U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
VANADIUM INTERNATIONAL, INC.
(Name of Small Business issuer in its charter)
NEVADA 88-0402908
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5466 CANVASBACK ROAD, BLAINE, WASHINGTON 98230
(Address of Principal Executive Office) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (360) 371-5061
SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
------------------- --------------------
COMMON SHARES NONE
$.01 PAR VALUE
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PART I
ITEM 1: DESCRIPTION OF BUSINESS
Forward-Looking Statements
This Registration Statement contains certain forward-looking statements
that involve risks and uncertainties. The actual results of the Company could
differ materially from those anticipated in these forward-looking statements as
a result of factors including those set forth in Risk Factors and elsewhere in
this Registration Statement.
Glossary of Mining Terms
The following terms used in this registration statement shall have the meaning
set forth in this glossary.
Biological Leaching Ores which contain low valency metal oxides require
lengthy microbial biologic activity to completely oxidize and solubilize the
metals for chemical leaching.
Breccia A rock in which angular fragments are surrounded by a mass
of fine-grained minerals.
Deposit A "mineralized material" or "vanadium deposit" as used
herein, means a mineralized body which has been deliniated by apprpriate
drilling and/or underground sampling to support a sufficient tonnage and average
grade of metal(s). Under Securities Exchange Commission standards, such a
deposit does not qualify as a reserve until a comprehensive evaluation, based
upon unit cost, grade, recoveries and other such material factors, concludes
economic feasibility.
Diamond Drill A rotary type of rock drill that cuts a core of rock that
is recovered in long cylindrical sections, two centimeters or more in diameter.
Dilution (mining) Rock that is, by necessity, removed along
with the ore in the mining process, subsequently lowering the grade of the ore.
Drift A horizontal underground opening that follows along the
length of a vein or rock formation as opposed to a cross-cut which crosses the
rock formation.
Exploration Work involved in searching for ore, usually by drilling or
driving a drift.
Facies An association of rocks each consisting of minerals, most
commonly three or four, that exist together and have been formed within a
relatively limited range of temperature and pressure.
Heap Leaching A process involving the percolation of a cyanide solution
through crushed ore heaped on an impervious pad or base to dissolve minerals or
metals out of the ore.
Pregnant Solution A solvent solution which has been applied to ores or
concentrates and contains the valuable metals in ionic form. A solvent solution
which has not acted upon the ores or concentrates and contains no metal values
is called Barren Solution.
Reverse Circulation A drilling method, utilizing compressed air and a dual
walled string of drilling tools wherein the compressed air travels to the drill
bit through the outer pipe and returns, with the drill cuttings, through the
inner pipe, avoiding contamination of the samples.
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Transition Zone A zone in an orebody situated between the upper oxidized
zone and the lower sulphide zone, containing partially oxidized minerals.
Trend The direction, in the horizontal plane, or a linear
geological feature (for example, an ore zone), measured from true north.
Unpatented Mining
Claim A parcel of property located on federal lands
pursuant to the General Mining Law and the requirements of the state in which
the unpatented claim is located, the paramount title of which remains with the
federal government. The holder of a valid, unpatented lode mining claim is
granted certain rights including the right to explore and mine such claim under
the General Mining Law.
The Company
Vanadium International, Inc. (the Company) is a natural resource company engaged
in the acquisition, exploration, and, if warranted, development of its resource
properties in the state of Nevada. The Company was originally incorporated on
August 24, 1998 as U.S. Vanadium, Inc., and commenced its operation at that
date. The Company changed its name to Vanadium International, Inc. on February
24, 1999.
The Company is in the exploration stage and is in the process of
demonstrating the feasibility of exploiting vanadium deposits on its properties.
The Company's success will be dependent upon the feasibility of economically
recovering vanadium from its properties, obtaining the necessary financing to
develop its properties, and the profitable production of vanadium or the sale of
its properties at a profit. It has not yet determined whether these properties
contain vanadium deposits that are economically recoverable. The Company's
current focus is to have one of the Company's properties move from the
exploration stage and, if warranted, to the development and production stages
within the next two years. See Description of Property.
By a purchase agreement dated September 18, 1998, the Company acquired a
100% interest in three mineral claims properties located in Nevada comprising 36
unpatented lode mining claims.. The Bisoni and Gibellini claims are located in
Eureka County and the Bisoni-McKay is located in Nye County. To acquire the
properties, the Company delivered 15,000,000 of the Company's common shares
(deemed value $50,000) and agreed to pay $50,000 cash. At June 30,1999, the
Company has paid $34,000 and accrued $16,000 in accounts payable.
The properties, the Gibellini, Bisoni and Bisoni-McKay contain
approximately 19 to 21 million tons of 0.42% vanadium pentoxide hosted within
Devonian black shale facies. Further drilling in the three deposits will be
necessary to determine if there is an increase in tonnage and to ascertain the
average grade of the mineral deposit. The Company intends to first complete
exploration drilling and metallurgical testing of the Bisoni-McKay deposit to
determine whether the vanadium deposits are economically recoverable.
Phase I of the exploration program would consist of: installation of survey
control, aerial photography and production of 1 inch equals 40 feet topographic
maps; detailed geologic mapping of the property in general and mapping and
sampling of the mineralized zone; backhoe cleanout of existing trenches, bulk
sampling and metallurgical column leach testing. This phase would take
approximately 12 months to complete.
Phase II of the exploration program would consist of a 7,500 ft. reverse
circulation drilling campaign. Drilling would take place in the late spring and
would continue for three months, assaying and evaluation of the results would
take another six months.
Phase III of the exploration program would consist of an Environmental
Impact Study and a Preliminary Feasibility Study. This is expected to take at
least 12 months to complete. Environmental background data collection could
begin concurrent with Phase II.
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Subsequent to the acquisition of the properties, the Company has
issued 5,901,000 common shares through private offerings under Rule 504 of
Regulation D and for services rendered. (see Part II, Item 5). An offering
memorandum dated November 23, 1998 for the issuance of up to 600,000 common
shares at $0.50 per share was undertaken by the Company. The Company has
received $59,500 as subscriptions pursuant to this offering. Total shares
issued to the date of this registration statement are 20,901,000 common shares.
There have been no preferred shares issued.
The Company intends to raise additional funds through private financings,
or joint ventures to permit further property exploration and, if warranted,
development of various properties, and to move one of its properties into the
development and production stages within the next two years. No assurance can
be given that the Company will be able to raise the needed capital to develop
its properties. Failure to raise such financing could be detrimental to the
success of the Company. See Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
The Company's executive office is located at 5466 Canvasback Road, Blaine,
Washington 98230. Its telephone number is (360) 371-5061.
Vanadium
Vanadium is one of the less well know of the chemical elements; however, it
is found throughout nature and has many important uses, both for industry and
consumers.
In industry, vanadium is primarily used as an alloying agent for iron and
steel. It acts as a carbide stabilizer and, as such, it can improve the
strength and toughness as well as the rust-resistance of steel. This quality
makes it useful for producing steel to be used in manufacturing such things as
high-speed tools. Scientists have also found that the structural strength and
low-fission neutron cross section of vanadium makes it extremely useful in
nuclear applications.
Approximately 80% of vanadium in the marketplace is found in the form of a
vanadium derivative, ferrovanadium, used primarily in metallurgical
applications. Another derivative, pentoxide, is used primarily in ceramics and
as a catalyst. Vanadium and its derivatives are also used in dyeing and
printing fabrics and in the production of the chemical agent, aniline black.
Worldwide, there are seven countries (including the United States) that
produce vanadium. This production occurs mainly through the recovery of
vanadium from ores, concentrates, slag, or petroleum residues. The largest
vanadium-producing nations are South Africa, Russia, and China. The production
of vanadium has continued to increase as the worldwide economy has improved.
This has been especially true in countries with growing construction and
automobile industries. There currently exists a reserve base of more than 27
million metric tons of vanadium that by itself could satisfy world demand for
some time given the present rate of consumption.
U.S. production of vanadium has come mainly from implementing recovery
processes on industrial waste such as vanadium-bearing ferrophosophorus slag,
iron slag, fly ash, petroleum residues, and spent catalysts. There are
currently eight U.S. firms, located in Arkansas, Idaho, Louisiana, Texas and
Utah, that recover vanadium and produce the vanadium derivatives described above
as well as vanadium-bearing chemicals or specialty alloys. There is only a
negligible amount of vanadium recovered from recycling and this mostly from
small amounts of vanadium-based catalysts and vanadium-aluminum alloy.
South Africa has traditionally been the leading supplier of vanadium slag
and pentoxide. However, South Africa began recently to process more and more of
its supply for various internal applications, especially the production of
ferrovanadium. Consequently, economists expect that in the future there will be
less vanadium available for export from South Africa than in the recent past.
This development could have a wide-range effect on vanadium supply around the
world and may cause, for example, European ferrovanadium converters to
increasingly consider other sources of vanadium such as petroleum coke, recycled
catalysts and ashes.
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In the near term, economists expect that the vanadium market will continue
to follow the cyclical pattern of the steel industry. Another impact on the
worldwide supply of vanadium could come from a lower demand for carbon steel,
especially in the industrialized countries. The carbon steel sector is the
largest single economic sector for the consumption of vanadium. Economists
believe that this sector faces slower rates of growth as steel usage declines in
industrialized countries as a result of falling manufacturing output and
increased production efficiency in all industries. In addition, carbon steels
are increasingly being replaced with alloy steels in many applications.
Columbium, manganese, molybdenum, titanium and tungsten are metals that are to
some degree interchangeable with vanadium as alloying elements in steel. And
platinum and nickel are replacements for vanadium compounds as catalysts in some
chemical processes.
Risk Factors
No Operating History and No Revenues. The Company is in its initial stages
of exploration with no revenues or income and is subject to all the risks
inherent in the creation of a new business. Since the Company's principal
activities to date have been limited to organizational activities, prospect
development, and acquisition of leasehold interests, it has no record of any
revenue-producing operations. Consequently, there is no operating history upon
which to base an assumption that the Company will be able to achieve its
business plans.
Need for Additional Funding to Implement Business Plan. The Company
believes it will need to raise additional funds in order to implement its
business plan. The Company's continued operations therefore will depend upon
its ability to raise additional funds through bank borrowings, equity or debt
financing, or asset sales. There is no assurance that the Company will be able
to obtain additional funding when needed, or that such funding, if available,
can be obtained on terms acceptable to the Company. If the Company cannot
obtain needed funds, it may be forced to curtail or cease its activities. The
sale of additional securities could result in a substantial dilution of the
present equity interests of the Company's shareholders.
Volatility of Mineral Markets. The Company's revenues, profitability and
future rate of growth are substantially dependent upon prevailing market prices
for vanadium, which can be extremely volatile. In addition to market factors,
actions of governmental agencies can affect mineral prices. All of these factors
are beyond the control of the Company. These external factors and the volatile
nature of the commodity markets make it difficult to estimate future prices of
vanadium. There is no assurance that current price levels can be sustained or
that the Company will be able to produce vanadium on an economic basis in light
of prevailing market prices. Any substantial or extended decline in the price of
vanadium would have a material adverse effect on the Company's financial
condition and results of operations, including reduced cash flow and borrowing
capacity and could reduce both the value and the amount of the Company's
vanadium deposits.
Uninsured Risks. The Company may not be insured against losses or
liabilities that may arise from operations, either because such insurance is
unavailable or because the Company has elected not to purchase such insurance
due to high premium costs or other reasons.
Government Regulation. Mining operations are subject to federal, state and
local laws relating to the protection of the environment, including laws
regulating removal of natural resources from the ground and the discharge of
materials into the environment. Mining operations are also subject to federal,
state, and local laws and regulations which seek to maintain health and safety
standards by regulating the design and use of mining methods and equipment.
Various permits from government bodies are required for mining operations to be
conducted; no assurance can be given that such permits will be received. No
assurance can be given that environmental standards imposed by federal, state,
or local authorities will not be changed or that any such changes would not have
material adverse effects on the Company's activities. Moreover, compliance with
such laws may cause substantial delays or require capital outlays in excess of
those anticipated, thus causing an adverse effect on the Company. Additionally,
the Company may be subject to liability for pollution or other environmental
damages that it may elect not to insure against due to prohibitive premium costs
and other reasons.
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Need for Additional Key Personnel. At present, the Company has no
full-time employees. The success of the Company's proposed business will depend,
in part, upon the Company's ability to attract and retain additional qualified
employees, consultants, and third party service providers. The Company believes
that it will be able to attract competent employees, but no assurance can be
given that the Company will be successful in this regard. If the Company were
unable to engage and retain the necessary personnel, its business would be
materially and adversely affected.
Reliance Upon Directors and Officers. The Company is wholly dependent, at
the present, upon the personal efforts and abilities of its Officers who will
exercise control over the day to day affairs of the Company, and upon its
Directors, some of whom are engaged in other activities, and will devote limited
time to the Company's activities. Currently several employees of the Company
are not employed by the Company on a full-time basis and are serving in their
respective capacities as consultants. This situation will continue until the
Company's business warrants and the Company is able to afford an expanded staff.
There can be no assurance given that the volume of business necessary to employ
all essential personnel on a full time basis will be obtained nor that the
Company's proposed operations will prove to be profitable. The Company will
continue to be highly dependent on the continued services of its executive
officers, and a limited number of other senior management and technical
personnel. Loss of the services of one or more of these individuals could have a
material adverse effect on the Company's operations.
Indemnification of Officers and Directors for Securities Liabilities. The
Bylaws of the Company provide that the Company may indemnify any director,
officer, agent and/or employee as to those liabilities and on those terms and
conditions as are specified in the Nevada Business Corporation Act. Further,
the Company may purchase and maintain insurance on behalf of any such persons
whether or not the corporation would have the power to indemnify such person
against the liability insured against. The foregoing could result in substantial
expenditures by the Company and prevent any recovery from such officers,
directors, agents and employees for losses incurred by the Company as a result
of their actions. Further, the Company has been advised that in the opinion of
the Securities and Exchange Commission, indemnification is against public policy
as expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable.
Competition. The mining industry is an intensely competitive industry.
The Company will compete against established companies with significantly
greater financial, marketing, personnel, and other resources than the Company.
Accordingly, there is a high degree of competition for desirable mining leases,
suitable prospects for drilling operations and necessary mining equipment, as
well as for access to funds. There can be no assurance that the necessary funds
can be raised or that any projected work will be completed. Such competition
could have a material adverse effect on the Company's ability to execute its
business plan as well as profitability.
Limited Market for Securities. At present, no market exists for the
Company's Common Stock. Upon the filing of this Registration Statement, the
Company intends to commence trading on the Nasdaq Over-the-Counter Bulletin
Board (OTC/BB). There can be no assurance that trading will commence on the
OTC/BB or that the OTC/BB will provide adequate liquidity or that a trading
market will be sustained. A purchaser of stock may, therefore, be unable to
resell shares purchased should the purchaser desire to do so. Furthermore, it
is unlikely that a lending institution will accept the Company's securities as
pledged collateral for loans unless a trading market develops providing
necessary and adequate liquidity for the trading of shares.
Cumulative Voting, Preemptive Rights and Control. There are no preemptive
rights in connection with the Company's Common Stock. The stockholders may be
further diluted in their percentage ownership of the Company in the event
additional shares are issued by the Company in the future. Cumulative voting in
the election of Directors is not provided for in the Company's Bylaws or under
Nevada law. Accordingly, the holders of a majority of the shares of Common
Stock, present in person or by proxy, will be able to elect all of the Company's
Board of Directors.
No Dividends Anticipated. At the present time, the Company does not
anticipate paying dividends, cash or otherwise, on its Common Stock in the
foreseeable future. Future dividends will depend on earnings, if any, of the
Company, its financial requirements and other factors. Investors who anticipate
the need of an immediate income from their investment in the Company's Common
Stock should refrain from the purchase thereof.
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Operating Hazards. The mining business involves certain operating hazards
such as unusual or unexpected geological formations, power outages, labor
disruptions, flooding, explosions, rock-bursts, cave-ins, landslides, inability
to obtain suitable or adequate machinery, pollution, and other environmental
hazards and risks, any of which could result in substantial losses to the
Company. In addition, the Company may be liable for environmental damage to the
property purchased or leased by the Company. As a result, substantial
liabilities to third parties or governmental entities may be incurred, the
payment of which could reduce or eliminate the funds available for exploration,
development or acquisitions or result in losses to the Company. In accordance
with customary industry practices, the Company maintains insurance against some,
but not all, of such risks and losses. The Company may elect to self-insure if
management believes that the cost of insurance, although available, is excessive
relative to the risks presented. The occurrence of an event that is not covered,
or not fully covered, by insurance could have a material adverse effect on the
Company's financial condition and results of operations. In addition, pollution
and environmental risks generally are not fully insurable.
Year 2000 Issues. The Company has not yet approved a formal contingency
plan for Y2K issues, however, a formal contingency plan is expected to be
completed and approved during 1999.
Conflict of Interest. Dennis S. LaPrairie has been a member of the Board
of Directors and has been Secretary/Treasurer of the Company since its formation
in August 1998. (See Item 5, Directors and Executive Officers). Dennis LaPrairie
is the son of Jules P. LaPrairie, the mining consultant who prepared the
pre-feasibility study on the company's property. Jules has represented that his
relationship to Dennis did not impair his ability to perform an objective
evaluation for purposes of the pre-feasibility study; however, the relationship
of Jules to Dennis may present a potential conflict of interest.
Forward-looking Statements and Associated Risks. This document contains
forward-looking statements, including statements regarding, among other items,
the Company's business strategies, continued growth in the Company's markets,
projections, and anticipated trends in the Company's business and the industry
in which it operates. The words believe, expect, anticipate, intends, forecast,
project, and similar expressions identify forward-looking statements. These
forward-looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, certain of which are beyond
the Company's control. Actual results could differ materially from these
forward-looking statements, as a result of the factors described under Risk
Factors and elsewhere herein, including among others, regulatory or economic
influences. In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this document will in fact
transpire or prove to be accurate. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by this section.
Costs and Sources of Funding
To date the Company's activities have been financed primarily through the
sale of equity securities and the issuance of equity for the acquisition of
mining operations and property. No assurance can be given that the Company will
be able to raise the needed capital to develop its properties. See item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
The Company will need to obtain additional funding to pursue its business
strategy during the next fiscal year. At the present time, the Company
anticipates seeking additional funding through additional private placements,
joint venture agreements, production financing, and/or pre-sale loans. The
Company's inability to raise additional capital to fund operations through the
remainder of this year and through the next fiscal year would have a detrimental
effect on the Company's viability and capability to pursue its business plan.
Governmental Approval
The Company is in the process of obtaining all necessary governmental
approvals for exploration of its properties in Nevada. If additional approvals
are necessary for any development in the future, the Company intends to provide
all the necessary information to regulatory authorities and adjust its
exploration plans to enable it to obtain any requisite approvals. In the event
the Company is not able to obtain the necessary approvals, the Company's
development plans and operations could be negatively impacted.
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Governmental Regulation
The mining industry is regulated in both on a federal and state level in
the United States. The Company currently believes its operations on all of its
properties are in compliance with all governmental regulations, and it intends
to comply with all governmental regulations as it continues to explore, develop,
and exploit its properties.
Employees
As of September 30, 1999, the Company had one part-time employee. The
Company utilizes the services of various individuals on a consulting basis,
however, none have contracts with the Company. None of the Company's employees
are covered by a collective bargaining agreement, the Company has never
experienced a work stoppage, and the Company considers its labor relations to
be excellent.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has not yet had revenues from operations. Accordingly, the
following information centers upon the Company's plan of operation.
Liquidity and Capital Resources
To date the Company's activities have been financed primarily through the
sale of equity securities. No assurance can be given that the proceeds of the
private offering of the Company's securities or any other source of funding
described above will provide sufficient funds to undertake all of the Company's
planned project expansion for the next twelve months. It is anticipated that
significant additional funds will be required to complete the development of any
commercially viable project. There can be no assurance that the Company will be
able to obtain such additional financing, and whether the terms of such
financing would be favorable to the Company. Failure to obtain such financing
could be detrimental to the success of the project. No contracts or commitments
have been entered into at this time.
A summary of financing activities during the past year includes the items
and matter outlined in Part II, Item 4, Recent Sales of Unregistered Securities.
The Company will need to obtain additional funding to pursue its business
strategy during the next fiscal year. At the present time, the Company
anticipates seeking additional funding through additional private placements,
joint venture agreements, production financing, and/or pre-sale loans. The
Company's inability to raise additional capital to fund operations through the
remainder of this year and through the next fiscal year could have a detrimental
effect on the Company's ability to pursue its business plan and its viability.
Property Exploration
The Company owns the mineral rights and surface rights to three
properties on which it believes are located commercially minable vanadium
mineralization. The three properties are referred to as the Gibellini, Bisoni,
and Bisoni-McKay properties. The Company believes, based on a Pre-Feasibility
Report and Pro Forma Cash Flow Study for the Gibellini, Bisoni, Bisoni-Mckay
Vanadium Deposits in Eureka and Nye Counties, Nevada for the Company by Jules
Pierre LaPrairie, P.E., that the three properties contain approximately 19 to 21
million tons of 0.42% vanadium pentoxide hosted within Devonian black shale
facies of the Woodruff formation (vanadium deposits).
To date, $23,719 has been spent by the company on exploration and
development expenses, including title research, claim staking and filing fees
with the State of Nevada and Counties, annual rental payments to the Bureau of
Land Management ($100 per claim), travel expenses for site visits to the
property, library research and acquisition of reports, data and investigations
from previous owners of the project.
The Company intends to continue with exploration and, if warranted,
development of its properties; although, the Company's focus for the next two
years will be to have one of its properties move into the production stage.
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VANADIUM DEPOSITS
The following deposits* have been reported by Noranda and Hecla Mining
Corporations:
PROPERTY TONS GRADE
Gibellini 12,000,000 0.43
Bisoni 260,000 0.41
Bisoni-McKay 6,100,000 0.39
* These deposit size estimates do not represent mineable reserves as
defined by the Securities and Exchange Commission, but are estimates of
mineralized material for which tonnage continuity and grade are not well
defined.
The Bisoni-McKay property is the first deposit scheduled for exploration.
The Bisoni-Mckay deposit measures 60 feet by 8,000 feet and averages 144 feet
thick covering 390 acres. The vanadium mineralization reported for the
Bisoni-McKay were based on a deposit estimate calculated in the 1970's by Hecla
Mining Corp. based on 19 reverse circulation drill holes. The estimate and
drill logs were subsequently reviewed by James Askew and Associates (1989)
during their sampling evaluation of the property. Vanadium mineralization has
been drilled over a distance of 8,000 feet with widths up to 95 feet. The
oxidized zone is 144 feet thick and the orebody dips 40 degrees to 85 degrees
to the east. This is considered to be an indicated resource.
The Gibellini property claims are located in Eureka County, Nevada, and are
estimated to contain ore deposits of 12 million tons. The Gibellini deposit
measures approximately 2,400 feet by 1,200 feet and is approximately 200 feet
thick covering some 66 acres. Ore deposits were calculated by Noranda based on
52 reverse circulation drill holes. An additional 19 holes were drilled by
InterGlobe for metallurgical testing This is considered to be a measured
resource.
The Bisoni property ore deposits were calculated by Noranda based on 47 drill
holes. The ore deposit calculations are available and were reviewed by D.R.
Morgan, P.E. (Askew, 1989). The Bisoni deposit measures 1,500' X 500' and
averages 20' thick, covering 15 acres. This is considered to be a measured
resource.
Neither Noranda nor Hecla Mining Corporations is involved in the further
exploration of these ore deposits. At the time of their exploration efforts,
the price of vanadium was not sufficient to put the properties into production
at a level of profitability to meet corporate objectives.
See "Glossary" for a definition of deposit or vanadium mineralization.
METALLURGY
Extensive metallurgical tests have been undertaken in the past. Studies to
determine the optimum extractive process for the ores have not been completed.
Early tests concentrated on roasting and high temperature acid leaching while
later studies concentrated on acid heap or dump leaching.
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Initial studies by B.C. Research indicate that acceptable recoveries may
be possible by heap or dump leaching with lower reagent consumption. Three
column tests were performed on +3 mesh and +1/2 inch screen fractions from a
45kg sample. The -3 mesh fraction underwent a vat leach test. The leaching took
place rapidly, with final recoveries completed in about 90 days. Acid
consumption was approximately 150 lb/ton. The use of excess acid did not
increase overall recovery or rate of recovery. The calculated acid requirement
for a head grade of .607% V2O5 would be 136 lb/ton at 80% extraction. It was
suggested that enrichment of the Vanadium content of pregnant solutions would be
enhanced by applying pregnant solutions from mid-process heaps to new heaps.
Often, when excess acid is used, the solution not needed to attack the metal is
consumed by the clay minerals; often a lower acid concentration will be more
effective in improving recoveries.
Further metallurgical studies will be undertaken as soon as possible. The
success of the whole project is dependent upon being able to achieve reasonable
recoveries without excessive reagent consumption. Excessive reagent consumption
could lead to high operating costs, which could adversely affect the
profitability of the project. All of these factors can materially affect the
financial performance of the Company.
Personnel Requirements
If the Company is successful in its attempt to raise capital for moving one
of its properties into the advanced exploration stage, it will need to hire
additional personnel, subcontract the exploration work to a separate entity, or
enter into a joint venture with another entity which is able to perform the
exploration work. The method the Company uses to move its properties into the
advanced exploration stage will depend upon the ability of the Company to
finance operations. The Company intends to consider the need for hiring
additional personnel in its determination of how it can best move its properties
into advanced exploration.
Legal and Accounting
Management of Company does not expect legal and accounting fees to be
incurred at the same rates as previous financial statement disclosures because
the Company has completed legal agreements and substantially completed the
financial statements.
Results of Operations
The Company's financial performance is dependent on many external factors.
World prices and markets for metals and minerals are cyclical, difficult to
predict, volatile, subject to government fixing, pegging and/or controls, and
respond to changes in domestic and international political, social and economic
environments. Additionally the availability and costs of funds for production
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and other costs are increasingly difficult to project. All of these factors can
materially affect the financial performance of the Company.
ITEM 3. DESCRIPTION OF PROPERTY
The Company owns the mineral rights and surface rights to three properties
on which it believes are located commercially minable vanadium deposits. The
three properties are referred to as the Gibellini, Bisoni, and Bisoni-McKay
properties. The Company believes, based on a Pre-Feasibility Report and Pro
Forma Cash Flow Study for the Gibellini, Bisoni, Bisoni-Mckay Vanadium Deposits
in Eureka and Nye Counties, Nevada for the Company by Jules Pierre LaPrairie,
P.E., that the three properties contain approximately 19 to 21 million tons of
0.42% vanadium pentoxide hosted within Devonian black shale facies of the
Woodruff formation (vanadium mineralization).
The Gibellini, Bisoni and Bisoni-McKay deposits are within a kerogen-rich
sequence of black shales. The sequence is variably oxidized to 100 feet below
the surface. A partially oxidized transition zone overlies unoxidized hard
black shales. The main vanadiferous zone (0.35% V2O5) occurs immediately below
the transition zone.
The Gibellini and Bisoni deposits are flat lying and fault bounded and
additional mineralization are not likely to be easily discovered. At the
Bisoni-McKay deposit, this sequence of black shales outcrops and dips steeply
to the east showing additional potential mineralization in that direction.
Drilling, to date, has only probed this bedded structure to a depth of 150'.
The full extent of the structure, to depth, is unknown and could provide for
additional mineralization, especially if folding occurs at depth.
These additional deposits would be significant to the company's future
business in that the life of the project would be extended bringing in
additional cash flow. With additional deposits, a larger operation could be
undertaken resulting in lower production costs and thus increased cash flow.
Each additional 1,000,000 tons would extend the project life by 1.4 years. If
the deposit continues to a depth of 300', an additional 6,000,000 tons may be
found, extending the project life by 8.5 years. There is no assurance that these
additional deposits will be found.
MAP OF PROPERTY
On file.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<PAGE>
Page 11
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Company's shares as of March 31, 1999 for (i) each current
Director and each nominee for Director (ii) each officer of the Company, (iii)
all persons known by the Company to beneficially own more than 5% of the
outstanding shares of the Company's shares, and (iv) all officers and Directors
of the Company as a group.
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER (1) BENEFICIALLY OWNED(2) PERCENT OF TOTAL(3)
-------------------- --------------------- -------------------
Kenneth B. Liebscher (4) -0- 0%
George Weinstein (5) -0- 0%
Moshe C. Zefrani (6) -0- 0%
Dennis S. LaPrairie (7) 100,000 *
Medan Management Corp. (8) 15,000,000 72%
Admiral House Ltd. (9) 1,500,000 7%
All officers and directors 100,000 *
as a group
* less than one percent
- ------------------------
(1) Unless otherwise noted, the Company believes that all shares are
beneficially owned and that all persons named in the table or family
members have sole voting and investment power with respect to all shares
owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof have been exercised. As
of the date of this Registration Statement, no options, warrants or rights
to acquire shares have been granted.
(3) Assumes 20,883,000 shares outstanding.
(4) Mr. Liebscher's address is 5466 Canvasback Road, Blaine, Washington
98230.
(5) Mr. Weinstein's address is 11651 Twigg Place, Richmond, British Columbia
V6Y 3N3.
(6) Mr. Zefrani's address is 5501 Adalbert, Suite 1404, Cote St. Luc,
Quebec, Canada H4W 2B1.
(7) Mr. LaPrairie's address is 2525 Sharon Way, Reno, Nevada 89509.
The address for Medan Management Corp. is c/o S.A. Mann, F.C.A. Chartered
Accountant, 241 Maida Vale, London, England W9-1QJ.
The address for Admiral House Ltd. is 94 Dowdeswell Street, P.O. #N-7521
Nassau, Bahamas.
<PAGE>
Page 12
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Compliance With Section 16 (a) of the Exchange Act
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the ASEC@),
NASDAQ, and the Boston Stock Exchange. Officers, directors, and greater than
10% beneficial owners are required by SEC regulation to furnish the Company with
copies of all Section 16 (a) forms they file. The Company believes that it has
had no filing obligation to the time of this filing and, therefore, the filing
requirements applicable to its officers, directors, and greater than 10%
beneficial owners were complied with.
Directors and Executive Officers
The names, ages and positions of the Company's Directors and executive
officers as of March 31, 1999 are listed below:
NAME AGE POSITION WITH THE COMPANY FIRST ELECTED
Kenneth B. Liebscher 56 President, C.E.O, Director 1998
George Weinstein 73 Vice President 1998
Moshe C. Zefrani 49 Director 1998
Dennis S. LaPrairie 45 Secretary, Treasurer, and Director 1998
Kenneth B. Liebscher serves as a member of the Board of Directors and
President of the Company since its formation in August 1998. Mr. Liebscher has
been an international businessman with 28 years of securities and executive
management experience. From 1968 to 1990, Mr. Liebscher was actively involved
with Dentsply International, Inc., the world's largest dental products
manufacturer. Mr. Liebscher also serves on the Board of Directors of Belmont
Resources Inc., E.T.C. Industries Ltd., and Montoro Resources Inc. listed on the
Vancouver Stock Exchange; all involved with development of mineral resources.
George Weinstein has been the Vice President of the Company since its
formation in August 1998. Mr. Weinstein is self-employed as owner of Assistant
Manager of Allied Salvage & Metals, Ltd., for 45 years until his semi-retirement
in 1990. He remains active on a consulting basis.
Moshe C. Zefrani has been a member of the Board of Directors of the
Company since its formation in August 1998. He was born in Egypt where he
trained in electrical engineering. Since moving to Canada over 20 years ago,
Mr. Zefrani has been a self-employed electrical contractor.
Dennis S. LaPrairie has been a member of the Board of Directors and as
Secretary/Treasurer of the Company since its formation in August 1998. Mr.
LaPrairie is a registered professional engineer and has been employed with the
State of Nevada as an Environmental Engineer for the past five years. Prior to
that time, Mr. LaPrairie was self-employed as a consulting engineer for 10
years. Mr. LaPrairie graduated from Mackay School of Mines with a Bachelor of
Science degree in 1977. Dennis LaPrairie is the son of Jules P. LaPrairie, the
mining consultant who prepared the pre-feasibility study on the company's
property. Jules has represented that his relationship to Dennis did not impair
his ability to perform an objective evaluation for purposes of the
pre-feasibility study; however, the relationship of Jules to Dennis may present
a potential conflict of interest.
<PAGE>
Page 13
Board of Directors Committees and Compensation
The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of the Company.
However, in accordance with corporate legal principles, it is not involved in
day-to-day operating details. Members of the Board are kept informed of the
Company's business through discussions with the Chairman and other officers, by
reviewing analyses and reports sent to them, and by participating in Board and
committee meetings.
Board members are not presently compensated, but are reimbursed for their
expenses associated with attending Board meetings. The Company has no standing
committees at this time.
ITEM 6. EXECUTIVE COMPENSATION
Executive Compensation
The Company currently has two executive officers, Mr. Ken Liebscher and Mr.
Dennis LaPrairie. Mr. Liebscher, the Company's Chief Executive Officer, has a
one-year employment agreement with the Company providing for compensation at the
rate of $48,000 per year. The Company's agreement with Mr. Liebscher terminated
on October 1. 1999 and has been renewed on a month to month basis.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
The authorized capital of the Company consists of 80,000,000 shares of
Common Stock, par value $.01, of which 20,883,000 are outstanding. The material
terms of the securities are as follows:
All of the authorized common shares of the Company are of the same class
and, once issued, rank equally as to dividends, voting powers and participation
in assets. Holders of common shares are entitled to one vote for each share held
of record on all matters to be acted upon by the shareholders. Holders of common
shares are entitled to receive such dividends as may be declared from time to
time by the Board of Directors, in its discretion, out of funds legally
available therefrom. No shares have been issued subject to call or assessment.
There are no preemptive or conversion rights and no provisions for redemption or
purchase for cancellation, surrender, or sinking or purchase funds, nor any
cumulative voting rights. The Directors of the Company may from time to time
declare and authorize payment of dividends, as they deem advisable. Subject to
the rights of members, all dividends on shares shall be declared and paid
according to the number of shares held. No dividends have been declared since
incorporation. The outstanding shares are fully paid and non-assessable.
A class of preferred stock has been authorized with a par value of $0.01.
No shares of preferred stock have been authorized for issuance by the Board of
Directors as of the date of this statement. The rights, privileges and
preferences of any series of preferred stock shall be determined by the Board of
Directors at the time of issuance.
<PAGE>
Page 14
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company's securities are not currently traded on any market, although
the Company intends to commence trading on the OTC/BB upon the filing of this
Registration Statement.
The Company has not paid any cash dividends on its Common Stock since its
incorporation and anticipates that, for the foreseeable future, earnings, if
any, will continue to be retained for use in its business. As of March 31,
1999, the approximate number of record holders of the Company's Common Stock
was 46.
ITEM 2. LEGAL PROCEEDINGS
There are no material pending legal proceedings, and the Company is not
aware of any threatened legal proceedings to which the Company may be a party.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has experienced no recent change in or disagreement with its
accountant. The Company's present Auditor, Amisano & Hanson, Chartered
Accountants, Vancouver, British Columbia, Canada, has been the Company's auditor
since inception. Management of the Company intends to keep Amisano & Hanson, as
its auditor for the foreseeable future.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
A private placement financing by the Company in September 1998, the Company
issued 560,000 shares of common shares at a price of $.025 per share to five
persons and 1,500,000 to one person in exchange for the rights to the Company's
vanadium properties. The five persons to whom common shares were issued at
$0.025 per share are:
Mr. Edward Gresko
Mr. Steven Simons
Vista Developments Ltd.
Mrs. Shiela Lawson
Admiral House Ltd.
The rights to the Company's vanadium properties were obtained from Medan
Management Corporation. Medan Management was contacted about the availability
of the property by Mr. Jules LaPrairie P. Eng. His son, Dennis LaPrairie P.Eng.
now serves as on Officer and Director of the company. There is no relationship
or affiliation between the company and Medan Management Corp.
In October 1998, the Company declared a stock dividend of nine shares for
each outstanding share of Common Stock. Subsequently, in October 1998, the
Company issued 100,000 shares of Common Stock to Mr. LaPrairie in consideration
for services at $0.25 per share and approved the issuance of 100,000 shares in
reliance on Rule 504 of Regulation D at a price of $0.25 per share.
In November 1998, the Company authorized the issuance of 600,000 shares in
reliance on Rule 504 of Regulation D at a price of $.50 per share. None of the
subscription has been subscribed to by insiders.
The offerings of securities were exempt from the registration requirements
of the Securities Act of 1933 (the "Act") in accordance with section 4(2) of the
Act. The securities issued at $0.25 and $0.03 per share were issued to less than
10 persons in the aggregate. The securities issued at $0.50 were exempt from
the registration requirements of the Act pursuant to Regulation S.
None of the above investors reside in the United States and none of the
investors were accredited investors.
<PAGE>
Page 15
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada Revised Statutes and certain provisions of the Company's Bylaws
under certain circumstances provide for indemnification of the Company's
Officers, Directors and controlling persons against liabilities that they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this description is
qualified in its entirety by reference to the Company's Bylaws and to the
statutory provisions.
In general, any Officer, Director, employee or agent may be indemnified
against expenses, fines, settlements or judgments arising in connection with a
legal proceeding to which such person is a party, if that person's actions were
in good faith, were believed to be in the Company's best interest, and were not
unlawful. Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of the Board of Directors, by legal counsel, or by a vote of the
stockholders, that the applicable standard of conduct was met by the person to
be indemnified.
The circumstances under which indemnification is granted in connection with
an action brought on behalf of the Company is generally the same as those set
forth above; however, with respect to such actions, indemnification is granted
only with respect to expenses actually incurred in connection with the defense
or settlement of the action. In such actions, the person to be indemnified must
have acted in good faith and in a manner believed to have been in the Company's
best interest, and must not have been adjudged liable for negligence or
misconduct.
Indemnification may also be granted pursuant to the terms of agreements
that may be entered in the future or pursuant to a vote of stockholders or
Directors. The statutory provision cited above also grants the power to the
Company to purchase and maintain insurance which protects its Officers and
Directors against any liabilities incurred in connection with their service in
such a position, and such a policy may be obtained by the Company.
Item 6. Year 2000 Issues.
The primary Y2K risk to the Company's operations is service disruption from
third party providers that supply equipment for the mining projects. Any
disruption to these services would hinder the Company's ability to operate.
Therefore, efforts are currently under way to obtain Y2K compliance
certification from the Company's major equipment providers. Concern about
potential problems has been raised, but commitment to compliance is beyond the
Company's control.
The Company has not yet approved a formal contingency plan for Y2K issues,
however, a formal contingency plan is expected to be completed and approved
during 1999.
<PAGE>
Page 16
PART III
INDEX TO EXHIBITS
The following exhibits are filed herewith as part of this Registration
statement:
3.1 Articles of Incorporation, as amended See Below
3.2 Bylaws See Below
10.1 Employment Agreement with Kenneth Liebscher See Below
10.2 Purchase Agreement with Medan Management Corp. See Below
27 Financial Data Schedule See Below
99.1 Report and Financial Statements dated
December 31, 1998 See Below
99.2 Interim Report and Financial Statement dated
June 30, 1999 See Below
99.3 Interim Report and Financial Statement dated
September 30, 1999 See Below
<PAGE>
Exhibit 3.1
RESTATED
ARTICLES OF INCORPORATION
OF
US VANADIUM CORP.
SUSAN J. SMITH certifies that:
1. She is the sole incorporator and sole director of US VANADIUM CORP., a
Nevada corporation.
2. The articles of incorporation of this corporation are amended and
restated to read as follows:
FIRST. The name of the corporation is:
US VANADIUM CORP.
SECOND. Its principal office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706, that this corporation
may maintain an office, or offices, in such other place within or
without the State of Nevada as may be from time to time designated by
the Board of Directors, or by the Bylaws of said corporation, and that
this corporation may conduct all corporation business of every kind and
nature, including the holding of all meetings of Directors and
Stockholders, outside the State of Nevada as well as within The State
of Nevada.
THIRD. The objects for which this corporation is formed are: To engage
in any lawful activity, including but not limited to, the following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and
powers, when not inconsistent with the purposes and objects for
which this corporation is organized.
(C) Shall have power to have succession by its corporate name
for the period limited in its certificate or articles of
incorporation, and when no period is limited, perpetually, or until
dissolved and its affairs wound up according to law.
(D) Shall have power to sue and be sued in any court of law or
equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and
personal estate and to mortgage or lease any such real and personal
estate with its franchises. The power to hold real and personal
estate shall include the power to take the same by devise or
bequest in the State of Nevada, or in any other state, territory
or country.
(G) Shall have power to appoint such officers and agents as
the affairs of the corporation shall require, and to allow them
suitable compensation.
(H) Shall have power to make bylaws not inconsistent with the
constitution or laws of the United States, or of the State of
Nevada, for the management, regulation and government of its
affairs and property, the transfer of its stock, the transaction
of its business, and the calling and holding of meetings of its
stockholders.
(I) Shall have power to wind up and dissolve itself, or be
wound up or dissolved.
(J) Shall have power to adopt and use a common seal or stamp,
and alter the same at pleasure. The use of a seal or stamp by the
corporation on any corporate documents is not necessary. The
corporation may use a seal or stamp, if it desires, but such use
or nonuse shall not in any way affect eh legality of the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise
of its corporate rights, privileges or franchises, or for any
other lawful purpose of its incorporation; to issue bonds,
promissory notes, bills of exchange, debentures, and other
obligations and evidences of indebtedness, payable at a specified
time or times, or payable upon the happening of a specified event
or events, whether secured by mortgage, pledge or otherwise, or
unsecured, for money borrowed, or in payment for property
purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell,
assign, transfer, mortgage, pledge or otherwise dispose of the
shares of the capital stock for, or any bonds, securities or
evidences of the indebtedness created by, any other corporation
or corporations of the State of Nevada, or any other state or
government, and, while owners of such stock, bonds, securities
or evidences of indebtedness, to exercise all the rights, powers
and privileges of ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer
shares of its own capital stock, and use therefor its capital,
capital surplus, surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more
offices, and hold, purchase, mortgage and convey real and personal
property in the State of Nevada, and in any of the several states,
territories, possessions and dependencies of the United States, the
District of Columbia, and any foreign countries.
(O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in its
certificate or articles of incorporation, or any amendment thereof,
or necessary or incidental to the protection and benefit of the
corporation, and, in general, to carry on any lawful business
necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to
the objects set forth in the certificate or articles of
incorporation of the corporation, or any amendment thereof.
(P) Shall have the power to make donations for the public
welfare or for charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures, in connection with any lawful
activities.
FOURTH. The total number of shares of stock which the Corporation
shall have authority to issue is One Hundred Million (100,000,000), of
which Twenty Million (20,000,000) shares of the par value of $0.01 each
are to be of a class designed Preferred Stock, and Eighty Million
(80,000,000) shares of the par value of $0.01 each are to be of a class
designed Common Stock. Said shares without nominal or par value may be
issued by the corporation from time to time for such considerations as
may be fixed from time to time by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be
increased or decreased in such manner as shall be provided by the Bylaws
of this corporation, providing that the number of directors shall not be
reduced to less than one (1).
The name and post office address of the first Board of Directors shall
be one(1) in number and listed as follows:
Name Post Office Address
Susan J. Smith 2 Park Street Plaza, Suite 450
Irvine, California 92614
SIXTH. The capital stock, after the amount of the subscription price,
or par value, has been paid in, shall not be subject to assessment to
pay the debts of the incorporation.
SEVENTH. The name and post office address of the Incorporator signing
The Articles of Incorporation is as follows:
Name Post Office Address
Susan J. Smith 2 Park Plaza, Suite 450
Irvine, California 92614
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the principal or statutory address of
this corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the Bylaws, if any, adopted by the Stockholders, to
make, alter or amend the Bylaws of the corporation.
To fix the amount to be reserved as working capital over and
above Its capital stock paid in; to authorize and cause to be executed,
mortgages and liens upon the real and personal property of this
corporation.
By resolution passed by a majority of the whole Board, to
designate one (1) or more committees, each committee to consist of one
or more of the Directors of the corporation, which, to the extent
provided in the resolution, or in the Bylaws of the corporation, shall
have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the corporation. Such
committee, or committees, shall have such name, or names, as may be
stated in the Bylaws of the corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the
Stockholders holding stock entitling them to exercise at least a
majority of the voting power given at a Stockholders meeting called for
that purpose, or when authorized by the written consent of the holders
of at least a majority of the voting stock issued and outstanding, the
Board of Directors shall have power and authority at any meeting to
sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon
such terms and conditions as its board of Directors seems expedient and
for the best interests of the corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
Subscribe for or receive additional shares of any class of stock of the
corporation, whether now or hereafter authorized, or any bonds,
debentures or securities convertible into stock, but such additional
shares of stock or other securities convertible into stock may be
issued or disposed of by the Board of Directors to such persons and on
such terms as in its discretion it shall deem advisable.
TWELFTH. No director or officer of the corporation shall be personally
liable to the corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or
omission of any such director or officer; provided, however, that the
foregoing provision shall not eliminate or limit the liability of a
director or officer (i) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes.
Any repeal or modification of this Article by the stockholders of the
corporation shall be prospective only, and shall not adversely affect
any limitation on the personal liability of a director or officer of the
corporation for acts or omissions prior to such repeal or modification.
THIRTEENTH. This corporation reserves the right to amend, alter, change
Or repeal any provision contained in the Articles of Incorporation, in
the manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon stockholders herein are
granted subject to this reservation.
3. I am the sole director named in the original articles of incorporation.
4. No shares have been issued.
I further declare under penalty of perjury under the laws of the State of
Nevada that the matters set forth in this certificate are true and correct of my
own knowledge.
/s/Susan J. Smith
-----------------------
SUSAN J. SMITH
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On this 21st day of September, 1998, before me, GLENDA J. BURTON, the
undersigned Notary Public, personally appeared SUSAN J. SMITH, personally known
to me, or proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument, and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument, the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/Glenda J. Burton
-----------------------
GLENDA J. BURTON
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
For Profit Nevada Corporations
Ken B. Liebscher and Dennis LaPrairie certify that:
1. They are President and Secretary, respectively, of US VANADIUM CORP. a
Nevada Corporation incorporated on August 24, 1998.
2. Article First of the Articles of Incorporation of this corporation is
amended to read as follows:
ARTICLE FIRST
FIRST The name shall be:
VANADIUM INTERNATIONAL, INC.
3. The foregoing Amendment of Articles of Incorporation has been duly
approved by the Board of Directors.
4. The foregoing Amendment of Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with
Sections 78.320 and 78.390 of the Nevada Revised Statutes. In excess
of 50% of the outstanding shares of the corporation voted in favor of
the Amendment which equaled or exceeded the vote required.
We further declare under penalty of perjury under the laws of the State of
Nevada that the matters set forth in this certificate are true and correct of
our own knowledge.
Date: FEBRUARY 22, 1999.
/s/ Ken B. Liebscher /s/Dennis LaPrairie
- --------------------------- ----------------------------
Ken B.Liebscher , President Dennis LaPrairie, Secretary
State of: British Columbia
County of:
This instrument was acknowledged before me on
Feb. 23, 1999 ,by
Ken Liebscher (name of Person)
As President
as designated to sign this certificate
of U.S. Vanadium Corp.
(name on behalf of whom instrument was executed
Valerie A. Jewison
Notary Public Signature
<PAGE>
WRITTEN CONSENT OF THE SHAREHOLDERS OF
US VANADIUM CORP.
The undersigned, being the holders of in excess of the majority of the
outstanding shares of common stock of US VANADIUM CORP a Nevada corporation (the
"Company"), by this writing do hereby approve and pass the following resolutions
and consent to this shareholders action without a shareholders meeting pursuant
to the Bylaws of the Company and Section 78.320 of the Nevada Revised
Statutes:
RESOLVED, that the following resolution passed by the Company's Board of
Directors to amend the Articles of Incorporation of the Company is hereby
approved:
RESOLVED, that Article First of the Articles of Incorporation of this
corporation is amended to read as follows:
ARTICLE FIRST
FIRST The name shall be:
VANADIUM INTERNATIONAL, INC
APPROVED:
/s/Medan Management Corp.
- --------------------------- Dated: Feb. 22/99
signature
/s/S.A. Mann F.C.A.
- ----------------------------
name
15,000,000 Shares Majority Shareholder
<PAGE>
UNANIMOUS WRITTEN CONSENT TO ACTIONS
BY THE BOARD OF DIRECTORS OF
US. VANADIUM CORP.
The undersigned, being and constituting the all the directors of U.S.
VANADIUM CORP., a Nevada corporation, do hereby approve, consent to, and/or
ratify the following actions and resolutions taken by the Board of Directors of
the Corporation. These actions without a meeting by the Board of Directors are
made pursuant to this Unanimous Written Consent and section 2.11 of the
Company's Bylaws. The secretary of the Corporation is hereby directed to place
this consent with the regular and special meeting minutes of the Corporation.
RESOLVED, that Article First of the Articles of Incorporation of this
corporation is amended to read as follows:
ARTICLE FIRST
FIRST The name shall be:
VANADIUM INTERNATIONAL, INC
APPROVED:
/s/ Ken B. Liebscher
- --------------------
KEN B. LIEBSCHER
/s/ Dennis LaPrairie
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DENNIS LAPRAIRIE
/s/ Moshe Zeprani
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MOSHE ZEPRANI
Dated as of the 22nd day of February 1999.
<PAGE>
Exhibit 3.2
BYLAWS
OF
VANADIUM INTERNATIONAL, INC.
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICES.
The board of directors shall fix and may from time to time change the
location of the principal executive office of the Corporation at any place
within or outside the State of Nevada. If the principal executive office is
located outside this State, and the Corporation has one or more business offices
in this State, the board of directors shall fix and designate a principal
business office in the State of Nevada.
SECTION 2. OTHER OFFICES.
The board of directors may at any time establish branch or subordinate
offices at any place or places where the Corporation is qualified to do
business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at any place within or outside the
State of Nevada designated by the board of directors. In the absence of any
such designation, shareholders' meetings shall be held at the principal
executive office of the Corporation.
SECTION 2. ANNUAL MEETING.
The annual meeting of shareholders shall be held each year on a date and at
a time designated by the board of directors. The date so designated shall be
within five (5) months after the end of the fiscal year of the Corporation and
within fifteen (15) months after the last annual meeting. At each annual
meeting, directors shall be elected and any other proper business may be
transacted.
SECTION 3. SPECIAL MEETING.
A special meeting of the shareholders may be called at any time by the
board of directors, or by an officer, or by one or more shareholders holding
shares in the aggregate entitled to cast not less than ten percent (10%) of the
votes at that meeting.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time for
such meeting and the general nature of the business proposed to be transacted,
and shall be delivered personally or sent by registered mail or by telegraphic
or other facsimile transmission to the chairman of the board, the president, any
vice president, or the secretary of the Corporation. The officer receiving the
request shall cause notice to be promptly given to the shareholders entitled to
vote, in accordance with the provisions of Sections 4 and 5 of this Article II,
that a meeting will be held at the time requested by the person or persons
calling the meeting, not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, the person or persons requesting the
meeting may give the notice. Nothing contained in this paragraph of this
Section 3 shall be construed as limiting, fixing or affecting the time when a
meeting of shareholders called by action of the board of directors may be held.
SECTION 4. NOTICE OF SHAREHOLDERS' MEETING.
All notices of meetings of shareholders shall be sent or otherwise given in
accordance with Section 5 of this Article II not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The notice shall specify
the place, date and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business transacted, or (ii) in the case of
the annual meeting, those matters which the board of directors, at the time of
giving the notice, intends to present for action by the shareholders. The
notice of any meeting at which directors are to be elected shall include the
name of any nominee or nominees whom, at the time of the notice, management
intends to present for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a director has a direct or indirect material
financial interest, pursuant to the Nevada Corporations Code, (ii) an amendment
of the Articles of Incorporation, (iii) a reorganization of the Corporation,
(iv) a voluntary dissolution of the Corporation, or (v) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares, the notice shall also state the general nature of that proposal.
SECTION 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice of any meeting of shareholders shall be given either personally or
by first-class mail or telegraphic or other written communication, charges
prepaid, addressed to the shareholder at the address of that shareholder
appearing on the books of the Corporation or given by the shareholder to the
Corporation for the purpose of notice. If no such address appears on the
Corporation's books or is given, notice shall be deemed to have been given if
sent to that shareholder by first-class mail or telegraphic or other written
communication to the Corporation's principal executive office, or if published
at least once in a newspaper of general circulation in the county where that
office is located. Notice shall be deemed to have been given at the time when
delivered personally or deposited in the mail, delivered to a common carrier for
transmission to the recipient, actually transmitted by electronic means to the
recipient by the person giving the notice, or sent by other means of written
communication.
If any notice addressed to a shareholder at the address of that shareholder
appearing on the books of the Corporation is returned to the Corporation by the
United States Postal Service marked to indicate that the United States Postal
Service is unable to deliver the notice to the shareholder at that address, all
future notices or reports shall be deemed to have been duly given without
further mailing if these shall be available to the shareholder on written demand
of the shareholder at the principal executive office of the corporation for a
period of one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting shall be executed by the secretary, assistant secretary,
or any transfer agent of the Corporation giving the notice, and shall be filed
and maintained in the minute book of the Corporation.
SECTION 6. QUORUM.
The presence in person or by proxy of the holders of a majority of the
shares entitled to vote at any meeting of shareholders shall constitute a quorum
for the transaction of business. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum, if any action taken (other than adjournment) is approved by at
least a majority of the shares required to constitute a quorum.
SECTION 7. ADJOURNED MEETING; NOTICE.
Any shareholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the
shares represented at that meeting, either in person or by proxy, but in the
absence of a quorum, no other business may be transacted at that meeting, except
as provided in Section 6 of this Article II.
When any meeting of shareholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting of the
time and place are announced at a meeting at which the adjournment is taken,
unless a new record date for the adjourned meeting is fixed, or unless the
adjournment is for more than forty-five (45) days from the date set for the
original meeting, in which case the board of directors shall set a new record
date. Notice of any such adjourned meeting, if required, shall be given to each
shareholder of record entitled to vote at the adjourned meeting in accordance
with the provisions of Sections 4 and 5 of this Article II. At any adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting.
SECTION 8. VOTING.
The shareholders entitled to vote at any meeting of shareholders shall be
determined in accordance with the provisions of Section 11 of this Article II,
subject to the provisions of the Nevada Corporations Code (relating to voting
shares held by a fiduciary, in the name of a corporation, or in joint
ownership). The shareholders' vote may be by voice vote or by ballot; provided,
however, that any election for directors must be by ballot if demanded by any
shareholder before the voting has begun. On any matter other than elections of
directors, any shareholder may vote part of the shares in favor of the proposal
and refrain from voting the remaining shares or vote them against the proposal,
but, if the shareholder fails to specify the number of shares which the
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares that the shareholder
is entitled to vote. If a quorum is present (or if a quorum had been present
earlier at the meeting but some shareholders had withdrawn), the affirmative
vote of the majority of the shares represented and voting, provided such shares
voting affirmatively also constitutes a majority of the number of shares
required for a quorum, shall be the act of the shareholders, unless the vote of
a greater number or voting by classes is required by the Nevada Corporations
Code or by the Articles of Incorporation.
At a shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any one or more
candidates a number of votes greater than the number of the shareholder's
shares) unless the candidates' names have been placed in nomination prior to
commencement of the voting and the shareholder has given notice at the meeting,
prior to the voting, of the shareholder's intention to cumulate votes. If any
shareholder has given such a notice, then every shareholder entitled to vote may
cumulate votes for candidates in nomination and give one candidate a number of
votes equal to the number of directors to be elected, multiplied by the number
of votes to which that shareholder's shares are entitled, or distribute the
shareholder's votes on the same principle among any or all of the candidates, as
the shareholder thinks fit. The candidates receiving the highest number of
votes, up to the number of directors to be elected, shall be elected.
SECTION 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS.
The transactions of any meeting of shareholders, either annual or special,
however called and noticed, and wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum be present
either in person or by proxy, and if, either before or after the meeting, each
person entitled to vote, who was not present in person or by proxy, signs a
written waiver of notice or a consent to a holding of the meeting, or an
approval of the minutes. The waiver of notice or consent need not specify
either the business to be transacted or the purpose of any annual or special
meeting of shareholders, except that if action is taken or proposed to be taken
for approval of any of those matters specified in the second paragraph of
Section 4 of this Article II, the waiver of notice or consent shall state the
general nature of the proposal. All such waivers, consents or approvals shall
be filed with the corporate records or made a part of the minutes of the
meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of and presence at that meeting, except when the person objects, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened; except that such attendance at a meeting is
not a waiver of any right to object to the consideration of matters required to
be included in the notice of the meeting, but not so included, if that objection
is expressly made at the meeting.
SECTION 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice if a
consent in writing setting forth the action so taken is signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take that action at a meeting at which all shares
entitled to vote on that action were present and voted. In the case of election
of directors, such a consent shall be effective only if signed by the holders of
all outstanding shares entitled to vote for the election of directors; provided,
however, that a director may be elected at any time to fill a vacancy on the
board of directors (other than a vacancy created by removal of a director) that
has not been filled by the directors, by the written consent of the holders of a
majority of the outstanding shares entitled to vote for the election of
directors. All such consents shall be filed with the secretary of the
Corporation and shall be maintained in the corporate records. Any shareholder
giving a written consent, or the shareholder's proxy holders, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxy holders, may revoke the consent by a writing received by the secretary of
the Corporation before written consents of the number of shares required to
authorize the proposed action have been filed with the secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing, and if the unanimous written consent of all such
shareholders shall not have been received, the secretary shall give prompt
notice of the corporate action approved by the shareholders without a meeting.
This notice shall be given in the manner specified in Section 5 of this Article
II. In the case of approval of (i) contracts or transactions in which a
director has a direct or indirect material financial interest, pursuant to the
Nevada Corporations Code, (ii) indemnification of agents of the corporation,
(iii) a reorganization of the corporation, and (iv) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares, the notice shall be given at least ten (10) days before the consummation
of any action authorized by that approval.
SECTION 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS.
For purposes of determining the shareholders entitled to notice of any
meeting or to vote or entitled to give consent to corporate action without a
meeting, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) days nor less than ten (10) days before the date of
any such meeting nor more than sixty (60) days before any such action without a
meeting, and in this event only shareholders of record at the close of business
on the date so fixed are entitled to notice and to vote or to give consents as
the case may be, notwithstanding any transfer of any shares on the books of the
corporation after the record date, except as otherwise provided in the Nevada
Corporations Code.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived at the close of business, on the business day next preceding the day on
which the meeting is held;
(b) The record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting, (i) when no prior action by
the board has been taken, shall be the day on which the first written consent is
given, or (ii) when prior action of the board has been taken, shall be at the
close of business on the day on which the board adopts the resolution relating
to that action, or the sixtieth (60th) day before the date of such other action,
whichever is later.
SECTION 12. PROXIES.
Every person entitled to vote for directors or on any other matter shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the secretary of the
Corporation. A proxy shall be deemed signed if the shareholder's name is placed
on the proxy (whether by manual signature, typewriting, telegraphic
transmission, or otherwise) by the shareholder or the shareholder's attorney in
fact. A validly executed proxy which does not state that it is irrevocable
shall continue in full force and effect unless (i) revoked by the person
executing it, before the vote pursuant to that proxy, by a writing delivered to
the Corporation stating that the proxy is revoked, or by a subsequent proxy
executed by, or attendance at the meeting and voting in person by, the person
executing the proxy; or (ii) written notice of the death or incapacity of the
maker of that proxy is received by the Corporation before the vote pursuant to
that proxy is counted; provided, however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy, unless otherwise
provided in the proxy. The revocability of a proxy that states on its face that
it is irrevocable shall be governed by the provisions of the Nevada Corporations
Code.
SECTION 13. INSPECTORS OF ELECTION.
Before any meeting of shareholders, the board of directors may appoint any
persons other than nominees for office to act as inspectors of election at the
meeting or its adjournment. If no inspectors of election are so appointed, the
chairman of the meeting may, and on the request of any shareholder or a
shareholder's proxy shall, appoint inspectors of election at the meeting. The
number of inspectors shall be either one (1) or three (3). If inspectors are
appointed at a meeting on the request of one or more shareholders or proxies,
the holders of a majority of shares or their proxies present at the meeting
shall determine whether one (1) or three (3) inspectors are to be appointed. If
any person appointed as inspector fails to appear or fails or refuses to act,
the chairman of the meeting may, and upon the request of any shareholder or a
shareholder's proxy shall, appoint a person to fill that vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum, and the
authenticity, validity, and effect of proxies;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in any way arising in
connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote
with fairness to all shareholders.
ARTICLE III
DIRECTORS
SECTION 1. POWERS.
Subject to the provisions of the Nevada Corporations Code and any
limitations in the Articles of Incorporation and these Bylaws relating to action
required to be approved by the shareholders or by the outstanding shares, the
business and affairs of the Corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.
Without prejudice to these general powers, and subject to the same
limitations, the directors shall have the power to:
(a) Select and remove all officers, agents, and employees of the
Corporation; prescribe any powers and duties for them that are consistent with
law, with the Articles of Incorporation, and with these Bylaws; fix their
compensation; and require from them security for faithful service;
(b) Change the principal executive office or the principal business office
in the State of Nevada from one location to another; cause the Corporation to be
qualified to do business in any other state, territory, dependency, or country
and conduct business within or without the State of Nevada; and designate any
place within or without the State of Nevada for the holding of any shareholders'
meeting, or meetings, including annual meetings;
(c) Adopt, make, and use a corporate seal; prescribe the forms of
certificates of stock; and alter the form of the seal and certificates;
(d) Authorize the issuance of shares of stock of the Corporation on any
lawful terms, in consideration of money paid, labor done, services actually
rendered, debts or securities cancelled, or tangible or intangible property
actually received;
(e) Borrow money and incur indebtedness on behalf of the Corporation, and
cause to be executed and delivered for the Corporation's purposes, in the
Corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations, and other evidences of debt and securities.
SECTION 2. NUMBER AND QUALIFICATION OF DIRECTORS.
The authorized number of directors shall be three (3) until changed by a
duly adopted Amendment to the Articles of Incorporation or by an Amendment to
this Bylaw adopted by the vote or written consent of holders of a majority of
the outstanding shares entitled to vote; provided, however, that an amendment
reducing the number of directors to a number less than five (5) cannot be
adopted if the votes cast against its adoption at a meeting, or the shares not
consenting in the case of action by written consent, are equal to more than
16-2/3% of the outstanding shares entitled to vote.
No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.
SECTION 3. ELECTION AND TERM OF OFFICE OF DIRECTORS.
Directors shall be elected at each annual meeting of the shareholders to
hold office until the next annual meeting. Each director, including a director
elected to full a vacancy, shall hold office until the expiration of the term
for which elected and until a successor has been elected and qualified.
SECTION 4. VACANCIES.
A vacancy or vacancies in the board of directors shall be deemed to exist
in the event of the death, resignation, or removal of any director, or if the
board of directors by resolution declares vacant the office of a director who
has been declared of unsound mind by an order of court or convicted of a felony,
or if the authorized number of directors is increased, or if the shareholders
fail, at any meeting of shareholders at which any director or directors are
elected, to elect the number of directors to be voted for at that meeting.
Any director may resign effective on giving written notice to the chairman
of the board, the president, the secretary, or the board of directors, unless
the notice specifies a later time for that resignation to become effective. If
the resignation of a director is effective at a future time, the board of
directors may elect a successor to take office when the resignation becomes
effective.
Vacancies in the board of directors may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining director,
except that a vacancy created by the removal of a director by the vote or
written consent of the shareholders or by court order may be filled only by the
vote of a majority of the shares entitled to vote represented at a duly held
meeting of shareholders at which a quorum is present, or by the unanimous
written consent of holders of the outstanding shares entitled to vote. Each
director so elected shall hold office until the next annual meeting of the
shareholders and until a successor has been elected and qualified.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote, except that filling a vacancy created by removal of a
director shall require the written consent of the holders of all outstanding
shares entitled to vote.
SECTION 5. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE.
Regular meetings of the board of directors may be held at any place within
or outside the State of Nevada that has been designated from time to time by
resolution of the board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the Corporation. Special
meetings of the board shall be held at any place within or outside the State of
Nevada that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
Corporation. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another, and all such directors shall
be deemed to be present in person at the meeting.
SECTION 6. ANNUAL MEETING.
Immediately following each annual meeting of shareholders, the board of
directors shall hold a regular meeting at the place that the annual meeting of
shareholders was held or at any other place that shall have been designated by
the board of directors, for the purpose of organization, any desired election of
officers, and the transaction of other business. Notice of this meeting shall
not be required.
SECTION 7. OTHER REGULAR MEETINGS.
Other regular meetings of the board of directors shall be held without call
at such time as shall from time to time be fixed by the board of directors.
Such regular meetings may be held without notice.
SECTION 8. SPECIAL MEETINGS.
Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board or the president or any vice
president or the secretary or any two directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the Corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least four (4) days before
the time of the holding of the meeting. In case the notice is delivered
personally, or by telephone or telegram, it shall be delivered personally or by
telephone or to the telegraph company at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the director or to a person at the
office of the director whom the person giving the notice has reason to believe
will promptly communicate it to the director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at the
principal executive office of the Corporation.
SECTION 9. QUORUM.
A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 11 of
this Article III. Every act or decision done or made by a majority of the
directors present shall be regarded as the act of the board of directors,
subject to the provisions of the Nevada Corporations Code (as to approval of
contracts or transactions in which a director has a direct or indirect material
financial interest; appointment of committees; and, indemnification of
directors). A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
SECTION 10. WAIVER OF NOTICE.
The transactions of any meeting of the board of directors, however called
and noticed or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice if a quorum is present and if each director
(a) has received notice of the meeting, (b) attends the meeting without
protesting before or at the beginning of the meeting the lack of notice to such
director, or (c) before or after the meeting signs a written waiver of notice, a
consent to holding the meeting or an approval of the minutes. Any such waiver
of notice or consent need not specify the purpose of the meeting. All such
waivers, consents, and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
SECTION 11. ADJOURNMENT.
A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting to another time and place.
SECTION 12. NOTICE OF ADJOURNMENT.
Notice of the time and place of holding an adjourned meeting need not be
given, unless the meeting is adjourned for more than twenty-four (24) hours, in
which case notice of the time and place shall be given before the time of the
adjourned meeting, in the manner specified in Section 8 of this Article III, to
the directors who were not present at the time of the adjournment.
SECTION 13. ACTION WITHOUT MEETING.
Any action required or permitted to be taken by the board of directors may
be taken without a meeting, if all members of the board shall individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect of a unanimous vote of the board of
directors. Such written consent or consents shall be filed with the minutes of
the proceedings of the board.
SECTION 14. FEES AND COMPENSATION OF DIRECTORS.
Directors and members of committees may receive such compensation, if any,
for their services, and such reimbursement of expenses, as may be fixed or
determined by resolution of the board of directors. This Section 14 shall not
be construed to preclude any director from serving the Corporation in any other
capacity as an officer, agent, employee, or otherwise, and receiving
compensation for those services.
ARTICLE IV
COMMITTEES
SECTION 1. COMMITTEES OF DIRECTORS.
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent member at any meeting of the committee. Any
committee, to the extent provided in the resolution of the board, shall have all
the authority of the board, except with respect to:
(a) the approval of any action which, under the Nevada Corporations Code,
also requires shareholders' approval or approval of the outstanding shares;
b) the filling of vacancies on the board of directors or in any committee;
(c) the fixing of compensation of the directors for serving on the board
or on any committee;
(e) the amendment or repeal of any resolution of the board of directors
which by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the Corporation, except at a
rate or in a periodic amount or within a price range determined by the board of
directors; or
(g) the appointment of any other committees of the board of directors or
the members of these committees.
SECTION 2. MEETINGS AND ACTION OF COMMITTEES.
Meetings and action of committees shall be governed by, and held and taken
in accordance with the provisions of Article III of these Bylaws, Section 5
(place of meetings), 7 (regular meetings), 8 (special meetings and notice), 9
(quorum), 10 (waiver and notice), 11 (adjournment), 12 (notice of adjournment),
and 13 (action without meeting), with such changes in the context of those
Bylaws as are necessary to substitute the committee and its members for the
board of directors and its members, except that the time of regular meetings of
committees may be determined either by resolution of the board of directors or
by resolution of the committee; special meetings of committees may also be
called by resolution of the board of directors; and notice of special meetings
of committees shall also be given to all alternate members who shall have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these Bylaws.
<PAGE>
ARTICLE V
OFFICERS
SECTION 1. OFFICERS.
The officers of the Corporation shall be a chairman of the board or
president, or both, a secretary, and a chief financial officer. The Corporation
may also have, at the discretion of the board of directors, a chairman of the
board, one or more vice presidents, one or more assistant secretaries, one or
more assistant treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article V. Any number of
offices may be held by the same person.
SECTION 2. ELECTION OF OFFICERS.
The officers of the Corporation, except such officers as may be appointed
in accordance with the provisions of Section 3 or Section 5 of this Article V,
shall be chosen by the board of directors, and each shall serve at the pleasure
of the board, subject to the rights, if any, of an officer under any contract of
employment.
SECTION 3. SUBORDINATE OFFICERS.
The board of directors may appoint, and may empower the president to
appoint, such other officers as the business of the Corporation may require,
each of whom shall hold office for such period, have such authority and perform
such duties as are provided in the Bylaws or as the board of directors may from
time to time determine.
SECTION 4. REMOVAL AND RESIGNATION OF OFFICER.
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the
board of directors, at any regular or special meeting of the board, or, except
in case of an officer chosen by the board of directors, by any officer upon whom
such power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in the notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.
SECTION 5. VACANCIES IN OFFICES.
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.
SECTION 6. CHAIRMAN OF THE BOARD.
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may be from time to time assigned to him by the
board of directors or prescribed by the Bylaws. If there is no president, the
chairman of the board shall in addition be the chief executive officer of the
Corporation and shall have the powers and duties prescribed in Section 7 of this
Article V.
SECTION 7. PRESIDENT.
Subject to such supervisory powers, if any, as may be given by the Bylaws
or the board of directors to the chairman of the board, if there be such an
officer, the president shall be the general manager and chief executive officer
of the Corporation and shall, subject to the control of the board of directors,
have general supervision, direction, and control of the business and the
officers of the Corporation. He shall preside at all meetings of the
shareholders and, in the absence of the chairman of the board, or if there be
none, at all meetings of the board of directors. He shall have the general
powers and duties of management usually vested in the office of president of a
Corporation, and shall have such other powers and duties as may be prescribed by
the board of directors or the Bylaws.
SECTION 8. VICE PRESIDENTS.
In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the board of directors or, if not ranked, a
vice president designated by the board of directors, shall perform all the
duties of the president, and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors or the Bylaws, and
the president, or the chairman of the board if there is no president.
SECTION 9. SECRETARY.
The secretary shall keep or cause to be kept, at the principal executive
office or such other place as the board of directors may direct, a book of
minutes of all meetings and actions of directors, committees of directors, and
shareholders, with the time and place of holding, whether regular or special,
and, if special, how authorized, the notice given, the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings.
The secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the Corporation's transfer agent or registrar, as
determined by resolution of the board of directors, a share register, or a
duplicate share register, showing the names of all shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The secretary or assistant secretary, or if they are absent or unable to
act or refuse to act, any other officer of the corporation shall give, or cause
to be given, notice of all meetings of the shareholders, of the board of
directors and of committees of the board of directors, required by the Bylaws or
by law to be given. The secretary shall keep the seal of the Corporation, if
one be adopted, in safe custody and shall have such other powers and perform
such other duties as may be prescribed by the board of directors or by the
Bylaws.
SECTION 10. CHIEF FINANCIAL OFFICER.
The chief financial officer shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other valuables in
the name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall disburse the funds of the
Corporation as may be ordered by the board of directors, whenever they request
it, an account of all of his transactions as chief financial officer and of the
financial condition of the Corporation, and shall have other powers and perform
such other duties as may be prescribed by the board of directors or the Bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES, AND OTHER AGENTS
SECTION 1. AGENTS, PROCEEDINGS, AND EXPENSES.
For the purposes of this Article, "agent" means any person who is or was a
director, officer, employee, or other agent of this Corporation, or is or was
serving at the request of this Corporation as a director, officer, employee, or
agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee, or agent of a
foreign or domestic corporation which was a predecessor corporation of this
Corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative, or investigative; and
"expenses" includes, without limitation, attorneys' fees and any expenses of
establishing a right to indemnification under Section 4 or Section 5(c) of this
Article.
SECTION 2. ACTIONS OTHER THAN BY THE CORPORATION.
This Corporation shall have power to indemnify any person who was or is a
party, or is threatened to be made a party, to any proceeding (other than an
action by or in the right of this Corporation to procure a judgment in its
favor) by reason of the fact that such person is or was an agent of this
Corporation, against expense, judgments, finds, settlements and other amounts
actually and reasonably incurred in connection with such proceeding if that
person acted in good faith and in a manner that person reasonably believed to be
in the best interests of this Corporation, and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of that person was
unlawful. The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best interest of this
Corporation or that the person had reasonable cause to believe that the person's
conduct was unlawful.
SECTION 3. ACTIONS BY THE CORPORATION.
This Corporation shall have power to indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action by or in the right of this Corporation to procure a judgment in
its favor by reason of the fact that the person is or was an agent of this
Corporation, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action if that person acted in
good faith, in a manner that person believed to be in the best interests of this
Corporation and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances. No
indemnification shall be made under this Section 3:
(a) In respect to any claim, issue or matter as to which that person shall
have been adjudged to be liable to this Corporation in the performance of that
person's duty to this Corporation, unless and only to the extent that the court
in which the proceeding is or was pending shall determine upon application that,
in view of all the circumstances of the case, that person is fairly and
reasonably entitled to indemnity for the expenses which the court shall
determine.
(b) Of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval; and
(c) Of expenses incurred in defending a threatened or pending action that
is settled or otherwise disposed of with or without court approval.
SECTION 4. SUCCESSFUL DEFENSE BY AGENT.
To the extent that an agent of this Corporation has been successful on the
merits in defense of any proceeding referred to in Sections 2 or 3 of this
Article, or in defense of any claim, issue, or matter therein, the agent shall
be indemnified against expenses actually and reasonably incurred by the agent in
connection therewith.
SECTION 5. REQUIRED APPROVAL.
Except as provided in Section 4 of this Article, any indemnification under
this Article shall be made by this Corporation only if authorized in the
specific case on a determination that indemnification of the agent is proper in
the circumstances because the agent has met the applicable standard of conduct
set forth in Sections 2 or 3 of this Article, by:
(a) A majority vote of a quorum consisting of directors who are not
parties to the proceeding;
(b) Approval by the affirmative vote of a majority of the shares of this
Corporation entitled to vote represented at a duly held meeting at which a
quorum is present or by the written consent of the holders of a majority of the
outstanding shares entitled to vote. For this purpose, the shares owned by the
person to be indemnified shall not be considered outstanding or entitled to vote
thereon; or
(c) The court in which the proceeding is or was pending, on application
made by this Corporation or the agent or the attorney or other person rendering
services in connection with the defense, whether or not such application by the
agent, attorney, or other person is opposed by this Corporation.
SECTION 6. ADVANCE OF EXPENSES.
Expenses incurred in defending any proceeding may be advanced by this
Corporation before the final disposition of the proceeding on receipt of an
undertaking by or on behalf of the agent to repay the amount of the advance
unless it shall be determined ultimately that the agent is entitled to be
indemnified as authorized in this Article.
SECTION 7. OTHER CONTRACTUAL RIGHTS.
Nothing contained in this Article shall affect any right to indemnification
to which persons other than directors and officers of this Corporation or any
subsidiary hereof may be entitled by contract or otherwise.
SECTION 8. LIMITATIONS.
No indemnification or advance shall be made under this Article, except as
provided in Section 4 or Section 5(c), in any circumstance where it appears:
(a) That it would be inconsistent with a provision of the articles of
incorporation, a resolution of the shareholders, or an agreement in effect at
the time of the accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were paid, which
prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by
a court in approving a settlement.
SECTION 9. INSURANCE.
Upon and in the event of a determination by the board of directors of this
Corporation to purchase such insurance, this Corporation shall purchase and
maintain insurance on behalf of any agent of the Corporation against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such whether or not this Corporation would have the
power to indemnify the agent against that liability under the provisions of this
section.
SECTION 10. FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN.
This Article does not apply to any proceeding against any trustee,
investment manager, or other fiduciary of an employee benefit plan in that
person's capacity as such, even though that person may also be an agent of the
corporation as defined in Section 1 of this Article. This Corporation shall
have the power to indemnify, and to purchase and maintain insurance on behalf
of, any such trustee, investment manager, or other fiduciary of any pension,
profit-sharing, share bonus, share purchase, share option, savings, thrift and
other retirement, incentive, and benefit plan, trust, and other provision for
any or all of the directors, officers, and employees of the Corporation or any
of its subsidiary or affiliated corporations, and to indemnify and purchase and
maintain insurance on behalf of any fiduciary of such plans, trusts, or
provisions. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise, which shall be enforceable to the
extent permitted by applicable law other than this Article.
ARTICLE VII
RECORDS AND REPORTS
SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.
The Corporation shall keep at its principal executive office, or at the
office of its transfer agent or registrar, if either be appointed and as
determined by resolution of the board of directors, a record of its
shareholders, giving the names and addresses of all shareholders and the number
and class of shares held by each shareholder.
A shareholder or shareholders of the Corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation may (i) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours on five (5) days' prior
written demand on the Corporation, and (ii) obtain from the transfer agent of
the Corporation, on written demand and on the tender of such transfer agent's
usual charges for such list, a list of the shareholders' names and addresses,
who are entitled to vote for the election of directors, and their shareholdings,
as of the most recent record date for which that list has been compiled or as of
a date specified by the shareholder after the date of demand. This list shall
be made available to any such shareholder or shareholders by the transfer agent
on or before the later of five (5) days after the demand is received or the date
specified in the demand as the date as of which the list is to be compiled. The
record of shareholders shall also be open to inspection on the written demand of
any shareholder or holder of a voting trust certificate, at any time during
usual business hours, for a purpose reasonably related to the holder's interests
as a shareholder or as the holder of a voting trust certificate. Any inspection
and copying under this Section 1 may be made in person or by an agent or
attorney of the shareholder or holder of a voting trust certificate making the
demand.
SECTION 2. MAINTENANCE AND INSPECTION OF BYLAWS.
The Corporation shall keep at its principal executive office, or if its
principal executive office is not in the State of Nevada, at its principal
business office in Nevada, the original or a copy of the Bylaws as amended to
date, which shall be open to inspection by the shareholders at all reasonable
times during office hours. If the principal executive office of the Corporation
is outside the State of Nevada and the Corporation has no principal business
office in this State, the secretary shall, upon the written request of any
shareholder, furnish to that shareholder a copy of the Bylaws as amended to
date.
SECTION 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS.
The accounting books and records and minutes of proceedings of the
shareholders and the board of directors and any committee or committees of the
board of directors shall be kept at such place or places designated by the board
of directors, or, in the absence of such designation, at the principal executive
office of the Corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form. The minutes and
accounting books and records shall be open to inspection upon the written demand
of any shareholder or holder of a voting trust certificate, at any reasonable
time during usual business hours, for a purpose reasonably related to the
holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or attorney,
and shall include the right to copy and make extracts. These rights of
inspection shall extend to the records of each subsidiary corporation of the
Corporation.
SECTION 4. INSPECTION BY DIRECTORS.
Every director shall have the absolute right at any reasonable time to
inspect all books, records, and documents of every kind and the physical
properties of the Corporation and each of its subsidiary corporations. This
inspection by a director may be made in person or by an agent or attorney and
the right of inspection includes the right to copy and make extracts of
documents.
SECTION 5. ANNUAL REPORT TO SHAREHOLDERS.
The annual report to shareholders referred to in the Nevada Corporations
Code is expressly dispensed with, but nothing herein shall be interpreted as
prohibiting the board of directors from issuing annual or other periodic reports
to the shareholders of the Corporation as they consider appropriate.
SECTION 6. FINANCIAL STATEMENTS.
A copy of any annual financial statement and any income statement of the
Corporation for each quarterly period of each fiscal year, and any accompanying
balance sheet of the Corporation as of the end of each such period, that has
been prepared by the Corporation shall be kept on file in the principal
executive office of the Corporation for twelve (12) months and each such
statement shall be exhibited at all reasonable times to any shareholder
demanding an examination of any such statement or a copy shall be mailed to any
such shareholder.
If a shareholder or shareholders holding at least five percent (5%) of the
outstanding shares of any class of stock of the Corporation makes a written
request to the Corporation for an income statement of the Corporation for the
three-month, six-month or nine-month period of the then current fiscal year
ended more than thirty (30) days before the date of the request, and a balance
sheet of the Corporation as of the end of that period, the chief financial
officer shall cause that statement to be prepared, if not already prepared, and
shall deliver personally or mail that statement or statements to the person
making the request within thirty (30) days after the receipt of the request. If
the Corporation has not sent to the shareholders its annual report for the last
fiscal year, this report, if any, shall likewise be delivered or mailed to the
shareholder or shareholders within thirty (30) days after the request.
The Corporation shall also, on the written request of any shareholder, mail
to the shareholder a copy of the last annual, semi-annual, or quarterly income
statement which it has prepared, and a balance sheet as of the end of that
period.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Corporation or the certificate of an authorized
officer of the Corporation that the financial statements were prepared without
audit from the books and records of the Corporation.
SECTION 7. ANNUAL STATEMENT OF GENERAL INFORMATION.
The Corporation shall, each year during the calendar month in which its
Articles of Incorporation originally were filed with the Nevada Secretary of
State, or during the preceding five (5) calendar months, file with the Secretary
of State of the State of Nevada, on the prescribed form a statement setting
forth the authorized number of directors, the names and complete business or
residence addresses of all incumbent directors, the number of vacancies on the
board, if any, the names and complete business or residence addresses of the
chief executive officer, secretary, and chief financial officer, the street
address of its principal executive office or principal business office in
Nevada, and the general type of business constituting the principal business
activity of the Corporation, together with a designation of the agent of the
Corporation for the purpose of service of process, all in compliance with the
Nevada Corporations Code.
ARTICLE VIII
GENERAL CORPORATE MATTERS
SECTION 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.
For purposes of determining the shareholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action (other than action by
shareholders by written consent without a meeting), the board of directors may
fix, in advance, a record date, which shall not be more than sixty (60) days nor
less than ten (10) days before any such action, and in that case only
shareholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution, or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date so fixed, except as
otherwise provided in the Nevada Corporations Code.
If the board of directors does not so fix a record date, the record date
for determining shareholders for any such purpose shall be at the close of
business on the day on which the board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
SECTION 2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS.
All checks, drafts, or other orders for payment of money, notes, or other
evidences of indebtedness, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as,
from time to time, shall be determined by resolution of the board of directors.
SECTION 3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED.
The board of directors, except as otherwise provided in these Bylaws, may
authorize any officer or officers, agent or agents, to enter into any contract
or re-execute any instrument in the name of and on behalf of the Corporation,
and this authority may be general or confined to specific instances; and, unless
so authorized or ratified by the board of directors or within the agency power
of an officer, no officer, agent, or employee shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit or
to render it liable for any purpose or for any amount.
SECTION 4. CERTIFICATE FOR SHARES.
A certificate or certificates for shares of the capital stock of the
Corporation shall be issued to each shareholder when any of these shares are
fully paid, and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these certificates shall
state the amount of the consideration to be paid for them and the amount paid.
If the shares are subject to restrictions upon transfer, the restriction or
restrictions shall also appear on the certificate. All certificates shall be
signed in the name of the Corporation by the chairman of the board or vice
chairman of the board or the president or vice president and by the chief
financial officer or an assistant treasurer or the secretary or any assistant
secretary, certifying the number of shares and the class or series of shares
owned by the shareholder. Any or all of the signatures on the certificate may
be facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed on a certificate shall have ceased
to be that officer, transfer agent, or registrar before that certificate is
issued, it may be issued by the Corporation with the same effect as if that
person were an officer, transfer agent, or registrar at the date of issue.
SECTION 5. LOST CERTIFICATES.
Except as provided in this Section 5, no new certificates for shares shall
be issued to replace an old certificate unless the latter is surrendered to the
Corporation and cancelled at the same time. The board of directors may, in case
any share certificate or certificate for any other security is lost, stolen, or
destroyed, authorize the issuance of a replacement certificate on such terms and
conditions as the board may require, including provision for indemnification of
the Corporation secured by a bond or other adequate security sufficient to
protect the Corporation against any claim that may be made against it, including
any expense or liability, on account of the alleged loss, theft, or destruction
of the certificate or the issuance of the replacement certificate.
SECTION 6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS.
The chairman of the board, the president, or any vice president, or any
other person authorized by resolution of the board of directors or by any of the
foregoing designated officers, is authorized to vote on behalf of the
Corporation any and all shares of any other corporation or corporations, foreign
or domestic, standing in the name of the Corporation. The authority granted to
these officers to vote or represent on behalf of the Corporation any and all
shares held by the Corporation in any other corporation or corporations may be
exercised by any of these officers in person or by any person authorized to do
so by a proxy duly executed by these officers.
SECTION 7. EMPLOYEE STOCK PURCHASE PLANS.
The Corporation may, upon terms and conditions herein authorized, provide
and carry out an employee stock purchase plan or plans providing for the issue
and sale, or for the granting of options for the purchase, of its unissued
shares, or of issued shares purchased or to be purchased or acquired, to
shareholders or employees of the Corporation or of any subsidiary or to a
trustee on their behalf. Such plan may provide for such consideration as may be
fixed therein, for the payment of such shares in installments or at one time and
for aiding any such employees in paying for such shares by compensation for
services or otherwise. Any such plan before becoming effective must be approved
or authorized by the board of directors of the Corporation.
Such plan may include, among other things, provisions determining or
providing for the determination by the board of directors, or any committee
thereof designated by the board of directors, of:
(a) eligibility of employees (including officers and directors) and
shareholders to participate therein,
(b) the number and class of shares which may be subscribed for or for
which options may be granted under the plan,
(c) the time and method of payment therefor, shall be issued or sold,
(d) the price or prices at which such shares shall be issued or sold,
(e) whether or not title to the shares shall be reserved to the
Corporation until full payment thereof,
(f) the effect of the death of a shareholder or an employee participating
in the plan or termination of his employment, including whether there shall be
any option or obligation on the part of the Corporation to repurchase the shares
thereupon,
(g) restrictions, if any, upon the transfer of the shares, and the time
limits, and termination of the plan,
(h) termination, continuation or adjustments of the rights of
participating employees and shareholders upon the happening of specified
contingencies, including increase or decrease in the number or issued shares of
the class covered by the plan without receipt of consideration by the
Corporation or any exchange of shares of such class for stock or securities of
another corporation pursuant to a reorganization or merger, consolidation or
dissolution of the Corporation,
(i) amendment, termination, interpretation and administration of such plan
by the board or any committee thereof designated by the board of directors, and
(j) any other matters, not repugnant to law, as may be included in the
plan as approved or authorized by the board of directors or any such committee.
SECTION 8. CONSTRUCTION AND DEFINITIONS.
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Nevada Corporations Code shall govern the
construction of these Bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and natural
person.
ARTICLE IX
AMENDMENTS
SECTION 1. AMENDMENT BY SHAREHOLDERS.
New bylaws may be adopted or these Bylaws may be amended or repealed by the
vote or written consent of holders of a majority of the outstanding shares
entitled to vote, except as otherwise provided by law, these Bylaws, or the
Articles of Incorporation; provided, however, that if the Articles of
Incorporation of the Corporation set forth the number of authorized directors of
the Corporation, the authorized number of directors may be changed only by an
amendment of the Articles of Incorporation.
SECTION 2. AMENDMENT BY DIRECTORS.
Subject to the rights of the shareholders as provided in Section 1 of this
Article IX, Bylaws, other than a Bylaw or an amendment to a Bylaw changing the
authorized number of directors, may be adopted, amended, or repealed by the
board of directors.
<PAGE>
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement is entered into as of the 5th day of October, 1998, by
and between U.S. Vanadium Corp a Nevada corporation (hereinafter the "Company"),
and Ken B. Liebscher (hereinafter "Employee") under the following terms and
conditions:
RECITALS:
WHEREAS, it is in the best interest of the Company to employ the services
of Employee as President of the Company upon the terms and conditions
hereinafter set forth; and;
WHEREAS, it is in the desire of Employee to be employed as President of the
Company upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. TERM
1.1 The term of this Agreement shall be for a period of one (1) year,
commencing on the effective date of this Agreement subject however, to prior
termination as provided hereinbelow, in Paragraph 5 and 6.
1.2 For purposes of extending the term of the relationship between the
Company and Employee, the parties agree to enter into good faith negotiations
within sixty (60) days prior to the termination of this Agreement. In the event
that the parties are unable to reach an agreement at such time as this Agreement
terminates, this Agreement shall be automatically terminated on the anniversary
of the effective date of this Agreement.
2. COMPENSATION
2.1 The Company or one or more of its subsidiaries shall pay Employee
during the term hereof a salary at the rate of US$48,000 per year, which
compensation shall be paid to Employee in equal semi-monthly installments.
2.2 Employee shall be entitled to periodic cash bonuses, stock options
or other forms of compensation, at the discretion of the Company's Board of
Directors, dependent upon Employee's performance.
2.3 Compensation shall not be subject to customary withholding tax and
other employment taxes as they shall be the responsibility of the employee.
3. COVENANT NOT TO COMPETE
During the term of this Agreement, Employee shall not, without the consent
of the Company, engage in any activity competitive with and/or adverse to the
Company's business or practice. However, Employee may make passive investments
in companies which might be in a competitive business or have competitive
business practices with that of the Company.
4. SERVICES
4.1 Employee agrees to serve as President of the Company and to devote
sufficient time (subject to the limitations set forth in this Paragraph 4) to
perform those duties customarily incident to such office as required and such
other services, acts or things necessary or advisable as directed by the Board
of Directors of the Company. Employee shall report and shall be exclusively
responsible to the Board of Directors. Expenditures of time for personal,
business, charitable and other activities shall not be deemed a breach of this
Agreement, provided that such activities do not interfere with the services
required to be rendered to the Company hereunder or compete with the business of
the Company. Employee agrees that he will serve the Company faithfully,
diligently, competently and to the best of his ability until the termination of
his employment hereunder.
5. EFFECTIVE DATE.
The effective date of this Agreement shall be October 1, 1998.
6. TERMINATION.
6.1 This Agreement shall terminate upon the occurrence of any of the
following events:
(a) Upon the expiration of the term of this Agreement, pursuant to
Paragraph 1 hereof.
(b) Whenever the Company and Employee shall mutually agree to
termination
in writing.
(c) Upon the death of Employee.
7. TERMINATION WITHOUT CAUSE
The Company may terminate Employee, without cause, upon 90 days written
notice to Employee. In the event of termination without cause, the Employee
shall be entitled to a severance allowance payable in the manner in which
Employee received his compensation under this Agreement for the period remaining
under this Agreement if it were to continue for its full term. The severance
allowance shall be equal to one hundred percent (100%) of the compensation which
Employee would otherwise be entitled to if this Agreement were to continue for
its full term less such amounts as are required to be withheld and deducted.
8. EXPENSES
8.1 Employee shall be entitled to reimbursement of all reasonable
expenses actually incurred in the course of his employment. Employee shall
submit to the Company a standardized expense report form, provided by the
Company, and shall attach thereto receipts for all expenditures. Automobile
expenses shall be reimbursed at the maximum mileage rate allowed by the Internal
Revenue Service.
8.2 The Company shall reimburse employee within fifteen (15) days after
submission by Employee of his expense report. Employee shall be provided with a
VISA, Mastercard or American Express credit card for business expenses.
9. THE COMPANY'S AUTHORITY
Employee agrees to observe and comply with the reasonable rules and
regulations of the Company as adopted by the Company's Board of Directors either
orally or in writing respecting performance of his duties and to carry out and
perform orders, directions and policies stated by the Board of Directors, to him
from time to time, either orally or in writing.
10. INSURANCE
Employee shall be allowed to participate in any Company's medical health
insurance plan and/or prepaid dental plan for the benefit of its employees,
including Employee and his spouse hereunder.
11. NON-TRANSFERABILITY
This Agreement shall not be transferable or assignable by Employee, nor
shall Employee's interest herein be transferred or assigned by operation of law,
and any assignment or attempted assignment, transfer, mortgage, hypothecation,
or pledge of this Agreement or his interest herein by Employee, shall be null
and void.
12. NOTICES
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and (unless otherwise specifically provided
herein) shall be deemed to have been given at the time when mailed in any
general or branch United States Post Office, enclosed in a registered or
certified postpaid envelope, addressed to the parties stated below or to such
changed address as such party may have fixed by notice:
TO THE COMPANY: U.S. VANADIUM, CORP.
5466 Canvasback Road
Blaine,
Washington 98230
COPY TO: Gregory V. Gibson
Gibson, Haglund and Johnson
Jamboree Center
2 Park Plaza Suite 450
Irvine, California 92614
EMPLOYEE: Ken B. Liebscher
5466 Canvasback Rd
Blaine, WA 98230
13. ENTIRE AGREEMENT
This Agreement supercedes any and all Agreements, whether oral or written,
between the parties hereto, with respect to the employment of Employee by the
Company and contains all of the covenants and Agreements between the parties
with respect to the rendering of such services in any manner whatsoever. Each
party to this Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise with respect to such employment not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing and signed by all the
parties hereto.
14. PARTIAL INVALIDITY
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.
15. ATTORNEYS' FEES
If any action in law or equity, including an action for declaratory relief,
is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees and costs,
which may be set by the court in the same action or in a separate action brought
for that purpose, in addition to any other relief to which that party may be
entitled.
16. GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the State of Washington.
17. BINDING NATURE
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, heirs, successors and
assigns.
18. WAIVER
No waiver of any of the provision of this Agreement shall be deemed, or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
19. CORPORATE APPROVALS
The Company represents and warrant that the execution of this Agreement by
their respective corporate officers named below have been duly authorized by the
Board of Director of the Company, is not in conflict with any Bylaw or other
agreement and will be a binding obligation of the Company enforceable in
accordance with its terms.
20. TIME IS OF THE ESSENCE.
Time is of the essence with respect to all matters provided in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above written.
"THE COMPANY"
U.S. VANADIUM CORP.
/s/Dennis LaPrairie
By: ---------------------------------------
DENNIS LaPRAIRIE - Secretary/Director
"EMPLOYEE"
/s/Ken B. Liebscher
- -------------------------------------------
KEN B. LIEBSCHER
<PAGE>
Exhibit 10.2
PURCHASE AGREEMENT
- ------------------
THIS AGREEMENT made September 18, 1998
------------------
BETWEEN: U.S. VANADIUM CORP. having an office located at 5466 Canvasback
Road, Blaine, Washington, 98230
OF THE FIRST PART
(the "Purchaser")
AND: MEDAN MANAGEMENT CORP., a company having an office located at 4 Canons
Close, Edgware, Middlesex, United Kingdom, HA8 7QR
OF THE SECOND PART
(the "Vendor")
WHEREAS:
A. The Vendor warrants and represents that it is the owner of the mineral
claims more particularly described in the schedule attached hereto (the "Mineral
Claims").
B. The Vendor has agreed to sell and transfer 100% of the right, title and
interest in and to the Mineral Claims pursuant to the terms hereinafter set
forth free and clear of any and all claims of whatsoever nature and kind.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the mutual covenants and agreements hereinafter contained, the parties hereto
agree as follows:
1. Purchase and Sale
- -- -----------------
1.1 The Vendor hereby sells, assigns, transfers and sets over unto the
Purchaser for its own use absolutely an undivided 100% interest in and to the
Mineral Claims in consideration for 15,000,000 shares of U.S. Vanadium Corp.
(wherein the shares shall have a deemed aggregate value of US$50,000), US$50,000
and reimbursement for all registration and annual fee expenses up to US$5,000
that have been incurred by the Vendor (collectively, the "Purchase Price").
1.2 The parties agree that once the Purchaser has fulfilled all its
obligations (referred to in paragraph 1.1 herein), the Purchaser will become the
owner of the Mineral Claims free and clear of any and all claims of whatsoever
nature and kind.
2. Vendor's Representation, Warranties and Covenants
- -- -------------------------------------------------
2.1 The Vendor represents, warrants and covenants that:
(a) it is the owner of an undivided 100% interest in and to the Mineral
Claims;
<PAGE>
(b) the Mineral Claims are free and clear of any encumbrances, liens or
charges and neither it nor any of its predecessors in interest or title have
done anything whereby the Mineral Claims may be encumbered;
(c) the mineral Claims are in good standing under all applicable laws and
regulations and all assessment work required has been performed and filed and
all taxes have been paid;
(d) to the best of the information and belief of the Vendor, the Mineral
Claims have been properly located and staked and recorded in compliance with the
laws of the jurisdiction in which they are situation, and that there are no
disputes over title to the Mineral Claims;
(e) it has the right to enter into this Agreement and to dispose of 100% of
its right, title and interest in and to the Mineral Claims to the Purchaser;
(f) upon the payment of the Purchase Price, the Purchaser shall be deemed to
be the beneficial owner of a 100% interest in the Mineral Claims and the Vendor
shall execute or cause to be executed a Bill of Sale or such other documents as
the Purchaser may reasonably require, transferring 100% of its right, title and
interest in and to the Mineral Claims to the Purchaser, which the Purchaser
shall be at liberty to record forthwith. In any event, the Vendor shall transfer
the title in all of the Mineral Claims to the Purchaser as soon as is
practicably possible upon the payment of the Purchase Price; and
(g) to the knowledge of the Vendor there are no outstanding agreements or
options to acquire or purchase the Mineral Claims or any portion thereof or
interest therein and no person has any royalty or interest whatsoever in
production or profits from the Mineral Claims or any portion thereof.
2.2 The representations and warranties in paragraph 2.1 shall apply to all
assignments, conveyances, transfers and documents delivered in connection with
this Agreement and there shall be no merger or any representation and warranties
in such assignments, conveyances, transfers and documents notwithstanding any
rule of law, equity or statute to the contrary and all such rules are hereby
waived. The Purchaser shall have the right to waive any representation and
warranty made by the Vendor in the Purchaser's favor without prejudice to any of
its recourses with respect to any other breach by the Vendor. All of the
representations and warranties contained in this Agreement shall survive the
closing of this transaction.
3. Purchaser's Representations, Warranties and Covenants
- -- -----------------------------------------------------
3.1 The Purchaser represents, warrants and covenants that:
(a) it has the right to enter into this Agreement; and
(b) it will maintain the Mineral Claims in good standing under all
applicable laws and regulations, perform and file all assessment work and pay
taxes as they become due.
4. General Provisions
- -- ------------------
4.1 Time shall be of the essence and the parties shall execute all further
documents or assurances as may be required to carry out the full intent of this
agreement.
4.2 This Agreement constitutes and contains the entire agreement and
understanding between the parties and supersedes all prior agreement, memoranda,
correspondence, communications, negotiations and representation, whether oral or
written, expressed or implied, statutory or otherwise, between the parties or
any of them with respect to the subject matter thereof.
4.3 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
4.4 This Agreement may be signed in counterpart and all counterparts taken
together shall constitute one and the same Agreement, and any facsimile
signature shall be taken as an original.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
U.S. VANADIUM CORP.
/s/ Ken Liebscher
Per: Authorized Signatory
MEDAN MANAGEMENT CORP.
/s/ Sidney Mann
Per: Authorized Signatory
<PAGE>
BILL OF SALE ABSOLUTE
---------------------
In consideration of the sum of 91.00 now paid by U.S. Vanadium Corp. to
Medan Management Corp. (the "Company") and 15,000,000 shares of U.S. Vanadium
Corp., US$50,000 and certain expenses of Medan Management Corp. as set forth in
that Purchase Agreement between such parties (the receipt and sufficiency of
which consideration is hereby acknowledged), the Company does hereby absolutely
sell, transfer and assign to U.S. Vanadium Corp. for its sole use and benefit
forever, a 100% interest in the mineral claim described in schedule "A" attached
hereto.
Any facsimile signature shall be taken as an original.
Dated:
September 18, 1998
------------------
MEDAN MANAGEMENT CORP.
/s/Sidney Mann
Per: Authorized Signatory
Name: Sidney Mann
<PAGE>
<PAGE>
Exhibit 99.1
US VANADIUM CORP.
(A Development Stage Company)
REPORT AND FINANCIAL STATEMENTS
December 31, 1998
(Stated in US Dollars)
<PAGE>
Terry Amisano Ltd. Amisano Hanson
Kevin Hanson, CA Chartered Accountants
AUDITORS' REPORT
To the Directors,
US Vanadium Corp.
We have audited the balance sheet of US Vanadium Corp. (A Development Stage
Company) as at December 31, 1998 and the statement of loss and deficit
accumulated during the development stage, stockholders' equity and cash flows
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 1998 and the
results of its operations and cash flows for the period August 24, 1998 (Date of
Incorporation) to December 31, 1998, in accordance with generally accepted
accounting principles in the United States.
Vancouver, Canada /s/Amisano Hanson
September 8, 1998 Chartered Accountants
Comments by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict
In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when there is
substantial doubt about a company's ability to continue as a going concern. The
accompanying financial statements have been prepared on the basis of accounting
principles applicable to a going concern which assumes the realization of
assets and discharge of liabilities in the normal course of business. As
discussed in Note 1 to the accompanying financial statements in respect of the
company's substantial losses from operations, substantial doubt about the
company's ability to continue as a going concern exists. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Our report to the shareholders dated September 8, 1999 is expressed in
accordance with Canadian reporting standards which do not permit a reference to
such uncertainty in the auditors' report when the uncertainty is adequately
disclosed in the financial statements.
Vancouver, Canada /s/Amisano Hanson
September 8, 1999 Chartered Accountants
Suite 604 - 750 West Pender Street, Vancouver, B.C. V6C 2T7
Telephone (604)689-0188
Facsimile (604)689-9773
<PAGE>
SEE ACCOMPANYING NOTES
US VANADIUM CORP.
(A Development Stage Company)
BALANCE SHEET
December 31, 1998
(Stated in US Dollars)
ASSETS
1998
Current
Cash $ 17,455
--------
17,455
Mineral property - Note 3 100,000
--------
$ 117,455
--------
LIABILITIES
Current
Accounts payable $ 25,821
Due to related parties - Note 5 4,671
--------
30,492
--------
STOCKHOLDERS' EQUITY
Common stock - Note 4 140,500
Deficit accumulated during the development stage ( 53,537)
--------
86,963
--------
$ 117,455
--------
Nature and Continuance of Operations - Note 1
Commitments - Note 4
APPROVED BY THE DIRECTORS:
/s/Kenneth B. Liebscher /s/Dennis LaPrairie
- -----------------------------, Director ------------------------, Director
SEE ACCOMPANYING NOTES
<PAGE>
US VANADIUM CORP.
(A Development Stage Company)
STATEMENT OF LOSS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)
August 24, 1998
(Date of
Incorporation) to
December 31,
1998
Expenses
Exploration and development expenses - Note 5 $ 18,944
Interest and bank charges 59
Legal and accounting 18,992
Management fees - Note 5 12,000
Office 1,952
Travel 1,590
-------
Net loss for the period and deficit accumulated during the
development stage $ 53,537
-------
Loss per share $ 0.01
----------
Weighted average number of shares outstanding 13,594,713
----------
SEE ACCOMPANYING NOTES
<PAGE>
US VANADIUM CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)
August 24, 1998
(Date of
Incorporation) to
December 31,
1998
Cash Flows from Operating Activities
Net loss for the period $ ( 53,537)
Add adjustment to reconcile net loss to net cash used in
operations:
Common stock issued in consideration for exploration and
development expenses 10,000
---------
( 43,537)
Changes in non-cash working capital balances related to
operations:
Accounts payable 25,821
Due to related parties 4,671
---------
( 13,045)
---------
Cash Flows from Financing Activity
Issue of common stock for cash 80,500
---------
Cash Flows used in Investing Activity
Mineral property acquisition ( 50,000)
---------
Net increase in cash during the period 17,455
---------
Cash, beginning of the period -
Cash, end of the period $ 17,455
---------
Supplemental Disclosure
Non-cash Transactions
- - On September 23, 1998, the company issued 1,500,000 shares and on October
7, 1998 issued an additional 13,500,000 shares as stock dividends to total
15,000,000 shares at a deemed price of $0.00333. These shares were issued
to acquire mineral properties located in Nevada at a value of $50,000.
- - On October 2, 1998, the company issued 100,000 shares at $0.25 in
consideration for exploration and development expenses valued at $10,000.
$15,000 was charged to additional paid-in capital.
SEE ACCOMPANYING NOTES
<PAGE>
US VANADIUM CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)
Deficit
(Note 4) Accumulated
Common Additional During the
Shares Paid in Development
# Par Value Capital Stage Total
------ --------- ------- ----- -----
Shares issued for seed
capital-at $0.025 560,000 $ 5,600 $ 8,400 $ - $14,000
Shares issued for
property-at $0.0333 1,500,000 15,000 35,000 - 50,000
9:1 stock dividend 18,540,000 - - - -
Shares issued pursuant
to offering memorandum
-at $0.50 83,000 830 40,670 - 41,500
Shares issued for
services
-at $0.25 100,000 1,000 24,000 - 25,000
Shares issued for less
than cost - - (15,000) - (15,000)
Shares issued for cash
-at $0.25 100,000 1,000 24,000 - 25,000
Net loss for the period - - - (53,537) (53,537)
---------- --------- --------- -------- -------
Balance, as at
December 31, 1998 20,883,000 $ 23,430 $ 117,070 $(53,537) $86,963
---------- --------- --------- -------- -------
SEE ACCOMPANYING NOTES
<PAGE>
US VANADIUM CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)
Note 1 Nature and Continuance of Operations
The company currently is in the business of exploration and development of
mineral properties in Nevada.
The company is in the development stage and is in the process of exploring its
principal properties and has not yet determined whether these properties contain
reserves that are economically recoverable. The recoverability of amounts shown
for mineral properties is dependent upon the discovery of economically
recoverable reserves, the ability of the company to obtain necessary financing
to develop the properties, and upon future profitable production or proceeds
from the sale thereof.
These financial statements have been prepared on a going concern basis. The
company has accumulated a deficit of $53,537 since incorporation. Its ability
to continue as a going concern is dependent upon the ability of the company to
generate profitable operations in the future and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due.
The company was incorporated in Nevada on August 24, 1998, as US Vanadium Corp.
and commenced operations at that time.
Note 2 Summary of Significant Accounting Policies
The financial statements of the company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a
precise determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
Actual results could differ from these estimates.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
Development Stage Company
The company is a development stage company as defined in Statement of Financial
Accounting Standards No. 7. The company is devoting substantially all of its
present efforts to the business of exploration and development of its mineral
properties in Nevada. All losses accumulated since inception have been
considered as part of the company's development stage activities.
Cash and Cash Equivalents
The company's cash comprises cash on deposit with a bank.
<PAGE>
US VANADIUM CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
for the period August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars) - Page 2
Note 2 Summary of Significant Accounting Policies - (cont'd)
Mineral Properties
The acquisition of mineral properties is initially recorded at cost. Producing
mineral properties are depleted over their estimated useful lives based upon a
method relating recoverable mineral reserves to production. Non-producing
mineral properties that the company abandons interest in are written-off in the
year of abandonment.
Environmental Costs
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier
of completion of a feasibility study or the company's commitments to plan of
action based on the then known facts.
Values
The amounts shown for mineral property costs represent costs to date and do not
necessarily reflect present or future values.
Income Taxes
The company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards, No. 109 "Accounting for Income
Taxes".
Loss Per Share
Loss per share has been calculated upon the weighted average number of shares
outstanding during the period.
Fair Value of Financial Instruments
The carrying value of cash, accounts payable and due to related parties
approximate fair value because of the short maturity of those instruments.
Note 3 Mineral Property
By a purchase agreement dated September 18, 1998, the company acquired a 100%
interest in three mineral claims located in Nevada comprising 36 units. The
Bisoni and Gibellini claims are located in Eureka County and the Bisoni-McKay
claim is located in Nye County. To acquire the property, the company must
deliver 15,000,000 common shares (deemed value $50,000) and pay $50,000 cash.
At December 31, 1998, the company has paid $34,000 and accrued $16,000 in
accounts payable.
<PAGE>
US Vanadium Corp.
(A Development Stage Company)
Notes to the Financial Statements
August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)-Page 3
Note 4 Share Capital
a) Authorized:
80,000,000 common shares, $0.01 par value
20,000,000 preferred shares, $0.01 par value
Additional
Paid-in
b) Issued: # Par Value Capital Total
September 2, 1998,
Initial founders stock
for cash - at $0.025 560,000 $ 5,600 $ 8,400 $ 14,000
September 2, 1998
Issue of stock for
property - at $0.03333 1,500,000 15,000 35,000 50,000
October 7, 1998,
9:1 stock dividend 18,540,000 - - -
October 7, 1998
Issue of stock for
services - at $0.25 100,000 1,000 24,000 25,000
October 7, 1998
Stock issued for less
than cost - - (15,000) (15,000)
October 12, 1998
Issue of stock for cash
- at $0.25 100,000 1,000 24,000 25,000
November 15, 1998
Issue of stock for cash
pursuant to offering
memorandum - at $0.50 83,000 830 40,670 41,500
---------- -------- -------- ---------
Balance,
December 31, 1998 20,883,000 $ 23,430 $117,070 $ 140,500
---------- -------- -------- ---------
<PAGE>
US Vanadium Corp.
(A Development Stage Company)
Notes to the Financial Statements
August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)-Page 4
Note 4 Share Capital - (cont'd)
c) Commitments:
Offering Memorandum
The company has undertaken to complete an offering memorandum dated
November 23, 1998 for the issuance of up to 600,000 common shares at $0.50
per share. The company has received $41,500 as subscriptions pursuant to
this offering.
Note 5 Related Party Transactions
The company was charged the following management fees and exploration and
development expenses by two directors of the company:
1998
Management fees $ 12,000
Exploration and development expenses 16,819
-------
$ 28,819
-------
Due to related parties as at December 31,1998 includes $4,000 for unpaid
management fees and $671 for unpaid exploration and development costs. These
amounts are due to two directors of the company.
Note 6 Deferred Tax Assets
The Financial Accounting Standards Board issued Statement Number 109 in
Accounting for Income Taxes ("FAS 109") which is effective for fiscal years
beginning after December 15, 1992. FAS 109 requires the use of the asset and
liability method of accounting of income taxes. Under the assets and liability
method of FAS 109, deferred tax assts and liabilities are recognized for the
future tax consequences attributable to temporary differences between the
financial statements carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settles.
<PAGE>
US Vanadium Corp.
(A Development Stage Company)
Notes to the Financial Statements
August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)-Page 5
Note 6 - Deferred Tax Assets - (cont'd)
The following table summarizes the significant components of the company's
deferred tax assets:
Total
Deferred Tax Assets
Non-capital loss carryforwards $ 53,537
--------
Gross deferred tax assets $ 26,769
Valuation allowance for deferred tax asset ( 26,769)
--------
$ -
--------
The amount taken into income as deferred tax assets must reflect that portion of
the income tax loss carryforwards which is likely to be realized from future
operations. The company has chosen to provide an allowance of 100% against all
available income tax loss carryforwards, regardless of their time of expiry.
Note 7 Income Taxes
No provision for income taxes has been provided in these financial statements
due to the net loss. At December 31, 1998, the company has net operating loss
carryforwards, which expire commencing in 2007 totalling approximately $53,537,
the tax benefit of which has not been recorded in the financial statements.
Note 8 Accounting for Impairment of Long-lived Assets
In March, 1995, Statement of Financial Accounting Standards No. 121 "Accounting
for Impairment of long-lived assets and for long-lived assets to be disposed of"
was issued. Certain long-lived assets held by the company must be reviewed for
impairment whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable. Accordingly, the impairment loss is
recognized in the period it is determined. The company has adopted these
standards and there was no material effect on its financial position or results
of operations of the company from its adoption.
<PAGE>
US Vanadium Corp.
(A Development Stage Company)
Notes to the Financial Statements
August 24, 1998 (Date of Incorporation) to December 31, 1998
(Stated in US Dollars)-Page 6
Note 9 Uncertainty Due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
the year 2000 date is processed. In addition, similar problems may arise in
some systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 Issue may be experienced before, on, or
after January 1, 2000 and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant system failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 Issue
affecting the entity, including those related to the efforts of customers,
suppliers or other third parties, will be fully resolved.
<PAGE>
Exhibit 99.2
VANADIUM INTERNATIONAL ,INC.
(a Development Stage Company)
FINANCIAL STATEMENTS
for period January 1, 1999 to June 30, 1999
UNAUDITED
Prepared by Management
<PAGE>
VANADIUM INTERNATIONAL INC.
(formerly U.S. Vanadium Corp.)
(a Development Stage Company)
BALANCE SHEET
June 30, 1999
(Stated in U.S. Dollars)
------------------------
ASSETS
------
Current
Cash $ 1,041
- -----
1,041
Mineral acquisitions
Mineral property 100,000
Deferred exploration 1,175
-----
101,175
$ 102,216
= =======
LIABILITIES
-----------
Current
Accounts payable $ 22,910
Due to related parties 12,978
Contingent liabilities 3,772
-----
$ 39,660
- ------
SHAREHOLDER'S EQUITY
--------------------
Common stock - Note 2 $ 149,500
Deficit carried forward (47,022)
Deficit current year (39,922)
--------
(86,944)
$ 62,556
$ 102,216
= =======
Approved by Company Directors:
/s/Ken Liebscher /s/Dennis LaPrairie
Ken Liebscher Dennis LaPrairie
<PAGE>
VANADIUM INTERNATIONAL ,INC.
(formerly U.S. Vanadium Corp.)
(a Development Stage Company)
STATEMENT OF LOSS AND DEFICIT
For period January 1, 1999 to June 30, 1999
(Stated in U.S. Dollars)
------------------------
Expenses
Accounting & Audit $ 1,175
Interest & bank charges 94
Legal 11,934
Management fees 24,000
General office 1,502
Travel & Promotion 136
Transfer agent 1,081
------
Net loss for the period and deficit $ 39,922
= ======
<PAGE>
VANADIUM INTERNATIONAL ,INC.
(formerly U.S. Vanadium Corp.)
(a Development Stage Company)
STATEMENT OF CASH FLOWS
for period January 1, 1999 to June 30, 1999
(Stated in U.S. Dollars)
------------------------
Cash flows from Operating Activities
Net loss for the period $ (39,922)
Changes in non-cash working capital balances
related to operations
Accounts payable (2,692)
Due to related parties 10,504
Contingent Liabilities 3,772
-----
$ (28,338)
= ========
Cash flows from financing activities
Issue of common stock for cash $ 9,000
$ 9,000
= =====
Cash flows used in investing activities
Deferred exploration on mineral
property $ (1,175)
$ (1,175)
= =======
Net decrease in cash during period $ (20,513)
= ========
Cash, beginning of period 21,554
Cash, end of period 1,041
------
$ (20,513)
= ========
<PAGE>
VANADIUM INTERNATIONAL ,INC.
(formerly U.S. Vanadium Corp.)
(a Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
for period January 1, 1999 to June 30, 1999
(Stated in U.S. Dollars)
------------------------
Note 1 Interim Reporting
- ---------------------------
While the information presented in the accompanying six months to June 30, 1999,
financials statements is unaudited, it includes all adjustments which are, in
the opinion of management, necessary to present fairly the financial position,
results of operations and cash flows for the interim period presented.
Note 2 Share Capital
- -----------------------
Deficit Accumulated
Common Shares During The Development
Additional
# Par Value paid-in Capital Stage Total
- --------------------------------------------------------------------------------
Balance at December 31,1998
20,883,000 $ 23,430 $ 117,070 $(47,022) $ 93,478
- --------------------------------------------------------------------------------
Note 4 - Issuance of shares pursuant to offering memorandum
- -at $0.50 per share
18,000 $ 180 $ 8,820
- --------------------------------------------------------------------------------
Net loss for period $(39,922) $(39,922)
- --------------------------------------------------------------------------------
Balance, as at June 30, 1999
20,901,000 $ 23,610 $ 125,890 $(86,944) $ 53,556
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 99.3
VANADIUM INTERNATIONAL, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Balance Sheets as of September 30, 1999 and December 31, 1998 5
Statements of Operations for the three months ended
September 30, 1999 and September 30, 1998 and the nine months ended
September 30, 1999 and September 30, 1998 and from Inception through
September 30, 1999 6
Statements of Cash Flow for the three months ended
September 30, 1999 and September 30, 1998 and the nine months ended
September 30, 1999 and September 30, 1998 and from Inception through
September 30, 1999 7
Notes to Financial Statements for the three months ended
September 30, 1999 and September 30, 1998 and the nine months ended
September 30, 1999 and September 30, 1998 and from Inception through
September 30, 1999 8
Item 2. Management's Plan of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8 - K 10
Signatures 10
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, these Financial
Statements fairly present the financial condition of the Company, but should be
read in conjunction with the Financial Statements of the Company for the year
ended December 31, 1998 previously filed with the Securities and Exchange
Commission.
<PAGE>
Page 5
VANADIUM INTERNATIONAL, INC.
(FORMERLY U.S. VANADIUM CORP.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 1999 and December 31, 1998
ASSETS
CURRENT ASSETS SEPT 30,1999 DEC 31,1998
CASH $ 328 $ 17,455
PREPAID EXPENSES - -
------------ ------------
TOTAL CURRENT ASSETS $ 328 $ 17,455
MINERAL ACQUISITIONS
MINERAL PROPERTY $ 100,000 $ 100,000
DEFERRED EXPLORATION 4,775 -
------------ ------------
TOTAL ASSETS $ 105,103 $ 17,455
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 26,243 $ 25,821
DUE TO RELATED PARTIES 28,978 4,671
OTHER LIABILITIES 3,772 -
SHAREHOLDER LOANS 3,600 -
------------ ------------
TOTAL CURRENT LIABILITIES $ 62,593 $ 30,492
------------ ------------
NOTES PAYABLE - -
------------ ------------
TOTAL LIABILITIES $ 62,593 $ 30,492
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
SHARE CAPITAL - NOTE 2
AUTHORIZED:
80,000,000 common shares, $0.01 par value
20,000,000 preferred shares, $0.01 par value
ISSUED:
20,901,000 common shares $ 23,610 $ 23,430
CONTRIBUTED SURPLUS 125,890 117,070
DEFICIT ACCUMULATED DURING THE
DEVELOPMENT STAGE ( 106,990) $ (53,537)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 42,510 86,963
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 105,103 $ 117,455
------------ ------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
Page 6
VANADIUM INTERNATIONAL, INC.
(FORMERLY U.S. VANADIUM CORP.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 1999 AND
SEPTEMBER 30, 1998 AND FOR THE PERIOD AUGUST 24, 1998 (INCEPTION) THROUGH
SEPTEMBER 30, 1999
UNAUDITED
<TABLE>
<CAPTION>
AUGUST 24 1998
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS (DATE OF
ENDED SEPT 30 ENDED SEPT 30 ENDED SEPT 30 ENDED SEPT 30 INCEPTION TO
1999 1998 1999 1998 SEPT 30,1999)
<S> <C> <C> <C> <C> <C>
SALES - - - - -
COST OF SALES - - - - -
------------ ------------ ------------ ------------ ------------
GROSS PROFIT - - - - -
OPERATING EXPENSES $ 15,670 $ - $ 53,453 $ - $ 88,046
EXPLORATION & DEV - - - - 18,944
------------ ------------ ------------ ------------ ------------
NET (LOSS) $(15,670) $ - $(53,453) $ - $(106,990)
BASIC AND DILUTED
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.004)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
Page 7
VANADIUM INTERNATIONAL, INC.
(FORMERLY U.S. VANADIUM CORP.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 1999 AND
SEPTEMBER 30, 1998 AND FOR THE PERIOD AUGUST 24, 1998 (INCEPTION) THROUGH
SEPTEMBER 30, 1999
UNAUDITED
<TABLE>
<CAPTION>
AUGUST 24 1998
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS (DATE OF
ENDED SEPT 30 ENDED SEPT 30 ENDED SEPT 30 ENDED SEPT 30 INCEPTION TO
1999 1998 1999 1998 SEPT 30,1999)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C> <C>
NET (LOSS) $(15,670) $ $(53,453) $ - $(106,990)
ADD: ITEMS NOT
AFFECTING CASH
SHARES ISSUED FOR
EXPLOR. & DEV. $ - - - - 10,000
------------ ------------ ------------ ------------ -------------
$(15,670) $ - $(53,453) $ - $ (96,990)
CHANGES IN NON-CASH
ITEMS
DUE TO RELATED
PARTIES 12,000 - 26,504 - 31,175
ACCOUNTS PAYABLE 2,917 - (1,775) - 24,046
OTHER LIABILITIES - - 3,772 - 3,772
ACCOUNTS RECEIVABLE
DUE TO SHAREHOLDER'S 3,600 - 3,600 - 3,600
------------ ------------ ------------ ------------ -------------
NET CASH (USED) BY
OPERATING ACTIVITIES $ (2,847) $ - $(21,352) - $ (34,397)
------------ ------------ ------------ ------------ -------------
CASH FLOW FROM
INVESTING ACTIVITIES
ACQUISITION OF
MINERAL PROPERTY $ - $(50,000) $ - $(50,000) $(50,000)
MINERAL PROPERTY
EXPLORATION (3,600) - (4,775) - (4,775)
------------ ------------ ------------ ------------ -------------
NET CASH (USED) BY
INVESTMENT ACTIVITIES $(3,600) (50,000) (4,775) (50,000) (54,775)
------------ ------------ ------------ ------------ -------------
CASH FLOWS FROM
FINANCING ACTIVITIES
PROCEEDS FROM
ISSUANCE OF
COMMON SHARES $ - $ 50,000 $ 9,000 $ 50,000 $ 89,500
------------ ------------ ------------ ------------ -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ - $ 50,000 $ 9,000 $ 50,000 $ 89,500
------------ ------------ ------------ ------------ -------------
NET INCREASE (DECREASE)
IN CASH $ (753) $ - $(17,127) $ - $ 328
CASH AT BEGINNING
OF PERIOD 1,081 - 17,455 - -
------------ ------------ ------------ ------------ -------------
CASH AT END
OF PERIOD $ 328 $ - $ 328 $ - $ 328
------------ ------------ ------------ ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
Page 8
VANADIUM INTERNATIONAL, INC.
(FORMERLY U.S. VANADIUM CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS AND NINE MONTHS PERIODS
ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998 AND FOR THE PERIOD AUGUST 24,
1998 (INCEPTION) THROUGH SEPTEMBER 30, 1999.
1. BASIS OF PRESENTATION
In the opinion of management, the unaudited financial statements reflect all
normally recurring adjustments necessary to fairly present the Company's
financial position and results of operations for the periods indicated. The
accompanying interim financial statements should be read in conjunction with the
financial statements and related notes included in the Company's 10-KSB for the
period ended December 31, 1998, which has been filed with the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in the Company's annual financial statements have been omitted from the
quarterly financial statements based upon Securities and Exchange Commissions
rules and regulations. Net loss per common and common equivalent share was
computed based on the net loss divided by the weighted average number of common
and common equivalent shares outstanding, unless antidilutive, during the year
presented.
2. FINANCING
Common Shares Additional
# Par Value paid-in Capital
------------- ----------- ---------------
Balance, December 31,1998 20,883,000 $ 23,430 $ 117,070
Issuance of shares:
- pursuant to offering memorandum
for cash - at $0.50 per share 18,000 $ 180 $ 8,820
------------- ----------- ---------------
Balance, at September 30, 1999 20,901,000 $ 23,610 $ 125,890
------------- ----------- ---------------
The capital raised was used to fund operations. The Company anticipates needing
additional capital to fund operations during the upcoming year. The Company
intends to raise additional funds through private financings, or joint ventures
to permit further property exploration and development of various properties,
and to move one of its properties into the development and production stages
within the next two years.
3. RELATED PARTY TRANSACTIONS
The Company was charged the following management fees and exploration and
development expenses by two director of the company since inception:
Management Fees $48,000
Exploration and development expenses 16,819
----------
$64,819
Due to related parties as at September 30, 1999 includes $28,000 for unpaid
management fees and $978 for unpaid exploration and development costs. These
amounts are due to two directors of the company.
4. DESCRIPTION OF SECURITIES
The authorized capital of the Company consists of 80,000,000 shares of
Common Stock, par value $.01, of which 20,901,000 are outstanding. The material
terms of the securities are as follows:
All of the authorized common shares of the Company are of the same class
and, once issued, rank equally as to dividends, voting powers and participation
in assets. Holders of common shares are entitled to one vote for each share held
of record on all matters to be acted upon by the shareholders. Holders of common
shares are entitled to receive such dividends as may be declared from time to
time by the Board of Directors, in its discretion, out of funds legally
available therefrom. No shares have been issued subject to call or assessment.
There are no preemptive or conversion rights and no provisions for redemption or
purchase for cancellation, surrender, or sinking or purchase funds, nor any
cumulative voting rights. The Directors of the Company may from time to time
declare and authorize payment of dividends, as they deem advisable. Subject to
the rights of members, all dividends on shares shall be declared and paid
according to the number of shares held. No dividends have been declared since
incorporation. The outstanding shares are fully paid and non-assessable.
<PAGE>
Page 9
A class of preferred stock has been authorized with a par value of $0.01.
No shares of preferred stock have been authorized for issuance by the Board of
Directors as of the date of this statement. The rights, privileges and
preferences of any series of preferred stock shall be determined by the Board of
Directors at the time of issuance.
There is no provision in the Company's Articles of Incorporation, as
amended, or Bylaws that would delay, defer, or prevent a change in control of
the Company.
5. YEAR 2000 MATTERS
The inability of computers, software, and other equipment utilizing
microprocessors to recognize and properly process date fields containing a two
digit year reference such as "00" for the year 2000 is commonly referred to as
the Year 2000 issue. The primary Y2K risk to the Company's operations is
service disruption from third party providers that supply equipment for the
mining projects. Any disruption to these services would hinder the Company's
ability to operate. Therefore, efforts are currently under way to obtain Y2K
compliance certification from the Company's major equipment providers. Concern
about potential problems has been raised, but commitment to compliance is beyond
the Company's control.
The Company has not yet approved a formal contingency plan for Y2K issues,
however, a formal contingency plan is expected to be completed and approved
during 1999.
Item 2. Management's Plan of Operations
The Company is in its initial stages of exploration with no revenues or
income and is subject to all the risks inherent in the creation of a new
business. The Company has not yet had revenues from operations. Accordingly,
the following information centers upon the Company's plan of operation.
The Company owns the mineral rights and surface rights to three
properties on which it believes are located commercially mineable vanadium
deposits. The three properties are referred to as the Gibellini, Bisoni, and
Bisoni-McKay properties. The Company believes, based on a Pre-Feasibility
Report and Pro Forma Cash Flow Study for the Gibellini, Bisoni, Bisoni-Mckay
Vanadium Deposits in Eureka and Nye Counties, Nevada for the Company by Jules
Pierre LaPrairie, P.E., that the three properties contain approximately 19 to 21
million tons of 0.42% vanadium pentoxide hosted within Devonian black shale
facies.
To date, $23,719 has been spent by the company on exploration and
development expenses, including title research, claim staking and filing fees
with the State of Nevada and Counties, annual rental payments to the Bureau of
Land Management ($100 per claim), travel expenses for site visits to the
property, library research and acquisition of reports, data and investigations
from previous owners of the project.
The Company intends to continue with exploration and development of its
properties; although, the Company's focus for the next two years will be to have
one of its properties move into the production stage. Additional exploration
and development will occur on the first property to be exploited and on other
Company properties.
Liquidity
To date the Company's activities have been financed primarily through the
sale of equity securities. No assurance can be given that the proceeds of the
private offering of the Company's securities or any other source of funding
described above will provide sufficient funds to undertake all of the Company's
planned project expansion for the next twelve months. It is anticipated that
significant additional funds will be required to complete the development of any
commercially viable project. There can be no assurance that the Company will be
able to obtain such additional financing, and whether the terms of such
financing would be favorable to the Company. Failure to obtain such financing
could be detrimental to the success of the project. No contracts or commitments
have been entered into at this time.
<PAGE>
Page 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item.2. Changes in Securities and Use of Proceeds.
During the second quarter of 1999, the Company did not issue any
securities.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
Exhibit
(a) Exhibits.* Number
None.
(b) Reports on Form 8-K.
* A summary of any Exhibit is modified in its entirety by reference
to the actual Exhibit.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Blaine, State of Washington, on December 6, 1999.
By: /s/Kenneth B. Liebscher
Kenneth B. Liebscher,
Chief Executive Officer, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
SIGNATURE TITLE DATE
/s/Kenneth B. Liebscher
- ----------------------- Chief Executive Officer December 6, 1999
Kenneth B. Liebscher
/s/Dennis S. LaPrarie
- ----------------------- Treasurer (Principal Accounting December 6, 1999
Dennis S. LaPrarie Officer) and Director
/s/Moshe C. Zefrani
- ----------------------- Director December 6, 1999
Moshe C. Zefrani
<PAGE>
