U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Registration Statement on Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
FIN SPORTS U.S.A., INC.
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(Name of Small Business Issuer as specified in its charter)
0-25171
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SEC FILE No.
NEVADA 84-1385529
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(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
5525 South 900 East, Suite 110
Salt Lake City, Utah 84117
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 262-8844
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
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Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
PART I
Item 1. Description of Business.
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Business Development.
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<PAGE>
Organization and Charter Amendments
-----------------------------------
Fin Sports U.S.A., Inc. (the "Company") was organized under the laws of the
State of Nevada on June 18, 1987, to engage in any lawful purpose, activity or
pursuit. Its primary operations were to be comprised of marketing "FIN" tennis
racquets and sports equipment pursuant to a Distribution Agreement with Fin
Sports, Ltd. of London, England ("FSL").
The Company's initial authorized capital was $10,000.00 consisting of
1,000,000 shares of One Cent ($0.01) par value common voting stock. A copy of
the Company's initial Articles of Incorporation is attached hereto and is
incorporated herein by reference. See Part III, Item 1.
On October 11, 1995, the Articles of Incorporation were amended to reflect
a forward split of the 2,800 outstanding voting securities of the Company on a
basis on 2500 for one, while increasing the authorized shares to 50,000,000, and
reducing the par value to $0.001 per share. A copy of the Articles of Amendment
to the Articles of Incorporation is attached hereto and is incorporated herein
by reference. See Part III, Item 1.
On February 10, 1999, the Articles of Incorporation were amended to reflect
a 6.5 to 1 reverse split, while retaining par value of $0.001 per share with
appropriate adjustments being made in the additional paid in capital and stated
capital accounts. A copy of the Articles of Amendment to the Articles of
Incorporation is attached hereto and is incorporated herein by reference.All
computations below take into account this forward split.
Material Changes of Control Since Inception and Related Business History
------------------------------------------------------------------------
All of the outstanding voting securities of the Company were acquired in
October, 1987, by Commercial Ventures, Ltd., a Delaware corporation, Securities
and Exchange Commission File No. 0-23806 (the "Parent"), and the Company's name
was changed to "Fin USA, Inc." This transaction was deemed to be a "reverse
reorganization."
Until September, 1993, the Company manufactured and marketed the "Fin"
tennis racquets and sports equipment, as a wholly-owned subsidiary of the
Parent, without commercial success.
On September 17, 1993, the Board of Directors of the Parent resolved to
declare a dividend of 100% of the shares of the Company to stockholders of
record of the Parent as of September 23, 1993, as part of a reorganization with
I/NET, Inc., a Michigan corporation. This dividend was a requirement of the
reorganization, and was intended to separate the then pending litigation
involving FSL from the parent and to hopefully benefit and stockholders who had
purchased securities of the parent in reliance on its tennis racquet and sports
equipment business. The Company's shares were issued in the name of the Parent's
record holders as of this date and have been held by the transfer agent for the
Company, American Registrar & Transfer Co. in Salt Lake City, Utah, pending the
filing of a Registration Statement of Form 10-SB with the Securities and
Exchange Commission. All of these stock certificates bear an appropriate
"restricted" legend indicating that these stock certificates and the shares of
common stock represented thereby cannot be sold without registration under the
Securities Act of 1933, as amended (the "1933 Act"), or pursuant to an available
exemption from such registration. Following the effective date of this
Registration Statement and the completion of all comments of the Securities and
Exchange Commission, it is managements intention to deliver these stock
certificates to these stockholders. No stock certificate, except those owned by
"affiliates," will be imprinted with the "restricted" legend referred to above,
as these shares have been beneficially owned since 1993. The Company currently
has three beneficial holders; Duane S. Jenson, Leonard W. Burningham, Esq. and
Sheryl Ross. See the caption "Security Ownership of Certain Beneficial Owners
and Management," Part I, Item 4.
<PAGE>
In connection with this dividend, the Parent assigned all of its right,
title and interest in the following to the Company: all tangible and intangible
rights in any way related to FSL including rights or claims under the
Distributorship Agreement for unlawful termination, and the rights under a
pending civil action against FSL in the United States District Court for the
District of Utah, Central Division; and claims against FSL and its manufacturing
agent for defective racquets. In early 1994, the United States District Court
subsequently found that the Distribution Agreement's "arbitration" clause was
controlling, and stayed the civil action pending arbitration; this action has
since been dismissed because the Company did not have the funds to pursue FSL in
London, England, and the statute of limitations has run in favor of FSL on all
of the Company's claims. This left the Company with no assets or business.
Pursuant to the Company's Bylaws and the Nevada Revised Statutes, on
September 25, 1998, Duane S. Jenson, the Company's President and a director who
owned a majority of the outstanding voting securities of the Company, designated
Wayne Bassham as President and a director, Todd Albiston as Vice President and a
director and Kent Faulkner as Secretary and a director. These persons will serve
in these capacities until the next annual meeting of the stockholders of the
Company and until their successors are elected and qualified or until their
prior resignations or terminations. Information regarding these person is
contained in Part I, Item 5.
Sales of "Unregistered" and "Restricted" Securities Over the Past Three
Years
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There have been no sales of any securities of the Company during the past
three years. See Part II, Item 4.
Business.
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Other than the above-referenced matters and seeking and investigating
potential assets, property or businesses to acquire, the Company has had no
material business operations for over five years. To the extent that the Company
intends to continue to seek the acquisition of assets, property or business that
may benefit the Company and its stockholders, it is essentially a "blank check"
company. Because the Company has limited assets and conducts no material
business, management anticipates that any such venture would require it to issue
shares of its common stock as the sole consideration to acquire the venture.
This may result in substantial dilution of the shares of current stockholders.
The Company's Board of Directors shall make the final determination whether to
complete any such venture; the approval of stockholders will not be sought
unless required by applicable laws, rules and regulations, its Articles of
Incorporation or Bylaws, or contract. The Company makes no assurance that any
future enterprise will be profitable or successful.
The auditor's discussion on the Company's liquidity, Note 2 of the audited
financial statements herein, is as follows: "The Company has accumulated losses
through December 31, 1997 amounting to $7,740, and does not anticipate
generating sufficient cash flows from operations to meet the Company's cash
requirements. These factors raise substantial doubt about the Company's ability
to continue as a going concern.
Management plans include finding a well-capitalized merger candidate to
commence operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty."
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that the number of suitable
<PAGE>
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an underwriter
who is willing to publicly offer and sell shares, the lack of or the inability
to obtain the required financial statements for such an undertaking, limitations
on the amount of dilution to public investors in comparison to the stockholders
of any such entities, along with other conditions or requirements imposed by
various federal and state securities laws, rules and regulations. Any of these
types of entities, regardless of their prospects, would require the Company to
issue a substantial number of shares of its common stock to complete any such
acquisition, reorganization or merger, usually amounting to between 80% and 95%
of the outstanding shares of the Company following the completion of any such
transaction; accordingly, investments in any such private entity, if available,
would be much more favorable than any investment in the Company.
Although the Company has not communicated with any other entity with
respect to any potential merger or acquisition transaction, management has
determined to file this Registration Statement on a voluntary basis. In order to
have stock quotations for its common stock on the National Association of
Securities Dealers' Automated Quotation System ("NASDAQ"), an issuer must have
such securities registered under the Securities and Exchange Act of 1934, as
amended (the "1934 Act"). Upon the effective date of this Registration
Statement, the Company's common stock will become registered for purposes of the
1934 Act. Management believes that this will make the Company more desirable for
entities that may be interested in engaging in a merger or acquisition
transaction. To the extent that management deems it advisable or necessary to
maintain a quotation of its common stock on any securities market, the Company
will voluntarily file periodic reports in the event its obligation to file such
reports is terminated under the 1934 Act. Further, the National Association of
Securities Dealers, Inc. (the "NASD") has proposed that all "non-reporting"
companies whose shares of common stock are quoted on the NASD's OTC Bulletin
Board be dropped. Management believes the filing of this Registration Statement
will be important to the Company if the NASD's proposal in this respect is put
into effect. See the heading "Risk Factors," specifically "No Market for Common
Stock, No Market for Shares," herein.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as pro
forma financial information consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
<PAGE>
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.
Jenson Services has substantial experience and expertise with analyzing
prospective business endeavors and will assist in helping to determine the
viability of a prospective business endeavor. Jenson Services has for the last
eighteen years found several profitable businesses that have been merged into
"blank check" companies in which they were involved with. Mr. Bassham, Faulkner,
and Albiston have limited experience with analyzing the quality of a prospective
business endeavor. See the heading "Other Public Shell Activities," of Part I,
Item 5.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company anticipates
that proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest; a transaction of this type
would create a conflict of interest for such a person. Current Company policy
does not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging
<PAGE>
from a small amount to as much as $250,000. These fees are usually divided among
promoters or founders, after deduction of legal, accounting and other related
expenses, and it is not unusual for a portion of these fees to be paid to
members of management or to principal stockholders as consideration for their
agreement to retire a portion of the shares of common stock owned by them. In
the event that such fees are paid, they may become a factor in negotiations
regarding any potential acquisition by the Company and, accordingly, may present
a conflict of interest for such individuals.
Any finder's fee would be negotiated once a prospective merger candidate
has been identified. Typically, a finder's fee is based upon a percentage,
ranging from 5% to 15% of the fees discribed above.
Jenson Services may be compensated with cash and / or stock for its
assistance in any transaction. The amount of compensation will have to be
negotiated once a prospective merger candidate has been identified. Management
believes that the compensation paid to Jenson will be similar the historical
compensation disclosed under the heading "Other Public Shell Activities," of
Part I, Item 5.
None of the Company's directors, executive officers or promoters, or their
affiliates or associates, has had any negotiations with any representatives of
the owners of any business or company regarding the possibility of an
acquisition or merger transaction with the Company. Nor are there any present
plans, proposals, arrangements or understandings with any such persons regarding
the possibility of any acquisition or merger involving the Company.
Risk Factors.
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In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained until a potential acquisition,
reorganization or merger candidate has been identified; however, at a minimum,
the Company's present and proposed business operations will be highly
speculative and be subject to the same types of risks inherent in any new or
unproven venture, and will include those types of risk factors outlined below.
Auditor's Going Concern Opinion
-------------------------------
The auditors discussion on the Company's liquidity, Note 2 of the audited
financial statements herein, is as follows: "The Company has accumulated losses
through December 31, 1997 amounting to $7,740, and does not anticipate
generating sufficient cash flows from operations to meet the Company's cash
requirements. These factors raise substantial doubt about the Company's ability
to continue as a going concern.
Management plans include finding a well-capitalized merger candidate to
commence operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty."
Extremely Limited Assets; No Source of Revenue
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The Company has virtually no assets (less than $1,000 cash) and has had no
revenue for over five years or to the date hereof. Nor will the Company receive
any revenues until it completes an acquisition, reorganization or merger, at the
earliest. The Company can provide no assurance that any acquired business will
produce any material revenues for the Company or its stockholders or that any
such business will operate on a profitable basis.
Discretionary Use of Proceeds; "Blank Check" Company.
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Because the Company is not currently engaged in any substantive business
activities, as well as management's broad discretion with respect to the
acquisition of assets, property or business, the Company may be deemed to be a
"blank check" company. Although management intends to apply any proceeds it may
receive through the issuance of stock or debt to a suitable acquisition, subject
to the criteria identified above, such proceeds will not otherwise be designated
for any more specific purpose. The Company can provide no assurance that any use
or allocation of such proceeds will allow it to achieve its business objectives.
Absence of Substantive Disclosure Relating to Prospective Acquisitions.
----------------------------------------------------------------------
Because the Company has not yet identified any assets, property or business
that it may acquire, potential investors in the Company will have virtually no
substantive information upon which to base a decision whether to invest in the
Company. Potential investors would have access to significantly more information
if the Company had already identified a potential acquisition or if the
acquisition target had made an offering of its securities directly to the
public. The Company can provide no assurance that any investment in the Company
will not ultimately prove to be less favorable than such a direct investment.
<PAGE>
Unspecified Industry and Acquired Business; Unascertainable Risks.
------------------------------------------------------------------
To date, the Company has not identified any particular industry or business
in which to concentrate its acquisition efforts. Accordingly, prospective
investors currently have no basis to evaluate the comparative risks and merits
of investing in the industry or business in which the Company may acquire. To
the extent that the Company may acquire a business in a high risk industry, the
Company will become subject to those risks. Similarly, if the Company acquires a
financially unstable business or a business that is in the early stages of
development, the Company will become subject to the numerous risks to which such
businesses are subject. Although management intends to consider the risks
inherent in any industry and business in which it may become involved, there can
be no assurance that it will correctly assess such risks.
Uncertain Structure of Acquisition
----------------------------------
Management has had no preliminary contact or discussions regarding, and
there are no present plans, proposals or arrangements to acquire any specific
assets, property or business. Accordingly, it is unclear whether such an
acquisition would take the form of an exchange of capital stock, a merger or an
asset acquisition. However, because the Company has virtually no resources as of
the date of this Registration Statement, management expects that any such
acquisition would take the form of an exchange of capital stock. See Part I,
Item 2.
Potential Dilution
------------------
The Company is authorized to issued 50,000,000 shares of common stock. As
of March 15, 1999, only 1,083,324 shares were issued and outstanding. The
issuance of additional shares in connection with any reorganization transaction
or the raising of capital may result in substantial dilution of the holdings of
current stockholders.
Limited Funds Available for Operating Expenses
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The Company currently has limited assets. As a result, all funding
necessary to meet the Company's operating expenses in the next 12 months will
likely be advanced by management or principal stockholders as loans to the
Company. See the heading "Plan of Operation" of the caption "Management's
Discussion and Analysis or Plan of Operation," Part I, Item 2.
Lack of Public Information Regarding Acquisition
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As of the date of this Registration Statement, the Company has not
identified any potential merger or acquisition candidate. The Company does not
intend to limit its search to any particular business or industry. Stockholders
will not have access to any information about any such candidate until such time
as a transaction is completed and the Company files a Current Report on Form 8-K
disclosing the nature of such transaction.
State Restrictions on "Blank Check" Companies
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A total of 36 states prohibit or substantially restrict the registration
and sale of "blank check" companies within their borders. Additionally, 36
states use "merit review powers" to exclude securities offerings from their
borders in an effort to screen out offerings of highly dubious quality. See
paragraph 8221, NASAA Reports, CCH Topical Law Reports, 1990. Although it has no
present plans to register or qualify its securities in any state, the Company
intends to comply fully with all state securities laws, and plans to take the
steps necessary to ensure that any future offering of its securities is limited
to those states in which such offerings are allowed. However, while the Company
has no substantive business operations and is deemed to a "blank check" Company,
these legal restrictions may have a material adverse impact on the Company's
ability to raise capital because potential purchasers of the Company's
securities must be residents of states that permit the purchase of such
securities. These restrictions may also limit or prohibit stockholders from
reselling shares of the Company's common stock within the borders of regulating
states.
<PAGE>
By regulation or policy statement, several states place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing" registration
exemptions for secondary trading privileges and outright prohibition of public
offerings of such companies.
In most jurisdictions, "blank check" and "blind pool" companies are not
eligible for participation in the Small Corporate Offering Registration ("SCOR")
program, which permits an issuer to notify the Securities and Exchange
Commission of certain offerings registered in such states by filing a Form D
under Regulation D of the Commission. The majority of states have adopted some
form of SCOR. States participating in the SCOR program also allow applications
for registration of securities by qualification by filing a Form U-7 with the
states' securities commissions. Nevertheless, the Company does not anticipate
making any SCOR offering or other public offering in the foreseeable future,
even in any jurisdiction where it may be eligible for participation in SCOR,
despite its status as a "blank check" or "blind pool" company.
The net effect of the above-referenced laws, rules and regulations will be
to place significant restrictions on the Company's ability to register, offer
and sell and/or to develop a secondary market for shares of the Company's common
stock in virtually every jurisdiction in the United States. These restrictions
should cease once and if the Company acquires a venture by purchase,
reorganization or merger, so long as the business operations succeeded to
involve sufficient activities of a specific nature.
Management to Devote Insignificant Time to Activities of the Company.
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Members of the Company's management are not required to devote their full
time to the affairs of the Company. Because of their time commitments, as well
as the fact that the Company has no business operations, the members of
management anticipate that they will devote an insignificant amount of time to
the activities of the Company, at least until such time as the Company has
identified a suitable acquisition target.
Conflicts of Interest; Related Party Transactions.
--------------------------------------------------
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Such a transaction may occur
if management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A transaction
of this nature would present a conflict of interest to those parties with a
managerial position and/or an ownership interest in both the Company and the
acquired entity, and may compromise management's fiduciary duties to the
Company's stockholders. An independent appraisal of the acquired company may or
may not be obtained in the event a related party transaction is contemplated.
Furthermore, because management and/or beneficial owners of the Company's common
stock may be eligible for finder's fees or other compensation related to
potential acquisitions by the Company, such compensation may become a factor in
negotiations regarding such potential acquisitions.
Voting Control Held by One Person
---------------------------------
Due to Mr. Jenson's ownership of a majority of the shares of the Company's
outstanding common stock (approximately 78% of the outstanding voting securities
of the Company are owned by Duane S. Jenson), this stockholder has the ability
to elect all of the Company's directors, who in turn elect all executive
officers, without regard to the votes of other stockholders. Jenson Services is
solely owned by Mr. Jenson. See the caption "Security Ownership of Certain
Beneficial Owners and Management," Part I, Item 4.
<PAGE>
No Market for Common Stock; No Market for Shares.
-------------------------------------------------
Although the Company intends to submit for listing of its common stock on
the OTC Bulletin Board of the National Association of Securities Dealers, Inc.
(the "NASD"), there is currently no market for such shares; and there can be no
assurance that any such market will ever develop or be maintained. Any market
price for shares of common stock of the Company is likely to be very volatile,
and numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and continue
to experience, extreme price and volume fluctuations which have affected the
market price of many small capital companies and which have often been unrelated
to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop. Sales of "restricted securities" under Rule 144 may also have
an adverse effect on any market that may develop. See the caption "Recent Sales
of Unregistered Securities," Part II, Item 4.
In addition to the foregoing, in order to obtain a listing for its
securities on the OTC Bulletin Board, the Company will need to retain a
broker-dealer that is willing to act as a "market maker."
Only companies that report their current financial information to the
Securities and Exchange Commission may have its securities quoted on the OTC
Bulletin Board. Therefore, upon the effective date of this Registration
Statement, the Company may apply to have their securities quoted on the OTC
Bulletin Board. However, in the event that the Company loses this status as a
"reporting issuer," any future quotation of its common stock on the OTC Bulletin
Board may be jeopardized.
Risks of "Penny Stock."
----------------------
The Company's common stock may be deemed to be "penny stock" as that term
is defined in Rule 3a51-1 of the Securities and Exchange Commission. Penny
stocks are stocks (i) with a price of less than five dollars per share; (ii)
that are not traded on a "recognized" national exchange; (iii) whose prices are
not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must
still meet requirement (i) above); or (iv) in issuers with net tangible assets
less than $2,000,000 (if the issuer has been in continuous operation for at
least three years) or $5,000,000 (if in continuous operation for less than three
years), or with average revenues of less than $6,000,000 for the last three
years.
There has been no "established public market" for the Company's common
stock during the last five years. At such time as the Company completes a merger
or acquisition transaction, if at all, it may attempt to qualify for listing on
either NASDAQ or a national securities exchange. However, at least initially,
any trading in its common stock will most likely be conducted in the
over-the-counter market in the "pink sheets" or the OTC Bulletin Board of the
NASD.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule
15g-2 of the Securities and Exchange Commission require broker-dealers dealing
in penny stocks to provide potential investors with a document disclosing the
risks of penny stocks and to obtain a manually signed and dated written receipt
of the document before effecting any transaction in a penny stock for the
investor's account. Potential investors in the Company's common stock are
<PAGE>
urged to obtain and read such disclosure carefully before purchasing any
shares that are deemed to be "penny stock."
Moreover, Rule 15g-9 of the Securities and Exchange Commission requires
broker-dealers in penny stocks to approve the account of any investor for
transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
Year 2000.
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Because the Company is not presently engaged in any substantial business
operations, management does not believe that computer problems associated with
the change of year to the year 2000 will have any material effect on its
operations. However, the possibility exists that the Company may merge with or
acquire a business that will be negatively affected by the "year 2000" problem.
The effect of such problem or the Company in the future can not be predicted
with any accuracy until such time as the Company identifies a merger or
acquisition target.
Principal Products and Services.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted by
the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker-dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
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None; not applicable.
<PAGE>
Sources and Availability of Raw Materials and Names of Principal Suppliers.
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None; not applicable.
Dependence on One or a Few Major Customers.
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None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
<PAGE>
Research and Development.
- -------------------------
None; not applicable.
Number of Employees.
- --------------------
None.
Item 2. Management's Discussion and Analysis or Plan of Operation.
- -------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two fiscal years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit the Company and its stockholders.
Because the Company has virtually no resources, management anticipates that to
achieve any such acquisition, the Company will be required to issue shares of
its common stock as the sole consideration for such venture.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which may be advanced by management or principal stockholders
as loans to the Company. Because the Company has not identified any such venture
as of the date of this Registration Statement, it is impossible to predict the
amount of any such loan. However, any such loan will not exceed $25,000 and will
be on terms no less favorable to the Company than would be available from a
commercial lender in an arm's length transaction. As of the date of this
Registration Statement, the Company has not actively begun to seek any such
venture.
Results of Operations.
- ----------------------
The Company has had no material operations for over five years. Losses of
($270) and ($285), for the years ended December 31, 1997 and 1996, respectively.
The Company incurred losses of ($1,094) and ($96), for the nine month period
ended September 30, 1998 and 1997, respectively.
<PAGE>
Liquidity.
- ----------
The Company had no liquidity during the years ended December 31, 1997 and
1996, and a capital contribution of $1,000 was made by Duane S. Jenson, a
principal stockholder, during 1997. No contributions were made during the nine
month period ended September 30, 1998.
Item 3. Description of Property.
- ---------------------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the home address and telephone number of
Duane S. Jenson, and are provided at no cost. Because the Company has no current
business operations, its activities have been limited to keeping itself in good
standing in the State of Nevada, and with preparing this Registration Statement
and the accompanying financial statements. These activities have consumed an
insignificant amount of management's time; accordingly, the costs to Mr. Jenson
of providing the use of his office and telephone have been minimal.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the share holdings of those persons who own
more than five percent of the Company's common stock as of the date hereof, to
wit:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Duane S. Jenson 5,489,188 78.4%
5525 S. 900 E. #110
SLC, UT 84117
Leonard W. Burningham, Esq. 651,000 9.3%
455 S. 500 E. #100
SLC, UT 84107
Sheryl Ross 550,000 7.8%
455 S. 500 E. #100
SLC, UT 84107
</TABLE>
Security Ownership of Management.
- ----------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of the date hereof, to wit:
<TABLE>
Number of Shares
Beneficially Owned Percentage of
Name and Address as of 9/30/98 of Class
- ---------------- ------------------ -------------
<S> <C> <C>
Wayne Bassham 0 0%
Todd Albiston 0 0%
Kent Faulkner 0 0%
</TABLE>
<PAGE>
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ----------------------------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders (held in June of each year) or until their
successors are elected or appointed and qualified, or their prior resignations
or terminations.
<TABLE>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Wayne Bassham Director and 9/98 *
President
Kent Faulkner Director and 9/98 *
Secretary
Todd Albiston Director and 9/98 *
Vice President
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
Wayne Bassham, President and a director is 40 years of age. He has been
employed as a manager for Harley-Davidson of Salt Lake City for the past seven
years.
Kent Faulkner, Secretary and a director is 37 years of age. Mr. Faulkner
has been employed by Eco Labs, a manufacturer and distributor of commercial
cleaners, for the previous 14 years, as a district manager from 1993 to present;
as a sales distribution specialist from 1991 to 1993; and as a territory manager
from 1984 to 1991.
Todd Albiston, Vice President and a director is 40 years of age. Mr.
Albiston has been employed as a account manager for Bergen Medical Corporation,
a medical device company, for the past nine years. Previously, Mr. Albiston was
employed by Great Western Savings and Loan from 1978 to 1990.
Other "Public Shell" Activities.
- --------------------------------
None of the directors and executive officers are or have ever been
involved in any blank check public offerings and have no plans to do such an
offering. Furthermore, none of the current directors or executive officers were
involved when the Company had operations. However, as indicated below, Wayne
Bassham has been involved as a director and executive officer of another company
that may be deemed to be "blank check" company and future involvement in other
"blank check" companies is possible, but presently unplanned.
<PAGE>
None of the Company's officers are currently involved in any other company
that could be deemed to be a "blank check" company.
The following table summarizes the companies for which Jenson Services,
Inc., a Utah corporation which is wholly owned by Duane S. Jenson, the companies
principal stockholder, has been engaged as a consultant, for the previous three
years. Duane S. Jenson was the direct or indirect controlling shareholder for
each company identified below. The consideration received in connection with
each for services rendered*:
<TABLE>
<CAPTION>
Original Company Name New Company Name Symbol Reorg. Consideration
Date Received
- --------------------- ---------------- ------ ------ -------------
<S> <C> <C> <C> <C>
Intercontinental Strategic Computer Automated CASI 7/98 $100,000 and
Minerals, Inc. Systems, Inc. 187,498 shares
Seafoods Plus, Ltd. Cadapult Graphic GRFX 6/98 $0 and
Systems, Inc. 471,429 shares
United States Mining & Global Digital Information GDII 10/97 $112,500 and
Exploration, Inc. 244,410 shares
Olympus M.T.M. Corporation The Internet Advisory PUNK 6/98 $0 and
Corporation 636,350 shares
Opell, Inc. Wall Street Records OPLL 11/96 $100,000 and
100,000 shares
Triple Chip Systems, Inc. Miller Services, Inc. MILL 12/96 $0 and 251,250 shares
Summa Vest, Inc. Advance Voice AVRI 12/96 $65,000 and
Recognition, Inc. 334,400 shares
Ro-Mac Gold, Inc. Phoenex Associates PBLS 10/96 $77,500 and
Land Syndicate 200,000 shares purchased
through $0.001 warrants
Jungle Street, Inc. Jungle Street, Inc. ORCA 9/96 $50,000 and
250,000 shares
Nevada Resource Technology TCP Reliable, Inc. TCPN 1/96 $0 and 205,184 shares
Unix Source America, Inc. Man Sang Holdings, Inc. MSHI 1/96 $53,250 and 200,000 shares
Verazzana Ventures, Ltd. Pacific Aerospace and PCTH 1/95 $50,000 and 212,500 shares
Electronics, Inc.
Westcott Financial Entertainment ETPI 4/95 $20,925 and 289,254
Corporation Technologies and
Programs, Inc.
Onasco Companies, Inc. Tengasco, Inc. TNGO 5/95 $0 and 400,000 shares
</TABLE>
*The services rendered by Duane S. Jenson include, but are not limited to:
Paying federal and state taxes, providing a CPA to bring audits current,
settling old debts, providing office space, meeting with and evaluating
prospective merger candidates, and providing legal counsel.
The following table summarizes the companies for which Mr. Bassham has
served as a director, executive officer or consultant and which have completed a
reorganization or merger or in which he sold his interest and the consideration
received by Mr. Bassham in connection with each reorganization or sale:
<PAGE>
<TABLE>
<CAPTION>
Reorg. or
Sales
Original Company Name New Company Name Symbol Date Consideration
- --------------------- ---------------- ------ ---- -------------
<S> <C> <C> <C> <C>
United States Mining Global Digital GDII 11/98 $500 and 1,000 shares
& Exploration, Inc. Information, Inc.
(SEC File No. 000-2851)
</TABLE>
Mr. Bassham received this consideration in exchange for his services
provided while serving as Vice President and a director.
Mr. Bassham served as Vice President and a director of United States Mining
& Exploration, Inc., now known as Global Digital Information, Inc., from August
1997, until his resignation in November 1997. Mr. Bassham presently has no
involvement with either entity.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers.
Family Relationships.
- ---------------------
There are no family relationships between any director or executive
officer.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
Item 6. Executive Compensation.
- --------------------------------
There has been no executive compensation paid by the Company for services
rendered in the last three years.
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ended December 31, 1997 or 1996, or the period ending on the date of this
Registration Statement. Further, no member of the Company's management has been
granted any option or stock appreciation rights; accordingly, no tables relating
to such items have been included within this Item.
There are no conditions relating to payment of compensation to officers and
directors that a target company must comply with and loans made by shareholders
to the Company are typically forgiven with no recourse upon closing of a
transaction. No loans have been made or are anticipated to be made to officers,
directors, affiliates, or lending institutions.
<PAGE>
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- -------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or its subsidiaries, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
Certain Business Relationships.
- -------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
Jenson Services will facilitate and assist the Company's officers and
directors in evaluating prospective merger candidates. Jenson Services has
substantial experience and expertise with analyzing prospective business
endeavors and will assist in helping to determine the viability of a prospective
business endeavor. Jenson Services has for the last eighteen years found several
profitable businesses that have been merged into "blank check" companies in
which they were involved with. Mr. Bassham, Faulkner, and Albiston have limited
experience with analyzing the quality of a prospective business endeavor. See
the heading "Other Public Shell Activities," of Part I, Item 5.
Indebtedness of Management.
- ---------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
<PAGE>
Parents of the Issuer.
- ----------------------
The Company has no parents, except to the extent that Mr. Jenson may
be deemed to be a parent by virtue of his stock holdings. See the caption
"Security Ownership of Certain Beneficial Owners and Management" Part I, Item 4.
Transactions with Promoters.
- ----------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any promoter or founder, or any member of
the immediate family of any of the foregoing persons, had a material interest.
Item 8. Description of Securities.
- -----------------------------------
The Company has one class of securities authorized, consisting of
50,000,000 shares of $0.001 par value common voting stock. The holders of the
Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of stockholders. The shares of common stock do
not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire
additional shares of common stock or other securities. The common stock is not
subject to redemption rights and carries no subscription or conversion rights.
All shares of the common stock now outstanding are fully paid and
non-assessable.
There are no outstanding options, warrants or calls to purchase any of the
authorized securities of the Company.
There is no provision in the Company's Articles of Incorporation, as
amended, or Bylaws, as amended, that would delay, defer, or prevent a change in
control of the Company.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Stockholder Matters.
- --------------------------
Market Information.
- -------------------
There has never been any established "public market" for shares of common
stock of the Company. The Company intends to submit for quotation of its common
stock on the OTC Bulletin Board of the NASD; however, management does not expect
any public market to develop unless and until the Company completes an
acquisition, reorganization or merger. In any event, no assurance can be given
that any market for the Company's common stock will develop or be maintained. If
a public market ever develops in the future, the sale of "unregistered" and
"restricted" shares of common stock pursuant to Rule 144 of the Commission by
members of management may have a substantial adverse impact on any such public
market, and all of the current and former members of management have already
satisfied the "holding period" requirement of Rule 144. See the caption "Recent
Sales of Unregistered Securities," Part II, Item 4.
<PAGE>
Holders.
- --------
The number of record holders of the Company's common stock as of the date
of this Registration Statement is approximately 190.
Dividends.
- ----------
The Company has not declared any cash dividends with respect to its common
stock, and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and if and until the Company completes any acquisition, reorganization or
merger, no such policy will be formulated. There are no material restrictions
limiting, or that are likely to limit, the Company's ability to pay dividends on
its securities.
Item 2. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. No federal,
state or local governmental agency is presently contemplating any proceeding
against the Company. No director, executive officer or affiliate of the Company
or owner of record or beneficially of more than five percent of the Company's
common stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountant in the past two fiscal years or as of the date of this Registration
Statement. The current accountant for the Company audited its last financial
statements for the year ended December 31, 1997.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
There have been no sales of the Company's unregistered securities in the
past five years.
Item 5. Indemnification of Directors and Officers.
- ---------------------------------------------------
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes a
Nevada corporation to indemnify any director, officer, employee, or corporate
agent "who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation" due to his corporate role. Section 78.751(1) extends this
protection "against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful."
<PAGE>
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director, officer,
employee or agent who is sued, or is threatened with a suit, by or in the right
of the corporation. The party must have been acting in good faith and with the
reasonable belief that his actions were not opposed to the corporation's best
interests. Unless the court rules that the party is reasonably entitled to
indemnification, the party seeking indemnification must not have been found
liable to the corporation.
To the extent that a corporate director, officer, employee, or agent is
successful on the merits or otherwise in defending any action or proceeding
referred to in Section 78.751(1) or 78.751(2), Section 78.751(3) of the NRS
requires that he be indemnified "against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense."
Section 78.751 (4) of the NRS limits indemnification under Sections 78.751
(1) and 78.751(2) to situations in which either (1) the stockholders, (2)the
majority of a disinterested quorum of directors, or (3) independent legal
counsel determine that indemnification is proper under the circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may advance an
officer's or director's expenses incurred in defending any action or proceeding
upon receipt of an undertaking. Section 78.751(6)(a) provides that the rights to
indemnification and advancement of expenses shall not be deemed exclusive of any
other rights under any bylaw, agreement, stockholder vote or vote of
disinterested directors. Section 78.751(6)(b) extends the rights to
indemnification and advancement of expenses to former directors, officers,
employees and agents, as well as their heirs, executors, and administrators.
Regardless of whether a director, officer, employee or agent has the right
to indemnity, Section 78.752 allows the corporation to purchase and maintain
insurance on his behalf against liability resulting from his corporate role.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements
- --------------------
Audited Financial Statements for the year
December 31, 1997 and December 31, 1996
---------------------------------------
Independent Auditors' Report
Balance Sheet
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
<PAGE>
Notes to the Financial Statements
Unaudited Financial Statements for the period
September 30, 1998
------------------
Balance Sheet
Statement of Operations
Statements of Cash Flows
PART III
Item 1. Index to Exhibits.
- ---------------------------
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ ------------
<S> <C>
3.1 Initial Articles of Incorporation, filed June 18, 1987
3.2 By-laws
3.3 Certificate of Amendment to
Articles of Incorporation dated September 25, 1995 respecting forward
split, change of authorized common shares to 50,000,000
3.4 Certificate of Amendment to the Articles of Incorporation
dated February 4, 1999 respecting a reverse split of 1 for 6.5
27 Financial Data Schedule
</TABLE>
* Summaries of all exhibits contained within this Registration
Statement are modified in their entirety by reference to these Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
FIN SPORTS U.S.A., INC.
Date: 3/26/99 /S/ WAYNE BASSHAM
-----------------------------
Wayne Bassham, Director and President
Date: 3/26/99 /S/ TODD ALBISTON
-----------------------------
Todd Albiston, Director and Vice President
<PAGE>
FIN SPORTS U.S.A., INC.
FINANCIAL STATEMENTS
December 31, 1997
[WITH INDEPENDENT AUDITORS' REPORT]
<PAGE>
FIN SPORTS U.S.A., INC.
TABLE OF CONTENTS
Page
Independent Auditors' Report. . . . . . . . . . . . . 1
Balance Sheet - December 31, 1997 . . . . . . . . . . 2
Statements of Operations for the
years ended December 31, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . . . 3
Statements of Stockholders' Equity for
the years ended December 31, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows for the
years ended December 31, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-8
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Fin Sports U.S.A., Inc.:
We have audited the accompanying balance sheet of Fin Sports U.S.A., Inc. as of
December 31, 1997, and the related statements of operations, stockholders'
equity, and cash flows for the years ended December 31, 1997 and December 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fin Sports U.S.A., Inc. as of
December 31, 1997, and the results of their operations and their cash flows for
the years ended December 31, 1997 and December 31, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Fin
Sports U.S.A., Inc. will continue as a going concern. As discussed in note 2 to
the financial statements, the Company has accumulated losses from operations and
has minimal assets which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in note 2. The financial statements do not include any adjustment that
might result from the outcome of this uncertainty.
MANTYLA, McREYNOLDS & ASSOCIATES
Salt Lake City, Utah
September 9, 1998
<PAGE>
FIN SPORTS U.S.A., INC.
Balance Sheet
December 31, 1997
ASSETS
Assets
Current Assets
Cash $ 915
---------
Total Current Assets 915
---------
Total Assets $ 915
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current liabilities
Payable to Stockholders $ 655
---------
Total Liabilities 655
Stockholders' Equity:
Common stock, $.001 par value;
authorized 50,000,000 shares; issued
and outstanding 7,000,000 shares 7,000
Additional paid in capital 1,000
Accumulated deficit (7,740)
---------
Total Stockholders' Equity 260
Total Liabilities and
Stockholders Equity $ 915
=========
See accompanying notes to financial statements
<PAGE>
FIN SPORTS U.S.A., INC.
Statements of Operations
For the Years Ended December 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Revenue:
Revenues from operations $ -0- $ -0-
--------- ---------
Total Revenue -0- -0-
General and Administrative Expenses 270 285
--------- ---------
Net Income Before Taxes (270) (285)
Income/franchise taxes -0- -0-
Net income $ (270) $ (285)
========== =========
Loss per share $ (.01) $ (.01)
========== =========
Weighted Average Shares Outstanding 7,000,000 7,000,000
=========== ==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
FIN SPORTS U.S.A., INC.
Statements of Stockholders' Equity
For the Years Ended December 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
Additional Net
Common Common Paid in Accumulated Stockholders'
Shares Stock Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 7,000,000 $ 7,000 $ -0- $ (7,185) $ (185)
Net loss for the year ended
December 31, 1996 (285) (285)
--------- --------- ---------- ---------- ---------
Balance, December 31, 1996 7,000,000 7,000 -0- (7,470) (470)
Cash contributed by
shareholder 1,000 1,000
Net loss for the year ended
December 31, 1997 (270) (270)
--------- --------- ---------- ----------- ---------
Balance, December 31, 1997 7,000,000 $ 7,000 $ 1,000 $ (7,740) $ 260
========= ========= ========== =========== =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
FIN SPORTS U.S.A., INC.
Statements of Cash Flows
For the Years Ended December 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash Flows Provided by/(Used for)
Operating Activities:
Net Loss $ (270) $ (285)
Adjustments to reconcile net income
to net cash used for operating
activities:
Expenses paid on behalf
of company by a
stockholder 185 285
--------- --------
Net Cash Used for Operating
Activities (85) -0-
Cash Flows provided by
Financing Activities:
Cash contributed by stockholder 1,000 -0-
Net Increase in cash 915 -0-
Beginning Cash -0- -0-
Ending Cash $ 915 $ -0-
========= ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the periods for:
Interest $ -0- $ -0-
========= ========
Taxes $ -0- $ -0-
========= ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
FIN SPORTS U.S.A., INC.
Notes to Financial Statements
December 31, 1997
Note 1 Organization and Summary of Significant Accounting Policies
(a) Organization
Fin Sports U.S.A., Inc. [Company] incorporated under the laws of
the State of Nevada. The Company was a subsidiary of Fin U.S.A.,
Inc. until September 17, 1993, when it was spun off to the
shareholders of its parent.
The Company was originally organized to engage in any lawful
purpose, activity and pursuit. In 1987, the Company began importing
and selling sports racquets and other sporting goods equipment. In
May of 1989, the Company's distribution agreement with a
manufacturer was terminated, inventory was liquidated, and the
company ceased its business operations.
(b) Income Taxes
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the Statement],
"Accounting for Income Taxes." The Statement requires an asset and
liability approach for financial accounting and reporting for income
taxes, and the recognition of deferred tax assets and liabilities
for the temporary differences between the financial reporting bases
and tax bases of the Company's assets and liabilities at enacted tax
rates expected to be in effect when such amounts are realized or
settled. The cumulative effect of this change in accounting for
income taxes as of December 31, 1997 is $0 due to the valuation
allowance established as described below.
(c) Net Loss Per Common Share
Net loss per common share is based on the weighted average number of
shares outstanding.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company has $915 cash at
December 31, 1997.
<PAGE>
Note 1 Organization and Summary of Significant Accounting Policies
[continued]
(e) Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Note 2 Liquidity
The Company has accumulated losses through December 31, 1997
amounting to $7,740, and does not anticipate generating sufficient
cash flows from operations to meet the Company's cash requirements.
These factors raise substantial doubt about the Company's ability to
continue as a going concern.
Management plans include finding a well-capitalized merger candidate
to commence operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Note 3 Income Taxes
The Company adopted Statement No. 109 as of January 1, 1993. Prior
years' financial statements have not been restated to apply the
provisions of Statement No. 109. No provision has been made in the
financial statements for income taxes because the Company has
accumulated substantial losses from operations.
The tax effects of temporary differences that give rise to
significant portions of the deferred tax asset at December 31, 1997
have no impact on the financial position of the Company. A valuation
allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized.
<PAGE>
Note 3 Income Taxes [continued]
Because of the lack of taxable earnings history, the Company has
established a valuation allowance for all future deductible
temporary differences. The company has available net operating loss
(NOL) carryforwards of approximately $7,740, the benefits of which
will expire in various amounts through 2013. NOLs will only be
usable to the extent that the Company is successful in obtaining
future profitability, or incurring profitable transactions.
Note 4 Stockholder Loan
A stockholder has paid expenses on behalf of the Company in the
amount of $185 during the year ended December 31, 1997 and $285
during the year ended December 31, 1996. The Company has recorded
a liability for these expenses to the stockholder. The unsecured
loan bears no interest and is due on demand.
<PAGE>
FIN SPORTS U.S.A., INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
<TABLE>
<CAPTION>
9/30/98 12/31/97
----------- ------------
[Unaudited]
<S> <C> <C>
ASSETS
Assets
Cash $ 825 $ 915
Total Assets $ 825 $ 915
=========== ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Loans from stockholders $ 1,659 $ 655
----------- ------------
Total Liabilities 1,659 655
Stockholders' Equity:
Common Stock, $.001 par value;
authorized 50,000,000 shares; issued and
outstanding, 7,000,000 shares 7,000 7,000
Paid-in Capital 1,000 1,000
Accumulated Deficit (8,834) (7,740)
----------- ------------
Total Stockholders' Deficit (834) 260
----------- ------------
Total Liabilities and Stockholders' Deficit 825 $ 915
=========== ============
</TABLE>
NOTE TO FINANCIAL STATEMENTS:
Interim financial statements reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the periods. The
December 31, 1997 balance sheet has been derived from the audited financial
statements. These interim financial statements conform with the requirements for
interim financial statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles.
<PAGE>
FIN SPORTS U.S.A., INC.
STATEMENTS OF OPERATIONS
For the Three and Nine Month Periods Ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
9/30/98 9/30/97 9/30/98 9/30/97
----------- ----------- -------- -----------
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
REVENUE
Income $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- -----------
NET REVENUE 0 0 0 0
Operating Expenses
Office Expenses 30 0 175 0
Professional Fees 919 0 919 96
----------- ----------- ----------- -----------
Total Operating Expenses 949 0 1,094 96
----------- ----------- ----------- -----------
Net Income Before Taxes $ (949) $ 0 $ (1,094) $ (96)
=========== =========== =========== ===========
Income/Franchise taxes 0 0 0 0
Net loss (949) 0 (1,094) (96)
Loss Per Share $ (0.01) $ (0.01) $ (0.01) $ (0.01)
=========== =========== =========== ===========
Weighted Average Shares Outstanding 7,000,000 7,000,000 7,000,000 7,000,000
=========== =========== =========== ===========
</TABLE>
<PAGE>
FIN SPORTS U.S.A., INC.
STATEMENTS OF CASH FLOWS
For the Three and Nine Month Periods Ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
9/30/98 9/30/97 9/30/98 9/30/97
----------- --------- ----------- ----------
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Cash Flows Used For Operating Activities
- ------------------------------------
Net Loss $ (949) $ 0 $ (1,094) $ (96)
Adjustments to reconcile net loss to
net cash used in operating activities:
Increase/(Decrease) in Accounts Payable 0 0 85 0
Increase/(Decrease) in loans from 919 0 919 96
shareholder
----------- --------- ----------- ----------
Net Cash Used For Operating Activities (30) 0 (90) 0
=========== ========= =========== ==========
- --------------------------------------
Cash Flows Provided by Financing Activities 0 0 0 0
- --------------------------------------
Net Increase In Cash (30) 0 (90) 0
Beginning Cash Balance 855 0 915 0
Ending Cash Balance $ 825 $ 0 $ 825 $ 0
----------- --------- ----------- ----------
</TABLE>
ARTICLES OF INCORPORATION
OF
FIN SPORTS U.S.A., INC.
I, the undersigned, being a natural person more than eighteen (18) years
of age, acting as incorporator of the above-named corporation (hereinafter
referred to as the "Corporation") under the provisions of the Nevada Business
Corporation Act, do hereby adopt the following Articles of Incorporation for
such Corporation:
ARTICLE
NAME
The name of the Corporation hereby created shall be:
FIN Sports U.S.A., Inc.
ARTICLE II
DURATION
The Corporation shall continue in existence perpetually unless sooner
dissolved according to law.
ARTICLE III
PURPOSE
The Corporation is organized for the purpose of:
(a) engaging in any and all lawful purposes, activities and
pursuits, and the Corporation shall have all the powers allowed or
permitted by the laws of the state of Nevada.
ARTICLE IV
CAPITALIZATION
The corporation is authorized to issue 1,000,000 common shares, all of
which shall have a par value of $0.01 per share. Each share shall have equal
rights as to voting and in the event of dissolution or liquidation.
<PAGE>
ARTICLE V
DENIAL OF PRE-EMPTIVE RIGHTS
No holder of any shares of the Corporation, whether now or hereafter
authorized, shall have any pre-emptive or preferential rights to acquire shares
or securities of the Corporation.
ARTICLE VI
PAID IN CAPITAL
The Corporation will not commence business until the consideration of the
value of at least $1,000.00 has been received by it as consideration for the
issuance of shares.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify any and all persons who may serve or who
have served at any time as directors or officers or who at the request of the
Board of Directors of the Corporation, may serve or any time have served as
directors or officers of another corporation in which the Corporation at such
time owned or may own shares of stock or of which it was or may be a creditor,
and their respective heirs, administrators, successors and upon judgments,
counsel fees and amounts paid in settlement (before or after suit is commenced),
actually and necessarily by claim, action, suit or proceeding in which they, or
any of them, are made parties, or a party, or which may be asserted against them
or any of them, by reason of being or have been directors or officers of the
Corporation, or of such other corporation, officer of the Corporation, or of
such other corporation or former director or officer or person shall be adjudged
in any action, suit or proceeding to be liable for his own negligence or
misconduct in the performance of his duty. Such indemnification shall be in
addition to any other rights to which those indemnified may be entitled under
any law, by law, agreement, vote of shareholder or otherwise.
ARTICLE VIII
OFFICERS' AND DIRECTORS' CONTRACTS
No contract or other transaction between this Corporation and any other
firm or corporation shall be affected by the fact that a director or officer of
this Corporation has an interest in, or is a director or officer of this
Corporation or any other corporation. Any officer or director, individually or
with others, may be a party to, or may have an interest in, any transaction of
this Corporation or any transaction in which this Corporation is a party or has
an interest. Each person who is now or may become an officer and director of
this Corporation is hereby relieved from liability that he might otherwise
obtain in the event such officer or director contracts with this Corporation for
the benefit of himself or any firm or other corporation in which he may have an
interest, provided each officer or director acts in good faith.
<PAGE>
ARTICLE IX
ADOPTION AND AMENDMENT OF BYLAWS
The initial Bylaws of the Corporation shall be adopted by its board of
directors. The power to alter or amend or repeal the Bylaws or adopt new Bylaws
shall be vested in the board of directors, but the holders of common stock of
the Corporation may also alter, amend or repeal the Bylaws or adopt new Bylaws.
The Bylaws may contain any provisions for the regulation and management of the
affairs of the Corporation not inconsistent with law or these Articles of
Incorporation.
ARTICLE
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation and its
initial registered agent at such address is:
The Corporation Trust Company of Nevada
One East First Street
Reno, Nevada 89501
ARTICLE XI
DIRECTORS
The Corporation shall not have fewer directors than the number of
shareholders who own an equity interest in the Corporation. At such time as the
Corporation has three (3) or more shareholders, it shall not have less than (3)
nor more than nine (9) directors. The permissible number of directors may be
increased or decreased from time to time by the board of directors in accordance
with Section 78.330 of the Nevada Revised Statutes or any amendment or successor
statute. The original name and address of the person who is to serve as director
until the first annual meeting of shareholders and until his successor is duly
elected and shall qualify is:
Herbert M. Holmes
c/o Terrel W. Smith
136 South Main, #602
Salt Lake City, Utah 84101
ARTICLE XII
INCORPORATOR
The name and address of the incorporator is:
Herbert M. Holmes
c/o Terrel W. Smith
136 South Main, #602
Salt Lake City, Utah 84101
DATED this 19th day of May, 1987.
/S/ HERBERT M. HOLMES
Herbert M. Holmes
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
I, Vicki L. McCollin, a notary public, hereby certifiy that on the 19th
day of May, 1987, personally appeared before me Herbert M. Holmes, being by me
first duly sworn, who acknowledged to me that he is the person who signed the
foregoing document as the incorporator and that the statements contained herein
are true.
/S/ Vicki L. McCollin
N O T A R Y P U B L I C
Residing in /S/ Salt Lake County
My Commission Expires:
/S/ 2/6/89
BYLAWS
OF
FIN SPORTS U.S.A., INC.
ARTICLE I
OFFICES
Section 1.01 Location of Office. The corporation may maintain such offices
within or without the State of Nevada as the Board of Directors may from time to
time designate or require.
Section 1.02 Principal Office. The address of the principal office of the
corporation shall be at the address of the registered office of the corporation
as so designated in the office of the Lieutenant Governor/Secretary of State of
the state of incorporation, or at such other address as the Board of Directors
shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.0 Annual Meeting. The annual meeting of the shareholders shall
be held in May of each year or at such other time designated by the Board of
Directors and as is provided for in the notice of the meeting, 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 shall not be held on the day
designated for the annual meeting of the shareholders, or at 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 may be convenient.
Section 2.02 Special Meetings. Special meetings of the shareholders may be
called at any time by the chairman of the board, the president, or by the Board
of Directors, or in their absence or disability, by any vice president, and
shall be called by the president or, in his or her absence or disability, by a
vice president or by the secretary on the written request of the holders of not
less than one-tenth of all the shares entitled to vote at the meeting, such
written request to state the purpose or purposes of the meeting and to be
delivered to the president, each vice-president, or secretary. In case of
failure to call such meeting within 60 days after such request, such shareholder
or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may designate any
place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for 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 without the state of
incorporation, as the place for the holding of such meeting. If no designation
is made, or if a special meeting be otherwise called, the place of meeting shall
be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary, if
any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at least
ten (10) days, but not more than fifty (50) days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a written
waiver of notice or a consent to the holding of such meeting, or an approval of
the minutes thereof. Attendance at a meeting, in person or by proxy, shall
constitute waiver of all defects of call or notice regardless of whether waiver,
consent, or approval is signed or any objections are made. All such waivers,
consents, or approvals shall be made a part of the minutes of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend or in order to make a determination
<PAGE>
of shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the share transfer books shall be closed, for the
purpose of determining shareholders entitled to notice of or to vote at such
meeting, but not for a period exceeding fifty (50) days. If the share transfer
books are closed for the purpose of determining shareholders entitled to notice
of or to vote at such meeting, such books shall be closed for at least ten (10)
days immediately preceding such meeting.
In lieu of closing the share transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty (50) and, in case
of a meeting of shareholders, not less than ten (10) days prior to the date on
which the particular action requiring such determination of shareholders is to
be taken. If the share transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting or to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this Section, such determination shall apply to any adjournment thereof. Failure
to comply with this Section shall not affect the validity of any action taken at
a meeting of shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation having
charge of the share transfer books for shares of the corporation shall make, at
least ten (10) days before each meeting of the shareholders, a complete list of
the shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of, and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any shareholder during the whole time of the meeting.
The original share transfer book shall be prima facia evidence as to the
shareholders who are entitled to examine such list or transfer books, or to vote
at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the outstanding
shares of the corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of the shareholders. If a quorum is
present, the affirmative vote of the majority of the voting power represented by
shares at the meeting and entitled to vote on the subject shall constitute
action by the shareholders, unless the vote of a greater number or voting by
classes is required by the laws of the state of incorporation of the corporation
or the Articles of Incorporation. If less than one-half of the outstanding
voting power is represented at a meeting, a majority of the voting power
represented by shares so present may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.
Section 2.09 Voting of Shares. Each outstanding share of the corporation
entitled to vote shall be entitled to one vote on each matter submitted to vote
at a meeting of shareholders, except to the extent that the voting rights of the
shares of any class or series of stock are determined and specified as greater
or lesser than one vote per share in the manner provided by the Articles of
Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each shareholder
entitled to vote shall be entitled to vote in person or by proxy; provided,
however, that the right to vote by proxy shall exist only in case the instrument
authorizing such proxy to act shall have been executed in writing by the
registered holder or holders of such shares, as the case may be, as shown on the
share transfer of the corporation or by his or her or her attorney thereunto
duly authorized in writing. Such instrument authorizing a proxy to act shall be
delivered at the beginning of such meeting to the secretary of the corporation
or to such other officer or person who may, in the absence of the secretary, be
acting as secretary of the meeting. In the event that any such instrument shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or if only one be present, that one shall (unless the
instrument shall otherwise provide) have all of the powers conferred by the
instrument on all persons so designated. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held and the persons whose
shares are pledged shall be entitled to vote, unless in the transfer by the
pledge or on the books of the corporation he or she shall have expressly
empowered the pledgee to vote thereon, in which case the pledgee, or his or her
proxy, may represent such shares and vote thereon.
<PAGE>
Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action which
may be taken at a meeting of the shareholders, may be taken without a meeting,
if a consent in writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of the
corporation shall be managed by its Board of Directors. The Board of Directors
may exercise all the powers of the corporation whether derived from law or the
Articles of Incorporation, except such powers as are by statute, by the Articles
of Incorporation or by these Bylaws, vested solely in the shareholders of the
corporation.
Section 3.02 Number, Term, and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation, as
the Board of Directors shall from time to time determine by amendment to these
Bylaws. An increase or a decrease in the number of the members of the Board of
Directors may also be made upon amendment to these Bylaws by a majority vote of
all of the shareholders, and the number of directors to be so increased or
decreased shall be fixed upon a majority vote of all of the shareholders of the
corporation. Each director shall hold office until the next annual meeting of
shareholders of the corporation and until his or her successor shall have been
elected and shall have qualified. Directors need not be residents of the state
of incorporation or shareholders of the corporation.
Section 3.03 Classification of Directors. In lieu of electing the entire
number of directors annually, the Board of Directors may provide that the
directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting after
their election, and that of the third class, if any, to expire at the third
annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately following, 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 without the state
of incorporation, for the holding of additional regular meetings without other
notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the president, vice 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 without the state of
incorporation, as the place for holding any special meeting of the Board of
Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the Board
of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at least
ten (10) days prior thereto by written notice delivered personally or mailed to
each director at his or her regular business address or residence, or by
telegram. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice of
any
<PAGE>
meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting solely for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business or any meeting of the Board
of Directors, but if less than a majority is present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without further
notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any vacancies
shall occur in the Board of Directors by reason of death, resignation or
otherwise, or if the number of directors shall be increased, the directors then
in office shall continue to act and such vacancies or newly created
directorships shall be filled by a vote of the directors then in office, though
less than a quorum, in any way approved by the meeting. Any directorship to be
filled by reason of removal of one or more directors by the shareholders may be
filled by election by the shareholders at the meeting at which the director or
directors are removed.
Section 3.11 Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 3.12 Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his or her dissent shall be entered in the minutes of the meeting, unless he or
she shall file his or her written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof, or shall forward
such dissent by registered or certified mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
Section 3.13 Resignations. A director may resign at any time by delivering
a written resignation to either the president, a vice president, the secretary,
or assistant secretary, if any. The resignation shall become effective on its
acceptance by the Board of Directors; provided, that if the board has not acted
thereon within ten days (10) from the date presented, the resignation shall be
deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action required
to be taken at a meeting of the directors of the corporation or any other action
which may be taken at a meeting of the directors or of a committee, may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors, or all of the members of the committee,
as the case may be. Such consent shall have the same legal effect as a unanimous
vote of all the directors or members of the committee.
Section 3.15 Removal. At a meeting expressly called for that purpose, one
or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a president,
one or more vice-presidents, as shall be determined by resolution of the Board
of Directors, a secretary, a treasurer, and such other officers as may be
appointed by the Board of Directors. The Board of Directors may elect, but shall
not be required to elect, a chairman of the board and the Board of Directors may
appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The officers
shall be chosen
<PAGE>
by the Board of Directors annually at its annual meeting. In the event of
failure to choose officers at an annual meeting of the Board of Directors,
officers may be chosen at any regular or special meeting of the Board of
Directors. Each such officer (whether chosen at an annual meeting of the Board
of Directors to fill a vacancy or otherwise) shall hold his or her office until
the next ensuing annual meeting of the Board of Directors and until his or her
successor shall have been chosen and qualified, or until his or her death, or
until his or her resignation or removal in the manner provided in these Bylaws.
Any one person may hold any two or more of such offices, except that the
president shall not also be the secretary. No person holding two or more offices
shall act in or execute any instrument in the capacity of more than one office.
The chairman of the board, if any, shall be and remain a director of the
corporation during the term of his or her office. No other officer need be a
director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors from time
to time may appoint such other officers or agents as it may deem advisable, each
of whom shall have such title, hold office for such period, have such authority,
and perform such duties as the Board of Directors from time to time may
determine. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint any such subordinate officer or agents and to
prescribe their respective titles, terms of office, authorities, and duties.
Subordinate officers need not be shareholders or directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall take
effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without cause.
Any officer or agent appointed in accordance with the provisions of Section 4.03
hereof may also be removed, either with or without cause, by any officer on whom
such power of removal shall have been conferred by the Board of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification,
or any other cause, or if a new office shall be created, then such vacancies or
newly created offices may be filled by the Board of Directors at a regular or
special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties:
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of Directors; and
(c) He or she shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following powers
and duties:
(a) If no general manager has been appointed, he or she shall be the chief
executive officer of the corporation, and, subject to the direction of the Board
of Directors, shall have general charge of the business, affairs, and property
of the corporation and general supervision over its officers, employees, and
agents;
(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders and
Board of Directors;
(c) He or she shall be a member of the executive committee, if any;
(d) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and
(e) He or she shall have all power and shall perform all duties normally
incident to the office of a president of a corporation, and shall exercise such
other powers and perform such other duties as from time to time may be assigned
to him or her by the Board of Directors.
<PAGE>
Section 4.10 The Secretary. The secretary shall have the following powers
and duties:
(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the Board of Directors in
books provided for that purpose;
(b) He or she shall cause all notices to be duly given in accordance with
the provisions of these Bylaws and as required by statute;
(c) He or she shall be the custodian of the records and of the seal of the
corporation, and shall cause such seal (or a facsimile thereof) to be affixed to
all certificates representing shares of the corporation prior to the issuance
thereof and to all instruments, the execution of which on behalf of the
corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed, he or she may attest the same;
(d) He or she shall assume responsibility that the books, reports,
statements, certificates, and other documents and records required by statute
are properly kept and filed;
(e) He or she shall have charge of the share books of the corporation and
cause the share transfer books to be kept in such manner as to show at any time
the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for, the
names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became such
holder or record; and he or she shall exhibit at all reasonable times to any
director, upon application, the original or duplicate share register. He or she
shall cause the share book referred to in Section 6.04 hereof to be kept and
exhibited at the principal office of the corporation, or at such other place as
the Board of Directors shall determine, in the manner and for the purposes
provided in such Section;
(f) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and
(g) He or she shall perform in general all duties incident to the office
of secretary and such other duties as are given to him or her by these Bylaws or
as from time to time may be assigned to him or her by the Board of Directors or
the president.
Section 4.11 The Treasurer. The treasurer shall have the following powers
and duties:
(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;
(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation in
such banks or trust companies or with such banks or other depositories as shall
be selected in accordance with Section 5.03 hereof;
(c) He or she shall cause the monies of the corporation to be disbursed by
checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and preserved
property vouchers for all monies disbursed;
(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial report
at the annual meeting of the shareholders, if called upon to do so;
(e) He or she shall cause to be kept correct books of account of all the
business and transactions of the corporation and exhibit such books to any
director on request during business hours;
<PAGE>
(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the office
of treasurer and such other duties as are given to him or her by these Bylaws or
as from time to time may be assigned to him or her by the Board of Directors or
the president.
Section 4.12 General Manager. The Board of Directors may employ and appoint
a general manager who may, or may not, be one of the officers or directors of
the corporation. The general manager, if any, shall have the following powers
and duties;
(a) He or she shall be the chief executive officer of the corporation and,
subject to the directions of the Board of Directors, shall have general charge
of the business affairs and property of the corporation and general supervision
over its officers, employees, and agents;
(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times be
subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
(d) He or she shall make a report to the president and directors as often
as required, setting forth the results of the operations under his or her
charge, together with suggestions looking toward improvement and betterment of
the condition of the corporation, and shall perform such other duties as the
Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the officers
of the corporation shall be fixed from time to time by the Board of Directors,
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any subordinate
officers or agents appointed in accordance with the provisions of Section 4.03
hereof. No officer shall be prevented from receiving any such salary or
compensation by reason of the fact that he or she is also a director of the
corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful performance of his or her
duties to the corporation, including responsibility for negligence and for the
accounting of all property, monies, or securities of the corporation which may
come into his or her hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation contained
in the Articles of Incorporation or these Bylaws, the president or any vice
president or the general manager, if any, may, in the name and on behalf of the
corporation, execute and deliver any contract or other instrument authorized in
writing by the Board of Directors. The Board of Directors may, subject to any
limitation contained in the Articles of Incorporation or in these Bylaws,
authorize in writing any officer or agent to execute and deliver any contract or
other instrument in the name and on behalf of the corporation; any such
authorization may be general or confined to specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or conveyed
as security for the payment of any loan, advance, indebtedness, or liability of
the corporation, unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.
<PAGE>
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks and or
trust companies or with such bankers or other depositories as the Board of
Directors may select, or as from time to time may be selected by any officer or
agent authorized to do so by the Board of Directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements, and, evidences of indebtedness of the corporation, subject to the
provisions of these Bylaws, shall be signed by such officer or officers or such
agent or agents of the corporation and in such manner as the Board of Directors
from time to time may determine. Endorsements for deposit to the credit of the
corporation in any of its duly authorized depositories shall be in such manner
as the Board of Directors from time to time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued by the
corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or vice president and by the secretary and sealed with
the seal of the corporation. The seal may be a facsimile, engraved or printed.
where such bond or debenture is authenticated with the manual signature of an
authorized officer of the corporation or other trustee designated by the
indenture of trust or other agreement under which such security is issued, the
signature of any of the corporation's officers named thereon may be a facsimile.
In case any officer who signed, or whose facsimile signature has been used on
any such bond or debenture, should cease to be an officer of the corporation for
any reason before the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted by the corporation and issued and
delivered as through the person who signed it or whose facsimile signature has
been used thereon had not ceased to be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by or
standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to any
such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by an
officer or agent thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any vice
president and the secretary or assistant secretary of the corporation, or by any
officer or agent thereunder authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the corporation
shall be entitled to have a certificate, signed by the president or any vice
president, and the secretary or assistant secretary, and sealed with the seal
(which may be a facsimile, engraved or printed) of the corporation, certifying
the number and kind, class or series of shares owned by him or her in the
corporation; provided, however, that where such a certificate is countersigned
by (a) a transfer agent or an assistant transfer agent, or (b) registered by a
registrar, the signature of any such president, vice president, secretary, or
assistant secretary may be a facsimile. In case any officer who shall have
signed, or whose facsimile signature or signatures shall have been used on any
such certificate, shall cease to be officer of the corporation, for any reason,
before the delivery of such certificate by the corporation, such certificate may
nevertheless be adopted by the corporation and be issued and delivered as though
the person who signed it, or whose facsimile signature or signatures shall have
been used thereon, has not ceased to be such officer. Certificates representing
shares of the corporation shall be in such form as provided by the statutes of
the state of incorporation. There shall be entered on the share books of the
corporation at the time of issuance of each share, the number of the certificate
issued, the name and address of the person owning the shares represented
thereby, the number and kind, class or series of such shares, and the date of
issuance thereof. Every certificate exchanged or returned to the corporation
shall be marked "Canceled" with the date of cancellation.
<PAGE>
Section 6.02 Transfer of Shares. Transfers of shares of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his or her attorney thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the corporation or any of
its transfer agents, and on surrender of the certificate or certificates,
properly endorsed or accompanied by proper instruments or transfer, representing
such shares. Except as provided by law, the corporation and transfer agents and
registrars, if any, shall be entitled to treat the holder of record of any stock
as the absolute owner thereof for all purposes, and accordingly, shall not be
bound to recognize any legal, equitable, or other claim to or interest in such
shares on the part of any other person whether or not it or they shall have
express or other notice thereof.
Section 6.03 Regulations. Subject to the provisions of this Article VI and
of the Articles of Incorporation, the Board of Directors may make such rules and
regulations as they may deem expedient concerning the issuance, transfer,
redemption, and registration of certificates for shares of the corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of Business. A
share book (or books where more than one kind, class, or series or stock is
outstanding) shall be kept at the principal place of business of the
corporation, or at such other place as the Board of Directors shall determine,
containing the names, alphabetically arranged, of original shareholders of the
corporation, their addresses, their interest, the amount paid on their shares,
and all transfers thereof and the number and class of shares held by each. Such
share books shall at all reasonable hours be subject to inspection by persons
entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of the corporation, and may require all
such certificates to bear the signature of either or both. The Board of
Directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share books of
the corporation for a period of not to exceed fifty (50) days preceding the date
of any meeting of shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholder for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the Board of
Directors may fix in advance a date, not exceeding fifty (50) days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent.
(c) If the share transfer books shall be closed or a record date set for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for, or such record date
shall be, at least ten (10) days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may issue a
new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the Board
of Directors may, in its discretion, require the owner of the lost or destroyed
certificate or his or her legal representatives, to give the corporation a bond
in such form and amount as the Board of Directors may direct, and with such
surety or sureties as may be satisfactory to the board, to indemnify the
corporation and its transfer agents and registrars, if any, against any
<PAGE>
claims that may be made against it or any such transfer agent or registrar on
account of the issuance of such new certificate. A new certificate may be issued
without requiring any bond when, in the judgement of the Board of Directors, it
is proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any jurisdiction
to which the corporation may become subject by reason of the conduct of
business, the ownership of assets, the residence of shareholders, the location
of offices or facilities, or any other item, the corporation elects not to be
governed by the provisions of any statute that (i) limits, restricts, modifies,
suspends, terminates, or otherwise affects the rights of any shareholder to cast
one vote for each share of common stock registered in the name of such
shareholder on the books of the corporation, without regard to whether such
shares were acquired directly from the corporation or from any other person and
without regard to whether such shareholder has the power to exercise or direct
the exercise of voting power over any specific fraction of the shares of the
corporation or from any other person and without regard to whether such
shareholder has the power to exercise or direct the exercise of voting power
over any specific fraction of the shares of common stock of the corporation
issued and outstanding or (ii) grants to any shareholder the right to have his
or her stock redeemed or purchased by the corporation or any other shareholder
on the acquisition by any person or group of persons of shares of the
corporation. In particular, to the extent permitted under the laws of the state
of incorporation, the corporation elects not to be governed by any such
provision, including the provisions of the Section 78.378 - 78.3793 inclusive of
the Nevada Revised Statutes or any statute of similar effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may deem
appropriate, each of which committees shall consist of two or more directors.
Members of the executive committee and of any such other committees shall be
designated annually at the annual meeting of the Board of Directors; provided,
however, that at any time the Board of Directors may abolish or reconstitute the
executive committee or any other committee. Each member of the executive
committee and of any other committee shall hold office until his or her
successor shall have been designated or until his or her resignation or removal
in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the Board of
Directors, the executive committee shall have and may exercise all powers of the
Board of Directors in the management of the business and affairs of the
corporation, except for the power to fill vacancies in the Board of Directors or
to amend these Bylaws, and except for such powers as by law may not be delegated
by the Board of Directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix its
own presiding and recording officer or officers, and may meet at such place or
places, at such time or times and on such notice (or without notice) as it shall
determine from time to time. It will keep a record of its proceedings and shall
report such proceedings to the Board of Directors at the meeting of the Board of
Directors next following.
Section 7.04 Quorum and Manner of Acting. At all meetings of the executive
committee, and of such other committees as may be designated hereunder by the
Board of Directors, the presence of members constituting a majority of the total
authorized membership of the committee shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act of a majority
of the members present at any meeting at which a quorum is present shall be the
act of such committee. The members of the executive committee, and of such other
committees as may be designated hereunder by the Board of Directors, shall act
only as a committee and the individual members thereof shall have not powers as
such.
Section 7.05 Resignations. Any member of the executive committee, and of
such other committees as may be designated hereunder by the Board of Directors,
may resign at any time by delivering a written resignation to either the
president, the secretary, or assistant secretary, or to the presiding officer of
the committee of which he or she is a member, if
<PAGE>
any shall have been appointed and shall be in office. Unless otherwise specified
herein, such resignation shall take effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or any other committee designated by the Board of Directors hereunder,
by reason of disqualification, death, resignation, removal, or otherwise, the
remaining members shall, until the filling of such vacancy, constitute the then
total authorized membership of the committee and, provided that two or more
members are remaining, continue to act. Such vacancy may be filled at any
meeting of the Board of Directors.
Section 7.07 Compensation. The Board of Directors may allow a fixed sum
and expenses of attendance to any member of the executive committee, or of any
other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, or suit by or
in the right of the corporation to procure a judgement in its favor by reason of
the fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him or her in connection with any such action, suit or proceeding,
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interest of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, he or she had reasonable
cause to believe that his or her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such a person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his or her duty to the corporation, unless and only to the extent that the court
in which the action or suit was brought shall determine on application that,
despite the adjudication of liability but in view of all circumstances of the
case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Sections
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith. Any
other indemnification under Sections 8.01 and 8.02 hereof, shall be made to the
corporation
<PAGE>
upon a determination that indemnification of the officer, director, employee, or
agent is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in Sections 8.01 and 8.02 hereof. Such
determination shall be made either (i) by the Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit,
or proceeding; or (ii) by independent legal counsel on a written opinion; or
(iii) by the shareholders by a majority vote of a quorum of shareholders at any
meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by this
Section shall not be deemed exclusive of any other indemnification granted under
any provision of any statute, in the corporation's Articles of Incorporation,
these Bylaws, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent, and shall inure to
the benefit of the heirs and legal representatives of such a person.
Section 8.05 Advances. Expenses incurred in defending a civil or criminal
action, suit or proceeding as contemplated in this Section may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon a majority vote of a quorum of the Board of Directors and upon
receipt of an undertaking by or on behalf of the director, officers, employee,
or agent to repay such amount or amounts unless if it is ultimately determined
that he or she is to be indemnified by the corporation as authorized by this
Section.
Section 8.06 Scope of Indemnification. The indemnification authorized by
this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who cease to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification permitted
by law.
8.07 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
or her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the corporation would have the power to
indemnify him or her against any such liability and under the laws of the state
of incorporation, as the same may hereafter be amended or modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
<PAGE>
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and on the terms and
conditions provided by the Articles of Incorporation and these Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of Directors
or the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that;
<PAGE>
(a) No Bylaws adopted or amended by the shareholders shall be altered or
repealed by the Board of Directors;
(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; provided,
however that (I) if any Bylaw regulating an impending election of directors is
adopted or amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the Bylaws so adopted or amended or repealed, together with a concise
statement of the changes made; and (ii) no amendment, alteration or repeal of
this Article XI shall be made except by the shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the secretary of FIN
SPORTS U.S.A., INC., a corporation duly organized and existing under and by
virtue of the laws of the State of Nevada; that the above and foregoing bylaws
of said corporation were duly and regularly adopted as such by the Board of
Directors of the corporation at a meeting of the board of Directors, which was
duly and regularly held on the 1st day of November, 1996 and
that the above and foregoing Bylaws are now in full force and effect.
DATED this 1st day of November, 1998.
By/s/ Kent Faulkner
Secretary
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
FIN SPORTS U.S.A., INC.
We, the undersigned, Duane S. Jenson, President, and Sheryl Ross,
Secretary, of Fin Sports U.S.A., Inc., a Nevada corporation (the "Corporation"),
do hereby certify:
I
The name of the Corporation is Fin Sports U.S.A., Inc.
II
The following amendments to the Articles of Incorporation of the
Corporation were adopted by the written consent of stockholders of the
Corporation owning in excess of a majority of the outstanding voting securities
of the Corporation on September 17, 1993, and September 25, 1995, respectively,
following resolutions of the Board of Directors adopting, ratifying and
approving these amendments:
First: Article IV shall be amended as follows, to-wit:
ARTICLE IV
The Corporation is authorized to issue 50,000,000 common shares, all of
which shall have a par value of $0.001 per share. Each share shall have equal
rights as to voting and in the event of dissolution or liquidation.
Second: The 2,800 outstanding shares of the Corporation are forward
split on a basis of 2,500 for 1, increasing the presently outstanding shares
from 2,800 shares to 7,000,000 shares.
IV
The number of shares entitled to vote on the amendments was 2,800.
V
The number of shares voted in favor of the amendments was 2,800 by the
written consent given on September 17, 1993, and 2,195 by the written consent
given on September 25, 1995, with none opposing and none abstaining.
<PAGE>
/S/ DUANE S. JENSON, PRES
Duane S. Jenson, President
/S/ SHERYL ROSS
Sheryl Ross, Secretary
STATE OF UTAH )
: ss
COUNTY OF SALT LAKE )
On the 25 day of September, 1995, personally appeared before me, a Notary
Public, Duane S. Jenson, who acknowledged that he is the President of the
Corporation, and that he is authorized to and did execute the above instrument.
/S/ SHERYL ROSS
NOTARY PUBLIC
(Notary Seal)
STATE OF UTAH )
: ss
COUNTY OF SALT LAKE )
On the 25 day of September, 1995, personally appeared before me, a Notary
Public, Sheryl Ross, who acknowledged that he is the Secretary of the
Corporation, and that he is authorized to and did execute the above instrument.
/S/ DONNA J. GEORGE
NOTARY PUBLIC
(Notary Seal)
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
FIN SPORTS U.S.A., INC.
We, the undersigned, Wayne Bassham, President and Director, of Fin Sports
U.S.A., Inc., a Nevada corporation (the "Company"), do hereby certify:
I
Pursuant to Section 78.390 of the Nevada Revised Statutes, the Articles of
Incorporation of the Corporation shall be amended as outlined in Section III
hereof.
II
The foregoing amendment was adopted by Unanimous Consent of the Board of
Directors pursuant to Section 78.315 of the Nevaa Revised Statutes, and by
Consent of Majority Stockholder pursuant to Section 78.320 of the Nevada Revised
Statutes.
III
Puruant to the resolutions adopted by the Board of directors and Majority
Stockholder as set forth in Paragraph II above, the 7,000,000 outstanding shares
of the Corporation were reverse split on a basis of 1 for 6.5, effective
February 10, 1999, retaining the authorized shares at 50,000,000 and par value
at one mill ($0.001) per share, with appropriate adjustments being made in the
additional paid in capital and stated capital accounts of the Corporation;
<PAGE>
provided, however, that no stockholder, computed on a per stock certificate of
record basis on the effective date hereof, currently owning 100 or more shares
shall be reduced to less than 100 shares as a result of the reverse split and
that no stockholder owning less than 100 shares, on the per stock certificate
basis on the effective date hereof, shall be affected by the reverse split; such
additional shares required to provide the minimum of 100 shares to be conveyed
to the Company by a principal stockholder of the Company; and provided, further,
that all fractional shares shall be rounded to the nearest whole share.
IV
The number of shares entitled to vote on the amendment was 7,000,000.
V
The number of shares voted in favor of the amendment was 5,489,188, with
none opposing and none abstaining.
/S/WAYNE BASSHAM
Wayne Bassham, President and Director
STATE OF UTAH )
)SS
COUNTY OF SALT LAKE )
On the 4 day of February, 1999, personally appeared before me, a Notary
Public, Wayne Bassham, who acknowledged that he is the President and Director of
Fin Sports U.S.A., Inc., and that he is authroized to and did execute the above
instrument.
/S/KATHLEEN L. MORRISON
NOTARY PUBLIC
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