U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
(Name of Small Business Issuer in its Charter)
Nevada 13-3500-677
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
827 State Street, Suite 26
Santa Barbara, California 93101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (805)899-1299
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of each class to be so registered
Common Stock
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
----- -----
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB. [ ]
The issuer's revenues for the Fiscal Year ended December 31, 1999 were $0
The aggregate market value of the voting stock (which consists solely of shares
of Common Stock) held by non-affiliates of the issuer as of December 31, 1999,
computed by reference to the issuer's shareholder's list as composed by the
issuer's transfer agent at February 5, 2000, of 816,800 shares of the
registrant's Common Stock, which is not quoted on any exchange on such date, was
approximately $816,800. As at December 31, 1999, there were 9,149,320 shares of
the issuer's common stock outstanding.
Transitional Small Business Disclosure Format (check one)
Yes X No
----- -----
PART 1
------
Statements contained in the annual report that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from estimated results. Such risks and uncertainties are detailed in filings
with the Securities and Exchange Commission, including without limitation in
Item 1. "BUSINESS" and Item 6 "MANAGEMENT'S DISCUSSION AND DESCRIPTION OR PLAN
OF OPERATION" below.
ITEM 1. DESCRIPTION OF BUSINESS
A. IN GENERAL.
Innovative Software Technologies, Inc.(the "Company"), a California Corporation,
was incorporated on September 23, 1996. The Company is a development stage
company, engaged in the business of specialty software sales on the Internet.
The Company's plan is to develop an Internet web site and offer discount sales
of specialty business to business software to businesses, with after market
support by local support teams of computer and software technicians and
personnel. The Company has hired a web site designer with experience not only
web site development but also wholesale buying and retail sales of software. The
Company's plan is to become the leading seller of business related software on
the Internet.
Government approval is not necessary for the Company's business, and government
regulations have no or only a negligible effect on their respective businesses.
The Company has not booked any significant research and development costs and
therefor do not expect to pass any of those costs to customers. And has no
product development or research and development costs.
On November 26, 1999, the Company effected an 8 to 1 forward split of its
capital common stock, increasing the authorized common shares to 160,000,000,
and its par value to $0.008.
The Company's mailing address is 827 State Street, Suite 26, Santa Barbara, CA
93101.The telephone number of its principal executive office is (805) 560-1308.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those expected
are the following: business conditions and general economic conditions;
competitive factors, such as pricing and marketing efforts; and the pace and
success of product research and development. These and other factors may cause
expectations to differ.
THE INDUSTRY
The Internet industry is a young industry, but one of the fastest growing
industries in the country. The Company has seen a market niche in providing
business to business computer software and hardware sales, coupled with local
aftermarket support, as opposed to an Internet sale that never involves the
prospect of human contact, if the customer has a problem or a question.
MARKETING
The Company is developing an Internet web site with full e commerce
capabilities, which will offer the company's products for sale to the Internet
business consumer. The Company will promote its web site and its products by
conventional advertising and marketing. With the proceeds of this offering, the
Company plans to hire a sales force and offer "multi-level marketing" incentives
for sales.
To help achieve its sales goals, the Company plans to implement an aggressive
online marketing campaign. The objective will be to name awareness for the
Company in the online community and to continually acquire new visitors to its
Web site. One of the best ways to attract this target audience is to achieve
high visibility in the places where prospective customers are likely to be
browsing. The Company's online campaign will target sites that generate high
traffic from Internet users who fit the Company's customer profile. In order to
create this market presence and increase customer awareness, the Company intends
to promote its Web site on the most effective search engines, directories and
promotional sites the Internet offers. However, the Company has not yet
developed its Web site, and there can be no assurance that it will implement
these programs. The programs to establish visibility and increase traffic to the
web site include directory submissions to make sure the company is listed in the
top five listings on the major search engines such as Yahoo, America Online,
Excite, Infoseek, HotBot, AltaVista, and Lycos, when a potential visitor types
in key words related to business software sales. Of course, there can be no
assurance that the Company can obtain such a status, but it will continually
update its submissions to search engines to keep them current and will update
its site weekly. The Company will review its site data to optimize its listing.
Once the site data has been perfected, the Company's site will be submitted to
the top 75 search engines and promotional sites.
While listing a Web site with the search engines and promotional sites is a high
priority for the foundation of the Company's Internet program, targeted links
with sites of similar interest is another powerful method of obtaining visitors
that are interested in the Company's site. The Company will search for sites of
similar interest where it is likely to find its target audience to place
targeted links. These links will increase targeted traffic to the Company's Web
site.
The Company intends to design a professional banner and place it with various
sites on a "reciprocal" basis, at no charge to the Company. The Company also
plans to purchase online ad banners on highly trafficked Web sites that appeal
to the Company's target audience. The Company will work with a nationally
recognized media buying firm to research the sites that are regularly visited by
prospective customers in order to design and to execute an online advertising
campaign on a cost-per-lead or similar direct response basis.
Online communities such as Mailing Lists, Newsgroups, and Online Service Forums
tend to be very successful in driving traffic to sites as Internet surfers use
these communities to get advice from their peers. The Company will work with a
firm to seed messages about its offerings in the various online communities that
are visited by its target audience. Companies specializing in Community
Discussion Seeding include Word of Net Promotions, Web promote and Agency.
Targeted e-mail announcements with information about the Company's products and
services will be sent to individuals who have expressed an interest in receiving
information within targeted categories. These individuals have voluntarily
signed up to receive these e-mail messages about specific topics and are more
likely to read them. Response rates are expected to average between 5% to
10%.These efforts will results in Company Web site visits by these individuals
because they have an interest in the Company's products and services and can
click-through Hyperlinks created in the Company's e-mail announcement. Each
e-mail message will contain a header that specifies that the e-mail was sent to
the recipient because they had subscribed to a particular service.
The Company expects to maintain a clean corporate image by practicing
"etiquette" when sending e-mail messages. In order to differentiate between
e-mail messages that are voluntarily requested and true "spamming" from
unwelcome sources, the Company plans to only send targeted e mail to those
individuals who have voluntarily requested to receive such announcements, and
always give the participants the option to remove themselves from the e mail
lists.
The Company intends to announce its products and services on the Web in press
relases. Favorable articles or editorial pieces about the Company's Web site can
generate tremendous visibility and opportunity to sell its products and
services. The Company will e-mail its press releases to targeted publications
selected from a database of over 30,000 media resources. Press releases can be
distributed within 72 hours.
THE PRODUCTS
The Company offers a full line of business oriented software manufactured by
others.
PATENTS
The Company holds no patents for its products. The Company is the registered
owner of the Internet domain name, www.software-software-software.com.
COMPETITION
The business of providing retail business to business computer software sales is
one of intense competition. Other companies making Internet software sales and
other companies have financial resources superior to the Company, so there can
be no assurance that the Company's projected income will not be affected by its
competition. There are also many other companies with greater financial
resources that the Company who offer computer sales on the Internet. However,
the Company feels it is able to compete adequately with these other companies,
by maintaining and updating its website to insure that it receives recognition
from the Internet search engines on an ongoing basis. However, there can be no
assurance that companies with greater buying power will be able to undercut the
Company's pricing structure.
GOVERNMENT REGULATION
Government approval is not necessary for the Company's business, and government
regulations have no effect or a negligible effect on its business.
EMPLOYEES
The Company presently employs two employees, the President, Jeffrey Volpe, who
devotes his part time efforts to the Company, and a computer consultant, web
site designer and software buyer, who devotes his part time efforts to the
Company.
ITEM 2. DESCRIPTION OF PROPERTY
The Company rents professional offices from its attorney, Kenneth G. Eade, on a
month to month basis, pursuant to an oral agreement. The Company has no other
property, other than office equipment. The Company owns its domain name to its
web site, www.software-software-software.com.
ITEM 3. LEGAL PROCEEDINGS
The Company is not subject to any litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
- -------
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is not listed or quoted at the present time, and
there is no present public market for the Company's common stock. The Company
has obtained a market maker who has filed a form 211 with the National
Association of Securities Dealers to quote the Company's securities on the NASD
OTC Bulletin Board, but there can be no assurance that the Company's stock will
be quoted on the NASD OTC Bulletin Board.
The Company has not paid any cash dividends since its inception and does not
contemplate paying any in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of the Company's business.
PENNY STOCK STATUS
If and when it creates a market for its common stock, the Company's common stock
is a "penny stock," as the term is defined by Rule 3a51-1 of the Securities
Exchange Act of 1934.This makes it subject to reporting, disclosure and other
rules imposed on broker-dealers by the Securities and Exchange Commission
requiring brokers and dealers to do the following in connection with
transactions in penny stocks:
1.Prior to the t`ransaction, to approve the person's account for transactions
in penny stocks by obtaining information from the person regarding his or her
financial situation, investment experience and objectives, to reasonably
determine based on that information that transactions in penny stocks are
suitable for the person, and that the person has sufficient knowledge and
experience in financial matters that the person or his or her independent
advisor reasonably may be expected to be capable of evaluating the risks of
transactions in penny stocks. In addition, the broker or dealer must deliver to
the person a written statement setting forth the basis for the determination
and advising in highlighted format that it is unlawful for the broker or dealer
to effect a transaction in a penny stock unless the broker or dealer has
received, prior to the transaction, a written agreement from the person.
Further, the broker or dealer must receive a manually signed and dated written
agreement from the person in order to effectuate any transactions is a penny
stock.
2.Prior to the transaction, the broker or dealer must disclose to the customer
the inside bid quotation for the penny stock and, if there is no inside bid
quotation or inside offer quotation, he or she must disclose the offer price
for the security transacted for a customer on a principal basis unless exempt
from doing so under the rules.
3.Prior to the transaction, the broker or dealer must disclose the aggregate
amount of compensation received or to be received by the broker or dealer in
connection with the transaction, and the aggregate amount of cash compensation
received or to be received by any associated person of the broker dealer, other
than a person whose function in solely clerical or ministerial.
4.The broker or dealer who has effected sales of penny stock to a customer,
unless exempted by the rules, is required to send to the customer a written
statement containing the identity and number of shares or units of each such
security and the estimated market value of the security. The imposition of
these reporting and disclosure requirements on a broker or dealer make it
unlawful for the broker or dealer to effect transactions in penny stocks on
behalf of customers. Brokers or dealers may be discouraged from dealing in
penny stocks, due to the additional time, responsibility involved, and, as a
result, this may have a deleterious effect on the market for the company's
stock.
(1) The above quotations reflect inter-dealer prices, without retail mark up,
mark down or commission and may not represent actual transactions.
(2) Source of information: Stockmaster Stock Quotation Service
(Stockmaster.com) and Freerealtime.com, NASD Bulletin Board.
SECURITY HOLDERS
The approximate number of record holders of shares of the common stock of the
Company outstanding as of December 31, 1999 was 28.
DIVIDENDS
No dividends have been declared or paid on the Company's common stock.
ITEM 6.MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATIONS
The Company is engaged in the business of sales of business to business
software on the Internet.The Company's plan is to develop an Internet web site
and offer discount sales of software to the public, with after market support
by local support teams of computer and software technicians and personnel.The
Company has financed its operations to date through the sale of its securities.
During the next twelve months, the Company plans to satisfy its cash
requirements by additional equity financing. The Company has no current
material commitments. The Company intends to undertake a subsequent private
placement of its common stock in order to raise future development and
operating capital. The Company depends upon capital to be derived from future
financing activities such as subsequent offerings of its stock. There can be no
assurance that the Company will be successful in raising the capital it requires
through the sale of its common stock.The Company believes that its efforts to
raise capital will be assisted greatly by obtaining a quotation of its common
stock on the NASD OTC Bullwtin Board, but there can be no assurance that it
will be successful in obtaining this listing.
The Company has no current material commitments. The Company will seek to
raise capital as a cash reserve, but there can be no assurance that the Company
will be successful in raising the capital it needs through sales of its common
stock.
There is no contemplated product research and development costs the Company
will perform for the next twelve months, because the Company employee who is
designing and promoting the web site has been prepaid with company stock. There
is no expected purchase or sale of any plant or significant equipment, and
there is no expected significant changes in the number of employees
contemplated.
The Company's plan of operations over the next 12 months includes implementing
its marketing plan by developing its web site, and vigorously promoting it to
businesses worldwide. The Company will seek to foster long term relationships
and word of mouth referrals through customer service.
The Company has no current material commitments. The Company has just recently
commenced operations, has no significant revenue, and is dependent upon the
raising of capital through placement of its common stock. There can be no
assurance that the Company will be successful in raising the capital it requires
through the sale of its common stock.
PATENTS
The Company holds no patents for its software.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those
expected are the following: business conditions and general economic
conditions; competitive factors, such as pricing and marketing efforts; and the
pace and success of product research and development. These and other factors
may cause expectations to differ.
ITEM 7. FINANCIAL STATEMENTS
Information with respect to this item is contained in the financial statements
appearing on Item 13 of this Report. Such information is incorporated herein by
reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in, or disagreements with accountants on accounting and
financial disclosure for the two most recent fiscal years.
PART III.
---------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Directors are elected by the shareholders to terms of one year. Officers serve
at the pleasure of the Board of Directors, and serve one year terms unless
removed by the Board prior to their terms.
The Executive Officers of the Company and its subsidiaries, and their ages,
are as follows:
Name Age Position
---------------------
Jeffrey Volpe 43 President, Director
Agata Gotova 28 Secretary, Treasurer,
Director
Jeffrey Volpe. Mr. Volpe is the President, Chief Executive Officer, and Director
of the Company. He is also the President and Chief Executive Officer of Mercury
Software. He is also the Secretary of Russian-caviar.com, Russian Imports.com,
and FirsTelevision.com. Mr. Volpe has over twelve years' experience in computer
programming, hardware and software. Mr. Volpe has extensive experience in web
site design, , PERL and CGI scripting, development of software macros for legal
support services, as well as legal research and support.
Agata Gotova. Ms. Gotova is the current Secretary, Chief Financial Officer and
Director of the Company. She is also the President and Director of Russian-
caviar.com, Russian Imports.com, and FirsTelevision.com. She is also the
Secretary of Cinecam Corporation. For the past five years, she has been engaged
in the import and export business, specializing in trade with Russia and the
former Soviet Republics. For a period of four years prior to 1997, Ms. Gotova
resided and did business in Paris, France. She speaks French, English and
Russian fluently. Ms. Gotova was educated at the University, Minister of
International Affairs, Moscow, and Sorbonne University, Paris.
FAMILY RELATIONSHIPS.
There are no family relationships among directors, executive officers or other
persons nominated or chosen by the Company to become officers or executive
officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
The Company is not aware of any material legal proceedings involving any
director, director nominee, promoter or control person including criminal
convictions, pending criminal matters, pending or concluded administrative or
civil proceedings limiting one's participation in the securities or banking
industries, or findings of securities or commodities law violations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent 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 "SEC").Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended March 31, 1999, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION.
The Company has made no provisions for cash compensation to its officers and
directors. The only non-cash compensation paid to officers and directors was the
$2,000 compensation paid to the President in 1999, and the only non-cash
compensation paid by the Company is reflected in section in Item 7 below. No
salaries are being paid at the present time, and will not be paid unless and
until there is available cash flow from operations to pay salaries. There were
no grants of options or SAR grants given to any executive officers during the
last fiscal year. The following table sets forth the cash and non-cash
compensation paid by the Company to its Chief Executive Officer and all other
executive officers for services rendered up to the period ended December 31,
1999.
Annual Compensation
- -------------------
Name and Position Salary Bonus Annual Deferred Salary
Jeffrey Volpe, President $2000.00 0 0
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The Company has no long-term incentive plans or awards to report for last
fiscal year other than that which has already been reported.
COMPENSATION OF DIRECTORS
The members of the Company's Board of Directors are reimbursed for actual
expenses incurred in attending Board meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no written contracts or agreements. Employee compensation is set by
the members of the Board of Directors.
ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.
Name and Address Number of Shares Percentage Owned
---------------- ---------------- ----------------
Agata Gotova (2) 5,640,000 61.77%
827 State Street
Santa Barbara, CA 93101
Jeffrey Volpe 800,000 8.76%
P.O. Box 2132
Ventura, CA 93002
Richard Tearle 600,000 6.57%
1216 State Street #305
Santa Barbara, CA 93101
Officers and Directors 7,040,000 77.11%
as a Group
- ------------
(1) Table is based on current outstanding shares of 9,129,320.
(2) Agata Gotova is the wife of the Company's attorney, Kenneth G. Eade.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's founders, or promoters, are Agata Gotova and Jeffrey Volpe. The
Company rents its offices from its attorney, Kenneth G. Eade, on a month to
month basis on an arms length basis for an insignificant amount of monthly
rental.
On March 1, 1999, the Company issued 100,000 shares to Jeffrey Volpe in
exchange for services, and 900,000 shares to Agata Gotova in exchange for
organizational costs. These shares were issued without registration pursuant
to an exemption from registration contained within Section 4(2) of the
Securities Act of 1933, to sophisticated investors who had full access to
company financial and other information.
On April 6, 1999, the Company issued 102,100 shares of common stock in a
Regulation D Rule 504 offering to 22 individuals, in exchange for $2200.00 in
gross offering proceeds.
There have been no other transactions since the beginning of fiscal year 1998,
or any currently proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any of the officers, or directors, or holders of over 5%
of the Company's stock have or will have any direct or indirect material
interest. The Company does not currently have any policy toward entering into
any future transactions with related parties.
ITEM 13. INDEX TO EXHIBITS AND REPORTS ON FORM 8-K
(a)Financial Statements (included in Part II of this Report):
Report of Independent Certified Public Accountant
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Cash Flows
Statements of Stockholder's Equity
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. Description
- ------------ -----------
Item 13. FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant dated February 29, 2000
Financial Statements
Balance Sheets
Statement of Loss and Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITOR
To the Shareholders and Board of Directors
Innovative Software Technologies, Inc.
I have audited the accompanying balance sheets of Innovative Software
Technologies, Inc. (A Development Stage Company) as of December 31, 1999 and
December 31, 1998 and the related statements of income, stockholders' equity,
and cash flows for the year ended December 31, 1999 and the year then ended.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Innovative Software
Technologies, Inc. (A Development Stage Company) at December 31, 1999 and
December
31, 1998, and the results of operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
Oxnard, California
/s/ Roger G. Castro
February 29, 2000
[CAPTION]
Innovative Software Technologies, Inc.
(A Development Stage Company)
BALANCE SHEET AS OF DECEMBER 31, 1999
AND DECEMBER 31, 1998
December 31 December 31
1999 1998
ASSETS
Current Assets:
Cash $ 1,000 $ 1,000
Total Current Assets -------- --------
1,000 1,000
-------- --------
LIABILITIES & STOCKHOLDERS' EQUITY
Stockholders' Equity:
Common stocks, $.008 par value
Authorized shares - 20,000,000
Issued and outstanding shares
9,149,320 9,149 9,149
Paid in capital 9,144 9,144
Deficit accumulated during
development stage ( 17,893) ( 17,502)
--------- ---------
Total Stockholders' Equity 400 791
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,000 $1,000
<[CAPTION>
Innovative Software Technologies, Inc.
(A Development Stage Company)
STATEMENT OF INCOME FOR THE YEAR ENDED
DECEMBER 31, 1999 AND FOR THE YEAR
ENDED DECEMBER 31, 1998 AND FROM MAY 27, 1998
(INCEPTION) THROUGH DECEMBER 31, 1999
Cumulative
During
Development December 31 December 31
Stage 1999 1998
Income
Sales $-0- -0- -0-
------- ------ --------
Total Income - - -
------- ------ --------
Expenses:
Administrative Expenses (17,983) (391) (17,502)
-------- ------- ---------
Total Expenses (17,983) (391) (17,502)
-------- ------- ---------
Net loss (17,983) (391) (17,502)
======== ======== =========
[CAPTION]
Innovative Software Technologies, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED December 31, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1998
AND FROM MAY 27, 1998 (INCEPTION) THROUGH
DECEMBER 31, 1999
Cumulative
During
Development December 31 December 31
Stage 1999 1998
------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
$ -0- -0- -0-
------- ---------- ----------
Net Loss$ (17,983) $ (391) $ (17,502)
Accounts payable 991 391 600
Stocks issued for services 15,702 15,702
---------- ----------
NET CASH USED BY OPERATING ACTIVITIES ( 1,200) 237
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Stocks issued for cash 2,200 2,200
------- ---------- ----------
NET CASH FROM FINANCING ACTIVITIES 215,012 7,500
------- ---------- ----------
INCREASE (DECREASE) IN CASH 1,000 1,000
------- ---------- ----------
BEGINNING CASH -0- 1,000 -
------- ---------- ----------
ENDING CASH $ 1,000 $ 1,000 $1,000
========= ========== ==========
[CAPTION]
Innovative Software Technologies, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM MAY 27, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1999
<TABLE>
Deficit
Accumulated
During
Common Stock Paid-In Development
Shares Par Value Capital Stage
------ ---------- ------- ---------
<S> <C> <C> <C> <C>
Net loss for the year ended
December 31, 1998 - $ - $ - $ (17,502)
Stocks Issued for Cash 102,100 102 2,098
Stocks issued for services 975,000 975 14,727
------- --------- -------- ---------
Balance at December 31, 1998 1,077,100 1,077 16,825 (17,502)
Shares Issued for Cash 6,500 6 12,994
------- --------- -------- ---------
Balance at December 31, 1998 1,077,100 1,077 16,825 (17,502)
Retroactive adjustment for
8 to 1 stock split November
26, 1999 8,072,220 8,072 (7,681) (17,893)
Restated Balance January 1,
1998 9,149,320 9,149 9,144 (17,893)
Net Loss for the year
Ended December 31, 1999 ( 391)
------- --------- -------- ---------
Balance at December 31,1999 1,077,100 $1,077 $ 16,825 $ (17,893)
========== ======== ========== ==========
[CAPTION]
Innovative Software Technologies, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF THE BUSINESS
The Company was incorporated under the laws of the state of California on May
27, 1998.The purpose for which the Corporation is organized is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of the State of California including, without
limitation, to provide sales of computer related software and related services.
The Company has been in the development stage since its formation on May 27,
1998. Planned principal operations have not commenced since then. There were no
activities from its inception date through December 31, 1999.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customers.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash equivalents.
The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average number
of shares outstanding at the dates of the financial statements. Fully Diluted
Earnings Per Shares shall be shown on stock options and other convertible
issues that may be exercised within ten years of the financial statement dates.
E. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
NOTE 3 STOCK SPLIT
On November 26, 1999, the Company effected an 8 to 1 forward split of its
capital stock, to change the number of authorized shares to 160,000,000 and the
par value to $.008. All references in the accompanying financial statements to
the number of common shares for 1998 and 1999 have been restated to reflect the
stock split.
Item 14. EXHIBITS, FINANCIAL STATEMENTS
14(a) Report of Independent Certified Public Accountant April 28, 1999
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. D E S C R I P T I O N
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3 (a) Articles of Incorporation Innovative Software Technologies, Inc.
3.1(a) Certificate of Amendment to Articles of Incorporation
3 (b) By-laws Innovative Software Technologies, Inc.
4 (a) Specimen certificate of common stock
10 Other Documents - Not applicable
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
Innovative Software Technologies, Inc.
/s/ Jeffrey Volpe
_____________________________________
JEFFREY VOLPE, President and Director
Date: February 29, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Jeffrey Volpe
_____________________________________
JEFFREY VOLPE, President and Director
Date: February 29, 2000
/s/ Agata Gotova
__________________________________________
AGATA GOTOVA, Secretary/Treasurer/Director
Date: February 29, 2000
<CAPTION>
Exhibit 3(a)
ARTICLES OF INCORPORATION
FILE NO.: 2087130
ENDORSED-FILED
IN THE OFFICE OF THE SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
MAY 27 1998
BILL JONES, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
FIRST: The name of this corporation is: INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
SECOND: The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business
or the practice of a profession permitted to be incorporated by the California
Corporations Code.
THIRD: The name and address in the State of California of this
corporation's initial agent for service of process is: MARIO SAPO, 27306 N.
Sara Street #201, Canyon Country, California 91351.
FOURTH: The liability of the directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
FIFTH: This corporation is authorized to issue only one class of shares of
stock, all common; and the total number of shares which this corporation is
authorized to issue is One Million (1,000,000)
Dated: May 20, 1998
/s/ Mario Sapo
__________________________
MARIO SAPO
I hereby declare that I am the person who executed the foregoing Articles of
Incorporation, which execution is my own act and deed.
Executed on May 20, 1998 at Oxnard, California.
/s/ Mario Sapo
__________________________
MARIO SAPO
EXHIBIT 3.1(a)
<CAPTION>
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF
INNOVATIVE SOFTWARE TECHNOLOGIES, INC. A CALIFORNIA CORPORATION
The undersigned hereby certifies as follows:
ONE: That they are the President and Secretary, respectively, of INNOVATIVE
SOFTWARE TECHNOLOGIES, INC., a California corporation.
TWO: That, at a meeting of the Shareholders and the Board of Directors on March
1, 1999, the Corporation amended its articles of incorporation by adopting the
following resolution:
RESOLVED, that the Corporation amend its Articles of Incorporation, FIFTH, as
follows:
"FIFTH: This corporation is authorized to issue only one class of shares of
stock, all common, and the total number of shares which this corporation is
authorized to issue is twenty million (20,000,000) at a par value of $.001 per
share."
THREE: This amendment was approved by the required vote of shareholders in
accordance with the corporations law of the state of California. The total
number of outstanding shares of each class entitled to vote for the amendment
is: Nine Hundred Seventy Five Thousand(975,000) shares. The number of shares
of each class voting for the amendment equaled or exceeded the vote required,
that being fifty (50%) percent. The amendment was approved by a vote of Nine
Hundred Seventy Five Thousand (975,000) shares, equaling 100% of all shares
entitled to vote.
Dated: March 1, 1999
/s/ Jeffrey Volpe
- ------------------------
JEFFREY VOLPE, PRESIDENT
Dated: March 1, 1999
/s/ Agata Gotova
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AGATA GOTOVA, SECRETARY
We, the undersigned, hereby declare, under penalty of perjury, in accordance
with the laws of the State of California, that we are the President and
Secretary of the above-referenced corporation, that we executed the above-
referenced Certificate of Amendment to Articles of Incorporation, that we have
personal knowledge of the information contained therein, and that the
information contained therein is true and correct
Dated: March 1, 1999
/s/ Jeffrey Volpe
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JEFFREY VOLPE, PRESIDENT
Dated: March 1, 1999
/s/ Agata Gotova
- -------------------
AGATA GOTOVA, SECRETARY
<CAPTION>
EXHIBIT 3.2(a)
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF INNOVATIVE SOFTWARE
TECHNOLOGIES, INC. A California Corporation
The undersigned hereby certifies as follows:
ONE: That they are the President and Secretary, respectively, of INNOVATIVE
SOFTWARE TECHNOLOGIES, INC., a California corporation.
TWO: That, at a meeting of the Shareholders and the Board of Directors on
November 26, 1999, the Corporation amended its articles of incorporation by
adopting the following resolution:
RESOLVED, that the Corporation amend its Articles of Incorporation, FIFTH, as
follows:
"FIFTH: In order to reflect an 8-1 forward split of the shares of this
corporation authorized by the Board of Directors on November 26, 1999, this
corporation is authorized to issue only one class of shares of stock, all
common, and the total number of shares which this corporation is authorized to
issue is one hundred sixty million (20,000,000) at a par value of $.008 per
share.
THREE: This amendment was approved by the required vote of shareholders in
accordance with the corporations law of the state of California. The total
number of outstanding shares of each class entitled to vote for the amendment
is: One Million Seventy Seven Thousand One hundred (1,077,100) shares. The
number of shares of each class voting for the amendment equaled or exceeded the
vote required, that being fifty (50%) percent. The amendment was approved by a
vote of One Million Seventy Five Thousand (1,075,000) shares, equaling 99.8% of
all shares entitled to vote.
Dated: November 26, 1999 /S/ JEFFREY VOLPE
JEFFREY VOLPE, PRESIDENT
/s/ AGATA GOTOVA
Dated: November 26, 1999
__________________________________
AGATA GOTOVA, SECRETARY
We, the undersigned, hereby declare, under penalty of perjury, in accordance
with the laws of the State of California, that we are the President and
Secretary of the above- referenced corporation, that we executed the
above-referenced Certificate of Amendment to Articles of Incorporation, that we
have personal knowledge of the information contained therein, and that the
information contained therein is true and correct
/s/ JEFFREY VOLPE
JEFFREY VOLPE, President
/S/ AGATA GOTOVA
__________________________________
AGATA GOTOVA, Secretary
EXHIBIT 3(b)
<CAPTION>
BYLAWS OF
INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
A California Corporation
O F F I C E S
-------------
1. PRINCIPAL OFFICE. The principal office for the transaction of the business
of the corporation is hereby fixed and located at 143 south B Street, Oxnard,
California. The Board of Directors is hereby granted full power and authority
to change the place of said principal office.
2. OTHER OFFICES. Branch or subordinate offices may at any time be established
by the Board of Directors at any place or places where the corporation is
qualified to do business.
S H A R E H O L D E R S
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3. PLACE OF MEETINGS. Shareholders' meetings shall be held at the principal
office for the transaction of the business of this corporation in the State of
California, or at such other place as the Board of Directors shall, by
resolution, appoint.
4. ANNUAL MEETINGS. The annual meetings of shareholders shall be held in the
month of May in each year. At such meeting Directors shall be elected; reports
of the affairs of the corporation shall be considered, and any other business
may be transacted which is within the powers of the shareholders. The first
annual meeting of shareholders after incorporation need not be held if less
than nine months have elapsed since incorporation to such meeting date.
Written notice of each annual meeting shall be mailed to each shareholder
entitled to vote, addressed to such shareholder at his address appearing on the
books of the corporation or given by him to the corporation for the purpose of
notice. If a shareholder gives no address, notice shall be deemed to have been
given if sent by mail or other means of written communication addressed to the
place where the principal executive office of the corporation is situated, or
if published at least once in some newspaper of general circulation in the
county in which said office is located. All such notices shall be mailed,
postage prepaid, to each shareholder entitled thereto not less than ten (10)
days nor more than sixty (60) days before each annual meeting. Such notices
shall specify the place, the day, and the hour of such meeting, the names of
the nominees for election as Directors if Directors are to be elected at the
meeting, and those matters which the Board of Directors intends to present for
action by the shareholders, and shall state such other matters, if any, as may
be expressly required by statute.
5. SPECIAL MEETINGS. Special meetings of the shareholders, may be called at
any time by the Chairman of the Board of Directors, if any, the President or
any Vice President, or by the Board of Directors, or by one or more
shareholders holding not less than ten (10%) percent of the voting power of the
corporation. Except in special cases where other express provision is made by
statute, notice of such special meeting shall be given in the same manner as
for an annual meeting of shareholders. Said notice shall specify the general
nature of the business to be transacted at the meeting. No business shall be
transacted at a special meeting except as stated in the notice sent to
shareholders, unless by the unanimous consent of all shareholders represented
at the meeting, either in person or by proxy. Upon written request to the
Chairman of the Board, the President, the Secretary or any Vice President of
the corporation by any person (but not the Board of Directors) entitled to call
a special meeting of shareholders, the person receiving such request shall
cause a notice to be given to the shareholders entitled to vote that a meeting
will be held at a time requested by the person calling the meeting not less
than thirty-five (35) nor more than sixty (60) days after the receipt of the
request.
6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any shareholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares the holders of which are either present
in person or represented by proxy thereat, but in the absence of a quorum no
other business may be transacted at such meeting.
Notice of an adjourned meeting need not be given if (a) the meeting is
adjourned for forty-five (45) days or less, (b) the time and place of the
adjourned meeting are announced at the meeting at which the adjournment is
taken, and (c) no new record date is fixed for the adjourned meeting.
Otherwise, notice of the adjourned meeting shall be given as in the case of an
original meeting.
7. VOTING. Except as provided below or as otherwise provided by the Articles
of Incorporation or by law, a shareholder shall be entitled to one vote for
each share held of record on the record date fixed for the determination of the
shareholders entitled to vote at a meeting or if no such date is fixed, the
date determined in accordance with law. Upon the demand of any shareholder made
at a meeting before the voting begins, the election of Directors shall be by
ballot. At every election of Directors, shareholders may cumulate votes 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 the shares are entitled or
distribute votes according to the same principal among as many candidates as
desired; however, no shareholder shall be entitled to cumulate votes for any
one or more candidates unless such candidate or candidates' name has been
placed in nomination prior to the voting and at least one shareholder has given
notice at the meeting prior to the voting of such shareholder's intention to
cumulate votes.
8. QUORUM. A majority of the shares entitled to vote, represented in person or
by proxy, constitutes a quorum for the transaction of business. No business may
be transacted at a meeting in the absence of a quorum other than the
adjournment of such meeting, except that if a quorum is present at the
commencement of a meeting, business may be transacted until the meeting is
adjourned even though the withdrawal of shareholders results in less than a
quorum. If a quorum is present at a meeting, the affirmative vote of a majority
of the shares represented at the meeting and entitled to vote on any matter
shall be the act of the shareholders unless the vote of a larger number is
required by law or the Articles of Incorporation. If a quorum is present at the
commencement of a meeting but the withdrawal of shareholders results in less
than a quorum, the affirmative vote of the majority of shares required to
constitute a quorum shall be the act of the shareholders unless the vote of a
larger number is required by law or the Articles of Incorporation. Any meeting
of shareholders, whether or not a quorum is present, may be adjourned by the
vote of a majority of the shares represented at the meeting.
9. CONSENT OF ABSENTEES. The transactions of any meeting of shareholders,
however called and noticed and wherever held, are as valid as though had at a
meeting duly held after regular call and notice, if a quorum is present either
in person or by proxy and if, either before or after the meeting, each of the
persons entitled to vote who is not present at the meeting in person or by
proxy signs a written waiver of notice, a consent to the holding of the meeting
or an approval of the minutes of the meeting. For such purposes a shareholder
shall not be considered present at a meeting if, at the beginning of the
meeting, the shareholder objects to the transaction of any business because the
meeting was not properly called or convened or, with respect to the
consideration of a matter required to be included in the notice for the meeting
which was not so included, the shareholder expressly objects to such
consideration at the meeting.
10. ACTION WITHOUT MEETING. Except as provided below or by the Articles of
Incorporation, any action which may be taken at any 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 no less than the minimum number of votes which would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote on such action were present and voted. Unless the consents of all
shareholders entitled to vote have been solicited in writing, the corporation
shall give, to those shareholders entitled to vote who have not consented in
writing, a written notice of (a) any shareholder approval obtained without a
meeting pursuant to those provisions of the California Corporations Code set
forth in Subsection 603(b)(l) of such Code at least ten (10) days before the
consummation of the action authorized by such approval, and (b) the taking of
any other action approved by shareholders without a meeting, which notice shall
be given promptly after such action is taken.
11. PROXIES. A shareholder may be represented at any meeting of shareholders
by a written proxy signed by the person entitled to vote or by such person's
duly authorized attorney-in-fact. A proxy must bear a date within eleven (11)
months prior to the meeting, unless the proxy specifies a different length of
time. A revocable proxy is revoked by a writing delivered to the Secretary of
the corporation stating that the proxy is revoked or by a subsequent proxy
executed by, or by attendance at the meeting and voting in person by, the
person executing the proxy.
12. ELECTION INSPECTORS. One or three election inspectors may be appointed by
the Board of Directors in advance of a meeting of shareholders or at the
meeting by the Chairman of the meeting. If not previously chosen, one or three
inspectors shall be appointed by the Chairman of the meeting if a shareholder
or proxyholder so requests. When inspectors are appointed at the request of a
shareholder or proxyholder, the majority of shares represented in person or by
proxy shall determine whether one or three inspectors shall be chosen. The
election inspectors shall determine all questions concerning the existence of a
quorum and the right to vote, shall tabulate and determine the results of
voting and shall do all other acts necessary or helpful to the expeditious and
impartial conduct of the vote. If there are three inspectors, the decision, act
or certificate of a majority of the inspectors is effective as if made by all.
D I R E C T O R S
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13. POWERS. Subject to limitations of the Articles of Incorporation, the
Bylaws, and the California General Corporation Law as to action to be
authorized or approved by the shareholders, and subject to the duties of
Directors as prescribed by the Bylaws, all corporate powers shall be exercised
by or under the ultimate direction of, and the business and affairs of the
corporation shall be managed by, the Board of Directors. Without prejudice to
such general powers, but subject to the same limitations, it is hereby
expressly declared that the Directors shall have the following powers:
(a) To select and remove all of the other officers, agents and employees of
the corporation, prescribe such powers and duties for them as may be consistent
with law, with the Articles of Incorporation, or the Bylaws, fix their
compensation and require from them security for faithful service.
(b) To conduct, manage and control the affairs and business of the
corporation, and to make such rules and regulations therefor not inconsistent
with law, or with the Articles of Incorporation, or the Bylaws, as they may
deem best.
(c) To change the principal office for the transaction of the
business of the corporation from one location to another within the same county
as provided in Section 1 hereof; to fix and locate from time to time one or more
subsidiary offices of the corporation within or without the State of California,
as provided in Section 2 hereof; to designate any place within or without the
State of California for the holding of any shareholders' meeting or meetings;
and to prescribe the forms of certificates of stock, and to alter the form of
such certificates from time to time, as in their judgment they may deem best,
provided such certificates shall at all times comply with the provisions of law.
(d) To authorize the issuance of shares of capital stock of the corporation
from time to time, upon such terms as may be lawful.
(e) To borrow money and incur indebtedness for the purposes of the corporation,
and to cause to be executed and delivered therefor, in the corporate name,
promissory notes, bonds, debentures, deeds of trust, mortgages, pledges,
hypothecations, or other evidence of debt and securities therefor.
14. NUMBER OF DIRECTORS. The authorized number of Directors of this corporation
shall be three (3) until changed by amendment of the Articles of Incorporation
or by a By-Law duly adopted by the shareholders amending this Section 14.
15. ELECTION, TERM OF OFFICE AND VACANCIES. At each annual meeting of
shareholders, Directors shall be elected to hold office until the next annual
meeting. Each Director, including a Director elected to fill a vacancy, shall
hold office until the expiration of the term for which the Director was elected
and until a successor has been elected. The Board of Directors may declare
vacant the office of a Director who has been declared to be of unsound mind by
court order or convicted of a felony. Vacancies on the Board of Directors not
caused by removal may be filled by a majority of the Directors then in office,
regardless of whether they constitute a quorum, or by the sole remaining
Director. The shareholders may elect a Director at any time to fill any vacancy
not filled, or which cannot be filled, by the Board of Directors.
16. REMOVAL. Except as described below, any or all of the Directors may be
removed without cause if such removal is approved by the affirmative vote of a
majority of the outstanding shares entitled to vote. Unless the entire Board of
Directors is so removed no Director may be removed if (a) the votes cast against
removal, or not consenting in writing to such removal, would be sufficient to
elect such Director if voted cumulatively at an election at which the same total
number of votes were cast or, if such action is taken by written consent, all
shares entitled to vote were voted, and (b) the entire number of Directors
authorized at the time of the Director's most recent election were then being
elected.
17. RESIGNATION. Any Director may resign by giving written notice to the
Chairman of the Board, the President, the Secretary or the Board of Directors.
Such resignation shall be effective when given unless the notice specifies a
later time. The resignation shall be effective regardless of whether it is
accepted by the corporation.
18. COMPENSATION. If the Board of Directors so resolves, the Directors,
including the Chairman of the Board, shall receive compensation and expenses of
attendance for meetings of the Board of Directors and of committees of the
Board. Nothing herein shall preclude any Director from serving the corporation
in another capacity and receiving compensation for such service.
19. COMMITTEES. 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 a committee
who may replace any absent member at any meeting of the committee. To the extent
permitted by resolution of the Board of Directors, a committee may exercise all
of the authority of the Board to the extent permitted by Section 311 of the
California Corporations Code.
20. INSPECTION OF RECORDS AND PROPERTIES. Each Director may inspect all books,
records, documents and physical properties of the corporation and its
subsidiaries at any reasonable time. Inspections may be made either by the
Director or the Director's agent or attorney. The right of inspection includes
the right to copy and make extracts.
21. TIME AND PLACE OF MEETINGS AND TELEPHONE MEETINGS. Immediately following
each annual meeting of shareholders, the Board of Directors shall hold a regular
meeting for the purposes of organizing the Board, election of officers and the
transaction of other business. The Board may establish by resolution the times,
if any, when other regular meetings of the Board shall be held. All meetings of
Directors shall be held at the principal executive office of the corporation or
at such other place, within or without California, as shall be designated in the
notice for the meeting or in a resolution of the Board of Directors. Directors
may participate in a meeting through use of conference telephone or similar
communications equipment so long as all Directors participating in such meeting
can hear each other.
22. CALL. Meetings of the Board of Directors, whether regular or special, may
be called by the Chairman of the Board, the President, the Secretary, or any
Director.
23. NOTICE. Regular meetings of the Board of Directors may be held without
notice if the time of such meetings has been fixed by the Board. Special
meetings shall be held upon four days' notice by mail or 48 hours' notice
delivered personally or by telephone or telegraph, and regular meetings shall be
held upon similar notice if notice is required for such meetings. Neither a
notice nor a waiver of notice need specify the purpose of any regular or special
meeting. If a meeting is adjourned for more than 24 hours, notice of the
adjourned meeting shall be given prior to the time of such meeting to the
Directors who were not present at the time of the adjournment.
24. MEETING WITHOUT REGULAR CALL AND NOTICE. The transactions of any meeting of
the Board of Directors, however called and noticed or wherever held, are as
valid as though had at a meeting duly held after regular call and notice if a
quorum is present and if, either before or after the meeting, each of the
Directors not present signs a written waiver of notice, a consent to holding the
meeting or an approval of the minutes of the meeting. For such purposes, a
Director shall not be considered present at a meeting if, although in attendance
at the meeting, the Director protests the lack of notice prior to the meeting or
at its commencement.
25. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the
Board of Directors may be taken without a meeting, if all the members of the
Board individually or collectively consent in writing to such action.
26. QUORUM AND REQUIRED VOTE. A majority of the Directors then in office shall
constitute a quorum for the transaction of business, provided that unless the
authorized number of Directors is one, the number constituting a quorum shall
not be less than the greater of one-third of the authorized number of Directors
or two Directors. Except as otherwise provided by Subsection 307(a)(8) of the
California Corporations Code, the Articles of Incorporation or these Bylaws,
every act or decision done or made by a majority of the Directors present at a
meeting duly held at which a quorum is present is the act of the Board. 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 such meeting. A majority of the
Directors present at a meeting whether or not a quorum is present, may adjourn
the meeting to another time and place.
27. COMMITTEE MEETINGS. The principles set forth in Sections 21 through 26 of
these Bylaws shall apply to committees of the Board of Directors and to actions
by such committees.
28. LOANS. Except as provided by Section 315 of the California Corporations
Code, the vote or written consent of the holders of a majority of the shares of
all classes, regardless of limitations on voting rights, other than shares held
by the benefitted Director, officer or shareholder, shall be obtained before
this corporation makes any loan of money or property to or guarantees the
obligation of:
(a) Any Director or officer of the corporation, any Director or officer of any
of its parents, or any Director or officer of any of its subsidiary
corporations, directly or indirectly.
(b) Any person upon the security of the shares of the corporation or the shares
of its parent, unless the loan or guaranty is otherwise adequately secured.
O F F I C E R S
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29. TITLES AND RELATION TO BOARD OF DIRECTORS. The officers of the corporation
shall include a President, a Secretary and a Treasurer. The Board of Directors
may also choose a Chairman of the Board and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers or other officers. Any number of
offices may be held by the same person and, unless otherwise determined by the
Board, the Chairman of the Board and President shall be the same person. Ml
officers shall perform their duties and exercise their powers subject to the
direction of the Board of Directors.
30. ELECTION, TERM OF OFFICE AND VACANCIES. At its regular meeting after each
annual meeting of shareholders, the Board of Directors shall choose the officers
of the corporation. No officer need be a member of the Board of Directors except
the Chairman of the Board. The officers shall hold office until their successors
are chosen, except that the Board of Directors may remove any officer at any
time. If an office becomes vacant for any reason, the vacancy shall be filled by
the Board.
31. RESIGNATION. Any officer may resign at any time upon written notice to the
corporation without prejudice to the rights, if any, of the corporation under
any contract to which the officer is a party. Such resignation shall be
effective when given unless the notice specifies a later time. The resignation
shall be effective regardless of whether it is accepted by the corporation.
32. SALARIES. The Board of Directors shall fix the salaries of the Chairman of
the Board and President and may fix the salaries of other employees of the
corporation including the other officers. If the Board does not fix the salaries
of the other officers, the President shall fix such salaries.
33. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there shall be such an
officer, shall, if present, preside at all 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.
34. PRESIDENT (CHIEF EXECUTIVE OFFICER). Unless otherwise determined by the
Board of Directors, the President shall be the general manager and chief
executive officer of the corporation, shall preside at all meetings of the Board
of Directors and shareholders, shall be ex-officio a member of any committees of
the Board, shall effectuate orders and resolutions of the Board of Directors and
shall exercise such other powers and perform such other duties as the Board of
Directors shall prescribe.
35. VICE PRESIDENT. In the absence or disability of the President, the Vice
President (or if more than one, the Vice Presidents in order of their rank as
fixed by the Board of Directors, or if not so ranked, the Vice President
designated by the Board of Directors) or, if none, the Secretary or Treasurer,
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 President or, if none, the Secretary or Treasurer, 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.
36. SECRETARY. The Secretary shall have the following powers and duties:
(a) Record of Corporate Proceedings. The Secretary shall attend all meetings of
the Board of Directors and its committees and shall record all votes and the
minutes of such meetings in a book to be kept for that purpose at the principal
executive office of the corporation or at such other place as the Board of
Directors may determine. The Secretary shall keep at the corporation's principal
executive office, if in California, or at its principal business office in
California, if the principal executive office is not in California, the original
or a copy of the Bylaws, as amended.
(b) Record of Shares. Unless a transfer agent is appointed by the Board of
Directors to keep a share register, the Secretary shall keep at the principal
executive office of the corporation a share register showing the names of the
shareholders and their addresses, the number and class of shares held by each,
the number and date of certificates issued, and the number and date of
cancellation of each certificate surrendered for cancellation.
(c) Notices. The Secretary shall give such notices as may be required by law or
these Bylaws.
(d) Additional Powers and Duties. The Secretary shall exercise such other
powers and perform such other duties as the Board of Directors or President
shall prescribe.
37. TREASURER (CHIEF FINANCIAL OFFICER). The Treasurer of the corporation shall
be its chief financial officer. Unless otherwise determined by the Board of
Directors, the Treasurer shall have custody of the corporate funds and
securities and shall keep adequate and correct accounts of the corporation's
properties and business transactions. The Treasurer shall disburse such funds of
the corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, shall render to the President and Directors, at
regular meetings of the Board of Directors or whenever the Board may require, an
account of all transactions and the financial condition of the corporation and
shall exercise such other powers and perform such other duties as the Board of
Directors or President shall prescribe.
38. OTHER OFFICERS. The other officers (if any) of this corporation
shall perform such duties as may be assigned to them by the Board of Directors.
S H A R E S
- -----------
39. CERTIFICATES. A certificate or certificates for shares of the capital stock
of the corporation shall be issued to each shareholder when any such shares are
fully paid up. All such certificates shall be signed by the Chairman of the
Board, the President or a Vice President and the Secretary or Assistant
Secretary.
40. TRANSFERS OF SHARES OF CAPITAL STOCK. Transfers of shares shall be made
only upon the transfer books of this corporation, kept at the office of the
corporation or transfer agent designated to transfer such shares, and before a
new certificate is issued, the old certificate shall be surrendered for
cancellation.
41. REGISTERED SHAREHOLDERS. Registered shareholders only shall be entitled to
be treated by the corporation as the holders in fact of the shares standing in
their respective names and the corporation shall not be bound to recognize any
equitable or other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of California.
42. LOST OR DESTROYED CERTIFICATES. The corporation may cause a new
stock certificate to be issued in place of any certificate previously issued by
the corporation alleged to have been lost, stolen or destroyed. The corporation
may, at its discretion and as a condition precedent to such issuance, require
the owner of such certificate to deliver an affidavit stating that such
certificate was lost, stolen or destroyed, or to give the corporation a bond or
other security sufficient to indemnify it against any claim that may be made
against it, including any expense or liability, on account of the alleged loss,
theft or destruction or the issuance of a new certificate.
43. RECORD DATE AND CLOSING OF STOCK BOOKS. The Board of Directors may
fix a time, in the future, not more than sixty (60) nor less than ten (10) days
prior to the date of any meeting of shareholders, or not more than sixty (60)
days prior to the date fixed for the payment of any dividend or distribution,
or for the allotment of rights, or when any change or conversion or exchange of
shares shall go into effect, as a record date for the determination of the
shareholders entitled to notice of and to vote at any such meeting, or entitled
to receive any such dividend or distribution, or any such allotment of rights,
or to exercise the rights in respect to any such change, conversion, or
exchange of shares, and in such case except as provided by law, only
shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting or to receive such dividend, distribution, or allotment
of rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after any record date
fixed as aforesaid. A determination of shareholders of record entitled to
notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting unless the Board of Directors fixes a new record
date. The Board of Directors shall fix a new record date if the adjourned
meeting takes place more than 45 days from the date set for the original
meeting.
44. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may appoint one or
more transfer agents or transfer clerks, and one or more registrars, who shall
be appointed at such times and places as the requirements of the corporation may
necessitate and the Board of Directors may designate.
A M E N D M E N T S
- -------------------
45. ADOPTION OF AMENDMENTS. New Bylaws may be adopted or these Bylaws may be
amended or repealed:
(a) At any annual meeting, or other meeting of the shareholders called for that
purpose by the vote of shareholders holding more than fifty percent (50%) of the
issued and outstanding shares of the corporation; or
(b) Without a meeting, by written consent of shareholders holding more than
fifty percent (50%) of the issued and outstanding shares of the corporation; or
(c) By a majority of the Directors of the corporation; provided, however, that
a greater vote of shareholders or Directors shall be necessary if required by
law or by the Articles ofIncorporation; and provided, further, that Section 14
(number of Directors) and this Section 45 shall be amended or repealed only by
the vote or written consent of shareholders holding not less than a majority of
the issued and outstanding voting shares of the corporation. Section 14 shall
not be amended to reduce the number of Directors below two if the votes cast
against its adoption at a meeting or the shares not consenting in the case of an
action by written consent are equal to more than sixteen and two-thirds percent
(16- 2/3%) of the outstanding shares entitled to vote.
46. RECORD OF AMENDMENTS. Whenever an amendment or new Bylaw is adopted, it
shall be copied in the Book of Bylaws with the original Bylaws, in the
appropriate place. If any Bylaws or Bylaw is repealed, the fact of repeal with
the date of the meeting at which the repeal was enacted or written assent was
filed shall be stated in said book.
C O R P O R A T E S E A L
- ----------------- -------
47. FORM OF SEAL. The corporation may adopt and use a corporate seal but shall
not be required to do so. If adopted and used, the corporate seal shall be
circular in form, and shall have inscribed thereon the name of the corporation,
the date of its incorporation and the word "California
M I S C E L L A N E O U S
- -------------------------
48. CHECKS DRAFTS, ETC. 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.
49. CONTRACT, ETC., HOW EXECUTED. The Board of Directors, except as otherwise
provided in these Bylaws, may authorize any officer or officers, or agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances; and unless so authorized by the Board of Directors, 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.
50. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of the Board,
the President or any Vice President and the Secretary or Assistant Secretary of
this corporation are authorized to vote, represent, and exercise on behalf of
this corporation all rights incident to any and all shares of any other
corporation or corporations standing in the name of this corporation. The
authority herein granted to said officers to vote or represent on behalf of this
corporation any and all shares held by this corporation in any other corporation
or corporations may be exercised either by such officers in person or by any
other person authorized so to do by proxy or power of attorney duly executed by
said officers.
51. INSPECTION OF BYLAWS. The corporation shall keep in its principal office
for the transaction of business the original or a copy of these Bylaws as
amended or otherwise altered to date, certified by the Secretary, which shall be
open to inspection by the shareholders at all reasonable times during office
hours.
52. ANNUAL REPORT. The annual report to shareholders specified in Section 1501
of the California Corporations Code is dispensed with except as the Board of
Directors may otherwise determine, so long as there are less than 100 holders of
record of the corporation's shares. Any such annual report sent to shareholders
shall be sent at least 15 days prior to the next annual meeting of shareholders.
53. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise requires, the
general provisions, rules and construction, and definitions contained in the
California General Corporation Law shall govern the construction of these
Bylaws. Without limiting the generality of the foregoing, the masculine gender
includes the feminine and neuter, the singular number includes the plural and
the plural number includes the singular, and the term "person" includes a
corporation as well as a natural person.
S I G N A T U R E S
-------------------
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being the Directors of INNOVATIVE SOFTWARE
TECHNOLOGIES, INC., as of the 4th day of March, 1998, hereby assent to the
foregoing Bylaws and adopt the same as the Bylaws of the said corporation
IN WITNESS WHEREOF, we have hereunto subscribed our names the 27th day of May,
1998.
/s/Jeffrey Volpe
_______________________
JEFFREY VOLPE, DIRECTOR
/s/ Agata Gotova
______________________
AGATA GOTOVA, DIRECTOR
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of INNOVATIVE
SOFTWARE TECHNOLOGIES, INC., and that the above and foregoing Bylaws were
adopted as the Bylaws of said corporation on the 4th day of March, 1998, by the
Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of March, 1998.
By /s/Agata Gotova
_______________________
Agata Gotova, Secretary
SPECIMEN OF COMMON STOCK CERTIFICATE
Innovative Software Technologies, Inc.
INCORPORATED STATE OF CALIFORNIA MAY 27, 1998
[________]NUMBER
SHARES[________]
AUTHORIZED COMMON STOCK; 20,000,000 SHARES PAR VALUE $.001
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT INCORPORATED
UNDER THE LAWS OF THE STATE OF CALIFORNIA COMMON STOCK CUSIP 45768 A 10 4
THIS CERTIFIES THAT
Is the RECORD HOLDER OF SHARES OF Innovative Software Technologies, Inc. COMMON
STOCK TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY
AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT AND
REGISTERED BY THE REGISTRAR.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
[SEAL OF Innovative Software Technologies, Inc.]
/s / JEFFREY VOLPE
President
/s/ AGATA GOTOVA
Secretary
By: ^^Illegible Signature^^
American Registrar and Transfer Company
Salt Lake City, UT 84107
This Certificate is not valid unless countersigned by the Transfer Agent.
NOTICE: Signature must be guaranteed by a firm which is a member of a
registered national stock exchange, or by a bank (other than a savings bank) ,
or a trust company.
The following abbreviation, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____Custodian____
TEN ENT - as tenants by the entireties
(Cust) (Minor) JT TEN - as joint tenants with right under Uniform Gifts to
Minors of survivorship and not as tenants in common
(State) Additional abbreviation may also be used though not in above list.
FOR VALUE RECEIVED, _________ hereby sell, assign and transfer unto PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated: ______________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
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