<PAGE> 1
Date Filed: ___________ SEC File No. __________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM SB-2
Registration Statement Under the Securities Act of 1933
CYBERGUIDE ONLINE, INC.
(Exact Name of Issuer as Specified in Its Charter)
<TABLE>
<S> <C> <C>
Texas 76-0594616
State of Incorporation Primary Standard Industrial I.R.S. Employer
Classification Code Number Identification Number
</TABLE>
4300 Horizon N. Parkway, Suite 915, Dallas, TX. 75287 (409) 760-2600
(Address and Telephone Number of Issuer's Principal
Offices and Place of Business)
James B. Tucker
4300 Horizon N. Parkway, Suite 915, Dallas, TX. 75287
(409) 760-2600
(Name, Address and Telephone Number of Agent for Service)
Approximate date of proposed sale to the public: As soon as this Registration
Statement becomes effective.
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the box. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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Proposed Proposed
Title of class of Maximum maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered unit price Registration Fee
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<S> <C> <C> <C> <C>
Common Stock 10,200,000 $0.50 $510,000
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</TABLE>
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a) ,
may determine.
<PAGE> 2
PROSPECTUS
CYBERGUIDE ONLINE, INC
Maximum of 10,200,000 shares of common stock
Price per share: $0.05.
Total proceeds if maximum sold: $510,000.
This is the Company's initial public offering so there is no public market for
the Company's shares. However, we hope to have prices for our shares quoted on
the bulletin board maintained by the National Association of Securities Dealers
after we complete our offering.
AN INVESTMENT IN OUR COMPANY IS RISKY, ESPECIALLY GIVEN THE YOUNG AGE OF OUR
COMPANY. ONLY PEOPLE WHO CAN AFFORD TO LOSE THE MONEY THEY INVEST IN OUR COMPANY
SHOULD INVEST IN OUR SHARES. A FULL DISCUSSION OF THE RISKS OF OWNING OUR SHARES
BEGINS AT PAGE 4 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF OUR SHARES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OF COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Underwriting Discount Proceeds to Issuer
Price to Public and Commissions or other Persons
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<S> <C> <C> <C>
Per Share $ 0.05 None $ 0.05
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Total Maximum $510,000 None $510,000
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</TABLE>
We will probably sell the shares ourselves and do not plan to use underwriters
or pay any commissions. We will be selling our shares using our best efforts and
no one has agreed to buy any of our shares. There is no minimum amount of shares
we must sale so no money raised from the sale of our stock will go into escrow,
trust or another similar arrangement. We expect to end our offering no later
than June 30, 2000.
The information in this Prospectus is not complete and may be changed. We may
not sell our shares until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
our shares and it is not soliciting an offer to buy our shares in any state
where the offer or sale is not permitted.
MARCH 3, 1999
<PAGE> 3
<TABLE>
<S> <C>
SUMMARY OF THE OFFERING............................................................. 1
RISK FACTORS........................................................................ 4
USE OF PROCEEDS..................................................................... 9
DETERMINATION OF OFFERING PRICE..................................................... 10
DILUTION ........................................................................... 11
PLAN OF DISTRIBUTION................................................................ 12
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS........................ 12
SECURITIES OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT........................................... 15
DESCRIPTION OF SECURITIES........................................................... 15
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.......................... 17
DESCRIPTION OF BUSINESS............................................................. 18
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............................ 20
DESCRIPTION OF PROPERTY............................................................. 24
MARKET FOR COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS............................................ 24
EXECUTIVE COMPENSATION.............................................................. 26
FINANCIAL STATEMENTS................................................................ 26
</TABLE>
<PAGE> 4
SUMMARY OF THE OFFERING
THE COMPANY: The Company is a recently incorporated
Texas corporation. The Company is in the
business of developing and producing
Internet advertisements for the Dallas
Metroplex. The Company maintains its
executive offices at 4300 Horizon N.
Parkway, Suite 915, Dallas, TX. 75287
(409) 760-2600
SECURITIES OFFERED: Up to a maximum of 10,200,000 shares of
common stock, no par value per share.
The shares are offered at $0.05 per
Share for total gross offering proceeds
of $510,000.
SHARES OF COMMON 0 Shares
STOCK OUTSTANDING
BEFORE OFFERING:
SHARES OF COMMON 10,200,000 Shares
STOCK OUTSTANDING
AFTER OFFERING,
ASSUMING MAXIMUM
AMOUNT SOLD:
SHARES OF PREFERRED 1,050 Shares
STOCK OUTSTANDING
PRIOR TO THE OFFERING,
CONVERTIBLE INTO
COMMON STOCK ON A 1:10,000 BASIS
TERMS OF THE OFFERING: There is no minimum offering.
Accordingly, as shares are sold, the
Company will use the money raised for
its activities. The Offering will remain
open until June 30, 2000, unless all of
the shares are sold earlier or the
Company decides, in its sole discretion
to cease selling efforts.
USE OF PROCEEDS: The Company intends to use the proceeds
of this Offering primarily for
developing a web page and related
activities, for repayment of corporate
debt and for working capital and general
corporate purposes.
RISK FACTORS: The purchase of Shares in this Offering
is highly speculative and involves a
high degree of risk for investors. Risk
factors associated with this Offering
include, but are not limited to:
o the Company is a development stage business
with an extremely limited operating history.
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o the dependence for success of the Company
upon the receipt of all or substantially all
of the maximum proceeds of the Offering.
o the need for substantial additional capital
beyond the proceeds sought in this Offering.
o the fact that there can be no assurance that
the services offered by the Company will be
popular with the public in general.
o the offering is a best efforts offering with
no required minimum proceeds amount and no
escrow provision.
o the reliance on existing management for
success of the Company.
o competition in the industry and general
economic conditions.
o potential conflicts of interest between
management and the Company and the fact that
the Company, at present, has no independent
directors.
o the fact that existing management has
effective control of the Company.
o the fact that additional shares could be
issued, thereby diluting the ownership
interests of potential shareholders.
o the fact that management can resale under
Rule 144 of restricted stock issued to the
Company's management.
o the arbitrary determination of the Offering
price for the shares.
o the lack of dividends paid with respect to
the Company's stock.
o the lack of an existing market in the common
stock of the Company.
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o the applicability of the "penny stock" rules
to the Common Stock of the Company.
O AN INVESTOR MAY LOSE HIS ENTIRE INVESTMENT.
PLAN OF DISTRIBUTION: This is a best efforts underwriting,
with no commitment by anyone to purchase
any shares. The shares will be offered
and sold by the Company's principal
executive officers and directors,
although the Company may use the
services of one or more NASD registered
broker-dealers as selling agent(s) to
make offers and sales on behalf of the
Company.
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RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK, INCLUDING A
RISK OF LOSS OF AN INVESTOR'S ENTIRE INVESTMENT IN THE COMPANY. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY, IN ADDITION TO THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, THE FOLLOWING RISK FACTORS BEFORE PURCHASING ANY
SHARES.
DEVELOPMENT STAGE COMPANY. The Company was incorporated in November,
1998, and is, therefore, a development stage company with a limited operating
history. The Company needs to receive substantially all of the Maximum Proceeds
of this Offering to proceed with its business plan and will require substantial
additional capital, for which no agreements or arrangements are currently in
place, to implement its business plan. The Company currently has no agreements,
understandings or arrangements with any person(s) to provide the Company with
additional financing which will be necessary to fully effectuate the Company's
business plan and no assurances are given that such funds will be available, or
if available, on terms that will be satisfactory to the Company. In such event,
the Company and its planned operations could be materially adversely affected.
No assurances can be given that the Company's business will ultimately be
successful or that the Company will ever be or remain profitable. Accordingly,
the Company's ability to continue as a going concern is dependent upon it
receiving the maximum proceeds of this Offering and/or securing conventional
financing.
LACK OF DIVERSIFICATION. If the Company is successful in selling the
maximum number of shares offered, the Company will only have enough money to
develop its web page and provide other web services to the public to a limited
extent. As a result, the Company will have no real diversification of
operations, at least initially. This will mean that the Company's fortunes will
depend significantly upon the success of its web page; if the public does not
like the Company's web page or the related services, the Company will not
succeed.
"BEST EFFORTS" OFFERING This Offering is being conducted on a "best
efforts" basis, meaning there is no guarantee as to how much money the Company
will be able to raise through the sale of its stock. If the Company fails to
sell all the stock it is trying to sell, its ability to expand and complete its
business plan will be materially adversely effected, and investors may lose all
or substantially all of their investment.
DEPENDENCE ON MARKETING AND PROMOTION . The Company plans to market and
promote its web services through its own sales and marketing personnel as well
as through advertising in recognized trade publications and on its web site.
Depending upon the level and timing of funding received in this Offering, such
marketing and promotional efforts will commence by the end of Second or Third
Quarter, 1999. No assurances are given that such marketing and promotional
efforts will prove or continue to be successful.
DEPENDENCE ON MANAGEMENT. The Company's future success is materially
dependent on the continued services of Mr. Brad Tucker, its President, who
intends to devote full time to the business of the Company. The Company's
success is also dependent on its ability to attract, motivate and retain
highly-qualified employees. The loss of the services of Mr. Tucker could have a
material adverse effect upon the Company's business and operations until a
suitable replacement may be located.
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COMPETITION. Any business that is related to the Internet is highly
competitive because of numerous factors, including the ease of access to the
Internet and the perception, albeit incorrect, among the public that involvement
in the Internet can generate huge profits. The result is that any person with a
computer and a modem can conduct business over the Internet. Coupled with this
is the reality that several of the world's most valuable companies are actively
involved in all aspects of the Internet. The Company's resources, even assuming
the successful completion of this offering, are meager when compared to these
industry giants. The Company will compete for virtually every aspect of its
business with these companies, from the pursuit of advertising dollars to the
ability of the Company to hire people to work for it.
POTENTIAL CONFLICTS OF INTEREST BETWEEN MANAGEMENT AND THE COMPANY. The
Company's President intends to devote full time as may be required to the
business and affairs of the Company. Management is not currently aware of any
known or potential conflicts between management and the interests of the
Company. Should any conflicts develop, management of the Company has not
established any policies for handling any conflicts which may arise between the
interests of the Company and the interests of any member of management and/or an
affiliated entity. Purchasers of Shares in this Offering will be relying solely
on management's and the Company's Board of Directors' judgment concerning the
resolution of any conflicts or potential conflicts. The Company has no
independent directors at this time.
VOTING CONTROL BY MANAGEMENT. After completion of this Offering,
assuming all of the Shares offered hereby are sold, management of the Company,
inclusive of its Board of Directors, through its ownership of preferred stock,
will have the right to acquire 10,500,000 shares of the Company's outstanding
Common Stock. In addition, each share of Preferred Stock is entitled to 10,000
votes on all matters submitted to shareholders. Thus, management will control
approximately 51% of the voting securities of the Company if all Shares offered
hereby are sold, without giving effect to any additional issuances of Common
Stock or other securities of the Company to management and/or others, in
management's sole discretion. As a result, management of the Company will
effectively control the affairs of the Company, including the election of all of
its Board of Directors, the issuance of additional shares of Common Stock or
Preferred Stock, the distribution and timing of dividends, if any, and all other
matters.
DILUTION. The Company is authorized to issue a substantial number of
shares of common stock in addition to the shares offered hereby, as well as
potentially shares of preferred stock in such series and with such rights and
preferences as may be determined by the Company's Board of Directors in its sole
discretion. The Company will require significant additional financing to fully
implement its business plan, which funding could entail the issuance of a
substantial number of additional Company securities which could in turn cause
material dilution to investors in this Offering.
This Offering itself involves immediate and substantial dilution to
investors. Any securities issuances in the future, including issuances to
management, could reduce the proportionate ownership, economic interests and
voting rights of any holders of shares of the Company's Common Stock purchased
in this Offering.
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SHARES AVAILABLE FOR RESALE UNDER RULE 144. All of the Company's
presently outstanding shares of stock are "restricted securities" as defined
under Rule 144 promulgated under the Securities Act and may only be sold
pursuant thereto or otherwise pursuant to an effective registration statement or
an exemption from registration, if available. Rule 144 generally provides that a
person who has satisfied a one year holding period for such restricted
securities may sell, within any three month period, an amount of restricted
securities which does not exceed the greater of 1% of a company's outstanding
common stock or the average weekly trading volume in such securities during the
four calendar weeks prior to such sale, provided the company is current in its
reporting obligations under the Exchange Act or, if not required to file such
reports and not filing such reports on a voluntary basis, makes publicly
available certain information set forth under Rule 15c2-11 under the Exchange
Act, subject to certain manner of resale provisions. The Company's principal
executive officers own preferred stock having rights to convert into common
stock up to an aggregate of 10,500,000 restricted shares for which the one year
holding period expires in November, 1999. A sale of shares by such security
holders, whether pursuant to Rule 144 or otherwise, may have a depressing effect
upon the price of the Company's Common Stock in any market that might develop.
ARBITRARY DETERMINATION OF OFFERING PRICE. The offering price and other
terms and conditions relative to the shares offered hereby have been arbitrarily
determined by the Company and do not necessarily bear any direct relationship to
assets, earnings, book value or any other objective criteria of value.
NO DIVIDENDS ON COMMON STOCK. The Company intends for the foreseeable
future to retain earnings, if any, for the future operation and expansion of its
business and does not anticipate paying dividends on its shares of common stock
for the foreseeable future.
NO FIRM COMMITMENT. There is no underwriter and no firm commitment by
anyone to purchase all or any part of the shares offered. The receipt of nominal
proceeds will have a material adverse effect upon the Company and investors.
ILLIQUIDITY OF INVESTMENT IN SECURITIES. There is currently no market
for any of the Company's shares and no assurances are given that a public market
for such securities will develop or be sustained if developed. While the Company
plans, following the termination of this Offering, to take affirmative steps to
request or encourage one or more broker/dealers to act as a market maker for the
Company's securities, no such efforts have yet been undertaken and no assurances
are given that any such efforts will prove successful. Generally, in order for a
broker/dealer to make a market in a company's securities, such company must
either timely file reports on a required or voluntary basis with the Commission
under the Exchange Act (i.e., Forms 10-KSB, Forms 10-QSB) or otherwise, if not
required to file such reports or not filing such reports on a voluntary basis,
make publicly available certain information set forth under Rule 15c2-11 under
the Exchange Act. The Company is not currently and after the Termination Date of
this Offering, regardless of the amount of proceeds which may be received
hereby, will not be required to file Exchange Act reports with the Commission
but does
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intend to voluntarily do so. While the Company does intend to become a reporting
company under the Exchange Act to facilitate potential market making in the
Company's securities, no assurances are given that it will do so. As such,
investors may not be able to readily dispose of any securities purchased hereby.
PENNY STOCK REGULATION. Broker-dealer practices in connection with
transactions in "penny stocks" are regulated by certain penny stock rules
adopted by the Commission. Penny stocks generally are equity securities with a
price of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to
making a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about
penny stocks and the risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
generally require that prior to a transaction in a penny stock, the
broker-dealer make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. Since the Company's securities immediately
following this Offering will likely be subject to the penny stock rules,
investors in this Offering will in all likelihood find it more difficult to sell
their securities.
YEAR 2000 PROBLEMS. Most people know that the advent of the new
millennium on January 1, 2000, may cause computers that are not Y2K compliant to
malfunction, potentially causing massive disruptions. Although the Company's
current computer is and any computers to be acquired will be designed to be Y2K
compliant, the Company's success also depends greatly upon the public having
unfettered access to the Internet. As a result, any problems caused generally to
the Internet by Y2K compliance issues will likely harm the Company's business as
could problems individuals have with their own computers that are not Y2K
compliant, thus limiting their ability to access the Company's web page.
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USE OF PROCEEDS
The net proceeds to the Company from the sale of the Shares offered
hereby, assuming all of the Shares offered hereby are sold, of which no
assurances are given, are estimated to be $460,000, giving effect to the
estimated expenses of the Offering of approximately $49,000 and exclusive of
Selling Commissions, if any.
The following table sets forth the anticipated use of the net proceeds
of this Offering in the event that all 10,200,000 Shares offered hereby are
sold. The Company may not be able to sell all of the Shares and thus generate
$510,000. The receipt by the Company of no or nominal proceeds will have a
material adverse effect upon the Company and investors.
<TABLE>
<CAPTION>
USE OF PROCEEDS
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<S> <C>
Placement of 10,200,000
shares at $0.05 per share resulting in
FUNDING of: $ 510,000
CyberGuide Online:
Advertising $ 112,500
Internet Service $ 112,500
Website Provider $ 112,500
Working Capital $ 112,500
Repayment of Loans $ 11,000
Accounting $ 10,000
Legal $ 35,000
Additional offering expenses $ 4,000
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TOTAL PROCEEDS $ 510,000
===========
</TABLE>
Because the Company presently anticipates selling the Shares strictly
through the efforts of its officers and directors, the above numbers do not
include any deductions for Selling Commissions. If broker/dealers are used in
the sale of the Shares, up to 10% of any gross proceeds raised in this Offering
will probably be payable to one or more NASD registered broker-dealers. In such
event, net proceeds to the Company will be decreased and the use of proceeds may
be proportionately reallocated in Management's sole discretion.
In the event the Company's receives the Maximum Proceeds of $510,000,
management believes that the net proceeds therefrom, together with anticipated
funds from operations, will provide the Company with sufficient funds to meet
the Company's cash requirements for approximately twelve (12) months following
the Termination Date. If the Company's receives net proceeds in amounts less
than the Maximum Proceeds, this twelve month time frame will be diminished and
the Company's business operations will be curtailed to an extent not presently
determinable by Management. The receipt of no or nominal proceeds will
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have a material adverse effect upon the Company and investors. No assurances are
given that the Company will sell any of the Shares offered hereby, or raise any
proceeds or consummate any other financing.
None of the Offering proceeds that the Company may receive will be used
to make loans to officers, directors and/or affiliates.
In January, 1999, the Company borrowed $11,000 from various individuals
to pay expenses of the Company while this offering is completed. The agreements
by which the Company borrowed these funds and may borrow in the future provide
that the persons who loaned the money have the right to convert the amounts due
to them into preferred stock of the Company on the basis of 2 shares of
preferred stock for each $1,000 loaned. The preferred stock of the Company is
convertible into common stock of the Company on the basis of 10,000 shares of
common stock for each share of preferred stock. If the lenders decide to convert
their debt into preferred stock and then decide to convert their preferred stock
into common stock, the Company may issue shares of the common stock offered
hereby to the lenders in satisfaction of the loan agreements on the basis of one
share of common stock for each $0.05 of debt so converted. In the alternative,
the Company may take part of the proceeds of the offering to pay these debts.
The estimated allocation of net proceeds of this Offering set forth
above is based upon the Company's present plans and its assumptions and
estimates regarding its intended operations, anticipated expenditures and
revenues. The actual allocation of net proceeds of this Offering may be shifted
at the discretion of the Company's Board of Directors, if the Company's
assumptions and estimates concerning anticipated expenditures and revenues prove
to be inaccurate. The allocation may also be changed if problems, expenses and
delays frequently encountered in growing a new business within the internet
industry, implementing new business strategies, as well as changes in the
economic climate and/or the Company's planned business operations are
experienced by the Company.
DETERMINATION OF OFFERING PRICE
There is no established public market for the shares of common stock
being registered. As a result, the offering price and other terms and conditions
relative to the shares of common stock offered hereby have been arbitrarily
determined by the Company and do not necessarily bear any relationship to
assets, earnings, book value or any other objective criteria of value. In
addition, no investment banker, appraiser or other independent, third party has
been consulted concerning the offering price for the Shares or the fairness of
the price used for the Shares.
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DILUTION
At December 31, 1998, the Company had a net tangible book value of
$1,462. The following table sets forth the dilution to persons purchasing Shares
in this Offering without taking into account any changes in the net tangible
book value of the Company, except the sale of 10,200,000 Shares at the offering
price and receipt of $510,000, less offering expenses estimated at $49,000. The
net tangible book value per share is determined by subtracting total liabilities
from the tangible assets of the Company divided by the total number of shares of
Common Stock outstanding. The numbers set forth in this table also assume the
conversion of all of the currently outstanding shares of preferred stock into
common stock of the Company.
<TABLE>
<CAPTION>
November 23, 1998 10,200,000 shares sold
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<S> <C> <C>
Public offering price per n/a $0.05
share
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Net tangible book value per less than $0.01 n/a
share of
common stock before the
Offering(1)
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Pro forma net tangible book n/a $0.02
value per share
of common stock after the
offering, assuming all
preferred stock is converted
into common stock
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Increase to net tangible book n/a approximately $0.02
value per
share attributable to
purchase of
common stock by new
investors
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Dilution to new investors n\a approximately $0.03
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</TABLE>
(1) The Company's net tangible book value per share is determined by
dividing the number of shares of Common Stock outstanding into the net
tangible book value of the Company and is significantly less than zero
prior to this offering.
PLAN OF DISTRIBUTION
GENERAL. The Company is offering up to a maximum of 10,200,00 Shares at
a price of $0.05 per Share to be sold by its executive officers and directors.
If the Shares are sold through its executive officers and directors, no
compensation will be paid with respect to such sales. However, the Company may
retain a NASD registered broker-dealer to act as the Selling Agent in connection
with all or part of this Offering and will pay a cash commission of up to an
aggregate of 10% of the proceeds of this Offering (the "Selling Commission").
Since the Offering is conducted on a "best efforts" basis, there is no assurance
that any of the Shares offered hereby will be sold.
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The Offering will remain open until June 30, 2000, unless the maximum
proceeds are earlier received or the Company determines, in its sole discretion,
to cease selling efforts. The officers, directors and stockholders of the
Company and their affiliates may purchase Shares in this Offering.
NO ESCROW OF PROCEEDS. There is no escrow of any of the proceeds of this
Offering. Accordingly, the Company will have use of such funds once it accepts a
subscription and funds have cleared. Such funds shall be non-refundable to
subscribers except as may be required by applicable law.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
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Name Age Position Term of Office
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<S> <C> <C> <C>
Jim W. Tucker 56 Director, Chairman Until next annual meeting of
stockholders
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Bob Ringle 55 Director Until next annual meeting of
stockholders
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James B. Tucker 28 Director, President Until next annual meeting of
stockholders
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Paul C. Velte, IV 37 Secretary Until next annual meeting of
stockholders
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Kenneth Wages 27 Vice President Until next annual meeting of
stockholders
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Jim Lawrenz 34 Treasurer Until next annual meeting of
stockholders
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</TABLE>
There are no other persons nominated or chosen to become directors or
executive officers nor does the issuer have any employees other than above.
There is no arrangement or understanding between any of the directors or
officers of the Company pursuant to which he was elected to his office.
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JAMES B. ("BRAD") TUCKER - DIRECTOR AND PRESIDENT: Mr. Tucker has
served as director and President of the Company since its inception in November,
1998. For the period from 1996 to the formation of the Company, Mr. Tucker was
developing the concept for the Company. For the period from 1993 until 1996, Mr.
Tucker was a salesman with Silverleaf Resorts in Dallas, Texas, where Mr.
Tucker's primary duties consisted of selling time shares in various properties
throughout the country. James B. ("Brad") Tucker is the son of James W. Tucker.
JAMES W. TUCKER - DIRECTOR AND CHAIRMAN OF THE BOARD OF DIRECTORS: In
addition to his role as the Chairman of the Board of Directors of the Company,
Mr. Tucker has served as the Chairman of the Board of Directors and Vice
President of Crossroads Environmental Corp., located in Conroe, Texas for the
previous 6 years. Crossroads Environmental Corp. is engaged in the business of
disposing of non-hazardous waste water in the Conroe area. James W. Tucker is
the father of James B. ("Brad") Tucker.
ROBERT E. RINGLE - DIRECTOR: In addition to his role as a director of
the Company, Mr. Ringle has served as Vice President, Director of Sales and
Treasurer of American Communications Enterprises, Inc., since the inception of
American Communications Enterprises, Inc., in October, 1998. Mr. Ringle has more
than 20 years experience in owning and operating advertising agencies and
marketing companies.
For the period from 1997 to the inception of American Communications
Enterprises, Inc., Mr. Ringle served as the Chief Marketing Officer and Director
of Sales for Equicom Inc., a regional radio broadcasting network.
For the period from 1995 to 1997, Mr. Ringle served as the Chief
Executive Officer of Quadra Group, Inc., a small consulting company specializing
in marketing and management.
For the period from 1993 to 1995, Mr. Ringle served as the Marketing
Director and Sales Manager for Pell Automotive Group, a car dealership in
Tucson, Arizona.
PAUL C. VELTE, IV - SECRETARY. Mr. Velte has served as the Company's
secretary since its inception and is an attorney who has been engaged in the
private practice of law in the Austin, Texas area for the past 5 years.
KENNETH WAGES - VICE PRESIDENT. Mr. Wages has served as a Vice
President of the Company since its inception and has worked as a computer
consultant for the past 5 years, specializing in the design, construction and
maintenance of web pages on the Internet.
JIM LAWRENZE - TREASURER. Mr. Lawrenze has served as the Treasurer of
the Company since its inception, is a certified public accountant and has been
engaged in a private accounting practice for the last 5 years.
DIRECTORS. All of the Directors serve for one year periods. The Company
presently expects to conduct its first annual meeting of shareholder and
directors in November, 1999 at which time directors will again be elected. All
directors serve for a period of one year unless removed in accordance with the
bylaws of the Company.
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<PAGE> 16
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock before and after giving
effect to the sale of the maximum number of shares of common stock offered. All
shareholders have sole voting and investment power over the shares beneficially
owned. Included within this table is information concerning each stockholder who
owns more than 5% of any class of the Company's securities, including those
shares subject to outstanding options:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Amount % of Class,
Amount Owned after % of After
Owned the Offering Class, offering
Title of Name and Address of before the and Before and
Class Owner Offering conversion offering conversion
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Preferred James B. Tucker 525 5,250,000 50% 25.36%
Stock 4300 Horizon N. Parkway Preferred Common
Suite 915 Shares Shares
Dallas, Texas 75287
- -------------------------------------------------------------------------------------------------------------------------
Preferred Jim Lawrenz 157.5 1,570,000 15% 7.58%
Stock 826 Wildwood Dr. Preferred Common
Grapevine, Texas 75061 Shares Shares
Preferred Paul C. Velte, IV 157.5 1,570,000 15% 7.58%
Stock 1122 Colorado Preferred Common
Suite 2320 Shares Shares
Austin, Texas 78701
- -------------------------------------------------------------------------------------------------------------------------
Preferred Kenneth Wages 210 2,100,000 20% 10.14%
Stock 5502 Montclair Preferred Common
Colleyville, TX 76034 Shares Shares
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
DESCRIPTION OF SECURITIES
CURRENT CAPITAL STRUCTURE. As of the date of this Prospectus, the
Company has 100,000,000 shares of common stock, par value $0.001, authorized,
with no shares outstanding, and 10,000,000 shares of preferred stock, par value
$0.01, authorized, with 1,050 shares outstanding as of the date of this
prospectus. If the maximum number of shares offered in this Prospectus are
purchased, and assuming the conversion of all the outstanding preferred shares,
there will be a total of 20,700,000 shares of common stock issued and
outstanding.
COMMON STOCK. The holders of common stock are entitled to one vote for
each share held of record on all matters to be voted on by the shareholders.
There is no cumulative voting with respect to the election of directors, with
the result that the holders of more than 50 per cent of the shares voted for the
election of directors can elect all of the directors. The holders of common
stock are entitled to receive
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<PAGE> 17
dividends when, as and if declared by the board of directors out of funds
legally available therefor. In the event of liquidation, dissolution or winding
up of the Company, the holders of common stock are entitled to share ratably in
all assets remaining available for distribution to them after payment of
liabilities and after provision has been made for each class of stock, if any,
having preference over the common stock. All of the outstanding shares of common
stock are, and the Shares of common stock offered hereby when issued for the
consideration set forth in this Prospectus, will be fully paid and
non-assessable.
PREFERRED STOCK. The Company has 10,000,000 shares of preferred stock
authorized. At present, the Company has designated 1,100 Shares of its preferred
stock as Series A Preferred Stock. The Series A Preferred Stock, with respect to
rights on liquidation, dissolution or winding up of the affairs of the Company,
ranks prior to the common stock. Specifically, in the event of a liquidation of
the Corporation, the holders of the Series A Preferred Stock shall be entitled
to receive out of the assets of the Corporation, prior to the distribution of
assets of the Corporation to the holders of the common stock, an amount of cash
per share equal to $1,000.00 per share of Series A Preferred Stock. The Series A
Preferred Stock also carries voting rights, with each share of Series A
Preferred Stock entitled to 10,000 votes. Finally, the Series A Preferred Stock
is convertible into shares of the common stock on the basis of one share of
preferred stock for 10,000 shares of common stock. The preferred stock is
convertible into common stock at the earlier of two events; the selling of all
Shares in this Offering or 18 months from the date of this Prospectus.
In addition to the Series A Preferred Stock, the board of directors is
empowered, without shareholder approval, to issue additional series of preferred
stock with such designations, rights and preferences as they may from time to
time determine. Thus, preferred stock, if issued, could have dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the common stock. Preferred stock, if issued,
could be utilized, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company.
OPTIONS AND WARRANTS TO PURCHASE SECURITIES The Company does not have
at the date of this Prospectus any outstanding options or warrants to purchase
common stock.
DEBT SECURITIES. The Company does not have any authorized debt
securities. However, in January, 1999, the Company borrowed $11,000 from various
individuals to pay expenses of the Company while this offering is completed. The
agreements by which the Company borrowed these funds and may borrow in the
future provide that the persons who loaned the money have the right to convert
the amounts due to them into preferred stock of the Company on the basis of 2
shares of preferred stock for each $1,000 loaned. If the lenders decide to
convert their debt into preferred stock and then decide to convert their
preferred stock into common stock, the Company may issue shares of the common
stock offered hereby to the lenders in satisfaction of the loan agreements. In
the alternative, the Company may take part of the proceeds of the offering to
pay these debts.
DIVIDEND POLICY. To date, the Company has not paid any dividends. The
payment of dividends, if any, on the common stock in the future is within the
sole discretion of the Board of Directors and will depend upon the Company's
earnings, its capital requirements and financial condition,
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<PAGE> 18
and other relevant factors. The Board of Directors does not intend to declare
any dividends on the common stock in the foreseeable future, but instead intends
to retain all earnings, if any, for use in the Company's business operations.
TRANSFER AGENT AND REGISTRAR. The Company intends to use Signature
Stock Transfer, Inc., in Dallas, Texas as its transfer agent for the common
stock.
DISCLOSURE OF COMMISSION
POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Article Eleven of the Articles of Incorporation of the Company provides
that the Company shall indemnify its officer or directors against expenses
incurred in connection with the defense of any action in which they are made
parties by reason of being officers or directors of the Company, except in
relation to matters as to which such director or officer shall be adjudged in
such action to be liable for negligence or misconduct in the performance of his
duty. An officer or director of the Company could take the position that this
duty on behalf of the Company to indemnify the director or officer may include
the duty to indemnify the officer or director for the violation of securities
laws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the Company's Articles of Incorporation,
Bylaws, Texas law or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or payed by a director, officer or
controlling person of the Company and the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by a controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
DESCRIPTION OF BUSINESS
HISTORY OF THE COMPANY. CyberGuide Online, Inc. (the "Company") is a
recently organized Texas corporation, incorporated under the laws of the State
of Texas in November of 1998. The Company is in the business of developing and
producing Internet advertisements for the Dallas Metroplex.
OPERATIONS - BASIC DIRECTION. CyberGuide Online is hoping to be Dallas,
Texas' most comprehensive and easy to use "Yellow Pages" on the Internet. The
Company's management started developing the CyberGuide in mid 1996 and worked
through 1997 to get it ready for its launch in January of 1998. Since that time,
CyberGuide has received indications of interest from various businesses to
advertise their business to the Dallas Metroplex. With expanded resources in the
marketing, selling, and advertising departments, the Company hopes to grow its
customer base rapidly.
Currently, CyberGuide Online is operated by four principals. These four
principals consist of a Sales and Marketing Director, Web Master, Certified
Public Accountant, and an Attorney. CyberGuide wants to hire a larger sales
staff and increase its marketing capabilities.
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<PAGE> 19
CyberGuide Online was designed as an Internet site with listings and
categories for the city of Dallas and all of its surrounding suburbs, ie. the
"CyberGuide ". The CyberGuide is like having the Yellow Pages at your
fingertips. Other companies buy extensive lists of businesses and add them to
their listings. The only businesses listed on the CyberGuide will be companies
that have bought advertising space and/or spoken with one of CyberGuide's sales
representatives. Every potential customer that spends about 30 minutes with one
of CyberGuide's representatives will receive a free listing on the CyberGuide.
The Company believes that this will build a customer base for the future.
CyberGuide offers a "Web Site" and an "Information Site".
CyberGuide believes its business to be unique in the Internet
advertising market. Other companies build individual web pages for businesses
and link them to their site. These other companies typically charge more than
CyberGuide for creation and storage fees and also typically charge $250 to $1000
per month for banner sales. These companies generally are not currently
advertising in the forms of media that CyberGuide plans to enter. CyberGuide
believes that CyberGuide's only competitor will probably be the local yellow
pages. There are 16 surrounding cities in the Dallas Metroplex. Residents of
these cities do not usually obtain, manage, and store over 16 phone books.
CyberGuide will be right at their fingertips.
CyberGuide wants to be the first company of its kind to do a mass media
advertising in the Dallas Metroplex for services similar to those offered by
CyberGuide. CyberGuide hopes that this campaign will give CyberGuide the
competitive edge over its competition, including the "Yellow Pages". If
CyberGuide is successful enough to start its free Internet Service Provider,
CyberGuide hopes to be unmatched in the Dallas Metroplex.
In summary, there are currently millions of web sites on the Internet.
It is projected that by the year 2000 there will be at least 500 million people
actively using the Internet. The U.S. Government has stated that the Internet is
the largest growing commerce that this nation has ever seen. The Internet is the
largest form of communication since the invention of the telephone. Advertising
on the Internet should be the way of the future, with the future upon us.
Businesses that are not on the Internet by the year 2000 will be likely be left
behind.
BACKGROUND ON THE INTERNET INDUSTRY. The Internet's brief and
meteoritic existence provides little historic performance data. From a few
hundred thousand users seeking information, entertainment and commerce in the
early 1990's, the Internet community has grown into the millions in 1998.
Entrepreneurs and Fortune 500 companies are now racing forward to be a part of
what many believe will be part of the premier media market of the next
millennium. Only a few short years ago, Internet companies were struggling to
carve out revenue and many Internet sites offered free information posted by
various entities with links to related and unrelated sites. Now, as reported by
Advertising Age, billions of dollars in revenue are generated from advertising,
Website development and retailing.
Major electronic manufacturers have products and/or are developing
integrated Internet products for next generation home systems and mobile
systems. Future delivery of the Internet is slated to arrive via increased cable
usage and/or satellite to multi-purpose home entertainment systems that will
function as Internet links, computers, radios and TV sets. Cellular phones
currently can connect to the Internet
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<PAGE> 20
as well as automobile radios. There appears to be little or no limit to the ways
and means one can and will be able to access the "Net".
TRENDS IN AD REVENUES. Currently, as reported by Advertising Age, the
most lucrative Internet advertising comes from banner advertising. Banner
advertisers pay for "hits" or "impressions" based on the number of user
exposures to their ads. National brands in every industry are now using the
Internet as part of an integrated approach to marketing. Although difficult to
exactly quantify, it is estimated that national Internet ad revenues reach into
the millions of dollars. According to Advertising Age, local and regional web
sites offer similar opportunities to local and regional advertisers.
The Internet has become a global market place for commercial and
consumer goods from banking to soft goods. Entrepreneurs and national brands are
also enjoying phenomenal growth through "catalog", retail sales on the Internet.
The Internet user can access VAR (Value Added Retailer) and factory direct
products over secure sites using most types of credit cards and generally save
time and money in the process.
COMPETITION. Competition within the Internet community will be fierce.
Internet "audiences" will continue to be exposed to newspaper, TV, radio, direct
mail, etc. The advantages of the Internet lie in the totality of content and the
ability to deliver messages in audio and visual media twenty-four hours a day,
seven days a week. Furthermore, studies by Arbitron have indicated that the
Internet is the media of choice for the 24 to 35 age group with increasing
numbers of users in the affluent 35 to 55 age group.
REGULATION. The Internet is under no enforceable broadcast or
entertainment content regulation at this time. Although the U.S. Government may
prevail in regulating some functions of U.S. based web sites and portals, there
is good reason to believe it will be many years before regulation will be
pervasive or effective.
SUMMARY OF INDUSTRY ATTRACTIVENESS. The Company believes the Internet
industry will prevail as the media of choice for the aforementioned demographic
groups in the foreseeable future. The ability to access users should offer the
opportunity for increased revenues in advertising.
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
If the Company is successful in selling all of the shares offered
hereby, the Company believes the $510,000 generated thereby will be sufficient
to maintain the Company's operations for at least 12 months after completion of
the offering. To allow the Company to continue in business until the completion
of this offering, in January, 1999, the Company borrowed $11,000 from various
individuals.
CyberGuide's basic financing plan involves CyberGuide obtaining
listings of various businesses in the city of Dallas and all of its surrounding
suburbs. The only businesses listed on the CyberGuide are companies that have
bought advertising space and/or spoken with one of CyberGuide's sales
representatives. CyberGuide offers a "Web Site" and an "Information Site".
An Information Site is basically the same thing as a full page
advertisement in the Yellow Pages that is easy to access. However one major
difference from the Yellow Pages is the cost. A full page advertisement in the
local yellow pages may cost up to $5,000 per month, depending upon the size of
the advertisement. Initially, CyberGuide will charge $50 per month for an
Information Site. Unlike the local yellow
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<PAGE> 21
page advertisements, CyberGuide will offer its customers e-mail capabilities and
site counters to show how many people have accessed their site. Information
Sites are much more informative and, of course, can have multiple colors and be
animated. Web Sites are familiar and worldwide; everyone in today's world should
know what a Website is.
CyberGuide is offering these packages for a small setup fee and a
monthly fee of $50 for the first 1,000 customers. Upon reaching 1,000 customers,
CyberGuide's prices will likely increase to $100 monthly. CyberGuide anticipates
using the monthly fees from CyberGuide's advertisers to advertise the CyberGuide
on all forms of media in and around the Dallas Metroplex.
CyberGuide wants to advertise on TV, radio, billboards, and buses.
CyberGuide believes these forums will bring customers to CyberGuide's
advertisements. The clients' sites will be partially updated monthly and fully
updated quarterly.
If CyberGuide is successful in reaching 1,000 advertisers, CyberGuide
anticipates then launching an Internet Service Provider ("ISP") to the Dallas
Metroplex. CyberGuide currently anticipates that this will be offered initially
to 40,000 users in 5,000 user blocks. There will be a one time setup fee of $99
and offered free thereafter. To substitute for the free monthly services,
CyberGuide anticipates that there will be Dallas Business Banner Advertisements
at the top or bottom of the browser, 24 hours daily. CyberGuide feels that this
will insure CyberGuide's advertisers a captured audience of approximately 40,000
consumers in the Dallas area.
CyberGuide hopes to have a total of 16,000 customers listed on the
CyberGuide over a ten year period. CyberGuide currently anticipates that the
first 1,000 will pay $50 per month and the other 15,000 will pay $100 per month.
If achieved, these numbers of customers could add averaged revenues of
$1,550,000 per month over the ten year projected period.
CyberGuide has been working with local television and radio stations
for sponsorship campaigns. Currently, CyberGuide is attempting to come to terms
with a local radio station called "The Eagle 97.1". CyberGuide have also been in
contact with a company call Net Talk Live. Although these contacts are
interested in working out sponsorship for CyberGuide, CyberGuide needs initial
advertising campaigns of CyberGuide's own to make the business more attractive
for larger sponsors.
There are currently over 8 million consumers in the Dallas Metroplex
and the population is still growing. Currently, there are 16 cities in and
around the Dallas Metroplex proposed to be listed on the CyberGuide. Each city
averages at least 2,000 businesses. CyberGuide currently anticipates all 16
cities will have their own business section, with a business banner at the top
of every city. This city banner advertisement will cost $100 per month for each
city, thus potentially adding revenues of $1,600 per month. Each city has 26
alphabetical listing categories, with each category having at least 25
sub-categories of business types. One business per category will be offered a
banner at the top of their respective category for an additional $50 per month.
If achieved, this could add revenues of up to $520,000 per month (16 cities x 26
alphabetical listings x 25 sub-categories x $50/month).
Currently, CyberGuide, and all of its projections, are based solely on
the Dallas Metroplex. In the future, CyberGuide wants to market the Fort Worth
and Houston, Texas areas. The Houston area population is triple Dallas'. If
successful in Dallas, Fort Worth and Houston, CyberGuide may then move into
markets in other regions of the country.
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OPERATIONS - FIRST PHASE. The first phase of the Company's plan will
emphasize CyberGuide's business information sites and web sites. These sites
will be sold to business' throughout the Dallas Metroplex. The first 1,000
businesses will pay a $50 setup fee for their advertisements. All of the other
businesses will be charged a setup fee of $100. CyberGuide anticipates using
these setup fees to advertise the online guide on all forms of media to the
Dallas Metroplex.
There are sixteen cities already listed on the CyberGuide. Each city
has business categories filtered throughout the guide from A to Z (ie.
Accounting, Automotive, Appliances etc.). There are currently over 2000
businesses in each city. CyberGuide plans to market the guide to all of these
businesses.
OPERATIONS - SECOND PHASE. In the second phase of the Company's plan,
the Company anticipates developing and selling the City Banners and the City
Category Banners. There are sixteen cities listed on the CyberGuide, and each
city will have its own City Banner. One business will be able to place an
advertisement at the top of their respective city page. This City Banner will
cost $100 per month. If achieved, this could add $1,600 of monthly revenue to
the Company.
All sixteen cities have business categories from A to Z (ie.
Accounting, Automotive, Appliances etc.). Each business category will have its
own banner. Each city has 26 alphabetical listing categories. Each category will
have at least 25 sub-categories of business types. One business per category
will be offered a banner at the top of their respective category for an
additional $50 per month. If achieved, this could add revenues to the Company of
up to $520,000 per month.
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[FLOW CHART]
DALLAS
16 CITIES
Around the Dallas Metroplex
CITY BANNERS
$100 per City =
$1600 monthly revenue
CITY CATEGORY BANNERS
16 cities x 26 letters x 25 categories x $50 per month =
$520,000 monthly revenue
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<PAGE> 24
OPERATIONS - THIRD PHASE. In the Third Phase of the Company's plan, the
Company hopes to start its own Internet Service Provider (ISP). If CyberGuide
reaches 1000 advertisers, CyberGuide hopes to then launch an Internet Service
Provider in the Dallas Metroplex that only charges a one time setup fee of $99
and offered free thereafter. Initially, this is anticipated to be offered to
40,000 users in 5,000 user blocks. Most ISP charge anywhere from $10 to $30 per
month. To substitute for the free services, there will be Dallas Business Banner
Advertisements at the top or bottom of the browser 24 hours daily. CyberGuide
feels that this will insure CyberGuide's advertisers a captured audience of
perhaps as many as 40,000 consumers in the Dallas area, thus potentially
generating significant revenues to the Company.
EXPANSION PLANS TO OTHER CITIES. The Company hopes to establish its
basic market strategy in the Dallas/Ft. Worth Metroplex area. Assuming that the
Company's efforts are successful, the Company then plans to expand its realm of
operations by introducing a similar market into the Houston, Texas and the Los
Angeles, California areas. If the Company's efforts in Dallas, Houston and Los
Angeles are successful and the Company thinks the same to be prudent at the
time, the Company could expand its operations to even more cities, perhaps even
worldwide.
SUBSTITUTION. The Company may substitute other services if further
experience or further investigation indicates that they will be more suitable
for the accomplishment of the goal of the Company of developing maximum
production for the least possible expenditure and the lowest possible risk.
PROJECTION DISCLAIMER. This Prospectus contains several forward looking
statements or projections. These projections have been prepared by CyberGuide
and are subject to fluctuation due to numerous factors. While CyberGuide thinks
these projections are valid and that the bases on which such projections have
been prepared are reasonable, each person reviewing the same should note that
because the projections have been prepared by CyberGuide and have not been
verified by an independent source, undue certainty to these projections should
not be given. In addition, given the inherently speculative nature of
projections, there can be no guarantee that any of the projections contained in
the Prospectus will prove to be accurate. Investors should note that, especially
given the "start up" nature of the Company, it is probably not meaningful to
look at any projections for the Company for periods in the distant future.
DESCRIPTION OF PROPERTY
The Company is newly organized and has only conducted organizational
activities. At the present time the Company has only one computer and one
website and plans to purchase additional computer equipment at the close of this
offering.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company is newly organized and this is the Company's initial public
offering so there is currently no public trading market for the Company's common
stock. The Company hopes to have the Company's common stock prices listed on the
bulletin board maintained by the National Association of Securities Dealers. To
be eligible to have the Company's common stock quoted on the bulletin board, the
Company will be required to be a "reporting company", a step the Company will
attempt to accomplish after the effective date of this registration statement.
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<PAGE> 25
None of the Company's common stock is subject to outstanding options to
purchase. The Company has not agreed to register any stock of the Company for
anyone nor does the Company presently have in effect employee stock options or
benefit plan that would involve the issuing of additional shares of the common
stock of the Company.
The existing shareholders of the Company collectively own 1,050 shares
of the preferred stock of the Company which is convertible on the basis of
10,000 shares of common stock for each share of preferred stock for a total
amount of common stock of 10,500,000 shares. All of this stock is "founder's
stock" and was issued without registration under the Securities Act. Because the
stock owned is not registered, it is "restricted stock" within the meaning of
Rule 144 under the Securities Act and may only be sold in accordance with the
various rules and regulations of Rule 144. Specifically, after the shareholders
have held their stock for a period of at least one year, they could begin to
sell part of their stock. Generally speaking, the amount of stock that each of
the shareholders could sell could not exceed one percent (1%) of the outstanding
common stock of the Company during any ninety (90) day period. If the maximum
number of shares are sold under this offering, and assuming the conversion of
all of the preferred stock into common stock, the total number of shares of
common stock outstanding after the offering and conversion will be 20,700,000
shares. As a result, each of the shareholders could sell up to 207,000 shares
during any ninety (90) day period. Although the shareholders do not have any
present intention to sell any of their shares, the sale of a large block of the
Company's common stock could depress the per share price of the Company's common
stock.
Rule 144 is conditioned upon the Company making public certain
information concerning the Company. Although the Company does not currently make
information publically available that would allow the Company to use Rule 144,
the Company anticipates making such information available so shareholders could
sell the amount set forth in Rule 144.
The Company has never paid dividends and does not expect to declare any
in the foreseeable future. Instead, the Company expects to retain all earnings
for growth of the Company. Although the Company has no specific limitations on
its ability to pay dividends, the corporate law of Texas, the State under which
the Company is organized, limits the ability to pay dividends to those instances
in which the Company has earnings and profits. If the Company is unable to
achieve earnings and profits in a sufficient amount to satisfy the statutory
requirements of Texas, no dividends will be made, even if the Board of Directors
of the Company otherwise wanted to pay dividends. Investors should not purchase
shares in this offering if their intent is to receive dividends.
EXECUTIVE COMPENSATION
The Company's directors do not currently receive any compensation for
serving as a director of the Company. In addition, at present, there are no
ongoing plans or arrangements for compensation of any of the Company's officers.
However, the Company expects to adopt a plan of reasonable compensation to its
officers and employees when and if the Company becomes operational and
profitable.
The Company does not presently have a stock option plan but intends to
develop an incentive-based stock option plan for its officers and directors in
the future.
FINANCIAL STATEMENTS
The following are the financial statements of the Company, with
independent auditor's report, for the period ending December 31, 1999.
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CYBERGUIDE ONLINE, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
===============================================================================
<TABLE>
<S> <C>
Independent Auditors' Report F-2
Financial Statements as of and for the period November 19, 1998
(date of incorporation) to December 31, 1998:
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
</TABLE>
===============================================================================
F-1
<PAGE> 27
[Letterhead of Beard Nertney Kingery Crouse & Hohl P.A.]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of CyberGuide Online, Inc:
We have audited the accompanying balance sheet of CyberGuide Online, Inc. (the
"Company"), a development stage enterprise, as of December 31, 1998, and the
related statements of operations, stockholders' equity and cash flows for the
period November 19, 1998 (date of incorporation) to December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and the disclosures in the financial statements. An
audit also includes assessing the accounting principles used and the
significant estimates made by management, as well as the overall financial
statement presentation. We believe our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
1998, and the results of its operations and its cash flows for the period
November 19, 1998 (date of incorporation) to December 31, 1998 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes A and B to the
financial statements, the Company is in the development stage and will require
a significant amount of capital to commence its planned principal operations
and proceed with its business plan. As of the date of these financial
statements, an insignificant amount of capital has been raised, and as such
there is no assurance that the Company will be successful in its efforts to
raise the necessary capital to commence its planned principal operations and/or
implement its business plan. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to this matter are described in Note B. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Beard Nertney Kingery Crouse & Hohl P.A.
March 1, 1999
F-2
<PAGE> 28
CYBERGUIDE ONLINE, INC.
(A Development Stage Enterprise)
BALANCE SHEET AS OF DECEMBER 31, 1998
===============================================================================
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Computer equipment (net of accumulated
depreciation of $38) $ 1,462
----------
TOTAL $ 1,462
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY:
Preferred stock - $.01 par value - 10,000,000
shares authorized; 1,050 shares issued and outstanding
with a liquidation value of $ 1,050,000 $ 10
Common stock - $.001 par value - 100,000,000 shares
authorized; zero shares issued and outstanding 0
Additional paid-in capital 1,490
Deficit accumulated during the development stage (38)
----------
Total stockholders' equity 1,462
----------
TOTAL $ 1,462
==========
</TABLE>
===============================================================================
SEE NOTES TO FINANCIAL STATEMENTS
F-3
<PAGE> 29
CYBERGUIDE ONLINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIOD NOVEMBER 19, 1998 (DATE OF INCORPORATION)
TO DECEMBER 31, 1998
===============================================================================
<TABLE>
<S> <C>
EXPENSES -
Depreciation $ 38
-----------
NET LOSS $ 38
===========
NET LOSS PER SHARE:
Basic $ 0
===========
Weighted average number of shares - basic 0
===========
Diluted $ 0
===========
Weighted average number of shares - diluted 10,500,000
===========
</TABLE>
===============================================================================
SEE NOTES TO FINANCIAL STATEMENTS
F-4
<PAGE> 30
CYBERGUIDE ONLINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS'EQUITY
FOR THE PERIOD NOVEMBER 19, 1998 (DATE OF INCORPORATION)
TO DECEMBER 31, 1998
===============================================================================
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid-in Development
Shares Value Shares Value Capital Stage Total
--------- ----- ------ ----- ---------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, November 20, 1998
(date of incorporation) 0 $ 0 0 $ 0 $ 0 $ 0 $ 0
Issuance of Class A
preferred stock 1,050 10 0 0 1,490 0 1,500
Net loss for the period,
November 20, 1998
(date of incorporation)
to December 31, 1998 (38) (38)
------- ------- ------- ------- ------- ------- -------
Balances, December 31,
1998 1,050 $ 10 0 $ 0 $ 1,490 $ (38) $ 1,462
======= ======= ======= ======= ======= ======= =======
</TABLE>
===============================================================================
SEE NOTES TO FINANCIAL STATEMENTS
F-5
<PAGE> 31
CYBERGUIDE ONLINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD NOVEMBER 19, 1998 (DATE OF INCORPORATION)
TO DECEMBER 31, 1998
===============================================================================
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (38)
Adjustment to reconcile net loss to net cash used in
operating activities - depreciation 38
-----------
NET CASH USED IN OPERATING ACTIVITIES 0
NET CHANGE IN CASH AND CASH EQUIVALENTS 0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0
-----------
$ 0
CASH AND CASH EQUIVALENTS, END OF PERIOD ===========
Interest paid $ 0
===========
Taxes paid $ 0
===========
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
During the period ended November 19, 1998 (date of incorporation) to December
31, 1998, assets and stockholders' equity increased by $1,500 when a
computer was contributed to the Company.
</TABLE>
===============================================================================
SEE NOTES TO FINANCIAL STATEMENTS
F-6
<PAGE> 32
CYBERGUIDE ONLINE, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
===============================================================================
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
CyberGuide Online, Inc. (the "Company") was incorporated under the laws of the
state of Texas on November 19, 1998. The Company, which is considered to be in
the development stage as defined in Financial Accounting Standards Board
Statement No. 7, intends to operate a yellow pages advertising business on the
Internet. The planned principal operations of the Company have not commenced,
therefore accounting policies and procedures have not yet been established.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. Accordingly, the Company's ability to continue
as a going concern is dependent upon its ability to secure an adequate amount
of capital to finance its planned principal operations and/or implement its
business plan. The Company's plans include a public offering of its common
stock (see Note G) and the issuance of debt, however there is no assurance that
they will be successful in their efforts to raise capital. This factor, among
others, may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
F-7
<PAGE> 33
NOTE C - RELATED PARTY TRANSACTION
A shareholder contributed a computer valued at $1,500 to the Company in
consideration for preferred shares.
NOTE D - INCOME TAXES
During the period November 19, 1998 (date of incorporation) to December 31,
1998, the Company recognized losses for both financial and tax reporting
purposes. Accordingly, no deferred taxes have been provided for in the
accompanying statement of operations.
NOTE E - CONVERTIBLE PREFERRED STOCK
The Company has issued 1,050 shares of preferred stock designated as Class A to
certain directors and officers. Each of the preferred shares contain the
following rights and preferences: (1) entitlement to dividends as may be
declared by the Board of Directors in preference and priority to any dividends
on any other class of capital stock, (2) voting rights equal to 10,000 shares
of common stock, (3) liquidation preference equal to $1,000 per share and (4)
convertible into 10,000 common shares upon the earlier of May 1, 2000 or the
Company completing an offering of common stock by raising $500,000. The
conversion rates described above are subject to proportional adjustment in the
event of a stock split, stock dividend or similar recapitalization event
effecting such shares.
With respect to liquidation, preferred shareholders have certain specific
rights of preference over the common shareholders prior to any distribution of
assets or funds to common shareholders.
NOTE F - LOSS PER SHARE
The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss for
the period by the number of common and common equivalent shares outstanding
during the period. Common equivalent shares, composed of incremental common
shares issuable upon the conversion of Class A preferred stock, are included in
diluted net loss per share to the extent such shares are dilutive. The
following table sets forth the computation of basic and diluted net loss per
share:
F-8
<PAGE> 34
<TABLE>
<S> <C>
Numerator
Net loss available to common stockholders $ 38
============
Denominator
Weighted average shares 0
------------
Denominator for basic calculation 0
============
Weighted average effect of dilutive securities:
Class A Preferred Stock 10,500,000
============
Denominator for diluted calculation 10,500,000
============
Net loss per share:
Basic $ 0.00
============
Diluted $ 0.00
============
</TABLE>
NOTE G - PROPOSED COMMON STOCK OFFERING
During the first calendar quarter of 1999, the Company intends to file a
registration statement for the sale of up to 10,200,000 shares of the Company's
common stock at $0.05 per share. The existing shareholders do not intend to
offer any shares for sale. The offering is on a best efforts, no minimum basis.
As such, there will be no escrow of any of the proceeds of the offering and the
Company will have the immediate use of such funds to finance its operations.
NOTE H - SUBSEQUENT EVENT
In January, 1999, the Company borrowed $4,000 from certain individuals. The
agreements by which the Company borrowed these funds provide that the note
holders may convert the amounts due to them into the Company's preferred stock
on the basis of two shares of preferred stock for each $1,000 loaned. Each of
these preferred shares may be convertible into 10,000 shares of the Company's
common stock. In addition, the Company may borrow additional funds having
similar terms to fund certain costs of the offering.
===============================================================================
F-9
<PAGE> 35
Date Filed: March_____________, 1999 SEC File No._____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM SB-2
UNDER
THE SECURITIES ACT OF 1933
---------------------------------------
CYBERGUIDE ONLINE, INC.
(Consecutively numbered pages______through_______of this Registration Statement)
<PAGE> 36
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Eleven of the Articles of Incorporation of the Company provides
that the Company shall indemnify its officer or directors against expenses
incurred in connection with the defense of any action in which they are made
parties by reason of being officers or directors of the Company, except in
relation to matters as to which such director or officer shall be adjudged in
such action to be liable for negligence or misconduct in the performance of his
duty. An officer or director of the Company could take the position that this
duty on behalf of the Company to indemnify the director or officer may include
the duty to indemnify the officer or director for the violation of securities
laws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the Company's Articles of Incorporation,
Bylaws, Texas law or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or payed by a director, officer or
controlling person of the Company and the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by a controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
1
<PAGE> 37
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized list of the estimate by the Company of the
expenses of the offering:
<TABLE>
<CAPTION>
TYPE OF EXPENSE AMOUNT
- --------------- ------
<S> <C>
Accounting Fees $10,000.00
Filing Fees $ 1,000.00
Attorneys Fees $35,000.00
Transfer Agent Fees $ 1,000.00
Printing Costs $ 2,000.00
TOTAL $49,000.00
</TABLE>
RECENT SALES OF UNREGISTERED SECURITIES
On or about November 20, 1998, the Company was incorporated under the
laws of the State of Texas. Effective as of November 21, 1998, the Company
issued a total of 1,050 shares of its preferred stock to the four founders of
the Company, James. B. Tucker, Paul C. Velte, IV, Jim Lawrenz, and Kenneth
Wages. The federal exemption the Company relied upon in issuing the securities
was Section 4(2) of the Securities Act. The Section 4(2) exemption was available
to the Company because the Company did not solicit any investment in the Company
and instead simply issued shares to its four founders, Messrs Tucker, Velte,
Lawrenz and Wages. In addition, given Messrs Tucker, Velte, Lawrenz and Wages'
involvement in the establishment of the Company, they each had access to such
information as they deemed necessary to fully evaluate an investment in the
Company. In addition, the issuance of the shares of stock to Messrs Tucker,
Velte, Lawrenz and Wages was exempt under the laws of the State of Texas, the
State in which all persons resided at the time of the commencement of the
Company, pursuant to Section 5 I. (a) of the Texas Securities Act. Section 5 I.
(a) of the Texas Securities Act provides that the provisions of the Texas
Securities Act shall not apply to the sale of any security by the issuer thereof
so long as the total number of security holders of the issuer thereof does not
exceed thirty-five (35) persons after taking such sale into account; and such
sale is made without any public solicitation or advertisements:
The actual consideration paid for the shares issued to Messrs Tucker,
Velte, Lawrenz and Wages was each of their interest in a computer, being the
Company's sole asset. Because of the extremely limited nature of the transaction
by which the shares were issued to Messrs Tucker, Velte, Lawrenz and Wages, no
underwriters were used.
2
<PAGE> 38
EXHIBITS
Attached to this registration are the exhibits required by Item 601 of
Regulation S-B.
UNDERTAKINGS
The Company does not presently anticipate using an underwriter in
conducting this offering; if the company changes its plan and utilizes an
underwriter, the Company will provide to the underwriter, at the closing
specified in any underwriting agreement, certificates in such denominations and
registered in such names as required by the underwriter to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the Company's Articles of Incorporation,
Bylaws, Texas law or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or payed by a director, officer or
controlling person of the Company and the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by a controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
3
<PAGE> 39
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Dallas,
State of Texas on March 3, 1999.
(Registrant) CyberGuide Online, Inc.
By (Signature and Title): /s/ JAMES B. TUCKER
--------------------------------
James B. Tucker, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
(Signature) /s/ JAMES B. TUCKER
----------------------------
James B. Tucker
(Title) President
(Date) March 3, 1999
(Signature) /s/ JAMES W. TUCKER
----------------------------
James W. Tucker
(Title) Chairman of the Board of Directors
(Date) March 3, 1999
<PAGE> 40
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
<S> <C> <C>
3 Charter and Bylaws This Filing
Page_____
5 Opinion and consent of Hoge, This Filing
Evans, Holmes, Carter & Ledbetter, Page_____
PLLC, Attorneys and Counselors at
Law
10 Loan Agreements This Filing
Page_____
23.1 Consent of Beard, Nertney, This Filing
Kingery, Crouse & Hohl, P.A. Page_____
23.2 Consent of Hoge, Evans, Holmes, This Filing
Carter & Ledbetter, PLLC, (See Page_____
Exhibit 5)
</TABLE>
<PAGE> 1
EXHIBIT 3
[SEAL]
THE STATE OF TEXAS
SECRETARY OF STATE
NOV. 20, 1998
STEVEN HOLMERS (HOGE EVANS HOLMES CARTER+)
4311 OAKLAWN, SUITE 600
DALLAS, TX 75219
RE:
CYBERGUIDE ONLINE, INC.
CHARTER NUMBER 01513094-00
IT HAS BEEN OUR PLEASURE TO APPROVE AND PLACE ON RECORD THE ARTICLES OF
INCORPORATION THAT CREATED YOUR CORPORATION. WE EXTEND OUR BEST WISHES FOR
SUCCESS IN YOUR NEW VENTURE.
AS A CORPORATION, YOU ARE SUBJECT TO STATE TAX LAWS. SOME NON-PROFIT
CORPORATIONS ARE EXEMPT FROM THE PAYMENT OF FRANCHISE TAXES AND MAY ALSO BE
EXEMPT FROM THE PAYMENT OF SALES AND USE TAX ON THE PURCHASE OF TAXABLE ITEMS.
IF YOU FEEL THAT UNDER THE LAW YOUR CORPORATION IS ENTITLED TO BE EXEMPT YOU
MUST APPLY TO THE COMPTROLLER OF PUBLIC ACCOUNTS FOR THE EXEMPTION. THE
SECRETARY OF STATE CANNOT MAKE SUCH DETERMINATION FOR YOUR CORPORATION.
IF WE CAN BE OF FURTHER SERVICE AT ANY TIME, PLEASE LET US KNOW.
[SEAL] VERY TRULY YOURS,
/s/ ALBERTO R. GONZALES
---------------------------------------
Alberto R. Gonzales, Secretary of State
<PAGE> 2
[SEAL]
THE STATE OF TEXAS
SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
CYBERGUIDE ONLINE, INC.
CHARTER NUMBER 01513094
THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE OF TEXAS, HEREBY
CERTIFIES THAT THE ATTACHED ARTICLES OF INCORPORATION FOR THE ABOVE NAMED
CORPORATION HAVE BEEN RECEIVED IN THIS OFFICE AND ARE FOUND TO CONFORM TO LAW.
ACCORDINGLY, THE UNDERSIGNED, AS SECRETARY OF STATE, AND BY VIRTUE OF THE
AUTHORITY VESTED IN THE SECRETARY BY LAW, HEREBY ISSUES THIS CERTIFICATE OF
INCORPORATION.
ISSUANCE OF THIS CERTIFICATE OF INCORPORATION DOES NOT AUTHORIZE THE USE
OF A CORPORATE NAME IN THIS STATE IN VIOLATION OF THE RIGHTS OF ANOTHER UNDER
THE FEDERAL TRADEMARK ACT OF 1946, THE TEXAS TRADEMARK LAW, THE ASSUMED
BUSINESS OR PROFESSIONAL NAME ACT OR THE COMMON LAW.
DATED NOV. 19, 1998
EFFECTIVE NOV. 19, 1998
[SEAL]
ALBERTO R. GONZALES
--------------------------------------
Alberto R. Gonzales, Secretary of State
<PAGE> 3
---------------------------
FILED
ARTICLES OF INCORPORATION in the Office of the
Secretary of State of Texas
OF NOV 19 1998
CYBERGUIDE ONLINE, INC. Corporations Section
---------------------------
I, the undersigned natural person of age twenty-one (21) years or
more, a citizen of the State of Texas, acting as an Incorporator of a
corporation under the Texas Business Corporation Act, do hereby adopt the
following Articles of Incorporation for said corporation:
ARTICLE ONE
The name of the corporation is Cyberguide Online, Inc..
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose for which the Corporation is organized is to transact any
or all lawful business for which a corporation may be incorporated under the
Texas Business Corporation Act, as now existing or hereafter amended.
ARTICLE FOUR
1. General. The Corporation shall have authority to issue two
classes of shares, to be designated as "Preferred" and "Common". The total
number of shares which the Corporation is authorized to issue is 110,000,000
shares. The number of Common shares authorized is 100,000,000 and the par value
of each share is $0.001 per share. The Common shares shall have identical
rights and privileges in every respect. The number of Preferred shares
authorized is 10,000,000 and the par value of each such share is $0.01 per
share.
2. Preferred Stock. The Board of Directors is vested with the
authority to adopt a resolution or resolutions providing for the issue of
authorized but unissued shares of Preferred Stock, which shares may be issued
from time to time in one or more series and in such amounts as may be
determined by the Board of Directors in such resolution or resolutions. The
characteristics of the Preferred Stock, including the ownership powers, voting
powers,
ARTICLES OF INCORPORATION - Page 1
<PAGE> 4
designations, preferences, and relative, participating, optional or other
rights, if any, of each series of Preferred Stock and the qualifications,
limitations or restrictions, if any, of such preferences and/or rights
(collectively the "Series Terms"), shall be such as are stated and expressed in
a resolution or resolutions providing for the creation or revision of such
Series Terms (a "Preferred Stock Series Resolution") adopted by the Board of
Directors or a committee of the Board of Directors to which such responsibility
is specifically and lawfully delegated. The powers of the Board with respect to
the Series Terms of a particular series (any of which powers may, by a
resolution of the Board of Directors, be specifically delegated to one or more
of its committees, except as prohibited by law) shall include, but not be
limited to, the establishment of the following relative rights and preferences:
A. The rate of dividends;
B. The price at and the terms and conditions for which shares
may be redeemed;
C. The amount payable upon shares in event of involuntary
liquidation;
D. The amount payable upon shares in event of voluntary
liquidation;
E. Sinking fund provisions (if any) for the redemption or
purchase of shares;
F. The terms and conditions on which shares may be converted
if the shares of any Series are issued with the privilege
of conversion; and
G. Voting rights, including the number of votes per shares,
the matter on which shares can vote, and the contingencies
which make the voting rights effective.
3. Preferences, Limitations and Relative Rights.
A. General. All shares of Common Stock shall have identical
rights with each other. Except as provided in this Article
Four or in Preferred Stock Series Resolutions, all shares
of Preferred Stock shall have preferences, limitations and
relative rights identical with each other. Except as
expressly provided in the Preferred Stock Series
Resolutions, shares of Preferred Stock shall have only the
preferences and relative rights expressly stated in this
Article.
B. Dividends.
(i) The Preferred Stock at the time outstanding shall
be entitled to receive, when, as, and if declared
by the Board of Directors, out of any funds
legally available therefor, dividends at the rate
fixed by the Board of Directors.
ARTICLES OF INCORPORATION - Page 2
<PAGE> 5
(ii) No dividends shall be declared or paid on Common
Stock unless full dividends on outstanding
Preferred Stock for all past dividend periods
and for the current dividend periods shall have
been declared and paid.
C. Liquidation Preference. In the event of dissolution,
liquidation, or winding up of the Corporation (whether
voluntary or involuntary), after payment or provision for
payment of debts but before any distribution to the
holders of the Common Stock, as provided under Texas law,
the holders of each Series of Preferred Stock then
outstanding shall be entitled to receive the amount fixed
by the Board of Directors, plus a sum equal to all
cumulated, but unpaid dividends (if any) to the date fixed
for distribution. All remaining assets shall be
distributed pro rata among the holders of Common Stock.
D. Redemption.
(1) All or part of any one or more Series of Preferred
Stock may be redeemed at any time or times at the
option of the Corporation by a resolution of the
Board of Directors, in accordance with the terms
and provisions of this Article Four and those
fixed by the Board of Directors. The Corporation
may redeem shares of any one or more series
without redeeming shares of other series, as
determined by the Board of Directors. If less than
all the shares of any series are to be redeemed,
the shares of the series to be redeemed shall be
selected ratably whether by lot or by any other
equitable method determined by the Board of
Directors.
(2) Redeemed shares shall be paid for in amounts and
manners as fixed by the Board of Directors.
(3) Shares of Preferred Stock which are redeemed shall
be canceled and shall be restored to the status of
authorized but unissued shares.
E. Purchase. Except as provided in this Article, nothing
shall limit the right of the Corporation to purchase any
of its outstanding shares in accordance with law, by
public or private transaction.
F. Voting. Except as fixed by the Board of Directors and
except as otherwise expressly provided by law, all voting
powers shall be in Common Stock and none in the Preferred
Stock. Where Preferred Stock as a Class has voting power,
all Series of Preferred Stock shall be a single class.
ARTICLES OF INCORPORATION - Page 3
<PAGE> 6
ARTICLE FIVE
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done or property actually received.
ARTICLE SIX
The street address of the corporation's initial registered office is
4300 Horizon N. Parkway, Suite 915, Dallas, Texas 75287. The name of the
initial Registered Agent at that address is James B. Tucker.
ARTICLE SEVEN
The number of Directors constituting the initial Board of Directors is
three (3) and the names and addresses of the persons who are to serve as
Directors until the first annual meeting of the Shareholders, or until their
successors are elected and qualified are:
Jim W. Tucker
4300 Horizon N. Parkway
Suite 915
Dallas, Texas 75287
James B. Tucker
4300 Horizon N. Parkway
Suite 915
Dallas, Texas 75287
Bob Ringle
4300 Horizon N. Parkway
Suite 915
Dallas, Texas 75287
ARTICLES OF INCORPORATION - Page 4
<PAGE> 7
ARTICLE EIGHT
The name and address of the Incorporator is:
Steven B. Holmes
Hoge, Evans, Holmes
Carter & Ledbetter, PLLC
4311 Oaklawn
Suite 600
Dallas, Texas 75219
ARTICLE NINE
Cumulative voting by the Shareholders of the corporation at any
election for Directors is expressly prohibited. The Shareholders entitled to
vote for Directors in such election shall be entitled to cast one (1) vote for
each Director for each share held and no more.
ARTICLE TEN
No holder of any stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any part of any stock of the
corporation authorized by these Articles or of any additional stock of any
class to be issued by reason of any increase of the authorized stock of the
corporation, or of any bonds, certificates of indebtedness, debentures,
warrants, options or other securities convertible into any class of stock of
the corporation, but any stock authorized by these Articles or any such
additional authorized issue of any stock or securities convertible into any
stock may be issued and disposed of by the Board of Directors to such persons,
firms, corporations or associations for such consideration and upon such terms
and in such manner as the Board of Directors may in its discretion determine
without offering any part thereof on the same terms or on any terms to the
Shareholders then of record or to any class of Shareholders, provided only that
such issuance may not be inconsistent with any provision of law or with any of
the provisions of this Article.
ARTICLE ELEVEN
The corporation shall indemnify as set forth herein, to the extent
allowed by Article 2.02-1 of the Texas Business Corporation Act, any person who
is or was a Director, Officer, agent or employee of the corporation, and any
person who serves or served at the corporation's request as a Director,
Officer, agent, employee, partner or trustee of another corporation,
partnership, joint venture, trust or other enterprise.
ARTICLES OF INCORPORATION - Page 5
<PAGE> 8
(A) Persons. The corporation shall indemnify, to the extent
provided in Paragraph (B), (D), or (F):
(1) any person who is or was a Director, Officer, agent or
employee of the corporation, and
(2) any person who serves or served at the corporation's
request as a Director, Officer, agent, employee, partner or
trustee of another corporation or of a partnership, joint
venture, trust or other enterprise.
(B) Extent - Derivative Suits. In case of a suit by or in the
right of the corporation against a person named in Paragraph
(A) by reason of his holding a position named in Paragraph
(A), the corporation shall indemnify him, if he satisfies the
standard in Paragraph (C), for expenses (including attorney's
fees but excluding amounts paid in settlement) actually and
reasonably incurred by him in connection with the defense or
settlement of the suit.
(C) Standard - Derivative Suit. In case of a suit by or in the
right of the corporation, a person named in Paragraph (A)
shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the
corporation. However, he shall not be indemnified in respect
of any claim, issue or matter as to which he has been
adjudged liable for negligence or misconduct in the
performance of his duty to the corporation unless (and only
to the extent that) the court in which the suit is brought
shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is
fairly and reasonably entitled to indemnity for such expenses
as the court shall deem proper.
(D) Extent - Nonderivative Suits. In case of a suit, action, or
proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
corporation, together hereafter referred to as "Nonderivative
suit", against a person named in Paragraph (A) by reason of
his holding a position named in Paragraph (A), the
corporation shall indemnify him if he satisfies the standard
in Paragraph (E), for amounts actually and reasonably
incurred by him in connection with the defense or settlement
of the Nonderivative suit as:
(1) expenses (including attorney's fees);
(2) amounts paid in settlement;
(3) judgments; and
ARTICLES OF INCORPORATION - Page 6
<PAGE> 9
(4) fines.
(E) Standard - Nonderivative Suits. In case of a Nonderivative
suit, a person named in Paragraph
(A) shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the
subject of the Nonderivative suit, and in a manner he
reasonably believed to be in, and not opposed, to, the best
interests of the corporation and, with respect to any
criminal action or proceeding, he had no reason to believe
his conduct was unlawful. The termination of a Nonderivative
suit by judgment, order, settlement, conviction or upon plea
of nolo contendere or its equivalent shall not, of itself,
create a presumption that the person failed to satisfy the
standard of this Paragraph (E) (2).
(F) Determination That Standard Has Been Met. A determination
that the standard of Paragraphs (C) or (E) has been satisfied
may be made by a court, or except as stated in Paragraph
(C)(2) (second sentence), the determination may be made by:
(1) a majority of the Directors of the corporation (whether
or not a quorum) who were not parties to the action, suit or
proceeding; or
(2) independent legal counsel (appointed by a majority of the
Directors of the corporation, whether or not a quorum, or
elected by the Shareholders of the corporation) in a written
opinion; or
(3) the shareholders of the corporation.
(G) Proration. Anyone making a determination under Paragraph (F)
may determine that a person has met the standard as to some
matters but not as to others, and may reasonably prorate
amounts to be indemnified.
(H) Advance Payment. The corporation may pay in advance any
expenses (including attorney's fees) which may become subject
to indemnification under Paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment;
and
(2) the person receiving the payment undertakes in writing to
repay the corporation, unless it is ultimately determined
that he is entitled to indemnification by the corporation
under Paragraphs (A) - (G).
ARTICLES OF INCORPORATION - Page 7
<PAGE> 10
(I) Nonexclusive. The indemnification provided in Paragraphs (A)
- (G) shall not be exclusive of any other rights to which a
person may be entitled by law, by-law, agreement, vote of
Shareholders or disinterested Directors, or otherwise.
(J) Continuation. The indemnification and advance payment
provided in Paragraphs (A) - (H) shall continue as to a
person who has ceased to hold a position named in Paragraph
(A) and shall inure to his heirs, executors and
administrators.
(K) Insurance. The corporation may purchase and maintain
insurance on behalf of any person who holds or who has held
any position named in Paragraph (A), against any liability
incurred by him in any such position, or arising out of his
status as such, whether or not the corporation would have
power to indemnify him against such liability under
Paragraphs (A) - (H).
(L) Reports. Indemnification payments, advance payments and
insurance purchases and payments made under Paragraphs (A) -
(K) shall be reported in writing to the Shareholders of the
corporation with the next notice of annual meeting, or within
six (6) months, whichever is sooner.
(M) Severability. All of the provisions of this Article Eleven
are separate from each other, and to the extent that a
particular provision is held by a court of competent
jurisdiction to be invalid for any reason, then such holding
shall not affect the enforceability and binding effect of the
other provisions herein not held to be invalid.
ARTICLE TWELVE
No contract or other transaction between the Corporation and any other
person (as used herein the term "Person" means an individual, firm, trust,
partnership, association, corporation, or other entity) shall be affected or
invalidated by the fact that any director of the Corporation is interested in,
or is a member, director, or an officer of, such other person, and any director
may be a party to or may be interested in any contract or transaction of the
Corporation or in which the Corporation is interested; and no contract, act, or
transaction of the Corporation with any person shall be affected or invalidated
by the fact that any director of the Corporation is a party to, or interested
in, such contract, act, or transaction, or in any way connected with such
person. Each and every person who may become a director of the Corporation is
hereby relieved from any liability that might otherwise exist from contracting
with the Corporation for the benefit of himself or any person in which he may
in any way be interested; provided that the fact of such interest shall have
been disclosed to, or shall be known by, the other directors or the
shareholders of the Corporation, as the case may be, acting upon or with
reference to such act, contract, or transaction, even though the presence at a
meeting or vote or votes of such interested director might have been necessary
to obligate the Corporation upon such act, contract, or transaction.
ARTICLES OF INCORPORATION - Page 8
<PAGE> 11
ARTICLE THIRTEEN
The Corporation shall have the authority to purchase, directly or
indirectly, its own shares to the extent of the aggregate of the unrestricted
capital surplus available therefor and unrestricted reduction surplus available
therefor, without submitting such purchase to a vote of the shareholders of the
Corporation.
ARTICLE FOURTEEN
Any action required by the Texas Business Corporation Act to be taken
at any annual or special meeting of Shareholders, or any action which 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.
IN WITNESS WHEREOF, I have hereunto set my hand on November 18, 1998.
/s/ STEVEN B. HOLMES
---------------------------------
STEVEN B. HOLMES,
INCORPORATOR
ARTICLES OF INCORPORATION - Page 9
<PAGE> 12
BYLAWS
OF
CYBERGUIDE ONLINE, INC.
ARTICLE ONE - OFFICES
SECTION ONE. REGISTERED OFFICE. The Registered Office of the
Corporation is located at 4300 Horizon N. Parkway, Suite 915, Dallas, Texas
75287.
SECTION TWO. ADDITIONAL OFFICE. The Corporation may also have offices
at such other places, within or without the State of Texas, where the
Corporation is qualified to do business, as the Board of Directors may from
time to time designate and as the business of the Corporation may require.
ARTICLE TWO - SHAREHOLDER'S MEETINGS
SECTION ONE. PLACE OF MEETINGS. Meetings of the Shareholders shall be
held at any place, either within or without the State of Texas, designated by
the Board of Directors pursuant to authority hereinafter granted to the Board
or by the written consent of all persons entitled to vote thereat. In the
absence of any such designation, Shareholder's meetings shall be held at the
Registered Office of the Corporation.
SECTION TWO. ANNUAL MEETING. The annual meeting of the Shareholders
shall be held at a date and time to be set by resolution of the Board of
Directors. If no resolution is made setting the date for the annual meeting of
the Shareholders, such meeting shall be held on the annual anniversary of the
date on which the Corporation's Articles of Incorporation were issued. At such
meetings Directors shall be elected, reports of the affairs of the Corporation
shall be considered and any other business may be transacted which is within
the powers of the Shareholders. The date and time of the Annual Meeting of
Shareholders may be changed by appropriate resolutions of the Board of
Directors, to a time within sixty (60) days before or following the date stated
herein.
SECTION THREE. NOTICE OF MEETING. Notice of all meetings of the
Shareholders stating 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, shall
be given in writing to each Shareholder entitled to vote at the meeting at
least ten (10) but not more than fifty (50) days before the date of the meeting
either personally or by mail or other means of written communication, addressed
to the Shareholder at the address appearing on the books of the Corporation or
given by the Shareholder to the Corporation for the purpose of notice. If
mailed, the notice shall be deemed to be delivered when deposited in the United
States mail, with postage prepaid, properly addressed to the Shareholder.
Notice of adjourned meetings is not necessary unless the meeting is adjourned
for thirty (30) days or more, in which case notice of the adjourned meeting
shall be given as in the case of any special meeting. Any notice required by
law or by these Bylaws may be waived by the person entitled to
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 1
<PAGE> 13
the notice by the execution of a written waiver of such notice, which waiver
may be signed before or after the time stated in the notice.
SECTION FOUR. SPECIAL MEETINGS. Special meetings of the Shareholders
may be called by the President, the Board of Directors or by the holder or
holders of at least one-tenth (1/10) of all the shares entitled to vote at the
meeting. No question may be voted upon at a special meeting of the Shareholders
unless the notice of said meeting states that one of the purposes of the
meeting will be to act upon the question or unless the meeting is attended by
all of the Shareholders entitled to vote upon the question and all the
Shareholders vote that the question may then be voted upon at that meeting.
SECTION FIVE. QUORUM AND MANNER OF ACTION. The holders of a majority
of shares entitled to vote, represented in person or by proxy, shall constitute
a quorum at a meeting of Shareholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without notice other than
announcement at the meeting that the meeting shall be adjourned until a quorum
shall be present. At a reconvened meeting at which a quorum is present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. When a quorum is present at any meeting, the
vote of the holders of a majority of the shares having voting power, present in
person or represented by proxy, shall decide any question brought before the
meeting, unless the question is one upon which, by express provision of the
statues, the Articles of Incorporation or these Bylaws, a different vote is
required, in which case the express provision shall govern and control the vote
required for decision upon the question.
SECTION SIX. VOTING OF COMMON SHARES. Each outstanding share of common
stock shall be entitled to one (1) vote on each matter submitted to a vote at a
meeting of Shareholders.
SECTION SEVEN. ELIGIBLE SHAREHOLDERS. For the purpose of determining
Shareholders entitled to notice of and to vote at any meeting of Shareholders
or at any adjournment thereof, for the purpose of determining Shareholders
entitled to receive payment of any dividend or for the purpose of determining
the shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the share transfer books shall be closed for a
stated period, not to exceed in any case fifty (50) days. If the share transfer
books shall be closed for the purpose of determining Shareholders entitled to
notice of or to vote at a meeting of Shareholders, the books shall be closed
for at least ten (10) days immediately preceding the meeting. In lieu of
closing the share transfer books, the Board of Directors may fix in advance a
date as the record date for such determinations of Shareholders, with the date
in any case to be not more than fifty (50) days and in case of a meeting of
Shareholders, not less than ten (10) days prior to the date on which the
particular action requiring the determination of Shareholders is to be taken.
If the share transfer books are not closed and no record date is fixed for the
determination of Shareholders entitled to notice of and to vote at a meeting of
Shareholders or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring the dividend is adopted, as the
case may be, shall be the record date for the determination of Shareholders.
When a determination of shareholders entitled to vote at any meeting of
Shareholders has been made as provided in this section, the determination shall
apply to any adjournment thereof.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 2
<PAGE> 14
SECTION EIGHT. VOTING LIST. The Officer or agent having charge of the
Corporation's share transfer books shall make, at least ten (10) days before
each meeting of Shareholders, a complete list of the Shareholders entitled to
vote at the meeting or at any adjournment thereof. The list shall be arranged
in alphabetical order with the address of each Shareholder and the number of
shares owned by each Shareholder. The list, for a period of ten (10) days prior
to the meeting, shall be kept on file at the Registered Office of the
Corporation and shall be subject to the inspection by any Shareholder at any
time during usual and ordinary business hours. The list shall also be produced
and kept open at the time and place of the meeting and shall be subject to the
inspection of any Shareholder during the whole time of the meeting. The
original share transfer books shall be prima facie evidence as to the
Shareholders who are entitled to examine the list and transfer books and to
vote at any meeting of Shareholders.
SECTION NINE. PROXIES. At any meeting of Shareholders, a Shareholder
may vote in person or by proxy executed in writing by the Shareholder or by his
duly authorized attorney-in-fact. The proxy shall be filed with the Secretary
of the Corporation before or at the time of the meeting. No proxy shall be
valid after eleven (11) months from the date of its execution, unless otherwise
specifically provided in the proxy. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and unless otherwise made
irrevocable by law.
SECTION TEN. ACTION WITHOUT MEETING. Any action required by the Texas
Business Corporation Act to be taken at any annual or special meeting of
Shareholders, or any action which 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.
SECTION ELEVEN. CONSENT OF ABSENTEES. No defect in the calling or
noticing of a Shareholder's meeting will affect the validity of any action at
the meeting if a quorum was present and if each Shareholder not present in
person or by proxy signs a written waiver of notice, consent to the holding of
the meeting or approval of the Minutes, either before or after the meeting and
such waivers, consents or approvals are filed with the corporate records or
made a part of the Minutes of the meeting.
SECTION TWELVE. ELECTION INSPECTOR. In advance of any meeting of
Shareholders, the Board of Directors may appoint any person, other than a
nominee for office, as inspector of election to act at such meeting or any
adjournment thereof. If an inspector of election is not so appointed, the
chairman of any such meeting may, and on the request of any Shareholder or his
proxy, shall, appoint an inspector of election at the meeting. In case the
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may be filled by appointment by the Board of Directors in advance of
the meeting or at the meeting by the person acting as chairman. The inspector
of election shall determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a
quorum, the authenticity, validity, and effect of proxies, receive notes,
ballots or consents, hear and determine all challenges and questions in any way
arising in connection with the right to vote, count and tabulate all votes or
consents, determine the result, and do such acts as may be proper to conduct
the election or vote with fairness to all Shareholders. The inspector of
election shall perform his
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 3
<PAGE> 15
duties impartially, in good faith, to the best of his ability and as
expeditiously as is practical. On request of the chairman of the meeting or of
any Shareholder or his proxy, the inspector shall make a report in writing of
any challenge or question of matter determined by him and execute a certificate
of any fact found by him. Any report or certificate made by him is prima facie
evidence of the facts stated therein.
SECTION THIRTEEN. CONDUCT OF MEETING. At every meeting of the
Shareholders, the President, or in his absence, the Vice President designated
by the Board of Directors, shall act as chairman. The Secretary of the
Corporation, or in his absence, any person appointed by the presiding officer,
shall act as Secretary of all meetings of the Shareholders.
SECTION FOURTEEN. CUMULATIVE VOTING. Cumulative voting by the
Shareholders of the Corporation at any election for Directors is expressly
prohibited. The Shareholders entitled to vote for Directors in any election
shall be entitled to cast one (1) vote and no more per share for each Director
to be elected.
SECTION FIFTEEN. VOTING OF SHARES OF CERTAIN HOLDERS.
(a) Shares standing in the name of another corporation may be
voted by such officer, agent or proxy as the Bylaws of such
corporation may authorize, or in the absence of such
authorization, as the Board of Directors of such corporation
may determine.
(b) Shares held by an administrator, executor, guardian or
conservator may be voted by him so long as such shares are in
the possession and forming a part of the estate being served
by him, either in person or by proxy, without the necessity
of a transfer of the shares into his name. Shares standing in
the name of a trustee may be voted by him, either in person
or by proxy, but no trustee shall be entitled to vote shares
held by him, either in person or by proxy, without a transfer
of the shares into his name as trustee.
(c) Shares standing in the name of a receiver may be voted by the
receiver, and shares held by or under the control of a
receiver may be voted by him without the transfer thereof
into his name if authority to do so is contained in an
appropriate order of the court by which he was appointed.
(d) A shareholder whose shares are pledged shall be entitled to
vote such shares until they have been transferred into the
name of the pledgee, and thereafter the pledgee shall be
entitled to vote the transferred shares.
(e) Treasury shares, shares of its own stock owned by another
corporation the majority of the voting stock of which is
owned or controlled by this Corporation, and shares of its
own stock held by this corporation in a fiduciary capacity
shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of
outstanding shares at any given time.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 4
<PAGE> 16
ARTICLE THREE - DIRECTORS
SECTION ONE. POWERS. The business and affairs of the Corporation shall
be managed by the Board of Directors which shall exercise all the powers of the
Corporation and do all lawful acts and things as are not by statute, by the
Articles of Incorporation or by these Bylaws directed or required to be
exercised or done or approved by the Shareholders.
SECTION TWO. NUMBER AND QUALIFICATION. The Board of Directors shall
consist of at least one and no more than nine (9) Directors, who need not be a
Shareholder or resident of the State of Texas. The actual number of Directors
chosen within these limits shall be established by the Board of Directors by
properly approved resolution. The upper limit to the number of Directors may be
increased or decreased from time to time by amendment to these Bylaws;
provided, however, that no decrease in the number of Directors shall have the
effect of shortening the term of any incumbent Director.
SECTION THREE. TERM OF OFFICE. The Directors named in the Articles of
Incorporation shall hold office until the first annual meeting of Shareholders
and until their successors are elected and qualified, either at an annual or a
special meeting of Shareholders. Directors other than those named in the
Articles of Incorporation, shall hold office until the next annual meeting and
until their successors are elected and qualified.
SECTION FOUR. VACANCIES. Vacancies in the Board of Directors shall
exist in the case of the happening of any of the following events; (a) the
death, resignation or removal of any Director; (b) the authorized number of
Directors is increased; or (c) at any annual, regular or special meeting of
Shareholders at which any Director is elected, the Shareholders fail to elect
the full authorized number of Directors to be voted for at that meeting. In
addition, the Board or Directors may declare vacant the office of a Director in
either of the following cases: (a) if he is adjudged incompetent by an order of
Court or convicted of a felony; or (b) if within thirty (30) days after notice
of his election, he does not accept the office either in writing or by
attending a meeting of the Board of Directors. Vacancies may be filled by the
unanimous vote of the remaining Directors, though less than a quorum or by a
sole remaining Director. Each Director so elected shall hold office until his
successor is elected at an annual, regular or special meeting of the
Shareholders. The Shareholders may elect a Director at any time to fill any
vacancy not filled by the Directors. If the Board of Directors accepts 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. A reduction of the authorized number of Directors shall not
remove any Director prior to the expiration of his term of office.
SECTION FIVE. REMOVAL. The entire Board of Directors or any individual
Director may be removed from office, either with or without cause, by a vote of
Shareholders holding a majority of the outstanding shares entitled to vote at
an election of Directors. If any or all Directors are so removed, new Directors
may be elected at the same meeting.
SECTION SIX. PLACE OF MEETINGS. All meetings of the Board of Directors
shall be held at any place, within or without the State of Texas, which has
been designated from time to time by resolution of the Board or by written
consent of all members of the Board. Any regular or
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 5
<PAGE> 17
special meeting is valid, wherever held, if held on written consent of all
members of the Board given either before or after the meeting and filed with
the Secretary of the Corporation.
SECTION SEVEN. ANNUAL MEETINGS. Annual meetings of the Board of
Directors shall be held, without call or notices, immediately following each
annual meeting of the Shareholders of the Corporation.
SECTION EIGHT. SPECIAL MEETINGS. Special meetings of the Board of
Directors of the Corporation shall be called by the President, or, if he is
absent or is unable or refuses to act, by any Vice President or by any
Director.
SECTION NINE. NOTICE OF SPECIAL MEETING. Written notice of the time,
place and purpose of special meetings of the Board of Directors shall be
delivered personally to each Director or sent to each Director by mail or by
other form of written communication, at least seven (7) days before the
meeting. If the address of a Director is not shown on the records and is not
readily ascertainable, notice shall be addressed to him at the city or place in
which meetings of the Directors are regularly held. Notice of the time and
place of holding an adjourned meeting of a meeting need not be given to absent
Directors if the time and place are fixed at the meeting adjourned.
SECTION TEN. QUORUM AND MANNER OF ACTION. At all meetings of the Board
of Directors, the presence of a majority of the Directors shall be necessary
and sufficient to constitute a quorum for the transaction of business and the
act of a majority of Directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors, except as otherwise
specifically provided by statute, by the Articles of Incorporation, or by these
Bylaws. If a quorum shall not be present at any meeting of Directors, the
Directors present may adjourn the meeting from time to time, without notice
other than announcement at the meeting that the meeting shall be adjourned,
until a quorum shall be present. At a reconvened meeting at which a quorum is
present any business may be transacted which might have been transacted at the
meeting as originally noticed. Each Director who is present at a meeting will
be deemed to have assented to any action taken at such meeting unless his
dissent to the action is entered in the Minutes of the meeting or unless he
shall file his written dissent thereto with the Secretary of the meeting or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after such meeting.
SECTION ELEVEN. ACTION WITHOUT MEETING. Any action required or
permitted to be taken by the Board of Directors or any Committee of Directors
under any provision of the Texas Business Corporation Act may be taken without
a meeting, if all members of the Board or of the Committee of Directors shall
individually or collectively consent in writing to such action. Such written
consent or consents shall be filed with the Minutes of the proceedings of the
Board. Such action by written consent shall have the same force and effect as a
unanimous vote of such Directors. Any certificate or other document filed under
any provisions of the Texas Business Corporation Act which relates to actions
so taken shall state that the action was taken by unanimous written consent of
the Board of Directors to so act and such statement shall be prima facie
evidence of such authority.
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<PAGE> 18
SECTION TWELVE. VALIDATION OF MEETING DEFECTIVELY CALLED. The
transaction of any meeting of the Board of Directors, however called and
noticed or wherever held, are as valid as though had at a meeting duly held
after regular call and notice, if a quorum is present and if, either before or
after the meeting, each of the Directors not present signs a waiver of notice,
a consent to holding the meeting or an approval of the Minutes thereof. All
such waivers, consents, or approvals shall be filed with the corporate records
or made a part of the Minutes of the meeting. Attendance by a Director at a
meeting shall constitute a waiver of notice of the meeting, unless the express
purpose for such attendance is to present the objection that the meeting is not
lawfully called or convened.
SECTION THIRTEEN. CONDUCT OF MEETINGS. The President, or, in his
absence, the Vice President designated by the Board of Directors, shall preside
at meetings of the Board of Directors. The Secretary of the Corporation, or in
his absence, any person appointed by the presiding officer, shall act as
Secretary of the Board of Directors.
SECTION FOURTEEN. 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.
SECTION FIFTEEN. 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 is directly of indirectly
interested) shall be valid for all purposes notwithstanding the presence of
such Director at the meeting; provided however, the foregoing shall apply only
if the interest of each such Director is known or disclosed to the Board of
Directors and it shall nevertheless authorize or ratify such contract or other
transaction by a majority of the Directors present, each such interested
Director to be counted in determining whether a quorum is present but not in
calculating the majority necessary to carry such vote.
SECTION SIXTEEN. EXECUTIVE COMMITTEE. The Board of Directors may at
any time appoint two (2) or more Directors to serve and act as an Executive
Committee. The Executive Committee so appointed shall have such power and
authority to conduct the business and affairs of the Corporation as is vested
by law, the Articles of Incorporation and these Bylaws in the Board of
Directors as a whole, except that it may not take any action that is
specifically required by statute to be taken by the entire Board of Directors.
Members of the Executive Committee shall receive such compensation as the Board
or Directors may from time to time provide. Each Director shall be deemed to
have assented to any action of the Executive Committee unless he shall, within
seven (7) days after receiving actual or constructive notice of such action,
deliver his written dissent thereto to the Secretary of the Corporation.
Members of the Executive Committee shall serve at the pleasure of the Board of
Directors.
ARTICLE FOUR - OFFICERS
SECTION ONE. OFFICERS. The Officers of the Corporation shall be a
President and a Secretary and may be a Vice President and a Treasurer. The
Corporation may also have, at the discretion of the Board of Directors, one or
more additional Vice Presidents, one or more Assistant
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 7
<PAGE> 19
Treasurers, and such other Officers as may be appointed in accordance with the
Provisions of Section Three of this Article. One person may hold two or more
offices.
SECTION TWO. ELECTION. The Officers of the Corporation shall be
elected annually by the Board of Directors and each shall hold his office until
he shall resign or shall be removed or otherwise is qualified to serve, or his
successors shall be elected and qualified.
SECTION THREE. ADDITIONAL OFFICERS. The Board of Directors may appoint
such other officers or agents as the business of the Corporation may require,
each of whom shall hold office for such period, have such authority and perform
such duties as are provided in these Bylaws or as the Board or Directors may
from time to time determine.
SECTION FOUR. COMPENSATION. The compensation of the President, all
Vice Presidents, the Secretary and the Treasurer shall be fixed by the Board of
Directors, but the compensation of all minor officers and all other agents and
employees of the Corporation may be fixed by the President, unless by
resolution the Board of Directors shall determine otherwise; provided, however,
that without the express approval of the Board of Directors, the President may
not enter into any employment agreement on behalf of the Corporation with any
person which may not be terminated by the Corporation, either at will or upon
thirty (30) days written notice.
SECTION FIVE. REMOVAL AND RESIGNATION. Any Officer may be removed,
either with or without cause, by a majority of the Directors in office, at any
regular or special meeting of the Board; provided, however, that 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 or to the President or to the Secretary of the Corporation.
Any such resignation shall take effect at the date of the receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION SIX. VACANCIES. If the office of the President, Vice
President, Secretary or Treasurer becomes vacant by reason of death,
resignation, removal or otherwise, the Board of Directors shall elect a
successor who shall hold office for the unexpired term and until his successor
is elected.
SECTION SEVEN. PRESIDENT. 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 and shall have the general powers and duties of
management usually vested in the office of President of a corporation and shall
have such other powers and duties as may be prescribed by the Board of
Directors or the Bylaws. Within this authority and in the course of his duties
he shall:
(a) Preside at all meetings of the Shareholders and all meetings
of the Board of Directors and shall be ex officio a member of
the Executive Committee, if any;
(b) Sign all certificates of stock of the Corporation;
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 8
<PAGE> 20
(c) When authorized by the Board of Directors or required by law,
execute in the name of the Corporation deeds, conveyances,
notices, leases, checks, drafts, bills of exchange, warrants,
promissory notes, bonds, debentures, contracts and other
papers and instruments in writing and, unless the Board of
Directors shall order otherwise by resolution, make such
contracts as the ordinary conduct of the Corporation's
business may require; and
(d) Appoint and remove, employ and discharge and prescribe the
duties and fix the compensation of all agents, employees and
clerks of the Corporation other than the duly appointed
Officers, subject to the approval of the Board of Directors,
and control, subject to the direction of the Board of
Directors, all of the Officers, agents and employees of the
Corporation.
SECTION EIGHT. VICE PRESIDENT. In the absence or disability of the
President, the Vice President designated by the Board of Directors shall
perform all the duties of the President and, when so acting, shall have the
powers of and be subject to all the restrictions on the President. The Vice
President or Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for him or them by the
Board of Directors or the Bylaws.
SECTION NINE. SECRETARY. The Secretary shall:
(a) Attest and keep at the principal office of the Corporation
the original or a copy of its Bylaws as amended or otherwise
altered to date;
(b) Keep at the principal office of the Corporation or such other
place as the Board of Directors may order, a book of Minutes
of all meetings of its directors, Shareholders and Executive
Committee, with the time and place of holding, whether
regular or special, and, if special, how authorized, the
notice thereof given, the names of those present at
Directors' meetings, the number of shares or members present
or represented at Shareholder's meetings and the proceedings
thereof;
(c) Sign or attest such documents as may be required by law or
the business of the Corporation and keep the corporate seal
and affix it to such instruments as may be necessary or
proper;
(d) Be custodian of the records and of the seal of the
Corporation;
(e) See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law;
(f) Keep at the principal office of the Corporation a share
register or duplicate share register showing the names of the
Shareholders and their addresses; the number, date of issue,
and class of shares represented by each outstanding share
certificate surrendered for cancellation.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 9
<PAGE> 21
(g) See that the books, reports, statements, certificates and all
other documents and records required by law are properly kept
and filed; and
(h) In general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be
assigned by the Board or Directors.
SECTION TEN. TREASURER. The Treasurer shall:
(a) Have charge and custody of, and be responsible for, all funds
and securities of the Corporation and deposit all such finds
in the name of the Corporation in such banks, trust companies
or other depositories as shall be selected by the Board of
Directors;
(b) Receive, and give receipt for, moneys due and payable to the
Corporation from any source whatsoever;
(c) Disburse or cause to be disbursed, the funds of the
Corporation as may be directed by the Board of Directors,
taking proper vouchers for such disbursements, gains, losses,
capital, surplus and shares;
(d) Keep and maintain adequate and correct accounts of the
Corporation's properties and business transactions including
accounts of its assets, liabilities, receipts, disbursements,
gains, losses, capital, surplus and shares;
(e) Render to the President and Directors, whenever requested, an
account of all transactions as Treasurer and of the financial
condition of the Corporation;
(f) Prepare, or cause to be prepared, and certify the financial
statements to be included in the annual report to
Shareholders and statements of the affairs of the Corporation
when requested by Shareholders holding at least ten percent
(10%) of the number of outstanding shares of the Corporation;
and
(g) In general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned by the Board or Directors.
ARTICLE FIVE - EXECUTION OF INSTRUMENTS
SECTION ONE. AUTHORITY FOR EXECUTION OF INSTRUMENTS. The Board of
Directors, except as otherwise provided in these Bylaws, may 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; and, unless so
authorized, no Officer, agent or employees shall have any power or authority to
bind the Corporation by any contract or engagement or to pledge its credit or
to render it liable pecuniarily for any purpose or in any amount.
SECTION TWO. EXECUTION OF INSTRUMENTS. Unless otherwise specifically
determined by the Board of Directors or otherwise required by law, formal
contracts of the
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 10
<PAGE> 22
Corporation, promissory notes, deeds of trust, mortgages and other evidences of
indebtedness of the Corporation and other corporate instruments and documents
and certificates of shares of stock owned by the Corporation shall be executed,
signed or endorsed by the President and may have the corporate seal affixed
thereto.
ARTICLE SIX - DEPOSIT OF FUNDS
SECTION ONE. BANK ACCOUNTS. All funds of the Corporation shall be
deposited from time to time to the credit of the Corporation with such banks,
trust companies or other depositories as the Board of Directors may select.
SECTION TWO. SIGNING OF CHECKS. All checks, drafts or other orders for
payment of money, notes or other evidences or indebtedness, issued in the name
of or payable to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by
resolution of the Board or Directors.
ARTICLE SEVEN - ISSUANCE AND TRANSFER OF SHARES
SECTION ONE. ISSUANCE OF STOCK. The Board of Directors may offer for
sale and issue shares of the common stock of the Corporation as authorized in
the Articles of Incorporation.
SECTION TWO. CERTIFICATES FOR FULLY PAID SHARES. Neither shares nor
certificates representing such shares may be issued by the Corporation until
the full amount of the consideration has been paid. When such consideration has
been paid to the Corporation, the shares shall be deemed to have been issued
and the certificate representing such shares shall be issued to the
Shareholder.
SECTION THREE. CONSIDERATION FOR SHARES. The consideration paid for
the issuance of shares shall consist of money paid, labor done or property
actually received. Neither promissory notes nor the promise of future services
shall constitute payment or part payment for shares of the Corporation.
SECTION FOUR. CERTIFICATES REPRESENTING SHARES. Certificates in the
form as may be determined by the Board or Directors and as shall conform to the
requirements of the statutes, the Articles of Incorporation and these Bylaws
shall be delivered representing all shares to which Shareholders are entitled.
The certificates shall be consecutively numbered and shall be entered in the
books of the Corporation as they are issued. Each certificate shall be signed
by the President of the Corporation, may be signed by the Secretary of the
Corporation and shall be sealed with the seal of the Corporation. Each
certificate shall state the following upon the face thereof:
(a) That the Corporation is organized under the laws of the State
of Texas;
(b) The name of the person to whom issued;
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 11
<PAGE> 23
(c) The number and class of shares and the designation of the
series, if any, which such certificate represents; and
(d) The par value of each share represented by the certificate,
or a statement that the shares are without par value.
SECTION FIVE. REPLACEMENT OF CERTIFICATES. No new certificates shall
be issued until the former certificate for the shares represented thereby shall
have been surrendered and canceled, except in the case of lost or destroyed
certificates for which the Board of Directors may order new certificates to be
issued upon such terms, conditions and guarantees as the Board may see fit to
impose, including the filing of sufficient indemnity.
SECTION SIX. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may appoint one or more transfer agents and may appoint one or more registrars
who shall be appointed at such times and places as the requirements of the
Corporation may necessitate and as the Board of Directors may designate.
SECTION SEVEN. TRANSFER OF SHARES. Shares of the stock shall be
transferable only on the books of the Corporation by the holder thereof in
person or by his duly authorized attorney. Upon surrender to the Corporation or
transfer agent of the Corporation of a certificate or certificates representing
shares, duly endorsed or accomplished by a proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the Corporation or
the transfer agent of the Corporation to issue a new certificate or
certificates to the person entitled thereto, to cancel the old certificate or
certificates and to record the transaction upon its books. The transferee in
any transfer of shares shall be deemed to have full notice of, and to consent
to, the Bylaws of the Corporation to the same extent as if he had signed a
written assent thereto. Whenever any transfer of shares shall be made for
collateral security, and not absolutely, and written notice thereof shall be
given to the Secretary of the Corporation or its transfer agent, if any, such
fact shall be stated in the entry of the transfer.
SECTION EIGHT. REGISTERED SHAREHOLDERS. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or beneficial claim to or interest in the share or shares on the part
of any other person.
SECTION NINE. REASONABLE DOUBT 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, if any, 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 his 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 (2) individual sureties satisfactory
to the Corporation as to form, amount and responsibility of the sureties. The
bond shall be conditioned to protect the Corporation, its Officers, transfer
agents and registrars, if any, or any of them against any loss, damage, expense
or other liability to the owner of the shares of a new certificate for shares.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 12
<PAGE> 24
ARTICLE EIGHT - CORPORATE RECORDS, REPORTS AND SEAL
SECTION ONE. MINUTES OF MEETINGS. The Corporation shall keep and
maintain a book of Minutes of all meetings of its Directors and of its
Shareholders with the time and place of holding, whether regular or special,
and, if special, how authorized, the notice thereof given, the names of those
present at Directors' meetings, the number of shares present or represented at
Shareholders' meetings and the proceedings thereof.
SECTION TWO. BOOKS OF ACCOUNTS. The Corporation shall keep and
maintain adequate and correct accounts of its properties and business
transactions, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital surplus and shares. Any surplus,
including earned surplus, paid-in surplus and surplus arising from a reduction
of stated capital, shall be classified according to source and shown in a
separate account.
SECTION THREE. SHARE REGISTER. The Corporation shall keep and maintain
a share register, showing the names of the Shareholders and their addresses,
the number and classes of shares held by each, and the number and date of
cancellation of every certificate surrendered for cancellation.
SECTION FOUR. INSPECTION OF RECORDS BY SHAREHOLDER. Any person who
shall have been a Shareholder of record for at least six (6) months immediately
preceding this demand or who is the holder of record of at least five percent
(5%) of all of the outstanding shares of the Corporation, on written demand
stating the purpose thereof, has the right to examine, in person or by agent,
accountant or attorney, at any reasonable time or times, for any proper
purpose, its books and records of account, Minutes and record of Shareholders
and is entitled to make extracts therefrom.
SECTION FIVE. INSPECTION OF RECORDS BY DIRECTORS. Every Director shall
have the absolute right at any reasonable time to inspect all books, records,
documents of every kind and the physical properties of the Corporation. Such
inspection by a Director may be made in person or by agent or attorney and the
right of inspection includes the right to make extracts therefrom.
SECTION SIX. FINANCIAL REPORTS. The Board of Directors must, when
requested by the holders of at least one-third (1/3) of the outstanding shares
of the Corporation, present written reports concerning the situation and
business of the Corporation.
SECTION SEVEN. FISCAL YEAR. The fiscal year of the Corporation shall
be determined by the Board of Directors.
SECTION EIGHT. CORPORATE SEAL The Board of Directors may adopt, use
and thereafter alter the corporate seal.
SECTION NINE. DIVIDENDS. The Board of Directors may declare and the
Corporation may pay dividends on its outstanding shares in cash, property or
its own shares, pursuant to law and subject to the provisions of its Articles
of Incorporation.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 13
<PAGE> 25
SECTION TEN. CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or to execute
and deliver any instrument in the name, and on behalf of, the Corporation. This
authority may be general or confined to specific instances.
SECTION ELEVEN. LOANS. No loans shall be contracts on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. This authority may be
general or confined to specific instances.
SECTION TWELVE. RESERVES. The Board of Directors may by resolution
create a reserve or reserves out of earned surplus for any purpose or purposes,
and may abolish any such reserve in the same manner.
ARTICLE NINE - INDEMNIFICATION OF OFFICERS AND DIRECTORS
SECTION ONE. INDEMNIFICATION. The Corporation shall be empowered, to
the extent allowed by Article 2.02-1 of the Texas Business Corporation Act, to
indemnify Directors, Officers, agents and employees as follows:
(a) PERSONS. The Corporation shall indemnify to the extent
provided in paragraph (b), (d) or (f):
(1) any person who is or was Director, Officer, agent, or
employee of the Corporation, and
(2) any person who serves or served at the Corporation's
request as a Director, Officer, agent, employee, partner or
trustee of another corporation or of a partnership, joint
venture, trust or other enterprise.
(b) EXTENT - DERIVATIVE SUITS. In case of a suit by or in the
right of the Corporation against a person named in paragraph
(a) by reason of his holding a position named in paragraph
(a), the Corporation shall indemnify him, if he satisfies the
standard in paragraph (c), for expenses (including attorney's
fees but excluding amounts paid in settlement) actually and
reasonably incurred by him in connection with the defense or
settlement of the suit.
(c) STANDARD - DERIVATIVE SUIT. In case of a suit by or in the
right of the Corporation, a person named in paragraph (a)
shall be indemnified only if:
(1) he is successful on the merits of otherwise; or
(2) he acted in good faith in the transaction which is the
subject of this suit, and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the
Corporation. However, he shall not be indemnified in respect
of any claim, issue or matter as to which he has been
adjudged liable for negligence or misconduct in the
performance of his duty to the Corporation unless (and only
to the extent that)
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 14
<PAGE> 26
the court in which the suit was brought shall determine upon
application that, despite the adjudication but in view of all
the circumstances, he is fairly and reasonably entitled to
indemnity for such expense as the court shall deem proper.
(d) EXTENT - NONDERIVATIVE SUITS. In case of a suit, action or
proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
Corporation, together hereinafter referred to as a
nonderivative suit, against a person named in paragraph (a)
by reason of his holding a position named in paragraph (a),
the Corporation shall indemnify him if he satisfies the
standard in paragraph (e), for amounts actually and
reasonably incurred by him in connection with the defense or
settlement of the nonderivative suit as:
(1) expenses (including attorney's fees);
(2) amounts paid in settlement;
(3) judgments; and
(4) fines.
(e) STANDARD - NONDERIVATIVE SUITS. In case of a nonderivative
suit, a person named in paragraph (a) shall be indemnified
only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he
reasonably believed to be in, and not opposed to, the best
interests of the Corporation and, with respect to any
criminal action or proceeding, he had no reason to believe
his conduct was unlawful. The termination of a nonderivative
suit by judgment, order, settlement, conviction or upon a
plea of nolo contendre or its equivalent shall not, of
itself, create a presumption that the person failed to
satisfy the standard of this paragraph (e) (2).
(f) DETERMINATION THAT STANDARD HAS BEEN MET. A determination
that the standard of paragraph (c) or (e) has been satisfied
may be made by a court or, except as stated in paragraph (c)
(2) (second sentence), the determination may be made by:
(1) a majority of the Directors of the Corporation (whether
or not a quorum) who were not parties to the action, suit or
proceeding;
(2) independent legal counsel (appointed by a majority of the
Directors of the Corporation, whether or not a quorum, or
elected by the Shareholders of the Corporation) in a written
opinion; or
(3) the Shareholders of the Corporation.
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 15
<PAGE> 27
(g) PRORATION. Anyone making a determination under paragraph (f)
may determine that a person has met the standard as to some
matters but not as to others, and may reasonably prorate
amounts to be indemnified.
(h) ADVANCE PAYMENT. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject
to the indemnification under paragraphs (a)-(g) if:
(1) the Board of Directors authorized the specific payment;
and
(2) the person receiving the payment undertakes in writing to
repay unless it is ultimately determined that he is entitled
to indemnification by the Corporation under paragraphs
(a)-(g).
(i) NONEXCLUSIVE. The indemnification provided in paragraphs
(a)-(g) shall not be exclusive of any other rights to which a
person may be entitled by law, Bylaw, Agreement, vote of
Shareholders or disinterested Directors, or otherwise.
(j) CONTINUATION. The indemnification and advance payment
provided in paragraphs (a)-(h) shall continue as to a person
who has ceased to hold a position named in paragraph (a) and
shall inure to his heirs, executors and administrators.
(k) INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held
any position named in paragraph (a), against any liability
incurred by him in any such position, or arising out of his
status as such, whether or not the Corporation would have
power to indemnify him against such liability under
paragraphs (a)-(h).
(l) REPORTS. Indemnification payments, advance payments and
insurance purchases and payments made under paragraphs
(a)-(k) shall be reported in writing to the Shareholders of
the Corporation with the next notice of annual meeting, or
within six (6) months, whichever is sooner.
(m) SEVERABILITY. All of the provisions of this Article Nine are
separate from each other, and to the extent a particular
provision is held by a court of competent jurisdiction to be
invalid for any reason, then such holding shall not affect
the enforceability and binding effect of the rest of the
provisions of this Article Nine not specifically held to be
invalid, with the remaining parts of this Article Nine
remaining in full force and effect.
ARTICLE TEN - SURETY BONDS
SECTION ONE. SURETY BONDS. When the Board of Directors so directs,
Officers and agents of the Corporation shall be bonded for the faithful
performance of their duties and for the restoration to the Corporation of, in
case of their death, resignation, retirement, disqualification or removal from
office, all books, papers, vouchers, money and other properties of whatever
kind in
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 16
<PAGE> 28
their possession or under their control belonging to the Corporation,
in the amounts and by the surety companies as the Board of Directors may
determine. The premiums on the bonds shall be paid by the Corporation and the
bonds so furnished shall be in the custody of the Secretary.
ARTICLE ELEVEN - AMENDMENT OF BYLAWS
SECTION ONE. AMENDMENT. These Bylaws may be altered, amended or
repealed, and new Bylaws may be adopted, by the Directors, subject to repeal or
change by action of the Shareholders.
The foregoing set of Bylaws was unanimously adopted as the Bylaws of
Cyberguide Online, Inc., by the Board of Directors effective as of November 18,
1998, to certify which witness my signature.
/s/ JAMES B. TUCKER
------------------------------------
JAMES B. TUCKER, SECRETARY
BYLAWS OF CYBERGUIDE ONLINE, INC. - Page 17
<PAGE> 1
EXHIBIT 5
[HOGE, EVANS, HOLMES, CARTER & LEDBETTER, PLLC LETTERHEAD]
February 17, 1999
Board of Directors
CyberGuide Online, Inc.
4300 Horizon N. Parkway
Suite 915
Dallas, Texas 75287
Re: CyberGuide Online, Inc.
Registration Statement on Form SB-2
Gentlemen:
We have been retained by CyberGuide Online, Inc. (the "Company") in
connection with the Registration Statement (the "Registration Statement") on
Form SB-2, to be filed by the Company with the Securities and Exchange
Commission relating to the offering of securities of the Company. You have
requested that we render our opinion as to whether or not the securities
proposed to be issued on terms set forth in the Registration Statement will be
validly issued, fully paid, and nonassessable.
In connection with the request, we have examined the following:
1. Articles of Incorporation of the Company;
2. Bylaws of the Company;
3. The Registration Statement; and
4. Unanimous consent resolutions of the Company's Board of Directors.
We have examined such other corporate records and documents and have
made such other examinations as we have deemed relevant.
<PAGE> 2
[HOGE, EVANS, HOLMES, CARTER & LEDBETTER, PLLC LETTERHEAD]
CyberGuide Online, Inc.
Board of Directors
February 17, 1999
Page 2
Based on the above examination, we are of the opinion that the
securities of the Company to be issued pursuant to the Registration Statement
are validly authorized and, when issued in accordance with the terms set forth
in the Registration Statement, will be validly issued, and fully paid, and
non-assessable under the corporate laws of the State of Texas.
We consent to our name being used in the Registration Statement as
having rendered the foregoing opinion and as having represented the Company in
connection with the Registration Statement.
Sincerely,
HOGE, EVANS, HOLMES,
CARTER & LEDBETTER PLLC
Steven B. Holmes
SBH
<PAGE> 1
EXHIBIT 10
Pledge of stock for debt
PLEDGE OF STOCK
Brad Tucker, referred to as OWNER, and George W. Smith, referred to as
CREDITOR, agree:
OWNER is indebted to CREDITOR in the sum of $1,000.00 (one thousand & no/100
dollars) for sell of the stock; to secure repayment of the debt, OWNER pledges
to CREDITOR 2 shares of Cyberguide Online, Inc. Preferred stock.
OWNER agrees to execute all necessary documents to perfect the pledge.
So long as OWNER is indebted to CREDITOR the CREDITOR shall have the right to
vote the shares.
Within six months of this agreement, CREDITOR may convert this note for the
Preferred Stock.
Dated: 1/29/99
-----------------
BRAD TUCKER
- -----------------------------
Brad Tucker, Owner
GEORGE W. SMITH
- ----------------------------
Creditor
<PAGE> 2
Pledge of stock for debt
PLEDGE OF STOCK
Brad Tucker, referred to as OWNER, and Kent R. Smith, referred to as
CREDITOR, agree:
OWNER is indebted to CREDITOR in the sum of $1,000.00 (one thousand & no/100
dollars) for sell of the stock; to secure repayment of the debt, OWNER pledges
to CREDITOR 2 shares of Cyberguide Online, Inc. Preferred stock.
OWNER agrees to execute all necessary documents to perfect the pledge.
So long as OWNER is indebted to CREDITOR, the CREDITOR shall have the right to
vote the shares.
Within six months of this agreement, CREDITOR may convert this note for the
Preferred Stock.
Dated: 1/29/99
-----------------
BRAD TUCKER
- -----------------------------
BRAD TUCKER, Owner
KENT R. SMITH
- ----------------------------
Creditor
1319 Meadow Creek Drive #114
Irving, TX 75038
(214) 210-7782 Work
(972) 518-0499 Home
<PAGE> 3
Pledge of stock for debt
PLEDGE OF STOCK
Brad Tucker, referred to as OWNER, and William O. Smith Jr. and Mary A. Smith,
referred to as CREDITOR, agree:
OWNER is indebted to CREDITOR in the sum of $1,000.00 (one thousand & no/100
dollars) for sell of the stock; to secure repayment of the debt, OWNER pledges
to CREDITOR 2 shares of Cyberguide Online, Inc. Preferred stock.
OWNER agrees to execute all necessary documents to perfect the pledge.
So long as OWNER is indebted to CREDITOR, the CREDITOR shall have the right to
vote the shares.
Within six months of this agreement, CREDITOR may convert this note for the
Preferred Stock.
Dated: 1/29/99
-----------------
BRAD TUCKER
- -----------------------------
Brad Tucker, Owner
WILLIAM O. SMITH JR. & MARY A. SMITH
- ------------------------------------
Creditor
Address:
4 Widow Coomb's Walk
Sandwich, MA 02563
Phone: 508-420-4092
Enclosed check #4285 for $1,000.00
<PAGE> 4
Pledge of stock for debt
PLEDGE OF STOCK
Brad Tucker, referred to as OWNER, and Howard Wages, referred to as
CREDITOR, agree:
OWNER is indebted to CREDITOR in the sum of $1,000.00 (one thousand & no/100
dollars) for sell of the stock; to secure repayment of the debt, OWNER pledges
to CREDITOR 2 shares of Cyberguide Online, Inc. Preferred stock.
OWNER agrees to execute all necessary documents to perfect the pledge.
So long as OWNER is indebted to CREDITOR, the CREDITOR shall have the right to
vote the shares.
Within six months of this agreement, CREDITOR may convert this note for the
Preferred Stock.
Dated: 1/26/99
-----------------
BRAD TUCKER
- -----------------------------
Brad Tucker, Owner
HOWARD WAGES
- ----------------------------
Creditor
<PAGE> 1
EXHIBIT 23.1
[BEARD, NERTNEY, KINGERY, CROUSE & HOHL, P.A. LETTERHEAD]
March 1, 1999
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in the prospectus constituting part of this
Registration Statement on Form SB-2 (No. ________________) of our report dated
March 1, 1999, with respect to the financial statements of CyberGuide Online,
Inc., as of and for the period November 19, 1998 (date of incorporation) to
December 31, 1998, filed with the Securities and Exchange Commission.
/s/ BEARD, NERTNEY, KINGERY, CROUSE & HOHL, P.A.
