of closing and the conditions which must be satisfied by each of
the parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default,
and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its
principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business
opportunity prior to signing a binding agreement. Such a letter of
intent will set forth the terms of the proposed acquisition but will not
bind any of the parties to consummate the transaction. Execution of a
letter of intent will by no means indicate that consummation of an
acquisition is probable. Neither the Company nor any of the other
parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the
acquisition as described in the preceding paragraph is executed. Even
after a definitive agreement is executed, it is possible that the
acquisition would not be consummated should any party elect to
exercise any right provided in the agreement to terminate it on
specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for
accountants, attorneys and others. If a decision is made not to
participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are
provided, the inability of the Company to pay until an indeterminate
future time may make it impossible to procure goods and services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity by
purchasing, trading or selling the securities of such business. The
Company does not, however, intend to engage primarily in such
activities. Specifically, the Company intends to conduct its activities
so as to avoid being classified as an "investment company" under the
Investment Company Act of 1940 (the "Investment Act"), and
therefore to avoid application of the costly and restrictive registration
and other provisions of the Investment Act, and the regulations
promulgated thereunder.
The Company's plan of business may involve changes in its
capital structure, management, control and business, especially if it
consummates a reorganization as discussed above. Each of these
areas is regulated by the Investment Act, in order to protect
purchasers of investment company securities. Since the Company will
not register as an investment company, stockholders will not be
afforded these protections.
Any securities which the Company might acquire in exchange
for its Common Stock will be "restricted securities" within the
meaning of the Securities Act of 1933, as amended (the "Act"). If the
Company elects to resell such securities, such sale cannot proceed
unless a registration statement has been declared effective by the
Securities and Exchange Commission or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales
of securities not involving a public distribution by persons other than
the issuer, would in all likelihood be available to permit a private sale.
Although the plan of operation does not contemplate resale of
securities acquired, if such a sale were to be necessary, the Company
would be required to comply with the provisions of the Act to effect
such resale.
An acquisition made by the Company may be in an industry
which is regulated or licensed by federal, state or local authorities.
Compliance with such regulations can be expected to be a
time-consuming and expensive process.
Competition
The Company expects to encounter substantial competition in
its efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies,
small investment companies, and wealthy individuals. Many of these
entities will have significantly greater experience, resources and
managerial capabilities than the Company and will therefore be in a
better position than the Company to obtain access to attractive
business opportunities. The Company also will experience competition
from other public "blind pool" companies, many of which may have
more funds available than does the Company.
Administrative Offices
The Company currently maintains a mailing address at 7331 S.
Meadow Court, Boulder, Colorado 80301, which is the office address
of its President. The Company's telephone number there is (303)
530-3353. Other than this mailing address, the Company does not
currently maintain any other office facilities, and does not anticipate
the need for maintaining office facilities at any time in the foreseeable
future. The Company pays no rent or other fees for the use of this
mailing address.
Employees
The Company is in the development stage and currently has no
employees. Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need
to engage any full-time employees so long as it is seeking and
evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision whether
or not to acquire or participate in specific business opportunities.
Risk Factors
A. Conflicts of Interest. Certain conflicts of interest exist
between the Company and its officers and directors. They have other
business interests to which they currently devote attention, and are
expected to continue to do so. As a result, conflicts of interest may
arise that can be resolved only through their exercise of judgment in a
manner which is consistent with their fiduciary duties to the Company.
See "Management," and "Conflicts of Interest."
In particular, the Company's officers and directors formed four
other blind pool or blank check companies simultaneously with the
formation of the Company, which have a structure and a business plan
identical to that of the Company. They are currently also officers and
directors of one other blind pool or blank check company, formed in
1997, which has shareholders and a capital structure similar, but not
identical, to that of the Company, and which has previously a filed
registration statements under the Securities Exchange Act of 1934.
Finally, it is likely that the Company's officers and directors will form
additional blind pool or blank check companies in the future, with a
business plan similar or identical to that of the Company. The four
other blind pool or blank check companies which were formed at the
same time as the Company and have an identical structure and
business plan do not currently create a conflict of interest with the
Company because they have the same shareholders. However, the
blind pool or blank check company formed in 1997, and any
additional blind pool or blank check companies formed in the future,
which do not have the same shareholders and an identical capital
structure as the Company, would also be in direct competition with
the Company for available business opportunities (See Item 5 -
"Directors, Executive Officers, Promoters and Control Persons -
Conflicts of Interest").
It is anticipated that the Company's principal shareholders may
actively negotiate or otherwise consent to the purchase of a portion of
their common stock as a condition to, or in connection with, a
proposed merger or acquisition transaction. In this process, the
Company's principal shareholders may consider their own personal
pecuniary benefit rather than the best interests of other Company
shareholders, and the other Company shareholders are not expected to
be afforded the opportunity to approve or consent to any particular
stock buy-out transaction. See "Conflicts of Interest."
B. Possible Need for Additional Financing. The Company
has very limited funds, and such funds may not be adequate to take
advantage of any available business opportunities. Even if the
Company's funds prove to be sufficient to acquire an interest in, or
complete a transaction with, a business opportunity, the Company may
not have enough capital to exploit the opportunity. The ultimate
success of the Company may depend upon its ability to raise
additional capital. The Company has not investigated the availability,
source, or terms that might govern the acquisition of additional capital
and will not do so until it determines a need for additional financing.
If additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained
on terms acceptable to the Company. If not available, the Company's
operations will be limited to those that can be financed with its modest
capital.
C. Regulation of Penny Stocks. The Company's securities,
when available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons
other than established customers or accredited investors. For purposes
of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having
a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written agreement to the
transaction prior to the sale. Consequently, the rule may affect the
ability of broker-dealers to sell the Company's securities and also may
affect the ability of purchasers in this offering to sell their securities in
any market that might develop therefor.
In addition, the Securities and Exchange Commission has
adopted a number of rules to regulate "penny stocks." Such rules
include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and
15g-7 under the Securities Exchange Act of 1934, as amended.
Because the securities of the Company may constitute "penny stocks"
within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules may further affect the ability of the
Company's shareholders to sell their shares in any public market
which might develop.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one
or a few broker-dealers that are often related to the promoter or
issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii)
"boiler room" practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv)
excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and (v) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to
a desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses. The Company's
management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be
in a position to dictate the behavior of the market or of broker-dealers
who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns from
being established with respect to the Company's securities.
D. No Operating History. The Company was formed in
December of 1994 for the purpose of registering its common stock
under the 1934 Act and acquiring a business opportunity. The
Company has no operating history, revenues from operations, or
assets other than cash from private sales of stock. The Company
faces all of the risks of a new business and the special risks inherent
in the investigation, acquisition, or involvement in a new business
opportunity. The Company must be regarded as a new or "start-up"
venture with all of the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject.
E. No Assurance of Success or Profitability. There is no
assurance that the Company will acquire a favorable business
opportunity. Even if the Company should become involved in a
business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of the Company's
outstanding shares will be increased thereby.
F. Possible Business - Not Identified and Highly Risky.
The Company has not identified and has no commitments to enter into
or acquire a specific business opportunity. As a result, it is only able
to make general disclosures concerning the risks and hazards of
acquiring a business opportunity, rather than providing disclosure with
respect to specific risks and hazards relating to a particular business
opportunity. As a general matter, prospective investors can expect
any potential business opportunity to be quite risky. See Item 1
"Description of Business."
G. Type of Business Acquired. The type of business to be
acquired may be one that desires to avoid effecting its own public
offering and the accompanying expense, delays, uncertainties, and
federal and state requirements which purport to protect investors.
Because of the Company's limited capital, it is more likely than not
that any acquisition by the Company will involve other parties whose
primary interest is the acquisition of control of a publicly traded
company. Moreover, any business opportunity acquired may be
currently unprofitable or present other negative factors.
H. Impracticability of Exhaustive Investigation. The
Company's limited funds and the lack of full-time management will
likely make it impracticable to conduct a complete and exhaustive
investigation and analysis of a business opportunity before the
Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility
studies, independent analysis, market surveys and the like which, if
the Company had more funds available to it, would be desirable. The
Company will be particularly dependent in making decisions upon
information provided by the promoter, owner, sponsor, or others
associated with the business opportunity seeking the Company's
participation. A significant portion of the Company's available funds
may be expended for investigative expenses and other expenses related
to preliminary aspects of completing an acquisition transaction,
whether or not any business opportunity investigated is eventually
acquired.
I. Lack of Diversification. Because of the limited
financial resources that the Company has, it is unlikely that the
Company will be able to diversify its acquisitions or operations. The
Company's probable inability to diversify its activities into more than
one area will subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks
associated with the Company's operations.
J. Possible Reliance upon Unaudited Financial Statements.
The Company generally will require audited financial statements from
any business that it proposes to acquire. No assurance can be given,
however, that audited financials will be available to the Company. In
cases where audited financials are unavailable, the Company will have
to rely upon unaudited information that has not been verified by
outside auditors. The lack of the type of independent verification
which audited financial statements would provide, increases the risk
that the Company, in evaluating an acquisition with such a target
company, will not have the benefit of full and accurate information
about the financial condition and operating history of the target
company. This risk increases the prospect that the acquisition of such
a company might prove to be an unfavorable one for the Company or
the holders of the Company's securities.
Moreover, the Company will be subject to the reporting
provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and thus will be required to furnish certain
information, including audited financial statements, for any existing
business it may acquire. Consequently, acquisition prospects that do
not have, or are unable to provide reasonable assurances that they will
be able to obtain, the required audited statements would not be
considered by the Company to be appropriate for acquisition so long
as the reporting requirements of the Exchange Act are applicable.
Should the Company, during the time it remains subject to the
reporting provisions of the Exchange Act, complete an acquisition of
an entity for which audited financial statements prove to be
unobtainable, the Company would be exposed to enforcement actions
by the Securities and Exchange Commission (the "Commission") and
to corresponding administrative sanctions, including permanent
injunctions against the Company and its management. The legal and
other costs of defending a Commission enforcement action are likely
to have material, adverse consequences for the Company and its
business. The imposition of administrative sanctions would subject
the Company to further adverse consequences.
In addition, the lack of audited financial statements would
prevent the securities of the Company from becoming eligible for
listing on NASDAQ, the automated quotation system sponsored by the
National Association of Securities Dealers, Inc., or on any existing
stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to
serve as market makers in the securities of the Company. Without
audited financial statements, the Company would almost certainly be
unable to offer securities under a registration statement pursuant to the
Securities Act of 1933, and the ability of the Company to raise capital
would be significantly limited until such financial statements were to
become available.
K. Other Regulation. An acquisition made by the
Company may be of a business that is subject to regulation or
licensing by federal, state, or local authorities. Compliance with such
regulations and licensing can be expected to be a time-consuming,
expensive process and may limit other investment opportunities of the
Company.
L. Dependence upon Management; Limited Participation of
Management. The Company will be heavily dependent upon the
skills, talents, and abilities of its officers and directors to implement
its business plan, and may, from time to time, find that the inability of
such persons to devote their full time attention to the business of the
Company results in a delay in progress toward implementing its
business plan. Furthermore, the Company will be entirely dependent
upon the experience of its officers and directors in seeking,
investigating, and acquiring a business and in making decisions
regarding the Company's operations. See "Management." Because
investors will not be able to evaluate the merits of possible business
acquisitions by the Company, they should critically assess the
information concerning the Company's officers and directors.
M. Lack of Continuity in Management. The Company
does not have an employment agreement with any of its officers or
directors, and as a result, there is no assurance that they will continue
to manage the Company in the future. In connection with acquisition
of a business opportunity, it is likely the current officers and directors
of the Company may resign. A decision to resign will be based upon
the identity of the business opportunity and the nature of the
transaction, and is likely to occur without the vote or consent of the
stockholders of the Company.
N. Indemnification of Officers and Directors. The
Company's Articles of Incorporation provide for the indemnification
of its directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The
Company will also bear the expenses of such litigation for any of its
directors, officers, employees, or agents, upon such person's promise
to repay the Company therefor if it is ultimately determined that any
such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by the
Company which it will be unable to recoup.
O. Director's Liability Limited. The Company's Articles
of Incorporation exclude personal liability of its directors to the
Company and its stockholders for monetary damages for breach of
fiduciary duty except in certain specified circumstances. Accordingly,
the Company will have a much more limited right of action against its
directors than otherwise would be the case. This provision does not
affect the liability of any director under federal or applicable state
securities laws.
P. Dependence upon Outside Advisors. To supplement the
business experience of its officers and directors, the Company may be
required to employ accountants, technical experts, appraisers,
attorneys, or other consultants or advisors. The selection of any such
advisors will be made by the Company's officers without any input
from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to the Company. In the event the
officers of the Company consider it necessary to hire outside advisors,
they may elect to hire persons who are affiliates, if those affiliates are
able to provide the required services.
Q. Leveraged Transactions. There is a possibility that any
acquisition of a business opportunity by the Company may be
leveraged, i.e., the Company may finance the acquisition of the
business opportunity by borrowing against the assets of the business
opportunity to be acquired, or against the projected future revenues or
profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity
acquired through a leveraged transaction is profitable only if it
generates enough revenues to cover the related debt and expenses.
Failure to make payments on the debt incurred to purchase the
business opportunity could result in the loss of a portion or all of the
assets acquired. There is no assurance that any business opportunity
acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
R. Competition. The search for potentially profitable
business opportunities is intensely competitive. The Company expects
to be at a disadvantage when competing with many firms that have
substantially greater financial and management resources and
capabilities than the Company. These competitive conditions will
exist in any industry in which the Company may become interested.
S. No Foreseeable Dividends. The Company has not paid
dividends on its Common Stock and does not anticipate paying such
dividends in the foreseeable future.
T. Loss of Control by Present Management and
Stockholders. The Company may consider an acquisition in which the
Company would issue as consideration for the business opportunity to
be acquired an amount of the Company's authorized but unissued
Common Stock that would, upon issuance, represent the great
majority of the voting power and equity of the Company. The result
of such an acquisition would be that the acquired company's
stockholders and management would control the Company, and the
Company's management could be replaced by persons unknown at this
time. Such a merger would result in a greatly reduced percentage of
ownership of the Company by its current shareholders. In addition, in
conjunction with such a transaction, the Company's current officers,
directors and principal shareholders could sell their controlling block
of stock at a premium price to the acquired company's stockholders.
U. No Public Market Exists. There is no public market
for the Company's common stock, and no assurance can be given that
a market will develop or that a shareholder ever will be able to
liquidate his investment without considerable delay, if at all. If a
market should develop, the price may be highly volatile. Factors such
as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered
hereby. Owing to the low price of the securities, many brokerage
firms may not be willing to effect transactions in the securities. Even
if a purchaser finds a broker willing to effect a transaction in these
securities, the combination of brokerage commissions, state transfer
taxes, if any, and any other selling costs may exceed the selling price.
Further, many lending institutions will not permit the use of such
securities as collateral for any loans.
V. Rule 144 Sales. All of the outstanding shares of
Common Stock held by present stockholders are "restricted securities"
within the meaning of Rule 144 under the Securities Act of 1933, as
amended. As restricted shares, these shares may be resold only
pursuant to an effective registration statement or under the
requirements of Rule 144 or other applicable exemptions from
registration under the Act and as required under applicable state
securities laws. Rule 144 provides in essence that a person who has
held restricted securities for a prescribed period may, under certain
conditions, sell every three months, in brokerage transactions, a
number of shares that does not exceed the greater of 1.0% of a
company's outstanding common stock or the average weekly trading
volume during the four calendar weeks prior to the sale. There is no
limit on the amount of restricted securities that may be sold by a
nonaffiliate after the restricted securities have been held by the owner
for a period of at least two years. A sale under Rule 144 or under
any other exemption from the Act, if available, or pursuant to
subsequent registrations of shares of Common Stock of present
stockholders, may have a depressive effect upon the price of the
Common Stock in any market that may develop. Of the total
12,000,000 shares of common stock held by present stockholders of
the Company, a total of approximately 2,119,750 shares are currently
available for immediate resale in accordance with the provisions of
Rule 144(k), without compliance with the volume restrictions and
other limitations imposed by Rule 144. The remaining 9,880,250
shares are currently eligible for resale in accordance with the
provisions of Rule 144.
Z. Blue Sky Considerations. Because the securities registered
hereunder have not been registered for resale under the blue sky laws
of any state, the holders of such shares and persons who desire to
purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and of
purchasers to purchase the securities. Some jurisdictions may not
allow the trading or resale of blind-pool or "blank-check" securities
under any circumstances. Accordingly, investors should consider the
secondary market for the Company's securities to be a limited one.
Item 2. Management's Discussion and Analysis or Plan of
Operations.
Liquidity and Capital Resources
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of proceeds in
the amount of $255 from its inside capitalization funds. The
Company also received cash contributed by Company shareholders in
the amount of $574, which was charged to additional paid-in capital.
Consequently, the Company's balance sheet for the period of
December 30, 1994 (inception) through December 31, 1998, and
through June 30, 1999, reflects a current asset value of $258 and a
total asset value of $298 and $278, respectively, which is all in the
form of cash.
The Company will carry out its plan of business as discussed
above. The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations
During the period from December 30, 1994 (inception) through
December 31, 1998, and through the interim period ended June 30,
1999, the Company has engaged in no significant operations other
than organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of
1934, as amended. No revenues were received by the Company
during this period.
For the current fiscal year, the Company anticipates incurring a
loss as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues other than
limited interest income. The Company may also continue to operate
at a loss after completing a business combination, depending upon the
performance of the acquired business.
Need for Additional Financing
The Company believes that its existing capital will be sufficient
to meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, for a period of approximately one year.
Accordingly, in the event the Company is able to complete a business
combination during this period, it anticipates that its existing capital
will be sufficient to allow it to accomplish the goal of completing a
business combination. There is no assurance, however, that the
available funds will ultimately prove to be adequate to allow it to
complete a business combination, and once a business combination is
completed, the Company's needs for additional financing are likely to
increase substantially.
No commitments to provide additional funds have been made
by management or other stockholders, and the Company has no plans,
proposals, arrangements or understandings with respect to the sale or
issuance of additional securities prior to the location of a merger or
acquisition candidate. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to
cover its expenses. In the event the Company does elect to raise
additional capital prior to location of a merger or acquisition
candidate, it expects to do so through the private placement of
restricted securities rather than through a public offering. The
Company does not currently contemplate making a Regulation S
offering.
Regardless of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company
might seek to compensate providers of services by issuances of stock
in lieu of cash. For information as to the Company's policy in regard
to payment for consulting services, see "Certain Relationships and
Transactions."
Item 3. Description of Property.
The Company currently maintains a mailing address at 7331 S.
Meadow Court, Boulder, Colorado 80301, which is the address of its
President. The Company pays no rent for the use of this mailing
address. The Company does not believe that it will need to maintain
an office at any time in the foreseeable future in order to carry out its
plan of operations described herein. The Company's telephone
number is (303) 530-3353.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date of this
Registration Statement, the number of shares of Common Stock owned
of record and beneficially by executive officers, directors and persons
who hold 5% or more of the outstanding Common Stock of the
Company. Also included are the shares held by all executive officers
and directors as a group.
<TABLE>
<CAPTION>
%
Number of of
Name and Shares Owned Class
Address Beneficially Owned
<S> <C> <C>
Grant W. Peck <F1>
7331 S. Meadow Court
Boulder, CO 80301 2,491,250<F2> 20.76%
Dean F. Sessions <F1>
P. O. Box 17881
Boulder, CO 80308 2,498,000<F3> 20.82%
Gary S. Joiner
4750 Table Mesa Drive
Boulder, CO 80303 2,491,000<F4> 20.76%
Mark DiSalvo
192 Searidge Court
Shell Beach, CA 93449 2,400,000 20.00%
All directors and executive
officers (2 persons) 4,989,250 41.58%
<FN>
<F1> The person listed is an officer, a director, or both, of the Company.
<F2> Includes 3,500 shares owned by family members, of which Mr. Peck
may be deemed to be the beneficial owner.
<F3> Includes 10,000 shares owned by Mr. Sessions' spouse, of which he
may be deemed to be the beneficial owner.
<F4> Includes 5,000 shares owned by family members, of which Mr.
Joiner may be deemed to be the beneficial owner.
</FN>
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The directors and executive officers currently serving the Company
are as follows:
<TABLE>
<CAPTION>
Positions Held
and
Name Age Tenure
<S> <C> <C>
Grant W. Peck 45 President and a Director since
September, 1997
Dean F. Sessions 49 Secretary, Treasurer, and a
Director since September, 1997
</TABLE>
The directors named above will serve until the first annual
meeting of the Company's stockholders. Thereafter, directors will be
elected for one-year terms at the annual stockholders' meeting.
Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding
between any of the directors or officers of the Company and any other
person pursuant to which any director or officer was or is to be
selected as a director or officer, and there is no arrangement, plan or
understanding as to whether non-management shareholders will
exercise their voting rights to continue to elect the current directors to
the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management shareholders may directly
or indirectly participate in or influence the management of the
Company's affairs.
The directors and officers will devote their time to the
Company's affairs on an "as needed" basis, which, depending on the
circumstances, could amount to as little as two hours per month, or
more than forty hours per month, but more than likely will fall within
the range of five to ten hours per month. There are no agreements or
understandings for any officer or director to resign at the request of
another person, and none of the officers or directors are acting on
behalf of, or will act at the direction of, any other person.
Biographical Information
Grant W. Peck.
Mr. Peck has served as President and a Director of the
Company since September, 1997. He is also currently the President
and a Director of four other blind pool or blank check companies (i.e.
Capmacco Corp., First CMA, Inc., Second CMA, Inc., and National
CMA, Inc.) which were formed at the same time as the Company and
have a capital structure which is identical to that of the Company.
Mr. Peck was the principal shareholder, the President and a
Director of J. S. Grant's, Inc., doing business as Just Squeezed
Juices, from its inception in 1985 until January, 1995, when the
Company was sold. J.S. Grant's distributed fresh juices from
Denver, Colorado, to five states, and had approximately $3.5 million
in annual sales and 36 employees. Between 1977 and 1984, Mr. Peck
was an owner and Director of Operations for the Harvest Restaurant
and Bakery, a restaurant company that catered to the then emerging
health-conscious market. During his tenure with Harvest Restaurant
and Bakery, Mr. Peck was responsible for the growth and daily
operation of the restaurant company, employing over 385 employees
and staffing 28 managers.
Mr. Peck is also currently the President and a director of
Buffalo Capital VIII, Ltd (formed September 1997), which is a blind
pool or blank check company, and has been an officer and director of
several other blind pool or blank check companies. For further
information about these other entities, see "Other Blind Pool
Activities").
Mr. Peck attended the University of Colorado and Macalester
College in St. Paul, Minnesota, but did not receive a degree from
either institution.
Dean F. Sessions.
Mr. Sessions has served as Secretary and Treasurer, and as a
Director of the Company since September 1997. He is also currently
the Secretary, Treasurer and a Director of four other blind pool or
blank check companies (i.e. Capmacco Corp., First CMA, Inc.,
Second CMA, Inc., and National CMA, Inc.) which were formed at
the same time as the Company and have a capital structure which is
identical to that of the Company.
From 1973 through 1982 Mr. Sessions was employed as an
investment broker by E.F. Hutton & Co., in its Boulder, Colorado
office. From 1982 through 1986 Mr. Sessions was an officer,
director and principal shareholder of A. S. Food Company, Inc., a
Colorado corporation formed to acquire the franchise rights for Round
The Corner restaurants in Oregon, Washington and British Columbia.
A. S. Food Company, Inc., opened and operated two Round The
Corner restaurants in the Seattle, Washington area, but in 1986 it filed
bankruptcy and ceased operations.
In October 1986, Mr. Sessions renewed his securities license
with the NASD and simultaneously joined the Boulder, Colorado
office of E. F. Hutton as an account executive. From June of 1987
through March of 1988, Mr. Sessions was a registered representative
of L. T. Securities, the securities division of Lincoln Trust
Corporation of Denver, Colorado. From March, 1988, to August,
1990, Mr. Sessions was a registered representative with Cohig
Securities, Inc. of Denver, Colorado, and from January, 1991 to
June, 1994, Mr. Sessions was a registered representative with
Walford and Company, of Boulder, Colorado. In addition, from
August, 1990, to the present, Mr. Sessions has been actively engaged
in attempting to acquire his Professional Golf Association (PGA) tour
card.
Mr. Sessions is also currently the Secretary, Treasurer and a
director of Buffalo Capital VIII (formed in September, 1997), Ltd,
which is a blind pool or blank check company, and has been an
officer and director of several other blind pool or blank check
companies. For further information about these other entities, see
"Other Blind Pool Activities").
Mr. Sessions has a B.S. degree from the University of
Colorado.
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of
Incorporation provide that the Company will indemnify its directors
and officers against expenses and liabilities they incur to defend,
settle, or satisfy any civil or criminal action brought against them on
account of their being or having been Company directors or officers
unless, in any such action, they are adjudged to have acted with gross
negligence or willful misconduct. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and
is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Colorado Business Corporation Act, the
Company's Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any breach of
the duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, acts in
violation of Section 7-106-401 of the Colorado Business Corporation
Act, or any transaction from which a director receives an improper
personal benefit. This exclusion of liability does not limit any right
which a director may have to be indemnified and does not affect any
director's liability under federal or applicable state securities laws.
Other Blind Pool Activities
Each of the Company's executive officers, directors, and
principal shareholders holds an identical officer, director and/or
shareholder position with several other companies (i.e. Buffalo Capital
VIII, Ltd., Capmacco Corp., Inc., First CMA, Inc., Second CMA,
Inc., and National CMA, Inc., all of which are Colorado
corporations. The Company and each of these other entities will be in
competition with each other for prospective companies to acquire.
See "Conflicts of Interest" below.
In addition, the Company's officers, directors and certain of its
principal shareholders have been affiliated in the past with other blind
pool companies. Such other companies and such affiliations are set
forth in this section below.
Messrs. Joiner, Peck, and Sessions were founders and officers
and directors of two blind pool companies established in 1993, Dakota
Equities, Ltd. ("Dakota"), and Cumberland Capital Corporation
("Cumberland"). They were also founders and officers and directors
of three blind pool companies established in 1995, Alchemy Equities,
Ltd. ("Alchemy"), Chelmsford Capital, Ltd. ("Chelmsford"), and
Global Capital Access Corporation ("Global"), and were founders of
four other blind pool companies established in 1996, Buffalo Capital
I, Ltd. ("Buffalo I"), Buffalo Capital II, Ltd. ("Buffalo II"), Buffalo
Capital III, Ltd. ("Buffalo III") and Buffalo Capital IV, Ltd. ("Buffalo
IV"), and were founders of four other blind pool companies
established in 1997, Buffalo Capital V, Ltd. ("Buffalo V"), Buffalo
Capital VI, Ltd. ("Buffalo VI"), Buffalo Capital VII, Ltd. ("Buffalo
VII"), Buffalo Capital VIII, Ltd. ("Buffalo VIII").
Dakota filed a registration statement under the Securities
Exchange Act of 1934, which became effective on or about January
24, 1994. On December 14, 1994, the controlling shareholders of
Dakota sold stock representing approximately 87.5% of the
outstanding shares to California Brokerage Services, Inc., for an
aggregate purchase price of $60,000.00. Thereafter, on or about
February 1, 1995, Dakota completed a merger transaction with
Sel-Drum International, Inc., which, through its wholly owned
subsidiaries Sel-Drum Corp (Canada), Sel-Drum Corporation
(U.S.A.), Inc., and Micron Imaging Technologies, is engaged in the
distribution of copier photoreceptors, high mortality parts for copy
machines, and copier accessories. The shares of Sel-Drum (formerly
Dakota Equities), trade in the over the counter market on the NASD
Bulletin Board (SDUM).
On or about October 8, 1993, Cumberland filed a registration
statement under the Securities Act of 1933. The registration statement
was subsequently withdrawn, and until its investment in Alchemy,
Chelmsford and Global, Cumberland did not engage in any business
activities. Cumberland Capital subsequently sold its interests in
Alchemy, Chelmsford and Global, and the corporation did not engage
in any other business operations. The company was dissolved in June,
1999.
Alchemy filed a registration statement under the Securities
Exchange Act of 1934, on April 3, 1995, which became effective on
or about June 2, 1995. On January 15, 1996, the controlling
shareholders of Alchemy sold stock representing approximately
74.69% of the outstanding shares to California Brokerage Services,
Inc., for an aggregate purchase price of $25,000, and all of the
existing officers and directors resigned and nominated replacements
designated by the purchaser. Thereafter, on or about March 6, 1996,
Alchemy completed a merger transaction with Heritage Mines, Ltd.,
which is engaged in the gold mining business. The shares of Heritage
Mines, Ltd (formerly Alchemy), trade in the over the counter market
on the NASD Bulletin Board (HMIL).
Chelmsford filed a registration statement under the Securities
Exchange Act of 1934, on April 6, 1995, which became effective on
or about June 6, 1995. On November 6, 1996, the controlling
shareholders of Chelmsford sold stock representing approximately
86.86% of the outstanding shares to Capital Twain, Inc., a Nevada
corporation, for an aggregate purchase price of $70,000, and all of
the existing officers and directors resigned and nominated
replacements designated by the purchaser. On or about November 13,
1997, Chelmsford changed its name to Worldwide Internet Marketing,
Inc.("Worldwide") Thereafter, on or about January 16, 1998,
Worldwide formally completed the acquisition of a controlling interest
in Futurenet Online International, Inc., a Colorado corporation (FNI),
which holds the rights to engage in the network marketing business in
countries outside the United States using the name and business
system developed by Futurenet Online, Inc., a California corporation.
No public market current exists for the shares of Worldwide.
Global filed a registration statement under the Securities
Exchange Act of 1934, on April 11, 1995, which became effective on
or about June 12, 1995. On July 12, 1996, the controlling
shareholders of Global sold stock representing approximately 71.03%
of the outstanding shares to The Rally Group, Ltd., for an aggregate
purchase price of $30,000, and all of the existing officers and
directors resigned and nominated replacements designated by the
purchaser. Thereafter, Global changed its name to Controlled
Environment Aquaculture Technology, Inc. ("CEA Tech"), and
commenced activities related to intensive land-based aquaculture. The
shares of CEA Tech (formerly Global), trade in the over the counter
market on the NASD Bulletin Board (CEAT).
Buffalo I filed a registration statement under the Securities
Exchange Act of 1934 on January 9, 1997, which became effective on
or about March 10, 1997. On June 25, 1997, Buffalo I acquired all
of the issued and outstanding stock of Multiple Dimensional Laser
Technologies, Inc., a Nevada corporation ("MDLT Nevada"), in
exchange for the issuance of 4,800,000 shares of common stock. As
part of that transaction, Buffalo I also changed its name to Multiple
Dimensional Laser Technologies, Inc., and cancelled all previously
issued and outstanding Class A and Class B Warrants. In conjunction
with this transaction, Wilmington Capital, LLC, an investment
consulting firm representing MDLT Nevada, agreed to pay the
principal shareholders of Buffalo I a consulting fee of $75,000, but
only paid a total of $25,000 and thereafter defaulted in payment of the
balance of that obligation. There is not currently a public trading
market for the shares of Multiple Dimensional Laser Technologies,
Inc. (formerly Buffalo I).
Buffalo II filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on January 9, 1997, which
became effective on or about March 10, 1997. On August 21, 1997,
the controlling shareholders of Buffalo II sold stock representing
approximately 70.04% of the outstanding shares to Golden Age
Development Corporation, an Ohio corporation, for an aggregate
purchase price of $75,000. In conjunction with the change of control
all of existing officers and directors resigned and were replaced by
successors designated by the purchaser, the previously issued and
outstanding Class A and Class B Warrants were cancelled and the
Company changed its name to Cincinnati Regional Initiative, Inc.
("CRI"). There is not currently any public market for the shares of
CRI.
Buffalo III filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on January 10, 1997, which
became effective on or about March 11, 1997. On April 22, 1999,
the controlling shareholders of Buffalo III sold stock representing
approximately 94.4% of the outstanding shares to Steadfast
Investments, LP, a Delaware limited partnership ("Steadfast") and
GMK Family Holdings, LLC, ("GMK") for an aggregate purchase
price of $335,000. Steadfast and GMK also purchased 12,740,000
newly issued shares for a purchase price of $1,000. In conjunction
with the change of control, all of the existing officers and directors
resigned and were replaced by successors designated by the purchaser
and the previously issued and outstanding Class A and Class B
Warrants were cancelled. There is not currently any public market
for the shares of Heritage.
Buffalo IV filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on January 10, 1997, which
became effective on or about March 11, 1997. On May 10, 1999, the
controlling shareholders of Buffalo IV sold stock representing
approximately 96% of the outstanding shares to M & A West, Inc., a
Nevada corporation ("MAWI") and Robert G. Bryan ("RGB") for an
aggregate purchase price of $150,000. In conjunction with the change
of control, the previously issued and outstanding warrants were
cancelled and the Company changed its name to M & A West, Inc.
("MAWI"). MAWI business activities include corporate structuring,
strategic planning, mergers, acquisitions, corporate finance, investor
relations, public relations, web site development and internet
marketing consulting. The shares of M & A West, Inc. (formerly
Buffalo IV). trade in the over the counter market of the NASD
Bulletin Board (MAWI).
Buffalo V filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on March 4, 1998, which
became effective on or about May 4, 1998. On June 22, 1999, the
controlling shareholders of Buffalo V sold stock representing
approximately 94% of the outstanding shares to Aladdin Oil
Corporation, a Nevada corporation ("Aladdin") for an aggregate
purchase price of $125,000. In conjunction with the change of
control, the previously issued and outstanding warrants were cancelled
and the Company changed its name to Aladdin Oil Corporation.
Aladdin is an independent oil and gas company engaged in the
acquisition and exploration of oil and gas within the United States.
The shares of Aladdin Oil Corporation (formerly Buffalo V) trade in
the over the counter market of the NASD Bulletin Board (ADDN).
Buffalo VI filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on March 4, 1998, which
became effective on or about May 4, 1998. On December 28, 1998,
the controlling shareholders of Buffalo VI sold stock representing
approximately 94.6% of the outstanding shares to Alan J. Setlin,
Donald G. Saunders, Gary Kornman, and Thomas K. Russell ("the
Purchasers") for an aggregate purchase price of $150,000. The
Purchasers then completed a business combination with isolver.com,
Inc., a Nevada corporation. In conjunction with the change of
control, the Company changed its name to isolver.com, Inc.
Isolver.com, Inc. operates an internet shopping mall and provides
customer services and merchant services on the web. The shares of
isolver. com, Inc. (formerly Buffalo VI) trade in the over the counter
market of the NASD Bulletin Board ("ISLV").
Buffalo VII filed a registration statement on Form 10-SB under
the Securities Exchange Act of 1934 on March 4, 1998, which
became effective on or about May 4, 1998. On June 18, 1999, the
controlling shareholders of Buffalo VII sold stock representing
approximately 94% of the outstanding shares to Workfire.com, Inc., a
Nevada corporation for an aggregate purchase price of $150,000. In
conjunction with the change of control, the previously issued and
outstanding warrants were cancelled and the Company changed its
name to Workfire.com, Inc. Workfire.com, Inc. has developed an
internet access acceleration technology which greatly reduces
browsing time on the web. The shares of Workfire.com, Inc.
(formerly Buffalo VII) trade in the over the counter market of the
NASD Bulletin Board ("WKFR"). There is not currently any public
market for the shares of Buffalo Capital VIII, Ltd.
Buffalo VIII filed a registration statement on Form 10-SB
under the Securities Exchange Act of 1934 on March 4, 1998, which
became effective on or about June 4, 1998. Buffalo VIII has not
acquired a business opportunity, and remains in the development
stage.
The officers and directors of the Company are also officers and
directors of Capmacco Corp., First CMA, Inc., Second CMA, Inc.,
and National CMA, Inc., each of which was formed at the same time
as the Company and has a capital structure identical to that of the
Company. The officers and directors of the Company may also
establish additional blind pool or blank check companies in the future.
See "Conflicts of Interest."
Conflicts of Interest
None of the officers of the Company will devote more than a
portion of his time to the affairs of the Company. There will be
occasions when the time requirements of the Company's business
conflict with the demands of the officers' other business and
investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that
the services of such persons will be available or that they can be
obtained upon terms favorable to the Company.
Each of the Company's officers and directors is also an officer
and a director of several other blind pool or blank check companies.
See "Other Blind Pool Activities." Although these other companies
will, in effect, be in direct competition with the Company for
acquisition of available business opportunities, the potential that such
competition will create a conflict of interest for the officers and
directors of the Company is minimized by the fact that each of the
entities currently has substantially the same shareholders, and is
expected to continue to have the same shareholders until a business
acquisition has been completed.
As a way of further minimizing any potential conflict of
interest in the process of acquisition of available business
opportunities, it is the stated policy of the persons who are officers
and directors of the Company and of other blind pool or blank check
companies, to present the opportunity to the available blind pool or
blank check company that has had its securities registered pursuant to
Section 12(g) of the 1934 Act for the longest period of time. In the
event that none of the pools is more mature than the others, the
officers and directors will arbitrarily assign the particular business
opportunity to one of the pool companies. Potential investors should
expect that, because of the policy that will be employed by the
Company's officers and directors as set forth above, whereby more
"mature" pool companies will have business opportunities presented to
them first, the Company and its shareholders may have to wait a
significant amount of time before an appropriate business opportunity
for the Company is identified.
The officers, directors and principal shareholders of the
Company may actively negotiate for the purchase of a portion of their
common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction. Members of management, and
other principal shareholders of the Company, acquired their shares for
consideration totalling $__, including $__ in cash, and services
relating to organization of the Company and developing its business
plan, which services were valued at a total of $__. This consideration
is the equivalent of $.0002 per share. It is anticipated that a
substantial premium may be paid by the purchaser in conjunction with
any sale of shares by the Company's officers, directors and principal
shareholders made as a condition to, or in connection with, a
proposed merger or acquisition transaction. The fact that a substantial
premium may be paid to members of Company management to
acquire their shares creates a conflict of interest for them and may
compromise their state law fiduciary duties to the Company's other
shareholders. In making any such sale, members of Company
management may consider their own personal pecuniary benefit rather
than the best interests of the Company and the Company's other
shareholders, and the other shareholders are not expected to be
afforded the opportunity to approve or consent to any particular
buy-out transaction involving shares held by members of Company
management.
Item 6. Executive Compensation.
No officer or director has received any remuneration or
compensation from the Company. Until the Company acquires
additional capital, it is not anticipated that any officer or
director will receive additional compensation from the Company other
than reimbursement for out-of-pocket expenses incurred on behalf of
the Company. See "Certain Relationships and Related Transactions."
The Company has no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of
one or more such programs in the future.
The Company may employ a spouse of an officer or director,
or an employee of a company owned by an officer or director, to
perform administrative or secretarial services required by the
Company. Such individuals would be paid standard, "going rate"
hourly compensation for services rendered.
The Company has employed the law firm of Frascona, Joiner
& Goodman, P.C., in which one of its principal shareholders, Gary
S. Joiner, is a shareholder, to provide legal services in connection
with registration of the Company's shares. It may also employ the
same law firm to provide legal services in connection with the
acquisition of a business. Mr. Joiner and any other members of his
firm, if employed, would be paid their normal hourly rate for legal
services provided.
Item 7. Certain Relationships and Related Transactions.
During the two years preceding the date of this registration
statement on Form 10-SB, the officers, directors, and other principal
shareholders of the Company have contributed a total of
approximately $5,574 in additional capital to the Company (including
$5,000 contributed after June 30, 1999) for working capital and
payment of expenses.
No officer, director, promoter, or affiliate of the Company has
or proposes to have any direct or indirect material interest in any asset
proposed to be acquired by the Company through security holdings,
contracts, options, or otherwise.
The Company has adopted a policy under which any consulting
or finder's fee that may be paid to a third party for consulting services
to assist management in evaluating a prospective business opportunity
would be paid in stock rather than in cash. Any such issuance of
stock would be made on an ad hoc basis. Accordingly, the Company
is unable to predict whether, or in what amount, such a stock issuance
might be made.
It is not currently anticipated that any salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or
executive officers, or to any other affiliate of the Company except as
described under "Executive Compensation" above.
The Company does not maintain an office, but it does maintain
a mailing address at the residence of its President, for which it pays
no rent, and for which it does not anticipate paying rent in the future.
It is likely that the Company will not establish an office until it has
completed a business acquisition transaction, but it is not possible to
predict what arrangements will actually be made with respect to future
office facilities.
Although management has no current plans to cause the
Company to do so, it is possible that the Company may enter into an
agreement with an acquisition candidate requiring the sale of all or a
portion of the Common Stock or Warrants held by the Company's
current stockholders to the acquisition candidate or principals thereof,
or to other individuals or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring
the future employment of specified officers and payment of salaries to
them. It is more likely than not that any sale of securities by the
Company's current stockholders to an acquisition candidate would be
at a price substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the context of
an acquisition involving the Company would be determined entirely
by the largely unforeseeable terms of a future agreement with an
unidentified business entity.
Gary S. Joiner, who is a principal shareholder of the
Company, is also a shareholder of Frascona, Joiner & Goodman,
P.C., the law firm which has been engaged to represent the Company
in conjunction with preparation and filing of this registration statement
on Form 10-SB.
Item 8. Description of Securities.
Common Stock
The Company's Articles of Incorporation authorize the
issuance of 100,000,000 shares of Common Stock. Each record
holder of Common Stock is entitled to one vote for each share held on
all matters properly submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not permitted by the
Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to
such dividends as may be declared from time to time by the Board of
Directors out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of the Company,
holders are entitled to receive, ratably, the net assets of the Company
available to stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights upon liquidation.
Holders of outstanding shares of Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares when offered
and sold will be, duly authorized, validly issued, fully paid, and
nonassessable. To the extent that additional shares of the Company's
Common Stock are issued, the relative interests of then existing
stockholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation authorize the
issuance of 10,000,000 shares of preferred stock. The Board of
Directors of the Company is authorized to issue the preferred stock
from time to time in series and is further authorized to establish such
series, to fix and determine the variations in the relative rights and
preferences as between series, to fix voting rights, if any, for each
series, and to allow for the conversion of preferred stock into
Common Stock. No preferred stock has been issued by the Company.
The Company anticipates that preferred stock may be utilized in
making acquisitions.
Transfer Agent
As of the date hereof, the Company is serving as its own
Transfer Agent.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual
report for each fiscal year ending December 31 containing financial
statements audited by its independent certified public accountants. In
the event the Company enters into a business combination with
another company, it is the present intention of management to
continue furnishing annual reports to stockholders. Additionally, the
Company may, in its sole discretion, issue unaudited quarterly or
other interim reports to its stockholders when it deems appropriate.
The Company intends to comply with the periodic reporting
requirements of the Securities Exchange Act of 1934.
PART II
Item 1. Market Price and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
No public trading market exists for the Company's securities
and all of its outstanding securities are restricted securities as defined
in Rule 144. As of the date of this registration statement, there are
approximately 43 holders of record of the Company's common stock.
No dividends have been paid to date and the Company's Board of
Directors does not anticipate paying dividends in the foreseeable
future.
Item 2. Legal Proceedings
The Company is not a party to any pending legal proceedings,
and no such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner
of record or beneficial owner of more than 5.0% of the securities of
the Company, or any associate of any such director, officer or
security holder is a party adverse to the Company or has a material
interest adverse to the Company in reference to pending litigation.
Item 3. Changes in and Disagreements with Accountants.
Not applicable.
Item 4. Recent Sales of Unregistered Securities.
The Company has not sold any Unregistered Securities during
the prior three years.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company,
filed as Exhibits 3.1 and 3.2, respectively, provide that the Company
will indemnify its officers and directors for costs and expenses
incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a
manner he reasonably believed to be in the Company's best interest
and is a party by reason of his status as an officer or director, absent
a finding of negligence or misconduct in the performance of duty.
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements for Capmacco Corporation as and for
the years ending December 31, 1997 and December 31, 1998 and for
the six months ending June 30, 1999, are attached. See following
pages.
PACIFIC CMA, INC.
(A Development Stage Company)
Financial Statements
December 31, 1998 (audited)
June 30, 1999 (unaudited)
PACIFIC CMA, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant
Balance Sheets
Statements of Operations
Statement of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT
The Board of Directors and Stockholders of Pacific CMA, Inc.
We have audited the accompanying balance sheet of Pacific CMA,
Inc. (a development stage company) as of December 31, 1998, and the
related statement of operations, stockholders' equity, and cash flows
for each of the two years then ended, and for the period from
inception (December 30, 1994) to December 31, 1998. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Pacific CMA,
Inc. as of December 31, 1998, and the results of its operations and its
cash flows for each of the two years then ended and for the period
from inception (December 30, 1994) to December 31, 1998, in
conformity with generally accepted accounting principles.
Comiskey & Company, P.C.
Denver, Colorado
September 21, 1999
PACIFIC CMA, INC.
(A Development Stage Company)
BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
<S> <C> <C>
ASSETS
CURRENT ASSETS
Prepaid expenses 372 372
Total current assets 372 372
OTHER ASSETS
Organizational costs (net) 20 40
TOTAL ASSETS 392 412
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Total current liabilities - -
STOCKHOLDERS' EQUITY
Preferred stock, no par value
10,000,000 shares authorized;
no shares issued and outstanding
Common stock, no par value; - -
100,000,000 shares authorized;
12,000,000 shares issued and
outstanding 2,400 2,400
Additional paid-in capital 574 574
Deficit accumulated
during the development stage (2,582) (2,562)
Total stockholders' equity 392 412
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 392 412
</TABLE>
The accompanying notes are an integral part of the financial statements.
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
page 1 of 2
<TABLE>
<CAPTION>
Period from For the For the
December 29, 6 months 6 months
1994 (Inception) ended ended
to 6/30/99 6/30/99 6/3/99
(Audited) (unaudited) (unaudited)
<S> <C> <C> <C>
REVENUES - - -
EXPENSES
Amortization 180 20 20
Consulting fees 2,145 - -
Legal fees 257 - -
Total expenses 2,582 20 20
NET LOSS (2,582) (20) (20)
Accumulated deficit
Balance, beginning of period - (2,562) (2,320)
Balance, end of period (2,582) (2,582) (2,340)
NET LOSS PER SHARE (NIL) (NIL) (NIL)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 12,000,000 12,000,000 12,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
page 2 of 2
<TABLE>
<CAPTION>
For the For the
year ended year ended
12/31/98 12/31/97
(audited) (unaudited)
<S> <C> <C>
REVENUES - -
EXPENSES
Amortization 40 40
Consulting fees - -
Legal fees 202 -
Total expenses 242 40
NET LOSS (242) (40)
Accumulated deficit
Balance,
beginning of period (2,320) (2,280)
Balance, end of period (2,562) (2,320)
NET LOSS PER SHARE (NIL) (NIL)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 12,000,000 12,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (December 30, 1994) to June 30, 1999
(Page 1 of 2)
<TABLE>
<CAPTION>
Common Stock Additional
Number of Paid-in
shares Amount Capital
<S> <C> <C> <C>
Common stock issued for
cash and services, December
1994 at $.0002 per share 12,000,000 2,400 -
Net loss for the year
ended December 31, 1994 - - -
Balance, December 31, 1994 12,000,000 2,400 -
Net loss for the year
ended December 31, 1995 - - -
Balance, December 31, 1995 12,000,000 2,400 -
Net loss for the year
ended December 31, 1996 - - -
Balance, December 31, 1996 12,000,000 2,400 -
Net loss for the year
ended December 31, 1997 - - -
Balance, December 31, 1997 12,000,000 2,400 -
Expenses paid by
shareholders, September, 1998 - - 574
Net loss for the year
ended December 31, 1998 - - -
Balance, December 31, 1998 12,000,000 2,400 574
Net loss for the period
ended June 30, 1999 - - -
Balance, June 30, 1999 12,000,000 2,400 574
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (December 30, 1994) to June 30, 1999
(Page 2 of 2)
<TABLE>
<CAPTION>
Deficit
accumulated
during the Total
development stockholder
stage equity
<S> <C> <C>
Common stock issued for
cash and services, December
1994 at $.0002 per share - 2,400
Net loss for the year
ended December 31, 1994 (2,200) (2,200)
Balance, December 31, 1994 (2,200) 200
Net loss for the year
ended December 31, 1995 (40) (40)
Balance, December 31, 1995 (2,240) 160
Net loss for the year
ended December 31, 1996 (40) (40)
Balance, December 31, 1996 (2,280) 120
Net loss for the year
ended December 31, 1997 (40) (40)
Balance, December 31, 1997 (2,320) 80
Expenses paid by
shareholders, September 1998 - 574
Net loss for the year
ended December 31, 1998 (242) (242)
Balance, December 31, 1998 (2,562) 412
Net loss for the period
ended June 30, 1999 (20) (20)
Balance, June 30, 1999 (2,582) 392
</TABLE>
The accompanying notes are an integral part of the financial statements.
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Page 1 of 2)
<TABLE>
<CAPTION>
For the period
December 30, 1994, For the six For the six
(Inception) months ended months ended
to 6/30/99 6/30/99 6/30/98
(unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss (2,582) (20) (20)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization 180 20 20
Stock issued for
consulting fees 2,145 - -
Increase in prepaid expenses (372) - -
Net cash used by operating activities:
(629) - -
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in organization
costs (200) - -
Net cash used by investing activities:
(200) - -
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for expenses
by shareholders 574 - -
Issuance of common stock 255 - -
Net cash provided by financing activities:
829 - -
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,
beginning of period - - -
CASH AND CASH EQUIVALENTS,
end of period - - -
</TABLE>
The accompanying notes are an integral part of the financial statements.
PACIFIC CMA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Page 2 of 2)
<TABLE>
<CAPTION>
For the year For the year
ended ended
12/31/98 12/31/97
(audited) (audited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss (242) (40)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization 40 40
Stock issued for
consulting fees - -
Increase in prepaid expenses (372) -
Net cash used by operating activities (574) -
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in organization costs - -
Net cash used by investing activities - -
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for expenses
by shareholders 574 -
Issuance of common stock - -
Net cash provided by financing
activities 574 -
NET INCREASE (DECREASE)IN
CASH AND CASH EQUIVALENTS - -
CASH AND CASH EQUIVALENTS,
beginning of period - -
CASH AND CASH EQUIVALENTS,
end of period - -
</TABLE>
The accompanying notes are an integral part of the financial statements.
PACIFIC CMA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage company
Pacific CMA, Inc. (a development stage company) (the "Company")
was incorporated under the laws of the State of Colorado on
December 30, 1994. After engaging in minimal activity related to its
business plan, the Company's activities ceased in early 1995, and the
Company became inactive until its reinstatement by the Colorado
Secretary of State on September 25, 1998. The principal office of the
Company is 7331 South Meadow Court, Boulder, CO 80301.
The Company is a new enterprise in the development stage as defined
by Statement No. 7 of the Financial Accounting Standards Board and
has not engaged in any business other than organizational efforts. It
has no full-time employees and owns no real property. The Company
intends to operate as a capital market access corporation by registering
with the U.S. Securities and Exchange Commission under the
Securities Exchange Act of 1934. After this, the Company intends to
seek to acquire one or more existing businesses which have existing
management, through merger or acquisition. Management of the
Company will have virtually unlimited discretion in determining the
business activities in which the Company might engage.
The Company currently does not own any properties or an interest in
any business. Moreover, it has not identified any properties or
business opportunities that it shall seek to acquire, has no
understanding or arrangement to acquire any properties or business
interests, and has not identified any specific geographical area,
industry, or type of business in which it intends to operate.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal year
The fiscal year end of Company is December 31.
Loss per share
Loss per share was computed using the weighted number of shares
outstanding during the period.
Organization Costs
Costs to incorporate the Company were capitalized and are being
amortized over a sixty month period.
Statement of cash flows
For the purpose of the Statement of Cash Flows, the Company
considers all highly liquid debt instruments purchased with an original
maturity of three month or less to be cash equivalents.
Use of estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principals requires the Company's
management to make estimates and assumptions that effect the
amounts reported in these financial statements and accompanying
notes. Actual results could differ from those estimates.
Consideration of Other Comprehensive Income Items
SFAF 130 - Reporting Comprehensive Income, requires companies to
present comprehensive income (consisting primarily of net income
plus other direct equity changes and credits) and its components as
part of the basic financial statements. For the year ended December
31, 1998, the Company's financial statements do not contain any
changes in equity that are required to be reported separately in
comprehensive income.
Stock basis
Shares of common stock issued for other than cash have been assigned
amounts equivalent to the fair value of the service or assets received
in exchange.
2. STOCKHOLDERS' EQUITY
As of December 31, 1998, 12,000,000 shares of the Company's no
par value common stock had been issued for a combination of cash
and consulting services provided. The services were converted to
shares at $0.0002 per share and valued at a total of $2,145.
3. RELATED PARTY TRANSACTIONS
As of the date hereof, there are two shareholders of the Company
acting as officers and directors who are the owners of 4,989,250
shares of common stock, constituting approximately 41.58% of the
Company's issued and outstanding shares.
4. INCOME TAXES
The Company has Federal net operating loss carryforwards of
approximately $2,600 expiring during the years 2009 and 2018. The
tax benefit of these net operating losses is approximately $500 and has
been offset by a full allowance for realization. This carryforward
may be limited upon the consummation of a business combination
under IRC Section 381. For the years ended December 31, 1998 and
1997, the valuation allowance increased by approximately $50 and $0,
respectively.
PART III
Item 1. INDEX TO EXHIBITS
The Exhibits listed below are filed as part of this Amended
Registration Statement.
<TABLE>
<CAPTION>
Exhibit
No. Document
<S> <C>
2.1 Articles of Incorporation
2.2 Bylaws
3.2 Specimen Stock Certificate
27 Financial Data Schedule
</TABLE>
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.
PACIFIC CMA, INC.
By: /s/ ________________________________
Grant W. Peck, President and Director
Date: October 14, 1999
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
PACIFIC CMA, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1474837
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7331 S. Meadow Court,
Boulder, Colorado 80301
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 530-3353
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Document
<S> <C>
2.1 Articles of Incorporation
2.2 Bylaws
3.2 Specimen Stock Certificate
27 Financial Data Schedule
</TABLE>
EXHIBIT 2.1 - ARTICLES OF INCORPORATION OF PACIFIC
CMA, INC.
The undersigned, who, if a natural person, is eighteen years of
age or older, hereby establishes a corporation pursuant to the
Colorado Business Corporation Act as amended and adopts the
following Articles of Incorporation:
FIRST: The name of the corporation is Pacific CMA,
Inc.
SECOND: The corporation shall have and may exercise all
of the rights, powers and privileges now or hereafter conferred upon
corporations organized under the laws of Colorado. In addition, the
corporation may do everything necessary, suitable or proper for the
accomplishment of any of its corporate purposes. The corporation
may conduct part or all of its business in any part of Colorado, the
United States or the world and may hold, purchase, mortgage, lease
and convey real and personal property in any of such places.
THIRD: The aggregate number of shares which the
corporation shall have authority to issue is one hundred ten million
(110,000,000) shares of which a portion shall be common stock and a
portion shall be preferred stock, all as described below.
A. Common Stock. The aggregate number of common
shares which the corporation shall have the authority to issue is one
hundred million (100,000,000), which shares shall be designated
"Common Stock." Subject to all the rights of the Preferred Stock as
expressly provided herein, by law or by the Board of Directors
pursuant to this Article, the Common Stock of the corporation shall
possess all such rights and privileges as are afforded to capital stock
by applicable law in the absence of any express grant of rights or
privileges in these Articles of Incorporation, including, but not limited
to, the following rights and privileges:
(a) dividends may be declared and paid or set apart for
payment on the Common Stock out of any assets or funds of the
corporation legally available for the payment of dividends;
(b) the holders of Common Stock shall have unlimited
voting rights, including the right to vote for the election of directors
and on all other matters requiring stockholder action. Each holder of
Common Stock shall have one vote for each share of Common Stock
standing in his name on the books of the corporation and entitled to
vote, except that in the election of directors each holder of Common
Stock shall have as many votes for each share of Common Stock held
by him as there are directors to be elected and for whose election the
holder of Common Stock has a right to vote. Cumulative voting shall
not be permitted in the election of directors or otherwise.
(c) on the voluntary or involuntary liquidation, dissolution
or winding up of the corporation, and after paying or adequately
providing for the payment of all of its obligations and amounts
payable in liquidation, dissolution or winding up, and subject to the
rights of the holders of Preferred Stock, if any, the net assets of the
corporation shall be distributed pro rata to the holders of the Common
Stock.
B. Preferred Stock. The aggregate number of
preferred shares which this corporation shall have the authority to
issue is ten million (10,000,000) shares, each with no par value,
which shares shall be designated "Preferred Stock." Shares of
Preferred Stock may be issued from time to time in one or more
series as determined by the Board of Directors. The Board of
Directors is hereby authorized, by resolution or resolutions, to
provide from time to time, out of the unissued shares of Preferred
Stock not then allocated to any series of Preferred Stock, for a series
of the Preferred Stock. Each such series shall have distinctive serial
designations. Before any shares of any such series of Preferred Stock
are issued, the Board of Directors shall fix and determine, and is
hereby expressly empowered to fix and determine, by resolution or
resolutions, the voting powers, full or limited, or no voting powers,
and the designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations and
restrictions thereof as provided by Colorado law. Before issuing any
shares of a class or series, the corporation shall deliver to the
secretary of state for filing articles of amendment to these articles of
incorporation that set forth information required by Colorado law,
including but not limited to, the designations, preferences, limitations,
and relative rights of the class or series of shares.
C. Voting. Unless otherwise ordered by a court of
competent jurisdiction, at all meetings of shareholders one-third of the
shares of a voting group entitled to vote at such meeting, represented
in person or by proxy, shall constitute a quorum of that voting group.
FOURTH: The number of directors of the corporation shall
be fixed by the bylaws, should the bylaws fail to fix such a number,
then by resolution adopted from time to time by the board of
directors, provided that the number of directors shall not be more than
five (5) nor less than two (2). Two (2) directors shall constitute the
initial board of directors. The following persons are elected to serve
as the corporation's initial directors until the first annual meeting of
shareholders or until their successors are duly elected and qualified:
<TABLE>
<CAPTION>
Name Address
<S> <C>
J. Albert Garcia 16105 Woodvale Road
Encino, California 91436
Elizabeth A. Garcia 16105 Woodvale Road
Encino, California 91436
William C. Pierce 16105 Woodvale Road
Encino. California 91436
</TABLE>
FIFTH: The street address of the initial registered office
of the corporation is 4750 Table Mesa Drive, Boulder, Colorado
80303. The name of the initial registered agent of the corporation at
such address is Gary S. Joiner.
SIXTH: The address of the initial principal office of the
corporation is 4750 Table Mesa Drive, Boulder, Colorado 80303.
SEVENTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of the
corporation, and the same are in furtherance of and not in limitation
or exclusion of the powers conferred by law.
(a) Conflicting Interest Transactions. As used in
this paragraph, "conflicting interest transaction" means any of the
following: (i) a loan or other assistance by the corporation to a
director of the corporation or to an entity in which a director of the
corporation is a director or officer or has a financial interest; (ii) a
guaranty by the corporation of an obligation of a director of the
corporation or of an obligation of an entity in which a director of the
corporation is a director or officer or has a financial interest; or (iii) a
contract or transaction between the corporation and a director of the
corporation or between the corporation and an entity in which a
director of the corporation is a director or officer or has a financial
interest. No conflicting interest transaction shall be void or voidable,
be enjoined, be set aside, or give rise to an award of damages or
other sanctions in a proceeding by a shareholder or by or in the right
of the corporation, solely because the conflicting interest transaction
involves a director of the corporation or an entity in which a director
of the corporation is a director or officer or has a financial interest, or
solely because the director is present at or participates in the meeting
of the corporation's board of directors or of the committee of the
board of directors which authorized, approves or ratifies a conflicting
interest transaction, or solely because the director's vote is counted
for such purpose if: (A) the material facts as to the director's
relationship or interest and as to the conflicting interest transaction are
disclosed or are known to the board of directors or the committee,
and the board of directors or committee in good faith authorizes,
approves or ratifies the conflicting interest transaction by the
affirmative vote of a majority of the disinterested directors, even
though the disinterested directors are less than a quorum; or (B) the
material facts as to the director's relationship or interest and as to the
conflicting interest transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the conflicting interest
transaction is specifically authorized, approved or ratified in good
faith by a vote of the shareholders; or (C) a conflicting interest
transaction is fair as to the corporation as of the time it is authorized,
approved or ratified by the board of directors, a committee thereof, or
the shareholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes, approves or ratifies the
conflicting interest transaction.
(b) Loans and Guaranties for the Benefit of
Directors. Neither the board of directors nor any committee thereof
shall authorize a loan by the corporation to a director of the
corporation or to an entity in which a director of the corporation is a
director or officer or has a financial interest, or a guaranty by the
corporation of an obligation of a director of the corporation or of an
obligation of an entity in which a director of the corporation is a
director or officer or has a financial interest, until at least ten days
after written notice of the proposed authorization of the loan or
guaranty has been given to the shareholders who would be entitled to
vote thereon if the issue of the loan or guaranty were submitted to a
vote of the shareholders. The requirements of this paragraph (b) are
in addition to, and not in substitution for, the provisions of paragraph
(a) of Article SEVENTH.
(c) Indemnification. The corporation shall
indemnify, to the maximum extent permitted by law, any person who
is or was a director, officer, agent, fiduciary or employee of the
corporation against any claim, liability or expenses arising against or
incurred by such person made party to a proceeding because he is or
was a director, officer, agent, fiduciary or employee of the
corporation or because he was a director, officer, agent, fiduciary or
employee of the corporation or because he is or was serving another
entity as a director, officer, partner, trustee, employee, fiduciary or
agent at the corporation's request. The corporation shall further have
the authority to the maximum extent permitted by law to purchase and
maintain insurance providing such indemnification.
(d) Limitation on Director's Liability. No director
of this corporation shall have any personal liability for monetary
damages to the corporation or its shareholders for breach of his
fiduciary duty as a director, except that this provision shall not
eliminate or limit the personal liability of a director to the corporation
or its shareholders for monetary damages for: (i) any breach of the
director's duty of loyalty to the corporation or its shareholders; (ii)
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) voting for or assenting
to a distribution in violation of Colorado Revised Statutes Section
7-106-401 or the articles of incorporation if it is established that the
director did not perform his duties in compliance with Colorado
Revised Statutes Section 7-108-401, provided that the personal
liability of a director in this circumstance shall be limited to the
amount of the distribution which exceeds what could have been
distributed without violation of Colorado Revised Statutes Section
7-106-401 or the articles of incorporation; or (iv) any transaction from
which the director directly or indirectly derives an improper personal
benefit. Nothing contained herein will be construed to deprive any
director of his right to all defenses ordinarily available to a director
nor will anything herein be construed to deprive any director of any
right he may have for contribution from any other director or other
person.
(e) Negation of Equitable Interests in Shares or
Rights. Unless a person is recognized as a shareholder through
procedures established by the corporation pursuant to Colorado
Revised Statutes Section 7-107-204 or any similar law, the corporation
shall be entitled to treat the registered holder of any shares of the
corporation as the owner thereof for all purposes permitted by the
Colorado Business Corporation Act, including without limitation all
rights deriving from such shares, and the corporation shall not be
bound to recognize any equitable or other claim to, or interest in,
such shares or rights deriving from such shares on the part of any
other person including without limitation, a purchaser, assignee or
transferee of such shares, unless and until such other person becomes
the registered holder of such shares or is recognized as such, whether
or not the corporation shall have either actual or constructive notice of
the claimed interest of such other person. By way of example and not
of limitation, until such other person has become the registered holder
of such shares or is recognized pursuant to Colorado Revised Statutes
Section 7-107-204 or any similar applicable law, he shall not be
entitled: (i) to receive notice of the meetings of the shareholders; (ii)
to vote at such meetings; (iii) to examine a list of the shareholders;
(iv) to be paid dividends or other distributions payable to
shareholders; or (v) to own, enjoy and exercise any other rights
deriving from such shares against the corporation. Nothing contained
herein will be construed to deprive any beneficial shareholder, as
defined in Colorado Revised Statutes Section 7-113-101(1), of any
right he may have pursuant to Article 113 of the Colorado Business
Corporation Act or any subsequent law.
EIGHTH: The name and address of the incorporator is:
Gary S. Joiner
4750 Table Mesa Drive
Boulder, Colorado 80303
DATED the 29th day of December, 1994.
/s/ Gary S. Joiner
Incorporator
Gary S. Joiner hereby consents to the appointment as the initial
registered agent for Pacific CMA, Inc.
/s/ Gary S. Joiner
Initial Registered Agent
EXHIBIT 2.2 - BYLAWS OF PACIFIC CMA, INC.
ARTICLE I
Offices
The principal office of the corporation shall be designated from
time to time by the corporation and may be within or outside of
Colorado.
The corporation may have such other offices, either within or
outside Colorado, as the board of directors may designate or as the
business of the corporation may require from time to time.
The registered office of the corporation required by the
Colorado Business Corporation Act to be maintained in Colorado may
be, but need not be, identical with the principal office, and the
address of the registered office may be changed from time to time by
the board of directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held during the month of September of each year
on a date and at a time fixed by the board of directors of the
corporation (or by the president in the absence of action by the board
of directors), beginning with the year 2000, for the purpose of
electing directors and for the transaction of such other business as
may come before the meeting. If the election of directors is not held
on the day fixed as provided herein for any annual meeting of the
shareholders, or any adjournment thereof, the board of directors shall
cause the election to be held at a special meeting of the shareholders
as soon thereafter as it may conveniently be held.
A shareholder may apply to the district court in the county in
Colorado where the corporation's principal office is located or, if the
corporation has no principal office in Colorado, to the district court of
the county in which the corporation's registered office is located to
seek an order that a shareholder meeting be held (i) if an annual
meeting was not held within six months after the close of the
corporation's most recently ended fiscal year or fifteen months after
its last annual meeting, whichever is earlier, or (ii) if the shareholder
participated in a proper call of or proper demand for a special meeting
and notice of the special meeting was not given within thirty days
after the date of the call or the date the last of the demands necessary
to require calling of the meeting was received by the corporation
pursuant to C.R.S. Section 7-107-102(1)(b), or the special meeting
was not held in accordance with the notice.
Section 2. Special Meetings. Unless otherwise prescribed
by statute, special meetings of the shareholders may be called for any
purpose by the president or by the board of directors. The president
shall call a special meeting of the shareholders if the corporation
receives one or more written demands for the meeting, stating the
purpose or purposes for which it is to be held, signed and dated by
holders of shares representing at least ten percent of all the votes
entitled to be cast on any issue proposed to be considered at the
meeting.
Section 3. Place of Meeting. The board of directors may
designate any place, either within or outside Colorado, as the place
for any annual meeting or any special meeting called by the board of
directors. A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place, either within or outside
Colorado, as the place for such meeting. If no designation is made,
or if a special meeting is called other than by the board, the place of
meeting shall be the principal office of the corporation.
Section 4. Notice of Meeting. Written notice stating the
place, date, and hour of the meeting shall be given not less than ten
nor more than sixty days before the date of the meeting, except that
(i) if the number of authorized shares is to be increased, at least thirty
days' notice shall be given, or (ii) any other longer notice period is
required by the Colorado Business Corporation Act. Notice of a
special meeting shall include a description of the purpose or purposes
of the meeting. Notice of an annual meeting need not include a
description of the purpose or purposes of the meeting except the
purpose or purposes shall be stated with respect to (i) an amendment
to the articles of incorporation of the corporation, (ii) a merger or
share exchange in which the corporation is a party and, with respect
to a share exchange, in which the corporation's shares will be
acquired, (iii) a sale, lease, exchange or other disposition, other than
in the usual and regular course of business, of all or substantially all
of the property of the corporation or of another entity which this
corporation controls, in each case with or without the goodwill, (iv) a
dissolution of the corporation, or (v) any other purpose for which a
statement of purpose is required by the Colorado Business
Corporation Act. Notice shall be given personally or by mail, private
carrier, telegraph, teletype, electronically transmitted facsimile or
other form of wire or wireless communication by or at the direction
of the president, the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such
meeting. If mailed and if in a comprehensible form, such notice shall
be deemed to be given and effective when deposited in the United
States mail, addressed to the shareholder at his address as it appears
in the corporation's current record of shareholders, with postage
prepaid. If notice is given other than by mail, and provided that such
notice is in a comprehensible form, the notice is given and effective
on the date received by the shareholder.
If requested by the person or persons lawfully calling such
meeting, the secretary shall give notice thereof at corporation
expense. No notice need be sent to any shareholder if three
successive notices mailed to the last known address of such
shareholder have been returned as undeliverable until such time as
another address for such shareholder is made known to the
corporation by such shareholder. In order to be entitled to receive
notice of any meeting, a shareholder shall advise the corporation in
writing of any change in such shareholder's mailing address as shown
on the corporation's books and records.
When a meeting is adjourned to another date, time or place,
notice need not be given of the new date, time or place if the new
date, time or place of such meeting is announced before adjournment
at the meeting at which the adjournment is taken. At the adjourned
meeting the corporation may transact any business which may have
been transacted at the original meeting. If the adjournment is for
more than 120 days, or if a new record date is fixed for the adjourned
meeting, a new notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the meeting as of the new
record date.
A shareholder may waive notice of a meeting before or after
the time and date of the meeting by a writing signed by such
shareholder. Such waiver shall be delivered to the corporation for
filing with the corporate records. Further, by attending a meeting
either in person or by proxy, a shareholder waives objection to lack of
notice or defective notice of the meeting unless the shareholder objects
at the beginning of the meeting to the holding of the meeting or the
transaction of business at the meeting because of lack of notice or
defective notice. By attending the meeting, the shareholder also
waives any objection to consideration at the meeting of a particular
matter not within the purpose or purposes described in the meeting
notice unless the shareholder objects to considering the matter when it
is presented.
Section 5. Fixing of Record Date. For the purposes of
determining shareholders entitled to (i) notice of or vote at any
meeting of shareholders or any adjournment thereof, (ii) receive
distributions or share dividends, or (ii) demand a special meeting, or
to make a determination of shareholders for any other proper purpose,
the board of directors may fix a future date as the record date for any
such determination of shareholders, such date in any case to be not
more than seventy days, and, in case of a meeting of shareholders not
less than ten days, prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If no
record date is fixed by the directors, the record date shall be the date
on which notice of the meeting is mailed to shareholders, or the date
on which the resolution of the board of directors providing for a
distribution is adopted, as the case may be. When a determination of
shareholders entitled to vote at any meeting of shareholders is made as
provided in this Section, such determination shall apply to any
adjournment thereof unless the board of directors fixes a new record
date, which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
Notwithstanding the above, the record date for determining the
shareholders entitled to take action without a meeting or entitled to be
given notice of action so taken shall be the date a writing upon which
the action is taken is first received by the corporation. The record
date for determining shareholders entitled to demand a special meeting
shall be the date of the earliest of any of the demands pursuant to
which the meeting is called.
Section 6. Voting Lists. The secretary shall make, at the
earlier of ten days before each meeting of shareholders or two
business days after notice of the meeting has been given, a complete
list of the shareholders entitled to be given notice of such meeting or
any adjournment thereof. The list shall be arranged by voting groups
and within each voting group by class or series of shares, shall be in
alphabetical order within each class or series, and shall show the
address of and the number of shares of each class or series held by
each shareholder. For the period beginning the earlier of ten days
prior to the meeting or two business days after notice of the meeting
is given and continuing through the meeting and any adjournment
thereof, this list shall be kept on file at the principal office of the
corporation, or at a place (which shall be identified in the notice) in
the city where the meeting will be held. Such list shall be available
for inspection on written demand by any shareholder (including for
the purpose of this Section 6 any holder of voting trust certificates) or
his agent or attorney during regular business hours and during the
period available for inspection. The original stock transfer books
shall be prima facie evidence as to the shareholders entitled to
examine such list or to vote at any meeting of shareholders.
Any shareholder, his agent or attorney may copy the list
during regular business hours and during the period it is available for
inspection, provided (i) the shareholder has been a shareholder for at
least three months immediately preceding the demand or holds at least
five percent of all outstanding shares of any class of shares as of the
date of the demand, (ii) the demand is made in good faith and for a
purpose reasonably related to the demanding shareholder's interest as
a shareholder, (iii) the shareholder describes with reasonable
particularity the purpose and the records the shareholder desires to
inspect, (iv) the records are directly connected with the described
purpose and (v) the shareholder pays a reasonable charge covering the
costs of labor and material for such copies, not to exceed the
estimated cost of production and reproduction.
Section 7. Recognition Procedure for Beneficial Owners.
The board of directors may adopt by resolution a procedure whereby
a shareholder of the corporation may certify in writing to the
corporation that all or a portion of the shares registered in the name
of such shareholder are held for the account of a specified person or
persons. The resolution may set forth (i) the types of nominees to
which it applies, (ii) the rights or privileges that the corporation will
recognize in a beneficial owner, which may include rights and
privileges other than voting; (iii) the form of certification and the
information to be contained therein, (iv) if the certification is with
respect to a record date, the time within which the certification must
be received by the corporation, (v) the period for which the nominee's
use of the procedure is effective, and (vi) such other provisions with
respect to the procedure as the board deems necessary or desirable.
Upon receipt by the corporation of a certificate complying with the
procedure established by the board of directors, the persons specified
in the certification shall be deemed, for the purpose or purposes set
forth in the certification, to be the registered holders of the number of
shares specified in place of the shareholder making the certification.
Section 8. Quorum and Manner of Acting. One-third of
the votes entitled to be cast on a matter by a voting group shall
constitute a quorum of that voting group for action on the matter. If
less than one-third of such votes are represented at a meeting, a
majority of the votes so represented may adjourn the meeting from
time to time without further notice, for a period not to exceed 120
days for any one adjournment. If a quorum is present at such
adjourned meeting, any business may be transacted which might have
been transacted at the meeting as originally noticed. The shareholders
present at a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, unless the meeting is
adjourned and a new record date is set for the adjourned meeting.
If a quorum exists, action on a matter other than the election
of directors by a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast within the
voting group opposing the action, unless the vote of a greater number
or voting by classes is required by law or the articles of
incorporation.
Section 9. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy by signing an appointment form or
similar writing, either personally or by his duly authorized
attorney-in-fact. A shareholder may also appoint a proxy by
transmitting or authorizing the transmission of a telegram, teletype, or
other electronic transmission providing a written statement of the
appointment to the proxy, a proxy solicitor, proxy support service
organization, or other person duly authorized by the proxy to receive
appointments as agent for the proxy, or to the corporation. The
transmitted appointment shall set forth or be transmitted with written
evidence from which it can be determined that the shareholder
transmitted or authorized the transmission of the appointment. The
proxy appointment form or similar writing shall be filed with the
secretary of the corporation before or at the time of the meeting. The
appointment of a proxy is effective when received by the corporation
and is valid for eleven months unless a different period is expressly
provided in the appointment form or similar writing.
Any complete copy, including an electronically transmitted
facsimile, of an appointment of a proxy may be substituted for or used
in lieu of the original appointment for any purpose for which the
original appointment could be used.
Revocation of a proxy does not affect the right of the
corporation to accept the proxy's authority unless (i) the corporation
had notice that the appointment was coupled with an interest and
notice that such interest is extinguished is received by the secretary or
other officer or agent authorized to tabulate votes before the proxy
exercises his authority under the appointment, or (ii) other notice of
the revocation of the appointment is received by the secretary or other
officer or agent authorized to tabulate votes before the proxy exercises
his authority under the appointment. Other notice of revocation may,
in the discretion of the corporation, be deemed to include the
appearance at a shareholders' meeting of the shareholder who granted
the proxy and his voting in person on any matter subject to a vote at
such meeting.
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 exercises his authority under the appointment.
The corporation shall not be required to recognize an
appointment made irrevocable if it has received a writing revoking the
appointment signed by the shareholder (including a shareholder who is
a successor to the shareholder who granted the proxy) either
personally or by his attorney-in-fact, notwithstanding that the
revocation may be a breach of an obligation of the shareholder to
another person not to revoke the appointment.
Subject to Section 11 and any express limitation on the proxy's
authority appearing on the appointment form, the corporation is
entitled to accept the proxy's vote or other action as that of the
shareholder making the appointment.
Section 10. Voting of Shares. Each outstanding share,
regardless of class, shall be entitled to one vote, except in the election
of directors, and each fractional share shall be entitled to a
corresponding fractional 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 or classes are limited or denied by the articles
of incorporation as permitted by the Colorado Business Corporation
Act. Cumulative voting shall not be permitted in the election of
directors or for any other purpose. Each record holder of stock shall
be entitled to vote in the election of directors and shall have as many
votes for each of the shares owned by him as there are directors to be
elected and for whose election he has the right to vote.
At each election of directors, that number of candidates
equaling the number of directors to be elected, having the highest
number of votes cast in favor of their election, shall be elected to the
board of directors.
Except as otherwise ordered by a court of competent
jurisdiction upon a finding that the purpose of this Section would not
be violated in the circumstances presented to the court, the shares of
the corporation are not entitled to be voted if they are owned, directly
or indirectly, by a second corporation, domestic or foreign, and the
first corporation owns, directly or indirectly, a majority of the shares
entitled to vote for directors of the second corporation except to the
extent the second corporation holds the shares in a fiduciary capacity.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the
shares has been deposited with a bank, trust company or other
financial institution under an irrevocable obligation to pay the holders
the redemption price on surrender of the shares.
Section 11. Corporation's Acceptance of Votes. If the
name signed on a vote, consent, waiver, proxy appointment, or proxy
appointment revocation corresponds to the name of a shareholder, the
corporation, if acting in good faith, is entitled to accept the vote,
consent, waiver, proxy appointment or proxy appointment revocation
and give it effect as the act of the shareholder. If the name signed on
a vote, consent, waiver, proxy appointment or proxy appointment
revocation does not correspond to the name of a shareholder, the
corporation, if acting in good faith, is nevertheless entitled to accept
the vote, consent, waiver, proxy appointment or proxy appointment
revocation and to give it effect as the act of the shareholder if:
(i) the shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity;
(ii) the name signed purports to be that of an
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary
status acceptable to the corporation has been presented with respect to
the vote, consent, waiver, proxy appointment or proxy appointment
revocation;
(iii) the name signed purports to be that of a receiver
or trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the corporation has been
presented with respect to the vote, consent, waiver, proxy
appointment or proxy appointment revocation;
(iv) the name signed purports to be that of a pledgee,
beneficial owner or attorney-in-fact of the shareholder and, if the
corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented
with respect to the vote, consent, waiver, proxy appointment or proxy
appointment revocation;
(v) two or more persons are the shareholder as
co-tenants or fiduciaries and the name signed purports to be the name
of at least one of the co-tenants or fiduciaries, and the person signing
appears to be acting on behalf of all the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver,
proxy appointment or proxy appointment revocation is otherwise
proper under rules established by the corporation that are not
inconsistent with this Section 11.
The corporation is entitled to reject a vote, consent, waiver,
proxy appointment or proxy appointment revocation if the secretary or
other officer or agent authorized to tabulate votes, acting in good
faith, has reasonable basis for doubt about the validity of the signature
on it or about the signatory's authority to sign for the shareholder.
Neither the corporation nor its officers nor any agent who
accepts or rejects a vote, consent, waiver, proxy appointment or
proxy appointment revocation in good faith and in accordance with the
standards of this Section is liable in damages for the consequences of
the acceptance or rejection.
Section 12. Informal Action by Shareholders. Any action
required or permitted to be taken at a meeting of the shareholders may
be taken without a meeting if a written consent (or counterparts
thereof) that sets forth the action so taken is signed by all of the
shareholders entitled to vote with respect to the subject matter thereof
and received by the corporation. Such consent shall have the same
force and effect as a unanimous vote of the shareholders and may be
stated as such in the document. Action taken under this Section 12 is
effective as of the date the last writing necessary to effect this action
is received by the corporation, unless all of the writings specify a
different effective date, in which case such specified date shall be the
effective date for such action. If any shareholder revokes his consent
as provided for herein prior to what would otherwise be the effective
date, the action proposed in the consent shall be invalid. The record
date for determining shareholders entitled to take action without a
meeting is the date the corporation receives a writing upon which the
action is taken.
Any shareholder who has signed a writing describing and
consenting to action taken pursuant to this Section 12 may revoke
such consent by a writing signed by the shareholder describing the
action and stating that the shareholder's prior consent thereto is
revoked, if such writing is received by the corporation before the
effectiveness of the action.
Section 13. Meetings by Telecommunication. Any or all of
the shareholders may participate in an annual or special shareholders'
meeting by, or the meeting may be conducted through the use of, any
means of communication by which all persons participating in the
meeting may hear each other during the meeting. A shareholder
participating in a meeting by this means is deemed to be present in
person at the meeting.
ARTICLE III
Board of Directors
Section 1. General Powers. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of
the corporation shall be managed under the direction of its board of
directors, except as otherwise provided in the Colorado Business
Corporation Act or the articles of incorporation.
Section 2. Number, Qualifications and Tenure. The
number of directors of the corporation shall be fixed from time to
time by the board of directors, within a range of no less than three or
more than five. A director shall be a natural person who is eighteen
years of age or older. A director need not be a resident of Colorado
or a shareholder of the corporation.
Directors shall be elected at each annual meeting of
shareholders. Each director shall hold office until the next annual
meeting of shareholders following his election and thereafter until his
successor shall have been elected and qualified. Directors shall be
removed in the manner provided by the Colorado Business
Corporation Act.
Section 3. Vacancies. Any director may resign at any
time by giving written notice to the corporation. Such resignation
shall take effect at the time the notice is received by the corporation
unless the notice specifies a later effective date. Unless otherwise
specified in the notice of resignation, the corporation's acceptance of
such resignation shall not be necessary to make it effective. Any
vacancy on the board of directors may be filled by the affirmative
vote of a majority of the shareholders or the board of directors. If the
directors remaining in office constitute fewer than a quorum of the
board, the directors may fill the vacancy by the affirmative vote of a
majority of all the directors remaining in office. If elected by the
directors, the director shall hold office until the next annual
shareholder's meeting at which directors are elected. If elected by the
shareholders, the director shall hold office for the unexpired term of
his predecessor in office; except that, if the director's predecessor was
elected by the directors to fill a vacancy, the director elected by the
shareholders shall hold office for the unexpired term of the last
predecessor elected by the shareholders.
Section 4. Regular Meetings. A regular meeting of the
board of directors shall be held without notice immediately after and
at the same place as the annual meeting of shareholders. The board
of directors may provide by resolution the time and place, either
within or outside Colorado, for the holding of additional regular
meetings without other notice.
Section 5. Special Meetings. Special meetings of the
board of directors may be called by or at the request of the president
or any two directors. The person or persons authorized to call special
meetings of the board of directors may fix any place, either within or
outside Colorado, as the place for holding any special meeting of the
board of directors called by them, provided that no meeting shall be
called outside the State of Colorado unless a majority of the board of
directors has so authorized.
Section 6. Notice. Notice of any special meeting shall be
given at least two days prior to the meeting by written notice either
personally delivered or mailed to each director at his business address,
or by notice transmitted by telegraph, telex, electronically transmitted
facsimile or other form of wire or wireless communication. If
mailed, such notice shall be deemed to be given and to be effective on
the earlier of (i) three days after such notice is deposited in the United
States mail, properly addressed, with postage prepaid, or (ii) the date
shown on the return receipt, if mailed by registered or certified mail
return receipt requested. If notice is given by telex, electronically
transmitted facsimile or other similar form of wire or wireless
communication, such notice shall be deemed to be given and to be
effective when sent, and with respect to a telegram, such notice shall
be deemed to be given and to be effective when the telegram is
delivered to the telegraph company. If a director has designated in
writing one or more reasonable addresses or facsimile numbers for
delivery of notice to him, notice sent by mail, telegram, telex,
electronically transmitted facsimile or other form of wire or wireless
communication shall not be deemed to have been given or to be
effective unless sent to such addresses or facsimile numbers, as the
case may be.
A director may waive notice of a meeting before or after the
time and date of the meeting by a writing signed by such director.
Such waiver shall be delivered to the corporation for filing with the
corporate records. Further, a director's attendance at or participation
in a meeting waives any required notice to him of the meeting unless
at the beginning of the meeting, or promptly upon his arrival, the
director objects to holding the meeting or transacting business at the
meeting because of lack of notice or defective notice and does not
thereafter vote for or assent to action taken at the meeting. 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.
Section 7. Quorum. A majority of the number of directors
fixed by the board of directors pursuant to Section 2 or, if no number
is fixed, a majority of the number in office immediately before the
meeting begins, shall constitute a quorum for the transaction of
business at any meeting of the board of directors. If less than such
majority is present at a meeting, a majority of the directors present
may adjourn the meeting from time to time without further notice, for
a period not to exceed sixty days at any one adjournment.
Section 8. Manner of Acting. 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. No director may vote or act by
proxy at any meeting of directors.
Section 9. Compensation. By resolution of the board of
directors, any director may be paid any one or more of the following:
his expenses, if any, of attendance at meetings, a fixed sum for
attendance at each meeting, a stated salary as director, or such other
compensation as the corporation and the director may reasonably
agree upon. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving
compensation therefor.
Section 10. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors or
committee of the board at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless (i)
the director objects at the beginning of the meeting, or promptly upon
his arrival, to the holding of the meeting or the transaction of business
at the meeting and does not thereafter vote for or assent to any action
taken at the meeting, (ii) the director contemporaneously requests that
his dissent or abstention as to any specific action taken be entered in
the minutes of the meeting, or (iii) the director causes written notice
of his dissent or abstention as to any specific action to be received by
the presiding officer of the meeting before its adjournment or by the
corporation promptly after the adjournment of the meeting. A
director may dissent to a specific action at a meeting, while assenting
to others. The right to dissent to a specific action taken at a meeting
of the board of directors or a committee of the board shall not be
available to a director who voted in favor of such action.
Section 11. Committees. By resolution adopted by a majority
of all the directors in office when the action is taken, the board of
directors may designate from among its members an executive
committee and one or more other committees, and appoint one or
more members of the board of directors to serve on them. To the
extent provided in the resolution, each committee shall have all the
authority of the board of directors, except that no such committee
shall have the authority to (i) authorize distributions, (ii) approve or
propose to shareholders actions or proposals required by the Colorado
Business Corporation Act to be approved by shareholders, (iii) fill
vacancies on the board of directors or any committee thereof, (iv)
amend articles of incorporation, (v) adopt, amend or repeal the
bylaws, (vi) approve a plan of merger not requiring shareholder
approval, (vii) authorize or approve the reacquisition of shares unless
pursuant to a formula or method prescribed by the board of directors,
or (viii) authorize or approve the issuance or sale of shares, or
contract for the sale of shares or determine the designations and
relative rights, preferences and limitations of a class or series of
shares, except that the board of directors may authorize a committee
or officer to do so within limits specifically prescribed by the board of
directors. The committee shall then have full power within the limits
set by the board of directors to adopt any final resolution setting forth
all preferences, limitations and relative rights of such class or series
and to authorize an amendment of the articles of incorporation stating
the preferences, limitations and relative rights of a class or series for
filing with the Secretary of State under the Colorado Business
Corporation Act.
Sections 4, 5, 6, 7, 8 and 12 of Article II, which govern
meetings, notice, waiver of notice, quorum, voting requirements and
action without a meeting of the board of directors, shall apply to
committees and their members appointed under this Section 11.
Neither the designation of any such committee, the delegation
of authority to such committee, nor any action by such committee
pursuant to its authority shall alone constitute compliance by any
member of the board of directors or a member of the committee in
question with his responsibility to conform to the standards of care set
forth in Article IVII, Section 14 of these bylaws.
Section 12. Action Without a Meeting. Any action required or
permitted to be taken at a meeting of the directors or any committee
designated by the board of directors may be taken without a meeting
if a written consent (or counterparts thereof) that sets forth the action
so taken is signed by all of the directors entitled to vote with respect
to the action taken. Such consent shall have the same force and effect
as a unanimous vote of the directors or committee members and may
be stated as such in any document. Unless the consent specifies a
different effective date, action taken under this Section 12 is effective
at the time the last director signs a writing describing the action taken,
unless, before such time, any director has revoked his consent by a
writing signed by the director and received by the president or
secretary of the corporation.
Section 13. Telephonic Meetings. The board of directors may
permit any director (or any member of a committee designated by the
board) to participate in a regular or special meeting of the board of
directors or a committee thereof through the use of any means of
communication by which all directors participating in the meeting can
hear each other during the meeting. A director participating in a
meeting in this manner is deemed to be present in person at the
meeting.
Section 14. Standard of Care. A director shall perform his
duties as a director, including, without limitation his duties as a
member of any committee of the board, in good faith, in a manner he
reasonably believes to be in the best interests of the corporation, and
with the care an ordinarily prudent person in a like position would
exercise under similar circumstances. In performing his duties, a
director shall be entitled to rely on information, opinions, reports or
statements, including financial statements and other financial data, in
each case prepared or presented by the persons herein designated.
However, he shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause
such reliance to be unwarranted. A director shall not be liable to the
corporation or its shareholders for any action he takes or omits to take
as a director if, in connection with such action or omission, he
performs his duties in compliance with this Section 14.
The designated persons on whom a director is entitled to rely
are (i) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the
matters presented, (ii) legal counsel, public accountant, or other
person as to matters which the director reasonably believes to be
within such person's professional or expert competence, or (iii) a
committee of the board of directors on which the director does not
serve if the director reasonably believes the committee merits
confidence.
ARTICLE IV
Officers and Agents
Section 1. General. The officers of the corporation shall be a
president, one or more vice presidents, a secretary, a treasurer,
and/or such other officers as may be appointed from time to time by
the board of directors, each of whom shall be a natural person
eighteen years of age or older. The board of directors or an officer
or officers authorized by the board may appoint such other officers,
assistant officers, committees and agents, including a chairman of the
board, assistant secretaries and assistant treasurers, as they may
consider necessary. The board of directors or the officer or officers
authorized by the board shall from time to time determine the
procedure for the appointment of officers, their term of office, their
authority and duties and their compensation. One person may hold
more than one office. In all cases where the duties of any officer,
agent or employee are not prescribed by the bylaws, or by the board
of directors, such officer, agent or employee shall follow the orders
and instructions of the president of the corporation.
Section 2. Appointment and Term of Office. The officers of
the corporation shall be appointed by the board of directors at each
annual meeting of the board held after each annual meeting of the
shareholders. If the appointment of officers is not made at such
meeting or if an officer or officers are to be appointed by another
officer or officers of the corporation, such appointment shall be made
as soon thereafter as conveniently may be. Each officer shall hold
office until the first of the following occurs: his successor shall have
been duly appointed and qualified, his death, his resignation, or his
removal in the manner provided in Section 3.
Section 3. Resignation and Removal. An officer may resign at
any time by giving written notice of resignation to the corporation.
The resignation is effective when the notice is received by the
corporation unless the notice specifies a later effective date.
Any officer or agent may be removed at any time with or
without cause by the board of directors or an officer or officers
authorized by the board. Such removal does not affect the contract
rights, if any, of the corporation or of the person so removed. The
appointment of an officer or agent shall not in itself create contract
rights.
Section 4. Vacancies. A vacancy in any office, however
occurring, may be filled by the board of directors, or by the officer or
officers authorized by the board, for the unexpired portion of the
officer's term. If an officer resigns and his resignation is made
effective at a later date, the board of directors, or officer or officers
authorized by the board, may permit the officer to remain in office
until the effective date and may fill the pending vacancy before the
effective date if the board of directors or officer or officers authorized
by the board provide that the successor shall not take office until the
effective date. In the alternative, the board of directors, or officer or
officers authorized by the board of directors, may remove the officer
at any time before the effective date and may fill the resulting
vacancy.
Section 5. President. Subject to the direction and supervision
of the board of directors, the president shall be the chief executive
officer of the corporation, and shall have general and active control of
its affairs and business and general supervision of its officers, agents
and employees. Unless otherwise directed by the board of directors,
the president shall attend in person or by substitute appointed by him,
or shall execute on behalf of the corporation written instruments
appointing a proxy or proxies to represent the corporation, at all
meetings of the stockholders of any other corporation in which the
corporation holds any stock. On behalf of the corporation, the
president may in person or by substitute or by proxy execute written
waivers of notice and consents with respect to any such meetings. At
all such meetings and otherwise, the president, in person or by
substitute or proxy, may vote the stock held by the corporation,
execute written consents and other instruments with respect to such
stock, and exercise any and all rights and powers incident to the
ownership or said stock, subject to the instructions, if any, of the
board of directors. The president shall have custody of the treasurer's
bond, if any.
Section 6. Vice Presidents. The vice presidents shall assist the
president and shall perform such duties as may be assigned to them by
the president or by the board of directors. In the absence of the
president, the vice president, if any (or, if more than one, the vice
presidents in the order designated by the board of directors, or if the
board makes no such designation, then the vice president designated
by the president, or if neither the board nor the president makes any
such designation, the senior vice president as determined by first
election to that office), shall have the powers and perform the duties
of the president.
Section 7. Secretary. The secretary shall (i) prepare and
maintain as permanent records the minutes of the proceedings of the
shareholders and the board of directors, a record of all actions taken
by the shareholders or board of directors without a meeting, a record
of all actions taken by a committee of the board of directors in place
of the board of directors on behalf of the corporation, and a record of
all waivers of notice of meetings of shareholders and of the board of
directors or any committee thereof, (ii) see that all notices are duly
given in accordance with the provisions of these bylaws and as
required by law, (iii) serve as custodian of the corporate records and
of the seal of the corporation and affix the seal to all documents when
authorized by the board of directors, (iv) keep at the corporation's
registered office or principal place of business a record containing the
names and addresses of all shareholders in a form that permits
preparation of a list of shareholders arranged by voting group and by
class or series of shares within each group, that is alphabetical within
each class or series and that shows the address of, and the number of
shares of each class or series held by each shareholder, unless such a
record shall be kept at the office of the corporation's transfer agent or
registrar, (v) maintain at the corporation's principal office the
originals or copies of the corporation's articles of incorporation,
bylaws, minutes of all shareholders' meetings and records of all action
taken by shareholders without a meeting for the past three years, all
written communications within the past three years to shareholders as
a group or to the holders of any class or series of shares as a group, a
list of the name and business addresses of the current directors and
officers, a copy of the corporation's most recent corporate report filed
with the Secretary of State, and financial statements showing in
reasonable detail the corporation's assets and liabilities and results of
operations for the last three years, (vi) have general charge of the
stock transfer books of the corporation, unless the corporation has a
transfer agent, (vii) authenticate records of the corporation, and (vii)
in general, perform all duties incident to the office of secretary and
such other duties as from time to time may be assigned to him by the
president or by the board of directors. Assistant secretaries, if any,
shall have the same duties and powers subject to supervision by the
secretary. The directors and/or shareholders may however
respectively designate a person other than the secretary or assistant
secretary to keep the minutes of their respective meetings.
Any books, records, or minutes of the corporation may be in
written form or in any form capable of being converted into written
form within a reasonable time.
Section 8. Treasurer. The treasurer shall be the principal
financial officer of the corporation, shall have the care and custody of
all funds, securities, evidences of indebtedness and other personal
property of the corporation and shall deposit the same in accordance
with the instructions of the board of directors. He shall receive and
give receipts and acquittances for money paid in on account of the
corporation, and shall pay out of the corporation's funds on hand all
bills, payrolls and other just debts of the corporation of whatever
nature upon maturity. He shall perform all other duties incident to
the office of the treasurer and, upon request of the board, shall make
such reports to it as may be required at any time. He shall, if
required by the board, give the corporation a bond in such sums and
with such sureties as shall be satisfactory to the board, conditioned
upon the faithful performance of his duties and for the restoration to
the corporation of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the corporation. He shall have such other powers and
perform such other duties as may from time to time be prescribed by
the board of directors or the president. The assistant treasurers, if
any, shall have the same powers and duties, subject to the supervision
of the treasurer.
The treasurer shall also be the principal accounting officer of
the corporation. He shall prescribe and maintain the methods and
systems of accounting to be followed, keep complete books and
records of account as required by the Colorado Business Corporation
Act, prepare and file all local, state and federal tax returns, prescribe
and maintain an adequate system of internal audit and prepare and
furnish to the president and the board of directors statements of
account showing the financial position of the corporation and the
results of its operations.
ARTICLE V
Stock
Section 1. Certificates. The board of directors shall be
authorized to issue any of its classes of shares with or without
certificates. The fact that the shares are not represented by
certificates shall have no effect on the rights and obligations of
shareholders. If the shares are represented by certificates, such shares
shall be represented by consecutively numbered certificates signed,
either manually or by facsimile, in the name of the corporation by one
or more persons designated by the board of directors. In case any
officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, such certificate may nonetheless be issued by the
corporation with the same effect as if he were such officer at the date
of its issue. Certificates of stock shall be in such form and shall
contain such information consistent with law as shall be prescribed by
the board of directors. If shares are not represented by certificates,
within a reasonable time following the issue or transfer of such
shares, the corporation shall send the shareholder a complete written
statement of all of the information required to be provided to holders
of uncertificated shares by the Colorado Business Corporation Act.
Section 2. Consideration for Shares. Certificated or
uncertificated shares shall not be issued until the shares represented
thereby are fully paid. The board of directors may authorize the
issuance of shares for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash,
promissory notes, services performed or other securities of the
corporation. Future services shall not constitute payment or partial
payment for shares of the corporation. The promissory note of a
subscriber or an affiliate of a subscriber shall not constitute payment
or partial payment for shares of the corporation unless the note is
negotiable and is secured by collateral, other than the shares being
purchased, having a fair market value at least equal to the principal
amount of the note. For purposes of this Section 2, "promissory
note" means a negotiable instrument on which there is an obligation to
pay independent of collateral and does not include a non-recourse
note.
Section 3. Lost Certificates. In case of the alleged loss,
destruction or mutilation of a certificate of stock, the board of
directors may direct the issuance of a new certificate in lieu thereof
upon such terms and conditions in conformity with law as the board
may prescribe. The board of directors may in its discretion require
an affidavit of lost certificate and/or a bond in such form and amount
and with such surety as it may determine before issuing a new
certificate.
Section 4. Transfer of Shares. Upon surrender to the
corporation or to a transfer agent of the corporation of a certificate of
stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, and receipt of such
documentary stamps as may be required by law and evidence of
compliance with all applicable securities laws and other restrictions,
the corporation shall issue a new certificate to the person entitled
thereto, and cancel the old certificate. Every such transfer of stock
shall be entered on the stock books of the corporation which shall be
kept at its principal office or by the person and at the place designated
by the board of directors.
Except as otherwise expressly provided in Article VII, Sections
7 and 11, and except for the assertion of dissenters' rights to the
extent provided in Article 113 of the Colorado Business Corporation
Act, the corporation shall be entitled to treat the registered holder of
any shares of the corporation as the owner thereof for all purposes,
and the corporation shall not be bound to recognize any equitable or
other claim to, or interest in, such shares or rights deriving from such
shares on the part of any person other than the registered holder,
including without limitation any purchaser, assignee or transferee of
such shares or rights deriving from such shares, unless and until such
other person becomes the registered holder of such shares, whether or
not the corporation shall have either actual or constructive notice of
the claimed interest of such other person.
Section 5. Transfer Agent, Registrars and Paying Agents. The
board may at its discretion appoint one or more transfer agents,
registrars and agents for making payment upon any class of stock,
bond, debenture or other security of the corporation. Such agents and
registrars may be located either within or outside Colorado. They
shall have such rights and duties and shall be entitled to such
compensation as may be agreed.
ARTICLE VI
Indemnification of Certain Persons
Section 1. Indemnification. For purposes of Article VII, a
"Proper Person" means any person who was or is a party or is
threatened to be made a party to any threatened, pending, or complete
action, suit or proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal, by reason of the fact
that he is or was a director, officer, employee, fiduciary or agent of
the corporation, or is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary or agent of
any foreign or domestic profit or nonprofit corporation or of any
partnership, joint venture, trust, profit or nonprofit unincorporated
association, limited liability company, or other enterprise or employee
benefit plan. The corporation shall indemnify any Proper Person
against reasonably incurred expenses (including any attorneys' fees),
judgments, penalties, fines (including any excise tax assessed with
respect to an employee benefit plan) and amounts paid in settlement
reasonably incurred by him in connection with such action, suit or
proceeding if it is determined by the groups set forth in Section 4 of
this Article that he conducted himself in good faith and that he
reasonably believed (i) in the case of conduct in his official capacity
with the corporation, that his conduct was in the corporation's best
interests, or (ii) in all other cases (except criminal cases), that his
conduct was at least not opposed to the corporation's best interests, or
(iii) in the case of any criminal proceeding, that he had no reasonable
cause to believe his conduct was unlawful. A Proper Person will be
deemed to be acting in his official capacity while acting as a director,
officer, employee or agent on behalf of this corporation and not while
acting on this corporation's behalf for some other entity.
No indemnification shall be made under this Article VI to a
Proper Person with respect to any claim, issue or matter in connection
with a proceeding by or in the right of a corporation in which the
Proper Person was adjudged liable to the corporation or in connection
with any proceeding charging that the Proper Person derived an
improper personal benefit, whether or not involving action in an
official capacity, in which he was adjudged liable on the basis that he
derived an improper personal benefit. Further, indemnification under
this Section in connection with a proceeding brought by or in the right
of the corporation shall be limited to reasonable expenses, including
attorneys' fees, incurred in connection with the proceeding.
Section 2. Right to Indemnification. The corporation shall
indemnify any Proper Person who was wholly successful, on the
merits or otherwise, in defense of any action, suit, or proceeding as to
which he was entitled to indemnification under Section 1 of this
Article VI against expenses (including attorneys' fees) reasonably
incurred by him in connection with the proceeding without the
necessity of any action by the corporation other than the determination
in good faith that the defense has been wholly successful.
Section 3. Effect of Termination of Action. The termination of
any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall
not of itself create a presumption that the person seeking
indemnification did not meet the standards of conduct described in
Section 1 of this Article VI. Entry of a judgment by consent as part
of a settlement shall not be deemed an adjudication of liability, as
described in Section 2 of this Article VI.
Section 4. Groups Authorized to Make Indemnification
Determination. Except where there is a right to indemnification as set
forth in Sections 1 or 2 of this Article or where indemnification is
ordered by a court in Section 5, any indemnification shall be made by
the corporation only as authorized in the specific case upon a
determination by a proper group that indemnification of the Proper
Person is permissible under the circumstances because he has met the
applicable standards of conduct set forth in Section 1 of this Article.
This determination shall be made by the board of directors by a
majority vote of those present at a meeting at which a quorum is
present, which quorum shall consist of directors not parties to the
proceeding ("Quorum"). If a Quorum cannot be obtained, the
determination shall be made by a majority vote of a committee of the
board of directors designated by the board, which committee shall
consist of two or more directors not parties to the proceeding, except
that directors who are parties to the proceeding may participate in the
designation of directors for the committee. If a Quorum of the board
of directors cannot be obtained and the committee cannot be
established, or even if a Quorum is obtained or the committee is
designated and a majority of the directors constituting such Quorum
or committee so directs, the determination shall be made by (i)
independent legal counsel selected by a vote of the board of directors
or the committee in the manner specified in this Section 4, or, if a
Quorum of the full board of directors cannot be obtained and a
committee cannot be established, by independent legal counsel
selected by a majority vote of the full board (including directors who
are parties to the action) or (ii) a vote of the shareholders.
Section 5. Court-Ordered Indemnification. Any Proper Person
may apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction for mandatory
indemnification under Section 2 of this Article, including
indemnification for reasonable expenses incurred to obtain
court-ordered indemnification. If the court determines that such
Proper Person is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not he met the
standards of conduct set forth in Section 1 of this Article or was
adjudged liable in the proceeding, the court may order such
indemnification as the court deems proper except that if the Proper
Person has been adjudged liable, indemnification shall be limited to
reasonable expenses incurred in connection with the proceeding and
reasonable expenses incurred to obtain court-ordered indemnification.
Section 6. Advance of Expenses. Reasonable expenses
(including attorneys' fees) incurred in defending an action, suit or
proceeding as described in Section 1 may be paid by the corporation
to any Proper Person in advance of the final disposition of such
action, suit or proceeding upon receipt of (i) a written affirmation of
such Proper Person's good faith belief that he has met the standards
of conduct prescribed by Section 1 of this Article VII, (ii) a written
undertaking, executed personally or on the Proper Person's behalf, to
repay such advances if it is ultimately determined that he did not meet
the prescribed standards of conduct (the undertaking shall be an
unlimited general obligation of the Proper Person but need not be
secured and may be accepted without reference to financial ability to
make repayment), and (iii) a determination is made by the proper
group (as described in Section 3 of this Article VI) that the facts as
then known to the group would not preclude indemnification.
Determination and authorization of payments shall be made in the
same manner specified in Section 4 of this Article VI.
Section 7. Witness Expenses. The sections of this Article VI
do not limit the corporation's authority to pay or reimburse expenses
incurred by a director in connection with an appearance as a witness
in a proceeding at a time when he has not been a named defendant or
respondent in the proceeding.
Section 8. Report to Shareholders. Any indemnification of or
advance of expenses to a director in accordance with this Article VII,
if arising out of a proceeding by or on behalf of the corporation, shall
be reported in writing to the shareholders with or before the notice of
the next shareholders' meeting. If the next shareholder action is taken
without a meeting at the instigation of the board of directors, such
notice shall be given to the shareholders at or before the time the first
shareholder signs a writing consenting to such action.
ARTICLE VII
Provision of Insurance
By action of the board of directors, notwithstanding any
interest of the directors in the action, the corporation may purchase
and maintain insurance, in such scope and amounts as the board of
directors deems appropriate on behalf of any person who is or was a
director, officer, employee, fiduciary or agent of the corporation, or
who, while a director, officer, employee, fiduciary or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, fiduciary or agent of any
other foreign or domestic corporation or of any partnership, joint
venture, trust, profit or nonprofit unincorporated association, limited
liability company or other enterprise or employee benefit plan, against
any liability asserted against, or incurred by, him in that capacity
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the
provisions of Article VI or applicable law. Any such insurance may
be procured from any insurance company designated by the board of
directors of the corporation, whether such insurance company is
formed under the laws of Colorado or any other jurisdiction of the
United States or elsewhere, including any insurance company in which
the corporation has an equity interest or any other interest, through
stock ownership or otherwise.
ARTICLE VIII - Miscellaneous
Section 1. Seal. The corporate seal of the corporation shall be
circular in form and shall contain the name of the corporation and the
words, "Seal, Colorado."
Section 2. Fiscal Year. The fiscal year of the corporation
shall be as established by the board of directors.
Section 3. Amendments. The board of directors shall have
power, to the maximum extent permitted by the Colorado Business
Corporation Act, to make, amend and repeal the bylaws of the
corporation at any regular or special meeting of the board unless the
shareholders, in making, amending or repealing a particular bylaw,
expressly provide that the directors may not amend or repeal such
bylaw. The shareholders also shall have the power to make, amend
or repeal the bylaws of the corporation at any annual meeting or at
any special meeting called for that purpose.
Section 4. Gender. The masculine gender is used in these
bylaws as a matter of convenience only and shall be interpreted to
include the feminine and neuter genders as the circumstances indicate.
Section 5. Conflicts. In the event of any irreconcilable conflict
between these bylaws and either the corporation's articles of
incorporation or applicable law, the latter shall control.
Section 6. Definitions. Except as otherwise specifically
provided in these bylaws, all terms used in these bylaws shall have
the same definition as in the Colorado Business Corporation Act.
THE FOREGOING BYLAWS, consisting of eighteen (18)
pages, including this page, constitute the bylaws of Pacific CMA,
Inc., adopted by the board of directors of the corporation as of
December 30, 1994.
/s/ Leah DiSalvo, Secretary
EXHIBIT 3.2 - SPECIMEN STOCK CERTIFICATE
CONTENTS:
State of Incorporation
Name of Company
Number of authorized shares of common stock
Name of Individual Shareholder
Number of shares owned by individual shareholder
Fully paid and non-assessable shares
Date of issuance of certificate
Signature of President
Restrictive transfer legend
EXHIBIT 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 372
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 392
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,400
<OTHER-SE> 574
<TOTAL-LIABILITY-AND-EQUITY> 392
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,582)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,582)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
