<PAGE> 1
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 12(g) OF THE SECURITIES ACT OF 1934
CORE SYSTEMS, INC.
------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 88-0390251
------ ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12618 BIRCHBROOK COURT, POWAY CA 92064
- -------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619)699-1750
- -------------
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
<S> <C>
- -------------------------------- --------------------------------------
- -------------------------------- --------------------------------------
</TABLE>
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
(TITLE OF CLASS)
1
<PAGE> 2
PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
General
Core Systems, Inc. is filing this Form 10-SB on a voluntary basis in order to
make Core Systems' financial information available to any interested parties or
investors and meet registration requirements for publicly traded securities on
the OTC Electronic Bulletin Board. The Company will file an information
statement with a sponsoring NASD Broker-Dealer for listing of its securities on
the OTC Bulletin Board upon SEC approval of the Company's Form 10-SB.
Business Development
Core Systems, Inc. was incorporated in Nevada on February 19, 1997 for the
purpose of developing cost efficient methods of pipe restoration in commercial
and residential buildings. In March 1999 the board of directors voted to seek
capital and began development of the Company's business plan. During March and
April 1999, the Company raised capital through the sale of common stock to
investors.
There have been no bankruptcy, receivership or similar proceedings.
In the ordinary course of business there have been no material
reclassifications, mergers, consolidations, or purchase or sale of a significant
amount of assets.
Business of the Issuer
The Company intends to implement its business plan to offer its pipe restoration
services to commercial and residential building owners in California in the
fourth quarter of 1999 or the first quarter of 2000. Management has identified
older buildings and residences in large cities such as Los Angeles and San
Francisco which are areas with a large number of multi-unit residential and
commercial buildings which were constructed prior to 1980. After the first two
years, the Company intends to market its pipe restoration services in the states
of Oregon and Washington. Its services specifically involve a process of
cleaning aged pipes in buildings that carry fresh and waste water, and then
applying commercially available epoxy coatings under high pressure to coat and
seal the pipes in order to double or triple the life of these pipes. Management
has extensive knowledge and experience in these plumbing areas and has
determined this type of pipe restoration is between forty and fifty percent less
costly than traditional construction processes of removing existing pipes and
installing new pipes in building frames and foundations.
Over the next twelve months the Company intends to take the following steps in
order to make its pipe restoration services available in California: during the
first six months raise capital of $800,000 to $1,000,000 through the sale of
securities, during the second six months open one office in Los Angeles with a
budget of $500,000. Management will use its knowledge and experience to hire six
plumbers and one manager, train all employees, and provide all required
2
<PAGE> 3
equipment, office furnishings, and marketing.
The Company has no new product or service planned or announced to the public.
The size and financial strengths of the Company's competitors are substantially
greater than those of the Company. Although Management has limited access to
in-depth information regarding the operations of the Company's competitors,
Management believes that the Company can effectively compete because of
Management's extensive knowledge of plumbing and pipe restoration services and
the cost efficiency of its technology. Management is not aware of any
significant barriers to the Company's entry into the pipe restoration market,
however, the Company at this time cannot ascertain its exact market share of
this market.
Pipe restoration systems are available through a limited number of pipe coating
suppliers such as Armour Coat Corporation. While Management has already had
several meetings with suppliers, the Company currently has no contracts with
suppliers and will not complete contracts with potential suppliers until such
time as the Company has sufficient funding. At this time the Company has no
formal contracts with any suppliers or developers/manufacturers and will not
initiate negotiations with any potential suppliers until such time as the
Company has sufficient funding per its business plan.
The Company intends to sell its services to a broad base of multi-unit and
commercial property owners and will not depend on any one or a few major
customers. When the Company has secured sufficient funding it will begin
marketing after the first six months of its business plan to these potential
customers through trade publications, newspapers, focused mailings and the
Internet on its own proposed Website.
The Company has no current or future business plans involving patents,
trademarks, franchises, concessions, royalty agreements, or labor contracts. The
Company will only use coating products in its contracts that are certified by
the manufacturer to be in full compliance with federal, state, and local
government clean water and health mandates.
The Company's business is not subject to material regulation by federal
governmental agencies. The Company will be required to meet all state and local
governmental building codes and standards. Management personnel are familiar
with all California state and local building codes, plumbing and health
department regulations, and contractor licensing requirements.
All research and development costs since inception have been immaterial in cost
and will not be passed on to customers.
The Company's only employees are its two officers who will devote as much time
as the board of directors determines is necessary to manage the affairs of the
Company. The officers intend to work on a full time basis when the Company is
able to provide proper remuneration as discussed in Item 6, "Executive
Compensation".
While Management believes its estimates of projected occurrences and events are
within the timetable of its business plan, there can be no guarantees or
assurances that the results anticipated will occur.
3
<PAGE> 4
Year 2000 Disclosure
Computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business activities.
The Company's Management has hands-on familiarity with all of the software that
will be utilized in its business plan and has confirmation from third party
suppliers that its current software is certified Year 2000 compatible for all of
its computing requirements. In addition, proposed suppliers of office equipment
for the Company's business plan have confirmed that embedded technology systems
such as micro processors in telephone systems and other non-computer devices
that will be purchased per the Company's business plan are already Year 2000
compatible.
While the Company has made what it believes to be adequate inquiries of the its
software suppliers as to Year 2000 compliance, there can be no guarantee that
the software suppliers will be adequately prepared for every possible contingent
Year 2000 software problem, which could have minor or material adverse effects
on the Company's results of operations. In a worst case scenario, the Company
may experience minor or material adverse cash flow effects depending on the
length of the worst case scenario. Based upon the extent of adverse cash flow,
Management may decide to reduce operations to match the adverse cash flow or
seek additional equity funding.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by December 31, 1999, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time.
ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Plan of Operation
The Company maintains a cash balance sufficient to sustain corporate operations
until such time as Management can raise the funding necessary to advance its
business plan. The losses through April 1999 were due to operational expenses.
Sales of the Company's equity securities have allowed the Company to maintain a
positive cash flow balance.
During the next twelve months, Management's business plan is for the Company to
take the following steps to offer its pipe restoration services in California:
raise capital of $800,000 to $1,000,000 through the sale of securities pursuant
to a private placement during the first six months, open one office in Los
Angeles County during the second six months with a budget of $500,000. The
Company intends to use the capital raised from the private placement to fund the
Company's business plan as cash flow from sales is estimated to begin near the
end of the twelve month period. The Company will face considerable risk in each
of its business plan steps, such as difficulty of renting adequate office
facilities within its budget, difficulty of hiring
4
<PAGE> 5
competent personnel within its budget, difficulty in completing necessary
personnel training within time limits, and a shortfall of funding due to the
Company's inability to raise capital in the equity securities market. If no
funding is received during the next twelve months, the Company will be forced to
rely on its existing cash in the bank and funds loaned by the directors and
officers. In such a restricted cash flow scenario, the Company would be unable
to complete its business plan steps, and would, instead, delay all cash
intensive activities. Without necessary cash flow, the Company may have to
reduce its activities until such time as necessary funds could be raised in the
equity securities market.
There are no current plans for additional product research and development.
There are no current plans to purchase or sell any significant amount of fixed
assets. The Company's business plan provides for an increase of seven employees
during the next twelve months.
Results of Operations
There were no revenues from sales for the period ended April 30, 1999. The
Company sustained a net loss of $46 for the period ended April 30, 1999. Losses
were primarily attributable to bank fees and expenditures for the operations of
the corporation.
Liquidity and Capital Resources
As of April 30, 1999, the Company had $7,273.85 cash on hand and in the bank.
The primary costs and operating expenses for the period ended April 30, 1999
were bank fees of $26 and management fees of $20.
ITEM 3
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 12618 Birchbrook Court,
Poway, CA 92064. The principal executive office and telephone number are
provided by Vic Barger, president of the corporation, at no cost. Management
considers the Company's current principal office space arrangement adequate for
current and short-term estimated growth.
ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - April 30,1999:
5
<PAGE> 6
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
- ----- ------- --------------- -----
<S> <C> <C> <C>
Common Vic Barger 330,000 (a) 10.8%
12618 Birchbrook Court
Poway, CA 92064
Common A. Tasso Tsalamandris 330,000 (b) 10.8%
1906 West King Edward Avenue
Vancouver, BC V6J 2W6
Total 660,000 21.6%
</TABLE>
(a) Mr. Barger received for services 10,000 shares of the Company's
common stock on March 11, 1999. 320,000 shares of the Company's
common stock were issued to him per a 32 for 1 stock split on April
30, 1999.
(b) Mr. Tsalamandris received for services 10,000 shares of the Company's
common stock on March 11, 1999. 320,000 shares of the Company's
common stock were issued to him per a 32 for 1 stock split on April
30, 1999.
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose terms will expire
in March 2000, or at such a time as their successors shall be elected and
qualified are as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected
- -------------- --- -------- ------------------
<S> <C> <C> <C>
Vic Barger 41 President, 3/11/99
12618 Birchbrook Court Secretary,
Poway, CA 92064 Director
A. Tasso Tsalamandris 35 Treasurer, 4/3/98
1906 King Edward Avenue Director
Vancouver BC V6J 2W6
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
6
<PAGE> 7
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities nor has any such person been the subject of
any Order of a State authority barring or suspending for more than sixty (60)
days, the right of such a person to be engaged in such activities or to be
associated with such activities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Vic Barger, President, Secretary & Director
1990 - Current President, CVB Plumbing, Heating & Air, Inc.
Company provides services and repair, replacement
and new installation. Developer of new services
and technology for plumbing, heating and air
conditioning trades. Serves all of San Diego
County.
A. Tasso Tsalamandris, Treasurer & Director
1996 - Current Independent Consultant providing business process
design and integrated systems implementation to
mechanical & plumbing business clients.
1989 - 1996 Senior Regulatory Analyst for BC Gas Utility.
Conducted specialized financial analysis for
various gas industry projects.
ITEM 6
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
7
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name & Year Salary Bonus Other Restricted Options LTIP All other
principle ($) ($) annual stock SARs Payouts compen-
position compen- awards ($) ($) sation ($)
sation ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
V Barger 1997 -0- -0- -0- -0- -0- -0- -0-
President 1998 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0- -0-
Tsalamandris 1997 -0- -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
The Directors and Principal Officers have worked with no remuneration until such
time as the Company receives sufficient revenues necessary to provide proper
salaries to all Officers and compensation for Directors' participation. The
Officers and the Board of Directors have the responsibility to determine the
timing of remuneration for key personnel based upon such factors as positive
cash flow to include stock sales, product sales, estimated cash expenditures,
accounts receivable, accounts payable, notes payable, and a cash balance of not
less than $15,000 at each month end. When positive cash flow reaches $15,000 at
each month end and appears sustainable the board of directors will readdress
compensation for key personnel and enact a plan at that time which will that
benefits the Company as a whole. At this time, management cannot accurately
estimate when sufficient revenues will occur to implement this compensation, or
the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.
ITEM 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Barger received for services 10,000 shares of the Company's common stock on
March 11, 1999. 320,000 shares of the Company's common stock were issued to him
per a 32 for 1 stock split on April 30, 1999.
Mr. Tsalamandris received for services 10,000 shares of the Company's common
stock on March 11, 1999. 320,000 shares of the Company's common stock were
issued to him per a 32 for 1 stock split on April 30, 1999.
8
<PAGE> 9
ITEM 8
DESCRIPTION OF SECURITIES
The Company's Certificate of Incorporation authorizes the issuance of 50,000,000
Shares of Common Stock, .001 par value per share. There is no preferred stock
authorized. 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
have cumulative voting rights. Holders of shares of Common Stock are entitled to
share ratably 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 shares of Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of Common Stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares. All of the
outstanding Common Stock is, and the shares offered by the Company pursuant to
this offering will be, when issued and delivered, fully paid and non-assessable.
The Securities and Exchange Commission has adopted Rule 15g-9 which established
the definition of a "penny stock", for the purposes relevant to the Company, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks are suitable for
that person and the person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form, (i) sets forth the basis on which the
broker or dealer made the suitability determination; and (ii) that the broker or
dealer received a signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
PART II
ITEM 1
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company plans to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers (NASD). The OTC
Electronic Bulletin Board is a
9
<PAGE> 10
network of security dealers who buy and sell stock. The dealers are connected by
a computer network which provides information on current "bids" and "asks" as
well as volume information.
As of the date of this filing, there is no public market for the Company's
securities. As of April 30, 1999, the Company had 70 shareholders of record. The
Company has paid no cash dividends. The Company has no outstanding options. The
Company has no plans to register any of its securities under the Securities Act
for sale by security holders. There is no public offering of equity and there is
no proposed public offering of equity.
ITEM 2
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
On March 11, 1999, the shareholders authorized the issuance of 10,000 shares of
common stock for services to each of the officers and directors of the Company
for a total of 20,000 Rule 144 shares. The Company relied upon Section 4(2) of
Securities Act of 1993, as amended (the "Act"). The Company issued the shares in
satisfaction of management services rendered to officers and directors, which
does not constitute a public offering.
From the period of approximately April 1, 1999 until April 30, 1999, the Company
offered and sold 73,000 shares at $0.10 per share to non-affiliated private
investors. The Company relied upon Section 4(2) of the Securities Act of 1993,
as amended (the "Act"). Each prospective investor was given a private placement
memorandum designed to disclose all material aspects of an investment in the
Company, including the business, management, offering details, risk factors and
financial statements. Each investor also completed a subscription confirmation
letter and private placement subscription agreement whereby the investors
certified that they were purchasing the shares for their own accounts, with
investment intent. Each investor was either accredited as defined, or were
"sophisticated" purchasers, having prior investment experience or education, and
having adequate and reasonable opportunity and access to corporate information.
This offering was not accompanied by general advertisement or general
solicitation and the shares were issued with a Rule 144 restrictive legend. The
Company relied on Rule 504 of Regulation D as the basis of exemption from
registration, as identified on Form D as filed with Commission on March 25,
1999. Blue Sky filings were made (where required) in each state that the shares
were offered and sold.
10
<PAGE> 11
On April 30, 1998, the Board of Directors authorized a forward stock split of 32
for 1 (33:1) resulting in a total of 3,069,000 shares of common stock issued and
outstanding.
ITEM 5
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The
By-Laws also allow for reimbursement of certain legal defenses.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
PART F/S
The audited financial statements of the Company and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
PART III
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A Financial Statements
1 Audited financial statements for the period ended April 30, 1999
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included
Exhibit 3(ii) Bylaws Included
Exhibit 4 Instruments defining the rights of holders None
Exhibit 7 Opinion re: liquidation preference None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material contracts None
Exhibit 11 Statement re: computation of per share earnings See Exhibit A
Exhibit 14 Material foreign patents None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included
Exhibit 24 Power of Attorney None
Exhibit 27 Financial Data Schedule Included
Exhibit 28 Reports furnished to State insurance agencies None
</TABLE>
11
<PAGE> 12
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Core Systems, Inc.
Date June 22, 1999 By /s/ VIC BARGER
------------------------ --------------------------------------
Vic Barger, President, Sec. & Director
Date June 22, 1999 By /s/ A.T. TSALAMANDRIS
------------------------ --------------------------------------
A.T. Tsalamandris, Treas. & Director
12
<PAGE> 13
EXHIBIT A
13
<PAGE> 14
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
APRIL 30, 1999
SEPTEMBER 30, 1998
SEPTEMBER 30, 1997
<PAGE> 15
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
------
<S> <C>
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-11
</TABLE>
<PAGE> 16
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors May 27, 1999
Core Systems, Inc.
San Diego, California
I have audited the accompanying Balance Sheets of Core Systems, Inc.,
(formerly Creative Systems, Inc.), (A Development Stage Company), as of April
30, 1999, September 30, 1998, and September 30, 1997, and the related statements
of operations, stockholders' equity and cash flows for the period October 1,
1998 to April 30th, 1999, and the year ended September 30, 1998, and the period
February 19, 1997 (inception) to September 30, 1997. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Core Systems, Inc.,
(formerly Creative Systems, Inc.), (A Development Stage Company), as of April
30, 1999, September 30, 1998, and September 30, 1997, and the results of its
operations and cash flows for the period October 1, 1998 to April 30th, 1999,
and the year ended September 30, 1998, and the period February 19, 1997
(inception) to September 30, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ BARRY L. FRIEDMAN
- ---------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE> 17
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
APRIL SEPTEMBER SEPTEMBER
30, 1999 30, 1998 30, 1997
-------- --------- ---------
<S> <C> <C> <C>
CURRENT ASSETS:
CASH $7,274 $ 0 $ 0
------ ------ ------
TOTAL CURRENT ASSETS: $7,274 $ 0 $ 0
------ ------ ------
OTHER ASSETS: $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS: $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $7,274 $ 0 $ 0
------ ------ ------
</TABLE>
See accompanying notes to financial statements
- 2 -
<PAGE> 18
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
APRIL SEPTEMBER SEPTEMBER
30, 1999 30, 1998 30, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES: $ 0 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT LIABILITIES: $ 0 $ 0 $ 0
-------- -------- --------
STOCKHOLDERS' EQUITY: (Note #4)
Common stock
NO PAR VALUE
Authorized 25,000 shares
Issued and outstanding at
September 30, 1997 -
None $ 0
September 30, 1998 -
None $ 0
Common stock
Par value $0.001
Authorized 50,000,000 shares
Issued and outstanding at
April 30, 1999 -
3,069,000 shares: $ 3,069
Additional Paid-In Capital +4,251 0 0
Deficit accumulated during
Development stage: -46 0 0
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY: $ 7,274 $ 0 $ 0
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $ 7,274 $ 0 $ 0
-------- -------- --------
</TABLE>
See accompanying notes to financial statements
- 3 -
<PAGE> 19
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Oct. 1, Year Feb 19 Feb 19,1997
1998 to Ended 1997 to (Inception)
Apr. 30, Sep. 30, Sep. 30, to Apr. 30,
1999 1998 1997 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ----------
EXPENSES:
General, Selling and
Administrative $ 46 $ 0 $ 0 $ 46
---------- ---------- ---------- ----------
TOTAL EXPENSES: $ 46 $ 0 $ 0 $ 46
---------- ---------- ---------- ----------
NET PROFIT/LOSS (-): $ -46 $ 0 $ 0 $ -46
---------- ---------- ---------- ----------
Net Profit/Loss(-)
per weighted share
(Note 1): $ NIL $ NIL $ NIL $ NIL
---------- ---------- ---------- ----------
Weighted average
Number of common
shares outstanding: 3,069,000 3,069,000 3,069,000 3,069,000
---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements
- 4 -
<PAGE> 20
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Balance,
September 30, 1997 0 $ 0 $ 0 $ 0
Net loss year ended
September 30, 1997 0
--------- --------- --------- ---------
Balance,
September 30, 1998 0 $ 0 $ 0 $ 0
March 11, 1999
Stock issued for
Services 20,000 20
March 25, 1999
Changed Par Value
From no par value to
$0.001 0 0
April 30, 1999
Issued for Cash 73,000 73 7,227
April 30, 1998
Forward Stock Split
33:1 2,976,000 +2,976 -2,976
Net Loss
October 1, 1998 to
April 30, 1999 -46
--------- --------- --------- ---------
Balance,
April 30, 1999 3,069,000 $ 3,069 $ +4,251 $ -46
--------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements
- 5 -
<PAGE> 21
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Oct. 1, Year Feb. 19 Feb.19,1997
1998 to Ended 1997 to (Inception)
Apr. 30, Sep. 30, Sep. 30, to Apr. 30,
1999 1998 1997 1999
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $ -46 $ 0 $ 0 $ -46
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities:
Issue Common Stock
For Services +20 0 0 +20
Changes in assets and
Liabilities: 0 0 0 0
------- ------- ------- -------
NET CASH USED IN
OPERATING ACTIVITIES: $ -26 $ 0 $ 0 $ -26
CASH FLOWS FROM
INVESTING ACTIVITIES: 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES:
Issuance of Common
Stock for Cash 7,300 0 0 +7,300
------- ------- ------- -------
Net Increase (decrease) $+7,274 $ 0 $ 0 $+7,274
Cash,
Beginning of period: 0 0 0 0
------- ------- ------- -------
Cash, End of Period: $ 7,274 $ 0 $ 0 $ 7,274
------- ------- ------- -------
</TABLE>
See accompanying notes to financial statements
- 6 -
<PAGE> 22
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999, SEPTEMBER 30, 1998, and SEPTEMBER 30, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized FEBRUARY 19, 1997, under the laws of the State
of Nevada as Creative Systems, Inc. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of April 30, 1999.
- 7 -
<PAGE> 23
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1999, SEPTEMBER 30, 1998, and SEPTEMBER 30, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of April 30th, 1999, the Company had no dilative common
stock equivalents such as stock options.
Year End
The Company has selected September 30th as its year-end.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash
transaction is to issue the equivalent amount of stock equal to
the fair market value of the assets or services received.
- 8 -
<PAGE> 24
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1999, SEPTEMBER 30, 1998, and SEPTEMBER 30, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
Computer programs that have time sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing
disruption of normal business activities.
The company's potential software suppliers have verified that
they will provide only certified "Year 2000" compatible software
for all of the company's computing requirements. Because the
company's products and services are sold to the general public
with no major customers, the company believes that the "Year
2000" issue will not pose significant operational problems and
will not materially affect future financial results.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended April 30,
1999, due to the net loss and no state income tax in Nevada, the state
of the Company's domicile and operations. The Company's total deferred
tax asset as of September 30, 1998 is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 0
Valuation allowance $ 0
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward is not applicable.
- 9 -
<PAGE> 25
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1999, SEPTEMBER 30, 1998, and SEPTEMBER 30, 1997
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 50,000,000
shares with a par value $.001 per share.
Preferred Stock
Core Systems, Inc. has no preferred stock.
On March 11, 1999, the Company issued 20,000 shares of its $0.001 par
value common stock in consideration of $20.00 to its two directors,
10,000 common shares to each.
On March 25, 1999, the State of Nevada approved the Company's restated
Articles of Incorporation, which changed the par value from no par value
to $0.001, and increased its Authorized Common Stock from 25,000 shares
to 50,000,000 shares.
On April 30, 1999, the Company issued 73,000 shares of its $0.001 par
value common stock for cash of $7,300.00.
On April 30, 1999, the Company approved a forward stock split on the
basis of 33:1, thus increasing the common stock from 93,000 Common
Shares to 3,069,000 Common shares.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. The stockholders/officers and or directors
have committed to advancing the operating costs of the Company interest
free.
- 10 -
<PAGE> 26
CORE SYSTEMS, INC.
(Formerly Creative Systems, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1999, SEPTEMBER 30, 1998, and SEPTEMBER 30, 1997
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company
are involved in other business activities and may in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
share of common stock.
- 11 -
<PAGE> 1
EXHIBIT 3(i)
SECRETARY OF STATE
[THE GREAT SEAL OF THE STATE OF NEVADA]
STATE OF NEVADA
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that CREATIVE SYSTEMS, INC. did on FEBRUARY 19, 1997 file in this
office the original Articles of Incorporation; that said Articles are now on
file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed the Great Seal of State,
at my office, in Carson city, Nevada, on
FEBRUARY 20, 1997.
/s/ DEAN HELLER
----------------------------------------
Secretary of State
[THE GREAT SEAL OF
THE STATE OF NEVADA]
By /s/ Beverly J. Davenport
----------------------------------------
Certification Clerk
<PAGE> 2
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 19 1997
NO. C3328-97
/s/ DEAN HELLER
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
CREATIVE SYSTEMS, INC.
a Nevada Corporation
FIRST. The name of the corporation is:
CREATIVE SYSTEMS, INC.
SECOND. The resident agent for this corporation shall be:
SAGE INTERNATIONAL INC.
The address of said agent, and the principal or statutory address of this
corporation in the State of Nevada, shall be 1135 TERMINAL WAY, SUITE 209,
RENO, NEVADA 89502, located in WASHOE COUNTY, State of Nevada. This corporation
may maintain an office, or offices, in such other place within or without the
State of Nevada as may be from time to time designated by the Board of
Directors, or by the By-Laws of said corporation, and that this corporation may
conduct all corporation business of every kind and nature, including the
holding of all meetings of Directors and Stockholders, outside the State of
Nevada as well as within the State of Nevada.
THIRD. The objects for which this corporation is formed are as follows: to
engage in any lawful activity.
FOURTH. That the total number of voting common stock authorized that may
be issued by the corporation is TWENTY FIVE THOUSAND (25,000) shares of stock
with NO PAR VALUE, and no other class of stock shall be authorized. Said shares
may be issued by the corporation from time to time for such considerations as
may be fixed from time to time by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the bylaws of this
corporation, providing that the number of directors shall not be reduced to
less than one (1). The name and post office address of the first Board of
Directors shall be one (1) in number and listed as follows:
<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
- ---- -------------------
<S> <C>
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
</TABLE>
1 of 3 pages.
<PAGE> 3
SIXTH. After the amount of the subscription price, the purchase price, of
the par value of the stock of any class or series is paid into the corporation,
owners or holders of shares of any stock in the corporation may never be
assessed to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
- ---- -------------------
<S> <C>
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
</TABLE>
EIGHTH. The corporation is to have a perpetual existence.
NINTH. No director or officer of the corporation shall be personally
liable to the corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer or for any act or omission of any such
director or officer; however, the foregoing provision shall not eliminate or
limit the liability of a director or officer for (a) acts or omission which
involve intentional misconduct, fraud or a knowing violation of law; or (b) the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Any repeal or modification of this Article by the stockholders of
this corporation shall be prospective only and shall not adversely affect any
limitation on the personal liability of a director or officer of the
corporation for acts or omissions prior to such repeal or modification.
TENTH. No shareholder shall be entitled as a matter of right to subscribe
for or receive additional shares of any class of stock of the corporation,
whether now or hereafter authorized, or any bonds, debentures or securities
convertible into stock, but such additional shares of stock or other securities
convertible into stock may be issued or disposed of by the Board of Directors
to such persons and on such terms as in its discretion it shall deem advisable.
ELEVENTH. This corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation,
and all rights conferred upon Stockholders herein are granted subject to this
reservation.
2 of 3 pages.
<PAGE> 4
I, THE UNDERSIGNED, being the Incorporator hereinabove named for the
purpose of forming a corporation pursuant to the General Corporation Laws of
the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying the facts herein stated are true, and accordingly have
hereunto set my hand FEBRUARY 18, 1997.
/s/ CHERI S. HILL
- ----------------------------
CHERI S. HILL, Incorporated
STATE OF NEVADA
COUNTY OF WASHOE
On FEBRUARY 18, 1997, before me, the undersigned, a Notary Public in and for
said County and State, personally appeared CHERI S. HILL, personally known to
me to be the person whose name is subscribed to the foregoing document and
acknowledged to me that she executed the same.
/s/ V.R. SWEET [SEAL] V.R. SWEET
- --------------------- Notary Public - State of Nevada
Notary Public Appointment Recorded in Washoe County
MY APPOINTMENT EXPIRES AUG. 1, 1997
CERTIFICATE OF ACCEPTANCE OF
APPOINTMENT BY RESIDENT AGENT
SAGE INTERNATIONAL, INC., hereby accepts appointment as Resident Agent of
CREATIVE SYSTEMS, INC. in accordance with NRS 78.090.
SAGE INTERNATIONAL, INC.
By: /s/ CHERI S. HILL
------------------------------ Date: FEBRUARY 18, 1997
CHERI S. HILL, Senior V.P.
3 of 3 pages.
<PAGE> 5
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(BEFORE PAYMENT OF CAPITAL OR ISSUANCE OF STOCK)
CHERI S. HILL and
- --------------------------- -----------------------------------
Name of Incorporator Name of Incorporator
certify that:
1. They constitute at two-thirds of the original incorporators of
CREATIVE SYSTEMS, INC., a Nevada corporation.
2. The original Articles were filed in the Office of the Secretary of State
on FEBRUARY 19, 1997.
3. As of the date of this certificate, no stock of the corporation has been
issued.
4. They hereby adopt the following amendments to the articles of
incorporation of this corporation:
Article FIRST is amended to read as follows:
The name of the corporation: CORE SYSTEMS, INC.
FILED
IN THE OFFICE OF THE /s/ CHERI S. HILL
SECRETARY OF STATE OF THE ------------------------------------
STATE OF NEVADA Signature
MAY 26 1998
NO. C3328-97
/s/ DEAN HELLER /s/
DEAN HELLER, SECRETARY OF STATE ------------------------------------
Signature
State of NEVADA
County of WASHOE
On MAY 20, 1998, personally appeared before me, a Notary Public
CHERI S. HILL, who acknowledged that SHE executed the above instrument.
Signature /s/ V. R. Sweet V. R. SWEET
------------------------ Notary Public - State of Nevada
[SEAL] Appointment Recorded in Washoe County
No: 93-4205-2 - EXPIRES AUG. 1, 2001
<PAGE> 6
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAR 25 1999
NO. C3328-97
/s/ DEAN HELLER
DEAN HELLER, SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(AFTER ISSUANCE OF STOCK)
Core Systems, Inc.
---------------------------------------------------
Name of Corporation
We the undersigned Tasso Tsalamandris and
----------------------------------------------------
President or Vice President
Tasso Tsalamandris of Core Systems, Inc.
- --------------------------------- ------------------------------------------
Secretary or Assistant Secretary Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on the 1st day of March, 1999, adopted a resolution to amend the original
articles as follows:
Article Fourth is hereby amended to read as follows:
That the total number of voting common stock authorized that may be
issued by the corporation is FIFTY MILLION (50,000,000) shares of
stock with .001 PAR VALUE, and no other class of stock shall be
authorized. Said shares may be issued by the corporation from time to
time for such considerations as may be fixed from time to time by the
Board of Directors.
The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 20,000; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
[Signature Illegible]
--------------------------------
President or Vice President
[Signature Illegible]
--------------------------------
Secretary or Assistant Secretary
State of NEVADA
------------------
County of WASHOE
-----------------
On MARCH 11, 1999 , personally appeared before me, a Notary Public
------------------
TASSO TSALAMANDRIS , who acknowledged that
- ---------------------------------------------------------
he executed the above instrument.
Signature /s/ V.R. SWEET [SEAL] V.R. SWEET
------------------- Notary Public - State of Nevada
Appointment recorded in Washoe County
No. 93-4205-2 EXPIRES AUG. 1, 2001
<PAGE> 1
EXHIBIT 3(ii)
BY-LAWS
OF
CREATIVE SYSTEMS, INC.
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State designated
in the Articles of Incorporation. The Corporation may also maintain offices at
such other places within or without the United States as the Board of Directors
may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the shareholders of the Corporation shall be held within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or the
Secretary at the written request of the holders of ten per cent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise required
under the provisions of the Business Corporation Law.
Section 3 - Place of Meetings:
AR meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waivers of notice of such meetings.
By-Laws - 1
<PAGE> 2
Section 4 - Notice of Meetings:
(a) Except as otherwise provided by Statute, written notice of each meeting of
shareholders, whether annual or special, stating the time when and place where
it is to be held, shall be served either personally or by mail, not less than
ten or more than fifty days before the meeting, upon each shareholder of record
entitled to vote at such meeting, and to any other shareholder to whom the
giving of notice may be required by law, Notice of a special meeting shall also
state the purpose or purposes for which the meeting is called, and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle shareholders to receive payment for their shares
pursuant to the Statute, the notice of such meeting shall include a statement of
that purpose and to that effect. If mailed, such notice shall be directed to
each such shareholder at his address, as it appears on the records of the
shareholders of the Corporation, unless he shall have previously filed with the
Secretary of the Corporation a written request that notices intended for him be
mailed to some other address, in which case, it shall be mailed to the address
designated in such request.
(b) Notice of any meeting need not be given to any person who may become a
shareholder of record after the mailing of such notice and prior to the meeting,
or to any shareholder who attends such meeting, in person or by proxy, or to any
shareholder who, in person or by proxy, submits a signed waiver of notice either
before or after such meeting. Notice of any adjourned meeting of shareholders
need not be given, unless otherwise required by statute.
Section 5 - Quorum:
(a) Except as otherwise provided herein, or by statute, or in the Certificate of
Incorporation (such Certificate and any amendments thereof being hereinafter
collectively referred to as the "Certificate of Incorporation"), at all meetings
of shareholders of the Corporation, the presence at the commencement of such
meetings in person or by proxy of shareholders holding of record a majority of
the total number of shares of the Corporation then issued and outstanding and
entitled to vote, shall be necessary and sufficient to constitute a quorum for
the transaction of any business. The withdrawal of any shareholder after the
commencement of a meeting shall have no effect on the existence of a quorum,
after a quorum has been established at such meeting.
By-Laws - 2
<PAGE> 3
(b) Despite the absence of a quorum at any annual or special meeting of
shareholders, the shareholders, by a majority of the votes cast by the holders
of shares entitled to vote thereon, may adjourn the meeting. At any such
adjourned meeting at which a quorum is present, any business may be transacted
at the meeting as originally called if a quorum had been present.
Section 6 - Voting:
(a) Except as otherwise provided by statute or by the Certificate of
Incorporation, any corporate action, other than the election of directors, to be
taken by vote of the shareholders, shall be authorized by a majority of votes
cast at a meeting of shareholders by the holders of shares entitled to vote
thereon.
(b) Except as otherwise provided by statute or by the Certificate of
Incorporation, at each meeting of shareholders, each holder of record of stock
of the Corporation entitled to vote thereat, shall be entitled to one vote for
each share of stock registered in his name on the books of the Corporation.
(c) Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so by proxy; provided, however, that the instrument authorizing
such proxy to act shall have been executed in writing by the shareholder
himself, or by his attorney-in-fact thereunto duly, authorized in writing. No
proxy shall be valid after the expiration of eleven months from the date of its
execution, unless the persons executing it shall have specified therein the
length of time it is to continue in force. Such instrument shall be exhibited to
the Secretary at the meeting and shall be filed with the records of the
Corporation.
(d) Any resolution in writing, signed by all of the shareholders entitled to
vote thereon, shall be and constitute action by such shareholders to the effect
therein expressed, with the same force and effect as if the same had been duly
passed by unanimous vote at a duly called meeting of shareholders and such
resolution so signed shall be inserted in the Minute Book of the Corporation
under its proper date.
By-Laws - 3
<PAGE> 4
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Election and Term of Office:
(a) The number of the directors may from time to time be increased or decreased,
in the manner provided in these bylaws, providing that the number of directors
shall not be reduced to less than (1) person.
(b) Except as may otherwise be provided herein or in the Certificate of
Incorporation, the members of the Board of Directors of the corporation, who
need not be shareholders, shall be elected by a majority of the votes cast at a
meeting of shareholders, by the holders of shares, present in person or by
proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the shareholders
next succeeding his election, and until his successor is elected and qualified,
or until his prior death, resignation or removal.
Section 2 - Duties and Powers:
The Board of Directors shall be responsible for the control and management of
the affairs, property and interests of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation or
by statute expressly conferred upon or reserved to the shareholders,
Section 3 - Annual and Regular Meetings; Notice:
(a) A regular annual meeting of the Board of Directors shall be held immediately
following the annual meeting of the shareholders, at the place of such annual
meeting of shareholders,
(b) The Board of Directors, from time to time, may provide by resolution for the
holding of other regular meetings of the Board of Directors, and may fix the
time and place thereof
By-Laws - 4
<PAGE> 5
(c) Notice of any regular meeting of the Board of Directors shall not be
required to be given and, if given, need not specify the purpose of the meeting;
provided, however, that in case the Board of Directors shall fix or change the
time or place of any regular meeting, notice of such action shall be given to
each director who shall not have been present at the meeting at which such
action was taken within the time limited, and in the manner set forth in
paragraph (b) Section 4 of this Article III, with respect to special meetings,
unless such notice shall be waived in the manner set forth in paragraph (c) of
such Section 4.
Section 4 - Special Meetings; Notice:
(a) Special meetings of the Board of Directors shall be held whenever called by
the President or by one of the directors, at such time and place as may be
specified in the respective notices or waivers of notice thereof
(b) Except as otherwise required by statute, notice of special meetings shall be
mailed directly to each director, addressed to him at his residence or usual
place of business, at least two (2) days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegram, radio or cable,
or shall be delivered to him personally or given to him orally, not later than
the day before the day on which the meeting is to be held. A notice, or waiver
of notice, except as required by Section 8 of this Article III, need not specify
the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5 - Chairman:
At all meetings of the Board of Directors, the Chairman of the Board, if any and
if present, shall preside. If there shall be no Chairman, or he shall be absent,
then the President shall preside, and in his absence, a Chairman chosen by the
Directors shall preside.
By-Laws - 5
<PAGE> 6
Section 6 - Quorum and Adjournments:
(a) At all meetings of the Board of Directors, the presence of a majority of the
entire Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, except as otherwise provided by law, by the Certificate
of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place of any regular or
special meeting, although less than a quorum, may adjourn the same from time to
time without notice, until a quorum shall be present.
Section 7 - Manner of Acting:
(a) At all meetings of the Board of Directors, each director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws, the action of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors. Any action authorized, in writing, by all of the directors
entitled to vote thereon and filed with the minutes of the corporation shall be
the act of the Board of Directors with the same force and effect as if the same
had been passed by unanimous vote at a duly called meeting of the Board.
Section 8 - Vacancies:
Any vacancy in the Board of Directors occurring by reason of an increase in the
number of directors, or by reason of the death, resignation, disqualification,
removal (unless a vacancy created by the removal of a director by the
shareholders shall be filled by the shareholders at the meeting at which the
removal was effected) or inability to act of any director, or otherwise, shall
be filled for the unexpired portion of the term by a majority vote of the
remaining directors, though less than a quorum, at any regular meeting or
special meeting of the Board of Directors called for that purpose.
Section 9 - Resignation:
Any director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof by the Board of Directors or such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
By-Laws - 6
<PAGE> 7
Section 10 - Removal:
Any director may be removed with or without cause at any time by the affirmative
vote of shareholders holding of record in the aggregate at least a majority of
the outstanding shares of the Corporation at a special meeting of the
shareholders called for that purpose, and may be removed for cause by action of
the Board.
Section 11 - Salary:
No stated salary shall be paid to directors, as such, for their services, but by
resolution of the Board of Directors a fixed sum and expenses of attendance, if
any, may be allowed for attendance at each regular or special meeting of the
Board; provided, however, that nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
Section 12 - Contracts:
(a) No contract or other transaction between this Corporation and any other
Corporation shall be impaired, affected or invalidated, nor shall any director
be liable in any way by reason of the fact that any one or more of the directors
of this Corporation is or are interested in, or is a director or officer, or are
directors or officers of such other Corporation, provided that such facts are
disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or may be
interested in any contract or transaction of this Corporation, and no director
shall be liable in any way by reason of such interest, provided that the fact of
such interest be disclosed or made known to the Board of Directors, and provided
that the Board of Directors shall authorize, approve or ratify such contract or
transaction by the vote (not counting the vote of any such director) of a
majority of a quorum, notwithstanding the presence of any such director at the
meeting at which such action is taken. Such director or directors may be counted
in determining the presence of a quorum at such meeting. This Section shall not
be construed to impair or invalidate or in any way affect any contract or other
transaction which would otherwise be valid under the law (common, statutory or
otherwise) applicable thereto.
By-Laws - 7
<PAGE> 8
Section 13 - Committees.
The Board of Directors, by resolution adopted by a majority of the entire Board,
may from time to time designate from among its members an executive committee
and such other committees, and alternate members thereof, as they deem
desirable, each consisting of three or more members, with such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a Secretary, a
Treasurer, and such other officers, including a Chairman of the Board of
Directors, and one or more Vice Presidents, as the Board of Directors may from
time to time deem advisable. Any officer other than the Chairman of the Board of
Directors may be, but is not required to be, a director of the Corporation. Any
two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such resignation
shall take effect upon receipt thereof by the Board of Directors or by such
officer, 2nd the acceptance of such resignation shall not be necessary to make
it effective.
By-Laws - 8
<PAGE> 9
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these by-laws, or may from time to time be specifically conferred or imposed by
the Board of Directors. The President shall be the chief executive officer of
the Corporation.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or agent
of the Corporation shall execute to the Corporation a bond in such sum, and with
such surety or sureties as the Board of Directors may direct, conditioned upon
the faithful performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all property, funds or
securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other corporation, any
right or power of the Corporation as such shareholder (including the attendance,
acting and voting at shareholders' meetings and execution of waivers, consents,
proxies or other instruments) may be exercised on behalf of the Corporation by
the President, any Vice President, or such other person as the Board of
Directors may authorize.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing shares of the Corporation shall be in such
form as shall be adopted by the Board of Directors, and shall be numbered and
registered in
By-Laws - 9
<PAGE> 10
the order issued. They shall bear the holder's name and the number of shares,
and shall be signed by (i) the Chairman of the Board or the President or a Vice
President, and (ii) the Secretary or Treasurer, or any Assistant Secretary or
Assistant Treasurer, and shall bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount of
consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the holder
to exercise voting rights, receive dividends and participate in liquidating
distributions, in proportion to the fractional holdings; or it may authorize the
payment in cash of the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined; or it may authorize the
issuance, subject to such conditions as may be permitted by law, of scrip in
registered or bearer form over the signature of an officer or agent of the
Corporation, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a shareholder, except as therein
provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the certificate
representing the same. The Corporation may issue a new certificate in the place
of any certificate theretofore issued by it, alleged to have been lost or
destroyed. On production of such evidence of loss or destruction as the Board of
Directors in its discretion may require, the Board of Directors may, in its
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond in such sum as the Board may
direct, and with such surety or sureties as may be satisfactory to the Board, to
indemnify the Corporation against any claims, loss, liability or damage it may
suffer on account of the issuance of the new certificate. A new certificate may
be issued without requiring any such evidence or bond when, in the judgment of
the Board of Directors, it is proper so to do.
By-Laws - 10
<PAGE> 11
Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records of
the Corporation only by the holder of record thereof, in person or by his duly
authorized attorney, upon surrender for cancellation of the certificate or
certificates representing such shares, with an assignment or power of transfer
endorsed thereon or delivered therewith, duly executed, with such proof of the
authenticity of the signature and of authority to transfer and of payment of
transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and, accordingly, shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding fifty days, nor less than ten days, as
the record date for the determination of shareholders entitled to receive notice
of, or to vote at, any meeting of shareholders, or to consent to any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividends, or allotment of any rights, or for the purpose
of any other action. If no record date is fixed, the record date for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if no notice is given, the day on which the
meeting is held; the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the resolution of
the directors relating thereto is adopted. When a determination of shareholders
of record entitled to notice of or to vote at any meeting of shareholders has
been made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
By-Laws - 11
<PAGE> 12
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors from
time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from time
to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All by-laws of the Corporation shall be subject to alteration or repeal, and new
by-laws may be made, by the affirmative vote of shareholders holding of record
in the aggregate at least a majority of the outstanding shares entitled to vote
in the election of directors at any annual or special meeting of shareholders,
provided that the notice or waiver of notice of such meeting shall have
summarized or set forth in full therein, the proposed amendment.
Section 2 - By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, by-laws of the Corporation; provided, however, that the
shareholders entitled to vote with respect thereto as in this Article IX
above-provided may alter, amend or repeal by-laws made by the Board of
Directors, except that the Board of Directors shall have no power to change the
quorum for meetings of shareholders or of the Board of Directors, or to change
any provisions of the by-laws with respect to the removal of directors or the
filling of vacancies in the Board resulting from the removal by the
shareholders. If any by-law regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set forth
in the notice of the next meeting of shareholders for the election of directors.
the by-law so adopted, amended or repealed, together with a concise statement of
the changes made.
By-Laws - 12
<PAGE> 13
ARTICLE X - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of the
fact that he, his testator or intestate representative is or was a director,
officer or employee of the Corporation, or of any Corporation in which he served
as such at the request of the Corporation, shall be indemnified by the
Corporation against the reasonable expenses, including attorney's fees, actually
and necessarily incurred by him in connection with the defense of such action,
suit or proceedings, or in connection with any appeal therein, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer, director
or employee is liable for negligence or misconduct in the performance of his
duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any
other rights to which any officer or director or employee may be entitled apart
from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled
shall be fixed by the Board of Directors, except that in any case where there is
no disinterested majority of the Board available, the amount shall be fixed by
arbitration pursuant to the then existing rules of the American Arbitration
Association.
By-Laws - 13
<PAGE> 1
EXHIBIT 23
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
To Whom It May Concern: May 27, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of May 27th, 1999, on the Financial
Statements of CORE SYSTEMS, INC., as of April 30, 1999, in any filings that are
necessary now or in the near future with the U.S. Securities and Exchange
Commission.
Very truly yours,
/s/ BARRY L. FRIEDMAN
- ---------------------------
Barry L. Friedman
Certified Public Accountant
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR 7 MONTHS ENDING APRIL 30, 1999, AUDITED FINANCIAL
STATEMENTS FOR YEAR ENDING SEPTEMBER 30, 1998, AUDITED FINANCIAL STATEMENTS FOR
PERIOD ENDING SEPTEMBER 30, 1997 AND ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO SUCH CORE SYSTEMS, INC 10-SB.
</LEGEND>
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<FISCAL-YEAR-END> SEP-30-1999 SEP-30-1998 SEP-30-1997
<PERIOD-START> OCT-01-1998 OCT-01-1997 FEB-19-1997
<PERIOD-END> APR-30-1999 SEP-30-1998 SEP-30-1997
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