SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
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Pursuant to Section 12(g) of
The Securities Exchange Act of 1934
MIND2MARKET, INC.
(Exact name of registrant as specified in its charter)
Colorado (84-1361341)
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
1625 Abilene Dr., Broomfield, Colorado 80020
(Address of principal executive offices) (Zip Code)
(303) 438-9185
Registrant's telephone number, including area code:
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of class
Common $.001 Par Value
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TABLE OF CONTENTS
Sequential
Page
Part I
Item 1. Description of Business .................
Item 2. Managements Discussion and Analysis
or Plan of Operation.....................
Item 3. Description of Properties ...............
Item 4. Security Ownership of Certain
Beneficial Owners and Management ......
Item 5. Directors and Executive Officers .......
Item 6. Executive Compensation .................
Item 7. Certain Relationships and Related
Transactions ...........................
Item 8. Description of Securities ...............
Part II
Item 1. Market Price of and Dividends on
Registrants Common Equity and
Related Stockholder matters ............
Item 2. Legal Proceedings .......................
Item 3. Changes and Disagreements with Accountants on
Accounting and Financial Disclosure ....
Item 4. Recent Sales of Unregistered
Securities .............................
Item 5. Indemnification of Directors and
Officers ...............................
Part III
Financial Statements.................... F-1 - F- 9
Exhibit Index ......................
Signatures .........................
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ITEM 1. DESCRIPTION OF BUSINESS
(a) General Description and Development of Business.
Mind2Market, Inc. (the "Registrant" or the "Company") was incorporated
in Colorado in February, 1996, as NELX Marketing, Inc. In October 1996
shareholders approved a name change to Mind2Market, Inc.
THE COMPANY BUSINESS
The company was formed as a Colorado Corporation in 1996 as NELX Marketing,
Inc. It was formed as a wholly owned subsidiary corporation of NELX, Inc. It
received limited capital of $10,000 from NELX, Inc. In October, 1996, NELX, Inc.
agreed to divest the company. NELX, Inc. received 600,000 shares of NELX
Marketing, Inc. stock and NELX, Inc. assigned all rights and privileges to two
products to NELX Marketing, Inc. NELX Marketing, Inc. changed its name to
Mind2Market, Inc. concurrent with the separation from NELX, Inc.
The company was formed to develop, manufacture and market safety
products. The initial product was obtained under a manufacturing and marketing
license from Radarfind, Inc. It is a Radar Beacon Emergency Signal Balloon which
is a visual distress signal and an inflatable radar reflector that is
lightweight and small enough to be worn by a person.
1. Property and General Operations
General Operations: The company's current operations are limited to
planning marketing of products and are minimal at this time due to lack
of capital.
PRODUCTS DESCRIPTION
The initial products that will be marketed are the Radar Beacon and the
AeroLink distress signals. The products were conceived and patented by
RadarFind, Inc. of Denver, Colorado. Radarfind, Inc. completed the initial
development and testing of the aerodynamic balloon products for the outdoor land
and marine markets and subsequently conveyed manufacturing and marketing rights
to the company. The balloon in the products has a unique design which enables it
to sustain its upward flight in very high winds. There are no other balloon
products available capable of this flight performance. RadarFind, Inc. obtained
patents and Mind2Market has licensed all development rights on the products
under the manufacturing and marketing agreement. Since the company has no
manufacturing capabilities, it will hire third party manufacturing.
(b) Parents and Subsidiaries: None
(c) Narrative Description of Business.
The Company is a product marketing company. The first products the
company is proposing to market are described as follows:
(1) EMERGENCY SIGNAL BALLOON (RADAR BEACON)
The Emergency Signal Balloon is a personal, portable locator device,
designed to be deployed in emergency situations to assist in search and rescue
efforts. The device consists of a lightweight tubular plastic case encompassing
a folded 26" balloon, made of microfoil (microwave reflecting) material, with a
fluorescent orange coating, string for tethering the balloon, a cylinder
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containing 2 cubic feet of helium, and a release valve which, when activated,
fills the balloon and releases it into the air. The balloon is tethered to the
case with 200 feet of line. The case is a round plastic tube 2" in diameter and
is 11" in length, weighs approximately 15 ounces, and is made of a high impact
plastic designed to be secured to a belt, equipment, or tethering device. The
case may also be purchased with an optional water seal for the diving market.
The balloon and its attached airfoil have been tested both in the atmosphere and
in a major university wind tunnel. The balloon is capable of flying at an angle
of 58 degrees in winds over 75 mph. The balloon has flown for sustained periods
over ten days in atmospheric tests. The balloon is an inflatable radar
reflector. The distance the balloon can be seen on radar depends on the type of
radar and height of the balloon.
(2) RADIO ANTENNA BALLOON (AEROLINK)
The Radio Antenna Balloon has been developed to meet the need for a
portable antenna to enhance signal transmission and receipt in remote areas and
at sea. The unit is approximately 8" x 12" x 3" in size and weighs 2 lbs. 10
ounces. It is packaged in a handle-equipped plastic case for ease of
transportation or can be carried in an optional fabric shoulder bag. Each unit
contains two helium cylinders for multiple usage, a 36" microfoil balloon, a
fill valve, and a removable hand cranked reel containing approximately 250 feet
of antenna line. This reel has been designed with a built-in frequency adjuster
for different radio bands and a lightning arrester that can be connected to an
optional ground anchor for usage in bad weather. Also included in the case is
the connector and coax cabling to permit emergency locator transmitter (ELT) or
radio connections. The AeroLink Balloon is capable of sustained flight in winds
over 75 mph for more than ten days. The balloon has been tested extensively by
engineers in the Colorado State University wind tunnel and in actual adverse
outdoor conditions. This balloon, with attached tail assembly, is also radar
reflective. The distance the balloon can be seen on radar depends on the type of
radar and height of the balloon. This product will be introduced to the market
approximately 6-9 months after the initial introduction of the Radar Beacon.
BUSINESS
The Company will market safety products as its main business. The
company has no manufacturing capabilities and will be reliant upon third party
manufacturers for product supplies. The Radar Beacon and AeroLink products have
been analyzed for their market potential and the market strategy for acquiring
sales.
The Company obtained rights to manufacture and market the two products
by way of assignment from NELX, Inc. In September, 1995, NELX and Radarfind,
Inc., a Colorado corporation, entered into an agreement whereby Radarfind
assigned the exclusive rights to manufacture and market the products along with
an irrevocable option for NELX to purchase the underlying patents owned by
Radarfind for $50,000 subject to the payment by NELX of $150,000 of royalties to
Radarfind for subsequent sales of the products. In lieu of payment of the
$50,000 and the royalties, NELX issued 750,000 shares of its common stock to the
shareholders of Radarfind for their respective shares of Radarfind. The 750,000
shares of NELX stock were issed as follows: 250,000 shares each to Messrs.
Charles Powell and Arthur Mears, each of whom were officers and 33 1/3%
shareholders of Radarfind at the time; and the remaining 250,000 shares were to
be held in escrow for the remaining shareholders of Radarfind. NELX recorded the
rights at $187,500, which was the market value of the NELX stock issued. After
incorporating the Company, NELX was unable to raise sufficient funds to follow
through with developing and marketing the products and in October 1996
transferred the rights to the subsidiary concurrent with the divestiture.
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Effective May 15, 1997, the Company and Radarfind entered into an
agreement which will ultimately transfer the patents for the products referred
to above from Radarfind to Mind2Market, Inc.. The Company will assume the
obligation to pay the royalties of $150,000 ($1.00 per unit sold). Effective on
May 15, 1997, the Company issued 250,000 shares of its common stock to be held
in escrow for the benefit of Radarfind's shareholders other then Messrs. Powell
and Mears. The 250,000 shares were recorded as additional cost of the
manufacturing and marketing rights in the amount of $125,000 ($.50 per share,
which was the price of shares issued for cash during the period). Upon final
payment of the $150,000 royalties, the NELX shares held in escrow and the
Company shares held in escrow will be distributed to the remaining shareholders
of Radarfind, and Radarfind will be liquidated.
MARKETING STRATEGY FOR RADAR BEACON
A. Market Research
For every outdoorsman, pilot, fisherman, boater, scuba diver, and for
every family member and acquaintance familiar with these activities, news
articles of "near-miss" encounters with disaster are real. Mind2Market has
developed products geared toward safety and to prevent near-miss incidents from
becoming real. The Radar Beacon is a visual distress signal with radar
reflective capabilities to enhance a person's ability to be seen in a
distressful situation. The Radar Beacon can aid people who enjoy outdoor
activities such as hunting, hiking, cross country skiing and snowmobiling to be
found in mountainous and back country regions where it is easy to become lost or
injured. The Radar Beacon can also be useful to boaters who are disabled to
signal other boaters in the area of their distress. It can also be used by
people who have been in a boat that has sunk, whether they are in a life raft or
physically in the water themselves. It provides a signal to other boats in the
area, whether visually or by radar, they need assistance.
The Company believes there are several large markets for the product
due to the need for the product by every outdoors group. The need is becoming
more apparent to everyone with the individual state legislators passing state
laws to have individuals reimburse the state for a search and rescue operation.
Also the Federal Government is requesting reimbursement of rescue operations
conducted by the Coast Guard. The company has prioritized which markets to
pursue first. The management team has decided the boating market would be the
first market. The decision was based on the scope of this market and the
available sales channels through representatives that can be utilized without
large staff and salary additions to the company. The need for the product is
more realized by the individual who owns and operates a boat in areas where they
venture to where they cannot see the shore line. Boaters often want all the
tools available to them that would help them in a distressful situation. The
company will stress the benefits of the Radar Beacon over the items currently
available to them.
B. Market Segments
The boating market can be segmented by the geographic regions and size
of boats registered in the U.S. The largest concentration of registered
motorized boats are in the following regions:
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GEOGRAPHIC AREA REGISTERED BOATS
Florida 3.5 million
Great Lakes 4 million
California 2 million
Northeast 1 million
Missouri 1/2 million
The company believes boaters who are in ocean areas with boats over 21
feet and under 75 feet would be inclined to buy this product. These people are
very safety conscious and realize a need to be seen as quickly as possible if
their boat breaks down or sinks.
This market will mostly be the commercial and recreational boater. The
commercial boater needs to be rescued quickly due to the number of people on
board and the dependence on the boat for income. They will buy a product of this
type because they see the need to be rescued quickly. They don't want to have to
pay for a rescue, nor does they want to lose the income by waiting for a long
period of time in a disabled boat or life rafts. The recreational boater has a
fear of not being found once they lose sight of land. He will buy the product
because he too doesn't want the added expense of a rescue or have his family
exposed to a near miss disaster without the most advanced tools available to
help them be found. Each group has indicated a strong desire for a product like
this to us while we exhibited the product to them at various boat shows.
Approximately 40% of the purchases by this market are bought at their
local marina, with an additional 30% purchased through a boaters catalog. There
are various boating catalogs that these people will purchase through, however
the research indicates U.S. Boating and West Marine are the most used and
respected. Other areas where purchases are made are sporting goods stores (10%),
discount stores (10%) and mail order (3%).
C. Market Strategy
The potential of the boating market is great, however, factors must be
considered. The product must be a quality product. It must be perceived as a
product that can benefit the buyer when they need it. The development, research
and testing work performed on this product has created a product that can be
sold as a dependable product. One of the first avenues available to us to help
sell this as a dependable product is the U.S. Coast Guard. The Company is in the
process of performing testing for them in anticipation they will give it their
approval. The Company will have the approval stamped on the product and it's
packaging and advertising.
Pricing is another key element in the sale of the Radar Beacon. While
the markets are concerned about a quality product, they are also concerned with
price. The Company must price the product at what the market will bear. To help
determine price, the Company looked at what other safety devices were selling
for. The following table shows some comparable safety products:
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Product Typical Retail Price
Compass $35 to $100
Signal Mirror $10
Flare Signal Kit $35 to $225
Flashlight $15 to $40
Emergency Strobe Signal Light $45 to $100
Life Vest $40 to $150
Emergency Position Indicating Beacon $450 to $2200
Radar Beacon Signal $150
From immediate responses the Company has obtained by attending various
trade shows, it appears it will be a readily acceptable product. However, the
Company intends to use as much free news release service as possible. A small 30
to 90 second demonstration of the product to be aired on the local news casts or
an article in the local newspaper or area magazine would expose the product to
the public.
The Company has contacted many of the targeted areas for sales
distributor support. The Company has under contract several distributors and
will contract with other distributors in other areas and work with these groups
to establish the best avenues of advertising for them to the target markets. The
Company has an initial advertising budget and will allocate two dollars ($2.00)
per unit sold for all forms of advertising in conjunction with the local
distributors.
The Company plans to contact many of the more respected periodicals to
gain their new product release information and see if they would print feature
articles. The feature article could center around the personal experience of the
inventor, who was lost at sea during a diving expedition for several hours and
how he has developed this new, state of the art SOS. Some of the periodicals to
be considered for press releases and feature articles include: Northwest
Magazine, Boat, Boat Journal, 38th Latitude, Cruising World, Great Lakes Sailor,
Heartland Boating, Hot Boat, Southern Boating Magazine, Yachting, The Fisherman,
Fishing World, Gulf coast Fisherman, The Maine Sportsman, Marlin, Outdoor Life,
Salt Water Sportsman, The Diver, Pacific Diver, Undercurrent, and Northeast
Outdoors.
D. Distribution Strategy
The Company is currently establishing sales distributors for the Radar
Beacon. With the extensive contacts provided by attending various trade shows,
the Company has estimated that approximately ten (10) distributors must be
obtained to gain total coverage of North America.
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Once a distributor has been placed under contract for a certain
geographic area, he will receive promotional material provided by the Company.
He must also provide an initial order for his immediate inventory and then meet
the performance clauses agreed to in the contract. The Company will provide all
necessary support to help the distributor get started, including a technical
training session and sales strategy sessions in the sales reps office. Follow up
sessions will be provided as needed. Also support to trade shows as technical
reps will be provided by the Company. All area news releases the distributor may
set up will be done by a company person.
A chronological plan which is under way is as follows:
1) Prepare distributor packages and contact as many as possible from the
contacts already established from the trade shows. Perform background
checks on all possible distributor candidates and select the most
suitable for each geographic region.
2) Prepare press releases and contact each publication individually for
specific needs. Thrust will be aimed at national media, using free
lance writers where possible. Special emphasis on inventor and
management's perception of need and practicality. Prepared material
will be coordinated so attention is centered on distributor for each
area.
3) Contact National Public Radio for telephone interview with the inventor
and other management personnel on products need and safety features.
4) Place the product in catalogs where appropriate.
5) Contact national associations to establish credibility of the product,
and to get endorsements. Use the Association's newsletters and
periodicals to market the product.
6) Work with the military to gain their approval of the product. Obtain an
approval for sale to the military by establishing a GSA number and
entering it in the GSA catalog. Establish military sales by direct
contact to the Pentagon.
(2) Working Capital. The historical working capital needs of the
Company consist primarily of: research and development, product and market
testing, manufacturing and marketing of products. The Company has over $2,000 in
cash as of the date of this registration statement.
(3) Dependence on a Single Customer or a Few Customers.
a) Revenues - Products
The Radar Beacon and AeroLink depend upon a large population base of
boaters and outdoor enthusiast and is not tied to only a few customers. It is
not limited to any geographic area and can be used anywhere in the world.
b) Client Services revenues - none
(4) Backlog of Orders. The company is currently negotiating with a
distributor for an initial order for 10,000 units of Radar Beacon. There are
currently no orders for sales at this time.
(5) Government Contracts. None at this time.
(6) Competitive Conditions. Currently, there are no other products
similar to those of the company on the market. However, competitive products
which already have a niche in the market include flare kits, signal mirrors,
flash lights and strobes, Emergency Positioning Indicator Beacons (EPIRB),
Global Positioning Systems, radar reflectors, and signal flags.
Registrant Sponsored Research and Development. None.
<PAGE>
(8) Compliance with Environmental Laws and Regulations.
The operations of the Company are subject to local, state and federal
laws and regulations governing environmental quality and pollution control. To
date, compliance with these regulations by the Company has had no material
effect on the Company's operations, capital, earnings, or competitive position,
and the cost of such compliance has not been material. The Company is unable to
assess or predict at this time what effect additional regulations or legislation
could have on its activities.
(9) Number of Persons Employed. As of October 25, 1999, the Company has
no employees.
Risk Factors
(1) Conflicts of Interest. Certain conflicts of interest may exist
between the Company and its officers and directors. They have other business
interests to which they devote their attention, and may be expected to continue
to do so although management time should be devoted to the business of the
Company. As a result, conflicts of interest may arise that can be resolved only
through exercise of such judgment as is consistent with fiduciary duties to the
company. See "Management," and "Conflicts of Interest".
(2) Need for Additional Financing. The Company has very limited funds,
and such funds may not be adequate to carryout the business plan. The ultimate
success of the Company may depend upon its ability to raise additional capital.
The Company has not investigated the availability, source, or terms that might
govern the acquisition of additional capital and will not do so until it
determines a need for additional financing. If additional capital is needed,
there is no assurance that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to the Company. If not
available, the Company's operations will be limited to those that can be
financed with its modest capital.
(3) Regulation of Penny Stocks. The Company's securities, when
available for trading, will be subject to a Securities and Exchange Commission
rule that imposes special sales practice requirements upon broker-dealers who
sell such securities to persons other than established customers or accredited
investors. For purposes of the rule, the phrase "accredited investors" means, in
general terms, institutions with assets in excess of $5,000,000, or individuals
having a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income, exceeds
$300,000). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities and
also may affect the ability of purchasers in this offering to sell their
securities in any market that might develop therefore.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny stocks". Such rules include Rules 3a51-1,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
and Exchange Act of 1934, as amended. Because the securities of the Company may
<PAGE>
constitute "penny stocks" within the meaning of the rules, the rules would apply
to the Company and to its securities. The rules may further affect the ability
of owners of Shares to sell the securities of the Company in any market that
might develop for them.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.
(4) Lack of Operating History. The Company was formed in October, 1996
for the purpose of product marketing. The Company has no revenues. The Company
is not profitable and the business effort is in start-up stage. The Company must
be regarded as a new or start-up venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject.
(5) No Assurance of Success or Profitability. There is no assurance
that the Company will ever operate profitably. There is no assurance that it
will generate revenues or profits, or that the market price of the Company's
Common Stock will be increased thereby.
(6) Lack of Diversification. Because of the limited financial resources
that the Company has, it is unlikely that the Company will be able to diversify
its operations. The Company's probable inability to diversify its activities
into more that one area will subject the Company to economic fluctuations within
a particular business or industry and therefore increase the risks associated
with the Company's operations.
(7) Dependence upon Management. Limited Participation of Management.
The Company currently has only two individuals who are serving as its officers
and directors on a part time basis. The Company will be heavily dependent upon
their skills, talents, and abilities to implement its business plan, and may,
from time to time, find that the inability of the officers and directors to
devote their full time attention to the business of the Company results in a
delay in progress toward implementing its business plan. See "Management."
Because investors will not be able to evaluate the merits of possible business
acquisitions by the Company, they should critically assess the information
concerning the Company's officers and directors.
<PAGE>
(8) Lack of Continuity in Management. The Company does not have an
employment agreement with its officers and directors, and as a result, there is
no assurance they will continue to manage the Company in the future. In
connection with acquisition of a business opportunity, it is likely the current
officers and directors of the Company may resign subject to compliance with
section 14f of the Securities Exchange Act of 1934. A decision to resign will be
based upon the identity of the business opportunity and the nature of the
transaction, and is likely to occur without the vote or consent of the
stockholders of the Company.
(9) Indemnification of Officers and Directors. Colorado Revised
Statutes provide for the indemnification of its directors, officers, employees,
and agents, under certain circumstances, against attorney's fees and other
expenses incurred by them in any litigation to which they become a party arising
from their association with or activities on behalf of the Company. The Company
will also bear the expenses of such litigation for any of its directors,
officers, employees, or agents, upon such person's promise to repay the Company
therefor if it is ultimately determined that any such person shall not have been
entitled to indemnification. This indemnification policy could result in
substantial expenditures by the Company which it will be unable to recoup.
(10) Director's Liability Limited. Colorado Revised Statutes exclude
personal liability of its directors to the Company and its stockholders for
monetary damages for breach of fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have a much more limited right of
action against its directors that otherwise would be the case. This provision
does not affect the liability of any director under federal or applicable state
securities laws.
(11) Dependence upon Outside Advisors. To supplement the business
experience of its officers and directors, the Company may be required to employ
accountants, technical experts, appraisers, attorneys, or other consultants or
advisors. The selection of any such advisors will be made by the Company's
President without any input from stockholders. Furthermore, it is anticipated
that such persons may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to the Company. In the event the President of the
Company considers it necessary to hire outside advisors, he may elect to hire
persons who are affiliates, if they are able to provide the required services.
(12) Competition. Radar Beacon is intensely competitive. The Company
expects to be at a disadvantage when competing with may firms that have
substantially greater financial and management resources and capabilities than
the Company. These competitive conditions will exist in any industry in which
the Company may become interested.
(13) No Foreseeable Dividends. The Company has not paid dividends or
its Common Stock and does not anticipate paying such dividends in the
foreseeable future.
(14) Loss of Control by Present Management and Stockholders. The
Company may issue further shares as consideration for the cash or assets or
services out of the Company's authorized but unissued Common Stock that would,
upon issuance, represent a majority of the voting power and equity of the
Company. The result of such an issuance would be that new stockholders and
management would control the Company, and the Company's management could be
<PAGE>
replaced by persons unknown at this time. Such an occurrence would result in a
greatly reduced percentage of ownership of the Company by its currents
shareholders.
(15) No Public Market Exists. There is no public market for the
Company's common stock, and no assurance can be given that a market will develop
or that a shareholder ever will be able to liquidate his investment without
considerable delay, if at all. If a market should develop, the price may be
highly volatile. Factors such as those discussed in the "Risk Factors" section
may have a significant impact upon the market price of the securities offered
hereby. Owing to the low price of the securities, many brokerage firms may not
be willing to effect transactions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.
(16) Rule 144 Sales. All of the outstanding shares of Common Stock held
by present officers, directors, and affiliate stockholders are "restricted
securities" within the meaning of Rule 144 under the Securities Act of 1933, as
amended. As restricted shares, these shares may be resold only pursuant to an
effective registration statement or under the requirements of Rule 144 or other
applicable exemptions from registration under the Act and as required under
applicable state securities laws. Rule 14 provides in essence that a person who
has held restricted securities for one year may, under certain conditions, sell
every three months, in brokerage transactions, a number of shares that does not
exceed the greater of 1.0% of a company's outstanding common stock or the
average weekly trading volume during the four calendar weeks prior to the sale.
There is no limit on the amount of restricted securities that may be sold by a
nonaffiliate after the restricted securities have been held by the owner for a
period of two years. Nonaffiliate shareholders holding 200,500 common shares of
the Company have held their shares for two years and under Rule 144(K) are
eligible to have freely tradable shares. A sale under rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registration of shares of Common Stock of present stockholders, may have a
depressive effect upon the price of the Common Stock in any market that may
develop.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
The information presented herein, should be read in conjunction with
the Company's audited financial statements and related notes attached hereto.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES
IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has no primary income source at this time. The company will
receive revenues from the sale of the products. The company has contracted with
Western Innovations, Inc. of Aurora, Colorado to manufacture the initial
products and anticipates the delivery of the first orders in January, 2000. The
company has completed a private offering of common stock at $0.50 per share
which achieved $112,500 and which terminated April 30, 1999.
Results of Operations for year ended December 31, 1998 as compared to
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prior year 1997. The Company revenues for the year ended December 31, 1998, were
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$665 and were $2,457 in 1997. The Company incurred expenses in 1998 of $66,776,
the largest items of which were amortization, $25,298, and salaries/contract
labor of $15,900. In 1997, the Company incurred $126,547 in expenses, the
largest items being: amortization $16,369; salaries and contract labor $28,679;
legal and accounting $27,320; research and development $18,176; and travel
$19,599. The Company had a loss on operations in 1998 of ($66,111) and
($124,090) in 1997. The Company commenced business operations in February 1996
and expects a significant net loss from operations in 1999 resulting from costs
of start up and developmental cost of products. The Company will continue to
show losses resulting from the start up of operations, but may generate limited
revenues from sales of Radar Beacon product.
Results of Operations for the nine month period ended September 30,
-----------------------------------------------------------------------
1999 as compared to the same period in 1998. During the nine month period in
- ---------------------------------------------
1999 the Company incurred expenses of $17,239 which $11,161 went to amortization
and $6,078 went to other costs. The Company had $15,025 revenues for the period
in 1999 and $353 in the period in 1998. The loss on operations was ($2,214) for
the period, a nominal loss per share. In the same period in 1998, the Company
incurred expenses of $19,205 which $11,161 went to amortization, $8,150 went to
other costs. The loss on operations in 1998 was $18,852 for the period or
($0.01) per share.
The Company operating expenses should be expected to increase
significantly as it attempts to commence marketing of initial product for sale.
Further it will need capital for purchase of product from a contract
manufacturer, which will be significant.
At this time, the Company is dependent upon private placements or loans
for future operations and funding. Therefore it will have to either borrow
money, if possible, or raise funds through subsequent public or private
offerings to continue operations until when, or if, it ever develops sufficient
revenue from its assets to maintain operations. If such revenues are not
generated, or investors not found the Company will be forced to develop another
line of business, or to finance its operations through borrowed funds, the sale
of assets it has, or enter into the sale of stock for additional capital none of
which may be feasible when needed. The Company has no management ability, and no
financial resources or plans to enter any other business as of this date
although the Company will be open to suggestion and opportunity.
<PAGE>
LIQUIDITY
The Company expects that its need for liquidity will increase for the
coming year due to its anticipation of expending funds to advertise and market
its existing products and the development of additional product lines.
Short Term.
On a short term basis, the Company does not generate revenue sufficient
to cover operations. Based on prior experience, the Company believes it will
continue to have insufficient revenue to satisfy current and recurring
liabilities as it seeks to develop and market its products. For short term needs
the Company will be dependent on receipt, if any, of private placement proceeds.
The Company's current assets $23,156 at December 31, 1998, were
exceeded by its current liabilities, $43,674.
Long Term.
As of December 31, 1998, the Company has a note payable to existing
principals of the Company of $63,647 used to finance the start-up operations. It
has additional accounts payable of $29,553 for R&D and initial marketing
expenses on the Radar Beacon product.
CAPITAL RESOURCES
The primary capital resources of the Company are its common stock.
As of the date of the registration statement, the Company has no
material commitments for capital expenditures within the next year, however if
sales are commenced, substantial capital will be needed to pay for manufactured
product.
Cash Flows:
The Company has achieved no revenues to date.
Need for Additional Financing. The Company does not have capital
sufficient to meet the Company's cash needs, or to commence business, including
the costs of compliance with the continuing reports requirements of the
Securities Exchange Act of 1934. The Company will have to seek loans or equity
placements to cover such cash needs. There is no assurance, however, that
without funds it will ultimately allow registrant to commence sales and
marketing. Once marketing commences, the Company's needs for additional
financing are likely to increase substantially.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
<PAGE>
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
Year 2000 Issues. Year 2000 problems result primarily from the
inability of some computer software to properly store, recall, or use data after
December 31, 1999. These problems may affect many computers and other devices
that contain embedded computer chips. The Company's operations, however, do not
rely on information technology (IT) systems. Accordingly, the Company does not
believe it will be material affected by Year 2000 problems.
The Company relies on non-IT systems that may suffer from Year 2000
problems, including telephone systems and facsimile and other office machines.
Moreover, the Company relies on third-parties that may suffer from Year 2000
problems that could affect the Company's operations, including banks, oil field
operators, and utilities. In light of the Company's substantially reduced
operations, the Company does not believe that such non-IT systems or third-party
Year 2000 problems will affect the Company in a manner that is different or more
industry generally. Consequently, the Company does not currently intend to
conduct a readiness assessment of Year 2000 problems or to develop a detailed
contingency plan with respect to Year 2000 problems that may affect the Company.
ITEM 3. DESCRIPTION OF PROPERTIES
(a) Real Estate. None
(b) Title to properties. None.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF
OCTOBER 1, 1999.
(a) Beneficial owners of five percent (5) or greater, of the
Registrant's Common Stock. (No Preferred Stock is outstanding at the date of
this Registration.)
The following sets forth information with respect to ownership by
holders of more than five percent (5%) of the Company's Common Stock known by
the Company:
<PAGE>
<TABLE>
<CAPTION>
Title Name and address of Beneficial Amount of Percent Voting
of Owner Beneficial of Class
Class Interest Equity
<S> <C> <C> <C>
Common Ronald Powell 1,000,000 30.7% 30.7%
Broomfield, CO
Common Ray W. Williams 597,500 18.4% 18.4%
Rancho Santa Fe, CA
Common NELX, Inc. 600,000 18.4% 18.4%
Wheat Ridge, CO
Common Catherine Williams 375,000 11.5% 11.5%
Broomfield, CO
Common Radarfind, Inc. 250,000 7.7% 7.7%
Broomfield, CO
</TABLE>
(b) The following sets forth information with respect to the Company's Common
and Preferred Stock beneficially owned by each Officer and Director, and by all
Directors and Officers as a group.
<TABLE>
<CAPTION>
Title Name of Amount and
of Beneficial Nature of
Class Owner Beneficial
Ownership
<S> <C> <C>
Common Stock Ronald Powell, President and Director 1,000,000
Common Stock Ray W. Williams, Secretary and Director 597,500
Common Stock Jerry Jernigan, Director 30,000
William Boyer, Director 0
Stuart M. Novak, Director 0
---------
Officers and Directors as a Group 1,627,500
</TABLE>
<PAGE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
(a) The following table furnishes the information concerning the
directors of the Company as of December 31, 1996. The directors of the Company
are elected every year and serve until their successors are elected and qualify.
Name Age Title
- ---- --- -----
Ronald Powell 42 President, Director
Ray W. Williams 43 Secretary/Treasurer, Director
Bill Boyer 45 Director
Stuart M. Novak 57 Director
Jerry Jernigan 56 Director
The term of office for each director is one (1) year, or until his/her
successor is elected at the Company's annual meeting and qualified. The term of
office for each officer of the Company is at the pleasure of the board of
directors.
The board of directors has no nominating, auditing committee or a
compensation committee. Therefore, the selection of person or election to the
board of directors was neither independently made nor negotiated at arm's
length.
(c) Identification of Certain Significant Employees.
There are no employees other than the executive officers disclosed
above who make, or are expected to make, significant contributions to the
business of the Company, the disclosure of which would be material.
(d) Family Relationships. None.
(e) Business Experience.
The following is a brief account of the business experience during the
past five years of each director and executive officer of the Company, including
principal occupations and employment during that period and the name and
principal business of any corporation or other organization in which such
occupation and employment were carried on.
<PAGE>
MANAGEMENT
CHARLES R. (Ron) POWELL
Mr. Powell is a President, Director and a principal shareholder of
Mind2Market, Inc. since 1996. While earning a degree in Business Administration
from Regis University (1997), Mr. Powell worked for Rockwell, International from
1983 till 1990 at the Rocky Flats Nuclear Weapons Site on a national defense
contract. Mr. Powell earned a certified Project Manager degree and worked as a
Project Manager with EG&G, Inc. at the Rocky Flats Environmental Cleanup Site
from 1990 till 1995, with responsibilities for design and construction on
projects ranging from $2 to $50 million dollars. He currently serves as a
project management consultant and trainer for Monks Associates, Inc. He has
served as the product manager for the products and has been responsible for the
management of the company finance and administrative functions.
RAY WILLIAMS
Mr. Williams is the Secretary/Treasurer, Director and a principal
shareholder since 1996. He has over 20 years in sales and marketing. He has
engaged in business consulting since 1989, principally in design, development
and implementation of sales and marketing programs, and in business financing,
including structuring public offerings, private placements, accounts receivable
financing, and venture capital. Mr. Williams studied Chemistry at Colorado State
University and Economics at the University of Colorado.
JERRY JERNIGAN
Mr. Jernigan is a Director of the company and a shareholder since 1997.
He is an experienced business person with over 25 years of business ownership.
He is currently the owner of Western Innovations in Aurora, CO. since 1977. He
has also served as shop foreman and engineering manager of several production
facilities. He holds a Mechanical Engineering degree from the University of
Florida. He has been instrumental in the final development and testing of the
company's current products.
WILLIAM J. BOYER
Mr. Boyer is a Director of the company since 1997. He has over 25 years
experience in sales, marketing and general business. His experience includes
start-up business development, financing and organization. He is founder and
currently the President and Director of Apparatus Sales, Inc., a computer
hardware and software company selling direct to government organizations since
1991. He also has experience in oil and gas businesses from serving as COO of
Peak Pipe & Supply Company from 1988 to 1991 and serving as President of
Associated Pipe and Supply from 1974 to 1986. Mr. Boyer gained international
sales and import/ export experience from his ownership of Boyer Imports from
1986 to 1988. His experience also includes dealings with banking institutions
and securities business. He also has a background in real estate, construction,
and computer businesses.
<PAGE>
STUART M. NOVAK
Mr. Novak is a Director of the company since 1997. Mr. Novak has more
than 25 years of highly successful senior management experience in both ongoing
and start-up entities as well as a distinguished service as a commissioned
officer in the U.S. Navy. He received a Naval Engineer's degree (a professional
post masters degree) as well as an MS degree in management from the
Massachusetts Institute of Technology in 1971. In 1964 he received a BS in
Engineering, from the US Naval Academy. As Chairman of Acclaim Mortgage, Inc.
(3/97-8/98) his efforts resulted in the tripling of that company's revenue and
net worth in a six month period. In 8/98 Mr. Novak founded Resource Funding
Group, Inc., a successful residential and commercial mortgage brokerage that
enjoys an excellent reputation for highly professional and creative mortgage
loan origination services. As President Rader Railcar, Inc. (11/94 - 1/97) his
leadership resulted in the growth of a seven employee company to one of more
than 300 employees in one year. He was instrumental in the acquisition of a $65
million contract and put in place systems, procedures, and managed day to day
operations that enabled the successful growth of the company.
After leaving active duty in the US Navy in 1975, he has experienced a high
degree of success in the marine industry in executive, operations, major project
management, operations and engineering. He had major impact on container ship
operations and acquisition as Director Marine Operations and Consultant while at
Farrell Lines Inc. (8/93-11/94). He was President and Chief Executive Officer of
The American Ship Building Company and Tampa Shipyards Inc. (6/92-7/93), a $100
million, NYSE company. As founder and President of Royal Hawaiian Cruise Line,
Inc. ( 7/90-7/92) he developed a new, U.S. flag cruise company and developed a
detailed plan for its start up and operations, including initial capitalization.
At Cunard Line Ltd. (2/81-7/90) as a Senior Vice President Mike directed
operations for a fleet of five passenger vessels and 2500 personnel. He
conceived and implemented numerous innovations including the $150 million life
extension of the ocean liner Queen Elizabeth 2, unique onboard management
structure, improved operations, profitability and business awareness.
His active duty in the US Navy (6/64-6/75) included sea and shore assignments,
Command, Chief Engineer and a tour of duty in Vietnam. He received various
decorations including the Purple Heart and the Navy Commendation Medal. He
served in the US Naval reserve attaining the rank of Captain, completing 28
years of service.
Directors Compensation
Each member of the Board of Directors of the Company receives $300
compensation for each meeting attended plus reasonable outside travel expenses
for each Board meeting he or she attends and for each Committee meeting he
attends during the fiscal year.
ITEM 6. EXECUTIVE COMPENSATION
The Company accrued a total of $15,900 compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the 1998 fiscal year.
There are no existing employment contracts with the officers of the
Company.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE OF EXECUTIVES
- ----------------------------------------
Annual Compensation Awards
Name and Year Salary ($) Bonus ($) Other Annual Restricted Stock Securities
Principal Position Compensation ($) Award(s) Underlying
($) Options/
SARs (#)
<S> <C> <C> <C> <C> <C> <C>
Ron 1996 0 0 0 0 0
Powell,
President
1997 0
1998 0
Ray 1996 10,000 0 0 0 0
Williams,
Secretary
1997 28,679
1998 15,900*
*Accured
</TABLE>
Total compensation for officers and directors:
1998 - $15,900 1997 - $28,679 1996 - $10,000
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
There was no director compensation for last fiscal year. Stock options
for future compensation are being negotiated with the Board members at this
time.
<PAGE>
KEY EMPLOYEES STOCK COMPENSATION PLAN:
The Company has adopted a stock compensation plan which provides for an
Awards Committee to award bonus compensation of Officers and employees and
advisors/consultants.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During 1998, the Company received loans from five individuals totaling
$55,000 for the purpose of providing funds for production setup of one of the
Company's products. Jerry Jernigan, a director, loaned $15,000 of the $55,000 in
loans and received 30,000 shares. As additional consideration for the loans, the
Company issued 110,000 shares of its common stock to the individuals, and agreed
to repay the loans at a rate of $3.00 per unit of product sold for the first
18,333 units sold, then the payment will be reduced to $1.00 per unit for the
next 55,000 units sold. The total payments will aggregate $110,000, or twice the
original amount of the loans. The 110,000 shares of stock were valued at $0.50
per share (representing the price at which shares were sold by the Company for
cash during the year), and the resulting $55,000 was recorded as prepaid loan
costs.
ITEM 8. DESCRIPTION OF SECURITIES TO BE REGISTERED
The Company is presently authorized to issue fifty million (50,000,000)
shares of its $.0001 par value common shares and five million (5,000,000) shares
of preferred stock $.10 par value in such classes as the Board may determine. A
total of 3,254,100 common shares are issued and outstanding. No shares of any
class of preferred stock is outstanding.
Common Shares
All shares, when issued, will be fully paid and non-assessable. All
shares are equal to each other with respect to voting, liquidation, and dividend
rights. Special shareholders' meetings may be called by the officers or
director, or upon the request of holders of at least one-tenth (1/10th) of the
outstanding shares. Holders of shares are entitled to one vote at any
shareholders' meeting for each share they own as of the record date fixed by the
board of directors. There is no quorum requirement for shareholders' meetings.
Therefore, a vote of the majority of the shares represented at a meeting will
govern even if this is substantially less than a majority of the shares
outstanding. Holders of shares are entitled to receive such dividends as may be
declared by the board of directors out of funds legally available therefor, and
upon liquidation are entitled to participate pro rata in a distribution of
assets available for such a distribution to shareholders. There are no
conversion, pre-emptive or other subscription rights or privileges with respect
to any shares. Reference is made to the Company's Articles of Incorporation and
its By-Laws as well as to the applicable statutes of the State of Delaware for a
more complete description of the rights and liabilities of holders of shares. It
should be noted that the By-Laws may be amended by the board of directors
without notice to the shareholders. The shares of the Company do not have
cumulative voting rights, which means that the holders of more than fifty
percent (50%) of the shares voting for election of directors may elect all the
directors if they choose to do so. In such event, the holders of the remaining
shares aggregating less than fifty percent (50%) of the shares voting for
election of directors may not elect all the directors if they choose to do so.
In each event, the holders of the remaining shares aggregating less than fifty
percent (50%) will not be able to elect directors.
<PAGE>
Preferred Stock. The Company's Articles of Incorporation authorize the
issuance of 5,000,000 shares of preferred stock. The Board of Directors of the
Company is authorized to issued the preferred stock from time to time in classes
and series and is further authorized to establish such classes and series, to
fix and determine the variations in the relative rights and preferences as
between the conversion of preferred stock into Common Stock. No Preferred Stock
has been issued by the Company. Preferred stock may be utilized in making
acquisitions.
Shareholders. Each shareholder has sole investment power and sole voting
power over the shares owned by such shareholder.
No shareholder has entered into or delivered any lock up agreement or
letter agreement regarding their shares or options thereon. Under Colorado laws,
no lock up agreement is required regarding the Company's shares as it might
relate to an acquisition.
Transfer Agent. The Company has engaged Mountain Share Transfer, Inc., 1625
Abilene Drive, Broomfield, CO 80020 as its transfer agent. Mr. Ronald Powell is
a principal in the Transfer Agency.
Reports to Stockholders. The Company plans to furnish its stockholders
with an annual report for each fiscal year containing financial statements
uadited by its independent certified public accountants. In the event the
Company enters into a business combination with another company, it is the
present intention of management to continue furnishing annual reports to
stockholders. The Company intends to comply with the periodic reporting
requirements of the Securities Exchange Act of 1934 for so long as it is subject
to those requirements, and to file unaudited quarterly reports and annual
reports with audited financial statements as required by the Securities Exchange
Act of 1934.
PART II
ITEM 1. (a) MARKET PRICE OF AND DIVIDENDS ON REGISTRANTS COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's common stock is not presently traded on any
"Over-the-Counter" market. If it is ever approved for trading by NASD Market
Regulation, Inc., it may trade on the OTC Bulletin Board or on the "Pink
Sheets". No assurance can be made that any trading market will ever develop or
that trading will be approved.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or security holder is a party
adverse to the Company or has a material interest adverse to the Company in
reference to any litigation.
<PAGE>
ITEM 3. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 4. FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as a part of this report:
1) Financial Statements: Pages F-1 through F-9.
2) Financial Statement Schedules: None
3) SB Exhibits: Articles, Amendment to Articles, By-Laws.
4) Supplemental Oil and Gas Information - None.
ITEM 5. RECENT SALES OF UNREGISTERED SECURITIES
Since October, 1996, the Company has sold its Common Stock to the
persons listed in the table below in transactions summarized as follows:
<TABLE>
<CAPTION>
ISSUE # OF PRICE/ TOTAL
NAME DATE SHARES SHARE CONSIDERATION
<S> <C> <C> <C> <C>
Ray Williams 10/15/96 1,000,000 $0.001 $1,000
12270 Cherrywood St.
Broomfield, CO 80020
Ronald Powell 10/15/96 1,000,000 $0.001 $1,000
1625 Abilene Drive
Broomfield, CO 80020
John Brinkman 05/28/97 70,000 $0.47 $30,000
1391 Carr St., Ste. 209
Lakewood, Co. 80215
<PAGE>
James R. and Jane K. Walsh, Trust 05/28/97 2,000 $0.50 $1,000
638 N. Hickory St.
Arlington Heights, IL 60004
David S. Losapio 05/28/97 6,000 $0.50 $3,000
509 Richards Lake Rd.
Ft. Collins, Co. 80524
Robert Monks 05/28/97 10,000 $0.50 $5,000
1160 Detroit St.
Denver, CO 80203
Galt Investment Club 05/28/97 5,000 $0.50 $2,500
1888 Sherman Street, Suite 780
Denver, CO 80203
Rodney Jackson 10/15/96 45,000 $0.25 $12,500
3702 W. 99th Ave.
Westminster, CO 80030
NELX, Inc. 10/15/96 600,000 $.016 $10,000
Route #1, Box 41J
Bridgeport, WV 26330
Brian V. Walker 10/15/96 15,000 $0.001 Services Rendered
505 S. Hunt Club Rd.
Gurnee, IL 60031
Stella C. Dempsey 10/15/96 50,000 $0.001 Services Rendered
325 Hale
Palo Alto, Ca. 94301
Mike Littman 10/15/96 50,000 $50.00 Services Rendered
10200 W. 44th Ave., Suite 400
Wheat Ridge, CO 80033
<PAGE>
Jerry Jernigan 04/13/98 30,000 $0.001 As Additional
15508 E. 19th Street Consideration for
Aurora, CO 80011 Loan
Bill Kellog 04/13/98 20,000 $0.001 As Additional
15508 E. 19th Street Consideration for
Aurora, CO 80011 Loan
Bill Johnson 04/13/98 20,000 $0.001 As Additional
15508 E. 19th Street Consideration for
Aurora, CO 80011
David Lancaster 04/13/98 15,000 $0.001 As Additional
5335 S. Cody St. Consideration for
Littleton, CO 80123 Loan
Donald Lancaster 04/13/98 15,000 $0.001 As Additional
5335 S. Cody St. Consideration for
Littleton, CO 80123 Loan
Eugene Pendery 04/13/98 10,000 $0.001 As Additional
2331 W. Hampden Unit 148 Consideration for
Englewood, CO Loan
Kymberly Ford 05/19/98 2,000 $0.50 $1,000
21314 CR 15-21
Elbert, CO 80106
Orval Neuschwanger 10/04/98 16,600 $0.50 Shares Issued
3135 W. 134th Ct. For Services
Broomfield, CO 80020
Radarfind, Inc. 10/15/96 250,000 $0.001 220
1625 Abilene Dr.
Broomfield, CO 80020
<PAGE>
John P. & Connie L. Chavez 04/14/99 20,000 $0.50 $10,000
7409 S. Alkire St. #206
Littleton, CO 80127
</TABLE>
Each of the sales listed above was made for cash or services as listed.
All of the listed sales were made in reliance upon the exemption from
registration offered by Section 4(2) of the Securities Act of 1933, as amended.
Based upon Subscription Agreements completed by each of the Subscribers, the
Company had reasonable grounds to believe immediately prior to making an offer
to the private investors, and did in fact believe, when such subscriptions were
accepted, that such purchasers (1) were purchasing for investment and not with a
view to distribution, and (2) had such knowledge and experience in financial and
business matters that they were capable of evaluating the merits and risks of
their investment and were able to bear those risks. The purchasers had access to
pertinent information enabling them to ask informed questions. The shares were
issued without the benefit of registration. An appropriate restrictive legend is
imprinted upon each of the certificates representing such shares, and
stop-transfer instructions have been entered in the Company's transfer records.
All such sales were effected without the aid of underwriters, and no sales
commissions were paid.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Colorado Statutes and Company By-Laws offer protection by way of
indemnification to any officer, director or employee of the Company. The
indemnification extends to expenses, including attorney's fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with an action, suit or proceeding if the party acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
Company and with respect to any criminal proceeding if the party had no
reasonable cause to believe the conduct was unlawful.
The general effect of the above indemnification provisions allow the
employees, directors, and officers of the Company to function and engage in the
day to day business activities of the Company knowing the Company will offer
protection against the threat or event of litigation subject to the limitations
that said individual must exercise good faith and reasonableness.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 or Securities Exchange Act of 1934 may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
<PAGE>
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEX TO FINANCIAL STATEMENTS
AND SUPPORTING SCHEDULES
Page
Report of Independent Public Accountants F-1- F-9
I. Financial Statements:
Balance Sheets, Dec. 31, 1997 and September 30, 1999 F-2
Statement of Operations Years Ended December 31,
1998 And 1997, Nine Month Periods Ended
September 30, 1999 And 1998, and the Period From
February 15, 1996 (Inception)To September 30, 1999 F-3
Statement of Stockholders' Equity Years Ended December
31, 1998 And 1997, Nine Month Periods Ended September
30, 1999 And 1998, and the Period From February 15,
1996 (Inception) To September 30, 1999 F-4
Statement of Cash Flows Years Ended December 31, 1998
And 1997, Nine Month Periods Ended September 30, 1999
And 1998, and the Period From February 15, 1996
(Inception) To September 30, 1999 F-5
Notes to Financial Statements F-6 - F-9
<PAGE>
INDEX
SB EXHIBITS
Sequential
Page No.
3.0 Articles
3.1 Amendment to Articles
3.2 By-Laws
10.0 Material Contracts - License Agreement
<PAGE>
SIGNATURES:
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DATED: December ___, 1999.
Mind2Market, INC.
by: --------------------------------
President
Directors:
------------------------------------
Ray Williams
------------------------------------
Jerry Jernigan
------------------------------------
William Boyer
------------------------------------
Stuart M. Novak
<PAGE>
VAN DORN & BOSSI
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Mind2Market, Inc.
We have audited the accompanying balance sheet of Mind2Market, Inc. (a
development stage company) as of December 31, 1998 and 1997, and the related
statements of operations, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. 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 Mind2Market, Inc. as of
December 31, 1998 and 1997, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Van Dorn & Bossi
Certified Public Accountants
Boulder, Colorado
July 22, 1999
F-1
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
BALANCE SHEETS
(A Development Stage Company)
DECEMBER 31, SEPTEMBER 30,
1998 1999
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS (unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash in banks $8,349 $2,332
Inventory 14,807 19,957
---------------------- ------------------------
Total current assets 23,156 22,289
Equipment 40,890 40,890
Less accumulated depreciation (6,661) (10,750)
---------------------- ------------------------
Net equipment 34,228 30,139
Prepaid loan costs (Note B) 50,000 50,000
Manufacturing and marketing rights 312,500 312,500
Less accumulated amortization (58,408) (69,568)
---------------------- ------------------------
Net manufacturing and marketing rights 254,092 242,932
---------------------- ------------------------
Total assets $361,477 $345,360
====================== ========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $29,553 $2,150
Accrued salaries 10,569 10,569
Payroll taxes payable 3,551 3,551
---------------------- ------------------------
Total current liabilities 43,674 16,271
Loans from stockholders (Note B) 113,647 112,147
STOCKHOLDERS' EQUITY:
Preferred stock: authorized 5,000,000 shares, $.10 par value;
none issued -- --
Common stock: authorized 50,000,000 shares, $.0001 par
value; issued and outstanding; 3,224,100 and
3,254,100 shares 322 325
Additional paid in capital 457,392 472,389
Deficit accumulated during development stage (253,558) (255,772)
---------------------- ------------------------
Total stockholders' equity 204,156 216,942
---------------------- ------------------------
Total liabilities and stockholders' equity $361,477 $345,360
====================== ========================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997,
THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998,
AND THE PERIOD FROM FEBRUARY 15, 1996
(INCEPTION) TO SEPTEMBER 30, 1999 (Unaudited with
respect to the nine-month periods ended September
30, 1999 and 1998 and the period
from February 15, 1996 to September 30, 1999)
PERIOD
FROM
FEBRUARY
15, 1996
YEAR ENDED NINE MONTHS ENDED (inception) to
DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
----------------- --------------- -------------------------- ----------------
1998 1997 1999 1998 1999
----------------- --------------- -------------- ------------- ----------------
REVENUES:
<S> <C> <C> <C> <C> <C>
Other $665 $2,457 $15,025 $353 $18,147
EXPENSES:
Amortization 25,298 16,369 11,161 11,161 69,568
Automobile 20 134 -- -- 199
Bank service charges 270 416 87 149 913
Depreciation 4,542 1,926 4,089 668 10,750
Licenses 75 5,000 -- -- 5,075
Marketing -- 2,200 250 -- 8,322
Miscellaneous 2,505 3,500 289 2,365 10,827
Salaries and contract labor 15,900 28,679 -- -- 54,579
Payroll taxes -- -- -- -- 1,101
Postage & freight 186 263 492 145 1,154
Printing 145 1,015 -- -- 1,288
Legal and accounting 6,695 27,320 600 -- 34,615
Research and development 4,696 18,176 -- -- 42,357
Telephone 2,750 1,950 272 685 4,972
Travel and entertainment 3,696 19,599 -- 4,032 28,201
----------------- ----------------- -------------- ------------ -----------------
Total expense 66,776 126,547 17,239 19,205 273,920
----------------- ----------------- -------------- ------------ -----------------
Net loss ($66,111) ($124,090) ($2,214) ($18,852) ($255,772)
================= ================= ============== ============ =================
Earnings per share:
Basic ($0.02) ($0.04) ($--) ($0.01) ($0.11)
See Notes to Financial Statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997,
THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998,
AND THE PERIOD FROM FEBRUARY 15,
1996 (INCEPTION) TO SEPTEMBER 30, 1999
(Unaudited with respect to the nine-month
periods ended September 30, 1999 and 1998 and
the period
from February 15, 1996 to September 30, 1999)
PERIOD
FROM
FEBRUARY
15, 1996
YEAR ENDED NINE MONTHS ENDED (inception) to
DECEMBER 31, DECEMBER 31, SEPTEMBER 30 SEPTEMBER 30,
---------------------- ---------------- ------------------
1998 1997 1999 1998 1999
---------------------- ---------------- -------- -------- --------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Net loss ($66,111) ($124,090) ($2,214) ($18,852) ($255,772)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization 25,298 16,369 11,161 11,161 69,568
Depreciation 4,542 1,926 4,089 668 10,750
Common stock issued for services 4,150 -- -- -- 4,150
Changes in:
Inventory (14,807) -- (5,150) (463) (19,957)
Accounts payable 12,275 (1,195) (27,403) (23) 2,150
Accrued Salaries -- 10,569 -- -- 10,569
Payroll taxes payable -- -- -- -- 3,551
---------------------- ------------------ -------------- ------------ -------------
Cash used by operating activities (34,653) (96,421) (19,518) (7,509) -174,991
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of equipment (34,209) (2,800) -- (11,000) (40,890)
---------------------- ------------------ -------------- ------------ -------------
Cash used by investing activities (34,209) (2,800) -- (11,000) (40,890)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Common stock issued for cash 28,500 49,000 15,000 3,500 106,065
Loans from stockholders 48,711 50,221 (1,499) 53,777 112,147
---------------------- ------------------ -------------- ------------ -------------
Cash provided by financing activities 77,211 99,221 13,501 57,277 218,212
---------------------- ------------------ -------------- ------------ -------------
INCREASE IN CASH 8,349 -- (6,017) 38,768 2,332
CASH, BEGINNING OF PERIOD -- -- 8,349 -- --
---------------------- ------------------ -------------- ------------ -------------
CASH, END OF PERIOD $8,349 $ -- $2,332 $38,768 $2,332
====================== ================== ============== ============ =============
Supplemental cash flow information:
Common stock issued:
Spin-off from Nelx, Inc. $187,500
Patents $125,000 $125,000
================== =============
Services $4,150 $4,150
====================== =============
Consideration for loans $50,000 $50,000 $50,000
====================== ============ =============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997,
THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998,
AND THE PERIOD FROM FEBRUARY 15, 1996
(INCEPTION) TO SEPTEMBER 30, 1999 (Unaudited with
respect to the nine-month periods ended September
30, 1999 and 1998 and the period
from February 15, 1996 to September 30, 1999)
DEFICIT
ACCUMULATED
ADDITIONAL DURING
COMMON STOCK PAID IN DEVELOPMENT
---------------------------------
SHARES AMOUNT CAPITAL STAGE
------------------ ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Balance at inception,
February 15, 1996 -- $ -- $ -- $ --
Cash invested by former parent
corporation, Nelx, Inc. -- -- 11,500 --
Manufacturing and marketing rights
assigned by Nelx, Inc at cost,
in connection with spinoff -- -- 187,500 --
Issuance of common stock to Nelx, Inc.
shareholders in spinoff 600,000 60 (60) --
Issuance of common stock for cash,
$.001 per share 2,065,000 207 1,859 --
Net loss -- -- -- (63,357)
------------------ ------------- ----------------- -----------------
Balance, December 31, 1996 2,665,000 267 200,799 (63,357)
Issuance of common stock for
patent rights, $.50 per share 250,000 25 124,975 --
Shares issued for cash, $.50 per share 95,500 10 48,990 --
Net loss -- -- -- (124,090)
------------------ ------------- ----------------- -----------------
Balance, December 31, 1997 3,010,500 301 374,764 (187,447)
Issuance of common stock as
consideration for loan, $.50 per share 100,000 10 49,990 --
Shares issued for cash:
$.25 per share 80,000 8 19,992 --
$.50 per share 17,000 2 8,498 --
Issuance of common stock as
consideration for services 16,600 2 4,148 --
Net loss -- -- -- (66,111)
------------------ ------------- ----------------- ------------------
Balance, December 31, 1998 3,224,100 322 457,392 (253,558)
Shares issued for cash 30,000 3 14,997 --
Net loss -- -- -- (2,214)
------------------ ------------- ----------------- -------------------
Balance, September 30, 1999 (Unaudited) 3,254,100 $325 $472,389 ($255,772)
================== ============= ================= ===================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Years ended December 31, 1999 and1998, the nine-month periods ended September
30, 1999 and 1998, and the period from February 15, 1996 (inception) to
September 30, 1999 (Unaudited with respect to the nine-month periods ended
September 30, 1999 and 1998 and the period from February 15, 1996
to September 30, 1999)
NOTE A - DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Description of the business
Mind2Market, Inc. ("the Company") was incorporated in Colorado on February
15,1996 as NELX Marketing, Inc., a wholly owned subsidiary of NELX, Inc., a
publicly owned company. On October 14, 1996, in a corporate divestiture, the
Company was divested from NELX by issuing 600,000 shares of the Company's common
stock to NELX, Inc.'s shareholders.
Subsequent to the divestiture, the Company issued 1,000,000 shares each to
Charles Powell and Ray Williams for cash of $1,000 each, and changed its name to
Mind2Market, Inc. The Company intends to manufacture, market and distribute two
products known as Aerosearch and Aerolink, which are visual distress signal
products and will be marketed principally to the offshore and marine markets
while the Company is in the development stage.
The Company obtained rights to manufacture and market the two products by way of
assignment from NELX. In September, 1995, NELX and Radarfind, Inc., a Colorado
corporation, entered into an agreement whereby Radarfind assigned the exclusive
rights to manufacture and market the products along with an irrevocable option
for NELX to purchase the underlying patents owned by Radarfind for $50,000
subject to the payment by NELX of $150,000 of royalties to Radarfind for
subsequent sales of the products. In lieu of payment of the $50,000 and the
royalties, NELX issued 750,000 shares of its common stock to the shareholders of
Radarfind for their respective shares of Radarfind. The 750,000 shares of NELX
stock were issued as follows: 250,000 shares each to Messrs. Charles Powell and
Arthur Mears, each of whom were officers and 33-1/3% shareholders of Radarfind
at the time; and the remaining 250,000 shares were issued to be held in escrow
for the other shareholders of Radarfind. NELX recorded the rights at $187,500,
which was the market value of the NELX stock issued. After incorporating the
Company, NELX was unable to raise sufficient funds to follow through with
developing and marketing the products and in October 1996 transferred the rights
to the subsidiary concurrent with the divestiture.
Effective May 15, 1997, the Company and Radarfind entered into an agreement
which will ultimately transfer the patents for the products referred to above
from Radarfind to Mind2Market, Inc. The Company will assume the obligation to
pay the royalties of $150,000 ($1.00 per unit sold). Effective on May 15, 1997,
the Company issued 250,000 shares of its common stock to be held in escrow for
the benefit of Radarfind's shareholders other than Mr. Powell and Mr. Mears. The
250,000 shares were recorded as additional cost of the manufacturing and
marketing rights in the amount of $125,000 ($.50 per share, which was the price
of shares issued for cash during the period). Upon final payment of the $150,000
in royalties, the NELX shares held in escrow and the Company shares held in
escrow will be distributed to the remaining shareholders of Radarfind, and
Radarfind will be liquidated.
F-6
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Years ended December 31, 1999 and1998, the nine-month periods ended September
30, 1999 and 1998, and the period from February 15, 1996 (inception) to
September 30, 1999 (Unaudited with respect to the nine-month periods ended
September 30, 1999 and 1998 and the period from February 15, 1996
to September 30, 1999)
In addition to the royalties to be paid to Radarfind, the Company will pay to
Mr. Mears a royalty of $.25 per unit for the duration of the patents.
ACCOUNTING POLICIES:
Equipment:
Equipment is recorded at cost and depreciated on the straight-line method over
the estimated useful lives.
Manufacturing and marketing rights:
The rights were recorded at cost and are being amortized over the remaining
patent period of 14 years on the straight-line method.
Advertising:
All advertising costs are expensed when incurred.
Prepaid loan costs:
Prepaid loan costs will be amortized at a rate of $1.00 per unit sold.
Use of estimates:
The preparation of financial statements in conformity with generally accepted
accounting principals 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.
Interim financial information:
The unaudited interim financial statements have been prepared on the same basis
as the audited financial statements and, in the opinion of management, include
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial information set forth therein in accordance with
generally accepted accounting principles. The interim results are not
necessarily indicative of the results to be expected for any future period.
Earnings per share:
Basic earnings per share is the amount of earnings for the period available to
each share of common stock outstanding during the period. The number of shares
outstanding is computed based on a daily weighted average.
F-7
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Years ended December 31, 1999 and1998, the nine-month periods ended September
30, 1999 and 1998, and the period from February 15, 1996 (inception) to
September 30, 1999 (Unaudited with respect to the nine-month periods ended
September 30, 1999 and 1998 and the period from February 15, 1996
to September 30, 1999)
The calculation of basic earnings per share is as follows:
<TABLE>
<CAPTION>
Period from
February 15,
Year ended Year ended Nine months ended 1996 (Inception)
December 31, December 31, September 30, to September 30,
1998 1997 1999 1998 1999
----------------- -------------------- ---------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
Net loss $ (66,111) $ (124,090) $(2,214) $ (18,852) $ (255,772)
================= ==================== ================ ================= ====================
Average shares
Outstanding 3,087,108 2,958,699 3,117,500 3,056,213 2,392,451
================= ==================== ================ ================= ====================
Earnings per share:
Basic $ (.02) $ (.04) $ (.00) $ (.01) $ (.11)
================= ==================== ================ ================= ====================
</TABLE>
Cash and cash equivalents:
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand and in banks.
NOTE B - LOANS FROM STOCKHOLDERS:
Loans from stockholders consist of the following:
Loans from stockholders consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, September 30,
1998 1999
------------------ ------------------
<S> <C> <C>
Loans from principal stockholders, unsecured, non-interest bearing,
payable at maturity, July 1, 1999 $ 63,647 $ 62,147
Loans from other stockholders, unsecured, non-interest bearing,
payable at a rate based on the units of product sold (see
below) 50,000 50,000
------------------ ------------------
$ 113,647 $ 112,147
================== ==================
</TABLE>
During April 1998, the Company received loans from five individuals
totaling $50,000 for the purpose of providing funds for production setup of one
of the Company's products. As
F-8
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Years ended December 31, 1999 and1998, the nine-month periods ended September
30, 1999 and 1998, and the period from February 15, 1996 (inception) to
September 30, 1999 (Unaudited with respect to the nine-month periods ended
September 30, 1999 and 1998 and the period from February 15, 1996
to September 30, 1999)
consideration for the loans, the Company issued 100,000 shares of its common
stock to the individuals, and agreed to repay the loans at a rate of $3.00 per
unit of product sold for the first 16,667 units sold, then the payment will be
reduced to $1.00 per unit for the next 50,000 units sold. The total payments
will aggregate $100,000, or twice the original amount of the loans. The 100,000
shares of stock were valued at $.50 per share (representing the price at which
shares were sold by the Company for cash during the year), and the resulting
$50,000 was recorded as prepaid loan costs.
NOTE C - INCOME TAXES:
For federal and state income tax reporting purposes, the Company has net
operating loss carryforwards in the approximate amount of $213,000 expiring in
varying amounts through 2012.
F-9
SB EXHIBIT 3.0
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF INCORPORATION
OF
NELX MARKETING, INC.
I, the undersigned natural person, being more than twenty-one (21)
years of age, acting as incorporator of a corporation under the Colorado
Corporation Act adopt the following Articles of Incorporation for such
corporation.
ARTICLE I
The name of the corporation is: NELX MARKETING, INC., and its principal
place of business shall be: 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033.
ARTICLE II
The period of duration of the corporation shall be perpetual.
ARTICLE III
The purposes for which the corporation is organized are:
to engage in any purpose or type of business lawful in the State of Colorado and
the United States of America, as the Board of Directors may deem convenient and
proper.
ARTICLE IV
The corporation shall have and may exercise all the rights, powers
and privileges now or hereafter conferred upon corporations organized under and
pursuant to the laws of the State of Colorado, including entering into
partnerships, limited partnerships (whether the corporation be a limited or
general partner), joint ventures, and other arrangements for carrying on one or
more of the purposes set forth in Article III of these Articles of
Incorporation.
<PAGE>
ARTICLE V
A. AUTHORIZED SHARES. The aggregate number of shares which the
Corporation shall have authority to issue is 10,000,000 shares of Common Stock
at no par value each and 1,000,000 Preferred shares at $.10 par value "with such
rights and preferences and in such classes as the Board may hereafter determine.
B. TRANSFER RESTRICTIONS. The Corporation shall have the right by
appropriate action to impose restrictions on the transfer of any shares of its
common stock, or any interest therein, from time to time issued, provided that
such restrictions as may from time to time be so imposed or notice of the
substance thereof shall be set forth upon the face or back of the certificates
representing such shares of common stock.
C. PRE-EMPTIVE RIGHTS. A holder of any of the shares of the Common
Stock of the Corporation shall not be entitled as of right to purchase or
subscribe for any unissued or treasurer shares of any class, or any additional
shares of any class to be issued by reason of any increase of the authorized
shares of the Corporation of any class, or any bonds, certificates of
indebtedness, debentures, or other securities, rights, warrants, or options
convertible into shares of the Corporation or carrying any right to purchase
shares of any class.
D. CUMULATIVE VOTING. Cumulative voting shall not be allowed in the
election of directors in the manner provided by the Colorado Code.
E. QUORUM. One-third (1/3rd) of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders.
ARTICLE VI
A. BOARD OF DIRECTORS. The number of directors of this corporation
shall be fixed in accordance with the bylaws. As long as the number of directors
shall not be less than three:
1. No shares of this corporation may be issued and held of record by more
shareholders that there are directors;
2. Any shares issued in violation of this paragraph shall be null and void;
<PAGE>
3. This provision shall also constitute a restriction on the transfer of shares
and the legend shall be conspicuously placed on each certificate respecting
shares preventing transfer of the shares to more shareholders than there are
directors.
B. INITIAL BOARD OF DIRECTORS. The initial Board of Directors of the
Corporation shall consist of three members, until such time as more than three
directors are elected, who need not be a shareholder of the Corporation or
resident of the State of Colorado.
The name and address of the person who is to serve as the initial
director of the Corporation until the first annual meeting of shareholders, and
until his successors shall be elected and shall qualify is as follows:
Ron Powell 10200 W. 44th Ave., #400
Wheat Ridge, CO 80033
ARTICLE VII
No contract or other transaction between the Corporation or any other
person, firm, partnership, corporation, trust, joint venture, syndicate or other
entity shall be in any way affected or invalidated solely by reason of the fact
that any director or officer of the Corporation is pecuniarily or otherwise
interested in, or is a director or officer of any entity which may be a party to
or may be interested in a contract or other transaction of the Corporation.
ARTICLE VIII
The address of the initial registered agent of the corporation is 10200
W. 44th Ave. #400, Wheat Ridge, CO 80033 and the initial registered agent is Ron
Powell.
--------------------------
Ron Powell
<PAGE>
ARTICLE IX
The corporation reserves the right to amend, alter, change or repeal
any provisions contained in, or add any provisions to its Articles of
Incorporation from time to time in any manner now or hereafter prescribed or
permitted by the Colorado Code.
ARTICLE X
The name and address of the Incorporator of the Corporation is as
follows:
NAME ADDRESS
Ron Powell 10200 W. 44th Ave., #400
Wheat Ridge, CO 80033
IN WITNESS WHEREOF, the undersigned, being the Incorporator in Article
X of the annexed and foregoing Articles of Incorporation, has executed said
Articles of Incorporation as of this 9th day of February, 1996.
------------------------------
Ron Powell
STATE OF COLORADO )
) SS.
COUNTY OF JEFFERSON)
I, Candi M. Cole, a Notary Public, hereby certify that on the day of
February, 1996, Ron Powell personally appeared before me, who being first duly
sworn, declares that he is the person who signed the foregoing Articles of
Incorporation as Incorporator for NELX MARKETING, INC., and that the statements
therein are true.
IN WITNESS WHEREOF I have hereto set my hand and seal this day of
February, 1996.
My Commission expires:
2/24/98
---------------------------
Notary Public
10200 W. 44th Ave., #400
Wheat Ridge, CO 80033
SB EXHIBIT 3.1
AMENDMENT TO ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF NELX MARKETING, INC.
Pursuant to the provisions of the Colorado Corporation Code,
MIND2MARKET, INC., a Colorado corporation, adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is
NELX MARKETING, INC.
SECOND: The following amendments to the Articles of Incorporation were
adopted on October 3, 1996, as prescribed by the Colorado Corporation Act by a
unanimous vote of the shareholders. The number of shares voted for the amendment
was sufficient for approval.
a) ARTICLE I:
The name of the corporation is changed to Mind2Market, Inc.
b) ARTICLE II:
The corporation shall be authorized to issue
50,000,000 common shares @ $.0001 per share, and
5,000,000 shares of Preferred stock at $.10 par value
with such rights and preferences and in such classes
as the Board may hereafter determine.
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassifications, or cancellation of issued shares provided for in
the amendment shall be effected, is as follows:
None.
FOURTH: The manner is which such amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by such
amendment, are as follows:
None.
<PAGE>
NELX MARKETING, INC.
By: ---------------------------------
President
And: --------------------------------
Secretary/Treasurer
STATE OF COLORADO )
) SS.
COUNTY OF )
The foregoing Articles of Amendment to the Articles of Incorporation
was acknowledged before me by Ron Powell as President of NELX MARKETING, INC.,
a Colorado corporation, this day of October, 1996.
My Commission expires:
---------------------------
Notary Public
Address:
STATE OF COLORADO )
) SS.
COUNTY OF )
The foregoing Articles of Amendment to the Articles of Incorporation
was acknowledged before me by Ray Williams as Secretary/Treasurer of
NELX MARKETING, INC., a Colorado corporation, this day of October, 1996.
My Commission expires:
---------------------------
Notary Public
SB EXHIBIT 3.2
BY-LAWS
<PAGE>
BY-LAWS
of
NELX MARKETING, INC.
a Colorado Corporation
ARTICLE I
The initial principal office of the Corporation shall be in Wheat
Ridge, Colorado. The Corporation may have offices at such other places within or
without the State of Colorado as the Board of Directors may from time to time
establish.
ARTICLE II
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken in
connection with corporate action, by any provisions of the statutes of the
Certificate of Incorporation, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who should have been entitled to vote
upon the action if such meeting were held, shall consent in writing to such
corporate action being taken.
ARTICLE III
Board of Directors
Section 1. GENERAL POWERS. The business of the Corporation shall be managed
by the Board of Directors, except as otherwise provided by statute or by the
Certificate of Incorporation.
Section 2. NUMBER AND QUALIFICATIONS. The Board of Directors shall
consist of up to three (3) members. Except as provided in the Certificate of
Incorporation, this number can be increased only by the vote or written consent
of the holders of ninety (90) percent of the stock of the Corporation
outstanding and entitled to vote. The current number of Directors shall be
determined by the Board of Directors at its annual meeting.
No Director need be a stockholder.
Section 3. ELECTION AND TERM OF OFFICE. The Directors shall be elected
annually by the stockholders, and shall hold office until their successors are
respectively elected and qualified.
Election of Directors need not be by ballot.
<PAGE>
Section 4. COMPENSATION. The members of the Board of Directors shall be
paid a fee of $10.00 for attendance at all annual, regular, special and
adjourned meetings of the Board. No such fee shall be paid any director if
absent. Any director of the Corporation may also serve the Corporation in any
other capacity, and receive compensation therefor in any form. Members of
special or standing committees may be allowed like compensation for attending
committee meetings.
Section 5. REMOVAL AND RESIGNATIONS. The stockholders may, at any
meeting called for the purpose, by vote of two-thirds of the capital stock
issued and outstanding, remove any directors from office, with or without cause;
provided however, that no director shall be removed in case the vote of a
sufficient number of shares are cast against his removal, which if cumulatively
voted at any election of directors would be sufficient to elect him, if
cumulative voting is allowed by the Articles of Incorporation.
The stockholders may, at any meeting, by vote of a majority of such
stock represented at such meeting accept the resignation of any director.
Section 6. VACANCIES. Any vacancy occurring in the office of director
may be filled by a majority of the directors then in office, though less than a
quorum, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and qualified, unless
sooner displaced.
When one or more directors resign from the Board, effective at a future
date, a majority of the directors then in office, including those who have so
resigned, shall have powers to fill such vacancy or vacancies, the vote thereon
to take effect when such resignation or resignations become effective.
ARTICLE IV
Meetings of Board of Directors
Section 1. REGULAR MEETINGS. A regular meeting of the Board of
Directors may be held without call or formal notice immediately after and at the
same place as the annual meeting of the stockholders or any special meeting of
the stockholders at such places within or without the State of Colorado and at
such times as the Board may by vote from time to time determine.
Section 2. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held at any place whether within or without the State of Colorado at any
time when called by the President, Treasurer, Secretary or two or more
directors. Notice of the time and place thereof shall be given to each director
at least three (3) days before the meeting if by mail or at least twenty-four
hours if in person or by telephone or telegraph. A waiver of such notice in
writing, signed by the person or persons entitled to said notice, either before
or after the time stated therein, shall be deemed equivalent to such notice.
Notice of any adjourned meeting of the Board of Directors need not be given.
Section 3. QUORUM. The presence, at any meeting, of one-third of the
total number of directors, but in no case less than two (2) directors, shall be
necessary and sufficient to constitute a quorum for the transaction of business
except as otherwise required by statute or by the Certificate of Incorporation,
the act of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a quorum,
a majority of the directors present at the time and place of any meeting may
adjourn such meeting from time to time until a quorum be present.
Section 4.a. CONSENT OF DIRECTORS IN LIEU OF MEETING. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board or committee, and such written
consent is filed within the minutes of the Corporation.
b. The Board of Directors may hold regular or special meetings
by telephone conference call, provided that any resolutions adopted shall be
recorded in writing within 3 days of such telephone conference, and written
ratification of such resolutions by the directors shall be provided within 10
days thereafter.
ARTICLE V
Committees of Board of Directors
The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which, to the extent provided in
the resolution, shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
<PAGE>
The committees of the Board of Directors shall keep regular minutes of
their proceedings and report the same to the Board of Directors when required.
ARTICLE VI
Officers
Section 1. NUMBER. The Corporation shall have a President, one or more
Vice Presidents, a Secretary and a Treasurer, and such other officers, agents
and factors as may be deemed necessary. One person may hold any two offices
except the offices of President and Vice President and the offices of President
and Secretary.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The officers
specifically designated in Section 1 of this Article VI shall be chosen annually
by the Board of Directors and shall hold office until their successors are
chosen and qualified. No officer need be a director.
Section 3. SUBORDINATE OFFICERS. The Board of Directors from time to
time may appoint other officers and agents, including one or more Assistant
Secretaries and one or more Assistant Treasurers, each of whom shall hold office
for such period, have such authority and perform such duties as are provided in
these By-Laws or as the Board of Directors from time to time may determine. The
Board of Directors may delegate to any office the power to appoint any such
subordinate officers, agents and factors and to prescribe their respective
authorities and duties.
Section 4. REMOVALS AND RESIGNATIONS. The Board of Directors may at any
meeting called for the purpose, by vote of a majority of their entire number,
remove from office any officer or agent of the Corporation, or any member of any
committee appointed by the Board of Directors.
The Board of Directors may at any meeting, by vote of a majority of the
directors present at such meeting, accept the resignation of any officer of the
Corporation.
Section 5. VACANCIES. Any vacancy occurring in the office of President,
Vice President, Secretary, Treasurer or any other office by death, resignation,
removal or otherwise shall be filled for the expired portion of the term in the
manner prescribed by these By-Laws for the regular election or appointment to
such office.
<PAGE>
Section 6. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation and, subject to the direction and under the
supervision of the Board of Directors, shall have general charge of the
business, affairs and property of the Corporation, and control over its
officers, agents and employees. The President shall preside at all meetings of
the stockholders and of the Board of Directors at which he is present. The
President shall do and perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 7. THE VICE PRESIDENT. At the request of the President or in
the event of his absence or disability, the Vice President, or in case there
shall be more than one Vice President, the Vice President designated by the
President, or in the absence of such designation, the Vice President designated
by the Board of Directors, shall perform all the duties of the President, and
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the President. Any Vice President shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-Laws or by the Board of Directors, or the President.
Section 8. THE SECRETARY. The Secretary shall:
a. Record all the proceedings of the meetings of the Corporation and
directors in a book to be kept for that purpose;
b. Have charge of the stock ledger (which may, however, be kept by any
transfer agent or agents of the Corporation under the direction of the
Secretary), an original or duplicate of which shall be kept at the principal
office or place of business of the Corporation in the State of Colorado;
c. Prepare and make, at least ten (10) days before every election of
directors, a complete list of the stockholders entitled to vote at said
election, arranged in alphabetical order;
d. See that all notices are duly given in accordance with the
provisions of these By-Laws or as required by statute;
e. Be custodian of the records of the Corporation and the Board of
Directors, and of the seal of the Corporation, and see that the seal is affixed
to all stock certificates prior to their issuance and to all documents, the
execution of which on behalf of the Corporation under its seal have been duly
authorized;
f. See that all books, reports, statements, certificates and the other
documents and records required by law to be kept or filed are properly kept or
filed; and
<PAGE>
g. In general, perform all duties and have all powers incident to the
office of Secretary and perform such other duties and have such powers as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors or the President.
Section 9. THE TREASURER. The Treasurer shall:
a. Have supervision over the funds, securities, receipts, and
disbursements of the Corporation;
b. Cause all monies and other valuable effects of the Corporation to be
deposited in its name and to its credit, in such depositories as shall be
selected by the Board of Directors or pursuant to authority conferred by the
Board of Directors.
c. Cause the funds of the Corporation to be disbursed by checks or
drafts upon the authorized depositories of the Corporation, when such
disbursements shall have been duly authorized;
d. Cause to be taken and preserved proper vouchers for all monies
disbursed;
e. Cause to be kept at the principal office of the Corporation correct
books of account of all its business and transactions;
f. Render to the President or the Board of Directors, whenever
requested, an account of the financial condition of the Corporation and of his
transactions as Treasurer;
g. Be empowered to require from the officers or agents of the
Corporation reports or statements giving such information as he may desire with
respect to any and all financial transactions of the Corporation; and
h. In general, perform all duties and have all powers incident to the
office of Treasurer and perform such other duties and have such power as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors or President.
Section 10. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries and Assistant Treasurers shall have such duties as from
time to time may be assigned to them by the Board of Directors or the President.
Section 11. SALARIES. The salaries of the officers of the Corporation
shall be fixed from time to time by the Board of Directors, except that the
Board of Directors may delegate to any person the power to fix the salaries or
other compensation of any officers or agents appointed in accordance with the
provisions of Section 3 of this Article VI. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.
<PAGE>
Section 12. SURETY BOND. The Board of Directors may secure the fidelity of
any or all of the officers of the Corporation by bond or otherwise.
ARTICLE VII
Execution of Instruments
Section 1. EXECUTION OF INSTRUMENTS GENERALLY. All documents or
writings of any nature shall be signed, executed, verified, acknowledged and
delivered by such officer or officers or such agent of the Corporation and in
such manner as the Board of Directors from time to time may determine.
Section 2. CHECKS, DRAFTS, ETC. All notes, drafts, acceptances, checks,
endorsements, and all evidence of indebtedness of the corporation whatsoever,
shall be signed by such officer or officers or such agent or agents of the
Corporation and in such manner as the Board of Directors from time to time may
determine. Endorsements for deposit to the credit of the Corporation in any of
its duly authorized depositories shall be made in such manner as the Board of
Directors from time to time may determine.
Section 3. PROXIES. Proxies to vote with respect to shares of stock of
other corporations owned by or standing in the name of the Corporation may be
executed and delivered from time to time on behalf of the Corporation by the
President or Vice President and the Secretary or Assistant Secretary of the
Corporation or by any other person or persons duly authorized by the Board of
Directors.
ARTICLE VIII
Section 1. CERTIFICATES OF STOCK. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed in the name of the
Corporation by the Chairman or Vice President of the Board of Directors, the
President or a Vice President and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation; provided, however, that where
such certificate is signed by a transfer agent or an assistant transfer agent or
by a transfer clerk acting on behalf of the Corporation and a registrar, the
signature of any such Chairman of the Board of Directors, President, Vice
President, Treasurer, Assistant Treasurer, Secretary, or Assistant Secretary may
be facsimile. In case any officer or officers who shall have signed, or whole
facsimile signature or signatures shall have been used thereon, any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the Corporation and
<PAGE>
be issued and delivered as though the person or persons who signed such
certificate or certificates, or whose facsimile signature or signatures shall
have been used thereon, had not ceased to be such officer or officers of the
Corporation, and any such delivery shall be regarded as an adoption by the
Corporation of such certificate or certificates.
Certificates of stock shall be in such form as shall, in conformity to
law, be prescribed from time to time by the Board of Directors.
Section 2. TRANSFER OF STOCK. Shares of stock of the Corporation shall
only be transferred on the books of the Corporation by the holder of record
thereof or by his attorney duly authorized in writing, upon surrender to the
Corporation of the certificates for such shares endorsed by the appropriate
person or persons, with such evidence of the authenticity of such endorsement,
transfer, authorization and other matters as the Corporation may reasonably
require, and accompanied by all necessary stock transfer tax stamps. In that
event, it shall be the duty of the Corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate, and record the transaction
on its books.
Section 3. RIGHTS OF CORPORATION WITH RESPECT TO REGISTERED OWNERS.
Prior to the surrender to the Corporation of the certificates for shares of
stock with a request to record the transfer of such shares, the Corporation may
treat the registered owner as the person entitled to receive dividends, to vote,
to receive notifications, and otherwise to exercise all the rights and powers of
an owner.
Section 4. CLOSING STOCK TRANSFER BOOK. The Board of Directors may
close the Stock Transfer Book of the Corporation for a period not exceeding
fifty (50) days preceding the date of any meeting of the stockholders or the
date for payment of any dividend or the date for the allotment of rights or the
date when any change or conversion or exchange of capital stock shall go into
effect or for a period of not exceeding (50) days in connection with obtaining
the consent of stockholders for any purpose. However, in lieu of closing the
Stock Transfer Book, the Board of Directors may fix in advance a date, not
exceeding fifty (50) days preceding the date of any meeting of stockholders or
the date for the payment of any dividend or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such consent, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights or to exercise
the rights in respect of any such change, conversion or exchange of capital
stock, or to give such consent, and in such case such stockholders, and only
<PAGE>
such stockholders as shall be stockholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
Section 5. LOST, DESTROYED AND STOLEN CERTIFICATES. Where the owner of
a Certificate for shares claims that such certificate has been lost, destroyed
or wrongfully taken, the Corporation shall issue a new certificate in place of
the original certificate if the owner (a) so requests before the Corporation has
notice that the shares have been acquired by a bona fide purchaser; (b) files
with the Corporation a sufficient indemnity bond; and (c) satisfies such other
reasonable requirements, including evidence of such loss, destruction, or
wrongful taking, as may be imposed by the Corporation.
ARTICLE IX
Dividends
Section 1. SOURCES OF DIVIDENDS. The directors of the Corporation,
subject to any restrictions contained in the statutes and Certificate of
Incorporation, may declare and pay dividends upon the shares of the capital
stock of the Corporation either (a) out of its new assets in excess of its
capital, or (b) in case there shall be no such excess, out of its net profits
for the fiscal year then current or the current and preceding fiscal year.
Section 2. RESERVES. Before the payment of any dividend, the directors
of the Corporation may set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose, and the
directors may abolish any such reserve in the manner in which it was created.
Section 3. RELIANCE ON CORPORATE RECORDS. A director shall be fully
protected in relying in good faith upon the books of account of the Corporation
or statements prepared by any of its officials as to the value and amount of the
assets, liabilities and net profits of the Corporation, or any other facts
pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid.
Section 4. MANNER OF PAYMENT. Dividends may be paid in cash, in property,
or in shares of the capital stock of the Corporation at par.
<PAGE>
ARTICLE X
Seal
The Corporate seal, subject to alteration by the Board of Directors,
shall be in the form of a circle and shall bear the name of the Corporation and
shall indicate its formation under the laws of the State of Colorado. Such seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE XI
Fiscal Year
Except as from time to time otherwise provided by the Board of
Directors, the fiscal year of the Corporation shall be the calendar year.
ARTICLE XII
Amendments
Section 1. BY THE STOCKHOLDERS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws may be amended
or repealed, or new By-Laws may be made and adopted by a majority vote of all
the stock of the Corporation issued and outstanding and entitled to vote at any
annual or special meeting of the stockholders, provided that notice of intention
to amend shall have been contained in the notice of meeting.
Section 2. BY THE DIRECTORS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws, including
amendments adopted by the stockholders, may be amended or repealed by a majority
vote of the whole Board of Directors at any regular or special meeting of the
Board, provided that the stockholders may from time to time specify particular
provisions of the By-Laws which shall not be amended by the Board of Directors.
<PAGE>
ARTICLE XIII
Indemnification
The Board of Directors hereby adopt the provision of C.R.S. 7-3-101 S
(as it may be amended from time to time) relating to Indemnification and in
corporate such provisions by this reference as fully as if set forth herein.
SB EXHIBIT 10.1
MATERIAL CONTRACTS - LICENSE AGREEMENT
<PAGE>
AGREEMENT
This agreement supersedes any and all previous agreements between the
two companies. For and in consideration of mutual benefits, detriments and
promises and the consideration hereinafter specified, the adequacy of which is
hereby acknowledged, the parties hereto, Mind2Market, Inc., a Colorado
corporation, and Radarfind, Inc., a Colorado corporation, hereby agree as
follows:
1. Radarfind, Inc. assigns and conveys herewith exclusive worldwide
manufacturing and sales and marketing rights to the radar locator
device and its derivatives described in patents No. 4,800,835,
4,919,365, and 5,065,163 to Mind2Market, Inc., subject to the royalties
described in paragraphs 3 and 4 below.
2. For payment of the patents referenced in paragraph 1 above,
Mind2Market, Inc. shall issue 250,000 common shares to Radarfind, Inc.
or its trustee for the benefit of its shareholders, except Charles R.
Powell and Arthur Mears. Such shares are intended to be distributed to
the Radarfind shareholders except Powell and Mears when and if
registration requirements under the Securities Act of 1933 or
Securities Exchange Act of 1934 are met.
3. Arthur Mears, in consideration of a complete assignment of any and all
patent or intellectual property rights in and to the derivatives,
thereof, shall receive from Mind2Market, Inc. a $0.25 per unit royalty
for the duration of the patent. Such royalties shall be paid by
Mind2Market, Inc. based upon sales, when paid, and accounted for
quarterly.
4. Mind2Market, Inc. shall pay Radarfind, Inc. a total of $150,000 in the
form of a $1.00 per unit royalty which funds shall be used to pay the
currently outstanding debts of Radarfind, Inc. The royalties shall be
paid quarterly on sales for which collection is made. When $150,000 has
been paid, the royalty shall expire.
5. Upon receipt of the $150,000 in total royalties set forth in paragraph
4 above, all cash after payment of debts and the Mind2Market, Inc.
stock will be distributed to Radarfind, Inc. shareholders, or a trustee
therefore, if necessary to comply with Securities laws.
6. In the event of bankruptcy liquidation of Mind2Market, Inc. or the
cessation of corporate operations, or the failure of Mind2Market, Inc.
to aggressively pursue manufacturing or marketing of Radarfind products
within 12 months of the signing of this agreement by funding or
financing $50,000 in expenditures, Radarfind, Inc. shall have the
continuing option to repurchase the exclusive manufacturing and
marketing rights and the patents listed in paragraph 1 above for the
sum of $1,000 plus return of all stock in Mind2Market, Inc.
7. The effective date of this agreement is May 15, 1997.
Mind2Market, Inc. Radarfind, Inc.
by: ----------------------- by: --------------------------
President President
Resolved and Approved by Radarfind, Inc.
Directors:
- ------------------------------ ------------------------------
Charles R. Powell Arthur Mears
AGREEMENT
For and in consideration of mutual benefits, detriments and promises
and the consideration hereinafter specified, the adequacy of which is hereby
acknowledged, the parties hereto, Mind2Market, Inc., a Colorado corporation, and
Radarfind, Inc., a Colorado corporation, hereby agree as follows:
1. Radarfind, Inc. assigns and conveys herewith exclusive worldwide
manufacturing and sales and marketing rights to the radar locator
device and its derivatives described in patents No. 4,800,835,
4,919,365, and 5,065,163 to Mind2Market, Inc., subject to the royalties
described in paragraphs 3 and 4 below.
2. For payment of the patents referenced in paragraph 1 above,
Mind2Market, Inc. shall issue 250,000 common shares to Radarfind, Inc.
or its trustee for the benefit of its shareholders, except Charles R.
Powell and Arthur Mears. Such shares are intended to be distributed to
the Radarfind shareholders except Powell and Mears when and if
registration requirements under the Securities Act of 1933 or
Securities Exchange Act of 1934 are met.
3. Arthur Mears, in consideration of a complete assignment of any and all
patent or intellectual property rights in and to the derivatives,
thereof, shall receive from Mind2Market, Inc. a $0.25 per unit royalty
for the duration of the patent. Such royalties shall be paid by
Mind2Market, Inc. based upon sales, when paid, and accounted for
quarterly.
4. Mind2Market, Inc. shall pay Radarfind, Inc. a total of $150,000 in the
form of a $1.00 per unit royalty which funds shall be used to pay the
currently outstanding debts of Radarfind, Inc. The royalties shall be
paid quarterly on sales for which collection is made. When $150,000 has
been paid, the royalty shall expire.
5. Upon receipt of the $150,000 in total royalties set forth in paragraph
4 above, all cash after payment of debts and the Mind2Market, Inc.
stock will be distributed to Radarfind, Inc. shareholders, in exchange
for their Radarfind, Inc. shares, or a trustee therefore, if necessary
to comply with Securities laws.
6. In the event of bankruptcy liquidation of Mind2Market, Inc. or the
cessation of corporate operations, or the failure of Mind2Market, Inc.
to aggressively pursue manufacturing or marketing of Radarfind products
within 12 months of the signing of this agreement by funding or
financing $50,000 in expenditures, Radarfind, Inc. shall have the
continuing option to repurchase the exclusive manufacturing and
marketing rights and the patents listed in paragraph 1 above for the
sum of $1,000 plus return of all stock in Mind2Market, Inc.
7. The effective date of this agreement is May 15, 1997.
Mind2Market, Inc. Radarfind, Inc.
by: ---------------------------- by: ----------------------------
President President
Resolved and Approved by Radarfind, Inc.
Directors:
- --------------------------------- --------------------------------
Charles R. Powell Arthur Mears
<PAGE>
AGREEMENT
This agreement dated , 1999 is between Mind2Market, Inc., a Colorado
Corporation, having a place of business at 1625 Abilene Drive, Broomfield, CO
80020 referred to as M2M in this agreement and Western Innovations Inc., having
a place of business at 15508 East 19th Ave., Aurora, Colorado 80011, referred to
as WII in this agreement.
WITNESSETH
Whereas: M2M is sole owner of two products called Radar Beacon and
AeroLink; and
Whereas: M2M is desirous of a relationship with a manufacturing firm to
acquire or manufacture components, and to assemble components into the products,
and further to packaging and ship products to required destinations; and
Whereas: WII is a manufacturing firm with the abilities to acquire or
manufacture, assemble, package and deliver products and is desirous of
manufacturing the products Radar Beacon and AeroLink;
Now Therefore: In consideration of these premise and of the mutual promise
and agreements herein set forth, the parties hereto agree as follows:
1. TERM:
(a) The term of this agreement shall commence as of the date of the
first purchase order to WII and shall continue for an initial period of five (5)
years, and for successive periods of five (5) years thereafter only upon the
mutual written agreement of the parties.
(b) M2M shall have the right to terminate this Agreement on the
occurrence of any one or more of the following events:
(1a) the breach by WII of any other material term of this
Agreement, provided that WII fails to cure the same
within 30 days of written notice thereof by M2M.
(2a) the insolvency of WII.
(3a) the placement of the assets of WII in the hands of
trustee or receiver.
2. GRANT OF RIGHTS:
M2M hereby grants WII exclusive rights to produce, acquire, assemble,
and package the products. WII will be responsible for total quality control of
all components as specified by M2M. WII will be responsible for the assembly,
packaging and shipping of product to all M2M customers as specified by M2M.
3. M2M WARRANTIES AND INDEMNITIES:
(a) M2M hereby warrants and represents that it has the right and power
to grant the Rights herein described in item two (2) of this agreement and is
free to enter into this agreement with WII. Upon the execution of this agreement
M2M shall provide WII with existing documentation regarding its proprietorship
of and ability to grant the Rights as set forth herein. WII is hereby granted
the right to duplicate and use such documentation and materials for use in
acquiring components for the manufacturing of the products.
(b) M2M hereby warrants and represents that it has not assigned or in
any other way, sold, conveyed, transferred or encumbered all or any portion of
the Rights, with the respect to the products to any other person, firm or
corporation by any instrument or agreement now valid or outstanding.
(c) M2M hereby indemnifies and saves WII and its respective successors,
assigns and licensees harmless from and against all claims, damages, loss of
profits, losses, settlement, judgements, expenses and cost, including reasonable
attorney's fees which may be suffered, made, incurred or assumed by WII or its
successors, assigns or licensees by reason of any breach or alleged breach by
M2M of any agreement, warranty or representation made or entered into hereunder
by M2M.
<PAGE>
4. WII WARRANTIES AND INDEMNITIES:
(a) WII hereby warrants and represents that it is free to enter into
this agreement.
(b) WII hereby warrants and represents that it will produce ordered
product within 45 days of receipt of all components that meet M2M
specifications.
(c) WII will, at all times, conduct all business required of it
hereunder, in a manner that will cause M2M to be in compliance with
all applicable International, Federal, State and local laws and
regulations.
5. TERRITORY:
The rights granted by M2M to WII shall be for all of Product markets.
6. MANUFACTURING RESPONSIBILITIES:
(a) WII shall have the sole and complete authority and responsibility
for all procuring, manufacturing, assembly, packaging and shipping
of the products except as listed in (b) & (c) below.
(b) M2M will be responsible to approve written components
specifications and quality control procedures before manufacturing
of the components and products,
(c) M2M will be responsible to approve major vendors (i.e. balloons,
cylinders, valve body, connector parts, tether, casing, adhesives
& tape) to supply components to WII. (e) M2M commits to minimize
delivery commitments in high growth periods (greater than 120%
per month) in order reduce production peaks and valleys.
7. TAXES:
Each party shall be responsible for all of its own Federal, State, and
local taxes of any kind or nature whatsoever.
8. PRICING:
The pricing of the Radar Beacon and AeroLink units shall be determined
under Appendix A of this agreement. The price includes placing the units in
provided packaging and having the units ready to ship. The price is F.O.B. WII
dock. Order quantities for components, greater than required to meet existing
orders, will be at WII's discretion.
9. MISCELLANEOUS:
(a) The parties hereto do hereby agree that they are each dealing with
the other under this agreement as independent parties and that this agreement
does not create, nor is it intended in any way to create a joint venture or
partnership between the parties hereto.
(b) This agreement may not be assigned by either party without the
prior written consent of the other party or one or more of the principals.
(c) Both parties agree to hold all information received from the other
party hereto in confidence and all contracts, names, names of clients will not
be used by the other party in any other type of endeavor or that party will be
held liable for damages.
(d) This agreement shall be governed by and interpreted in accordance
with the laws of the State of Colorado as it applies to contracts entered into
and performed whole therein.
(e) All disputes under this agreement shall be settled in the City of
Denver, Colorado by a panel of three (3) arbitrators, (one picked by each party
and the third picked by the two (2) selected arbitrators) under the rules
established by the American Arbitrators Association. The findings of the
arbitrators will be final and conclusive and may be filed with any court having
competent jurisdiction.
<PAGE>
(f) In the event any provisions of this agreement is deemed to be in
conflict with any law of any relevant jurisdiction, the agreement shall be
interpreted to the extent possible without such provision and the balance of the
agreement will not fail on account thereof.
(g) Any failure or omission by either party to insist upon compliance
by the other or any of the terms of this agreement shall not constitute a waiver
or for any later enforcement of the term or terms.
(h) Any notice required by or provided pursuant to this agreement shall
be given in writing by means of facsimile, the U.S. Postal Service or any
professional delivery service that requires a signed written receipt confirming
delivery of the envelope or package containing the notice. The effective date of
the notice shall be the date it is facsimiled or delivered to the party for
which it is intended. If the notice is for WII, it shall be delivered to the
following address or to such other addresses as WII may designate by notice:
Name Western Innovations
Address 15508 E. 19th Ave.
City Aurora
State Colorado Zip 80011
Attn: Jerry Jernigan
Phone 303-340-3811
Fax 303-367-5930
If the notice is to M2M it shall be delivered to the following address
or to such other addresses that M2M shall designate by notice:
Name Mind2Market, Inc.
Address 1625 Abilene Drive
City Broomfield
State Colorado Zip 80020
Attn: Ronald Powell
Phone: 303-438-9185
Fax: 303-438-9243
(i) This agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
(j) This agreement sets forth the entire agreement of the parties. All
prior verbal or written agreements, whether expressed or implied, being merged
herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth below to be effective as provided in the first sentence of the
Agreement.
Date: ----------------
---------------------------
Jerry Jernigan, President
Western Innovations
Date: ----------------
---------------------------
Ronald Powell, President
Mind2Market, Inc.
<PAGE>
Appendix A
M2M and WII hereby warrant and agree as follows:
1) WII grants an initial credit of $1,000,000 to M2M for the express
purpose of Radar Beacon and AeroLink orders secured by M2M.
2) With each order received by WII from M2M, a 50% deposit on the total
Cost of Goods Sold is required.
3) WII will maintain one (1) Board of Director seat on the M2M Board of
Directors for as long as this agreement remains in place.
4) M2M will hold WII harmless on any or all components and supplies that
meets M2M specifications (specifications in place when ordered) but not
used immediately for reasons determined by M2M. Balance of costs (cost
of item less deposit plus processing and return costs) will be due WII
at same time as WII costs are due vendor.
5) If M2M sells or assigns the Radar Beacon or AeroLink product line to
another entity, WII will receive three dollars ($3.00) per unit
produced by the purchasing entity for the remainder of the contract
between M2M and WII.
The price to M2M for the Radar Beacon product will be as follows:
1) Pricing formula is Cost of Goods Sold + Labor + Overhead/Adm. + Profit.
Labor and Overhead/Adm. cost are as follows and can be amended by
mutual consent.
<TABLE>
<CAPTION>
Pricing for Radar Beacon
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Less than 2000 2000 to 9999 10000 to 19999 20000 or more
Ordered /Month
Cost of Goods Sold
Labor 4.00 4.00 4.00 4.00
Adm. 4.00 3.50 3.00
& Overhead 2.50
Subtotal
Profit (15%)
Total Price
</TABLE>
SB EXHIBIT 23.1
CONSENT OF ACCOUNTANT
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated July 22, 1999, with respect to the
financial statements of Mind2Market, Inc. included in Form 10SB.
/s/ Van Dorn & Bossi
-------------------------
VAN DORN & BOSSI
Boulder, Colorado
November 19, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 8349 2332
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 14807 19957
<CURRENT-ASSETS> 23156 22289
<PP&E> 40890 40890
<DEPRECIATION> (6661) (10250)
<TOTAL-ASSETS> 34228 30139
<CURRENT-LIABILITIES> 43674 16271
<BONDS> 0 0
0 0
0 0
<COMMON> 322 325
<OTHER-SE> 203834 216617
<TOTAL-LIABILITY-AND-EQUITY> 203834 216942
<SALES> 665 15025
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 66776 17239
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (66111) (2214)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (66111) (2214)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (66111) (2214)
<EPS-BASIC> (.02) (.0)
<EPS-DILUTED> (.02) (.0)
</TABLE>
