UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
2
REMOTE UTILITIES NETWORK, INC.
(Exact name of registrant as specified in its charter)
Nevada 86-088251
(State of organization) (I.R.S. Employer Identification No.)
995 S. Virginia St., Suite 116, Reno, NV 89502
(Address of principal executive offices)
Registrant's telephone number, including area code (775) 322-7552
Registrant's Agent: Daniel G. Chapman, Esq., 2080 E. Flamingo
Road, Suite 112, Las Vegas, NV 89119
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
Preferred Stock, $0.001 par value per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
Remote Utilities Network, Inc. (the "Company") is a Nevada
corporation formed on January 22, 1996. The Company was formed
under the name Alexander-West, Inc. On March 15, 1999, the
Company changed its name to Remote Utilities Network, Inc., in
order to assemble the capital, management resources, and
marketing rights required to establish itself as a supplier of
security systems for wireless mobile asset surveillance. Its
principal place of business is located at 995 S. Virginia St.,
Suite 116, Reno, NV 89502.
On January 22, 1996, the Company issued 1,600,000 shares of its
stock to Robin Gardner, the initial director and sole officer of
the Company. On January 22, 1996, the Company also issued 100,000
shares each to the four remaining founders of the Company.
Subsequently, the initial director and sole officer of the
Company transferred 500 shares each to a total of 200
individuals. All transfers were exempt from the registration
requirements of Section 5 of the Securities Exchange Act of 1934,
as amended, (the "Act") as provided in Section 4(2) of that Act.
On February 22, 1999, the Company issued a total of 4,500,000
shares of its stock to a total of 15 individuals for a total
consideration of $45,000.00 cash pursuant to Rule 504 of
Regulation D.
On June 30, 1999, the Company entered into a licensing agreement
with Autoeye Inc. for use of its technology, trademarks, trade
names, insignia and other indicia known as Autoeye Multi Vehicle
Surveillance System (AMVSS). In consideration of the license, the
Company issued 7,200,000 shares of its stock to Autoeye Inc.
Under the terms of the agreement, the license is granted for the
operation of the business of manufacturing and marketing the
AMVSS on a worldwide basis to last for a period of ten years. The
Company also has an option to renew the Trade Mark License
Agreement for an additional ten years at no further cost to the
Company.
During the first quarter of 2000, the Company announced that it
was nearing the completion of a letter of intent with a major
telecommunications company. This major company will be
responsible for assuming the surveillance function and initiating
the dispatch of a predetermined security agent of all the Autoeye
systems installed and operational in Canada and the US. In
addition, the major company will be responsible for the
overseeing, of maintenance and monitoring of software/hardware in
regards to the Autoeye project. Negotiations are ongoing with the
major company in regards to it extending use of its National
sales team to assist the Company in marketing the Autoeye product
to their clientele base, in the interim, direct sales will be
conducted by the Company in-house.
The Company has a web-site that can be visited at
www.runcorp.com.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Business of Issuer
The Company provides a premium wireless multi-vehicle
surveillance/inventory management system in the security
industry. The Company's Autoeye Multi-Vehicle Surveillance
System is the first of its kind to use Radio Frequency (RF)
technology, in combination with specialized hardware and software
to create a comprehensive network between every vehicle equipped
with a Multi-Vehicle Surveillance System sensor. This allows for
controlled asset management. The central control computer not
only handles any alarm condition, more importantly it constantly
monitors the entire network of sensors and Radio Frequency (RF)
repeaters to ensure the integrity of the total system, at all
times.
The Company is a supplier of innovative security systems for
wireless multi-vehicle surveillance of motor vehicles, one of the
fastest growing concerns in the security of multi-vehicle parking
lots, such as the automobile dealer industry. The Company will
offer multi-vehicle security systems, which consists of sensor
units placed in each vehicle. Each vehicle is monitored on a full-
time basis and any incidence of theft or vandalism is reported by
the system at the time of the event; allowing for an immediate
response. The systems will be tailored to the needs of the
automobile dealers market throughout North America. The Company
will also offer surveillance systems to other applications such
as large overnight lots, fleet lots, trucking companies and
parking garages once the auto dealership market is established.
Consisting of a wireless sensor unit that is placed in a vehicle,
the AUTOEYE MVSS reports to the Central Control Computer via a RF
Network. The sensor monitors changes in voltage, vehicle attitude
or motion. The software that drives the CPU interprets
information gathered throughout the network and reacts as
required. When an alarm incident occurs the CPU initiates the
CCTV Cameras to begin recording the event. In this way the alarm
is confirmed and recorded.
The AUTOEYE MVSS will effectively monitor over 1,000 vehicles
with 24 hour surveillance.
1. Upon the vehicle's arrival on the lot, both the sensor and
the vehicle's VIN# are entered into the system, either manually
or by scanning. The AUTOEYE Alarm Sensor is then placed on the
interior dashboard and draws its power from the cigarette lighter
socket
2. A bar code scanner is available for scanning the sensor bar
code and the bar code on the vehicle's description sheet
3. The VIN# is automatically decoded and all important vehicle
information like its make, model, year, color, trim package and
engine size, is extracted
4. The scanner is then connected to the central computer and
the information is uploaded
The Company has developed a strategy to position itself as a
supplier of innovative motor vehicle security systems by
initially introducing the systems to the Western United States
and Canadian market place.
While the Company intends on focusing its efforts to take
advantage of the needs of the automobile dealers industry,
management has identified needs in several potential markets for
similar security systems which could provide a comprehensive and
effective deterrent against theft and vandalism of any mobile
assets, particularly in large vehicle lot situations, such as
boats, trailers, mobile homes, etc.
The Company has created a marketing plan to introduce and expand
its market base. Once the multi-vehicle systems have been
successfully launched through automobile dealers, the Company
will introduce a single vehicle surveillance system through new
car dealers who have purchased and are utilizing the multi-
vehicle system for their own dealerships. Management believes
this plan provides the individual car buyer an ideal situation to
actually see the system working at the dealership before
purchasing.
The Company is reliant upon an industry (initially automobile -
dealerships), not on one or a few major customers. The Company
has identified the overall target market to be large vehicle lot
operators and are focusing our initial marketing efforts on the
primary target market, automobile dealerships. Then, expansion
across similar segments, such as truck and other fleet lots,
hotel, airport as well as amusement lot operations. Our market
strategy will initially target localized areas and rapidly spread
across North America. The initial product launch will also allow
growth into new market segments. Constant growth and stability
will be maintained through ongoing research and development.
CUSTOMER PROFILE AND TARGET
1. The main target market segment being large lot operators,
further defined for data collection and monitoring of the
"primary" market segment, automobile dealerships
2. Automobile dealerships with an inventory in excess of 100
vehicles will present the greatest initial opportunities for
success
3. Primary usage of the AUTOEYE MVSS will be the security
function with a rollout of information retrieval, inventory and
traffic control
4. Customer acceptance will be enhanced by our ability to
negate liability and insurance exposure
Initially Direct Sales will be targeted towards the Automobile
Insurance Companies and will be conducted "inhouse". Sales
individuals will be retained by the Company and will be
compensated on a 100% commission basis. The Commission Structure
will be paid using a sliding structure: 5% payable on the first
$100,000.00 of sales; 3% payable on the next $100,000.00 in
sales; and 2% payable on sales over and above $200,000.00. In
addition, negotiations are currently being conducted with a sales
agent network that is based across Canada, to extend the use of
its National sales team to assist the company in marketing the
Autoeye product to their clientele base.
INDUSTRY ANALYSIS
1. The current North American "primary" market consists of over
110,000 automobile dealerships
2. Insurance incentives will provide opportunities for
expansion and growth
3. We anticipate market penetration, the first year to be
modest, at 1/5 of 1%, with anticipated growth to 1.47% within the
next five years
4. Management anticipates the marketplace to remain stable,
allowing for consistent growth and constant demand.
5. Further market opportunities will be facilitated with
expanding product line options, while providing superior system
servicing to our customers
Phase I of Testing has been completed under laboratory and field
conditions with extremely encouraging results. Phase I of
testing was to verify the original concept/design on a limited
basis. Phase II of Testing (which will verify original concept
under a fully operational environment) is expected to begin in
June/July, 2000 (duration - 45 days) , and upon completion, the
product, "AutoEye" will be ready for the market. Following
completion of Phase II Testing, application will be sought from
FCC/ Industry Canada for use of specific radio band. There have
been no expenditures for research and development by the Company
to date. Currently, the cost of the registration fees with the
FCC/ Industry Canada is US$ 15,000.00. These fees will be funded
by Autoeye Inc. as a condition of the licensing agreement with
the Company.
There is no known current equivalent competition using this
proactive technology (instead of reactive) as of the date of this
submission known to management.
Key components of the units are contracted out to several High-
Tech companies in Western Canada who specialize in
miniaturization of electronic components (as required in
satellites). Upon completion of the manufacturing and receipt of
these key components, the respective units are assembled at the
Company's facility in Calgary, Alberta, Canada, to ensure the
highest standard of quality, and to provide additional integrity
of the product. Main suppliers - Murandi Communications Ltd.,
Mouser Electronics, Digi-Key Corporation.
The Company currently has the use of a Patent Pending CA
2224671,which expires on October12, 2000. This Patent covers
the Wireless Remote Sensor. It is the Company's intention to
have the Patent finalized prior to October 12, 2000, however,
if in the event, due to time constraints, it is not successful,
application will be made on or before the October 12, 2000
expiration date to have the Patent Pending renewed, extending
it for a further 2 year period. Once the Patent has been finalized,
it will be valid for a period up to 20 years.
In 1999, there was nominal activity conducted by the company.
The Company is currently in a start-up phase with no full time
employees. It is expected that as funds become available the six
current part time employees, (hired between March and May 2000)
may become full time employees and additional staff will be
hired. All future employees will be hired under an equal
opportunity policy and evaluated by their manager on a regular
basis with regard to merit raises and advancements. Currently
all part time salaries are borne by Autoeye Inc. until such
time as the product is finished and ready to market, which was
also a condition of the licensing agreement with Autoeye.
Risk Factors
The Company is subject to the following risk factors:
DEVELOPMENT STAGE COMPANY - LACK OF OPERATING HISTORY. The
Company was organized in January 1996. The Company now intends to
assemble the capital, management resources and distribution
rights required to enact the full development of the Company's
marketing strategy. The Company is still in the development
stage. Until the commencement of operations, the Company will not
generate any operating revenues. The Company has had very limited
operational history. All risks inherent in a development stage
company are present in the Company's business including
competition, the absence of an operating history and
profitability and the need for the additional working capital. No
assurance can be given that the business will be profitable. (See
"Business")
The Company modeled its business plan, including capital,
personnel, equipment, and facilities required for its proposed
operations on certain other existing businesses that are
operating in comparable locations under similar business
conditions and plans. Management believes that its business plan
is reasonable, but, until the Company's operations have been
established, it is not possible to determine the accuracy of any
estimates or projections made in the plan. In formulating its
business plan, the Company has relied on the judgment of its
Officers, Directors and its technical and legal consultants.
Based upon their experience and that of their consultants,
Management believes the Company will be successful in gaining a
portion of the market.
UNCERTAINTIES REGARDING MARKETING STRATEGY. There can be no
assurance that the Company will be successful in its efforts.
Until the Company's marketing programs have been fully developed
and tested, there can be no assurance that the Company will be
successful. The marketing plans of any new company involves
uncertainties and risks not present with long established
businesses. (See "Business")
CONTINUED CONTROL BY EXISTING SHAREHOLDERS. Any prospective
investor must understand that, following the issuance of the
Company's shares he or she will have very limited rights to
affect the day to day operational decisions of the Company.
Shareholders must rely on the expertise and knowledge of the
Officers and Directors together with any consultants they may
appoint to manage and plan the operations of the Company.
COMPETITION. The Company will be required to compete with a
number of entities which are larger, have greater resources and
more extensive operating histories than the Company. Operating
losses may result from this competition which may have a
materially adverse effect on the Company.
LIMITED FINANCING. There is no assurance that additional monies
or financing will be available in the future or, if available,
will be at terms favorable to the Company.
It may be possible that the Company issue additional shares in
the future to finance its capital operations requirement. Any
such issuance will reduce the percent of ownership of present
shareholders.
GENERAL ECONOMIC AND OTHER CONDITIONS. The Company's business may
be adversely affected from time to time by such matters that may
be outside the control of the Company and/or its Officers and
Directors such as changes in general economic conditions, tax
law or policy of local and national governments, international
relations and related conditions, as they exist in any area where
the Company may target its marketing strategy.
ADDITIONAL FINANCING WILL BE REQUIRED. The conduct of the
Company's business will require availability of additional funds.
No funds have been committed to the Company, and there can be no
assurance that the necessary additional capital will be raised so
that the plan can be implemented. Moreover, even if financing
were to become available, it is likely that the cost of such
funds would be high and possibly prohibitive due to the fact that
the Company is a small start-up company without any record of
success. If such business plan is not implemented, it could have
a material adverse impact on the Company's future operations and
growth.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS.
Pursuant to Rule 405 of Regulation S-K, the Company is not a
"foreign private issuer" since it was incorporated in and remains
validly constituted under the laws of the State of Nevada. The
Company's resident agent for service in the United States is
Nevada Corporate Residency located at 955 S. Virginia St., Suite
116, Reno, NV 89502. The investor would be able to effect service
of process on the Company in the United States by serving process
at this address.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's principal administrative, sales, marketing,
research and development offices are located at its headquarters
located at 540 5th Ave. S.W., Suite 930, Calgary, Alberta, Canada
T2P 0M2. The Company has a limited use of this facility through
the licensing agreement with Autoeye at no cost to the Company.
The Company pays its own charges for long distance telephone
calls and other miscellaneous secretarial, photocopying, and
similar expenses.
Since the company is incorporated in Nevada, it is required to
maintain a resident office in that state in which corporate
documents are available. The resident office is located at 995 S.
Virginia St., Suite 116, Reno, NV 89502. No activities take place
in the resident office. All other activities have been
consolidated to the facility described above.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of 7th April, 2000, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors and
executive officers as a group. Except as noted, each person has
sole voting and investment power with respect to the shares
shown. There are no significant Autoeye Inc. shareholders (who
will hold 5% or more) of Remote Utilities Network, Inc.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Autoeye, Inc. (1) 7,200,000 52.55%
</TABLE>
(1) There are no shareholders of Autoeye, Inc. that are
beneficial owners owning 5% or more of Autoeye's common stock.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
David Phan 46 President/Direc
tor
Gerald S. Peatz 51 Secretary/Treasurer/Director
</TABLE>
David Phan; President
Suite 801, 200 Lacaille Pl. SW
Calgary, AB, T2P 5E2
CANADA
Mr. Phan is currently President/Director of Remote Utilities
Network, Inc. and has held this position since December, 1998.
Mr. Phan acts in an advisory capacity and as a Board liaison with
management. His duties include the general overseeing of the
company and it's day-to-day operations. Prior to this, Mr. Phan
owned and operated Phan & Associates, Calgary, Alberta (an
Insurance Brokerage Agency) from June 1993 to November, 1998.
From 1990-1992, Mr. Phan was financial controller and contract
administrator for Westronics, Inc., a Calgary technology company.
Mr. Phan's responsibilities for this period were ensuring that
all financial activities were in compliance with Canadian General
Accounting Principals (GAP), and overseeing contracts and
administration worldwide. For 1981 to 1990, he held the
positions of Divisional Chief Accountant and Senior Corporate
Accountant with the Central Alberta Dairy Pool in Calgary and Red
Deer, Alberta. . Mr. Phan sits on the board of several hi-tech
companies (financed with venture capital), namely, Autoeye Inc.,
TVR Technologies Inc., and West Development Corp. Mr. Phan has
also held various accounting positions internationally in Hong
Kong and Indonesia. Mr. Phan is a graduate of the Saskatchewan
Technical Institute, Moose Jaw, Saskatchewan and has Certified
Management Accounting Designation.
Gerald S. Peatz; Secretary/Treasurer/Director
174 - Woodglen Grove SW
Calgary, AB, T2W 4S5
Canada
Mr. Peatz is responsible for the overall financial administration
and financial reporting of Remote Utilities Network, Inc., and
has held this position since December, 1998. Mr. Peatz has
accumulated ten years of experience as Chief Financial Officer
for various privately held companies including his present
position at American IR for the past six months. Before his
current position he was President of Autoeye Inc. from March 1998
to September, 1999, and Chief Financial Officer from March, 1996
to March, 1998. Mr. Peatz worked from March, 1992 to March, 1998
for SED Systems Ltd. (a high tech company which was sponsored by
the University of Saskatchewan to conduct Research & Development
work on new technologies in the Engineering and Product
Development fields), where he was responsible for setting up an
administration infrastructure that was ultimately adopted
throughout the company. He graduated as a Certified Management
Accountant and is presently a member in good standing with the
Society of Management Accountants of Alberta. As a professional
accountant, he worked as a draftsman and cost accountant with
Dominion Bridge for six years. He then worked for ten years in
the manufacturing and engineering environment, in a wide range of
roles including cost accountant, controller, human resources,
credit, contract administration and computer administration. He
also has five years experience as an auditor with Revenue Canada.
Key Management
Trevor Critchley; Manager, Investor Relations
Mr. Critchley is responsible for Public Relations, Investor
Relations & Corporate Finance for the Company and has held this
position since 10th April, 2000.
September 1994 to present - Vice President Corporate Finance for
Total-interactive Telecommunications, Inc. (24 hour cable
programming company - Canadian Company - in process of merging
with U.S. Company - Lamour Telecommunications Inc.) upon merger,
relinquish title and position, and remain a shareholder of new
company. Duties included assisting the company in regards to
funding and Corporate Finance activities.
September 1996 to September 1998 - Corporate Communications
Consultant for two Canadian Public Companies (Kenrich Mining
Corporation and Nu-Lite Industries Ltd.) Assisted companies with
day-to-day Public relations/Investor Relations Activities.
June 1998 to June 1999 - Vice President Corporate Finance - Miss
Au Natural Inc. (specialized pay for TV beauty pageant
programming company). Duties included assisting company with
fundraising.
December 1998 to December 1999 - Canadian Representative -
Inntraport Gmbh (German company involved in the leisure industry,
primarily Hotel Intranet Services). Duties included representing
and introducing company to large Canadian Hotel Chains in Canada.
Paul Chidley; Technical Project Manager
Mr. Chidley is responsible for product development, and has held
this position since 8th May, 2000.
November 1989 to January 1995 - Senior Digital Design
technologist for NovAtel Communications Ltd. (Cellular
Telecommunications company). Duties included design and support
of duo-mode cellular phones.
January 1995 to June 1999 - President/Owner of Outback
Technologies Ltd. (contract electronic and circuit board design
company) Duties included overseeing day-to-day operations of the
company.
January 1996 to December 1997 - Product manager for Wi-Lan Inc.
(development of high speed wireless data communications equipment
company). Duties included design and manufacturer of the wireless
Ethernet links.
January 1998 to present - Vice President technical Operations -
Kayden Instruments, Inc. (flow level and temperature sensors
production and design company). Duties include all overseeing all
technical aspects of the company - research, development and
manufacturing.
Robert Gentles; Chief Financial Officer
Mr. Robert Gentles is responsible for the strategic planning and
corporate development of the Company since March 1, 2000.
January 1995 to April 1998 Professor of Management at Southern
Alberta Institute of Technology. Duties included teaching all
aspects of management and economics.
May 1998 to present (CFO until November 1999) (November 1999 to
present) President-Autoeye Inc. Duties include overseeing day-to-
day operation of the companys operations. Anticipated full time
starting date with the company, July 1st, 2000.
James Nikiforuk; V.P. Sales/Marketing
Mr. Nikiforuk is responsible for the Sales and Marketing areas of
the Company, and has held this position since 1st May, 2000.
Mr. Nikiforuk completed a rewarding 25-year career with TELUS
Communications Inc. in Edmonton and Calgary. In 1974 James
graduated from the University of Alberta with a Bachelor of
Science (Electrical Engineering) and started with Government
Telephones in Edmonton as an Engineer-in-training. After numerous
engineering positions James moved to Calgary in 1988 to assume a
managing position in Network Design. After numerous managing
assignments in Network Design and Network Management, James's
career culminated as the Director of Network Business Solutions
International, which was responsible for marketing and selling
high-end telecommunications consulting. His areas of strength
include management, leadership, working in a team environment
motivation, taking initiative plus adept at analyzing situations,
identifying problems and providing solutions while working within
set deadlines. James brings with him a proven track record
managing capital programs, process improvement, plus marketing
and selling expertise as it relates to the practical insight to
product deployment. He brings to the company skill sets necessary
to move the Company toward the future mode of operation.
There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has
not established any committees.
Conflicts of Interest
The officers and directors of the Company may in the future
become shareholders, officers or directors of other companies
which may be formed for the purpose of engaging in business
activities similar to those conducted by the Company. The Company
does not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business
operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Except as set forth above, the Company has
not adopted any other conflict of interest policy with respect to
such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
Summary Compensation Table
Annual compensation Long term compensation
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Awards Payout
s
Name and Year Salary Bonus Other Restric Securit LTIP A
Position ($) (1) ($) Annua ted ies Payout l
l Stock underly s ($) l
Comp. Awards ing o
($) ($) options t
/ SARs h
(#) e
r
C
o
m
p
.
(
$
)
Robert Gentles, 2000 $15,600
C.F.O. (2)
James 2000 $15,600
Nikiforuk,
Vice President
Sales/Marketing
(2)
Paul Chidley, 2000 $6,000
Technical
Manager (2)
Trevor 2000 $15,600
Critchley,
Communications
(2)
</TABLE>
Option /SAR Grant in Last Fiscal Year
Individual Grants
<TABLE>
<S> <C> <C> <C> <C>
Name Number of Percent of total Exercise or base Expiration
securities options / SARs price ($/sh) Date
underlying granted to
options / SARs employees in
Granted (#) last fiscal year
N/A
</TABLE>
(1) Currently all part time salaries are borne by Autoeye Inc.
until such time as the product is finished and ready to market.
(2) The salaries are based upon a monthly basis for the above-
named individuals since the commencement of their part-time
employment. The Key Management devotes a approximately 5 - 30
hours per week to the operations of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Robert Gentles, who is currently the C.F.O. of the Company is
also the current President of Autoeye, with whom the Company has
entered into a licensing agreement.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
There is no current market for the Company. Management has not
undertaken any discussions, preliminary or otherwise, with any
prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities.
There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
There can be no assurances that the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
There are 456 holders of the Company's Common Stock. On January
22, 1996, the Company issued 1,600,000 shares of its stock to
Robin Gardner, the initial director and sole officer of the
Company. On January 22, 1996, the Company also issued 100,000
shares each to the four remaining founders of the Company.
Subsequently, the initial director and sole officer of the
Company transferred 500 shares each to a total of 200
individuals. All transfers were exempt from the registration
requirements of Section 5 of the Securities Exchange Act of 1934,
as amended, (the "Act") as provided in Section 4(1) of that Act.
On February 22, 1999, the Company issued a total of 4,500,000
shares of its stock to a total of 15 individuals for a total
consideration of $45,000.00 cash pursuant to Rule 504 of
Regulation D.
On June 30, 1999, the Company entered into a licensing agreement
with Autoeye Inc. for use of its technology, trademarks, trade
names, insignia and other indicia known as Autoeye Multi Vehicle
Surveillance System (AMVSS). In consideration of the license, the
Company issued 7,200,000 shares of its stock to Autoeye Inc.
These shares were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of
1933.
Dividends
The Company does not have a policy of paying dividends, and it is
currently anticipated that no cash dividends will be paid in
order to retain earnings to finance future growth. Any future
decision to pay cash dividends will be made on the basis of
earning, alternative needs for funds and other conditions
existing at the time.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On February 22, 1999, the Company issued a total of 4,500,000
shares of its stock to a total of 15 individuals for a total
consideration of $45,000.00 cash pursuant to Rule 504 of
Regulation D.
On June 30, 1999, the Company issued 7,200,000 shares of its
stock to Autoeye Inc. in consideration for the use of a license
agreement. This stock was issued in reliance upon Section 4(2) of
the Securities Act of 1933, as amended.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 20,000,000 shares of Common Stock, par value $0.001 per share,
of which 13,700,000 are issued and outstanding. The shares are
non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance
of 5,000,000 shares of preferred stock, $0.001 par value per
share, none of which have been issued. The Company currently has
no plans to issue any preferred stock. The Company's Board of
Directors has the authority, without action by the shareholders,
to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting
rights, preferences as to dividends and liquidation, conversion
rights, and other rights of such series. The preferred stock, if
and when issued, may carry rights superior to those of common
stock; however no preferred stock may be issued with rights equal
or senior to the preferred stock without the consent of a
majority of the holders of then-outstanding preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring
possible future financings, and in meeting corporate needs which
may arise. If opportunities arise that would make the issuance of
preferred stock desirable, either through public offering or
private placements, the provisions for preferred stock in the
Company's Certificate of Incorporation would avoid the possible
delay and expense of a shareholder's meeting, except as may be
required by law or regulatory authorities. Issuance of the
preferred stock could result, however, in a series of securities
outstanding that will have certain preferences with respect to
dividends and liquidation over the common stock which would
result in dilution of the income per share and net book value of
the common stock. Issuance of additional common stock pursuant to
any conversion right which may be attached to the terms of any
series of preferred stock may also result in dilution of the net
income per share and the net book value of the common stock. The
specific terms of any series of preferred stock will depend
primarily on market conditions, terms of a proposed financing,
and other factor existing at the time of issuance. Therefore it
is not possible at this time to determine in what respect a
particular series of preferred stock will be superior to the
Company's common stock or any other series of preferred stock
which the Company may issue. The Board of Directors does not have
any specific plan for the issuance of preferred stock at the
present time, and does not intend to issue any preferred stock at
any time except on terms which it deems to be in the best
interest of the Company and its shareholders.
The issuance of preferred stock could have the effect of making
it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. While such provisions
are intended to enable the Board of Directors to maximize
shareholder value, they may have the effect of discouraging
takeovers which could be in the best interests of certain
shareholders. There is no assurance that such provisions will not
have an adverse effect on the market value of the Company's stock
in the future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
1. i. The Company's principal accountant was
dismissed on 10th March, 2000.
ii. The principal accountant's report on the financial
statements for the past two years was modified as to uncertainty
that the Company will continue as a going concern.
iii. The decision to change accountants was approved by the board
of directors.
iv. A. There were no disagreements with the former
accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the former accountants satisfaction,
would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its report.
2. A new accountant has been engaged as the principal
accountant to audit the issuer's financial statements. The new
accountant is Merdinger, Fruchter, Rosen & Corso, P.C. and was
engaged as of February 2, 2000. Neither the Company nor anyone
acting on its behalf consulted the new accountant regarding:
ii. the application of accounting principles to a specific
completed or contemplated transaction, or the type of audit
opinion that might be rendered on the small business issuer's
financial statements, as part of the process of deciding as to
the accounting, auditing or financial reporting issue, or
iii. any matter that was the subject of a disagreement or event
identified in response to paragraph 1(iv) of this Item.
3. The Company has provided the former accountant with a copy
of the disclosures it is making in response to this Item. The
Company has requested the former accountant to furnish a letter
addressed to the Commission stating that it agrees with the
statements made by the Company. The Company has filed the letter
as an exhibit to the registration statement containing this
disclosure.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Merdinger, Fruchter,
Rosen & Corso, P.C. dated March 23, 2000
Balance Sheet as of as of March 31, 2000
Statement of Operation for the three months ended March
31, 2000 and March 31, 1999, and the years ended
December 31, 1999 and 1998 and for the period
January 22, 1996 (inception) to December 31, 1999
Statement of Stockholders' Equity for the three months
ended March 31, 2000 and March 31, 1999, and the
years ended December 31, 1999 and 1998 and for the
period January 22, 1996 (inception) to December 31,
1999
Statement of Cash Flows for the three months ended
March 31, 2000 and March 31, 1999, and the years
ended December 31, 1999 and 1998 and for the period
January 22, 1996 (inception) to December 31, 1999
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF REMOTE UTILITIES NETWORK, INC.
We have audited the accompanying balance sheets of Remote
Utilities Network, Inc. (formerly Alexander-West, Inc.) (A
Development Stage Company) as of December 31, 1999 and 1998 and
the related statements of operations, stockholders' equity and
cash flows for the years then ended and for the period from
January 22, 1996 (inception) to December 31, 1999. These
financials 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 audits 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 Remote Utilities Network, Inc. as of December 31,
1999 and 1998 and the results of its operations and its cash
flows for the years then ended and for the period from January
22, 1996 (inception) to December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 1 to the accompanying financial statements,
the Company has no established source of revenue, which raises
substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are
also discussed in Note 1. These financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
MERDINGER, FRUCHTER ROSEN & CORSO,
P.C.
Certified Public Accountants
Los Angeles, California
March 23, 2000
REMOTE UTILITIES NETWORK, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<S> <C> <C> <C>
March 31,
2000 December
1999 1998
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 259 $ 1 $ -
Organizational cost, net - - 800
Total Current Assets 259 1
800
INTANGIBLE ASSETS, net amortization of 72,000 72,000
$0 -
TOTAL ASSETS $ 72,259 $ 72,001 $ 800
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES - accounts payable $ 3,000 $ 3,000 $
-
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value;
20,000,000 shares authorized;
13,700,000 and 2,000,000 shares 13,700 13,700 2,000
issued and outstanding
Additional paid-in capital 105,300 105,300
-
Advances to stockholder ( ) ( )
35,036 44,900 -
Deficit accumulated during
the development stage ( ) ( ) ( )
14,705 5,099 1,200
Total Stockholders' Equity 69,259 69,001 800
TOTAL LIABILITIES AND STOCKHOLDERS' $ 72,259 $ 72,001 $ 800
EQUITY
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 2 -
REMOTE UTILITIES NETWORK, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C> <C>
For the
Period from
January 22,
For the three For the Year Ended 1996
months (inception)
Ended March 31, December 31, to December 31,
2000 1999 1999 1998 1999
(Unaudited) (Unaudited)
REVENUE $ - $ - $ - $ - $ -
GENERAL, SELLING AND ADMINISTRATIVE 9,606 - 3,899 400 5,099
EXPENSES
LOSS BEFORE TAXES ( ) - ( ) ( ) ( )
9,606 3,899 400 5,099
PROVISION FOR INCOME TAXES - - - - -
NET LOSS $ ( ) $ - $ ( ) $ ( ) $ ( )
9,606 3,899 400 5,099
NET LOSS PER COMMON SHARE - basic and $ - $ - $ - $ - $ -
diluted
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - basic and diluted 13,700,000 2,000,000 10,944,260 2,000,000 4,529,920
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 3 -
REMOTE UTILITIES NETWORK, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Deficit
Accumulated
Additional Advance During the
Common Stock Paid-in To Development
Shares Amount Capital Stockholder Stage Total
lder
Balance at January 22, - $ - $ $ - $ $ -
1996 - -
Issuance of shares for
cash:
January 22, 1996 at 2,000,000 2,000 - -
$0.001 - 2,000
Net loss - - - - ( ) ( )
400 400
Balance at December 31, 2,000,000 2,000 - - ( )
1996 400 1,600
Net loss - - - - ( ) ( )
400 400
Balance at December 31, 2,000,000 2,000 - - ( )
1997 800 1,200
Net loss - - - - ( ) ( )
400 400
Balance at December 31, 2,000,000 2,000 - - ( )
1998 1,200 800
Issuance of shares for
cash:
March 8, 1999 at $0.01 350,000 350 3,150 - - 3,500
March 26, 1999 at $0.01 405,000 405 3,645 - - 4,050
March 29, 1999 at $0.01 250,000 250 2,250 - - 2,500
March 30, 1999 at $0.01 1,595,000 1,595 14,355 - - 15,950
March 31, 1999 at $0.01 1,900,000 1,900 17,100 - - 19,000
Issuance of shares for 7,200,000 7,200 64,800 - - 72,000
acquisition
Advances to Stockholder - - - ( ) - ( )
44,900 44,900
Net loss - - - - ( ) ( )
3,899 3,899
Balance at December 31, 13,700,00 13,700 105,300 ( ) ( )
1999 0 44,900 5,099 69,001
Repayment from Stockholder - - - 9,864 - 9,864
(unaudited)
Net loss (unaudited) - - - - ( ) ( )
9,606 9,606
Balance at March 31, 2000 13,700,000 $13,700 $ 105,300 $ ( ) $ ( ) $ 69,259
(unaudited) 0 35,036 14,705
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 4 -
- -
REMOTE UTILITIES NETWORK, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C> <C>
For the
Period from
January 22,
For the three months For the Year Ended 1996 (inception)
Ended March 31, December 31, to December 31,
2000 1999 1999 1998 1999
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ ( ) $ - $ ( ) $ ( ) $ ( )
9,606 3,899 400 5,099
Adjustments to reconcile net loss to
net cash used
in operating activities:
Increase in organization costs - - - - ( )
2,000
Decrease in organization costs - - 800 400 2,000
Increase in accounts payable - - 3,000 - 3,000
NET CASH USED IN OPERATING ACTIVITIES ( ) - ( 99) - ( )
9,606 99) 2,099
CASH FLOWS FROM FINANCING ACTIVITIES
Advances to shareholder - - ( ) - ( )
44,900 44,900
Issuance of common stock for cash 9,864 - 45,000 - 47,000
NET CASH PROVIDED BY FINANCING 9,864 - 100 - 2,100
ACTIVITIES
NET CHANGE IN CASH AND CASH 258 - 1 - 1
EQUIVALENTS
CASH AND CASH EQUIVALENTS - beginning 1 - - - -
of period
CASH AND CASH EQUIVALENTS - end of $ 259 $ - $ 1 $ - $ 1
year
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year - $ - $ - $ - $ - $ -
Interest
Income taxes $ - $ - $ - $ - $ -
</TABLE>
NON-CASH INVESTING AND FINANCING ACTIVITY
In December 1999, the Company issued 7,200,000 shares of the Company's common
stock with a fair market value of $72,000 as payment for a license agreement.
The accompanying notes are an integral part of the financial statements.
5 -
REMOTE UTILITIES NETWORK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
Remote Utilities Network, Inc.
("Company") (formerly Alexander-West, Inc.) is
currently a development stage company under the
provisions of Statement of Financial Accounting
Standards ("SFAS") No. 7. In March 1999, the Company
changed its name from Alexander-West, Inc. to its
current name. The Company was incorporated under the
laws of the State of Nevada on January 22, 1996.
Management is currently developing a business plan
to market certain products that they are entitled to
distribute and sell under its current licensing
agreement (See Note 3 - Intangible Assets).
Basis of Presentation
The accompanying financial statements have be
en prepared in conformity with generally accepted
accounting principles, which contemplate
continuation of the Company as a going concern.
However, the Company has no established source of
revenue. This matter raises substantial doubt about
the Company's ability to continue as a going
concern. Without realization of additional capital,
it would be unlikely for the Company to continue as
a going concern. These financial statements do not
include any adjustments relating to the
recoverability and classification of recorded asset
amounts, or amounts and classification of
liabilities that might be necessary should the
Company be unable to continue in existence.
Management plans to take the following steps that it
believes will be sufficient to provide the Company
with the ability to continue in existence:
Generate sales from the marketing of the product under its
licensing agreement.
Contemplating a private placement for the sale of shares of
the Company's common stock.
Contemplating a line of credit with an established financial
institution.
Use of Estimates
The preparation of financial statements in co
nformity 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 these
financial statements and the reported amounts of
revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid inves
tments purchased with original maturities of three
months or less to be cash equivalents.
Concentration of Credit Risk
The Company places its cash in what it believ
es to be credit-worthy financial institutions.
However, cash balances may exceed FDIC insured
levels at various times during the year.
- 6 -
REMOTE UTILITIES NETWORK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Intangible Assets
Intangible assets consist of the Company's co
sts for the purchase of its licensing agreement. The
costs are being amortized over the life of the
agreement, which is ten years, once sales activities
commence.
Loss Per Share
During 1998, the Company adopted SFAS No. 128,
"Earnings Per Share," which requires presentation of
basic loss per share ("Basic LPS") and diluted loss
per share ("Diluted LPS"). The computation of Basic
LPS is computed by dividing loss available to common
stockholders by the weighted average number of
outstanding common shares during the period. Diluted
LPS gives effect to all diluted potential common
shares outstanding during the period. The
computation of Diluted LPS does not assume
conversion, exercise or contingent exercise of
securities that would have an antidilutive effect on
earnings. As of December 31, 1999 and 1998, the
Company had no potentially dilutive securities.
Comprehensi
ve Income
In June 1998, the Financial Accounting Standards
Board issued SFAS No. 130, "Reporting Comprehensive
Income", which establishes standards for the
reporting and display of comprehensive income and
its components in the financial statements. As of
December 31, 1999 and 1998, and for the period from
January 22, 1996 (inception) to December 31, 1999,
the Company has no items that represent
comprehensive income and, therefore, has not
included a schedule of comprehensive income in the
accompanying financial statements.
Income Taxes
Income taxes are provided for based on the liability
method of accounting pursuant to SFAS No. 109,
"Accounting for Income Taxes". Deferred income
taxes, if any, are recorded to reflect the tax
consequences on future years of differences between
the tax bases of assets and liabilities and their
financial reporting amounts at each year-end.
Impact of Year 2000 Issue
As of December 31, 1999, the Company does not have
any computer systems or customers and suppliers.
Therefore, the issue of the year 2000 has no effect
on the Company's current activities.
NOTE 2 - RELATED PARTY TRANSACTIONS
Office and Administrative Expenses
The Company neither owns nor leases any real or
personal property. A stockholder provides office
services without charge. Such costs are immaterial to
the financial statements and, accordingly, have not
been reflected therein.
- 7 -
REMOTE UTILITIES NETWORK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 - RELATED PARTY TRANSACTIONS (Continued)
Advances to Stockholder
Advances to stockholder as of December 31, 1999
consist of $44,900 non-interest bearing advances to
the majority stockholder to pay for legal services.
Upon the Company's completion of its Form 10SB with
the Securities and Exchange Commission ("SEC"), the
stockholder will repay the advances. Management has
every intention and the ability to complete the Form
10SB process with the SEC
NOTE 3 - INTANGIBLE ASSETS
In June 1999, the Company entered into a 10-year
license agreement with a company that the current
management has a minority common stock ownership. The
license agreement is for the manufacturing and
marketing of Autoeye Multi-Vehicle Surveillance System
("AMVSS), which is to be marketed to automotive
dealerships. In August 1999, the Company's Board of
Directors approved the issuance of 7,200,000 shares of
the Company's common stock as payment for the license
agreement. In accordance with SFAS No. 123 "Accounting
for Stock-Based Compensation", the stock was valued at
$72,000, or $0.01 per share, which is the fair market
value of the shares based on the per share price
received from the Company's private placement
completed on March 31, 1999.
NOTE 4 - STOCKHOLDERS' EQUITY
The aggregate number of stock that the Company has
authority to issue is 25,000,000 shares, of which
20,000,000 shares shall be common stock at a par
value of $0.001 and 5,000,000 shares shall be
preferred stock at a par value of $0.001.
The Board of Directors shall have the authority from
time to time to divide the preferred shares into
series and to fix by resolution the voting powers,
designation, preferences, and relative participating,
and other special rights, qualifications, limitations
or restrictions of the shares of any series
established. As of December 31, 1999, the Board of
Directors has not established any series of preferred
shares.
- 8 -
REMOTE UTILITIES NETWORK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 5 -INCOME TAXES
The
components of the provision for income are as
follows:
<TABLE>
<S> <C> < <C>
C
>
For the
Period
from
For the Year Ended January
December 31, 22, 1996
(inceptio
n) to
December
31,
1999 1998 1999
Current Tax Expense
U.S. Federal $ $ $
- - -
State and Local - - -
Total Current - - -
Deferred Tax Expense
U.S. Federal - - -
State and Local - - -
Total Deferred - - -
Total Tax Provision (Benefit) from
Continuing Operatings $ $ $
- - -
</TABLE>
- 9 -
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
10. Material Contracts
16. Letter re change in certifying accountant
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Remote Utilities Network, Inc.
By: /s/ David Phan
David Phan, President
ARTICLES OF INCORPORATION
OF
ALEXANDER - WEST, INC.
The undersigned, a natural person, over the age of twenty-
one (21) years, in order to form a corporation for
the purposes hereinafter stated, under and
pursuant to the provisions of the laws of the
State of Nevada, does hereby certify as follows:
ARTICLE I
NAME
The name of the Corporation, hereinafter called the
"Corporation" is:
Alexander - West, Inc.
ARTICLE II
EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE III
OBJECTS AND PURPOSES
The purpose for which this Corporation is created is to
conduct any lawful business or businesses for
which corporations may be incorporated pursuant to
the Nevada Corporation Code.
ARTICLE IV
CAPITAL STOCK
1. Number of Shares. The aggregate number of capital stock
shares which the Corporation shall have authority to issue is
Twenty-Five Million (25,000,000) shares, of which Twenty-Million
(20,000,000) shares shall be common stock, $.001 par value, and
Five Million (5,000,000) shares shall be preferred stock, $.001
par value
2. Voting Rights of Shareholders. Each voting shareholder of
record shall have one vote for each share of stock standing in
his name on the books of the Corporation and entitled to vote.
Cumulative voting shall not be allowed in the
election of directors or for any other purpose.
3. Quorum. At all meetings of shareholders, one-half of the
shares entitled to vote at such meeting, represented in person or
by proxy, shall constitute a quorum. Except as otherwise provided
by these Articles of Incorporation or the Nevada Corporation
Code, if a quorum is present, the affirmative vote of a majority
of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders. When,
with respect to any action to be taken by shareholders of this
Corporation, the laws of Nevada require the vote or concurrence
of the holders of two-thirds of the outstanding shares, of the
shares entitled to vote thereon, or of any class or series, such
action may be taken by the vote or concurrence of a majority of
such shares or class or series thereof.
4. No Preemptive Rights. No shareholder of the Corporation
shall have any preemptive or other rights to subscribe for any
additional shares of stock, or for other securities of any class,
or for rights, warrants or options to purchase stock or for
scrip, or for securities of any kind convertible into stock or
carrying stock purchase warrants or privileges.
5. Shareholder Distributions. The Board of Directors may from
time to time distribute to the shareholders in partial
liquidation, out of stated capital or capital surplus of the
Corporation, a portion of its assets, in cash or property,
subject to the limitations contained in the statutes of the State
of Nevada.
6. Preferred Stock Rights. The Board of Directors shall have
the authority to divide the preferred shares into series and to
fix by resolution the voting powers, designation, preference, and
qualifications, limitations or restrictions of the shares of any
series so established.
ARTICLE V
DIRECTORS AND OFFICERS
1. Number of Directors. The Board of Directors shall consist of
as many members as the By-Laws shall prescribe, but in no event
shall the number of directors be more than thirteen (13).
2. Initial Board of Directors. The names of those persons who
shall constitute the Board of Directors of the Corporation for
the first year of its existence or until their successors are
duly elected and qualified are:
<TABLE>
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Name Addr
ess
Robin Gardner 3713 E.
Decatur
Mesa, Arizona
85205
</TABLE>
ARTICLE VI
RESIDENT AGENT AND PRINCIPAL OFFICE
The address of the initial principal office of the
Corporation is 3550 Bays Sands Drive, Villa 1061,
Laughlin, Nevada 89029. The name of its initial
resident agent at such address is Michael K. Hair.
The Corporation may conduct all or part of its business in
any other part of the State of Nevada, or any
other State in the United States.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS
1. Actions, Suites or Proceedings other than by or in the Right
of the Corporation. The Corporation shall indemnify any person
who was or is party or is threatened to be made a party to any
threatened, pending or completed 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, office, employee or agent of
another against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and, in the case of conduct
in his official capacity with the Corporation, in a manner he
reasonably believed to be in the best interests. In the case of
any criminal proceeding, he must have had no reasonable cause to
believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, determine that the individual did not meet the standard
of conduct set forth in this paragraph.
2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed 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 Company as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses
(including attorney's fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action
or suit if he acted in good faith and, in the case of conduct in
his official capacity with the Corporation, in a manner he
reasonably believed to be in the best interests of the
Corporation, in a manner he reasonably believed to be in the best
interests of the Corporation and, in all other cases, that his
conduct was at least not opposed to the other cases, that his
conduct was at least not opposed to the Corporation's best
interests; but no indemnification shall be made in respect of any
claim, issue or matter as to which such person has been adjudged
to be liable for negligence or misconduct in the performance of
this duty to the Corporation or where such person was adjudged
liable on the basis that personal benefit was improperly received
by him, unless and only to the extent that the improperly
received by him, unless and only to the extent that the court in
which such action or suit was brought determines 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 indemnification for such expenses which
such court deems proper.
3. Indemnification of Successful Party. To the extent that a
Director, Officer, employee or agent of the Corporation has been
successful on the merits or otherwise (including, without
limitation, dismissal without prejudice) in defense of any
action, suit, or proceeding referred to in this Article VII or in
defense of any claim, issue, or matter therein, he shall be
indemnified against all expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
4. Determination of Right to Indemnification. Any
indemnification under (1) or (2) of the Article VII (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 paragraphs (1) or (2) of this
Article VII. Such determination shall be made 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, if
such a quorum is not obtainable and a quorum of disinterested
Directors so directs, by independent legal counsel in a written
opinion, or by the shareholders.
5. Advance of Costs, Charges and Expenses. Cost, charges and
expenses (including attorney's fees) 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 as
provided in paragraph (4) of this Article VII upon receipt of a
written affirmation by the Director, Officer, employee or agent
of his good faith belief that he has met the standard of conduct
described in paragraphs (1) or (2) of this Article VII, and an
agent to repay such amount unless it is ultimately determined
that he is entitled to be indemnified by the Corporation as
authorized in this Article VII. The majority of the Directors
may, in the manner set forth above, and upon approval of such
Director, Officer, employee or agent of the Corporation,
authorize the Corporation's counsel to represent such person in
any action, suit or proceeding, whether or not the Corporation is
a party to such action, suit or proceeding.
6. Settlement. If in any action, suit or proceeding, including
any appeal, within the scope of (1) or (2) of this Article VII,
the person to be indemnified shall have unreasonably failed to
enter into a settlement thereof, then, notwithstanding any other
provision hereof, the indemnification obligation of the
Corporation to such person in connection with such action, suit
or proceeding shall not exceed the total of the amount at which
settlement could have been made and the expenses by such person
prior to the time such settlement could reasonably have been
effected.
7. Other Rights; Continuation of Right to Indemnification. The
indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under these Articles of Incorporation, any bylaw,
agreement, vote of shareholders or disinterested Directors, or
otherwise, and any procedure provided for by any of the
foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to person who has ceased to be a Director, Officer,
employee or agent and shall inure to the benefit of heirs,
executors, and administrators of such a person. All rights to
indemnification under this Article VII shall be deemed to be a
contract between the Corporation and each director or officer of
the Corporation who serves or served in such capacity at any time
while this Article VII is in effect. Any repeal or modification
of this Article VII or any repeal or modification of relevant
provisions of the Nevada Corporation Code or any other applicable
laws shall not in any way diminish any rights to indemnification
of such Director, Office, employee or agent or the obligations of
the Corporation arising hereunder. This Article VII shall be
binding upon any successor merger, consolidation or otherwise.
8. Insurance. The corporation may 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 director, 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
provision of this acceptable terms, which determination shall be
made by a vote of a majority of the Directors.
9. Savings Clause. If this Article VII or any portion hereof
shall be invalidated on any ground by an y court of competent
jurisdiction on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify
each Director, Officer, employee and agent of the Corporation as
to any cost, charge and expense (including attorney's fees),
judgment, fine and amount paid in settlement with respect to any
action, suit or proceeding whether civil, criminal,
administrative or investigative, including an action by or in the
right of the Corporation, to the full extent permitted by an
applicable portion of this Article VII that shall not have been
invalidated and to the full extent permitted by applicable law.
10. Amendment. The affirmative vote of at least two-thirds of
the total votes eligible to be cast shall be required to amend,
repeal, or adopt any provision inconsistent with, this Article
VII. No amendment, termination or repeal of this Article VII
shall affect or impair in any way the rights of any Director,
Officer, employee or agent of the Corporation to indemnification
under the provisions hereof with respect to any action, suit or
proceeding arising out of, or relating to, any actions,
transactions or facts occurring prior to the final adoption of
such amendment, termination or appeal.
11. Subsequent Legislation. If the Nevada Corporation Code is
amended after adoption of these Articles to further expand the
indemnification permitted to Directors, Officers, employees or
agents of the Corporation, then the Corporation shall indemnify
such persons to the fullest extent permitted by the Nevada
Corporation Code, as so amended.
ARTICLE VIII
INCORPORATOR
The name and address of the incorporator is:
Michael K. Hair
7407 E. Ironwood Court
Scottsdale, Arizona 85258\
IN WITNESS WHEREOF, I have hereunto set my hand this 18th
day of January, 1996.
/s/ Michael K. Hair
Michael K. Hair
BYLAWS OF REMOTE UTILITIES NETWORK, INC.
ARTICLE I
OFFICESl.l. Registered Office and Agent. The principal office and
resident agent of World Haven, Inc., (the "Corporation") in
Nevada shall be as designated by the Board of Directors from time
to time.
1.2. Other Offices. The Corporation may establish and maintain
such other offices at such other places of business both within
and without the State of Nevada as the Board of Directors may
from time to time determine.
ARTICLE II
STOCKHOLDERS
2.1. Annual Meetings. The annual stockholders' meeting for
electing Directors and transacting other business shall be held
at such time and place within or without the State of Nevada as
may be designated by the Board of Directors in a Resolution and
set forth in the notice of the meeting. Failure to hold any
annual stockholders' meeting at the designated time shall not
work a forfeiture or dissolution of the Corporation.
2.2. Special Meetings. Special meetings of the stockholders may
be called by the Board of Directors or by the Chairman of the
Board, if one be elected, or by the President, and shall be
called by the President or Secretary at the request in writing of
stockholders owning not less a majority of all the shares
entitled to vote at the proposed meeting. Such request shall
state the purpose or purposes of the proposed meeting. Business
transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice thereof.
2.3. Place of Meeting. All stockholders' meetings shall be held
at such place, within or without the State of Nevada as shall be
fixed from time to time by resolution of the Board of Directors.
2.4. Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten or more than fifty days
before the date of the meeting, either personally or by mail, by
or at the direction of the President, the Secretary or the
officer or persons calling the meeting, to each stockholder of
record entitled to vote at such meeting, except that if the
authorized shares are to be increased, at least thirty days
notice shall be given. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail addressed
to the stockholder at his address as it appears on the stock
transfer books of the Corporation, with postage thereon prepaid.
2.5. Waiver of Notice. Whenever any notice is required to be
given to any stockholder of the Corporation under the provisions
of any statute or the Articles of Incorporation or these Bylaws,
a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before, at or after the time
stated therein, shall be equivalent to the giving of such notice.
Attendance of a stockholder at a meeting shall constitute a
waiver of notice of such meeting, except when such stockholder
attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
2.6. Organization. Meetings of the stockholders shall be
presided over by the Chairman of the Board, or if he is not
present or one has not been elected, by the President, or if
nether the Chairman of the Board nor the President is present, by
a temporary chairman to be chosen by a majority of the
stockholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the Corporation, or in his
absence, an Assistant Secretary, shall act as secretary of every
meeting, or if neither the Secretary nor any Assistant Secretary
is present, by a temporary secretary to be chosen by a majority
of the stockholders entitled to vote who are present in person or
by proxy at the meeting.
2.7. Voting. Except as otherwise specifically provided by the
Articles of Incorporation or by these Bylaws or by statute, all
matters coming before any meeting of stockholders shall be
decided by a vote of the majority of the votes cast. The vote
upon any question shall be by ballot whenever requested by any
person entitled to vote, but, unless such a request is made,
voting may be conducted in any way approved at the meeting.
2.8. Stockholders Entitled to Vote. Each stockholder of the
Corporation shall be entitled to vote, in person or by proxy,
each share of stock standing in his name on the books of the
Corporation on the record date fixed or determined pursuant to
Section 6.06 hereof.
2.9. Proxies. The right to vote by proxy shall exist only if
the instrument authorizing such proxy to act shall have been
executed in writing by the stockholder himself or by his attorney-
in-fact duly authorized in writing. Such proxy shall be filed
with the Secretary of the Corporation before or at the time of
the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.
2.10. Quorum. The presence at any stockholders' meeting, in
person or by proxy, of the record holders of shares aggregating
at least fifty one percent (51%) the number of shares entitled to
vote at the meeting as indicated in the Articles of Incorporation
shall be necessary and sufficient to constitute a quorum for the
transaction of business. The stockholders present at the
stockholders meeting, for which a quorum exists, may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
2.11. Absence of Quorum. In the absence of a quorum at any
stockholders' meeting, a majority of the total number of shares
entitled to vote at the meeting and present there at, in person
or by proxy, may adjourn the meeting for a period not to exceed
sixty days at any one adjournment. Any business that might have
been transacted at the meeting originally called may be
transacted at any such adjourned meetings at which a quorum is
present.
2.12. List of Stockholders. The officer or agent having charge
of the stock transfer books for shares of the Corporation shall
make, at least ten days before each meeting of stockholders, a
complete current list of the stockholders entitled to vote at
such meeting or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each,
which list, for a period of ten days prior to such meeting, shall
be kept on file at the principal office of the Corporation,
whether within or without the State of Nevada, and shall be
subject to the inspection of any stockholder during the whole
time of the meeting. The original stock transfer books shall be
prima facie evidence as to who are the stockholders entitled to
examine such list or transfer books or to vote at any meeting of
stockholders. Failure to comply with the requirements of this
Section 2.12 shall not affect the validity of any action taken at
such meeting of stockholders.
2.13. Action by Stockholders Without a Meeting. Any action
required to be taken at a meeting of the stockholders of the
Corporation or any action which may be taken at such a meeting,
may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a majority of the
stockholders entitled to vote with respect to the subject matter
thereof, except that if a different proportion of voting power is
required for such action at a meeting, then that proportion of
written consents is required. Such consents shall have the same
force and effect as a vote in person of the stockholders of the
Corporation. A consent shall be sufficient for this Section 2.13
if it is executed in counterparts, in which event all of such
counterparts, when taken together, shall constitute one and the
same consent.
ARTICLE III
BOARD OF DIRECTORS
3.1. Number and Term of Office. The Board of Directors of the
Corporation shall consist of not less than one nor more than
thirteen (13) Directors, as determined by the Board of Directors
of the Corporation. Each Director (whenever elected) shall hold
office until his successor shall have been elected and qualified
unless he shall resign or his office shall become vacant by his
death or removal. Directors need not be residents of the State of
Nevada or stockholders of the Corporation.
3.2. Election of Directors. Except as otherwise provided in
Sections 3.03 and 3.04 hereof and except as otherwise provided in
the Articles of Incorporation, the Directors shall be elected
annually at the annual stockholders' meeting for the election of
Directors. The persons elected as Directors shall be those
nominees, equal to the number then constituting the Board of
Directors, who shall receive the largest number of affirmative
votes validly cast at such election by the holders of shares
entitled to vote therefor. Failure to annually re-elect Directors
of the Corporation shall not affect the validity of any action
taken by a Director who shall have been duly elected and
qualified and who shall not, at the time of such action, have
resigned, died, or been removed from his position as a Director
of the Corporation.
3.3. Removal of Directors. At a meeting called expressly for
that purpose, the entire Board of Directors or any Lesser number
may be removed, with or without cause, by a vote of the holders
of the majority of the shares then entitled to vote at an
election of Directors.
3.4. Vacancies and Newly Created Directorships. Any vacancy
occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining Directors though
less than a quorum of the Board of Directors. A Director elected
to fill a vacancy shall be elected for the unexpired term of his
predecessor in office and until his successor shall have been
elected and qualified. Any number of Directors shall be filled by
the affirmative vote of a majority of the Directors then in
office or by an election at an annual meeting of a special
meeting of the stockholders called for that purpose. A Director
chosen to fill a position resulting from an increase in the
number of directors shall hold such position until the next
annual meeting of stockholders and until his successor shall have
been elected and qualified.
3.5. Resignations. Any Director may resign at any time by
mailing or delivering or by transmitting by telegram or cable
written notice of his resignation to the Board of Directors of
the Corporation at the Corporation's principal office or its
registered office in the State of Nevada or to the President, the
Secretary, or any Assistant Secretary of the Corporation. Any
such resignation shall take effect at the time specified therein
or if no time be specified, then at the time of receipt thereof.
3.6. General Powers. The business of the Corporation shall be
managed by the Board of Directors, which may exercise all such
powers of the Corporation and do all such lawful acts and things
that are not by statute or by the Articles of Incorporation or by
these Bylaws directed or required to be exercised or done by the
stockholders.
3.7. Annual Meetings. The annual meeting of the Board of
Directors for electing officers and transacting other business
shall be held immediately after the annual stockholders' meeting
at the place of such meeting. Failure to hold any annual meeting
of the Board of Directors of the Corporation at the designated
time shall not work a forfeiture or dissolution of the
Corporation.
3.8. Regular Meetings. The Board of Directors from time to
time may provide by resolution for the holding of regular
meetings and fix the time and place of such meetings. Regular
meetings may be held within or without the State of Nevada.
Notice of regular meetings need not be given, provided that
notice of any change in the time or place of such meetings shall
be sent promptly to each Director not present at the meeting at
which such change was made.
3.9. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, if one be
elected, or by the President on two days' notice to each Director
specifying the time and place (within or without the State of
Nevada) of the meeting, and shall be called by the President or
Secretary in like manner and on like notice on the written
request of two or more Directors.
3.10. Notice. All notices to a Director required by Sections
3.07 or 3.09 hereof shall be addressed to him at his residence or
usual place of business and may be given by mail, telegram,
radiogram, cable or by personal delivery. No notice need be given
of any adjourned meeting.
3.11. Waiver of Notice. Whenever any notice is required to be
given to any Director of the Corporation under the provisions of
any statute or under the provisions of the Articles of
Incorporation or these Bylaws, a waiver thereof in writing signed
by the person or persons entitled to such notice, whether before,
at or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a Director at a meeting of
the Board of Directors shall constitute a waiver of notice of
such meeting, except where a Director attends such a meeting for
the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
annual, regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting.
3.12. Quorum. At all meetings of the Board of Directors a
majority of the whole Board of Directors shall constitute a
quorum for the transaction of business and, except as may be
otherwise specifically provided by statute or by the Articles of
Incorporation or these Bylaws, the act of a majority of the
Directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors. In the absence of a quorum
the Directors present there may adjourn the meeting from time to
time without notice other than announcement at the meeting, until
a quorum be present.
3.13. Action by Directors or Committee Without Meeting. Any
action required to be taken at a meeting of the Directors of
the Corporation or any committee thereof or any action which
may be taken at such a meeting, may be taken without a meeting
if a consent in writing, setting forth the action so taken,
shall be signed by all of the Directors or members of the
committee, as the case may be, entitled to vote with respect to
the subject matter thereof Such consent shall have the same
force and effect as a unanimous vote of the Board of Directors
or of the committee, as the case may be, of the Corporation. A
consent shall be sufficient for this Section 3.13 if it is
executed in counterparts, in which event all of such
counterparts, when taken together, shall constitute one and the
same consent.
3.14. Telephone / Electronic Meetings. Any Director or any
member of a committee may participate in a meeting of the Board
of Directors or a committee, as the case may be, by means of a
conference telephone, e-mail or other communications equipment by
means of which all persons participating in such meeting can
communicate with each other on a real-time basis, and such
participation shall constitute the presence of such person at
such meeting.
3.15. Compensation. By resolution of the Board of Directors,
any Director may be paid any one or more of the following: his
expenses, if any, of attendance at meetings; a fixed sum for
attendance at meetings; or a stated salary as Director. Nothing
herein contained shall be construed to preclude any Director from
serving the Corporation in any capacity as an officer, employee,
agent or otherwise, and receiving compensation therefor.
3.16. Reliance on Accounts and Reports, etc. A Director, or a
member of any committee designated by the Board of Directors, in
the performance of his duties, shall be fully protected in
relying in good faith upon the books of account or reports made
to the Corporation by any of its officers, or by an independent
certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such
committee, or in relying in good faith upon other records of the
Corporation.
3.17. Presumption of Assent. A Director of the Corporation who
is present at a meeting 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 his dissent shall be entered
in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof, or shall forward such
dissent by registered or certified mail to the Secretary of the
Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a Director who voted in
favor of such action.
ARTICLE IV
COMMITTEES
4.1. How Constituted. By resolution adopted by a majority of
the whole Board of Directors, the Board may designate one or more
committees, including an Executive Committee, each consisting of
two or more Directors. The Board of Directors may designate one
or more Directors as alternate members of any such committee, who
may replace any absent or disqualified member at any meeting of
such committee. Any such committee, to the extent provided in the
resolution and except as may otherwise be provided by statute,
shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to
all papers which may require it; but the designation of such
committee and the delegation thereto of the authority shall not
operate to relieve the Board of Directors, or any member thereof,
of any responsibility imposed upon it or him by law. In the
absence or disqualification of any member of any such committee,
the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent
or disqualified member.
4.2. Proceedings, Quorum and Manner of Acting. Except as
otherwise prescribed by the Board of Directors, each committee
may adopt such rules and regulations governing its proceedings,
quorum, and manner of acting as it shall deem proper and
desirable, provided that the quorum shall not be less than two
members.
ARTICLE V
OFFICERS AND AGENTS
5.1. Officers. The officers of the Corporation shall consist
of a President, one or more Vice-Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may elect and appoint a
Chairman of the Board and may elect and appoint such other
officers, assistant officers, and agents as may be deemed
necessary and may delegate to one or more officers or agents the
power to appoint such other officers, assistant officers and
agents and to prescribe their respective rights, terms of office,
authorities and duties. The same person may hold any two or more
offices of the Corporation. An officer of the Corporation need
not be a Director of the Corporation or a resident of the State
of Nevada.
5.2. Term of Office. Except as provided in Sections 5.03,
5.04 and 5.05 hereof, each officer appointed by the Board of
Directors shall hold office until his successor shall have been
appointed and qualified.
5.3. Resignation. Any officer or agent of the Corporation may
resign at any time by mailing or delivering or by transmitting
by telegram or cable written notice of his resignation to the
Board of Directors of the Corporation at the Corporation's
principal office or its registered office in the State of
Nevada or to the President, the Secretary or any Assistant
Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or if no time be
specified, then at the time of receipt thereof.
5.4. Removal. Any officer or agent may be removed by the Board
of Directors, or by the Executive Committee, if any, either with
or without cause, whenever in its judgment, the best interests of
the Corporation will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall
not of itself create contract rights. In addition, any other
officer, assistant officer or agent appointed in accordance with
the delegation provisions of Section 5.01 hereof may be removed,
either with or without cause, by any such officer or agent upon
whom such power of delegation shall have been conferred by the
Board of Directors.
5.5. Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal,
disqualification or other cause, or if any new office shall be
created, such vacancies or newly created offices may be filled by
the Board of Directors at any regular or special meeting or may
be filled by any officer or agent to whom the power is delegated
in accordance with the delegation provisions of Section 5.01
hereof.
5.6. President. The President shall be the chief operating
officer of the Corporation and shall, in the absence of the
Chairman of the Board, preside at all stockholders' meetings and
at all meetings of the Board of Directors. Subject to the
supervision of the Board of Directors and such direction and
control as the Chairman of the Board, if one be elected, may
exercise on matters of general policy, he shall have general
supervision over its operating officers, employees and agents. He
shall sign (unless a Vice-President shall have signed)
certificates representing the stock of the Corporation authorized
for issuance by the Board of Directors, and except as the Board
of Directors may otherwise order, he may sign in the name and on
behalf of the Corporation all deeds, bonds, contracts or
agreements. He shall exercise such other powers and perform such
other duties as from time to time may be assigned to him by the
Board of Directors.
5.7. Executive Vice-President and Vice-Presidents. The
Executive Vice-President, if one be elected, and any Vice-
Presidents, if one or more be elected, shall have such powers and
perform such duties as may be assigned to them by the Board of
Directors or by the President. At the request of or in the
absence or disability of the President, the Executive Vice-
President (or the Vice-President, if there is no duly appointed
Executive Vice-President, and if there are two or more Vice-
Presidents, then the senior of the vice-presidents present are
able to act) may perform all the duties of the President and,
when so acting, shall have the powers of and be subject to all
the restrictions upon the President. The Executive Vice-President
or any Vice-President may sign (unless the President or another
Vice-President shall have signed) certificates representing stock
of the Corporation authorized for issuance by the Board of
Directors.
5.8. Treasurer and Assistant Treasurers. The Treasurer shall
have general charge of, and general responsibility for, all
funds, securities and receipts of the Corporation, and shall
deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks,
trust companies, or other depositories as shall from time to time
be designed by the Board of Directors. He shall have all powers
and perform all duties incident to the office of a treasurer of a
corporation and as are provided for him in these Bylaws, and
shall exercise such other powers and perform such other duties as
may be assigned to him by the Board of Directors. Any Assistant
Treasurer may perform such duties of the Treasurer as the
Treasurer or the Board of Directors may assign, and, in the
absence of the Treasurer, any Assistant Treasurer may perform all
the duties of the Treasurer.
5.9. Secretary and Assistant Secretaries. The Secretary shall
attend to the giving and serving of all notice of the Corporation
and shall record all the proceedings of all meetings of the
stockholders and of the Board of Directors in a book to be kept
for that purpose. He shall keep in safe custody the seal of the
Corporation, and shall have charge of the records of the
Corporation, including the stock books and such other books,
reports, certificates and other documents required by law to be
kept, all of which shall at all reasonable times be open to
inspection by any Director. He shall sign (unless an Assistant
Secretary shall have signed) certificates representing stock of
the Corporation authorized for issuance by the Board of
Directors. He shall perform such duties as pertain to his office
or as may be required by the Board of Directors. Any Assistant
Secretary may perform such duties of the Secretary as the
Secretary or the Board of Directors may assign, and, in the
absence of the Secretary, Assistant Secretary may perform all the
duties of the Secretary.
5.10. Comptroller. The Comptroller, if one be elected, shall
have general charge and supervision of financial reports. He
shall maintain adequate records of all assets, liabilities and
transactions of the Corporation and shall keep the books and
accounts and cause adequate audits thereof to be made regularly
and shall exercise a general check upon the disbursements of
funds of the Corporation. In general, he shall perform all duties
incident to the office of a comptroller of a corporation, and
shall exercise such other powers and perform such other duties as
may be assigned to him by the Board of Directors.
5.11. Remuneration. The salaries or other compensation of the
officers of the Corporation shall be determined by the Board of
Directors, except that the Board of Directors may by resolution
delegate to any officer or agent the power to fix salaries or
other compensation of any other officer, assistant officer or
agent appointed in accordance with the delegation provisions of
Section 5.01 hereof.
5.12. Surety Bonds. The Board of Directors may require any
officer or agent of the Corporation to execute a bond to the
Corporation in such sum and with such surety or sureties as the
Board of Directors may determine, conditioned upon the faithful
performance of his duties to the Corporation, including
responsibility for negligence and for the accounting of any of
the Corporation's property, funds or securities that may come
into his hands.
ARTICLE VI
CAPITAL STOCK
6.1. Signatures. The shares of the Corporation's capital stock
shall be represented by certificates signed by the President or a
Vice-President and the Secretary or an Assistant Secretary of the
Corporation; any may be sealed with the seal of the Corporation,
or a facsimile thereof. The signatures of the President or a Vice-
President and of the Secretary or an Assistant Secretary upon
certificates may be facsimiles if the certificate if
countersigned by a transfer agent, or registered by a registrar,
other than the Corporation itself or an employee of the
Corporation. In case any officer who has 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 issue.
6.2. Certificates. Each certificate representing shares of the
Corporation shall state upon the face thereof. (a) that the
Corporation is organized under the laws of the State of Nevada;
(b) the name of the person to whom such certificate is issue; (c)
the number and class of shares which such certificate represents;
and (d) the par value of each share represented by such
certificate, or a statement that the shares are without par
value. Each certificate shall also set forth conspicuously on the
face or back hereof such restrictions upon transfer, or a
reference thereto, as shall be adopted by the Board of Directors
and stockholders. No certificate shall be issued for any shares
until such share is fully paid.
6.3. Classes of Stock. If the Corporation is or shall become
authorized to issue shares of more than one class, then, in
addition to the provisions of Section 6.02 hereof, every
certificate representing shares issued by the Corporation shall
also set forth upon the face or back of the certificate, or shall
state that the Corporation will furnish to any stockholder upon
request and without charge, a full statement of the designations,
preferences, limitations, and relative rights of the shares of
each class authorized to be issued and, if the Corporation is or
shall become authorized to issue any preferred or special class
in series, the variations in the relative rights and preferences
between the shares of each such series so far as the same have
been fixed and determined and the authority of the Board of
Directors to fix and determine the relative rights and
preferences of subsequent series.
6.4. Consideration for Shares. Shares having a par value may
be issued for such consideration expressed in dollars, not less
than the par value thereof, as shall be fixed from time to time
by the Board of Directors. Shares without par value may be issued
for such consideration expressed in dollars as may be fixed from
time to time by the Board of Directors. The Corporation may
dispose of treasury shares for such consideration expressed in
dollars as may be fixed from time to time by the Board of
Directors. The consideration for the issuance of shares may be
paid, in whole or in part, in money, in other properly, tangible
or intangible, or in labor or services actually performed for the
Corporation. Neither promissory notes nor future services shall
constitute payment or part payment for shares of the Corporation.
6.5. Transfer of Capital Stock. Transfers of shares of stock
of the Corporation shall be made on the books of the Corporation
upon surrender of the certificate or certificates, properly
endorsed or accompanies by proper instruments of transfer,
representing such shares, subject to the terms of any agreements
among the Corporation and shareholders.
6.6. Registered Stockholders. Prior to due presentment for
registration of transfer of shares of stock, the Corporation may
treat the person registered on its books as the absolute owner of
such shares of stock for all purposes, and accordingly shall not
be bound to recognize any legal, equitable or other claim or
interest in such shares on the part of any other person, whether
or not it shall have the express or other notice thereof, except
as otherwise expressly provided by statute; provided, however,
that whenever any transfer of shares shall be made for collateral
security and not absolute, it shall be so expressed in the entry
of the transfer if, when the certificates are presented to the
Corporation for transfer, both the transferor and the transferee
request the Corporation to do so.
6.7. Transfer Agents and Registrars. The Board of Directors
may, from time to time, appoint or remove one or more transfer
agents or one or more registrars of transfers of shares of stock
of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock
thereafter issued shall be countersigned by one of such transfer
agents or one of such registrars of transfers and shall not be
valid unless so countersigned. If the same person shall be both
transfer agent and registrar, only one countersignature by such
person shall be required.
6.8. Fixing or Determination of Record Date. The Board of
Directors may fix, in advance, a date as a record date for the
determination of the stockholders entitled to notice of, and to
vote at, any meeting of stockholders and any adjournment thereof,
or entitled to receive payment of any dividend or any other
distribution, allotment of rights, or entitled to exercise rights
in respect of any change, conversion, or exchange of capital
stock, or entitled to give any consent for any purpose, or in
order to make a determination of stockholders for any other
proper purpose; provided, however, that such record date shall be
a date not more than fifty days nor less than ten days before the
date of such meeting of stockholders or the date of such other
action. If no record date is so fixed, the record date for
determining stockholders entitled to notice of or to vote at any
stockholders' meeting shall be at the close of the business on
the date next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. The record date
for determining stockholders entitled to express consent to
corporate action in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date
for determining stockholders for any other purpose shall, unless
otherwise specified by the Board of Directors, be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of
record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of such meeting,
provided, however that the Board of Directors may fix a new
record date for the adjourned meeting. Only such stockholders as
shall be stockholders of record on the record date so fixed shall
be entitled to such notice of, and to vote at, such meetings and
any adjournments thereof, or to receive payment of such dividend,
or other distribution, or to receive such consent, as the case
may be, notwithstanding any transfer of any shares on the books
of the Corporation after any such record date.
6.9. Lost or Destroyed Certificates. The Board of Directors may
direct that a new certificate or certificates of stock be issued
in place of any certificate or certificates theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of the fact by the person
claiming the certificate or certificates to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, at its discretion and
as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same
in such manner as it shall require and to give the Corporation a
bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the
certificate or certificates alleged to have been lost, stolen or
destroyed.
ARTICLE VII
FINANCE
7.1. Checks, Drafts, etc. All checks, drafts or order for the
payment of money shall be signed by one or more of officers or
other persons as may be designated by resolution of the Board of
Directors.
7.2. Fiscal Year. The fiscal year of the Corporation shall be
such as may from time to time be established by the Board of
Directors.
ARTICLE VIII
INDEMNIFICATION
8.1. Action, Suites or Proceedings Other than by or in the
Right of the Corporation. The Corporation shall indemnify any
Directors, Officer, Employee or Agent of the Corporation who was
or is party or is threatened to be made a party to any
threatened, pending or completed 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, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and, in the case of
conduct in his official capacity with the Corporation, in a
manner he reasonably believed to be in the best interest of the
Corporation, or, in all other cases, that his conduct was at
least not opposed to the Corporation's best interests. In the
case of any criminal proceeding, he must have had no reasonable
cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment,
order settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, or itself, determine that the
individual did not meet the standard of conduct set forth in this
paragraph.
8.2. Actions or Suits by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgement 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 Company as a Director,
Officer, employee or agent of another corporation, partnership
joint venture, trust or other enterprise against
expenses(including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and, in the case of
conduct in his official capacity with the Corporation, in a
manner he reasonably believed to be in the best interests of the
Corporation and, in all other cases, that his conduct was at
least not opposed to the Corporation's best interests; but no
indemnification shall be made in respect of any claim, issue or
matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of this duty to the
Corporation or where such person was adjudged liable on the basis
that personal benefit was improperly received by him, unless and
only to the extent that the court in which such action or suit
was brought determines 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
indemnification for such expenses which such court deems proper.
8.3. Indemnification of Successful Party. To the extent that a
Director, Officer, employee or agent of the Corporation has been
successful on the merits or otherwise (including, without
limitation, dismissal without prejudice) in defense of any
action, suit, or proceeding referred to in this Article VIII or
in defense of any claim, issue, or matter therein, he shall be
indemnified against all expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
8.4. Determination of Right to Indemnification. Any
indemnification under (1) or (2) of this Article VIII (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 paragraphs (I) or (2) of this
Article VII. Such determination shall be made 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, if
such a quorum is not obtainable and a quorum of disinterested
Directors so directs, by independent legal counsel in a written
opinion, or by the shareholders.
8.5. Advance of Costs, Charges and Expenses. Cost, charges and
expenses (including attorney's fees) 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 as
provided in paragraph (4) of this Article VIII upon receipt of a
written affirmation by the Director, Officer, employee or agent
of his good faith belief that he has met the standard of conduct
described in paragraphs (1) or (2) of this Article VIII, and an
undertaking by or on behalf of the Director, Officer, employee or
agent to repay such amount unless it is ultimately determined
that he is entitled to be indemnified by the Corporation as
authorized in this Article VIII. The majority of the Directors
may, in the manner set forth above, and upon approval of such
Director, Officer, employee or agent of the Corporation,
authorize the Corporation's counsel to represent such person in
any action, suit or proceeding, whether or not the Corporation is
a party to such action, suit or proceeding.
8.6. Settlement. If in any action, suit or proceeding,
including any appeal, within the scope of (1) or (2) of this
Article VIII, the person to be indemnified shall have
unreasonably failed to enter into a settlement thereof, then,
notwithstanding any other provision hereof, the indemnification
obligation of the Corporation to such person in connection with
such action, suit or proceeding shall not exceed the total of the
amount at which settlement could have been made and the expenses
by such person prior to the time such settlement could reasonably
have been effected.
8.7. Other Rights; Continuation of Right to Indemnification.
The indemnification provided by this Article VIII shall not be
deemed exclusive of any other rights to which those indemnified
may be entitled under these Articles of Incorporation, any bylaw,
agreement, vote of shareholders or disinterested Directors, or
otherwise, and any procedure provided for by any of the
foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to person who has ceased to be a Director, Officer,
employee or agent and shall inure to the benefit of heirs,
executors, and administrators of such a person. All rights to
indemnification under this Article VIII shall be deemed to be a
contract between the Corporation and each director or officer of
the Corporation who serves or served in such capacity at any time
while this Article VIII is in effect. Any repeal or modification
of this Article VIII or any repeal or modification of relevant
provisions of the Nevada Corporation Code or any other applicable
laws shall not in any way diminish any rights to indemnification
of such Director, Officer, employee or agent or the obligations
of the Corporation arising hereunder. This Article VIII shall be
binding upon any successor corporation to this Corporation,
whether by way of acquisition, merger, consolidation or
otherwise.
8.8. Insurance. The Corporation may 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 Director, 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
provision of this Article VIII: provided, however, that such
insurance is available on acceptable terms, which determination
shall be made by a vote of the majority of the Directors.
8.9. Saving Clause. If this Article VIII or any portion hereof
shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify
each Director, Officer, employee and agent of the Corporation as
to any cost, charge and expense (including attorney's fees),
judgment fine and amount paid in settlement with respect to any
action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the
right of the Corporation, to the full extent permitted by an
applicable portion of this Article VII that shall not have been
invalidated and to the full extent permitted by applicable law.
8.10. Amendment. The affirmative vote of at least two-thirds of
the total votes eligible to be cast shall be required to amend,
repeal, or adopt any provision inconsistent with, this Article
VIII. No amendment, termination or repeal of this Article VIII
shall affect or impair in any way the rights of any Director,
Officer, employee or agent of the Corporation to indemnification
under the provisions hereof with respect to any action, suit or
proceeding arising out of, or relating to, any actions,
transactions or facts occurring prior to the final adoption of
such amendment, termination or appeal.
8.11. Subsequent Legislation. If the Nevada Corporation Code is
amended after adoption of these Articles to further expand the
indemnification permitted to Directors, Officers, employees or
agents of the Corporation, then the Corporation shall indemnify
such persons to the fullest extent permitted by the Nevada
Revised Statutes, as so amended.
ARTICLE IX
MISCELLANEOUS
9.1. Seal. The corporate seal of the Corporation shall be
circular in form and shall bear the name of the Corporation. The
form of seal shall be subject to alteration by the Board of
Directors and the seal may be used by causing it or a facsimile
to be impressed or affixed or printed or otherwise reproduced.
Any Officer or Director of the Corporation shall have the
authority to affix the corporate seal of the Corporation to any
document requiring the same.
9.2. Books and Records. The Board of Directors shall have
power from time to time to determine whether and to what extent,
and at what times and places and under what conditions and
regulations, the accounts and books of the Corporation (other
than stock ledger), or any of them, shall be open to the
inspection of the stockholders. No stockholder shall have any
right to inspect any account, book or document of the Corporation
except at a time conferred by statute, unless authorized by a
resolution of the stockholders or the Board of Directors.
9.3. Waivers of Notice. Whenever any notice is required to be
given by law, or under the provisions of the Articles of
Incorporation or of these Bylaws, a waiver thereof in writing,
signed by the person or person entitled to such notice, whether
before, at or after the time stated therein, shall be deemed
equivalent of notice.
9.4. Amendments. The Board of Directors shall have the power
to make, alter or repeal these Bylaws, in whole or in part, at
any time and from time to time. These Bylaws may be altered or
repealed, and new Bylaws made, by the stockholders at any annual
or special meeting if notice of the proposed alteration or repeal
or new Bylaws is included in the notice or waiver of notice of
such meeting.
APPROVED AND ADOPTED as of this l5th day of February 1999.
Signed by /s/ David Phan
David Phan, President
LICENSE AGREEMENT
THIS AGREEMENT made the 30 day of June, l999.
BETWEEN:
AUTOEYE INC.., a company incorporated under the laws of
the Province of Alberta
(hereinafter called the Licensor")
- and -
REMOTE UTILITIES NETWORK, INC.., a company incorporated
under the laws of the State of Nevada
(hereinafter called the Licensee")
WHEREAS the Licensor and the Licensee wish to enter
into an agreement for the use of the technology known as the
"Autoeye Multi Vehicle Surveillance System" (hereinafter
"AMVSS"):
NOW THEREFORE THE PARTIES hereto, in consideration of
the mutual agreement hereinafter contained and promises
herein expressed and for other good and valuable
consideration acknowledged by each of them to be
satisfactory and adequate, do hereby agree as follows:
1. In consideration of the issuance and delivery to the
Licensor of Seven Million Two Hundred Thousand (7,200,Q00) Class
"A" Common Shares of Remote Utilities Network Inc. on the Closing
Date which shall bc at the offices of Autoeye Inc. in Calgary,
Alberta at 12:00 p.m. on the 30 day of June, 1999, the Licensor
hereby grants to the Licensee and its permitted assigns and the
Licensee hereby accepts a license to use the technology, trade
marks, insignia and other indicia now or in future owned by the
Licensor (collectively referred to herein as the "Mark"), for a
period of ten (10) years from the date hereof. This license is
granted for the operation of the business of manufacturing and
marketing the AMVSS on a worldwide basis, together with all
related activities in conjunction with the Licensee's business.
2. Provided the Licensee has substantially complied with
its obligations hereunder the Licensee shall have the option to
renew this Trade Mark License Agreement for further term of ten
(10) years at no further cost to the Licensee subject to
continued compliance with conditions hereunder.
3. The Licensor shall have the right from time to time to
change, or add to the Mark whenever the Licensor deems that such
changes or additions are necessary or advisable; PROVIDED that no
such changes shall disentitle the Licensee to the use of the
trade names. Any such changes or additions shall automatically
become a part of this agreement.
4. The Licensee shall operate its business in such a way
as to maintain the reputation, integrity and distinctiveness of
the Mark. The Licensee shall also conduct its business in a
business-like and orderly manner and in compliance with all laws
and provisions which may apply within all governmental
regulations in place from time to time.
5. The Licensee shall indemnify and save the Licensor
harmless from and all claims, demands, liabilities, suits,
actions or causes of action, legal fees or expenses of any nature
or kind whatsoever arising out of tbe Licensee's business, except
those caused by the Licensor, its servants and agents, and these
provisions shall survive the termination of this Agreement
6. It is agreed that in the event that the Licensor and
the Licensee are unable to reach agreement as to any matter
therein, then such matter may be referred by either the Licensor
or the Licensee to arbitration by a board of three (3)
arbitrators in the following manner:
(a) The party referring the matter to arbitration shall
do so by written notice to the other party, which
notice shall stipulate the name of one arbitrator
selected by the party giving such notice.
(b) Within fifteen (15) days of the receipt of such
notice the party receiving the same shall by a further
notice in writing to the first party stipulate the name
of one arbitrator selected by that party.
(c) The two (2) arbitrators so selected shall thereupon
choose a third arbitrator who shall be chairman of the
Board of Arbitration.
(d) Should any party fail to stipulate the name of its
arbitrator within the time stated above or should the
two (2) arbitrators so selected fail to choose a third
arbitrator within a reasonable period of time, then
either party not being in default shall be entitled to
make application to a Justice of the Supreme Court of
Alberta for the appointment of a person to serve in
such capacity on the Board of Arbitration.
(e) The decision of the majority of the Board of
Arbitration as to any matter or procedure and the final
word of the majority of the Board of Arbitration in
respect of the matter referred to shall be binding upon
the parties hereto.
(f) The total cost of the arbitration proceeding shall
be borne equally by the Licensor and the Licensee.
Except as set forth above, the provisions of the
Arbitration Act (Alberta) shall apply.
7. All rights hereunder may be assigned or transferred by
the Licensor and shall enure to the benefit of the Licensor's
successors and assigns.
8. The Licensee's interest herein and rights hereunder
shall enure to the benefit of the Licensee's heirs, successors
and assigns provided that such heirs, successors and assigns must
assume all liabilities and obligations hereunder by agreeing in
writing to be bound by all of the obligations and covenants on
the part of the Licensee herein contained. Notwithstanding the
foregoing and Paragraphs 15 and 16 hereof, the Licensees may
assign or transfer any or all of their rights in this Agreement
to a corporate entity whose shares are wholly owned by the
respective Licensees at any time prior to or after closing
without consent of the Licensor which company will agree to be
bound by the terms of this Agreement.
9. If the Licensee sells or transfers its shares or
business, it may assign this Agreement to the purchaser subject
to the following conditions:
(a) That the business is offered for sale first to the
Licensor. The Licensor will have two (2) weeks to
respond on the first right of refusal. Upon the
Licensor's denial to purchase, the business may be
offered to others.
(b) That the prospective purchaser has a satisfactory
credit rating and has a good moral character and
reputation.
(c) That the prospective purchaser and its officers,
directors and shareholders do become personally bound
by the terms and conditions of the Trade Mark License
Agreement.
(d) That the Licensee shall execute a general release
under seal to the Licensor.
(e) That all of the financial and other obligations of
the Licensee to the Licensor and the Licensee's
suppliers and other creditors are fully satisfied.
10. The Licensee shall not be permitted to assign this
Agreement to a purchaser either by way of a sale of assets or by
way of sale or transfer of shares unless the Licensor consents in
writing to the same, which consent is not to be unreasonably
withheld.
11. The Licensee may terminate this agreement at any time
for any reason by giving to the Licensor at least ninety (90)
days prior to such termination date, written notice of its
election to do so.
I2. Upon default by the Licensee of any of the terms and
conditions of this Agreement and upon such default continuing for
a period of ten (10) business days after notice of default by the
Licensor to the Licensee, the Licensor may at its option
terminate this agreement by giving the Licensee written notice of
its election to do so at least ninety (90) days prior to such
termination date. The Licensee agrees to continually operate the
business during the notice period in accordance with this
Agreement. The Licensor reserves the right to claim remedies for
damage if harm is caused to the Mark.
13 If the Licensee or its assigns become bankrupt or
financially unable to continue its business, or if a receiver or
trustee is appointed by any Court with respect to the Licensee's
or its assigns' assets, property or undertaking, or the Licensee
or its assigns commences any proceeding in bankruptcy or for an
arrangement or reorganization or for any debt adjustment under
any bankruptcy law or under any law for relief or debtors or any
insolvency law, or if the Licensee or its assigns makes an
assignment for the benefit of creditors, or if the Licensee or
its assigns is dissolved, then notwithstanding that there has
been no default by the Licensee or its assigns of any terms or
conditions of this Agreement, the Licensor may terminate this
Agreement by giving the Licensee notice in writing terminating
and ending this Agreement and this Agreement shall be terminated
and ended immediately upon receipt of said notice.
14. Upon any termination of this Agreement:
(a) All rights of the Licensee under the license
granted hereby shall thereupon terminate.
(b) The Licensee shall, at its own cost, immediately
and permanently discontinue the use of any forms,
slogans, marks, symbols or devices used in connection
with the Mark.
(c) The Licensee shall promptly pay to the Licensor all
sums owing from the Licensee to the Licensor. Each
party shall remain fully liable to the other for all
obligations that have accrued prior to the termination.
(d) The Licensee shall not, without the written consent
of the Licensor, either directly or indirectly as
principal agent, owner, partner, shareholder, director,
officer, or otherwise, run, be engaged in the operation
of or have any financial interest in any business
operation, whether a proprietorship, partnership, joint
venture or private company, or otherwise carrying on or
engaged in business similar to AMVSS for a period of
ten (10) years from the date of termination herein,
PROVIDED ALWAYS THAT:
(i) If the geographic area encompassed by the foregoing
covenant is at any time determined to be unreasonable,
by a court of competent jurisdiction adjudicating upon
the validity of the covenant, then the geographic area
shall be reduced to such area as determined by the
parties or failing agreement of the parties as
determined by the courts of competent jurisdiction;
(ii) If the time limitation set forth in the foregoing
covenant is at any time determined to be unreasonable
by a court of competent jurisdiction adjudicating upon
the validity of the covenant, then such time
limitations shall be reduced to such reasonable period
as determined by the parties, or failing agreement of
the parties as determined by the courts of competent
jurisdiction;
(iii) Nothing in the foregoing covenant shall be read
or construed as a prohibition against the Licensee
purchasing stocks, shares, bonds, debentures or term
notes of any public company.
15. All obligations to be paid by the Licensee to the
Licensor or vice versa shall be paid in United States funds.
16. The Licensor shall have the right in its sole
discretion to apply any money or credits held by it for the
Licensee or owed to the Licensee by the Licensor against any
amounts owed to the Licensor by the Licensee.
17. The parties hereto waive each and every provision
contained in any other agreement insofar as it may conflict
with any of the provisions of this Agreement.
18. Time shall be of the essence of this agreement.
19. The laws of the Province of Alberta as interpreted in
the Courts of Alberta shall apply to this Agreement.
IN WITNESS WHEREOF the parties have executed this
Agreement as of the day, month and year first above written.
AUTOEYE INC.
Per: signed by Gerald
Peatz
REMOTE UTILITIES NETWORK
INC.
Per: signed by David Phan
CHANGE IN ACCOUNTANTS
April 11, 2000
Securities and Exchange Commission
450 Fifth St. N.W.
Washington, D.C. 20549
We audited the financial statements of Remote Utilities
Network, Inc. for the August 31, 1999.
We have reviewed the Company's comments concerning this
decision to change to a different firm for preparation
of the December 31, 1999 financial statements.
The Company (incorporated under the laws of the State
of Nevada) has advised us that it is preferential to
have a firm of Certified Public Accountants undertake
the audit and assist legal counsel with respect to a
proposed listing on the OTC NASDAQ Bulletin Board.
We agree with the statement made by the Company.
/s/ Grant Thornton LLP
Grant Thornton LLP
Calgary, Alberta
