[CAPTION]
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(Name of Small Business Issuer)
Nevada 87-0629754
(State or Other I.R.S. Employer
Jurisdiction of Identification
Incorporation or Number
Organization)
6322 South 3000 East Suite 320, Salt Lake City, Utah 84121
(Address of Principal Executive Offices including Zip Code)
(801) 733-6060
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under
Section 12(g) of the Act: Common Stock, $.001 Par Value
Title of Class)
ITEM 1. BUSINESS. DESCRIPTION OF BUSINESS. (Item 101 of Regulation S-B)
Txon International Development Corporation(the "Company"), was
incorporated on January 29, 1998 under the laws of the State of Nevada to
engage in any lawful corporate undertaking, including, but not limited to
construction and development services for corporate global expansion. The
Company has been in the development stage since inception and has very
limited operations to date due to a lack of capital.
The Company has been formed to address what management believes is an
unmet demand for a single entity with the ability to provide an extensive
array of commercial real estate development and facility expansion
services to major U.S. and multinational corporations. Management believes
that the growing need of large corporations to establish facilities throughout
the United States and the world from which to expand into the global economy
has created demand for employee housing, ex-patriot compounds, office space,
manufacturing and related production facilities. Txon believes development,
construction and management capabilities on a world-wide basis can be met
most
efficiently by a single provider.
The company intends to offer services in real estate finance,
development,
construction, planning, design, furnishings and engineering.
The company does not have any significant assets. Its belief that it
will be able to provide marketable services is based solely on the
skill, experience and contacts of the individuals who are affiliated with the
Company. (See "Directors, Executive Officers, Promoters and Control
Persons"). The company anticipates that its first projects will involve
provision of development services to companies who will themselves fund the
acquisition, development and construction of the real estate facilities they
require. Depending on the level of service provided, the Company will seek to
surrender cash payments in exchange for equity positions in some projects.
The
company will also seek opportunities to joint venture real estate projects
and
other business ventures. No assurances can be given that the Company will be
successful in locating or reaching agreements with businesses willing to
engage the Company's services or enter into equity compensation or joint
ventures with it to develop, build or manage real estate projects, or that it
will be able to find financing sources sufficient to permit the Company to
build such projects itself.
As a result of their long term employment as real property development
professionals for Exxon and many other Texas companies, members of the
Company's management have formed friendships and associations with experts in
many of the areas in which Txon seeks to provide real estate related services
to large national and international corporations seeking to build a variety
of
physical facilities worldwide. Management believes these relationships will
permit Txon to obtain assistance from knowledgeable experts through
independent consulting agreements, joint ventures agreements, subcontracts,
and
otherwise, from persons and organizations who will be willing to assist the
Company in addressing local construction customs or requirements and address
particular development and construction problems wherever they may occur. It
is hoped that these relationships, coupled with the skill of Txon's inside
management, will help to establish it as a leader in the field of large-scale
development and facility expansion services.
The Company intends to operate through four main operating divisions
including (1) fee development and construction services, (2) development
related financial services (3)co-investments of development projects and
acquisition of related real estate companies, and (4)property ownership or
equity and operations management.
In more detail the Development and Construction Services Division is
intended to include site acquisition services, procurement of
approvals and permits, design and engineering coordination, construction
bidding and management, tenant finish coordination, general contracting
and complete project advisory services. These services are fee based for
third party clients. The Development Financial Services Division will be
designed to assist clients in connection with the arrangement of short and
long term financing of office, industrial, housing, and retail space. The
Company's Co-investment and Acquisition Division will attempt to identify
and
pursue opportunities for the Company to grow through outside related project
and
business purchases or investments, on a national and global basis, but only
as
they are specifically related to the Company's core expertise. Finally, the
long term Property Ownership and Operations Management division will seek to
locate projects in which the Company can obtain an equity interest or
participate as a percentage of profits in exchange for services rendered
ex-patriate, specialize in running the business operations of such company
owned hotels, expatriot housing compounds, leased out corporate facilities,
and
resort conference centers as the Company may be able to acquire.
It is anticipated that approximately 90% of the Company's projects and
clients will be based in Europe, Russia and other locations other than Utah,
where the Company's executive offices are located. The Company has long term
strategic alliances with individuals and companies in Europe and Russia.
Management believes the broad geographic service area the Company will be
able
to cover will lead to economies in the cost of materials and labor. It may
also serve to limit exposure to an economic downturn in any single market,
which provides it with a competitive advantage over regional firms that
operate in a more limited number of geographic areas.
The Company believes that its key competitive advantage will lie in the
experience and quality of its management team, its long term relationships
and
client or professional alliances, and its complete full service approach to
meeting corporate expansion needs. The Company's principals have enjoyed a
long and close relationship among its senior management group. The Company
believes the numerous high achievements of its key personnel can be
attributed
to their continual commitment to quality relationships, prompt responsiveness
and assuring results.
The Company's internal culture is rooted on a long-standing belief in
promoting talented individuals from within the organization based on closely
measured performance criteria. The Company believes that its growth strategy,
incentive-based compensation and the high level of ownership by Company
insiders provides further motivation to achieve exceptionally high
performances.
The Company's senior management team has successfully developed
properties in all segments of the commercial real estate industry, with
particular emphasis on large-scale commercial and industrial facilities,
master planned communities, hotel and resort properties and medical
facilities.
Though the Company believes that it holds several important competitive
advantages in the large-scale development services industry, it does not
presently have assets with which to fund any portion of its business plan
except the offering of real estate development services, through its existing
management.
MARKETING. The Company intends to market its services through personal
contact by members of Management with persons and organizations known to have
real property expansion needs, through the formation of initial client
relationships on a limited nature and seeking to expand the range of services
the Company may be able to provide through providing exemplary services and
developing an understanding of the client's development needs, and through
referrals or prior client relationships. In order to insure that it provides
services of a quality which will support extended customer relationships,
Management intends to limit the services the Company offers to industries and
project types in which it has particular expertise.
Txon has already been approached by several landowners and holders of key
properties to assist them in feasibility studies and joint development of
properties. Most of these contacts have come by way of previous customer
contacts and Txon's principals' prior work in the field of commercial real
estate development, architecture, construction, and engineering as well as
from long term relationships members of management have established through
civic, philanthropic and professional associations. Txon has been presented
potential projects overseas and in Texas, California and Utah. The Company
believes that referral leads will open the door to other projects.
GENERAL BUSINESS PLAN
Txon International Development Corporation intends to operate as an
international land and facilities developer with projects throughout the
world. Members of the Company's Management have developed the expertise on
which they intend to rely in serving the Company.
The company has brought together highly successful design, financial,
business,project management, and construction experts with the credibility
and
experience to become a full-service development organization. Txon's
Management believes it has the know-how and strategic relationships in
numerous disciplines to get things done on time with quality, and within
budget.
ACQUISITION. Txon has signed an agreement dated April 26,1999 to acquire a
Utah based General Contracting firm, Furst Construction. Furst Construction
has a similar business philosophy as Txon and is believed to share Txon's
intent to provide excellent services and quality work while maintaining high
standards of ethics and integrity. Txon intends to capitalize on Furst's 18
years of experience and its outstanding reputation by continuing Furst's
existing business, and marketing Txon's wider range of services to Furst's
existing client base. A sizeable percentage of Furst Construction's business
is from repeat customers substantiating Furst's strong reputation for service
and quality.
Additionally, Txon is completing an exclusive strategic joint venture
affiliation with an established Irish International Architectural /
Engineering and Construction management firm, Murray O'Laoire International
(MOLI). Txon's former Exxon executives have worked closely with MOLI for
seven
years. Through this affiliation Txon has been invited to review and bid on
several projects in Eastern and Western Europe and the newly independent
states of the former U.S.S.R. MOLI clients include an extensive list of large
western corporations, including Nestle, AT&T, Exxon and the International
Monetary Fund. Principals of Txon and the Irish firm have already met with
Russian officials in Moscow regarding several potential projects, and intends
to continue to maintain the relationships it has established until funding
can
be obtained and the ventures can move forward.
Municipality Work- With the experience of the General Contractor
rounding
out our team, Txon will have the resources to solicit infrastructure and
public improvement projects in Eastern Europe. There appears to be
considerable pent up demand for these services as well as a strong need for
western organizations to assist with all aspects of project stewardship. Txon
has networked with various foreign governments and private representatives to
solicit public works projects and will continue to do so.
COMPETITION
Recent economic conditions have led to increased competition among
commercial real estate service companies. Some of the Company's competitors
and
potential competitors have vastly greater financial and marketing resources
than the Company. There can be no assurance that the Company will not
encounter increased competition in the future which could limit its ability
to maintain or increase its market share and could adversely affect the
Company's financial results.
There are many well established concerns which have vastly greater
financial and personnel resources than the Company. In view of the
Company's extremely limited financial resources and limited management
availability, the company expects to be at a competitive disadvantage
compared
to the Company's competitors. Management believes the Company's competitive
posture will be significantly improved by the Furst Construction Company
acquisition.
GOVERNMENT APPROVAL
The Company must obtain certain government approvals and meet many
licensing requirements in order to provide the services it proposes to offer
in many States and foreign countries. The Company believes its existing
management and project affiliates will be able to meet the licensing and
project approval requirements in most states. Mr. Robert Carter-the Executive
Vice President will act as the interface with the appropriate oversight
bodies
regarding regulations to maintain compliance. His experience as a two term
president of the Construction Industry Council, has familiarized him with
DOC,
DOE, OSHA, HHS, DOI and DOL regulations and the requirements of the Uniform
Building Code adopted by many states. Most approvals are granted pursuant to
evaluation criteria which are generally consistent among the majority of
states. Though the Company's management has many years of experience in
dealing with local, state, federal and international government regulations
and
approval processes, no assurance can be given that the Company's experience
and
financial capabilities will be sufficient to meet the requirements of the
jurisdictions in which it intends to operate.
EFFECTS OF GOVERNMENTAL REGULATIONS; COMPLIANCE WITH
ENVIRONMENTAL LAWS
The construction and development industry is highly regulated. The
Company must comply with a variety of federal, state and local laws relating
to, among other things, its building and sales activities, the building
materials it uses, and the designs of its construction projects. Proposed
environmental laws could, if enacted, result in production delays and
cause the Company to incur substantial compliance costs. While the Company
believes it will be able to remain in material compliance with all
such laws, if it should be determined that the Company is not in compliance
with the law, the Company could become subject to cease and desist orders,
injunctive proceedings, civil fines and other penalties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the eleven-month period ended December 31, 1998, the Company's
activities were primarily directed to the development of the Company's
business plan, organizational structure, acquisitions, negotiations,
financing, project evaluations and relationship building. The Company also
established sales and administrative offices in Salt Lake City, Utah and
began
developing its marketing strategy. To this point the Company has realized no
sales or revenues.
Since inception the Company has incurred expenses of approximately
$350,000. These expenses related to personnel, overhead, office equipment,
legal and accounting, and expenses incurred in formulating the Company's
business plan, developing its marketing strategy, and initiating sales
efforts. The Company has financed its activities primarily from the sale of
its common stock. During the eleven-month period ended December 31,1998 the
Company raised its initial start-up capital of $200,000 through the sale of
common stock to its founding principals. The Company raised an additional
$150,000 through the sale of common stock to investors.
During the coming year, Management plans to shift its focus to sales,
marketing and initiating active project operations. Management anticipates
cash requirements of $1,000,000 during the next twelve months. The Company
has
recently entered into a contract for the acquisition of Furst Construction
Company. This company had a job schedule of completed, on going, and
contracted
projects during 1998 exceeding $85 million. No assurance can be given that
these revenues will actually materialize, or that if received, the revenues
will result in operating profits. Txon and Furst Construction Company have
offered their combined services to several large, international corporations
and may be able to enter into contracts with them which will produce
additional revenues, though no assurance can be given that this will be the
case.
In order to meet anticipated expenses over the next twelve months, the
Company intends to seek additional risk capital through the sale of common
shares. No underwriter, agent or other person has agreed to assist the
Company in distributing any of its common shares, and no actions have been
taken to ascertain whether to register such shares under the Securities Act
of
1933 or rely on exemptions from registration to distribute such shares. No
assurance can be given that the Company will be able to sell securities to
meet its operating needs, or that if available, such sales could be effected
on terms acceptable to the Company. If the Company is not able to sell
additional securities to meet its operating expenses, it is doubtful that the
Company will be able to continue as a going concern.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently operates from leased office
premises. Management also provides for a significant portion of the
Company's office equipment needs without cost.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth, as of December 31, 1998, each person
known by the Company to be the beneficial owner of five percent or
more of the Company's Common Stock, all directors individually and all
directors and officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
- ------------------- -------------------- ----------
<C> <C> <C>
John Chris Kirch 1,100,000 20%
3672 Cove Point Dr.
Salt Lake City, UT 84109
Stephanie Harnicher 1,100,000 20%
5632 East Pioneer Fork Road
Salt Lake City, UT 84108
Robert E. Carter 900,000 16%
3739 Palmetto Creek
Kingwood, TX 77339
Seymour Tatar 600,000 11%
1023 Nantucket
Houston, TX 77057
Jay Schapiro 300,000 5%
12 Ruby Field Court
Baltimore, MD 21209
All Executive Officers
and Directors as a
Group (5 Person) 4,000,000 72%
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The Company has five Directors and Officers as follows:
Name Age Positions/Offices Held
- ------ --- ----------------------
John Chris Kirch 42 Chairman, Director
Stephanie Harnicher 41 President, CEO, Director
Robert E. Carter 58 Executive V.P., Director
Seymour Tatar 67 V.P. of Design, Director
Jay Schapiro 39 Secretary, Treasurer,
V.P.
of Admin., Director
There are no agreements or understandings for any officer of director to
resign at the request of another person and the above-named officers and
directors are not acting on behalf of, nor will they act at the direction of
any other person.
Set forth below are summaries of the business experience of the
Directors
and Officers of the Company for at least the last five years:
John Chris Kirch, Chairman of the Board, Director & Head of Corporate
Development.
Mr. Kirch Age 42, has been a director of the Company since its inception
in January of 1998. His main role is to facilitate the company's funding
needs
and promotional requirements. In 1997, prior to joining Txon Mr. Kirch was
Vice
Chairman and Director of Corporate Development for Weston Hotels and
Properties, Inc. a Hotel operating company. While in the hotel business Mr.
Kirch was involved in the areas of business planning and major funding to
rapidly expand this Hotel Chain. From 1994 to 1997 Mr. Kirch was a cofounder
and director of planning for PharmaPrint, Inc., f/k/a ABT Global
Pharmaceutical Corporation, out of the University of Southern California
School of Medicine. His specific role in this start up and development stage
company was to prepare its initial business plan and arrange for start-up
funding for the corporation. Mr. Kirch specializes in arranging large private
placement funding, preparing and placing public offerings, while developing
multi-media news, advertising and marketing support.
Stephanie Harnicher, President, Chief Executive Officer & Director.
Ms. Harnicher Age 41, has been President, Chief Executive Officer and a
director of the Company since its inception in January of 1998. Her main role
is to oversee all operations and administrative controls of the company. Ms.
Harnicher has over 20 years experience in real estate development,
construction management, and real estate financial services. From 1992
through
1997 Ms. Harnicher acted in a capacity as President of Entrepreneurs Mortgage
Source, Inc. which provides funding for residential and commercial real
estate
projects. Prior to her founding of Entrepreneurs Mortgage Source, Inc. Ms.
Harnicher worked in several key positions at Exxon for ten years, where she
was active in strategy, investment analysis, financing, real estate
development and marketing of commercial and residential real estate projects
worth $950 million. Ms. Harnicher was a key person in the development and
marketing for Exxon of many shopping centers, office complexes and land
development projects. During her 10 year tenure at Exxon, Ms. Harnicher
managed various leasing, sales and administrative personnel. To fully coordi-
nated all aspects of construction, design, legal and property management
functions. Prior to Exxon she has also served as a financial consultant to
Westinghouse, McDonald Douglas, Gould and the U.S. Navy, as well as an
instructor of Finance at the University of Houston. Ms. Harnicher has strong
community ties and is a member of several business, civic, and community
groups, including the National Association of Women Business Owners, the Utah
Professional Women's Association, and the Beta Gamma Sigma Honorary Business
Fraternity. Past associations include The National Mortgage Bankers
Association, Rotary, Park City and Salt Lake City Chambers of Commerce,
Executive Womans' Association and has served as President of her College
Association for 10 years.
Ms. Harnicher received her undergraduate degree from Goucher College and
her Masters of Business Administration concentrating in finance and
investments from the George Washington University, Washington,
D.C. She graduated with top honors and was invited to join the Beta Gamma
Sigma honorary Business Fraternity. Her business and professional history
includes almost two decades of multifaceted management experience in finance,
marketing, and real estate development.
Robert E. Carter, Executive Vice President, Head of Worldwide Project
Management, & Director.
Mr. Carter, age 58, has been Executive Vice President, and a director of
the Company since its inception in January of 1998. Mr. Carter's multi-
disciplined professional expertise stems from his very productive career as a
managing engineer in the building, development, and energy industry for over
25 years. For Txon he is responsible for project construction administration
for complex and large-scale real estate projects worldwide, he has built an
impressive record of accomplishments. Mr. Carter speaks English, Russian, and
Spanish. He has been able to adapt to different cultures effectively working
as a corporate team player and/or leader to manage and complete assignments on
time and within budget in difficult foreign locations. His diversified
experience ranges from complex renovations of aerospace testing and laboratory
environments, to hospitals and medical support facilities, from multimillion
dollar premier office buildings, hotels and retail centers to large secure
expatriate private housing communities. From 1992 through 1997 Mr. Carter has
worked as an independent contract manager, where he has facilitated the
start-up marketing, accounting, financial reporting and daily operation of an
entrepreneurial business, which has provided project development/ management
services in Russia, Ukraine, Nigeria, Egypt, England, Germany, France and
Belgium for several multinationalcompanies, defining missions or providing
feasibility studies, projectbfunding, planning and/or implementation. Prior
to
1992 Mr. Carter worked for Exxon's Houston development company as senior
international project manager for twelve years. He provided management
services
for local and overseas corporate ventures, while developing foreign networks
to
expedite contract demands. Mr. Carter analyzed and provided feasibility
studies
with long-term investment planning for capital projects, as well as
responsibility for stewardship of schedules, budgets, and reporting. At Exxon
he constructed and managed 230,000 square meters of Class A office buildings
and hotels, 10,000 square meters of commercial retail space, and served as a
key person for three (3) planned residential communities with supporting
infrastructure, including schools, religious facilities and municipal
buildings.
Seymour M. Tatar, Vice President of Design & Project Planning.
Mr. Tatar, age 67, has been Vice President, and a director of the Company
since its inception in January of 1998. Prior to joining Txon Mr. Tatar has
been an independent architect for over 25 years with a highly successful
professional career completing over 300 projects in architecture, urban
design, site planning, contracting, construction management, and real estate
development. Mr. Tatar's responsibilities for Txon include comprehensive
services that included site landscape and project design. programming, space
planning, feasibility, urban renewal, city planning, civic and tax increment
district design, engineering and specialized consultant coordination,
educational and library behavioral research, on-site construction management.
Mr. Tatar's tasks also include bringing together teams of specialized
professional consultants, directing them to accomplish specific complex tasks
in a comprehensive manner. He is also to analyze cost control, site
selection,
lighting, acoustics, environmental assessments, real estate appraisal,
traffic, food handling, asbestos removal, marketing, legal, business and
economic feasibility - all in response to an assignment's special needs.
Mr. Tatar has been professionally registered in fourteen states, is currently
accredited by the National Council of Architectural Registration Board, and
participates in several professional and civic associations.
Jay Schapiro, Vice President of Administration, Director and Secretary.
Mr. Schapiro, age 39, has been an officer and director of the company
since August 1998. Mr. Schapiro's duties include managing daily office and
financial administration of the company, along with maintaining all books and
records as the corporate secretary. From 1995 to 1997 he served as Mid
Atlantic Market manager for MCI Cellular where he oversaw the build out of
twelve facilities, concurrently with managing and marketing programs, the
staffing and providing profit/loss reports for the region. From 1993 to 1995
Mr. Schapiro served as a development manager for a chain of large format pet
supply stores, coordinating the roll out of the initial five locations.
Directors of the Company serve for periods of one year or until their
successors have been elected and accepted their positions.
The Company's officers and directors expect to potentially organize other
companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting
as an officer and director of the Company. Insofar as the officers and
directors are engaged in other business activities, Management anticipates
that they will devote only a fractional amount of time to the Company's
affairs.
The Company does not 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.
There are no binding guidelines or procedures for resolving
potential conflicts of interest.
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth the cash compensation paid or accrued for
services rendered in all capacities to the Company in 1999, to the Officers
and Directors of the Company (the "Named Executives").
SUMMARY COMPENSATION TABLESUMMARY COMPENSATION TABLE
FISCAL 1999 ANNUAL COMPENSATION
<TABLE>
<S> <C> <C> <C> <C>
Salary Bonus Other
Name & Principal Annual Long Term
Position Compensation Compensation
Awards
John Chris Kirch $36,000 --- --- ---
Chairman
Stephanie Harnicher $60,000 --- --- ---
President, CEO, & Director
Jay Schapiro $48,000 --- ---
Vice President, & Director
While the Company currently pays the Company's Chairman, President, and
Vice President the annual salaries listed above, there are no employment
agreements in effect as of this time. The Company is considering
implementing
employment agreements which would be in effect for an initial term of two
years and then renew automatically for successive one-year terms unless
terminated earlier according to the terms therein.
The Company issued 1,100,000 shares of common stock to John Chris Kirch,
an officer and a director of the Company, in consideration of certain
services
which he provided to the Company in calendar year 1998.The Company also
issued
1,100,000 shares of common stock to Stephanie Harnicher, an officer and a
director of the Company, in consideration of certain services which she
provided to the Company in calendar year 1998. The Company issued 900,000
shares of common stock to Robert Carter an officer and director in
consideration of certain services which he provided to the Company in
calendar
year 1998. The Company issued 600,000 shares of common stock to Seymour Tatar
an officer and director in consideration of certain services which he
provided
to the Company in calendar year 1998. And The Company issued 300,000 shares
of common stock to Jay Schapiro, an officer and a director of the Company, in
consideration of certain services which he provided to the Company in
calendar
year 1998. See Item 7 below, "Certain Relationships and Related Transactions".
The Company currently has no obligations to compensate any other of its
executive officers or directors at this time but retains the right to do so
as
it sees fit. The Company is considering instituting an incentive stock option
or stock bonus plan for its executive officers, but currently has no such
plan
in place.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for
the benefit of its employees to date.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On February 25, 1999 the Company issued a total of 4,000,000 shares of
Common Stock of the company to the five founders and officers and directors
for a total of $200,000.00 in cash ($.20 per share):
</TABLE>
<TABLE>
<CAPTION>
NAME NUMBER OF TOTAL SHARES CONSIDERATION
- ----- ---------------------- ------------
<S> <C> <C>
John Chris Kirch 1,100,000 $200,000.00
Stephanie Harnicher 1,100,000
Robert E. Carter 900,000
Seymour Tatar 600,000
Jay Schapiro 300,000
</TABLE>
Between March 1, 1999 and March 28, 1999 the company sold an aggregate of
1,500,000 shares of its common stock to a total of 41 investors at a sales
price of $.10 per share pursuant to an exemption from registration provided by
Regulation D, rule 504 as to which a form D was filed with the Securities and
Exchange Commission on March 8, 1999. These securities were sold for cash.
There were no underwriting discounts or commissions involved in the sale of
these securities.
ITEM 8. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 9. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
There is no trading market for the Company's Common Stock at present
and there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop,
that it will continue.
(a) Market Price. The Company's Common Stock is not quoted at the
present time.
(b) Holders. There are presently 36 holders of the Company's Common
Stock.
(c) There are no outstanding warrants or options giving any person the
right to acquire any shares of the Company, and none of its outstanding
common
shares are eligible to be sold under Rule 144. The Company intends to
publicly offer common shares to raise investment capital, but no details of
any such proposal have been agreed upon. There are no employee benefit or
dividend reinvestment plans which could have a material effect on the market
price, if any, of the Company's common shares.
(d) Dividends. There are no restrictions that limit the ability to pay
dividends on the Company's common stock. However, the Company has not paid
any
dividends to date, and has no plans to do so in the foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
During the past Twelve months, the Company has sold securities which were
not registered as follows:
<TABLE>
<CAPTION>
NAME NUMBER OF CONSIDERATION
SHARES
<S> <C> <C>
John Chris Kirch (1) 1,100,000
$200,000.00
Stephanie Harnicher (2) 1,100,000
Robert E. Carter (3) 900,000
Seymour Tatar (4) 600,000
Jay Schapiro (5) 300,000
</TABLE>
(1) Mr. Kirch is an officer and director of the Company and the beneficial
owner of such shares.
(2) Ms. Harnicher is an officer and director of the Company and the beneficial
owner of such shares.
(3) Mr. Carter is an officer and director of the Company and the beneficial
owner of such shares.
(4) Mr. Tatar is an officer and director of the Company and the beneficial
owner of such shares.
(5) Mr. Schapiro is an officer and director of the Company and the beneficial
owner of such shares.
Additionally since January 1, 1999 the Company has sold 1,500,000 of its
common shares to 31 persons without registration under the Securities Act of
1933 in reliance on the exemption from registration provided by § 3(b)
of
the Act and Rule 504 of Regulation D thereunder. Total gross proceeds from
this underwriting were $150,000.
ITEM 11. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, par value $.001 per share, and 10,000,000 shares of
Preferred Stock, par value $.001 per share. The following statements
relating to the capital stock are summaries and do not purport to be
complete. Reference is made to the more detailed provisions of, and such
statements are qualified in their entirety by the Certificate of
Incorporation and the By-laws of the Corporation, copies of which are filed
as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each
share
on all matters to be voted on by the stockholders. Holders of common stock
do
not have cumulative voting rights. Holders of common stock are entitled to
share proratably in dividends, if any, as may be declared from time to time
by the Board of Directors in its discretion from funds legally available
therefor.
In the event of a liquidation, dissolution or winding up of the Company,
the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are, fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights
or sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance
of 10,000,000 shares of preferred stock, $.001 par value per share, of
which
no shares have been issued. The Board of Directors is authorized to provide
for the issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Nevada, to establish from time
to time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof
without any further vote or action by the shareholders. Any shares of
preferred stock so issued would have priority over the common stock with
respect to dividend or liquidation rights.
Any future issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the voting and
other rights of the holders of common stock. At present, the Company has no
plans to issue any preferred stock nor adopt any series, preferences or other
classification of preferred stock.
Under certain circumstances, the issuance of Preferred Stock could
adversely affect the voting power of the holders of the Common Stock. The
Company has no present plans to issue any Preferred Stock.
The Company does not expect to pay dividends. Dividends, if any, will be
contingent upon the Company's revenues and earnings, if any, capital
requirements and financial conditions. The payment of dividends, if any, will
be within the discretion of the Company's Board of Directors. The Company
presently intends to retain all earnings, if any, for use in its business
operations and accordingly, the Board of Directors does not anticipate
declaring any dividends in the foreseeable future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Nevada provides
that
a Nevada corporation has the power, under specified circumstances, to
indemnify
its directors, officers, employees and agents, against expenses incurred in
any action, suit or proceeding. That law provides that a certificate of
incorporation may contain a provision eliminating the personal liability
of
a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director provided that such provision shall
not eliminate or limit the liability of a director (i)for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or
a knowing violation of law, (iii) relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the
General Corporation Law of the State of Nevada,
or (iv) for any transaction from which the director derived an improper
personal benefit. The Company's Certificate of Incorporation contains such
a
provision which provides for the indemnification of officers and directors of
the Company to the full extent permissible under Nevada law.
ITEM 13. FINANCIAL STATEMENTS
Attached hereto as Exhibit 27 is the company's financial statement dated
September 30, 1998 (the company's fiscal year end) along with interim
statements dated December 31, 1998 and March 30, 1999 prepared in accordance
with generally accepted accounting principles.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there
are no disagreements with the Company's accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
3 Articles of Incorporation and By-Laws
27 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this registration statement to be signed on its behalf
by the undersigned thereunto duly authorized.
TXON INTERNATIONAL DEVELOPMENT CORPORATION.
By: /s/ Stephanie Harnicher
Stephanie Harnicher, President
EXHIBIT 3
Articles of Incorporation
of
TXON
INTERNATIONAL DEVELOPMENT CORPORATION
Txon International Development Corporation. filed its original
Certificate of Incorporation with the Nevada Secretary of State on January 28,
1998. This Certificate of Incorporation as contained herein has been duly
adopted in accordance with the General Corporation Law of Nevada.
ARTICLE I
Name
The name of this corporation is Txon International Development
Corporation. (the "Corporation").
ARTICLE II
Registered Office and Agent
The street address of the registered office and agent of the
Corporation in the State of Nevada is 3230 East Flamingo Road Suite #156,
Las Vegas, NV 89121.
The name of the registered agent of the Corporation at that address is
Gateway Enterprises.
ARTICLE III
Mailing Address
The mailing address of the Corporation is 6322 South 300 East, Suite
320, Salt Lake City, UT 84121.
ARTICLE IV
Duration
This Corporation shall exist perpetually.
ARTICLE V
Purpose
The purpose or purposes of the Corporation are:
(1) To conduct any lawful business, to exercise any lawful purpose
and power, and to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Laws of Nevada; and
(2) In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Nevada or any other law of Nevada or
by this Certificate of Incorporation together with any power incidental
thereto, so far as such powers and privileges are necessary or convenient to
the conduct, promotion or attainment of the business or purposes of the
Corporation.
ARTICLE VI
Capital Stock
The maximum number of shares of capital stock which this Corporation
shall have authority to issue is Sixty Million (60,000,000), Consisting of
Fifty Million (50,000,000) shares of Common Stock, $.001 par value, and Ten
Million (10,000,000) shares of Preferred Stock at $.001 par value. The
preferences, qualifications, limitations, restrictions and the special or
relative rights in respect of the shares of each class are as follows:
SECTION 1. Preferred Stock. The Preferred Stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may
be fixed and determined by the Board of Directors as hereinafter provided, and
each share of each series shall be identical with all other shares of such
series, except as to the date from which dividends are cumulative. The
preferred stock shall have voting rights of 100 to 1 per share over the
voting rights of common stock. The Board of Directors hereby is authorized to
cause such shares to be issued in one or more classes or series and with
respect to each such class or series to fix and determine the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(1) the number of shares constituting a series, the distinctive
designation of a series and the stated value of a series, if different from
the par value;
(2) whether the shares or a series are entitled to any fixed or
determinable dividends, the dividend rate (if any) on such shares, whether the
dividends are cumulative and the relative rights or priority of dividends on
shares of that series;
(3) whether a series has voting rights in addition to the voting
rights provided by law and the terms and conditions of such voting rights;
including 100 to 1 voting rights per share over the voting rights of common
stock.
(4) whether a series will have or receive conversion or exchange
privileges and the terms and conditions of such conversion or exchange
privileges;
(5) whether the shares of a series are redeemable and the terms and
conditions of such redemption, including the manner of selecting shares for
redemption if less than all shares are to he redeemed, the date or dates on or
after which the shares in the series will be redeemable and the amount payable
in case of redemption;
(6) whether a series will have a sinking fund for the redemption or
purchase of the shares in the series and the terms and the amount of such
sinking fund;
(7) the right of a series to the benefit of conditions and
restrictions on the creation of indebtedness of the Corporation or any
subsidiary, on the issuance of any additional capital stock (including
additional shares of such series or any other series), on the payment of
dividends or the making of other distributions on any outstanding stock of the
Corporation and the purchase, redemption or other acquisition by the
Corporation, or any subsidiary, of any outstanding stock of the Corporation;
(8) the rights of a series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and the relative
rights of priority of payment of a series; and
(9) any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of such series.
Dividends on outstanding shares of Preferred Stock shall be paid or
set apart for payment before any dividends shall be paid or declared or set
apart for payment on the Common Stock with respect to the same dividend
period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series in
accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any, payable with respect thereto).
SECTION 2. Common Stock - General Provisions. The Common Stock shall
be subject to the express terms of the Preferred Stock and any series
thereof. Each share of Common Stock shall be equal to every other share of
Common Stock, except as otherwise provided herein or required by law.
Shares of Common Stock authorized hereby shall not be subject to
preemptive rights. The holders of shares of Common Stock now or hereafter
outstanding shall have no preemptive right to purchase or have offered to them
for purchase any of such authorized but unissued shares, or any shares of
Preferred Stock, Common Stock or other equity securities issued or to be
issued by the Company.
Subject to the preferential and other dividend rights applicable to
Preferred Stock, the holders of shares of Common Stock shall be entitled to
receive such dividends (payable in cash, stock or otherwise) as may be
declared on the Common Stock by the Board of Directors at any time or from
time to time out of any funds legally available therefor.
In the event of any voluntary or involuntary liquidation, distribution
or winding up of the Corporation, after distribution in full of the
preferential or other amounts to be distributed to the holders of shares of
Preferred Stock, the holders of shares of Common Stock shall be entitled to
receive all of the remaining assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the number of
shares of Common Stock held by them.
SECTION 3. Common Stock - Other Provisions.
(a) Voting Rights. The shares of Common Stock shall have the
following voting rights:
(1) Each share of Common Stock shall entitle the holder thereof to
one vote upon all matters upon which stockholders have the right to vote.
Except as otherwise required by applicable law, the holders of shares
of Common Stock shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation (or, if any holders of shares of
Preferred Stock are entitled to vote together with the holders of Common
Stock, as a single class with such holders of shares of Preferred Stock).
(b) Dividends and Distributions. Except as otherwise provided in this
Certificate of Incorporation, holders of Common Stock shall be entitled to
such dividends and other distributions in cash, stock or property of the
Corporation as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor;
provided, however, that in no event may the rate of any dividend payable on
outstanding shares of any class of Common Stock be greater than the dividend
rate payable on outstanding shares of the other class of Common Stock. All
dividends and distributions on the Common Stock payable in stock of the
Corporation shall be made in shares of Common Stock. In no event will shares
of Common Stock be split, divided or combined unless the outstanding shares of
the Common Stock shall be proportionately split, divided or combined.
(c) Options, Rights or Warrants. The Corporation may make offerings
of options, rights or warrants to subscribe for shares of capital stock to all
holders of Common Stock if an identical offering is made simultaneously to all
the holders of stock. All such offerings of options, rights or warrants shall
offer the respective holders of Common Stock the right to subscribe at the
same rate per share.
ARTICLE VII
Board of Directors
SECTION 1. Number and Terms. The number of directors which shall
constitute the whole Board of Directors shall be determined in the manner
provided in the Bylaws of the Corporation. The Board of Directors shall be
as nearly equal in number as possible. The initial directors shall hold
office for a term expiring at the next succeeding annual meeting of
stockholders and until election of their respective successors.
SECTION 2. Vacancies. Any vacancy on the Board of Directors, whether
arising through death, resignation or removal of a director or through an
increase in the number of directors of any class, shall be filled by a
majority vote of all remaining directors. The term of office of any director
elected to fill such a vacancy shall expire at the expiration of the term of
office of directors in which the vacancy occurred.
SECTION 3. Other Provisions. Notwithstanding any other provision of
this Article VII, and except as otherwise required by law, whenever the
holders of any one or more series of Preferred Stock or other securities of
the Corporation shall have the right, voting separately as a class, to elect
one or more directors of the Corporation, the term of office, the filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation applicable thereto, and unless the
terms of this Certificate of Incorporation expressly provide otherwise, such
directorship shall be in addition to the number of directors provided in the
Bylaws and such directors shall not be classified. Elections of directors need
not be by written ballot unless the Bylaws of the Corporation shall so
provide.
ARTICLE VIII
Bylaws
The power to adopt, alter, amend or repeal the Bylaws of the
Corporation shall be vested in the Board of Directors. The stockholders of
the Corporation may adopt, amend or repeal the Bylaws of the Corporation only
by the affirmative vote of holders of at least 66 2/3% of the combined voting
power of the then outstanding shares of stock of all classes and series of the
Corporation entitled to vote generally on matters requiring the approval of
stockholders (the "Voting Stock").
ARTICLE IX
Stockholder Meetings
Any action required or permitted to be taken by the stockholders of
the Corporation must be taken at a duly called and noticed meeting of
stockholders and may not be taken by consent in writing, unless such action
requiring or permitting stockholder approval is approved by a majority of the
directors then in office. An action required or permitted to be taken by the
stockholders which has been approved by a majority of the directors may be
taken by consent in writing if the consent is signed by the record holders of
no less than the Voting Stock that would otherwise be required for approval of
such action.
ARTICLE X
Amendments
The provisions set forth in Articles VI, VII, VIII and IX and in this
Article X may not he repealed, rescinded, altered or amended, and no other
provision may be adopted which is inconsistent therewith or impairs in any way
the operation or effect thereof, except by the affirmative vote of holders of
not less than 66 2/3% of the Voting Stock.
Consistent with the preceding sentence, the corporation reserves the
right to adopt, repeal, rescind, alter or amend in any respect any provision
contained in this Certificate of Incorporation as prescribed by applicable
law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Incorporation to be executed in its corporate name this 28th day of January,
1998.
As approved and adopted by the Board of Directors as of January
28, 1998.
BY-LAWS
of
TXON
INTERNATIONAL DEVELOPMENT CORPORATION
ARTICLE I
Meetings of Shareholders
SECTION 1. Annual Meeting. The annual meeting of the shareholders of
this Corporation for the election of directors and for the transaction of any
proper business shall be held at the time and place designated by the Board of
Directors (the "Board") of the Corporation. The annual meeting shall be held
within 4 months after the close of the Corporation's fiscal year.
SECTION 2. Special Meetings. Special meetings of the shareholders
shall be held when called by the Chief Executive Officer or by a majority of
the Board of Directors. Special meetings may not be called by any other
person. Written notice of a special meeting pursuant to Section 4 herein
shall be given to all stock holders entitled to vote at such meeting not less
than 10 nor more than 60 days before the date of the meeting. Each such
special meeting shall be held at such date and time as requested by the person
or persons calling the meeting within the limits fixed by law. Business
transacted at any special meeting of shareholders shall be limited to the
purposes stated in the notice.
SECTION 3. Place. Meetings of shareholders may be held in the State
of Nevada or outside the State of Nevada.
SECTION 4. Notice. Written notice stating the place, date and time
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than 10 nor more
than 60 days before the meeting, either personally or by first class mail, by
or at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be effective when deposited in the
United States mail addressed to the shareholder at his address as it appears
on the Corporation's current record of shareholders.
SECTION 5. Notice of Adjourned Meetings. When a meeting is
adjourned to another time or place, it shall not be necessary to give any
notice of the adjourned meeting if the time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken, and
at the adjourned meeting any business may be transacted that might have been
transacted on the original date of the meeting. If, however, the adjournment
is for more than 30 days, or if, after the adjournment, the Board of Directors
fixes a new record date for the adjourned meeting, a notice of the adjourned
meeting shall be given as provided in Section 4 herein to each shareholder of
record on the new record date entitled to vote at such meeting.
SECTION 6. Notice of Shareholder Business and Nominations. Except as
may otherwise be provided herein, or in the Certificate of Incorporation in
connection with rights to electing directors under specific circumstances
which may be granted to the holders of any series of Preferred Stock,
nominations for the election of directors and the proposal of business to be
considered by the shareholders may be made by the Board or any shareholder of
record entitled to vote at the meeting and who complies with the notice
procedures set forth in this by-law.
For nominations or other business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation and such other business
must otherwise be a proper matter for shareholder action. Except as otherwise
provided by applicable law, to be timely, a shareholder's notice must be
delivered to the Secretary of the Corporation at the Corporation's principal
executive offices not later than the close of business on the 60th day, nor
earlier than the close of business on the 90th day, prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is more than 30 days before or
60 days after such anniversary date, notice by the shareholder must he so
delivered not earlier than the close of business on the later of the 60th day
prior to such meeting or the 10th day following the day on which public
announcement of the date of such meeting is made by the Corporation. In no
event shall public announcement of an adjournment of an annual meeting
commence a new time period for giving of a shareholder's notice as described
above.
Such shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election to the Board of Directors,
all information relative to such person required to be disclosed in
solicitation of proxies for election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934 (including such person's written
consent to being named in the proxy statements as a nominee and to serving as
a director if elected); (b) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the nomination
or proposal is made; and (c) as to the shareholder giving notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such shareholder, as they appear on the
Corporation's books and of such beneficial owned and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by
such shareholder and beneficial owner. Notice of nominations which are
proposed by the Board shall be given by the Chairman, the President or the
Secretary of the Corporation on behalf of the Board.
The chairperson of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he or she should so determine, he or she shall
so declare to the meeting and the defective nomination shall be disregarded.
SECTION 7. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or entitled to receive payment of any
distribution, or in order to make a determination of shareholders for any
other purpose, the Board of Directors may fix in advance a date as the record
date for any determination of shareholders, such date in any case to be not
more than 60 days and, in case of a meeting of shareholders, not less than 10
days prior to the date on which the particular action requiring such
determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at an
annual or special meeting of shareholders, or shareholders entitled to receive
payment of a distribution, the date on which notice of the meeting is mailed
or the date on which the resolution of the Board of Directors declaring such
distribution is adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes a
new record date for the adjourned meeting. A new record date must be fixed if
the meeting is adjourned to a date more than 120 days after the date fixed for
the original meeting.
SECTION 8. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the Corporation shall make, at least 10
days before each meeting of shareholders, a complete alphabetical list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged by voting group with the address of and the number and class and
series, any, of shares held by each. The list, for a period of 10 days prior
to such meeting, shall be available for inspection at the principal office of
the Corporation, or at the office of the transfer agent or registrar of the
Corporation or at a place identified in the meeting notice in the city where
the meeting will be held. Upon written demand to the Corporation, any
shareholder or his agent or attorney shall be entitled to inspect the list at
any time during usual business hours. The list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder or his agent or attorney at any time during the
meeting.
If the requirements of this section have not been substantially
complied with, the meeting, on demand of any shareholder in person or by
proxy, shall be adjourned until the requirements are complied with. If no
such demand is made, failure to comply with the requirements of this section
shall not affect the validity of any action taken at such meeting.
SECTION 9. Shareholder Quorum and Voting. A majority of all then
outstanding shares of voting stock entitled to vote, represented in person or
by proxy, shall constitute a Quorum at a meeting of shareholders. When a
specified item of business is required to be voted on by a class or series of
stock, a majority of the shares of such class or series shall constitute- a
quorum for the transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law or by
the Certificate of Incorporation.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or
any adjournment thereof.
SECTION 10. Voting of Shares. Each outstanding share of Common
Stock shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. Holders of Common Stock shall be entitled to vote
for the election of directors or on any matter presented to the shareholders.
Shares of stock of this Corporation owned directly or indirectly by
another corporation the majority of the voting stock of which is owned,
directly or indirectly, by this Corporation are not entitled to vote, and
shall not be counted in determining the total number of outstanding shares at
any given time.
A shareholder or the shareholder's attorney in fact may vote either in
person or by proxy executed in writing by the shareholder or his duly
authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number
of votes represented by the shares owned by him for as many persons as there
are directors to be elected at that time and for whose election he has a right
to vote.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the
by-laws of the corporate shareholder; or, in the absence of any applicable
by-law, by such person as the board of directors of the corporate shareholder
may designate. Proof of such designation may be made by presentation of a
certified copy of the by-laws or other instrument of the corporate
shareholder. In the absence of any such designation, or in case of
conflicting designation by the corporate shareholder, the chairman of the
board, president, any vice president, secretary and treasurer of the corporate
shareholder shall be presumed to possess, in that order, authority to vote
such shares.
Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in
the name of a trustee may be voted by him, either in person or by proxy, but
no trustee shall be entitled to vote shares held by him without a transfer of
such shares into his name or the name of his nominee.
Shares held by or under the control of a receiver, trustee in
bankruptcy proceedings or an assignee for the benefit of creditors, may be
voted by such receiver, trustee or assignee, without the transfer thereof into
the name of such receiver, trustee or assignee.
A shareholder whose shares are Pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee or his nominee shall be entitled to vote the shares
so transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient
to redeem such shares has been deposited with a bank, trust company or other
financial institution, with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates
therefor, such shares shall not be entitled to vote on any matter and shall
not be deemed to be outstanding shares.
SECTION 11. Written Consent of Shareholders. Any action required or
permitted to be taken by the shareholders of the Corporation must be effected
at a duly called annual or special meeting of the shareholders, unless such
action is approved by a majority of the Board of Directors. In the event of
such approval, such action may be taken without a meeting, without prior
notice and without a vote if a consent in writing, setting forth the action so
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 of shareholders at which all shares entitled to vote
thereon were present and voted, provided that all requirements of law and the
Certificate of Incorporation have been satisfied. To be effective, the
executed written consent of the shareholders must be delivered to the
Corporation within 60 days of the date the earliest written consent is
received by the Corporation. If any class of shares is entitled to vote
thereon as a class, such written consent shall be required of the holders of a
majority of the shares of each class of shares entitled to vote thereon.
After obtaining such authorization by written consent, notice shall
promptly be given to those shareholders who have not consented in writing or
who are not entitled to vote on the action. The notice shall fairly summarize
the material features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters rights are
provided by law, the notice shall contain a clear statement of the right of
shareholders dissention there from to be paid the fair value of their shares
upon compliance with further provisions of the law regarding the rights of
dissenting shareholders.
SECTION 12. Waiver of Notice of meetings of Shareholders. Notice of
a meeting of the shareholders need not be given to any shareholder who signs a
Waiver of Notice either before or after the meeting. Attendance of a
shareholder at a meeting shall constitute a waiver of notice of such meeting
and waiver of any and all objections to the place of the meeting, the time of
the meeting, the manner in which it has been called or convened, or the
matters considered at a meeting, except when a shareholder states, at the
beginning of the meeting, any objection to the transaction of business because
the meeting is not lawfully called or convened, or except when a shareholder
objects to considering a particular matter that is not within the purposes
described in the meeting notice.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the shareholders need be specified in any
written Waiver of Notice of such meeting.
ARTICLE II
Directors
SECTION 1. Function. All corporate powers shall he exercised by or
under the authority of, and the business and affairs of the Corporation shall
be managed under the direction of the Board of Directors.
SECTION 2. Qualification. Directors must be natural persons who are
18 years of age or older, but need not be residents of this state or
shareholders of this Corporation.
SECTION 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.
SECTION 4. Duties of Directors. A director shall perform his duties
as a director, including his duties as a member of any committee of the board
upon which he may serve, in good faith, in a manner he reasonably believes to
be in the best interests of the Corporation, and with such care as an
ordinarily prudent person in a like position would use under similar
circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements
and other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the Corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence; or
(c) a committee of the Board upon which he does not serve, duly
designated in accordance with a provision of the Certificate of Incorporation
or the By-laws, as to matters within its designated authority, which committee
the director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
In discharging his duties, a director may consider such factors as the
director deems relevant, including the long term prospects and interests of
the Corporation and its shareholders, and the social, economic, legal, or
other effects of any action on the employees, suppliers, customers of the
Corporation or its subsidiaries, the communities and society inn which the
Corporation or its subsidiaries operate, and the economy of the state and the
nation.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
Corporation.
SECTION 5. Presumption of Assent. A director of the Corporation who
is present at a meeting of its Board of Directors or a committee of the Board
of Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless (a) he objects at the
beginning of the meeting (or promptly upon his arrival) to holding it or
transacting specified business at the Meeting; or (b) he votes against such
action or abstains from voting in respect thereto.
SECTION 6. Number. Except as may otherwise be provided pursuant to
the Certificate of Incorporation in connection with rights to elect directors
which may be granted to the holders of any series of Preferred Stock, the
number of directors which shall constitute the whole Board shall be fixed from
time to time exclusively pursuant to a resolution adopted by a majority of the
Board of Directors. At each annual meeting of shareholders, commencing with
the 1997 annual meeting, (I) directors elected to succeed those directors
whose terms shall expire shall be elected for a term of office to expire at
the succeeding annual meeting of shareholders after their election, each
director to hold office until his or her successor shall have been duly
elected and qualified, and (ii) if authorized by a resolution of the Board of
Directors, directors may be elected to fill any vacancy on the Board of
Directors, regardless of how such vacancy shall have been created.
SECTION 7. Election of Directors. Except as may otherwise be
provided pursuant to the Certificate of Incorporation in connection with the
rights to elect directors under specified circumstances which may be granted
to the holders of any series of Preferred Stock, and except as otherwise
provided pursuant to Section 8 of this Article II, directors shall be elected
by shareholders of the Corporation. Except as otherwise provided by
applicable law, at each election the persons receiving the greatest number of
votes, up to the number of directors then to be elected, shall be the persons
then elected. Each director shall serve until his or her successor is elected
and qualified or until his or her death, resignation or removal. The election
of directors is subject to any provisions relating thereto contained in the
Certificate of Incorporation.
SECTION 8. Vacancies. Except as may otherwise be provided pursuant to
the Certificate of Incorporation in connection with rights to elect additional
directors under specified circumstances which may be granted to the holders of
any series of Preferred Stock, newly created directorships resulting from any
increase in the number of directors, or any vacancies on the Board of
Directors resulting from death, resignation, removal or other causes, shall be
filled solely by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence shall hold office
until such director's successor shall have been elected and qualified or until
such director's death, resignation or removal, whichever first occurs. No
decrease in the number of directors constituting the Board shall shorten the
term of any incumbent director.
SECTION 9. Resignation of Directors. Any director of the Corporation
may resign at any time by giving written notice to the Chairman of the Board
or to the Secretary of the Corporation. The resignation of any director shall
take effect at the time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 10. Removal of Directors. Subject to the right to elect
directors under specified circumstances which may be granted pursuant to the
Certificate of Incorporation to the holders of any series of Preferred Stock
and unless otherwise provided by law, any director may be removed from office
without cause only by the affirmative vote of the holders of at least 66 2/3%
of the voting power of the then outstanding shares of voting stock, voting
together as a single class.
SECTION 11. Quorum and Voting. A majority of the number of directors
fixed by these By-laws or by resolution of the Board of Directors shall
constitute a quorum for the transaction of business. The act of the majority
of the directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors.
SECTION 12. Director Conflicts of Interest. No contract or other
transaction between this Corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because
such director or directors are present at the meeting of the Board of
Directors or a committee thereof which authorizes, approves or ratifies such
contract or transaction or because his or her votes are counted for such
purpose, if:
(a) the fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors of a committee
thereof which authorizes, approves or ratifies such contract or transaction.
SECTION 13. Executive and Other Committees. The Board of Directors,
by resolution adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and one or more other
committees each of which, to the extent provided in such resolution, shall
have and may exercise all the authority of the Board of Directors, except that
no committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders;
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise;
(c) fill vacancies on the Board of Directors or any committee thereof;
(d) adopt, amend or repeal these By-laws or the Certificate of
Incorporation;
(e) authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors;
(f) adopt an agreement of merger or consolidation; or
(g) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general
authorization for the issuance or sale of shares, or any contract therefor,
and, in the case of a series, the designation thereof, may, pursuant to a
general formula or method specified by the Board of Directors, by resolution
or by adoption of a stock option or other plan, authorize a committee to fix
the terms of any contract for the sale of the shares and to fix the terms upon
which such shares may be issued or sold, including the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features
of a class of shares, or a series of a class of shares, with full power in
such committee to adopt any final resolution setting forth all the terms
thereof and to authorize the statement of the terms of a series for filing
with the office of the Secretary of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members
at any meeting of such committee.
SECTION 14. Changes in Committees; Resignations, Removals and
Vacancies. The Board of Directors shall have power at any time to change or
remove the members of, to fill vacancies in, and to discharge any committee
created pursuant to these By-laws, either with or without cause. Any member
of any such committee may resign at any time by giving written notice to the
Board or the Chairman of the Board or the Secretary. Such resignation shall
take effect upon receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective. Any vacancy in any
committee, whether arising from death, resignation, an increase in the number
of committee members or any other cause, shall be filled by the Board of
Directors in the manner prescribed in these By-laws for the original
appointment of the members of such committee.
SECTION 15. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Nevada.
SECTION 16. Time, Notice and Call of Meetings. Regular meetings of
the Board of Directors shall be held at times and places specified by the
Board of Directors without notice of the date, time, place or purpose of the
meeting. Written notice of the date, time and place of special meetings of the
Board of Directors shall be given to each director at least 2 days before the
meeting. The notice need not describe the purpose of the special meeting. In
addition to any other regular meetings, a regular meeting of the Board of
Directors shall be held, without other notice than this by-law, immediately
after and at the same place as the annual meeting of shareholders.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or
convened, except when a director states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of
the adjourned meeting is announced at the time of the adjournment, to the
other directors.
Meetings of the Board of Directors may be called by the Chairman of
the Board, by the President of the Corporation, or by any two directors.
Members of the Board of Directors may participate in meeting of such
board by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other
at the same time. Participation by such means shall constitute presence in
person at a meeting.
SECTION 17. Action Without a Meeting. Any action required to be
taken at a meeting of the directors of the Corporation, or any action which
may be taken at a meeting of the directors or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action to
be taken, signed by all of the directors, or all the members of the committee,
as the case may be, is filed in the minutes of the proceedings of the Board
or of the committee. Such consent shall have the same effect as a unanimous
vote and may be described as such in any document.
SECTION 18. Advisory Directors. The Board of Directors shall have
the authority to elect a board of outside directors consisting of multiple
members, which number can be increased or decreased by a vote of the
shareholders. The outside directors shall not be shareholders or officers of
the Corporation, and shall not have voting powers, but rather are to act in
the capacity of consulting and advising the Board of Directors at their
invitation.
ARTICLE III
Officers
SECTION 1. Officers. The officers of this Corporation shall consist
of a President, Chairman of the Board, a Secretary and a Treasurer, each of
whom shall be elected by the Board of Directors, and shall serve until their
successors are chosen and qualify. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors from time to time.
Any two or more offices may be held by the same person. The failure
to elect a President, Chairman of the Board, Secretary or Treasurer shall not
affect the existence of this Corporation.
SECTION 2. Duties. The officers of this Corporation shall have the
following duties:
The Chairman shall be the chief executive of the Corporation
overseeing all management and directors and shall preside at all meetings of
the shareholders, unless a Chairman of the Board of Directors has been
elected and is present, and shall preside at all meetings of the Board of
Directors. The President shall be the chief operating officer of the
Corporation, and shall have general and active management of the business and
affairs of the Corporation subject to the directions of the Board of
Directors, The Chairman of the Board of Directors shall preside at all
meetings of the Board of Directors.
The Secretary shall have custody of, and maintain, all the corporate
records except the financial records. He or she shall have the authority to
execute any and all documents in connection with intellectual property
matters, including, but not limited to, Powers of Attorney, Appointment of
Resident Agent forms and any other documents which are required in connection
with the intellectual property matters of the Corporation, and shall prepare
the minutes of all meetings of the shareholders and Board of Directors, shall
authenticate records of the Corporation; shall send all notices of meetings
out, and shall perform such other duties as may be prescribed by the Board of
Directors or the President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements
and render accounts thereof at the annual meetings of shareholders and
whenever else required by the Board of Directors or the President, and shall
perform such other duties as may be prescribed by the Board of Directors or
the President.
SECTION 3. Removal of officers. Any Officer or agent elected or
appointed by the Board of Directors may be removed by the Board at any time
with or without cause.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of
an officer or agent shall not of itself create contract rights.
SECTION 4. Resignation of Officers. An officer may resign at any time
by delivering notice to the Corporation. A resignation is effective when the
notice is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the
successor does not take office until the effective date.
ARTICLE IV
Stock Certificates
SECTION 1. Issuance. Every holder of shares in this Corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. The Board of Directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the Corporation, including cash, promissory notes, services performed,
promises to perform services evidenced by a written contract, or other
securities of the Corporation.
Before the Corporation issues shares, the Board of Directors must
determine that the consideration received for shares to be issued is
adequate.
The determination by the Board of Directors is conclusive insofar as
the
adequacy of consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid and nonassessable. When it cannot be
determined that outstanding shares are fully paid and nonassessable, there
shall be a conclusive presumption that such shares are fully paid and
nonassessable if the Board of Directors makes a good faith determination that
there is no substantial evidence that the full consideration for such shares
has not been paid.
When the Corporation receives the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued therefor are
fully paid and nonassessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the Corporation at the
time of the making of the promise unless the agreement specifically provides
otherwise.
SECTION 2. Form. Certificates representing shares in this Corporation
shall be signed by the President or any vice president and the Secretary or
any assistant secretary and may be sealed with the seal of this Corporation or
a facsimile thereof . The signatures of the President or any vice president
and the Secretary or any assistant secretary may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or registrar,
other than the Corporation itself or an employee of the Corporation. In case
any officer who signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he
were such officer at the date of its issuance.
If this Corporation is authorized to issue shares of more than one
class or more than one series of any class, every certificate representing
shares issued by this Corporation shall set forth or fairly summarize upon the
face or back of the certificate, or shall state that the Corporation will
furnish any shareholder upon request and without charge a full statement of,
the designations, preferences, limitations and relative rights of the shares
of each class or series authorized to be issued, and the variations in the
relative rights and preferences between the shares of each series so far as
the same have been fixed and determined, and the authority of the Board of
Directors to fix and determine relative rights and preferences of subsequent
series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such
shares are restricted as to transfer and shall set forth or fairly summarize
upon the certificate, shall state that the Corporation will furnish to any
shareholder upon request and without charge a full statement of, such
restrictions.
Each certificate representing shares shall state upon the face
thereof: the name of the Corporation; that the Corporation is organized under
the laws of the State of Nevada, the name of the person or persons to whom
issued; the number and class of shares; and the designation of the series, if
any, which such certificate represents.
SECTION 3. Transfer of Stock. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the
holder of record thereof or by his legal representative, who shall furnish
proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate of such
shares. The person in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof for all purposes.
SECTION 4. Lost, Stolen, or Destroyed Certificates. The Corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the Corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and
without notice of any adverse claim; (c) gives bond in such form as the
Corporation may direct to indemnify the Corporation, the transfer agent and
registrar against any claim that may be made on account of the alleged loss,
destruction or theft of a certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation.
ARTICLE V
Contracts, Loans, Checks and Deposits
SECTION 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers, agent or
agents, of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI
Books and Records
SECTION 1. Books and Records. The Corporation shall keep as permanent
records, in accordance with applicable law, minutes of all meetings of its
shareholders and Board of Directors, a record of all actions taken by the
shareholders or Board of Directors without a meeting, a record of all actions
taken by a committee of the Board of Directors in place of the Board of
Directors on behalf of the Corporation, and such books or records and accounts
as may be necessary for the proper conduct of the business of the Corporation.
SECTION 2. Inspection of Books and Records. The Board of Directors
and, unless otherwise specified by the Board, the Chairman of the Board and
the President shall, subject to applicable law, have the sole power to
determine from time to time whether and to what extent and at what times and
places and under what conditions and regulations the accounts, books and
records of the Corporation, or any of them, shall be open to the inspection of
the shareholders; and, except as specifically conferred by law, no shareholder
shall have, any right to inspect any account, book, record or document of the
Corporation, unless and until authorized to do so by the Board or, unless
otherwise specified by the Board, by order of the Chairman of the Board or by
the President.
ARTICLE VII
Distributions, Share Dividends and Share Options
SECTION 1. Distributions. The Board of Directors of this Corporation
may, from time to time, authorize and the Corporation may pay distributions to
the shareholders. A distribution is a direct or indirect transfer of money or
other property (except the Corporation's own shares) or incurrence of
indebtedness by the Corporation to or for the benefit of the shareholders in
respect of any of its shares. A distribution may be in the form of a
declaration or payment of a dividend; a purchase, redemption, or other
acquisition of shares; a distribution of indebtedness; or otherwise.
No distribution may be made if, after giving it effect:
(a) the Corporation would not be able to pay its debts as they become
due in the usual course of business; or
(b) the Corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if the Corporation
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential
rights are superior to those receiving the distribution.
If the Board of Directors does not fix the record date for
determining shareholders entitled to a distribution (other than one involving
a purchase, redemption, or other acquisition of the Corporation's shares), it
is the date the Board of Directors authorizes the distribution.
The Board of Directors may base a determination that a distribution is
not prohibited either on financial statements prepared on the basis of
accounting practices and principles that are reasonable in the circumstances
or on a fair valuation or other method that is reasonable in the
circumstances. In the case of any distribution based upon such a valuation,
each such distribution shall be identified as a distribution based upon
current valuation of assets, and the amount per share paid on the basis of
such valuation shall be disclosed to the shareholders concurrent with their
receipt of the distribution.
SECTION 2. Share Dividends. Unless the Certificate of Incorporation
provides otherwise, shares may be issued pro rata and without consideration to
the Corporation's shareholders or to the shareholders of one or more classes
or series. An issuance of shares under this section is a share dividend.
Shares of one class or series may not be issued as a share dividend in
respect of shares if another class or series unless:
(a) the Certificate of Incorporation so authorizes;
(b) a majority of the votes entitled to be cast the class or series
to be issued approves the issue; or
(c) there are no outstanding shares of the class or series to be
issued.
If the Board of Directors does not fix the record date for
determining shareholders entitled to a share dividend, it is the date the
Board of Directors authorizes the share dividend.
SECTION 3. Share Options. Unless the Certificate of Incorporation
provides otherwise, the Corporation may issue rights, options or warrants for
the purchase of its shares. The Board of Directors shall determine the terms
upon which the rights, options or warrants are issued, their form and content,
and the consideration for which the shares are to be issued.
The terms and conditions of stock rights and options which are created
and issued by the Corporation, or its successor, and which entitle the holders
thereof to purchase from the Corporation shares of any class or classes,
whether authorized but unissued shares, treasury shares or shares to be
purchased or acquired by the Corporation, may include restrictions or
conditions that preclude or limit the exercise, transfer, receipt or holding
of such rights or options by any person or persons, including any person or
persons owning or offering to acquire a specified number or percentage of the
outstanding common shares or other securities of the Corporation, or any
transferee or transferees of any such person or persons, or that invalidate or
void such rights or options held by any such person or persons or any such
transferee or transferees.
ARTICLE VIII
Corporate Seal
The Board of Directors shall provide a corporate seal which shall have
inscribed thereon the name of the Corporation and such other words and figures
and in such design as may be prescribed by the Board of Directors, and may be
facsimile, engraved, printed or an impression, or other type seal.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall, by resolution, be determined
by the Board of Directors.
ARTICLE X
Indemnification of Directors, Officers, Employees and Agents
SECTION 1. Action Against Party Because of Corporate Position. The
Corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, partner,
officer, employee or agent of another Corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees
inclusive of any appeal), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such claim, action,
suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct unlawful. The termination of any claim, action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
SECTION 2. Action by or in the Right of Corporation. The Corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed claim, action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, partner, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees inclusive of any appeal) actually and reasonably
incurred by him in connection with the defense or settlement of such claim,
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Corporation
unless and only to the extent that a court of competent jurisdiction (the
"Court") in which such claim, action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court shall deem proper.
SECTION 3. Reimbursement if Successful. To the extent that a director,
officer, employee or agent of the Corporation has been successful on the
merits or otherwise in defense of any claim, action, suit or proceeding
referred to in Sections 1 or 2 of this Article X, or in defense of any claims,
issue or matter therein, he shall be indemnified against expenses (including
attorneys fees inclusive of any appeal) actually and reasonably incurred by
him in connection therewith, notwithstanding that he has not been successful
(on the merits or otherwise ) on any other claim, issue or matter in any such
claim, action, suit or proceeding.
SECTION 4. Authorization. Any indemnification under Sections 1 and 2
of this Article X (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in Sections 1 and 2. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
shareholders.
SECTION 5. Advanced Reimbursement. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in this Article.
SECTION 6. Indemnification Not Exclusive. The indemnification provided
by this Article shall be deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, rule of law, provision of the
Certificate of Incorporation, by-law, agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity, while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. Where such other provision provides broader
rights of indemnification than these by-laws, said other provision shall
control.
SECTION 7. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, partner, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article.
ARTICLE XI
Amendment
Except as otherwise provided herein, these By-laws may be altered,
amended or repealed or new by-laws may be adopted by the shareholders or by
the Board of Directors at any regular meeting of the shareholders or of the
Board of Directors or at any special meeting of the shareholders or of the
Board of Directors if notice of such alteration, amendment, repeal or adoption
of new By-laws be contained in the notice of such special meeting; provided,
however, that in the case of amendments by shareholders, notwithstanding any
other provisions of those By-laws or any other provision of law which might
otherwise permit a lesser vote or no vote, but in addition to any affirmative
vote of the holders of any particular class or series of the capital stock
required by law, the Certificate of Incorporation or these By-laws, the
affirmative vote of the holders of at least 66 2/3% of all then outstanding
shares of voting stock of the Corporation, voting together as a single class,
shall be required to alter, amend or repeal any provision of these By-laws.
ARTICLE XII
Emergency By-laws
SECTION 1. Emergency By-laws. The Board of Directors may adopt by-
laws to be effective only in an emergency. An emergency for the purposes of
this section if a quorum of the Corporation's directors cannot readily be
assembled because of some catastrophic event. The emergency by-laws, which
are subject to amendment or repeal by the shareholders may make all provisions
necessary for managing the Corporation during an emergency, including:
(a)procedures for calling a meeting of the Board of Directors;
(b)quorum requirements for the meeting; and
(c)designation of additional or substitute directors.
SECTION 2. Line of Succession. The Board of Directors, either before,
or during such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or
agents of the Corporation are for any reason rendered incapable of discharging
their duties.
SECTION 3. Governing By-laws. All provisions of these By-laws
consistent with the emergency by-laws remain effective during the emergency.
The emergency by-laws are not effective after the emergency ends.
SECTION 4. Effect of Corporation Action. Corporate action taken in
good faith in accordance with the emergency are subject to amendment or repeal
by the shareholders, may make all provisions necessary for managing the
Corporation during an emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for the meeting; and
(c) designation of additional or substitute directors.
SECTION 2. Line of Succession. The Board of Directors, either before
or during such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or
agents of the Corporation are for any reason rendered incapable of discharging
their duties.
SECTION 3. Governing By-laws. All provisions of these By-laws
consistent with the emergency by-laws remain effective during the emergency.
The emergency by-laws are not effective after the emergency ends.
SECTION 4. Effect of Corporate Action. Corporate action taken in
good faith in accordance with the emergency by-laws;
(a) binds the Corporation; and
(b) may not be used to impose liability on a corporate director,
officer, employee or agent.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
AND
MARCH 31, 1999 (UNAUDITED)
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Txon International Development Corporation
Salt Lake City, Utah
Board Members:
We have audited the accompanying balance sheet of Txon International
Development Corporation (a development Stage Company) as of September 30,
1998, and the related statements of operations, changes in stockholders'
equity, and cash flows for the period January 29, 1998 (inception)to
September 30, 1998 then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Txon
International Development Corporation (a development Stage Company), as of
September 30, 1998 and the results of its operations, and its cash flows for
the period January 29, 1998 (inception) to September 30, 1998 then ended in
conformity with generally accepted accounting principles.
Respectfully submitted,
/S/ Robinson Hill & Company
Certified Public Accountants
Salt Lake City, Utah
January 16 , 1999
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
March 31, September 30,
1999 1998
<S>
ASSETS
<S> <C> <C>
Cash in bank $ 6,881 $ 83,468
Investments 6,000 6,000
Total Assets $ 12,881 $ 89,468
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 6,714 $ 12,251
Accrued expenses 19,500 6,031
Accounts payable - officers 65,615 16,200
Total Liabilities 91,829 34,482
Stockholders' Equity
Preferred stock (par value $0.001),
10,000,000 shares authorized, no
shares issued at September 30, 1998 -- --
Common stock to be issued 200,000 110,000
Common stock (par value $0.001),
50,000,000 shares authorized, no
shares issued at September 30, 1998 -- --
Capital in excess of par value -- --
Deficit accumulated during development
stage (278,948) (55,014)
Total Stockholders' Equity ( 78,948) 54,986
Total Liabilities and
Stockholders' Equity $ 12,881 $ 89,468
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited) Cumulative
For the Six For the Period Since
Months Ended Ended Inception of
March 31, September 30, Development
1999 1998 Stage
<S> <C> <C> <C>
Revenues $ - $ - $ -
Expenses
Selling, general and
administrative expenses 223,934 55,014 278,948
Operating Loss (223,934) (55,014) (278,948)
Other income (expense):
Interest expense - - -
Loss before taxes (223,934) (55,014) (278,948)
Income taxes - - -
Net Loss $(223,934) $(55,014) $(278,948)
Basic per Share Amounts
Net Income (Loss) $ (0.06) $ (0.06)
Weighted Average Shares
Outstanding 3,460,000 854,144
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock During
Preferred To be Issued Common Excess of Development
Stock Shares Amount Shares Amount Par value Stage
<S> <C> <C> <C> <C> <C> <C> <C>
Stock to be
issued in
exchange
for cash - 2,200,000 $110,000 - - - $ -
Net Loss - - - - - -
(55,014)
Balance
September 30,
1998 - 2,200,000 110,000 - - -
(55,014)
Stock to be
issued in
exchange for
cash - 1,800,000 90,000 - - - -
Net Loss - - - - - -
(223,934)
Balance March
31, 1999
(Unaudited) - 4,000,000 $200,000 - - -
$(278,948)
<FN>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited) Cumulative
For the Six For the Since
Months Ended Period Ended Inception
of
March 31, September 30,
Development
1999 1998 Stage
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Cash paid to suppliers and employees $166,587 $ 20,532 $187,119
Net cash used in
operating activities (166,587) (20,532) (187,119)
Cash Flows from Investing Activities:
Investment in deferred
development costs - ( 6,000) ( 6,000)
Net cash used by
investing activities - ( 6,000) ( 6,000)
Cash Flows from Financing Activities:
Proceeds from common stock
to be issued 90,000 110,000 200,000
Net cash provided by
financing activities 90,000 110,000 200,000
Net change in cash and cash equivalents (76,587) 83,468 6,881
Cash and cash equivalents at
beginning of year 83,468 - -
Cash and cash equivalents at end of year $6,881 $83,468 $ 6,881
Reconciliation of Net Loss to Net Cash
Used in Operating Activities:
Net loss $(223,934) (55,014) $(278,948)
Adjustments used to reconcile net
loss to Net cash used in operating
activities:
Increase in accounts payable (5,537) 12,251 6,714
Increase accrued expenses 13,469 6,031 19,500
Increase in accounts payable - officers 49,415 16,200 65,615
Net cash used in operating activities $(166,587) $(20,532) $(187,119)
<FN>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(References to March 31, 1999 are Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Txon International Development
Corporation is presented to assist in understanding the Company' financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
The unaudited financial statements as of March 31, 1998 and for the six
months then ended reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly state
the financial position and results of operations for the six months.
Operating results for interim periods are not necessarily indicative of the
results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the state of Nevada on
January 29, 1998 as Weston International Development Corporation. On July
28, 1998 the name of the Company was changed to Txon International
Development
Corporation. The primary business of the Company is the acquisition,
development, construction and operation of real properties. The Company is
in the development stage since January 29, 1998 (inception) and has not
commenced planned principal operations.
Nature of Business
The Company intends to acquire interests in various business
opportunities, which in the opinion of management will provide a profit to
the company.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with maturity of three months or
less
to be cash equivalents to the extent the funds are not being held for
investment purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Continued)
(References to March 31, 1999 are Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.
Net Loss per Common Share
There are no outstanding common stock equivalents for 1998 and are thus
not considered.
The reconciliations of the numerators and denominators of the basic EPS
computations are as follows:
For the Six Months Ended March 31, 1999 (Unaudited)
Number
of
Loss Shares Loss Per
(numerator) (denominator) Share
<S> <C> <C> <C>
Loss to Common Shareholders $(223,934) 3,460,000 $(0.06)
For the Period Ended September 30, 1998
Number
of
Loss Shares Loss Per
(numerator) (denominator) Share
<S> <C> <C> <C>
Loss to Common Shareholders $(55,014) 854,144 $(0.06)
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Continued)
(References to March 31, 1999 are Unaudited)
NOTE 2 - INCOME TAXES
The Company has accumulated tax losses estimated at $275,000 and
$53,000, as of March 31, 1999 and September 30, 1998 respectively, expiring
in 2013. Current tax laws limit the amount of loss available to be offset
against future taxable income when a substantial change in ownership occurs.
The amount of net operating loss carryforward available to offset future
taxable income will be limited if there is a substantial change in ownership.
NOTE 3 - DEVELOPMENT STAGE
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of March 31, 1999 and September 30, 1998 all activities of the
Company have been conducted by corporate officers from either their homes or
business offices. Currently, there are no outstanding debts owed by the
company for the use of these facilities and there are no commitments for
future use of the facilities.
NOTE 5 - RELATED PARTY TRANSACTIONS
During 1999 and 1998 the Company borrowed $46,000 and $40,000,
respectively from an officer and shareholder to pay administrative expenses.
The loan is payable on demand. As of March 31, 1999 and September 30, 1998,
the principal owing is $65,615 and $16,200, respectively.
During 1998 the Company paid $3,000 to an officer for rent of office
space.
