U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
FOR SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange
Act of 1934
XAIBE, INC.
(Name of Small Business Issuer in its Charter)
Nevada
76 B 059 - 4907
(State or other jurisdiction (IRS Employer ID
of incorporation or number)
organization)
2400 Loop 35, #1502, Alvin TX
77512
(Address of Principal Executive Offices)
(Zip Code)
Issuer's Telephone Number: (281) 331-5580
Securities to be Registered under 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
Not Applicable
Securities to be registered under Section 12(b) of
the Act:
Common Stock
(Title of Class)
PART I
Item 1. Description of Business.
General
The Company was incorporated under the laws of the
State of Nevada on July 17, 1998, and is in the early
developmental and promotional stages. To date, the
Company's only activities have been organizational,
directed at acquiring its principal asset, raising
its initial capital and developing its business plan.
The Company has not commenced commercial operations.
The Company has no full time employees and owns no
real estate.
Recently Xaibe acquired from David R. Mortenson, an
officer of the Company, the rights to distribute and
produce an oxygen enriched water product for fish
farming, aquaculture, mariculture, the husbandry of
poultry, and for remediating animal waste from
dairies, feedlots of all kinds, and for other similar
uses. Mortenson acquired these rights from the
inventors of the product, N. W. Technologies, Inc.
under a distribution agreement. This technology
promises to shorten time to market for farm raised
sea food and poultry and to cut costs in the
processing of animal waste, and at the same time
making this waste less harmful to the environment.
While proprietary and not patented, this process is
virtually impossible to reverse engineer. The
Company will "black box" the generator of this
product to maintain control.
Background: This project is the result of technology
developed by a Houston Texas based Company, N. W.
Technologies, for the bioremediation of oil spills.
N. W. Discerned that creating a contact emulsifier,
acting as a host for microbes, would speed up the
process of bioremediating this spilled oil. By
breaking the oil into colloidal (microscopic)
particles, the microbes have increased surface area
(better access to the food source) and thus could
consume spilled oil much faster. In spite of this
better access to the food source, the microbes still
need a
ready supply of oxygen. Below six to twelve inches
of soil depth, depending on soil type, the oxygen
exchange is virtually non existent, yet many oil
spills reach far below that level. A process called
sparging utilizes perforated pipes placed in the
affected area that have air pumped into them that is
released through the perforations. This is an
expensive process to implement and may cause some of
the volatile compounds to be released cause secondary
air pollution. To counter this problem, N. W.
Technologies created a product called Biocatalyst.
This is a water product with oxygen organically
bonded to the water molecule. When the microbe's
extra-cellular enzymes come in contact with the
water/oxygen molecule structure, they release this
oxygen, making it available to the microbes. This
process provides an inexpensive way to provide the
microbes with oxygen at any depth. N. W. Technologies
and their distributors/applicators have proven that
the use of this product substantially speeds up the
remediation times often by a factor of three to ten
times. N. W. Has ceased using ordinary water in the
formulation of their products relying exclusively on
Biocatalyst, as Biocatalyst does everything that the
water does and provides the extra oxygen needed when
microbes are pre-mixed with their emulsifiers.
Since N. W. Technologies only use for this product
was for bioremediationof oil spills, Mr. Mortenson
was successful in obtaining the right for use of this
product for aquaculture, fish farming, mariculture
the husbandry of poultry, and the remediation of
manure ponds, and for aquariums.
The Technology: While the technology for producing
this product is proprietary, the process is organic,
and uses any water source. Once a generator is set
up and producing, production can continue
indefinitely provided that water is available
(minimum of 15 gallons per hour, maximum 30 gallons
per hour), that the generator is protected from
freezing, and provided that the Companies "biomass"
is added 5 days per week. When stored for use in
beverages or other products a dilution factor of two-
to-one must be applied immediately, to insure long-
term stability. This dilution is also required when
used to water poultry. When discharged immediately
into manure remediation ponds or into ponds or tanks
for raising seafood, that dilution will occurs
naturally. As part of a production package, the
Company will furnish to end-users the generator,
the initial culture to create the oxygen enriched
water, and a regular supply of "biomass" to feed
the generator.
The client will supply a source of usable water,
electrical power and staff to feed and operate of the
generator(s). As currently configured, each
generator can produce 720 gallons of raw undiluted
product per day. Where more than this volume is
needed, multiple generators can be supplied.
The Equipment: The equipment needed to build a
generator is standard off the shelf tankage, pumps
and plumbing supplies. These are inexpensive and the
generator only uses a six-foot by ten-foot print.
Total cost of an industrial grade generator is less
than $5,000.00 per unit. These units should give
years of trouble free service provided they are not
abused, burned or exposed to freezing conditions.
Markets: The Company's main target markets are:
Aquaculture, Mariculture and Fish farming. Fish
farming, long used in Asia is becoming one of the key
sources of protein around the world. In the US
catfish farming, crawfish farming and the raising of
rainbow trout have led this market. Along the gulf
coast, shrimp farming is also rapidly gaining
acceptance. Virtually every state game department
also raises various varieties of game fish to release
into public waters. The single largest problem
encountered in fish farming is oxygen exchange.
Utilizing one or more of the Companies generators can
solve this oxygen exchange problem quickly and
economically. The company would lease the units
needed on an annual basis and supply the Biomass as
required.
Husbandry of Poultry. A study done in Washington
State demonstrated that using oxygen-enriched water
had significant economic benefits. In this study,
fryers came to butcher weight one day sooner (in a
six week life span) with 5% less feed, and weighed 5%
more using oxygen enriched water. This market offers
a twofold opportunity for the Company: first is the
manufacture of the product for the chickens to drink,
second is the use of the product to accelerate
microbial degradation of the manure.
Aquariums. The pet market for fish is substantial.
The company plans to generate and distribute our
oxygen enriched product through pet stores and chains
for use in aquariums - both small and large
facilities. The extra oxygen will enable all
bacteria to remain aerobic (oxygen users) that help
produce a healthful environment for the fish and
aquatic life. Most of the product will be
distributed in gallon containers for individual use,
however, the Company may lease generators for large
facilities such as Sea World.
Remediation of Feedlot Manure. This high oxygen
water product can also be used for the remediation of
feedlot runoff and for waste ponds or lagoons. A
generator constantly feeding high oxygen water into
the pond or collection system supplies enough oxygen
to sustain aerobic microbe/bacterial growth. This
eliminates the foul odors associated with high
intensity feedlot and poultry operations. As the
product is pumped into the lagoon or pond, select
microbes that target the waste as a food source are
added to assure optimal microbe population. Once a
good colony of microbes is established, no additional
should be needed unless the colony is somehow killed.
Marketing: It is the Company's plan to use a
relatively small sales force to approach existing
marketing organizations serving the
aquaculture/fishfarming market, the existing feedlot
equipment or feed distributors and pet store
organizations such as Petsco or Petsmart. The main
goal of these sales persons is to educate the
existing sales forces of those large organizations.
Once they understand how the Company's systems work
and benefit the end-users, the sales should be easy
to achieve. The Company will offer generous
commissions to its sales force and the independent
representatives.
Cash Flow: Except for the pre-packaged product sold
to pet chains and other retailers, all of the
Company's cash flow will be in the form of leases.
The Company will lease generators to the fish farm
operators and feedlot/poultry enterprises, and
provide a monthly supply of Biomass for a fixed fee.
There will be a non-refundable set-up fee with each
generator that will cover the cost of setting up each
unit.
Administrative Offices
The Company currently maintains a mailing address
at PO Box 5034 Alvin, TX 77512 - 5034 that is the
mailing address of its Corporate Secretary. The
Company's telephone number is (281) 331-5580. Other
than this mailing address, the Company does not
maintain any other office facilities but does
anticipate the need for other office facilities when
and if commencement of its business plan occurs. At
present, the Company pays no rent or other fees for
the use of this mailing address.
Employees
The Company is a development stage company and
currently has no employees. Management plans to use
consultants, attorneys and accountants as necessary
and does not anticipate a need to engage any full time
employees until such time as the Company is funded
properly and initiates application of its business
plan. Although there is no current plan with respect
to either nature or amount, remuneration may be paid
to or accrued for the benefit of the Company's
directors and Officers in conjunction with the
commencement of business. See "Executive
Compensation" and "Certain Relationships and Related
Transactions".
Risk Factors
1. Conflicts of Interest. Certain conflicts of
interest exist between the Company and its officers
and directors.
All 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
their exercise of such judgement as is consistent with
their fiduciary duties to the Company. See
"Management" and "Conflicts of Interest".
2. Possible Need for Additional Financing. The
Company has very limited funds and such funds are
adequate to implement the Company's business plan.
The ultimate success of the Company may depend on its
ability to raise additional capital. The Company has
not investigated the availability, source or terms
that might govern the acquisition of additional
financing. When 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 would be severely limited and
commencement of business is impossible.3.
Regulation of Penny Stocks. The Company's securities,
when available for trading, will be subject to the
Securities and Exchange Commission rule that imposes
special sales practice requirements upon broker-
dealers that sell such securities to other than
established customers or accredited investors. For
purposes of the rule, the phrase "accredited
investors" means, in general terms, institutions with
assets exceeding $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, combined with a
spouses 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 purchasers written agreement to the
transaction prior to the sale. Consequently, the rule
may affect the ability of purchasers of the Company's
securities to buy or sell in any market that may
develop.
3. In addition, the Securities and Exchange
Commission has adopted a number of rules to regulate
"penny Stocks". Such rules included Rules 3a51-1, 15g-
1, 15g-2. 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under
the Securities and Exchange Act of 1934, as amended.
Because the securities of the Company may constitute
"penny stock" within the meaning of the rules, the
rules would apply to the Company and its securities.
The rules may further effect the ability of owners of
shares in the Company to sell their securities in any
market that may develop for them.
Shareholders should be aware that, according to the
Securities and Exchange Commission Release No. 34-
29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the
security by one or a few broker-dealers that are
often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching
of purchases and sales and false and misleading press
releases; (iii)"Aboiler room" practices involving
high pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv)
excessive and undisclosed bid-ask differentials and
markups by selling broker-dealers and (v) the
wholesale dumping of the same securities by promoters
and broker-dealers after prices have been manipulated
to a desired level, along with the inevitable
collapse of those prices with consequent investor
losses. The Company's management is aware of the
abuses that have occurred historically in the penny
stock market. Although the Company does not expect
to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the
market, management will strive within the confines of
practical limitations to prevent the described
patterns from being established with respect to the
Company's securities.
3. No Operating History. The Company was formed in
July of 1998 for the purpose of developing new,
revolutionary technology into a practical and viable
business in the field of Aquaculture. The Company
has no operating history or revenues from operations.
The only cash revenues have come from the private
sale of the Company's stock. The Company faces all
the risks of a new business. 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.
4. No Assurance of Success or Profitability. There
is no assurance that the Company will be successful
in its endeavors. Even if the Company is able to
successfully implement its business plan, there can
be no assurance of sufficient revenues or profits or
that the market price of the Company's Common Stock
will be increased.
5. Lack of Diversification. Because of its limited
financial resources, the Company will likely be
unable to diversify its activities, thus providing a
hedge should its business plan prove to be
impractical. Economic fluctuations within the
aquaculture industry will increase the risks
associated with the Company's operations.
6. Other Regulation. The aquaculture industry is
already subject to some regulation from local, state
and federal environmental agencies. There can be no
assurance that further regulation and/or licensing
will not emerge in the future. Such further
regulation or licensing could prove to be costly and
time consuming, thereby effecting the profitability
and perhaps the viability of the Company's business
plan.
7. Dependence on Management; Limited Participation
of Management. The Company now has two individuals
who are serving as the sole officers and directors.
The Company will be heavily dependent upon their
skills, talents and abilities to implement its
business plan and may, from time to time, find that
the inability of one or both of these individuals to
devote full time attention to the business of the
Company, will result in delay(s) in progress towards
the implementation of its business plan. See
"management". Because shareholders and future
investors will not be able to evaluate the merits of
business decisions of the Company, they should
carefully and critically assess the information
concerning the Company's officers and directors.
8. Lack of Continuity in Management. The Company
does not have employment agreements with its officer
and directors and as a result, there is no assurance
that they will continue to manage the Company's
affairs in the future.
9. Indemnification of Officers and Directors. The
Company's Articles of Incorporation provide for the
indemnification of its directors, officers, employees
and agents, under certain circumstances, against
attorney fees and other expenses incurred by them in
any litigation to which they become a party arising
from their association with, or their activities on
behalf of, the Company. The Company will also bear
the expense 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
10. Director's Liability Limited. The Company's
Articles of Incorporation exclude personal liability
of its directors to the Company and its shareholders
for monetary damages due to breach of fiduciary duty
except in certain specified circumstances.
Accordingly, the Company will have a much more
limited right of action against its directors than
otherwise would be the case. This provision does not
effect the liability of any director under applicable
federal and state securities laws.
11. Competition. While it is the belief of the
Company that it possesses proprietary technology that
makes them unique in the aquaculture industry, it is
possible that someone else may have a competing
technology that, while it does not encroach on the
proprietary features of the Company's technology,
could achieve the same final results. This event
could certainly effect the viability of the Company's
business plan and its potential to be profitable.
12. No Foreseeable Dividends. The Company has not
paid dividends on its Common Stock and does not
anticipate paying such dividends in the foreseeable
future.
13. Loss of Control by Present Management and
Stockholders. The Company may consider a future
financing in which the Company would issue as
consideration for the capital invested, an amount of
the Company's authorized but unissued Common Stock,
that would, upon issuance, result in a majority of the
voting power being transferred to the investor(s).
The result would be that the new shareholder(s) would
control the Company and persons unknown could replace
the Company's management at this time. In addition,
the Company's majority shareholders could sell their
control block to an outside party, resulting in the
same type of situation.
14. 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 any
shareholder will be able to liquidate his investment
without considerable delay, if at all. If a market
should develop, the price may be highly volatile.
Factors such as those discussed in this "Risk Factors"
section may have a significant impact on the market
price of the Company's securities. 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 the Company's Common Stock, the
combination of brokerage commissions, state transfer
taxes, if any, any other selling costs may exceed the
selling price. Further, many lending institutions
will not permit the use of such securities as
collateral for loans.
Blue Sky Considerations. Because the Company's
securities have not been registered for resale under
the blue sky laws of any state, the holders of such
shares and those persons desiring to purchase them in
any trading market that may develop in the future,
should be aware that there may be significant state
blue sky law restrictions on the ability of investors
to sell and of purchasers to buy the Company's
securities. Accordingly, investors should consider
the secondary market for the Company's securities to
be a limited one.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATIONS.
Liquidity and Capital Resources.
The Company remains in the development stage and,
since inception, has experienced no significant change
in liquidity or capital resources or stockholder's
equity other than the receipt of net cash proceeds in
the amount of $15,000, from its inside capitalization
funds. Consequently, the Company's balance sheet for
the period of July 17, 1998 (inception) through May
31, 1999 reflects current assets of $18,000.00 in the
form of cash, and total assets of $29,413.00. The
Company will carry out its plan of business as
discussed above. The Company cannot predict to what
extent its liquidity and capital resources will be
diminished prior to the consummation of a business
combination or whether its capital will be further
depleted by the operating losses (if any) of the
business entity which the Company may eventually
acquire.
Results of Operations
During the period from July 17, 1998 (inception)
through March 31, 1999, the Company has engaged in no
significant operations other than organizational
activities, acquisition of capital and preparation for
registration of its securities under the Securities
Exchange Act of 1934, as amended. No revenues were
received by the Company during this period.
For the current fiscal year, the Company anticipates
incurring a loss as a result of organizational
expenses, expenses associated with registration under
the Securities Exchange Act of 1934, and expenses
associated with setting up a company structure to
begin implementing the Company's business plan. The
Company anticipates that until these procedures are
completed, it will not generate revenues other than
interest income, and may continue to operate at a loss
thereafter, depending upon the performance of the
business.
Need for Additional Financing
The Company believes that its existing capital will be
sufficient to meet the Company's cash needs, including
the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934,
as amended, for a period of approximately one-year.
Accordingly, in the event the Company is able to
initiate its business plan during this period, it
anticipates that its existing capital will not be
sufficient to allow it to accomplish the goal of
completing its business plan. As a result, there is
no assurance that the available funds will ultimately
prove to be adequate. It is certain that the
Company's needs for additional financing is likely to
increase substantially.
No commitments to provide additional funds have been
made by management or other stockholders.
Accordingly, there can be no assurance that any
additional funds will be available to the Company to
allow it to cover its expenses.
Irrespective of whether the Company's cash assets
prove to be inadequate to meet the Company's
operational needs, the Company might seek to
compensate providers of services by issuances of stock
in lieu of cash. For information as to the Company's
policy in regard to payment for consulting services,
see "Certain Relationships and Transactions"
Item 3 Description of Property
The Company does not currently maintain an office or
any other facilities. It does currently maintain a
mailing address at PO Box 5034 Alvin, TX 77512-5034,
which is the address of its secretary. The Company
pays no rent for the use of this mailing address. The
Company does not believe that it will need to maintain
an office at any time in the foreseeable future until
the business plan is substantially implemented. The
Company's telephone number is (281) 331- 5580.
Item 4 Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth, as of the date of this
Registration Statement, the number of shares of Common
Stock owned of record and beneficially by executive
officers, directors and persons who hold 5.0% or more
of the outstanding Common Stock of the Company. Also
included are the shares held by all executive officers
and directors as a group.
<TABLE>
<CAPTION>
Name and Address Number of Percent of
Shares Owned Class Owned
Beneficially
<S> <C> <C>
John Bauska
2302 Highway 2 East,
Suite 4
Kalispell, MT 59901 250,000 15.6 %
Dorothy Mortenson<F1>
PO Box 5034
Alvin, TX 77512-5034 0 0 %
All directors and
executive Officers
as a group
(2 persons) 250,000 15.6 %
<FN>
<F1>Mrs. Mortenson is the wife of David R. Mortenson
one of the founders or the Company and its original
Secretary. Mr. Mortenson Holds 350,000 shares of
Common Stock representing 21% of the total shares
issued and outstanding.
The persons listed are the sole officers and directors
of the Company.
</FN>
</TABLE>
The directors and executive officers currently serving
the Company are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Positions Held and
Tenure
John T. Bauska 46 President and
Director since
July, 1998
Dorothy Mortenson 49 Secretary and
Director
since October, 1998
</TABLE>
The directors named above will serve until the first
annual meeting of the Company's stockholders.
Thereafter, directors will be elected for one-year
terms at the annual stockholders' meeting. Officers
will hold their positions at the pleasure of the board
of directors, absent any employment agreement, of
which none currently exists or is contemplated. There
is no arrangement or understanding between the
directors and officers of the Company and any other
person pursuant to which any director or officer was
or is to be selected as a director or officer.
The directors and officers of the Company will devote
their time to the Company's affairs on an "as needed"
basis. As a result, the actual amount of time, which
they will devote to the Company's affairs, is unknown
and is likely to vary substantially from month to
month.
Biographical Information
John T. Bauska. Mr. Bauska, who is the Company's
President, has served as an officer and director of
the Company since its inception.
Mr. Bauska is currently self-employed as a
business consultant, providing consulting services
relating to
mergers and acquisitions in a wide variety of fields.
From 1995 to the present Mr. Bauska has served as
president of Canadex Ventures, Inc., a Florida
corporation engaged in the development of oil and
mineral resources. From 1993 to the present, he has
served as a director of Bahalil, S.A. of Paris and
Damascus. Bahalil is an international arms dealer as
well as a thriving construction concern. Since 1991,
Mr. Bauska has served as president of Stratco, Inc.,
Kalispell, Montana, which is involved in arms sales,
import/export of arms and accessories as well as
weapons design, manufacture and finance.
Dorothy Mortenson. Mrs. Mortenson, who is the
Company's Secretary, has served as an officer and
director of the Company since its organizational
meeting on October 6, 1998.
From 1997 to the present, Mrs. Mortenson, together
with her husband, David R. Mortenson, has been engaged
as a consultant, assisting small emerging companies
with marketing and sales. Also in 1997, the
Mortensons formed Safeco Products, Inc., a Texas
corporation that markets and distributes health
supplements. . From 1990 to 1997 Mrs. Mortenson
assisted her husband in various enterprises in the
country of Belize.
Indemnification of Officers and Directors
As permitted by Nevada law, the Company's Articles of
Incorporation provide that the Company will indemnify
its directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy
any civil or criminal action brought against them on
account of their being or having been Company
directors or officers, unless, in any such action,
they are adjudged to have acted with gross negligence
or willful misconduct. Insofar as indemnification for
liabilities arising under the Securities Act of 1933
may be permitted to directors, officers or persons
controlling the Company pursuant to the forgoing
provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission,
such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable
.
Exclusion of Liabilities
Pursuant to the laws of the State of Nevada, the
Company's Articles of Incorporation exclude personal
liability for its directors for monetary damages based
upon any violation of their fiduciary duties as
directors, except as to liability for any breach of
the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section
7-106-401 of the Colorado Business Corporation Act, or
any transaction from which a director receives an
improper personal benefit. This exclusion of
liability does not limit any right, which a director
may have to be indemnified, and does not affect any
director's liability under federal or applicable state
securities laws.
Conflicts of Interest
The officers and directors of the Company will not
devote more than a portion of their time to the
affairs of the Company. There will be occasions when
the time requirements of the Company's business
conflict with the demands of their other business and
investment activities. Such conflicts may require
that the Company attempt to employ additional
personnel. There is no assurance that the services of
such persons will be available or that they can be
obtained upon terms favorable to the Company.
There is no procedure in place, which would allow Mr.
Bauska and Mrs. Mortenson to resolve potential
conflicts in an arms-length fashion. Accordingly, he
will be required to use his discretion to resolve them
in a manner, which they consider appropriate.
Item 6. Executive Compensation
No officer or director has received any remuneration.
Although there is no current plan in existence, it is
possible that the Company will adopt a plan to pay or
accrue compensation to its officers and directors for
services related to the implementation of the
Company's business plan. See "Certain Relationships
and Related Transactions". The Company has no stock
option, retirement, pension or profit-sharing programs
for the benefit of directors, officers or other
employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.
Item 7. Certain Relationships and Related
Transactions.
Prior to the date of this Registration Statement, the
Company issued to its officers and directors a total
of 1,000,000 shares of Common Stock in consideration
of acquiring the rights to manufacture and market an
oxygen-enhanced product for use in aquaculture, fish
and poultry farming and the bioremediation of waste
ponds and lagoons. The Company filed the necessary
papers required for the issuance of these shares as
required by Regulation D of Rule 504 of the Act, as
amended. Also prior to the date of this Registration
Statement, the Company issued a total of 150,000
shares of its Common Stock to thirty individuals or
corporations for a total consideration of $ 15,000.00.
These shares were also issued in compliance with Reg D
of Rule 504.
Although there is no current plan in existence, it is
possible that the Company will adopt a plan to pay or
accrue compensation to its officers and directors for
services related to the implementation of the
Company's business plan.
The Company maintains a mailing address at the office
of its Secretary, but otherwise does not maintain an
office. As a result it pays no rent and incurs no
expenses for maintenance of an office and does not
anticipate paying rent or incurring office expenses in
the future. It is likely that the Company will
establish and maintain an office after its business is
operating and the volume of business and the addition
of personnel dictate the acquisition of adequate
premises.
Although management has no current plans to cause the
Company to do so, it is possible that the Company
may enter into an agreement requiring the sale of all
or a portion of the Common Stock held by the Company's
current stockholders to other individuals or business
entities. It is more likely than not that any sale of
securities by the Company's current stockholders would
be at a price substantially higher than that
originally paid by such stockholders or deemed to have
been paid through the Company's acquisition of its
principal asset. Any payment to current stockholders
in the context of an acquisition involving the Company
would be determined entirely by the largely
unforeseeable terms of a future agreement with an
unidentified business entity.
Item 8. Description of Securities
Common Stock
The Company's Articles of Incorporation authorize the
issuance of 100,000,000 shares of Common Stock. Each
record holder of Common Stock is entitled to 1 vote
for each share held on all matters properly submitted
to the stockholders for their vote. The Articles of
Incorporation do not permit cumulative voting for the
election of directors.
Holders of outstanding shares of Common Stock are
entitled to such dividends as may be declared from
time to time by the Board of Directors out of legally
available funds; and, in the event of liquidation,
dissolution or winding up of the affairs of the
Company, holders are entitled to receive, ratably, the
net assets of the Company available to stockholders
after distribution is made to the preferred
shareholders, if any, who are given preferred rights
upon liquidation. Holders of outstanding shares of
Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares
when offered and sold, will be duly authorized,
validly issued, fully paid, and non assessable. To
the extent that additional shares of the Company's
Common Stock are issued, the relative interests of
then existing stockholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation authorize the
issuance of 10,000,000 shares of preferred stock.
The Board of Directors of the Company is authorized to
issue the preferred stock from time to time in series
and is further authorized to establish such series, to
fix and determine the variations in the relative
rights and preferences as Common Stock. The Company
has issued no preferred stock.
Transfer Agent
The Company is cur5rently serving as its own transfer
agent, and plans to continue to serve in that capacity
until such time as management believes it is necessary
or appropriate to employ an independent transfer agent
in order to facilitate the creation of a public
trading market for the Company's securities. Should
the Company's securities be quoted on any exchange or
OTC quotation system or application is made to have
the securities quoted, an independent transfer agent
will be appointed.
Reports to Stockholders
The Company plans to furnish its stockholders with an
annual report for each fiscal year containing
financial
statements audited by its independent certified public
accountants. Additionally, the Company may, in its
sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems
appropriate. The Company intends to comply with the
periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to
those requirements.
PART II
Item l. Market Price and Dividends on the
Registrant's Common Equity and Other Shareholder
Matters
No public trading market exists for the Company's
securities. There were thirty-two (32) holders of
record of the Company's common stock on March 10,
1999. No dividends have been paid to date and the
Company's Board of Directors does not anticipate
paying dividends in the foreseeable future.
Item 2. Legal Proceedings
The Company is not a party to any pending legal
proceedings, and no such proceedings are known to be
contemplated.
No director, officer or affiliate of the Company, and
no owner of record or beneficial owner of more than
5.0% of the securities of the Company, or any
associate of any such director, officer or security
holder is a party adverse to the Company or has a
material interest adverse to the Company in reference
to pending litigation.
Item 3. Changes in and Disagreements with
Accountants.
Not applicable.
Item 4. Recent Sales of Unregistered Securities.
Since July, 1998 (the date of the Company's
formation), the Company has sold its Common Stock to
the persons listed in the table below in transactions
summarized as follows:
<TABLE>
<CAPTION>
Name Date of Shares Purchase Price
Purchase Price per Share
<S> <C> <C> <C> <C>
John T. Bauska 10/6/98 250,000 $250.00 $.001
David R.
Mortenson 10/6/98<F1> 250,000 $250.00 $.001
5/28/99<F2> 100,000 $100.00 $.001
Laurent P.
Barbadaux 5/28/99<F2> 100,000 $100.00 $.001
Marie M.
Charles 5/28/99<F2> 100,000 $100.00 $.001
James H.
Collins 5/28/99<F2> 100,000 $100.00 $.001
Jock R.
Collins 5/28/99<F2> 100,000 $100.00 $.001
Terry Fowler 5/28/99<F2> 100,000 $100.00 $.001
Roy D.
Hinton Jr. 5/28/99<F2> 100,000 $100.00 $.001
C.E. Kaiser 5/28/99<F2> 100,000 $100.00 $.001
Lance Larsen 6/1/99 100,000 $20,000.00 $ .20
<FN>
<F1>Issued in consideration of pre-incorporation
services and expenses.
<F2>Issued in consideration of the transfer of the
Company's main asset.
</FN>
</TABLE>
Each of the sales listed above was made for cash,
services or in exchange for the Company's principal
asset. 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. 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 distributions,
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. Two
separate filings of Form D have been made to the
Securities and Exchange Commission concerning the
issuance of the aforementioned shares. All such
sales were made without the aid of underwriters, and
no sales commissions were paid.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the By-laws of the
Company, filed as Exhibits 2.1 and 2.2, respectively,
provide that the Company will indemnify its officers
and directors for costs and expenses incurred in
connection with the defense of actions, suits, or
proceedings where the officer or director acted in
good faith and in a manner he reasonably believed to
be in the Company's best interest and is a party by
reason of his status as an officer or director,
absent a finding of negligence or misconduct in the
performance of duty.
FINANCIAL STATEMENTS
XAIBE, INC.
A Development Stage Enterprise)
AUDIT REPORT
May 31, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
/S/Janet Loss
XAIBE, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM
Report of Certified Public
Accountant i
Balance Sheet, May 31, 1999 ii
Statement of Operations, for the period
From July 17, 1998 to May 31, 1999 iii
Statement of Stockholders' Equity (Deficit),
From July 17, 1998 to May 31, 1999 iv
Statement of Cash Flows, for the period
From July 17, 1998 to May 31, 1999 v
Notes to Financial Statements vi
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
(303) 220-0227
/S/Janet Loss
Board of Directors
Xaibe, Inc.
Post Office Box 5034
Alvin, Texas 77511
I have audited the accompanying Balance Sheet of
Xaibe, Inc. (A Development Stage Enterprise) as of
May 31, 1999 and the Statements of Operations,
Stockholders' Equity, and Cash Flows for the period
from July 17, 1998 (Inception) through May 31, 1999.
In my opinion, the financial statements referred to
above present fairly accurately, in all material
respects, the financial position of Xaibe, Inc. (A
Development Stage Enterprise) as of May 31, 1999, and
the results of its operations and changes in its cash
flows for the period from July 17, 1998 (Inception)
through May 31, 1999, in conformity with generally
accepted accounting principles applied on a
consistent basis.
Janet Loss, C.P.A., P.C.
/S/
July 29, 1999
i
XAIBE, INC.
(A Development Stage Enterprise)
BALANCE SHEET
May 31, 1999
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash in checking 18,000
OTHER ASSETS:
Organizational Costs,
net of amortization 408
License Rights 1,000
Deferred Offering Costs 10,005
Total other Assets 11,413
TOTAL ASSETS 29,413
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts Payable, trade 15,060
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par
Value, 10,000,000 shares
Authorized, 1,600,000 shares
Issued and outstanding 1,600
Additional Paid-In capital 19,900
Retained earnings (Deficit) (7,147)
Total Stockholders' Equity 14,353
Total Liabilities and
Stockholders' Equity 29,413
</TABLE>
The accompanying notes are an integral part
of the financial statements.
XAIBE, INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the period July 17, 1998 (Inception)
Through May 31, 1999
<TABLE>
<S> <C>
REVENUES: 0
OPERATING EXPENSES:
Amortization 92
Bank charges 55
Management fees 5,000
Legal fees 2,000
Total Operating Expenses 7,147
NET (LOSS) 7,147
NET (LOSS) PER
SHARE OF COMMON STOCK (.02)
Weighted Average
Number of shares
Outstanding 390,169
</TABLE>
The accompanying notes are an integral part of the
financial statements.
XAIBE, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the period from July 17, 1998 (Inception)
Through May 31,1999
<TABLE>
<S> <C> <C> <C> <C> <C>
Balance
July 17,1998 0 0 0 0 0
October 6,
1998, shares
issued for
organizational
costs 500,000 500 0 0 500
may 28, 1999
shares issued
for license
agreement 1,000,000 1,000 0 0 1,000
May 31, 1999,
shares issued
for cash 100,000 100 19,900 0 20,000
Net (loss) for
the period
ended May 31,
1999 0 0 0 (7,147) (7,147)
Balance May
31, 1999 1,600,000 1,600 19,900 (7,147) 14,353
</TABLE>
The accompanying notes are an integral part of the
financial statements.
4
XAIBE, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the period from July 17, 1998 (Inception)
Through May 31, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
<TABLE>
<S> <C>
Net Income (Loss) (7,147)
Adjustments to Reconcile
Net (Loss) to Cash Flow From
Operating Activities:
Amortization 92
Increase in organizational
costs (500)
Increase in license rights (1,000)
Increase in deferred
offering costs (10,005)
Increase in accounts payable 15,060
Net cash provided (Used)
By operating activities (3,500)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of Common Stock 21,500
Net increase in Cash 18,000
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD 18,000
</TABLE>
The accompanying notes are an integral part of the
financial statements.
V
XAIBE, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities
The Company was incorporated under the laws of the
state of Nevada in July 17, 1998, and is in the early
developmental and promotional stages. To date, the
Company's only activities have been organizational
directed acquiring its principal asset, raising its
initial capital and developing its business plan.
The Company has not commenced commercial operations.
Accounting Method
The Company records income and expenses on the
accrual method.
Fiscal Year-End
The Company has elected the fiscal year-end to be
June 30th.
NOTE II - LICENSE AGREEMENT
This agreement was made and entered into May 28, 1999
by David R Mortenson & Associates, ("Grantor") and
Xaibe, Inc. ("Licensee"). The Company has obtained
the rights to market and manufacture the oxygen-
enriched water known as "Biocatalyst" now
manufactured by NW Technologies, Inc. ("NW") for
which the product Grantor holds the exclusive rights
as evidenced by the Distribution Agreement between NW
and Grantor dated the 26th of March, 1998.
NOTE III - PRIVATE PLACEMENT
The Company offered a private placement of 100,000
shares of the Company's common stock by means of a
private placement at $.20 per share pursuant to
Regulation D Code 504.
vi
ARTICLES OF INCORPORATION
XAIBE,INC.
ARTICLES OF INCORPORATION
Of
XAIBE INC.
The undersigned natural person of the age of eighteen
years or more, acting as incorporator of a
corporation under and pursuant to the laws of the
State of Nevada, hereby adopts the following Articles
of Incorporation for such corporation:
ARTICLE I
The name of the corporation is XAIBE INC.
ARTICLE II
The principal office of this corporation is to be at
50 West Liberty Street #880, Reno, 89501, State of
Nevada. The Nevada Agency and Trust Company is
hereby named as Resident Agent of this corporation
and in charge of its said office in Nevada.
ARTICLE III
The nature of the business, objects and purposes to
be transacted, promoted, or carried on by the
corporation are:
A To conduct any lawful business, to promote any
lawful purpose, and to engage in any lawful act or
activity for which corporations maybe organized under
the General Corporation Law of the State of Nevada
and to act in every kind of fiduciary capacity. and
generally to do all things necessary or convenient
which are incident to or which a natural person might
or could do.
B To purchase, receive, take by grant, gift,
devise, bequest, or otherwise. lease, or otherwise
acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property,
or any interest therein, wherever situated, and to
sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of its
property and assets, or any interests therein,
wherever situated.
C To engage generally in the real estate business
as principal, and in any lawful capacity, and
generally to take, lease, purchase, or otherwise
acquire, and to own, use, hold, sell, convey,
exchange, lease, mortgage, work, clear, improve,
develop, divide, and otherwise handle, manage,
operate, deal in and dispose of mining claims, oil
leases, oil and gas wells, real estate, real
property, lands, multiple-dwelling structures,
houses, buildings and other works and any interest or
right therein; to take, lease, purchase or otherwise
handle or acquire, and to own, use, hold, sell,
convey, exchange, hire, lease, pledge, mortgage, and
otherwise handle, and deal in and dispose of, as
principal agent or in any lawful capacity, such
personal property, chattels, chattels real, rights,
easements, privileges, causes in action, notes,
bonds, mortgages, and securities as may lawfully be
acquired, held or disposed of and to acquire,
purchase, sell, assign, transfer, dispose of and
generally deal in and with as principal, agent,
broker, and in any lawful capacity, mortgages and
other interests in real, personal, and mixed
properties; to carry on a general oil exploration,
mining exploration and management business as
principal, agent, representative, contractor, sub-
contractor, and in any other lawful capacity. To
manufacture, purchase or acquire in any lawful manner
and to hold, own, mortgage, pledge, sell, transfer,
or in any manner dispose of, and to deal and trade in
goods, wares, merchandise, and property of any and
every class and description, and in any part of the
world.
D To apply for, register, obtain, purchase,
lease, take licenses in respect of or otherwise
acquire, and to hold, own, use, operate, develop,
enjoy, turn to account, grant licenses and immunities
in respect of, manufacture under and to introduce,
sell, assign, mortgage, pledge or otherwise dispose
of and, in any manner deal with and contract with
reference to:
1. Inventions, devices, formulas, processes,
improvements and modifications thereof;
2. Letters patent, patent rights, patented
processes, rights, designs, and similar rights,
trademarks, trade names, trade symbols and other
indications or origin and ownership granted by or
recognized under the laws of the United States of
America, any state or subdivision thereof, and any
commonwealth, territory, possession, dependency,
colony, possession agency or instrumentality of the
United States of America and of any foreign country,
and all rights connected therewith or appertaining
thereto.
3. Franchises licenses, grants and concessions.
E To make, enter into, perform and carry out
contracts of every kind and description with any
person, firm, association, corporation or government
or agency or instrumentality thereof.
F To lend money in furtherance of its corporate
purposes and to invest and reinvest its funds from
time to time to such extent, to such persons, firms,
associations, corporations, governments or agencies
or instrumentality's thereof, and on such terms and
on such security, if any, as the Board of Directors
of the corporation may determine and direct any
officer to complete.
G To borrow money without limit as to amount and
at such rates of interest as it may determine; from
time to time to issue and sell its own securities,
including its shares of stock, notes, bonds,
debentures, and other obligations, in such amounts,
on such terms and conditions, for such purposes and
for such prices, now or hereafter permitted by the
laws of the State of Nevada and by the Board of
Directors of the corporation as they may determine;
and to secure any of its obligations by mortgage,
pledge or other encumbrance of any or all of its
property, franchises and income.
H To be a promoter or manager of other
corporations of any type or kind; and to participate
with others in any corporation, partnership, limited
partnership, joint venture, or other association of
any kind, or in any transaction, undertaking or
arrangement which the corporation would have power to
conduct by itself, whether or not such participation
involves sharing or delegation of control with or to
others.
I To promote and exercise all or any part of the
foregoing purposes and powers in and all parts of the
world, and to conduct its business in all or any
branches in any lawful capacity.
The foregoing enumeration of specific purposes and
powers shall not be held to limit or restrict in any
manner the purposes and powers of the corporation by
references to or inference from the terms or
provisions of any other clause, but shall be regarded
as independent purposes.
ARTICLE IV
The aggregate number of shares, which the corporation
shall have authority to issue, is 10,000,000 shares
of common stock with $0.001 par value each.
No shareholder of the corporation shall have the
right of cumulative voting at any election of
directors or upon any other matter.
No holder of securities of the corporation shall be
entitled as a matter of right, preemptive or
otherwise, to subscribe for or purchase any
securities of the corporation now or hereafter
authorized to be issued, or securities held in the
treasury of the corporation, whether issued or sold
for cash or other consideration or as a share
dividend or otherwise. Any such securities may be
issued or disposed of by the board of directors to
such persons and on such terms as in its discretion
it shall deem advisable.
ARTICLE V
Any action required to, or that may, be taken at any
annual or special meeting of shareholders may be
taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by
the holder or holders of shares having not less than
the minimum number of votes that would be necessary
to take such action at a meeting at which the holders
of all shares entitled to vote on the action were
present and voted.
ARTICLE VI
The members of the governing board shall be styled
DIRECTORS and the number of such Directors shall be
not less than one (l), or more than five (5). The
first board of directors shall be Two Members whose
names and post office addresses are as follows:
Mr. John T. Bauska
2302 Hwy 2 East, Suite 4
Kalispell, Montana 59901
Mr. David R. Mortenson
P.O. Box 5034
Alvin, Texas 77512
ARTICLE VII
The initial number of stockholders will be two (2).
Additional stockholders may be obtained. The number
of directors may be changed as provided in N.R.S.
78.330.
ARTICLE VIII
A. No director of the corporation shall be liable
to the corporation or any of its shareholders for
monetary damages for an act or omission in the
director's capacity as a director, except that this
Article VIII shall not authorize the elimination or
limitation of liability of a director of the
corporation to the extent the director is found
liable for: (i) a breach of such director's duty of
loyalty to the corporation or its shareholders; (ii)
an act or omission not in good faith that constitutes
a breach of duty of such director to the corporation
or an act or omission that involves intentional
misconduct or a knowing violation of the law; (iii) a
transaction from which such director received an
improper benefit, whether or not the benefit resulted
from an action taken within the scope of the
director's office; or (iv) an act or omission for
which the liability of a director is expressly
provided by an applicable statute.
B. The capital stock of this corporation after the
amount of the subscription price or par value has
been paid in, shall not be subject to assessment to
pay debts of this corporation and no stock issued as
fully paid up shall ever be assessable or assessed
and the Articles of Incorporation shall not be
amended in this particular.
ARTICLE IX
This corporation is to have perpetual existence.
David R. Mortenson, the undersigned, being the
original incorporator for the purpose of forming a
corporation to do business both within and without
the state of Nevada, and in pursuance of the General
Corporation Law of the State of Nevada, effective
March 31, 1925 and as subsequently amended do make
and file this certificate, hereby declaring and
certifying that the facts herein above stated are
true.
This 17th day of July , 1998.
Address: P.O. Box 5034
Alvin TX 77512-5034
XAIBE, INC.
BYLAWS OF
XAIBE INC.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00 CORPORATE CHARTER AND BYLAWS
1.01 Corporate Charter Provisions
1.02 Registered Agent or Office Requirement
of Filing Changes with Secretary of State
1.03 Initial Business Office
1.04 Amendment of Bylaws
2.0 DIRECTORS AND DIRECTORS' MEETINGS
3.0
2.01 Action Without Meeting
2.02 Telephone Meetings
2.03 Place of Meetings
2.04 Regular Meetings
2.05 Call of Special Meeting
2.06 Quorum
2.07 Adjournment Notice of Adjourned Meetings
2.08 Conduct of Meetings
2.09 Powers of the Board of Directors
2.10 Board Committees Authority to Appoint
2.11 Transactions with Interested Directors
2.12 Number of Directors
2.13 Term of Office
2.14 Removal of Directors
2.15 Vacancies
2.15(a) Declaration of Vacancy
2.15(b) Filling Vacancies by Directors
2.15(c) Filling Vacancies by Shareholders
2.16 Compensation
2.17 Indemnification of Directors and Officers
2.18 Insuring Directors, Officers, and Employees
ARTICLE PAGE
3.00 SHAREHOLDERS' MEETINGS
3.01 Action Without Meeting
3.02 Telephone Meetings
3.03 Place of Meetings
3.04 Notice of Meetings
3.04 Voting List
3.05 Votes per Share
3.07 Cumulative Voting
3.08 Proxies
3.09 Quorum
3.09(a) Quorum of Shareholders
3.09(b) Adjourn for Lack or Loss of Quorum
3.10 Voting by Voice or Ballot
3.11 Conduct of Meetings
3.12 Annual Meetings
3.13 Failure to Hold Annual Meeting
3.14 Special Meetings
4.00 OFFICERS
4.01 Title and Appointment
4.01(a) Chairman
4.01(b) President
4.01(c) Vice President
4.01(d) Secretary
4.01(e) Treasurer
4.01(f) Assistant Secretary or
Assistant Treasurer
4.02 Removal and Resignation
4.03 Vacancies
4.04 Compensation
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization
5.02 Execution of Certain Instruments
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares
6.02 Certificates for Fully Paid Shares
6.03 Consideration for Shares
6.04 Replacement of Certificates
6.05 Signing Certificates Facsimile Signatures
6.06 Transfer Agents and Registrars
6.07 Conditions of Transfer
6.08 Reasonable Doubts as to Right to Transfer
ARTICLE PAGE
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01 Minutes of Corporate Meetings
7.02 Share Register
7.03 Corporate Seal
7.04 Books of Account
7.05 Inspection of Corporate Records
7.06 Fiscal Year
7.07 Waiver of Notice
8.00 ADOPTION OF INITIAL BYLAWS
ARTICLE ONEBCORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporation's Charter authorizes ten million
(10,000,000) shares to be issued. The officers and
transfer agents issuing shares of the Corporation
shall ensure that the total number of shares
outstanding at any given time does not exceed this
number. Such officers and agents shall advise the
Board at least annually of the authorized shares
remaining available to be issued. No shares shall be
issued for less than the par value stated in the
Charter. Each Charter provision shall be observed
until amended by Restated Articles or Articles of
Amendment duly filed with the Secretary of State.
1.02 REGISTERED AGENT AND OFFICEBREQUIREMENT OF
FILING CHANGES WITH SECRETARY OF STATE
The address of the Registered Office provided in the
Articles of Incorporation, as duly filed with the
Secretary of State for the State of Nevada, is: 50
West Liberty Street, Suite 880, Reno, Nevada 89501.
The name of the Registered Agent of the Corporation
at such address, as set forth in its Articles of
Incorporation, is: Nevada Agency and Trust Company.
The Registered Agent or Office may be changed by
filing a Statement of Change of Registered Agent or
Office or Both with the Secretary of State, and not
otherwise. Such filing shall be made promptly with
each change. Arrangements for each change in
Registered Agent or Office shall ensure that the
Corporation is not exposed to the possibility of a
default judgment. Each successive Registered Agent
shall be of reliable character and well informed of
the necessity of immediately furnishing the papers of
any lawsuit against the Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office
of the Corporation is hereby established as: 2400
Loop 35 #1502, Alvin, Texas 77511.
The Corporation may have additional business offices
within the State of Nevada and where it may be duly
qualified to do business outside of Nevada, as the
Board of Directors may from time to time designate or
the business of the Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to
any limits imposed by the Shareholders, may amend or
repeal these Bylaws and adopt new Bylaws. All
amendments shall be upon advice of counsel as to
legality, except in emergency. Bylaw changes shall
take effect upon adoption unless otherwise specified.
Notice of Bylaws changes shall be given in or before
notice given of the first Shareholders' meeting
following their adoption.
ARTICLE TWO DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the
Board of Directors may be taken without a meeting,
and shall have the same force and effect as a
unanimous vote of Directors, if all members of the
Board consent in writing to the action. Such consent
may be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these
Bylaws and by the Business Corporation Act, Directors
may participate in and hold a meeting by means of
conference call or similar communication by which all
persons participating can hear each other.
Participation in such a meeting shall constitute
presence in person at such meeting, except
participation for the express purpose of objecting to
the transaction of any business on the ground that
the meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at
the business office of the Corporation or at such
other place within or without the State of Nevada as
may be designated by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be
held, without call or notice, immediately following
each annual Shareholders' meeting, and at such other
regularly repeating times as the Directors may
determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any
purpose may be called at any time by the President
or, if the President is absent or unable or refuses
to act, by any Vice President or any two Directors.
Written notices of the special meetings, stating the
time and place of the meeting, shall be mailed ten
days before, or telegraphed or personally delivered
so as to be received by each Director not later than
two days before, the day appointed for the meeting.
Notice of meetings need not indicate an agenda.
Generally, a tentative agenda will be included, but
the meeting shall not be confined to any agenda
included with the notice.
Meetings provided for in these Bylaws shall not be
invalid for lack of notice if all persons entitled to
notice consent to the meeting in writing or are
present at the meeting and do not object to the
notice given. Consent may be given either before or
after the meeting.
Upon providing notice, the Secretary or other officer
sending notice shall sign and file in the Corporate
Record Book a statement of the details of the notice
given to each Director. If such statement should
later not be found in the Corporate Record Book, due
notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or
adjournment thereof, of a majority of the authorized
number of Directors shall be necessary to constitute
a quorum to transact any business, except to adjourn.
If a quorum is present, every act done or resolution
passed by a majority of the Directors present and
voting shall be the act of the Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors'
meeting to meet again at a stated hour on a stated
day. Notice of the time and place where an adjourned
meeting will be held need not be given to absent
Directors if the time and place is fixed at the
adjourned meeting. In the absence of a quorum, a
majority of the Directors present may adjourn to a
set time and place if notice is duly given to the
absent members, or until the time of the next regular
meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the
Chairman of the Board, if there is such an officer,
and if not, the President, or in the President's
absence, a Vice President designated by the
President, or in the absence of such designation, a
Chairman chosen by a majority of the Directors
present, shall preside. The Secretary of the
Corporation shall act as Secretary of the Board of
Directors' meetings. When the Secretary is absent
from any meeting, the Chairman may appoint any person
to act as Secretary of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all
corporate powers shall be exercised by or under
authority of the Board of Directors, subject to
limitations imposed by law, the Articles of
Incorporation, any applicable Shareholders'
agreement, and these Bylaws.
2.10 BOARD COMMITTEESBAUTHORITY TO APPOINT
The Board of Directors may designate an executive
committee and one or more other committees to conduct
the business and affairs of the Corporation to the
extent authorized. The Board shall have the power at
any time to change the powers and membership of, fill
vacancies in, and dissolve any committee. Members of
any committee shall receive such compensation as the
Board of Directors may from time to time provide. The
designation of any committee and the delegation of
authority thereto shall not operate to relieve the
Board of Directors, or any member thereof, of any
responsibility imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the
Corporation and any of its Directors (or any
corporation or firm in which any of its Directors are
directly or indirectly interested) shall be valid for
all purposes notwithstanding the presence of that
Director at the meeting during which the contract or
transaction was authorized, and notwithstanding the
Directors' participation in that meeting. This
section shall apply only if the contract or
transaction is just and reasonable to the Corporation
at the time it is authorized and ratified, the
interest of each Director is known or disclosed to
the Board of Directors, and the Board nevertheless
authorizes or ratifies the contract or transaction by
a majority of the disinterested Directors present.
Each interested Director is to be counted in
determining whether a quorum is present, but shall
not vote and shall not be counted in calculating the
majority necessary to carry the vote. This section
shall not be construed to invalidate contracts or
transactions that would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be
two. No Director need be a resident of Nevada or a
Shareholder. The number of Directors may be increased
or decreased from time to time by amendment to these
Bylaws. Any decrease in the number of Directors shall
not have the effect of shortening the tenure, which
any incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until
their successors are elected and qualified. Election
for all Director positions, vacant or not vacant,
shall occur at each annual meeting of the
Shareholders and may be held at any special meeting
of Shareholders called specifically for that purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual
Director may be removed from office by a vote of
Shareholders holding a majority of the outstanding
shares entitled to vote at an election of Directors.
However, if less than the entire Board is to be
removed, no one of the Directors may be removed if
the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at
an election of the entire Board of Directors. No
director may be so removed except at an election of
the class of Directors of which he is a part. If any
or all Directors are so removed, new Directors may be
elected at the same meeting. Whenever a class or
series of shares is entitled to elect one or more
Directors under authority granted by the Articles of
Incorporation, the provisions of this Paragraph apply
to the vote of that class or series and not to the
vote of the outstanding shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon
the occurrence of any of the following events: (a)
the death, resignation, or removal of any Director;
(b) an increase in the authorized number of
Directors; or (c) the failure of the Shareholders to
elect the full authorized number of Directors to be
voted for at any annual, regular, or special
Shareholders' meeting at which any Director is to be
elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare
vacant the office of a Director if the Director: (a)
is adjudged incompetent by a court order; (b) is
convicted of a crime involving moral turpitude; (c)
or fails to accept the office of Director, in writing
or by attending a meeting of the Board of Directors,
within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in
the number of Directors may be filled temporarily by
majority vote of the remaining Directors, though less
than a quorum, or by a sole remaining Director. Each
Director so elected shall hold office until a
qualified successor is elected at a Shareholders'
meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including
those caused by an increase in the number of
Directors shall be filled by the Shareholders at the
next annual meeting or at a special meeting called
for that purpose. Upon the resignation of a Director
tendered to take effect at a future time, the Board
or the Shareholders may elect a successor to take
office when the resignation becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their
services as Directors as shall be determined from
time to time by resolution of the Board. Any Director
may serve the Corporation in any other capacity as an
officer, agent, employee, or otherwise, and receive
compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the
Corporation to pay or reimburse any present or former
Director or officer of the Corporation any costs or
expenses actually and necessarily incurred by that
officer in any action, suit, or proceeding to which
the officer is made a party by reason of holding that
position, provided, however, that no officer shall
receive such indemnification if finally adjudicated
therein to be liable for negligence or misconduct in
office. This indemnification shall extend to good-
faith expenditures incurred in anticipation of
threatened or proposed litigation. The Board of
Directors may in proper cases, extend the
indemnification to cover the good-faith settlement of
any such action, suit, or proceeding, whether
formally instituted or not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance
on behalf of any Director, officer, employee, or
agent of the Corporation, or on behalf of any person
serving at the request of the Corporation as a
Director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or
other enterprise, against any liability asserted
against that person and incurred by that person in
any such corporation, whether or not the Corporation
has the power to indemnify that person against
liability for any of those acts.
ARTICLE THREEBSHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the
Shareholders under any provision of the Nevada
Business Corporation Act may be taken without a
meeting if authorized by a consent or waiver filed
with the Secretary of the Corporation and signed by
all persons who would be entitled to vote on that
action at a Shareholders' meeting. Each such signed
consent or waiver, or a true copy thereof, shall be
placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these
Bylaws and by the Business Corporation Act,
Shareholders may participate in and hold a meeting by
means of conference call or similar communication by
which all persons participating can hear each other.
Participation in such a meeting shall constitute
presence in person at such meeting, except
participation for the express purpose of objecting to
the transaction of any business on the ground that
the meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business
office of the Corporation, or at such other place
within or without the State of Nevada as may be
designated by the Board of Directors or the
Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or
persons calling a Shareholders' Meeting. shall give
notice, or cause it to be given, in writing to each
Director and to each Shareholder entitled to vote at
the meeting at least ten (10) but not more than sixty
(60) days before the date of the meeting. Such notice
shall state the place, day, and hour of the meeting,
and, in case of a special meeting, the purpose or
purposes for which the meeting is called. Such
written notice may be given personally, by mail, or
by other means. Such notice shall be addressed to
each recipient at such address as appears on the
Books of the Corporation or as the recipient has
given to the Corporation for the purpose of notice.
Meetings provided for in these Bylaws shall not be
invalid for lack of notice if all persons entitled to
notice consent to the meeting in writing or are
present at the meeting in person or by proxy and do
not object to the notice given, Consent may be given
either before or after the meeting. Notice of the
reconvening of an adjourned meeting is not necessary
unless the meeting is adjourned more than thirty days
past the date stated in the notice, in which case
notice of the adjourned meeting shall be given as in
the case of any special meeting. Notice may be waived
by written waivers signed either before or after the
meeting by all persons entitled to the notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days
before each Shareholders' meeting, the officer or
agent having charge of the Corporation's share
transfer books shall make a complete list of the
Shareholders entitled to vote at that meeting or any
adjournment thereof, arranged in alphabetical order,
with the address and the number of shares held by
each. The list shall be kept on file at the
Registered Office of the Corporation for at least ten
(10) days prior to the meeting, and shall be subject
to inspection by any Director, officer, or
Shareholder at any time during usual business hours.
The list shall also be produced and kept open at the
time and place of the meeting and shall be subject,
during the whole time of the meeting, to the
inspection of any Shareholder. The original share
transfer books shall be prima facie evidence as to
the Shareholders entitled to examine such list or
transfer books or to vote at any meeting of
Shareholders. However, failure to prepare and to make
the list available in the manner provided above shall
not affect the validity of any action taken at the
meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be
entitled to one (1) vote on each matter submitted to
a vote at a meeting of Shareholders, except to the
extent that the voting rights of the shares of any
class or classes are limited or denied pursuant to
the Articles of Incorporation. A Shareholder may vote
in person or by proxy executed in writing by the
Shareholder, or by the Shareholder's duly authorized
attorney-in-fact.
3.07 CUMULATIVE VOTING
Subject to any limitation stated in the Articles of
Incorporation, every Shareholder entitled to vote at
any election of Directors may cumulate votes. For
this purpose, each Shareholder shall have a number of
votes equal to the number of Directors to be elected
multiplied by the number of votes to which the
Shareholder's shares are entitled. The Shareholder
may cast all these votes for one candidate or may
distribute the votes among any number of candidates.
The candidates receiving the highest number of votes
are elected, up to the number of vacancies to be
filled. No Shareholder may cumulate votes unless that
Shareholder gives written notice of his or her
intention to do so to the Secretary of the
Corporation on or before the day preceding the
election at which the votes will be cumulated. If any
Shareholder gives written notice as provided above,
all Shareholders may cumulate their votes.
3.08 PROXIES
A Shareholder may vote either in person or by proxy
executed in writing by the Shareholder or his or her
duly authorized attorney in fact. Unless otherwise
provided in the proxy or by law, each proxy shall be
revocable and shall not be valid after eleven (11)
months from the date of its execution,
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the
presence (in person or by proxy) of the persons who
are entitled to vote a majority of the outstanding
voting shares on that matter shall constitute the
quorum necessary for the consideration of the matter
at a Shareholders' meeting. The vote of the holders
of a majority of the shares entitled to vote on the
matter and represented at a meeting at which a quorum
is present shall be the act of the Shareholders'
meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a
quorum, or upon the
withdrawal of enough Shareholders to leave less than
a quorum; other than to adjourn the meeting from time
to time by the vote of a majority of the shares
represented at the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless
a Shareholder demands election by ballot before the
voting begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the
President, or, in the President's absence, a Vice
President designated by the President, or, in the
absence of such designation, any other person chosen
by a majority of the Shareholders of the Corporation
present in person or by proxy and entitled to vote.
The Secretary of the Corporation, or, in the
Secretary's absence, an Assistant Secretary, shall
act as Secretary of all meetings of the Shareholders.
In the absence of the Secretary or Assistant
Secretary, the Chairman shall appoint another person
to act as Secretary of the meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of
the Shareholders of the Corporation, for the purpose
of electing Directors and for the transaction of any
other business as may come before the meeting, shall
be set from time to time by a majority vote of the
Board of Directors. If the day fixed for the annual
meeting shall be on a legal holiday in the State of
Nevada, such meeting shall be held on the next
succeeding business day. If the election of Directors
is not held on the day thus designated for any annual
meeting, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a
special meeting of the Shareholders as soon
thereafter as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual
Shareholders' Meeting is not held, any Shareholder
may apply to a court of competent jurisdiction in the
county in which the principal office of the
Corporation is located for a summary order that an
annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any
time by. (a) the President; (b) the Board of
Directors; or (c) one or more Shareholders holding in
the aggregate one-tenth or more of all the shares
entitled to vote at the meeting. Such meeting may be
called for any purpose. The party calling the meeting
may do so only by written request sent by registered
mail or delivered in person to the President or
Secretary. The officer receiving the written request
shall within ten (10) days from the date of its
receipt cause notice of the meeting to be sent to all
the Shareholders entitled to vote at such a meeting.
If the officer does not give notice of the meeting
within ten (10) days after the date of receipt of the
written request, the person or persons calling the
meeting may fix the time of the meeting and give the
notice. The notice shall be sent pursuant to Section
3.04 of these Bylaws. The notice of a special
Shareholders' meeting must state the purpose or
purposes of the meeting and, absent consent of every
Shareholder to the specific action taken, shall be
limited to purposes plainly stated in the notice,
notwithstanding other provisions herein.
ARTICLE FOURBOFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President
and a Secretary, as required by law. The Corporation
may also have, at the discretion of the Board of
Directors, a Chairman of the Board, one or more Vice
Presidents, a Treasurer, one or more Assistant
Secretaries, and one or more Assistant Treasurers.
One person may hold any two or more offices,
including President and Secretary. All officers shall
be elected by and hold office at the pleasure of the
Board of Directors, which shall fix the compensation
and tenure of all officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer,
shall, if present, preside at the meetings of the
Board of Directors and exercise and perform such
other powers and duties as may from time to time be
assigned to the Chairman by the Board of Directors or
prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be
given to the Chairman, if there is one, by the Board
of Directors, the President shall be the chief
executive officer of the Corporation and shall,
subject to the control of the Board of Directors,
have general supervision, direction, and control of
the business and officers of the Corporation. The
President shall have the general powers and duties of
management usually vested in the office of President
of a corporation; shall have such other powers and
duties as may be prescribed by the Board of Directors
or the Bylaws; and shall be ex officio a member of
all standing committees, including the executive
committee, if any. In addition, the President shall
preside at all meetings of the Shareholders and in
the absence of the Chairman, or if there is no
Chairman, at all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform
such duties as from time to time may be prescribed by
these Bylaws, by the Board of Directors, or by the
President. In the absence or disability of the
President, the senior or duly appointed Vice
President, if any, shall perform all the duties of
the President, pending action by the Board of
Directors when so acting, such Vice President shall
have all the powers of, and be subject to all the
restrictions on, the President.
4.01(d) SECRETARY
The Secretary shall:
A. See that all notices are duly given in
accordance with the provisions of these Bylaws and as
required by law. In case of the absence or disability
of the Secretary. or the Secretary's refusal or
neglect to act, notice may be given and served by an
Assistant Secretary or by the Chairman, the
President, any Vice President, or by the Board of
Directors.
B. Keep the minutes of corporate meetings, and the
Corporate Record Book, as set out in Section 7.01
hereof.
C. Maintain, in the Corporate Record Book, a record
of all share certificates issued or canceled and all
shares of the Corporation canceled or transferred.
D. Be custodian of the Corporation's records and of
any seal, which the Corporation may from time to time
adopt. when the Corporation exercises its right to
use a seal, the Secretary shall see that the seal is
embossed on all share certificates prior to their
issuance and on all documents authorized to be
executed under seal in accordance with the provisions
of these Bylaws.
E. In general, perform all duties incident to the
office of Secretary, and such other duties as from
time to time may be required by Sections 7.01, 7.02,
and 7.03 of these Bylaws, by these Bylaws generally,
by the Board of Directors, or by the President.
4.01(e) TREASURER
The Treasurer shall:
F. Have charge and custody of, and be responsible
for, all funds and securities of the Corporation, and
deposit all funds in the name of the Corporation in
those banks, trust companies, or other depositories
that shall be selected by the Board of Directors.
G. Receive, and give receipt for, monies due and
payable to the Corporation.
H. Disburse or cause to be disbursed the funds of
the Corporation as may be directed by the Board of
Directors, taking proper vouchers for those
disbursements.
I. If required by the Board of Directors or the
President, give to the Corporation a bond to assure
the faithful performance of the duties of the
Treasurer's office and the restoration to the
Corporation of all corporate books, papers, vouchers,
money, and other property of whatever kind in the
Treasurer's possession or control, in case of the
Treasurer's death, resignation, retirement, or
removal from office. Any such bond shall be in a sum
satisfactory to the Board of Directors, with one or
more sureties or a surety company satisfactory to the
Board of Directors.
J. In general, perform all the duties incident to
the office of Treasurer and such other duties as from
time to time may be assigned to the Treasurer by
Sections 7.O4 and 7.05 of these Bylaws, by these
Bylaws generally, by the Board of Directors, or by
the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall
have such powers and perform such duties as the
Secretary or Treasurer, respectively, or as the Board
of Directors or President may prescribe. In case of
the absence of the Secretary or Treasurer, the senior
Assistant Secretary or Assistant Treasurer,
respectively, may perform all of the functions of the
Secretary or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without
cause, by vote of a majority of the Directors at any
regular or special meeting of the Board, or, except
in case of an officer chosen by the Board of
Directors, by any committee or officer upon whom that
power of removal may be conferred by the Board of
Directors. Such removal shall be without prejudice to
the contract rights, if any, of the person removed.
Any officer may resign at any time by giving written
notice to the Board of Directors, the President, or
the Secretary of the Corporation. Any resignation
shall take effect on the date of the receipt of that
notice or at any later time specified therein, and,
unless otherwise specified therein, the acceptance of
that resignation shall not be necessary to make it
effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any
office of the Corporation, by reason of death,
resignation, removal, or otherwise, the Board of
Directors may elect an acting successor to hold
office for the unexpired term or until a permanent
successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from
time to time by the Board of Directors, and no
officer shall be prevented from receiving a salary by
reason of the fact that the officer is also a
Shareholder or a Director of the Corporation, or
both.
ARTICLE FIVEBAUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the
execution of instruments. The Board of Directors,
except as otherwise provided in these Bylaws, may
additionally authorize any officer or officers, agent
or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf
of the Corporation, and such authority may be general
or confined to specific instances. Unless expressly
authorized by these Bylaws or the Board of Directors,
no officer, agent, or employee shall have any power
or authority to bind the Corporation by any contract
or engagement nor to pledge its credit nor to render
it peculiarly liable for any purpose or in any
amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory
notes, deeds, deeds of trust, mortgages, pledges, and
other evidences of indebtedness of the Corporation,
other corporate documents, and certificates of
ownership of liquid assets held by the Corporation
shall be signed or endorsed by the President or any
Vice President and by the Secretary or the Treasurer,
unless otherwise specifically determined by the Board
of Directors or otherwise required by law.
ARTICLE SIX-ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or
series of shares, or both. Any of these classes or
series may have full, limited, or no voting rights,
and may have such other preferences, rights,
privileges, and restrictions as are stated or
authorized in the Articles of Incorporation. All
shares of any one class shall have the same voting,
conversion, redemption, and other rights,
preferences, privileges, and restrictions, unless the
class is divided into series, If a class is divided
into series, all the shares of any one series shall
have the same voting, conversion, redemption, and
other. rights, preferences, privileges, and
restrictions. There shall always be a class or series
of shares outstanding that has complete voting rights
except as limited or restricted by voting rights
conferred on some other class or series of
outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares
may be issued by the Corporation until the full
amount of the consideration has been received when
the consideration has been paid to the Corporation,
the shares shall be deemed to have been issued and
the certificate representing the shares shall be
issued to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be
fixed from time to time by the Board of Directors,
but not less than the par value stated in the
Articles of Incorporation. The consideration paid for
the issuance of shares shall consist of money paid,
labor done, or property actually received, and
neither promissory notes nor the promise of future
services shall constitute payment nor partial payment
for shares of the Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued
until the former certificate for the shares
represented thereby shall have been surrendered and
canceled, except that replacements for lost or
destroyed certificates may be issued, upon such
terms, conditions, and guarantees as the Board may
see fit to impose, including the filing of sufficient
indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the
officer(s) designated by the Board of Directors. The
signatures of the foregoing officers may be
facsimiles. If the officer who has signed or whose
facsimile signature has been placed on the
certificate has ceased to be such officer before the
certificate issued, the certificate may be issued by
the Corporation with the same effect as if he or she
were such officer on the date of its issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more
transfer agents or transfer clerks, and one or more
registrars, at such times and places as the
requirements of the Corporation may necessitate and
the Board of Directors may designate. Each registrar
appointed, if any, shall be an incorporated bank or
trust company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the
books of the Corporation shall be deemed the owner
thereof as regards the Corporation, provided that
whenever any transfer of shares shall be made for
collateral security, and not absolutely, and prior
written notice thereof shall be given to the
Secretary of the Corporation, or to its transfer
agent, if any, such fact shall be stated in the entry
of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is
reasonable doubt as to the right of the person
seeking the transfer, the Corporation or its transfer
agent, before recording the transfer of the shares on
its books or issuing any certificate therefor, may
require from the person seeking the transfer
reasonable proof of that person's right to the
transfer. If there remains a reasonable doubt of the
right to the transfer, the Corporation may refuse a
transfer unless the person gives adequate security or
a bond of indemnity executed by a corporate surety or
by two individual sureties satisfactory to the
Corporation as to form, amount, and responsibility of
sureties. The bond shall be conditioned to protect
the Corporation, its officers, transfer agents, and
registrars, or any of them, against any loss, damage,
expense, or other liability for the transfer or the
issuance of a new certificate for shares.
ARTICLE SEVENBCORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office,
or such other place as the Board of Directors may
order, a book recording the minutes of all meetings
of its Shareholders and Directors, with the time and
place of each meeting, whether such meeting was
regular or special, a copy of the notice given of
such meeting, or of the written waiver thereof, and,
if it is a special meeting, how the meeting was
authorized. The record book shall further show the
number of shares present or represented at
Shareholders' meetings, and the names of those
present and the proceedings of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office,
or at the office of the transfer agent, a share
register showing the names of the Shareholders, their
addresses, the number and class of shares issued to
each, the number and date of issuance of each
certificate issued for such shares, and the number
and date of cancellation of every certificate
surrendered for cancellation. The above information
may be kept on an information storage device such as
a computer, provided that the device is capable of
reproducing the information in clearly legible form.
If the Corporation is taxed under Internal Revenue
Code Section 1244 or Subchapter S, the Officer
issuing shares shall maintain the appropriate
requirements regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt,
prescribe the use of, or discontinue the use of, such
corporate seal as it deems desirable, and the
appropriate officers shall cause such seal to be
affixed to such certificates and documents as the
Board of Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate
accounts of its properties and business transactions,
including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital,
surplus, and shares. The corporate bookkeeping
procedures shall conform to accepted accounting
practices for the Corporation's business or
businesses. subject to the foregoing, The chart of
financial accounts shall be taken from, and designed
to facilitate preparation of, current corporate tax
returns. Any surplus, including earned surplus, paid-
in surplus, and surplus arising from a reduction of
stated capital, shall be classed by source and shown
in a separate account. If the Corporation is taxed
under Internal Revenue Code Section 1244 or
Subchapter S, the officers and agents maintaining the
books of account shall maintain the appropriate
requirements.
7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the
Corporation's books or records may be required to
first sign an affidavit that the demanding party will
not directly or indirectly participate in reselling
the information and will keep it confidential other
than in use for proper purposes reasonably related to
the Director's or Shareholder's role. A Director who
insists on examining the records while refusing to
sign this affidavit thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as
determined by the Board of Directors and approved by
the Internal Revenue Service. The Treasurer shall
forthwith arrange a consultation with the
Corporation's tax advisers to determine whether the
Corporation is to have a fiscal year other than the
calendar year. If so, the Treasurer shall file an
election with the Internal Revenue Service as early
as possible, and all correspondence with the IRS,
including the application for the Corporation's
Employer Identification Number, shall reflect such
non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be
waived by execution of a written waiver of notice
executed by the person entitled to the notice. The
waiver may be signed before or after the meeting.
ARTICLE EIGHT- ADOPTION OF INITIAL BYLAWS
The Board of Directors adopted the foregoing bylaws
on October 6, 1998.
/S/ John T. Bauska
Director
/S/ David R. Mortenson
Director
Attested to, and certified by: /S/ David R.
Mortenson, Secretary
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<PERIOD-END> MAY-31-1999
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