UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
CUSTOM LEATHERS OF LAS VEGAS, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State of organization) (I.R.S. Employer Identification No.)
1700 E. Desert Inn Rd., Suite 403, Las Vegas, NV 89109
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 735-1890
Registrant's Attorney: Daniel G. Chapman, Esq., 3360 W. Sahara
Ave., Suite 200, Las Vegas, NV 89102,
(702) 732-2253, Fax (702) 732-7516
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
Custom Leathers of Las Vegas, Inc. (the "Company") is a Nevada
corporation formed on January 11, 1995. Its principal place of
business is located at 1700 E. Desert Inn Rd., Suite 403, Las
Vegas, NV 89109. The Company was organized to engage in any
lawful corporate business, including but not limited to,
participating in mergers with and acquisitions of other
companies. The Company has been in the developmental stage since
inception and has no operating history other than organizational
matters.
The company was incorporated by Mr. Peter E. Berney. Six million
shares of common stock was issued to Mr. Berney and his wife,
Rebecca Berney, the current president and director, for cash of
$6,000. Mr. and Ms. Berney then transferred a total of 2,950,000
shares to a total of 8 business acquaintances either as gifts or
for repayment of existing indebtedness, in reliance upon section
4(2) of the Securities Act of 1933 (the "Act"). These 8
individuals then sold or gifted their shares to a total of 29
other acquaintances, again in reliance upon section 4(2) of the
Act. All transfers took place prior to June 1, 1995, and no stock
has been transferred since that time. The primary activity of the
Company currently involves seeking a company or companies that it
can acquire or with whom it can merge. The Company has not
selected any company as an acquisition target or merger partner
and does not intend to limit potential candidates to any
particular field or industry, but does retain the right to limit
candidates, if it so chooses, to a particular field or industry.
The Company's plans are in the conceptual stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item
2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to file
periodic reports is suspended pursuant to the Exchange Act, the
Company anticipates that it will continue to voluntarily file
such reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it completes a business combination. This may result
in the Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will identify a business opportunity or complete
a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the identified business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete
with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no
arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be
no assurance the Company will successfully identify and evaluate
suitable business opportunities or conclude a business
combination. Management has not identified any particular
industry or specific business within an industry for evaluations.
The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its
original shareholders, the Company never commenced any
operational activities. There is no assurance the Company will be
able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target business
opportunity to have achieved, and without which the Company would
not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth, or other
negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and
non "arms-length" transactions may also arise in the event the
Company's officers or directors are involved in the management of
any firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this
policy could be changed while current management is in control of
the Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act") must provide certain information about
significant acquisitions, including certified financial
statements for the company acquired, covering one or two years,
depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. If
there is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within
a particular business or industry, thereby increasing the risks
associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors
of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a
public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business
combination with the Company. The perceived adverse consequences
may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders, and
the inability or unwillingness to comply with various federal and
state securities laws enacted for the protection of investors.
These securities laws primarily relate to registering securities
and full disclosure of the Company's business, management, and
financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize
the federal and state tax consequences to both the Company and
the target entity. Management cannot assure that a business
combination will meet the statutory requirements for a tax-free
reorganization, or that the parties will obtain the intended tax-
free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes, which may have an adverse effect on both
parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than incur
the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. As a
result of recent changes in federal law, non-issuer trading or
resale of the Company's securities is exempt from state
registration or qualification requirements in most states.
However, some states may continue to restrict the trading or
resale of blind-pool or "blank-check" securities. Accordingly,
investors should consider any potential secondary market for the
Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation.
At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any
specific business or company, and the Company has not identified
any specific business or company for investigation and
evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under
this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict the Company's
virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common
stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid
technological advances being made in some industries, and
shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statues) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to benefit from
the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds to
acquire a target company and, therefore, could commit those funds
to the operations of the business, to combinations with other
target companies, or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the
assets of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender
would be able to exercise the remedies provided by law or by
contract. These leveraging techniques, while reducing the amount
of funds that the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the Company. No
assurance can be given as to the terms or availability of
financing for any acquisition by the Company. During periods when
interest rates are relatively high, the benefits of leveraging
are not as great as during periods of lower interest rates,
because the investment in the business held on a leveraged basis
will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders
from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company.
It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the
Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of any
acquired business opportunity until such time as the Company has
successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management, while not especially experienced in matters relating
to the new business of the Company, will rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants
or advisors, other than the Company's legal counsel and
accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In
the past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary in the industry, the Company may pay a finder's
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors and
will be in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably
down to 1% in a $4,000,000 transaction. Management has adopted a
policy that such a finder's fee or real estate brokerage fee
could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such
person plays a material role in bringing a transaction to the
Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Management"). Management intends to concentrate on
identifying prospective business opportunities which may be
brought to its attention through present associations with
management. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as;
1) the available technical, financial and managerial resources
2) working capital and other financial requirements
3) history of operation, if any
4) prospects for the future
5) present and expected competition
6) the quality and experience of management services which may
be available and the depth of that management
7) the potential for further research, development or
exploration
8) specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of the Company
9) the potential for growth or expansion
10) the potential for profit
11) the perceived public recognition or acceptance of products,
services or trades
12) name identification
Management will meet personally with management and key personnel
of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate
the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business
in its development stage (in that it has not generated
significant revenues from its principal business activities prior
to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in control
of the Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity,
which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event
the Company acquires a target company with substantial assets.
Any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares
held by the Company's then shareholders, including purchasers in
this offering.
Management has advanced, and will continue to advance, funds
which shall be used by the Company in identifying and pursuing
agreements with target companies. Management anticipates that
these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment
company" as an issuer which is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities. While the Company does not intend to engage
in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Management").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space from one of the directors, Caron Kelly at no cost to the
Company, and Management expects this arrangement to continue. The
Company pays its own charges for long distance telephone calls
and other miscellaneous secretarial, photocopying, and similar
expenses. This is a verbal agreement between Caron Kelly and the
Board of Directors.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of April 9, 1998, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors and
executive officers as a group. Except as noted, each person has
sole voting and investment power with respect to the shares
shown.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Rebecca A. Berney 2,900,000 48.33%
3916 Oroville Circle
Las Vegas, NV 89134
Common Caron A. Kelly 100,000 1.67%
4056 Elkridge Dr.
Las Vegas, NV 89129
Common R.K. McBride 100,000 1.67%
5681 Annie Oakley
Las Vegas, NV 89120
Common All officers and 3,100,000 51.67%
directors (3
individuals)
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Rebecca A. Berney 44 President/Direc
1901 Corta Bella Drive tor
Las Vegas, NV 89134
Caron A. Kelly 37 Secretary/Director
4056 Elkridge Dr.
Las Vegas, NV 89129
R.K. McBride 59 Treasurer/Director
5681 Annie Oakley
Las Vegas, NV 89120
</TABLE>
Rebecca A. Berney; President
Rebecca A. Berney is an entrepreneur investing in the real estate
markets of Southern Nevada, Northern Arizona, and Southwestern
Utah. She is, and has been, a licensed real estate sales woman
since 1992. One of Ms. Berney activities is investing in
depressed residential real estate that requires rehabilitation.
She upgrades the properties and either holds them for her own
investment portfolio or resells them. Ms. Berney has re-designed
properties, done partial and complete interior design, and
designed exterior fascia to cosmetically enhance the values of
the properties into which she has invested.
Ms. Berney retains general as well as sub-contractors for the
various stages of construction necessary on her projects. She
applies her knowledge and skills of leadership and supervision to
direct the contractors in producing the best possible results at
reasonable prices.
As a licensed real estate sales woman Ms. Berney excelled in her
chosen field of endeavor. She developed an extensive clientele
base, which resulted in repeat business. She works directly with
mortgage companies for her clients to locate the best possible
loan rates for their home purchases. She monitors closely the
work of the title insurance companies to assist in safeguarding
her client's investment into their homes.
Ms. Berney is involved in designing and marketing of men and
women's apparel constructed of leather. She is also involved in
the marketing and sales of several other useful items constructed
of leather and many items reflecting the American Indian
Heritage.
Ms. Berney is also an officer and director of PBA Energy
Associates, Inc. and Watkins Glenn Development Trustco, Inc., two
family corporations.
Prior to 1992 Ms. Berney was a housewife.
R. K. McBride; Treasurer
R. K. McBride, is an owner and operator of the Handymen, Las
Vegas, Nevada. He has been employed there since 1994. Mr. McBride
is a master craftsman and applies his knowledge and skills of
multi-craftsmanship in building maintenance, interior design and
custom construction in both commercial and residential remodeling
and construction.
From April 1992 until March 1994 Mr. McBride was employed with
Geranio Aviation, Livermore, CA. His Duties included the
Supervision of the VTOL (Flying Car) project. He was in charge of
all phases of the design, and fabrication of systems (power
drive), flight controls, suspension, counter-rotating systems,
fuel and electrical systems.
From March 1991 until March 1992 Mr. McBride was employed by
Villa Roma, Las Vegas, Nevada. He was a consultant for their
projects, maintenance engineer, and instructor. His duties
required him to set-up maintenance programs, teaching employee
maintenance engineering, plumbing electrical, carpentry, painting
and drywall repair.
From November 1989 until March 1991 Mr. McBride was employed by
Dean Contracting of Las Vegas, Nevada. In his position with this
firm he was employed as a carpenter.
From December 1996 until September 1989 Mr. McBride was employed
by Pleasanton Station Associates, Pleasanton, California. While
he was with this firm he was a working construction and
maintenance foreman.
From June 1979 until November 1986 Mr. McBride was an owner and
operator of the Handyman, Las Vegas, Nevada. Mr. McBride was a
master craftsman and applied his knowledge and skills of multi-
craftsmanship in building maintenance, interior design and custom
construction in both commercial and residential re-modeling and
construction.
From April 1962 until June 1979 various construction companies in
the Las Vegas area employed Mr. McBride in both craftsman and
supervisory capacities.
Caron A. Kelly; Secretary
Caron A. Kelly is a partial owner and the loan processor at
Equity 1st Associates, Inc., Las Vegas, Nevada. She has been
employed there since December 1996. Ms. Kelly works with
realtors, builders, loan officers, and individuals on a daily
basis compiling information to assist customers on home
financing.
From May 1996 until December 1996 Ms. Kelly was employed with
United Mortgage Guarantee, Las Vegas, NV Her duties included loan
processing for the retail loan officers, underwriting of loans
being sold on a wholesale level, funding and preparing loans to
be sold to either FannieMae or FreddieMac.
From January 1996 until May 1996 Express Financial, Las Vegas
employed Ms. Kelly, her position was senior loan processor. As a
supervisor of her unit she over saw the loan-processing
department and assisted them in processing, closing and funding
of both conventional loans and private party financing.
From August 1995 until January 1996 Ms. Kelly was employed by All
Western Mortgage, Las Vegas, Nevada. Her position was that of
senior loan processor. She processed both conventional and
government loans for approximately 12 loan officers.
From March 1994 until July 1995 Ms. Kelly was the owner of K & K
Investments, Harrisburg, Pennsylvania. She purchased blocks of
old and past due student loans, charge cards, and auto loans from
the FDIC or various companies selling loan packages. She would
then enter into the collection process with the individual
customers and collect the money due. At this time she also was
originating home loans. From August 1993 until March 1994 Ms.
Kelly was a loan officer with Knutson Mortgage, Harrisburg,
Pennsylvania. Her duties included interviewing customers,
collecting information and placing them in a home loan hat suited
their needs.
From January 1993 until August 1993 PNC Bank, Harrisburg
Pennsylvania, Employed Ms. Kelly as a loan processor. Her Duties
included data entry, gathering information from customers and
submitting their home loans for approval.
From January 1991 until January 1993, Stein, O'Brien, Reich &
Wolman, Attorneys at Law, Lancaster Pennsylvania employed Ms.
Kelly as a divorce paralegal. Her duties included meeting with
clients preparing divorce/custody complaints, real estate
transactions, and filing documents with the court. She was also
responsible for client billing, collections, payroll and
maintaining all trust accounts.
Blank Check Experience
In addition to the experience described above, Ms. Rebecca Berney
is an Officer and Director of Dream Team International, a blank
check company.
In addition to the experience described above, Ms. Caron Kelly is
or has been an officer and/or director of a number of blank check
companies.
Cambridge Funding Group, Inc. - Officer and Director from
June, 1995 through October, 1998. She resigned as part
of a merger agreement with Agriceuticals, Inc. in
October, 1998. Ms. Kelly received no compensation as
part of the merger, other than shares in Agriceuticals,
Inc. which were granted in the same amount as all other
shareholders received.
K-9 Protection, Inc. - Officer and Director since July,
1996.
Maverick Hydraulics, Inc. - Officer and Director since
April, 1998.
Nevada Newcomer, Inc. - Officer and Director since March,
1997.
Pacific Rags International, Inc. - Officer and Director
since November, 1993.
Pan World Trading, Inc. - Officer and Director since
January, 1993.
Papoose Properties, Inc. - Officer and Director since April,
1998.
Perfect World Entertainment, Inc. - Officer and Director
since May, 1998.
The Sonoran Group - Officer and Director since January,
1994.
In addition to the experience described above, Mr. R.K. McBride
is or has been an officer and/or director of a number of blank
check companies:
Aeronautics, Inc. - Officer and Director since May, 1998.
Asian-American International, Inc. - Officer and Director
since November, 1994.
Dream Team International - Officer and Director since
December, 1994.
Pacific Rags International, Inc. - Officer and Director
since November, 1993.
Pan World Trading, Inc. - Officer and Director since
January, 1993.
Vista Medical Terrace, Inc. - Officer and Director since
March, 1990.
There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has
not established any committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs. The officers and
directors of the Company may in the future become shareholders,
officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a
right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph, if a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company have no preference as to which company
will merge or acquire such target company, the company of which
the President first became an officer and director will be
entitled to proceed with the transaction. Except as set forth
above, the Company has not adopted any other conflict of interest
policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They both have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to
occur until the Registrant has generated revenues from operations
after consummation of a merger or acquisition. As of the date of
this registration statement, the Company has no funds available
to pay directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will receive
any finders fee, either directly or indirectly, as a result of
their respective efforts to implement the Company's business plan
outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is quoted on the over-the-counter
market in the United States under the symbol CLVA. Management has
not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities and
management does not intend to initiate any such discussions until
such time as the Company has consummated a merger or acquisition.
There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of
the Company's officers and directors will most likely be the
persons to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
As of March 23, 1998, there were 39 holders of the Company's
Common Stock. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the
exemption from registration afforded by Section 4(2) of the
Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the shares. The
securities were offered for investment only and not for the
purpose of resale or distribution, and the transfer thereof was
appropriately restricted. A total of 3,250,000 of the outstanding
shares are deemed restricted.
In general under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, $0.001 par value per share,
of which 6,000,000 are issued and outstanding. The shares are non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Barry L. Friedman,
dated February 12, 1998
Balance Sheet as of December 31, 1996, December 31,
1997, and December 31, 1998
Statement of Operation for the years ended December 31,
1996, 1997, and 1998.
Statement of Stockholders' Equity
Statement of Cash Flows for the years ended December
31, 1996, 1997, and 1998.
Notes to Financial Statements
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
To Whom It May Concern: February 12, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant,
consents to the inclusion of their report of February 12, 1999,
on the Financial Statements of Custom Leathers of Las Vegas,
Inc., as of December 31, 1998, in any filings that are necessary
now or in the near future with the U.S. Securities and Exchange
Commission.
Very Truly Yours
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
Las Vegas, NV
INDEPENDENT AUDITORS' REPORT
Board of Directors February 12, 1999
Custom Leathers of Las Vegas, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Custom Leathers
of Las Vegas, Inc., (A Development Stage Company), as of December
31, 1998, December 31, 1997, and December 31, 1996, and the
related statements of operations, stockholders' equity and cash
flows for three years ended December 31, 1998, December 31, 1997,
and December 31, 1996. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on my
audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Custom Leathers of Las Vegas, Inc., (A Development Stage
Company), as of December 31, 1998, December 31, 1997, and
December 31, 1996, and the results of its operations and cash
flows for the three years ended December 31, 1998, December 31,
1997, and December 31, 1996, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note #5 to the financial statements, the Company has suffered
recurring losses from operations and has no established source of
revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regard to these
matters are also described in Note #5. The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
Las Vegas, NV
CUSTOM LEATHERS OF LAS VEGAS, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<S> <C> <C> <C>
December December December
31, 1998 31, 1997 31, 1996
CURRENT ASSETS; $0 $0 $
0
TOTAL CURRENT ASSETS $0 $0 $0
OTHER ASSETS
Organization Costs $51 $102 $153
TOTAL ASSETS $51 $102 $153
</TABLE>
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<S> <C> <C> <C>
December December December
31, 1998 31, 1997 31, 1996
CURRENT LIABILITIES:
OFFICERS ADVANCE (NOTE #6) $1,010 $200 $100
TOTAL CURRENT LIABILITIES $1,010 $200 $100
STOCKHOLDERS' EQUITY: (Note
1)
Common stock, par value,
$.001
authorized 50,000,000 shares
issued and outstanding at
December 31, 1996-6,000,000 $6,000
shares
December 31, 1997-6,000,000 $6,000
shares
December 31, 1998-6,000,000 $6,000
shares
Additional paid in Capital $0 $0 $0
Accumulated loss $-6,959 $-6,098 $-5,947
TOTAL STOCKHOLDERS' EQUITY $-9591 $-98 $53
TOTAL LIABILITIES AND $51 $102 $153
STOCKHOLDERS' EQUITY
</TABLE>
See accompanying notes to financial statements and audit report
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C>
Jan. 1, 1998 Year Ended Dec. Year Ended Dec. Jan. 11, 1995
to Dec. 31, 1998 31, 1997 31, 1996 (inception)
1998
INCOME:
Revenue $0 $0 $0 $0
EXPENSES:
General, Selling $810 $100 $100 $5,945
and Administrative
Amortization $51 $51 $51 $166
Total Expenses $861 $151 $151 $6111
Net Profit/Loss (- $-861 $-151 $-151 $-6,111
)
Net Profit/Loss (- NIL NIL NIL NIL
)
per weighted
share (Note 1)
Weighted average 6,000,000 $6,000,000 $6,000,000 $6,000,000
number of common
shares outstanding
</TABLE>
See accompanying notes to financial statements and audit report
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Common Stock Additional Accumulated
Shares Amount paid-in Deficit
capital
Balance, 6,000,000 $6,000 $0 $-
December 31, 1995 5
,
7
9
6
Net loss year ended -151
December 31, 1996
Balance, 6,000,000 $6,000 $0 $-5947
December 31, 1996
Net loss year ended $-151
December 31, 1997
Balance 6,000,000 $6,000 $0 $6,098
December 31, 1997
Net loss year ended $-861
December 31, 1998
Balance, 6,000,000 $6,000 $0 $-6,959
December 31, 1998
</TABLE>
See accompanying notes to financial statements and audit report
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C>
Year Ended Year Ended Year Ended Dec. Jan. 11, 1995
December 31, December 31, 31, 1996 (inception)
1998 1997 March 31, 1998
Cash Flows from
Operating
Activities:
Net Loss $-861 $-151 $-151 $-6,111
Adjustment to $+51 $+51 $+51 $+166
reconcile net loss
to net cash
provided by
operating
activities
Amortization
Changes in assets
and
liabilities:
Organization Costs $-255
Increase in current $+810 $+100 $+100 $+200
liabilities:
Advances Payable
Net cash used in $0 $0 $0 $-6,000
operating
activities
Cash Flows from
Financing
Activities:
Issuance of common $0 $0 $0 $+6,000
Stock for cash
Net increase $0 $0 $0 $0
(decrease)
in cash
Cash, $0 $0 $0 $0
beginning of
period
Cash $0 $0 $0 $0
end of period
</TABLE>
See accompanying notes to financial statements and audit report
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 1 - HISTORY AND ORGANIZATIONS OF THE COMPANY
The Company was organized January 11, 1995, under the laws of the
State of Nevada, as Custom Leathers of Las Vegas, Inc. The
Company currently has no operations and, in accordance with SFAS
#7, is considered a development stage company.
NOTE 2- ACCOUNTING POLICIES AND PROCEDURES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. They're no cash equivalents as
of December 31, 1998.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109, (SFAS #109), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Organization Costs
Costs incurred to organize the Company are being amortized on a
straight-line basis over a sixty-month period
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128, (SFAS #128), "Earnings
Per Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of December 31, 1998, the Company had no dilative
common stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
Since the Company currently has no operating business and does
not use any computers, and since it has no customers, suppliers
or other constituents, there are no material Year 2000 concerns.
NOTE 3- INCOME TAXES
There is no provision for income taxes for the period ended
December 31, 1998, due to the net loss and no state income tax in
the state of the Company's domicile and operations, Nevada. The
Company's total deferred tax asset as of December 31, 1998 is as
follows:
Net operation loss carry forward $ 6,959
Valuation allowance 6,959
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire various
amounts from 2015 to 2018.
This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
NOTE 4- SHAREHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
50,000,000 shares with a par value of $0.001 per share.
Preferred Stock
The corporation has no preferred stock.
On February 6, 1995, the Company issued 6,000,000 shares of its
$.00l par value common stock in consideration of $6,000 in cash.
NOTE 5- GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the
Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek a merger with an
existing, operating company. Until that time, the
stockholders/officers and/or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6-RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal
property. Office services are provided without charge by a
director. Such costs are immaterial to the financial statements
and, accordingly, have not been reflected therein. The officers
and directors of the Company are involved in other business
opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between
the Company and their other business interests. The Company has
not formulated a policy for the resolution of such conflicts.
NOTE 7- WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional shares of common or preferred stock.
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Custom Leathers of Las Vegas, Inc.
By: /s/
Caron A. Kelly
Caron A. Kelly, Secretary
ARTICLES OF INCORPORATION
OF
Custom Leathers of Las Vegas, Inc.
KNOW BY ALL THESE PRESENTS:
That the undersigned, have this day voluntarily associated
ourselves together for the purpose of forming a corporation under
and pursuant to the provisions of Nevada Revised Statutes 78.010
to Nevada Revised Statutes 78.090 inclusive, as amended, and
certify that;
1. The name of the Corporation is:
Custom Leathers of Las Vegas, Inc.
2. Offices for the transaction of any business of the
Corporation, and where meetings of the Board of Directors and of
Stockholders may be held, may be established and maintained in
any part of the State of Nevada, or in any other state,
territory, or possession of the United States.
3. The nature of the business is to engage in any lawful
activity.
4. The Capital Stock shall consist of 50,000,000 shares of
common stock, $0.001 par value.
5. The members of the governing board of the corporation shall
be styled directors, of which there shall be not less than one.
The Directors of this corporation need not be stockholders. The
first Board of Directors is: Peter E. Berney, whose address is
1700 E. Desert Inn Rd., Suite 100, Las Vegas, NV 89109.
6. This corporation shall have perpetual existence.
7. The name and address of each of the incorporators signing
these articles of incorporation are as follows: Peter E. Berney,
whose address is 1700 E. Desert Inn Rd., Suite 100, Las Vegas, NV
89109.
8. This Corporation shall have a president, a secretary, a
treasurer, and a resident agent, to be chosen by the Board of
Directors, any person may hold two or more offices.
9. The resident agent of this Corporation shall be Peter E.
Berney, 1700 E. Desert Inn Rd., Suite 100, Las Vegas, NV 89109.
10. The Capital Stock of the corporation, after the fixed
consideration thereof has been paid or performed, shall not be
subject to assessment, and the individual liable for the debts
and liabilities of the Corporation, and the Articles of
Incorporation shall never be amended as the aforesaid provisions.
11. No director or officer of the corporation shall be
personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer
involving any act or omission of any such director or officer
provided, however, that the foregoing provision shall not
eliminate or limit the liability of a director or officer for
acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of this Article of the Stockholders of the
Corporation shall be prospective only, and shall not adversely
affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such
repeal or modification.
I, the undersigned, being the incorporator herein above named for
the purpose of forming a corporation pursuant to the general
corporation law of the State of Nevada, do make and file these
Articles of Incorporation, hereby declaring and certifying that
the facts within stated are true, and accordingly have herunto
set my hand this 11th day of January, 1995.
/s/ Peter E. Berney
Peter E. Berney
1700 E. Desert Inn Rd., Suite 100
Las Vegas, NV 89109
BY-LAWS
OF
Custom Leathers of Las Vegas, Inc.
ARTICLE I - OFFICES
Section 1. Principal Executive Office. The principal office of
the Corporation is hereby fixed in the County of Clark, in the
State of Nevada.
Section 2. Other Offices. Branch or subordinate offices may be
established by the Board of Directors at such other places as may
be desirable.
ARTICLE II - SHAREHOLDERS
Section 1. Place of Meeting. Meetings of shareholders shall be
held either at the principal executive office of the corporation
or at any other location within or without the State of Nevada
which may be designated by written consent of all persons
entitled to vote thereat.
Section 2. Annual Meeting. The annual meeting of shareholders
shall be held on such day and at such time as may be fixed by the
Board provided, however, that should said day fall upon a
Saturday, Sunday, or legal holiday observed by the Corporation at
its principal executive office, then any such meeting of
shareholders shall be held at the same time and place on the next
day thereafter ensuing which is a full business day. At such
meetings, directors shall be elected by plurality vote and any
other proper business may be transacted.
Section 3. Special Meetings. Special meetings of the shareholders
may be called for any purpose or purposes permitted under Chapter
78 of Nevada Revised Statutes at any time by the Board, the
Chairman of the Board, the President, or by the shareholders
entitled to cast not less than twenty-five percent (25%) of ..the
votes at such meeting. Upon request in writing to the Chairman of
the Board, the President, any Vice-President or the Secretary, by
any person or persons entitled to call a special meeting of
shareholders, the Secretary shall cause notice to be given to the
shareholders entitled to vote, that a special meeting will be
held not less than thirty-five (35) nor more than sixty (60) days
after the date of the notice.
Section 4. Notice of Annual or Special Meeting. Written notice of
each annual meeting of shareholders shall be given not less than
ten (10) nor more than sixty (60) days before the date of the
meeting to each shareholder entitled to vote thereat. Such notice
shall state the place, date and hour of the meeting and (i) in
the case of a special meeting the general nature of the business
to be transacted, or (ii) in the case of the annual meeting,
those matters which the Board, at the time of the mailing of the
notice, intends to present for action by the shareholders, but,
any proper matter may be presented at the meeting for such
action. The notice of any meeting at which directors are to be
elected shall include the names of the nominees intended, at the
time of the notice, to be presented by management for election.
Notice of a shareholders' meeting shall be given either
personally or by mail or, addressed to the shareholder at the
address of such shareholder appearing on the books of the
corporation or if no such address appears or is given, by
publication at least once in a newspaper of general circulation
in the County of Clark, the State of Nevada. An affidavit of
mailing of any notice, executed by the Secretary, shall be prima
facie evidence of the giving of the notice.
Section 5. Quorum. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at
any meeting of shareholders. If a quorum is present, the
affirmative vote of the majority of shareholders represented and
voting at the meeting on any matter, shall be the act of the
shareholders. The shareholders present at a duly called or held
meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding withdrawal of enough
shareholders to leave less than a quorum, if any action taken
(other than adjournment) is approved by at least a majority of
the number of shares required as noted above to constitute a
quorum. Notwithstanding the foregoing, (I ) the sale, transfer
and other disposition of substantially all of the corporations
properties and (2) a merger of consolidation of the corporation
shall require the approval by an affirmative vote of not less
than two-thirds (2/3) of the corporation's issued and outstanding
shares.
Section 6. Adjourned Meeting and Notice Thereof Any shareholders
meeting, whether or not a quorum is present, may be adjourned
from time to time. In the absence of a quorum (except as provided
in Section 5 of this Article), no other business may be
transacted at such meeting.
Section 9. Consent of Absentees. The transactions of any meeting
of shareholders, however called and noticed, and wherever held,
are as valid as though had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by
proxy, and 9, either before or after the meeting, each of the
persons entitled to vote not present in person or by proxy, signs
a written waiver of notice, or a consent to the holding of 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,
Section 10. Action Without Meeting. Any action which, under any
provision of law, may be taken at any annual or special meeting
of shareholders, may be taken without a meeting and without prior
notice if a consent in writing, setting forth the actions to
taken, shall be signed by the holders of outstanding shares
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
Unless a record date for voting purposes be fixed as provided in
Section 8 of this Article, the record date for determining
shareholders entitled to give consent pursuant to this Section
10, when no prior action by the Board has been taken, shall be
the day on which the first written consent is given.
Section 11. Proxies. Every person entitled to vote shares has the
right to do so either in person or by one or more persons
authorized by a written proxy executed by such shareholder and
filed with the Secretary not less than five (5) days prior to the
meeting,
Section 12. Conduct of Meeting. The President shall preside as
Chairman at all meetings of the shareholders, unless another
Chairman is selected. The Chairman shall conduct each such
meeting in a businesslike and fair manner, but shall not be
obligated to follow any technical, formal or parliamentary rules
or principles of procedure. The Chairman's ruling on procedural
matters shall be conclusive and binding on all shareholders,
unless at the time of ruling a request for a vote is made by the
shareholders entitled to vote and represented in person or by
proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders
without limiting the generality of the foregoing, the Chairman
shall have all the powers usually vested in the chairman of a
meeting of shareholders.
ARTICLE III - DIRECTORS
Section l. Power. Subject to limitation of the Articles of
incorporation, of these bylaws, and of actions required to be
approved by the shareholders, the business and affairs of the
corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board. The Board may,
as permitted by law, delegate the management of the day-to-day
operation of the business of the corporation to a management
company or other persons or officers of the corporation provided
that the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised under the ultimate
direction of the Board. Without prejudice to such general powers,
it is hereby expressly declared that the Board shall have the
following powers:
(a) To select and remove all of the officers, agents and
employees of the corporation, prescribe the powers and duties for
them as may not be inconsistent with law, or with the Articles of
Incorporation or by these bylaws,. fix their compensation, and
require from them, d necessary, security for faithful service.
(b) To conduct, manage, and control the affairs and business of
the corporation and to make such rules and regulations therefore
not inconsistent with law, with the Articles of Incorporation or
these bylaws, as they may deem best.
(c) To adopt, make and use a corporate seal, and to prescribe
the forms of certificates of stock and to alter the form of such
seal and such of certificates from time to time in their judgment
they deem best.
(d) To authorize the issuance of shares of stock of the
corporation from time to time, upon such terms and for such
consideration as may be lawful.
(e) To borrow money and incur indebtedness for the purposes of
the corporation, and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecation or
other evidence of debt and securities therefor.
Section 2. Number and Qualification of Directors. The authorized
number of directors shall be One, if there is only One
Shareholder, if there are more than One Shareholders the minimum
number of Directors shall be Three until changed by amendment of
the Articles or by a bylaw duly adopted by approval of the
outstanding shares amending this Section 2.
Section 3. Election and Term of Office. The directors shall be
elected at each annual meeting of shareholders but if any such
annual meeting is not held or the directors are not elected
thereat, the directors may be elected at any special meeting of
shareholders held for that purpose. Each director shall hold
office until the next annual meeting and until a successor has
been elected and qualified.
Section 4. Chairman of the Board. At the regular meeting of the
Board, the first order of business will be to select, from its
members, a Chairman of the Board whose duties will be to preside
over all board meetings until the next annual meeting and until a
successor has been chosen.
Section 5. Vacancies. Any director may resign effective upon
giving written notice to the Chairman of the Board, the
President, Secretary, or the Board, unless the notice specified a
later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be
elected to take office when the resignation becomes effective.
Vacancies in the Board including those existing as a result of a
removal of a director, shall be filled by the shareholder at a
special meeting, and each director so elected shall hold office
until the next annual meeting and until such director's successor
has been elected and qualified.
A vacancy or vacancies in the Board shall be deemed to exist in
case of the death, resignation or removal of any director or if
the authorized number of directors be increased, or if the
shareholders fail, at any annual or special meeting of
shareholders at which any directors are elected, to elect the
full authorized number of directors to be voted for the meeting.
The Board may declare vacant the office of a director who has
been declared of unsound mind or convicted of a felony by an
order of court.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies. Any such election by written
consent requires the consent of a majority of the outstanding
shares entitled to vote. If the Board accepts the resignation of
a director tendered to take effect at a future time, the
shareholder shall have power to elect a successor to take office
when the resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the
director's term of office.
Section 6. Place of Meeting. Any meeting of the Board shall be
held at any place within or without the State of Nevada which has
been designated from time to time by the Board. In the absence of
such designation meetings shall be held at the principal
executive office of the corporation.
Section 7. Regular Meetings. Immediately following each annual
meeting of shareholders the Board shall hold a regular meeting
for the purpose of organization, selection of a Chairman of the
Board, election of officers, and the transaction of other
business. Call and notice. of such regular meeting is hereby
dispensed with.
Section 8. Special Meetings. -Special meetings of the Board for
any purposes may be called at any time by the Chairman of the
Board, the President, or the Secretary or by any two directors.
Special meetings of the Board shall be, held upon at least four
(4) days written notice or forty-eight (48) hours notice given
personally or by telephone,.. telegraph, telex or other similar
means of communication. Any such notice shall be addressed or
delivered to each director at such director's address as it is
shown upon the records of the Corporation or as may have been
given to the Corporation by the director for the purposes of
notice.
Section 9.-Quorum. A majority of the authorized number of
directors constitutes a quorum of the Board for the transaction
of business, except to adjourn as hereinafter provided. Every act
or decision done or made by a majority of the directors present
at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board, unless a greater number be
required by law or by the Articles of Incorporation. A meeting at
which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any
action taken is approved by at least a majority of the number of
directors required as noted above to constitute a quorum for such
meeting.
Section 10. Participation in Meetings by Conference Telephone.
Members of the Board may participate in a meeting through use of
conference telephone or similar communications equipment, so long
as all members participate in such meeting can hear one another.
Section 11. Waiver of Notice. The transactions of any meeting of
the Board, however called and noticed or wherever held, are as
valid as though had at a meeting duty held after regular call and
notice if a quorum be present and. if, either before or after the
meeting, each of the directors not present signs a written waiver
of notice, a consent to holding such meeting or an approval of
the minutes thereof All such waivers, consents or approvals shall
be filed with the corporate records or made part of the minutes
of the meeting.
Sect 12. Adjournment. A majority of the directors present,
whether or not a quorum is present, may adjourn any directors'
meeting to another time and place. Notice of the time and place
of holding an adjourned meeting need not be given to absent
directors if the time and place be fixed at the meeting
adjourned. If the meeting is adjourned for more than forty-eight
(48) hours, notice of any adjournment to another time or place
shall be given prior to the time of the adjourned meeting to the
directors who were not present at the time of adjournment.
Section 13. Fees and Compensation. Directors and members of
committees may receive such compensation, if any, for their
services, and, such reimbursement for expenses, as may be fixed
or determined by the Board.
Section 14. Action Without Meeting. Any action required or
permitted to be taken by the Board may be taken without a meeting
if all members of the Board shall individually or collectively
consent in writing to such action. Such consent or consents shall
have the same effect as a unanimous vote of the Board and shall
be filed with the minutes of the proceedings of the Board.
Section 15. Committees. The board may appoint one or more
committees, each consisting of two or more directors, and
delegate to such committees any of the authority of the Board
except with respect to:
(a) The approval of any action which requires shareholders'
approval or approval of the outstanding shares;
(b) The filling of vacancies on the Board or on any committees;
(c) The fixing of compensation of the directors for serving on
the Board or on any committee;
(d) The amendment or repeal of bylaws or the adopt-Ion of new
bylaws;
(e) The amendment or repeal of any resolution of the Board which
by its express terms is not so amenable or repealable by a
committee of the board;
(g) The appointment of other committees of the Board or the
members thereof.
Any such committee must be appointed by resolution adopted by a
majority of the authorized number of directors and may be
designated an Executive Committee or by such other name as the
Board shall specify- The Board shall have the power to prescribe
the manner in which proceedings of any such committee shall be
conducted. Unless the Board or such committee shall otherwise,
provide, the regular or special meetings and other actions of any
such committee shall be governed by the provisions of this
Article applicable to meetings and actions of the Board. Minutes
shall be kept of each meeting of each committee.
ARTICLE IV - OFFICERS
Section I. Officers. The officers of the corporation shall be a
president, a secretary and a treasurer. The corporation may also
have, at the discretion of the Board, one or more vice-
presidents, one or more assistant vice presidents, one or more
assistant secretaries, one or more assistant treasurers and such
other officers as may be elected or appointed in accordance with
the provisions of Section 3 of this Article.
Section 2. Election. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the
provisions of Section 3 or Section 5 of this Article, shall be
chosen annually by, and shall serve at the pleasure of, the
Board, and shall hold their respective offices until their
resignation, removal or other disqualification from service, or
until their respective successors shall be elected.
Section 3. Subordinate Officers, The Board may elect, and may
empower the President to appoint, such other officers 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 the
President may from time to time direct.
Section 4. Removal and Resignation. Any officer may be removed,
either with or without cause, by the Board of Directors at any
time, or, except in the case of an officer chosen by the Board,
by any officer upon whom such power of removal may be conferred
by the Board.
Any officer may resign at any time by giving written notice to
the corporation. Any such resignation shall take effect at the
date of the receipt of such notice or at any later time specified
therein. The acceptance of such resignation shall be necessary to
make it effective.
Section 5. Vacancies, A vacancy of any office because of death,
resignation, removal, disqualification, or any other cause shall
be filled in the manner prescribed by these bylaws for the
regular election or appointment to such office.
Section 6. President. The President shall be the chief executive
officer and general manager of the corporation. The President
shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board at all meetings of the
Board. The president has the general powers and duties of
management usually vested in the chief executive officer and the
general manager of a corporation and such other powers and duties
as may be prescribed by the Board.
Section 7. Vice Presidents. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by
the Board or, if not ranked, the Vice President designated by the
Board, shall perform all the duties of the President, and when so
acting shall have all the powers of, and be subject to all the
restrictions upon the President. The Vice Presidents shall have
such other powers and perform such other duties as from time to
time may be prescribed for them respectively by the President or
the Board.
Section 8. Secretary. The Secretary shall keep or cause to be
kept, at the principal executive offices and such other place as
the Board may order, a book of minutes of all meetings of
shareholders, the Board, and its committees, 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 Board and committee meetings, the number of shares
present or represented at shareholders' meetings and proceedings
thereof The Secretary shall keep, or cause to be kept, a copy of
the bylaws of the corporation at the principal executive office
of the corporation.
The Secretary shall keep, or cause to be kept, at the principal
executive office, a share register, or a duplicate share
register, showing the names of the shareholders and their
addresses, the number and classes of shares held by each, the
number and date of certificates issued for the same, and the
number and date of cancellation of every certificate surrendered
for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board and any committees
thereof required by these bylaws or by law to be given, shall
keep the seat of the corporation in safe custody, and shall have
such other powers and perform such other duties as may be
prescribed by the Board.
Section 9. Treasurer. The Treasurer is the chief financial
officer of the corporation and shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the
properties and financial transactions of the corporation, and
shall send or cause to be sent to the shareholders of the
corporation such financial statements and reports as are by law
or these bylaws required to be sent to them.
The Treasurer shall deposit all monies and other valuables in the
name and to the credit of the corporation with such depositories
as may be designated by the Board. The Treasurer shall disburse
the funds of the corporation as may be ordered by the Board,
shall render to the President and directors, whenever they
request it, an account of all transactions as Treasurer and of
the financial conditions of the corporation, and shall have such
other powers and perform such other duties as may be prescribed
by the Board.
Section 10. Agents. The President, any Vice-President, the
Secretary or Treasurer may appoint agents with power and
authority, as defined or limited in their appointment, for and on
behalf of the corporation to execute and deliver, and affix the
seat of the corporation thereto, to bonds, undertakings,
recognizance, consents of surety or other written obligations in
the nature thereof and any said officers may remove any such
agent and revoke the power and authority given to him,
ARTICLE V - OTHER PROVISIONS
Section I - Dividends. The Board may from time to time declare,
and the corporation may pay, dividends on its outstanding shares
in the manner and on the terms and conditions provided by law,
subject to any contractual restrictions on which the corporation
is then subject.
Section 2. Inspection of By-Laws. The Corporation shall keep in
its Principal Executive Office the original or a copy of these
bylaws as amended to date which shall be open to inspection to
shareholders at all reasonable times during office hours. If the
Principal Executive Office of the Corporation is outside the
State of Nevada and the Corporation has no principal business
office in such State, it shall upon the written notice of any
shareholder furnish to such shareholder a copy of these bylaws as
amended to date.
Section 3. Representation of Shares of Other Corporations. The
President or any other officer or officers authorized by the
Board or the President are each authorized to vote, represent,
and exercise on behalf of the Corporation all rights incident to
any and all shares of any other corporation or corporations
standing in the name of the Corporation. The authority herein
granted may be exercised either by any such officer in person or
by any other person authorized to do so by proxy or power of
attorney duly executed by said officer.
ARTICLE VI - INDEMNIFICATION
Section 1. Indemnification in Actions by Third Parties. -Subject
to the limitations of law, if any, the corporation shall have the
power to indemnify any director, officer, employee and agent of
the corporation who was or is a party or is threatened to be made
a party to any proceeding (other than an action by or in the
right of to procure a judgment in its favor) against expenses,
judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding, provided
that the Board shall find that the director, officer, employee or
agent acted in good faith and in a manner which such person
reasonably believed in the best interests of the corporation and,
in the case of criminal proceedings, had no reasonable cause to
believe the conduct was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contenders shall not, of itself create a presumption
that such person did not act in good faith and in a manner which
the person reasonably believed to be in the best interests of the
corporation or that such person had reasonable cause to believe
such person's conduct was unlawful.
Section 2. Indemnification in Actions by or on Behalf of
Corporation, Subject to the limitations of law, if any, the
Corporation shall have the power to indemnify any director,
officer, employee and agent of the corporation who was or is
threatened to be made a party to any threatened, pending or
completed legal action by or in the right of the Corporation to
procure a judgment in its favor, against expenses actually and
reasonable incurred by such person in connection with the defense
or settlement, if the Board of Directors determine that such
person acted in good faith, in a manner such person believed to
be in the best interests of the Corporation and with such care,
including reasonable inquiry, as an ordinarily prudent person
would use under similar circumstances.
Section 3. Advance of Expenses. Expenses incurred in defending
any proceeding may be advanced by the Corporation prior to the
final disposition of such proceeding upon receipt of an
undertaking by or on behalf of the officer, director, employee or
agent to repay such amount unless it shall be determined
ultimately that the officer or director is entitled to be
indemnified as authorized by this Article.
Section 4. Insurance. The corporation shall have power to
purchase and maintain insurance on behalf of any officer,
director, employee or agent of the Corporation against any
liability asserted against or incurred by the officer, director,
employee or agent in such capacity or arising out of such
person's status as such whether or not the corporation would have
the power to indemnify the officer, or director, employee or
agent against such liability under the provisions of this
Article.
ARTICLE VII - AMENDMENTS
These bylaws may be altered, amended or repealed either by
approval of a majority of the outstanding shares entitled to vote
or by the approval of the Board; provided however that after the
issuance of shares, a bylaw specifying or changing a fixed number
of directors or the maximum or minimum number or changing from a
fixed to a flexible Board or vice versa May only be adopted by
the approval by an affirmative vote of not less than two-thirds
of the, corporation's issued and outstanding shares entitled to
vote.
