<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Registration Statement on Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
HIGHWAY ONE-OWEB, INC.
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(Name of Small Business Issuer as specified in its charter)
UTAH Applied for
---- -----------
(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
430 Fourth Street
Ogden, Utah 84404
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 392-6056
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
------------------------------------
Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: None.
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PART I
Item 1. Description of Business.
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Business Development.
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Organization, Charter Amendments and General History
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Highway One-OWEB, Inc., a Utah corporation (the "Company"), was
organized under the laws of the State of Utah on March 17, 1999. Copies of
the Company's Articles of Incorporation and Bylaws are attached hereto and are
incorporated herein by reference. See the Index to Exhibits, Part III, Item
1.
General History
---------------
Following the Company's organization, it conducted an offering of a
minimum of 300,000 shares and a maximum of 1,000,000 shares of common stock at
a price of $0.10 per share. This offering was conducted under Rule 504 of
Regulation D of the Securities and Exchange Commission and applicable state
laws, rules and regulations. The offering was subsequently closed, with the
Company having received gross proceeds of $34,800.
The Company has not commenced operations. This Registration
Statement is being filed on a voluntary basis to allow the Company to obtain
quotations for its common stock on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. (the "NASD"). See the heading
"Effects of Existing or Probable Governmental Regulations."
Changes of Control
------------------
At its inception, the Company issued 2,000,000 "unregistered" and
"restricted" shares of common stock to Pete Chandler, its sole director and
executive officer. There have been no changes in control of the Company since
its inception.
Sales of "Unregistered" and "Restricted" Securities Over the Past Three
Years
-----
For information concerning sales of "unregistered" and "restricted"
securities during the past three years, see the caption "Recent Sales of
Unregistered Securities."
Business.
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The Company was organized to develop and market internet web page
design and maintenance for companies that have not previously used the
internet to market their goods and services.
Risk Factors
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EARLY STAGE OF DEVELOPMENT
The Company was formed in March, 1999, and is at a very early
stage of development. It is subject to all of the risks inherent in any new
business. These risks include:
the need for substantial capital to support its development
efforts;
the need to attract and retain qualified personnel and
experienced management;
losses associated with start-up; and
competition.
LOSSES ASSOCIATED WITH START-UP
The Company was formed recently and has no operating history. The
purchase of the necessary computer and office equipment and software requires
large up front expenditures and working capital during the initial start-up
period. The Company expects that its initial expenses will result in losses
early in its development. It can not guarantee that it will become profitable
after it completes its initial purchases. See "Management's Discussion and
Analysis or Plan of Operation."
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS AND MARGINS; SEASONALITY OF
BUSINESS
The Company's operating results are likely to fluctuate in the
future as a result of a variety of factors, many of which will be outside the
Company's control. Some of these factors may include material reduction or
cancellation of major projects or the loss of a major client; the amount and
timing of the receipt of new business; timing of hiring or loss of personnel;
the amount and timing of the opening or closing of an office; the amount and
the relative mix of high-margin creative or strategy consulting projects as
compared to lower margin projects, capital expenditures and other costs
relating to the expansion of operations; the level of demand for web site
development; the ability to maintain adequate staffing to service clients
effectively; the cost of advertising and related media; the amount and timing
of expenditures by clients for professional services; the introduction of new
products or services by competitors; pricing changes in the industry; relative
mix of lower cost full-time employees versus higher cost independent
contractors; technical difficulties with respect to the use of the internet;
economic conditions specific to internet technology usage; government
regulation and legal developments regarding the use of the internet; and
general economic conditions. The Company may also experience seasonality in
its business, resulting in diminished revenues as a consequence of decreased
demand for professional services during summer and year-end vacation and
holiday periods. Due to all of the foregoing factors, the Company's operating
results in any given quarter may fall below expectations. In such an event,
any future trading price of the Company's common stock would likely be
materially and adversely affected.
EVOLVING BUSINESS MODEL
The Company and its prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by companies in an
early stage of development, particularly companies in new and rapidly evolving
markets such as internet solutions and services. Such risks for the Company
include, but are not limited to, an evolving business model. To address these
risks the Company must, among other things, develop strong business
development and management activities, develop the strength and quality of its
operations, maximize the value delivered to clients by the Company's internet
solutions, develop and enhance the Company's brands, respond to competitive
developments and attract, retain and motivate qualified employees. There can
be no assurance that the Company will be successful in meeting these
challenges and addressing such risks and the failure to do so could have a
material adverse effect on the Company's business, financial condition, result
of operations and prospects.
RISKS RELATED TO FUTURE ACQUISITIONS
A key component of the Company's growth strategy is expected to be
the acquisition of firms that meet the Company's goals for strategic growth.
The successful implementation of this strategy will depend on the Company's
ability to identify suitable acquisition candidates, acquire such companies on
acceptable terms and integrate their operations successfully with those of the
Company. There can be no assurance that the Company will be able to identify
additional suitable acquisition candidates or that the Company will be able to
acquire such candidates on acceptable terms. Moreover, in pursuing
acquisition opportunities the Company may compete with other companies with
similar growth strategies, certain of which competitors may be larger and have
greater financial and other resources than the Company. Competition for these
acquisition targets may also result in increased prices of acquisition targets
and a diminished pool of companies available for acquisition. Acquisitions
also involve a number of other risks, including adverse effects on the
Company's reporting operating results from increases in goodwill amortization,
acquired in-process technology, stock compensation expense resulting from
newly hired employees, the diversion of management attention, potential
disputes with the sellers of one or more acquired entities and the possible
failure to retain key acquired personnel. Lack of client satisfaction or
performance problems with an acquired firm could also have a material adverse
impact on the reputation of the Company as a whole, and any acquired
subsidiary could significantly underperform relative to the Company's
expectations. For all of these reasons, the Company's pursuit of an overall
acquisition strategy or any individual pending or future acquisition may have
a material adverse effect on the Company's business, financial condition,
results of operations and prospects. Management expects that, for the
foreseeable future, shares of the Company's common stock will be the sole
consideration for any such acquisition. As the Company issues stock to
complete any future acquisition, existing shareholders will experience
ownership dilution.
RISKS ASSOCIATED WITH FAILURE TO MANAGE GROWTH
At present, the Company's sole employee is its President, Pete
Chandler. Any expansion of the Company's operations would place a significant
strain on its limited personnel, management and other resources. Depending on
the success of its planned operations, the Company may be required to attract,
train, motivate and manage new employees successfully and to develop
operational, management and information systems and controls. There can be no
assurance that the Company's systems, procedures or controls will be adequate
to support its operations or that its management will be able to achieve the
rapid execution necessary to exploit the market for the Company's business
model. The failure to effectively manage growth could have a material adverse
effect on the Company's business, financial condition, results of operation
and prospects.
COMPETITION; LOW BARRIERS TO ENTRY
The market for internet professional services is relatively new,
intensely competitive, rapidly evolving and subject to rapid technological
change. The Company expects competition to persist, intensify and increase in
the future. The Company's competitors can be divided into several groups:
computer hardware and service vendors such as IBM and Hewlett Packard;
national advertising and media agencies such as Ogilvy & Mather, Young &
Rubicam and Foote, Cone & Belding, as well as local and regional agencies;
internet integrators and web presence providers such as Agency.com and iXL
Holdings; large information consulting service providers such as Anderson
Consulting, Cambridge Technology Partners and Electronic Data Systems
Corporation; telecommunications companies such as AT&T and MCI; internet and
online service providers such as America Online, Netcom Online, and UUNet
Technologies; and software vendors such as Microsoft, Netscape, Novell and
Oracle. Many of the Company's current and potential competitors have longer
operating histories, larger installed customer bases, longer relationships
with clients and significantly greater financial, technical, marketing and
public relation sources than the Company and could decide at any time to
increase their resource commitments to the Company's target market. In
addition, the market for web site development is relatively new and subject to
continuing definition, and, as a result, may better position the Company's
competitors to compete in this market as it matures. As a strategic response
to changes in the competitive environment, the Company may from time to time
make certain pricing, service technology or marketing decisions or business or
technology acquisitions that could have a material adverse effect on the
Company's business, financial condition, results of operations and prospects.
Competition of the type described above could materially adversely affect the
Company's business, results of operations, financial conditions and prospects.
In addition, the Company's ability to maintain future client
relationships and generate new clients will depend to a significant degree on
the quality of its services and its reputation among its clients and potential
clients, compared with the quality of its services provided by, and the
reputations of, the Company's competitors. To the extent the Company loses
clients to its competitors because of dissatisfaction with the Company's
services or its reputation is adversely affected for any other reason, the
Company's business, result of operations, financial conditions and prospects
could be materially adversely affected.
There are relatively low barriers to entry into the Company's
business. Because firms such as the Company rely on the skill of their
personnel and the quality of their client service, they have no patented
technology that would preclude or inhibit competitors from entering their
markets. The Company is likely to face additional competition from new
entrants into the market in the future. There can be no assurance that
existing or future competitors will not develop or offer services that provide
significant performance, price, creative or other advantages over those
offered by the Company, which could have a material adverse effect on its
business, financial condition, results of operations and prospects.
DEVELOPING INTERNET ECONOMY, MARKET FOR E-COMMERCE SOLUTIONS; UNPROVEN
ACCEPTANCE OF THE COMPANY'S SERVICES
A substantial portion of the Company's revenue is expected to be
derived from service that depend upon the adoption of Internet solutions by
companies to improve their business positioning and processes, and the
continued development of the World Wide Web, the internet and e-commerce.
The internet may not prove to be a viable commercial marketplace because of
inadequate development of necessary infrastructure, lack of development of
complementary products, implementation of competing technology, delays in the
development or adoption of new standards and protocols required to handle
increased levels of internet activity, government regulation, or other
reasons. The internet has experienced, and is expected to continue to
experience, significant growth in the number of users and volume of traffic.
There can be no assurance that the internet infrastructure will continue to be
able to support the demands placed on it by this continuous growth. Moreover,
critical issues concerning the use of internet and e-commerce solutions
(including security, reliability, cost ease of deployment and administration
and quality of service) remain unresolved and may affect the growth of the use
of such technologies to maintain, manage and operate a business, expand
product marketing, improve corporate communications and increase business
efficiencies. The adoption of internet solutions for these purposes,
particularly by those individuals and enterprises that have historically
relied on traditional means, can be capital intensive and generally requires
the acceptance of a new way of conducting business and exchanging information
If critical issues concerning the ability of internet solutions to improve
business positioning and processes are not resolved or if the infrastructure
is not developed, the Company's business, financial condition, results of
operations and prospects will be materially adversely affected.
CONFLICTS OF INTEREST
Conflicts of interest are inherent in certain segments of the
marketing communications industry, particularly in advertising. The Company
will likely be able to pursue potential advertising and other opportunities
because such opportunities will require the Company to provide services to
direct competitors of existing clients. In addition, the Company risks
alienating or straining relationships with existing clients each time the
Company agrees to provide services to even indirect competitors of existing
Company clients. Conflicts of interest may jeopardize the stability of
revenues generated from existing clients and preclude access to business
prospects, either of which developments could have a material adverse effect
on the Company's business, financial condition, results of operations and
prospects.
RAPID TECHNOLOGY CHANGE
The market for Internet solutions and marketing services is
characterized by rapid technological change, changes in user and client
requirements and preferences, frequent new product and service introductions
embodying new processes and technologies and evolving industry standards and
practices that could render the Company's proposed service practices and
methodologies obsolete. The Company's success will depend, in part, on its
ability to develop services and solutions that address the increasingly
sophisticated and varied needs of its prospective clients, and respond to
technological advances, emerging industry standards and practices, and
competitive service offerings. Failure to do so could result in the loss of
existing customers or the inability to attract and retain new customers,
either of which developments could have a material adverse effect on the
Company's business, financial condition, results of operations and prospects.
There can be no assurance that the Company will be successful in responding
quickly, cost-effectively and sufficiently to these developments. If the
Company is unable, for technical, financial or other reasons, to adapt in a
timely manner in response to change in market conditions or client
requirements, its business, financial condition, result of operations and
prospects would be materially adversely affected.
POTENTIAL LIABILITY TO CLIENTS
Many of the Company's consulting engagements will involve the
development, implementation and maintenance of applications that are critical
to the operations of its clients' businesses. Its failure or inability to meet
a client's expectations in the performance of its services could injure the
Company's business reputation or result in a claim for substantial damages,
regardless of its responsibility for such failure. In addition, the Company
will possess technologies and content that may include confidential or
proprietary client information. Although the Company has implemented policies
to prevent such client information from being disclosed to unauthorized
parties or used inappropriately, any such unauthorized disclosure or use could
result in a claim for substantial damages. The successful assertion of one or
more large claims against the Company that are uninsured, exceed available
insurance coverage or result in changes to the Company's insurance policies,
including premium increases or the imposition of a large deductible or
co-insurance requirements, could adversely affect the Company's business,
results of operations and financial conditions. The Company does not
currently have any "errors and omissions" policies that would cover any such
claim, and does not expect to obtain any such insurance until it can pay for
such coverage from revenues, as to which there can be no assurance.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING
The Company currently anticipates that its available cash resources
will be sufficient to meet its presently anticipated working capital and
capital expenditure requirements for the next fiscal year. However,
the Company may need to raise additional funds in order to support expansion,
develop new or enhanced services and products, respond to competitive
pressures, acquire complimentary businesses or technologies or take advantage
of unanticipated opportunities. The Company's future liquidity and capital
requirements will depend upon numerous factors, including the success of its
proposed service offerings and competing technological and market
developments. The Company may be required to raise additional funds through
public or private financing, strategic relationships or other arrangements.
There can be no assurance that such additional funding, if needed, will be
available on terms acceptable to the Company, or at all. Furthermore, any
additional equity financing may be dilutive to stockholders, and debt
financing, if available, may involve restrictive covenants, which may limit
the Company's operating flexibility with respect to certain business matters.
If additional funds are raised through the issuance of equity securities, the
percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution in net book value per share,
and such equity securities may have rights, preferences or privileges senior
to those of the holder of the Company's common stock. If adequate funds are
not available on acceptable terms, the Company may be unable to develop or
enhance its services and products, take advantage of future opportunities or
respond to competitive pressures, any of which could have a material adverse
effect on its business, financial condition, results of operations and
prospects.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
The Company is not currently subject to direct government
regulation, other than the securities laws and the regulations thereunder
applicable to all publicly owned companies, and laws and regulations
applicable to businesses generally, and there are currently few laws or
regulations directly applicable to access to or commerce on the internet.
However, due to the increasing popularity and use of the internet, it is
likely that a number of laws and regulations may be adopted at the local,
state, national and international levels with respect to issues such as user
privacy, freedom of expression, pricing of products and services, taxation,
advertising, intellectual property rights, information security or the
convergence of traditional communication services with internet
communications. For example, the Telecommunications Act of 1996 (the
"Telecommunications Act") imposes criminal penalties on anyone who distributes
obscene or indecent communications over the internet. Although the
anti-indecency provisions of the Telecommunications Act have been declared
unconstitutional by the federal courts, the increased attention focused upon
these liability issues as a result of the Telecommunications Act could
adversely affect the growth of the internet and therefore demand for the
Company's services. In addition, because the growth in the electronic
commerce market, Congress has held hearings on whether to regulate providers
of services and transactions in the electronic commerce market, which
regulations could negatively affect client demand for internet solutions that
facilitate electronic commerce. Moreover, the adoption of any such laws or
regulations may decrease growth of the internet, which could in turn decrease
the demand for the Company's services or increase cost of doing business or in
some other manner have a material adverse effect on the Company's business,
financial conditions, results of operations or prospects. In addition, the
applicability to the internet of existing laws governing issues such as
property ownership, copyrights and other intellectual property issues,
taxation, libel and personal property is uncertain. The vast majority of such
laws were adopted prior to the advent of the internet and related technologies
and, as a result, do not contemplate or address the unique issues of the
internet and related technologies. Changes to such laws intended to address
these issues, including some recently proposed changes, could create
uncertainty in the marketplace which could reduce demand for the Company's
services or increase the cost of doing business as a result of costs of
litigation or increased service delivery costs, or could in some other manner
have a material adverse effect on the Company's business, financial condition,
results of operations and prospects.
CONCENTRATION OF STOCK OWNERSHIP
Pete Chandler, who is the Company's sole director and executive
officer, beneficially owns a majority of its outstanding common stock. As a
result, Mr. Chandler will be able to exercise significant influence over all
matters requiring stockholder approval, including the election of directors
and approval of significant corporate transactions. Such concentration of
ownership may also have the effect of delaying or preventing a change in
control of the Company.
SUSCEPTIBILITY TO GENERAL ECONOMIC CONDITIONS
The Company's revenues and results of operations are subject to
fluctuations based upon general economic conditions. If there were to be a
general economic downturn or a recession in the United States, then the
Company expects that business enterprises, including its potential clients,
likely will substantially and immediately reduce their budgets. Any future
clients of the Company that have substantial overseas operations may also be
adversely affected by economic conditions in overseas markets such as the
recent volatility in Asian and Russian economies and Asian and Russian
currency and securities markets. In the event of such an economic downturn,
the Company's business, financial condition, results of operations and
prospects may be materially and adversely affected.
DIVIDENDS
The Company does not expect to pay dividends on its common stock
in the foreseeable future. Future dividends, if any, will depend upon the
Company's earnings, if any.
NO PUBLIC MARKET FOR THE COMPANY'S SECURITIES
There is no public market for the Company's securities. Although
the Company intends to submit for a quotation of its common stock on the OTC
Bulletin Board of the NASD, the Company can not guarantee that any public
market will develop for its securities or that, if any such market develops,
it will be maintained. As a result, stockholders may not be able to sell
their shares readily, if at all.
AUDITOR'S "GOING CONCERN" OPINION
The Independent Auditor's Report issued in connection with the
audited financial statements of the Company for the period ended April 30,
1999, expresses "substantial doubt about its ability to continue as a going
concern," due to the Company's status as a development stage company and its
lack of significant operations. See the Index to Financial Statements, Part
F/S of this Registration Statement.
DEPENDENCE ON MANAGEMENT
For the foreseeable future, the Company will be entirely dependent
upon the services of Pete Chandler, its sole director, executive officer and
employee. The Company has no employment agreement with Mr. Chandler and does
not maintain "key man" life insurance for him.
PENNY STOCK
The Company's common stock is "penny stock" as defined in Rule
3a51-1 of the Commission. This designation may adversely affect the
development of any public market for the Company's shares of common stock or,
if such a market develops, its continuation. Broker-dealers are required to
personally determine whether an investment in "penny stock" is suitable for
customers.
Penny stocks are securities (i) with a price of less than five
dollars per share; (ii) that are not traded on a "recognized" national
exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv)
of an issuer with net tangible assets less than $2,000,000 (if the issuer has
been in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average annual
revenues of less than $6,000,000 for the last three years.
Section 15(g) of the 1934 Act, and Rule 15g-2 of the Commission
require broker-dealers dealing in penny stocks to provide potential investors
with a document disclosing the risks of penny stocks and to obtain a manually
signed and dated written receipt of the document before effecting any
transaction in a penny stock for the investor's account. Potential investors
in the Company's common stock are urged to obtain and read such disclosure
carefully before purchasing any shares that are deemed to be "penny stock."
Rule 15g-9 of the Commission requires broker-dealers in penny
stocks to approve the account of any investor for transactions in such stocks
before selling any penny stock to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks
of penny stock transactions; (iii) provide the investor with a written
statement setting forth the basis on which the broker-dealer made the
determination in (ii) above; and (iv) receive a signed and dated copy of such
statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment
objectives. Compliance with these requirements may make it more difficult for
the Company's stockholders to resell their shares to third parties or to
otherwise dispose of them.
SALE OF "RESTRICTED" SHARES
All of the 2,000,000 shares of the Company's common stock owned by
Pete Chandler are "restricted" securities within the meaning of Rule 144 of
the 1933 Act. If a market for the Company's common stock ever develops, Mr.
Chandler may begin selling them as early as March, 2000. Such sales may have
a negative effect on the Company's stock price.
Year 2000
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The Company intends to purchase a computer using a Pentium III
microchip, to be used for development and hosting of its clients web sites.
Management believes that its computer system will be able to properly reflect
the change of year to the year 2000.
The Company can give no assurance that third parties with whom it
intends to do business will ensure Year 2000 compliance in a timely manner or
that, if they do not, their computer systems will not have an adverse effect
on the Company. However, the Company does not believe that Year 2000
compliance issues of such third parties will result in a material adverse
effect on its financial condition or results of operations.
Principal Products and Services
--------------------------------
The Company has not yet commenced operations. It plans to engage in
the business of internet web page design for small and medium-size companies.
Recent Public Announcements
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None; not applicable.
Distribution Methods of the Products or Services
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The Company intends to host its clients web sites on its own
computer, which will be built to management's specifications. As initially
configured, the Company expects that its computer will be able to host
approximately 500 web sites of average size, and can be expanded if necessary.
Management plans to advertise the Company's services through
mailings to new businesses, principally in Utah, Nevada and other states in
the intermountain West. Information on new businesses is readily available
from various governmental agencies, such as Secretaries of State and local
business licensing offices. Another planned method of advertising involves
the placement of "banner" advertisements on the pages of internet search
engines such as Yahoo. A banner advertisement allows the user to "click" his
or her mouse on the advertisement itself, if he or she wishes to get more
information about the product or service being offered. The Company plans to
develop a banner advertisement that will allow it to e-mail additional
information about itself to anyone who clicks on the advertisement.
The Company has budgeted $10,000 to $15,000 in advertising costs
during its first year of operations. These funds will come principally from
the net proceeds of its recent securities offering and then, if the Company
receives sufficient revenue, from operating revenue. There can be no
assurance that the Company will receive sufficient operating revenues to meet
its intended advertising budget; if it is not successful in this regard, the
Company may be unable to attract a sufficient number of new clients to allow
its business to continue.
Competitive Business Conditions
-------------------------------
The communications and information services industry is highly
competitive. Many of the Company's existing and potential competitors have
financial, personnel, marketing and other resources significantly greater than
those of the Company, as well as other competitive advantages including
customer bases. See the Risk Factor "Competition; Low Barriers to Entry" of
this Registration Statement.
Patents, Trademarks, Licenses, Franchisees, Concessions, Royalty Payments
or Labor Contracts
------------------
None; not applicable.
Need for Government Approval of Principal Products or Services
--------------------------------------------------------------
Upon the effective date of this Registration Statement, the Company
will become subject to Regulation 14A promulgated by the Securities and
Exchange Commission under the 1934 Act. Section 14(a) of the 1934 Act
requires all companies with securities registered pursuant to Section
12(g) thereof to comply with the rules and regulations of the Securities and
Exchange Commission regarding proxy solicitations as outlined in Regulation
14A. Matters submitted to stockholders of the Company at a special or annual
meeting thereof or pursuant to a written consent shall require the Company to
provide its stockholders with the information outlined in Schedules 14A or 14C
of Regulation 14; preliminary copies of this information must be submitted to
the Securities and Exchange Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to stockholders. See the
Risk Factor "Government Regulation and Legal Uncertainties."
Effect of Existing or Probable Governmental Regulations on Business
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Other than maintaining its good standing in the State of Utah;
complying with applicable local business licensing requirements; preparing its
periodic reports under the Securities Exchange Act of 1934, as amended (the
"1934 Act"); and complying with other applicable securities laws, rules and
regulations as set forth above, the Company does not believe that existing or
probable governmental regulations will have a material effect on its
operations. However, the internet is a rapidly evolving commercial medium and
may become subject to numerous types of regulation in the future. Areas of
potential regulation include user privacy, advertising, information security
and taxation. Because internet commerce is developing so rapidly, it is
impossible to predict the type and extent of governmental regulation in the
future. See the Risk Factor "Government Regulation and Legal Uncertainties."
Research and Development
------------------------
Although the internet web site design industry relies on the
technical knowledge of site designers, management does not believe that the
Company's proposed operations will require research and development in the
traditional sense. The Company's President, Pete Chandler has training in
computer information science and will be responsible for all of the Company's
web site design for the foreseeable future.
Number of Employees
-------------------
Other than its President/Secretary, Pete Chandler, the Company
currently has no employees. Mr. Chandler will be responsible for all of the
Company's proposed operations for the foreseeable future. The Company will
hire an additional clerical worker if necessary and if it is able to pay that
worker's wages or salary from operating revenues.
Mr. Chandler will work without any salary until the Company has
proven that it can obtain sufficient operating revenues to stay in business.
At that time, Mr. Chandler will begin to take compensation that is consistent
with the Company's operating revenues and custom in the industry. See the
caption "Executive Compensation."
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Plan of Operations.
- -------------------
The Company is a development stage company. Management believes that
in light of the large increase in the number of small and medium-sized
companies that will become connected to the internet, the size of the
potential market for goods and services on the internet will continue to
increase rapidly. Accordingly, the volume of business available to those who
can provide well-prepared web pages and related services will also increase
rapidly over the next several years.
The Company plans to provide a range of web page design and
marketing services. In addition, the Company intends to expand its operations
by acquiring, joint venturing or merging with other internet service providers
in exchange for the issuance of shares of its common stock. As of the date of
this Registration Statement, the Company has not entered into any agreements
in this regard, and there is no assurance that the Company will be successful
in entering into a transaction with any such entity.
The foregoing contains "forward-looking" statements and information,
all of which is modified by reference to the caption "Risk Factors."
Results of Operations.
- ---------------------
The Company has not yet commenced its intended operations. At
inception, it issued 2,000,000 "unregistered" and "restricted" shares of its
common stock to Pete Chandler in consideration of $5,000. On or about March
17, 1999, the Company commenced an offering of a minimum of 300,000 shares and
a maximum of 1,000,000 shares of its one mill ($0.001) par value common stock
at a price of $0.10 per share. The offering was conducted pursuant to Rule
504 of Regulation D of the Securities and Exchange Commission and applicable
state laws, rules and regulations. The offering was closed with the Company
having sold a total of 348,000 shares, for gross proceeds of $34,800.
Management intends to use these proceeds to acquire the computer system that
it will need to commence its intended web site design operations and to begin
advertising its design services through mailings and on the internet. See the
heading "Distribution Methods of the Products or Services" of the caption
"Description of Business."
Liquidity.
- ----------
As of April 30, 1999, the Company had cash on hand of $39,678.
Management believes that these funds will be sufficient to allow it to
purchase the computer equipment that it will need to begin operations and to
commence advertising via mailings and through the placement of "banner"
advertisements on the internet. The Company's cash on hand will be sufficient
to allow it to commence operations; however, the Company's success in its
planned business endeavors will depend entirely on its ability to attract and
maintain a sufficient base of web site design and hosting clients. The
Company has not yet commence operations and it can provide no assurance that
it will be successful in this regard.
Item 3. Description of Property.
- ---------------------------------
The Company does not currently own any property. Its business address
is the home office address of its President, Pete Chandler, and is provided
rent-free. The Company has free access to Mr. Chandler's telephone system.
Depending on its growth, the Company may find it necessary to acquire an
office and telephone system of its own, but management does not believe that
this will be necessary in the near future.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the share holdings of those persons
who own more than five percent of the Company's common stock as of the date
hereof:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Pete Chandler 2,000,000 85.2%
430 Fourth Street
Ogden, Utah 84404
</TABLE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of the date hereof:
<TABLE>
<CAPTION>
Number of Shares Percentage of
Name and Address Beneficially Owned of Class
- ---------------- ------------------ -------------
<S> <C> <C>
Pete Chandler 2,000,000 85.2%
430 Fourth Street
Ogden, Utah 84404
</TABLE>
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ---------------------------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth the name of the Company's sole
current director and executive officer. This person will serve until the
next annual meeting of the stockholders (held the third Friday in August of
each year) or until his successors are elected or appointed and qualified, or
his prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Pete Chandler Director 3/99 *
President 3/99 *
Secretary 3/99 *
</TABLE>
* This person presently serves in the capacities indicated.
Business Experience.
- --------------------
Pete Chandler, Director, President and Secretary. Mr. Chandler is 34
years of age. He was born and raised in northern Utah, where he received a
Bachelor of Science degree in Finance from Weber State University. Mr.
Chandler also attended DeVry Institute of Technology in Phoenix, Arizona,
where he studied Computer Information Science. In 1985 he formed Aqua Pure, a
water filtration company, which he built into a prosperous venture over the
next two years. Mr. Chandler next worked at the Internal Revenue Service for
two years before joining the securities industry. He has worked as an
investment consultant at Kemper Securities and at Everen Securities, where he
earned the Eagles Loft award for outstanding performance. Most, recently, Mr.
Chandler has worked as a consultant to businesses that are in or wish to enter
the capital markets.
Significant Employees.
- ----------------------
Other than Mr. Chandler, the Company has no employees.
Family Relationships.
- ---------------------
Mr. Chandler is the Company's sole director and executive officer.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of
the Company:
(1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
Item 6. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pete
Chandler, 12/31/98 0 0 0 0 0 0 0
Director, 4/30/99 0 0 0 0 0 0 0
President,
Secretary
</TABLE>
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
years ended December 31, 1998, or the period ended April 30, 1999. The
Company does not expect to compensate Mr. Chandler for services until it has
generated revenues sufficient to pay such compensation. The Company has not
entered into any compensation arrangement with Mr. Chandler as of the date of
this Registration Statement. However, Mr. Chandler's compensation will not
under any circumstances exceed the amount paid to other persons with similar
experience and expertise performing similar services in the web site design
industry. Mr. Chandler has not been granted any option or stock appreciation
rights; accordingly, no tables relating to such items have been included
within this Item.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as a director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- -------------
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any director or executive officer of the Company which would in any way
result in payments to any such person because of his resignation, retirement
or other termination of employment with the Company, any change in control of
the Company, or a change in the person's responsibilities following a change
in control of the Company.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
The only transaction between members of management, nominees to
become a director or executive officer, 5% stockholders, or promoters or
persons who may be deemed to be parents of the Company was the issuance to
Pete Chandler of 2,000,000 "unregistered" and "restricted" shares of the
Company's common stock in consideration of the sum of $5,000. Mr. Chandler is
the Company's President, Secretary and director, and is the beneficial owner
of approximately 85% of its issued and outstanding common stock. See the
captions "Business Development" and "Security Ownership of Certain Beneficial
Owners and Management."
Item 8. Description of Securities.
- -----------------------------------
Common Stock
------------
The Company has one class of securities authorized, consisting of
100,000,000 shares of $0.001 par value common voting stock. The holders of
the Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of stockholders. The shares of common stock
do not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire
additional shares of common stock or other securities. The common stock is
not subject to redemption rights and carries no subscription or conversion
rights. All shares of the common stock now outstanding are fully paid and
non-assessable.
No Outstanding Options, Warrants or Calls
-----------------------------------------
There are no outstanding options, warrants or calls to purchase any
of the authorized securities of the Company.
No Provisions Limiting Change of Control
----------------------------------------
There is no provision in the Company's Articles of Incorporation or
Bylaws that would delay, defer, or prevent a change in control of the Company.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Stockholder Matters.
- --------------------------
Market Information.
- -------------------
There has never been any established "public market" for shares of
common stock of the Company. The Company intends to submit for listing on the
OTC Bulletin Board of the NASD. No assurance can be given that any market for
the Company's common stock will develop or be maintained. For any market that
develops for the Company's common stock, the sale of "restricted securities"
(common stock) pursuant to Rule 144 of the Securities and Exchange Commission
by Mr. Chandler or any other person to whom any such securities may be issued
in the future may have a substantial adverse impact on any such public market.
Information about the date when Mr. Chandler's holding period of "restricted
securities" commenced can be found under the caption "Recent Sales of
Unregistered Securities."
A minimum holding period of one year is required for resales under
Rule 144, along with other pertinent provisions, including publicly available
information concerning the Company (this requirement will be satisfied by the
filing and effectiveness of this Registration Statement, the passage of 90
days and the continued timely filing by the Company of all reports required to
be filed by it with the Securities and Exchange Commission); limitations on
the volume of "restricted securities" which can be sold in any 90 day period;
the requirement of unsolicited broker's transactions; and the filing of a
Notice of Sale of Form 144.
Holders.
- --------
The number of record holders of the Company's securities as of the
date of this Registration Statement is approximately 31.
Dividends.
- ----------
The Company has not declared any cash dividends with respect to its
common stock or its preferred stock, and does not intend to declare dividends
in the foreseeable future. The future dividend policy of the Company cannot
be ascertained with any certainty, and if and until the Company completes any
sales of its products, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its securities.
Item 2. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. No
federal, state or local governmental agency is presently contemplating any
proceeding against the Company. No director, executive officer or persons who
may be deemed to be an "affiliate" of the Company or owner of record or
beneficially of more than five percent of the Company's common stock is a
party adverse to the Company or has a material interest adverse to the Company
in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
None; not applicable.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
<TABLE>
<CAPTION>
Common Stock
------------
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
<S> <C> <C> <C>
Pete Chandler 3/17/99 2,000,000 $ 5,000
Purchasers under 4/5/99 34,800 $34,800
Rule 504 offering
</TABLE>
Mr. Chandler is the sole director and executive officer of the
Company and as such had access to all material information regarding the
Company prior to the offer or sale of these securities. Mr. Chandler is an
"accredited investor." The offers and sales of these securities are believed
to have been exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended, pursuant to Sections 3(b) and/or 4(2)
thereof, and from similar applicable states' securities laws, rules and
regulations exempting the offer and sale of these securities by available
state exemptions from registration.
Item 5. Indemnification of Directors and Officers.
- ---------------------------------------------------
Section 16-10a-902(1) of the Utah Revised Business
Corporation Act authorizes a Utah corporation to indemnify any director
against liability incurred in any proceeding if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct
was unlawful.
Section 16-10a-902(4) prohibits a Utah corporation from
indemnifying a director in a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation or
in a proceeding in which the director was adjudged liable on the basis that
he or she improperly received a personal benefit. Otherwise, Section
16-10a-902(5) allows indemnification for reasonable expenses incurred in
connection with a proceeding by or in the right of a corporation.
Unless limited by the Articles of Incorporation, Section
16-10a-905 authorizes a director to apply for indemnification to the court
conducting the proceeding or another court of competent jurisdiction.
Section 16-10a-907(1) extends this right to officers of a corporation as
well.
Unless limited by the Articles of Incorporation, Section
16-10a-903 requires that a corporation indemnify a director who was
successful, on the merits or otherwise, in defending any proceeding to which
he or she was a party against reasonable expenses incurred in
connection therewith. Section 16-10a-907(1) extends this protection to
officers of a corporation as well.
Pursuant to Section 16-10a-904(1), the corporation may advance a
director's expenses incurred in defending any proceeding upon receipt of an
undertaking and a written affirmation of his or her good faith belief that he
or she has met the standard of conduct specified in Section 16-10a-902.
Unless limited by the Articles of Incorporation, Section 16- 10a-907(2)
extends this protection to officers, employees, fiduciaries and agents of a
corporation as well.
Regardless of whether a director, officer, employee, fiduciary or
agent has the right to indemnity under the Utah Revised Business Corporation
Act, Section 16-10a-908 allows the corporation to purchase and maintain
insurance on his or her behalf against liability resulting from his or her
corporate role.
Article V of the Company's Bylaws makes the provisions of Section
16-10a-902(1) mandatory with respect to the indemnification of Company
directors and executive officers. See the Exhibit Index of this Registration
Statement.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements
- --------------------
Financial Statements
April 30, 1999 (audited)
------------------------
Independent Auditors' Report
Balance Sheet
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to the Financial Statements
PART III
Item 1. Index to Exhibits.
- ---------------------------
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ ------------
<S> <C>
3.1 Articles of Incorporation
3.2 Bylaws
27 Financial Data Schedule
</TABLE>
* Summaries of all exhibits contained within this
Registration Statement are modified in their
entirety by reference to these Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant has caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
HIGHWAY ONE-OWEB, INC.
Date: 7-6-99 By: /s/Pete Chandler
---------- ------------------------
Pete Chandler, Director,
President and Secretary
HIGHWAY ONE-OWEB, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
April 30, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Highway One-OWeb, Inc.
(A Development Stage Company)
Ogden, Utah
We have audited the accompanying balance sheet of Highway One-OWeb, Inc.
(a development stage company) as of April 30, 1999 and the related statement
of operations, stockholders' equity and cash flows from inception on March
17, 1999 through April 30, 1999. 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 the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Highway One-OWeb,
Inc. (a development stage company) as of April 30, 1999 and the results of its
operations and its cash flows from inception on March 17, 1999 through April
30, 1999 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 2. The financial statements do
not include any adjustments that might result from the outcome of the
uncertainty.
/S/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
June 9, 1999
<PAGE>
HIGHWAY ONE-WEB, INC.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
ASSETS
April 30,
1999
<S> <C>
CURRENT ASSETS
Cash $ 39,678
Total Current Assets 39,678
TOTAL ASSETS $ 39,678
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -
Total Current Liabilities -
TOTAL LIABILITIES -
STOCKHOLDERS' EQUITY
Common stock: 100,000,000 shares authorized of $0.001
par value, 2,348,000 shares issued and outstanding 2,348
Additional paid-in capital 37,452
Deficit accumulated during the development stage (122)
Total Stockholders' Equity 39,678
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,678
</TABLE>
<TABLE>
HIGHWAY ONE-OWEB, INC.
(A Development Stage Company)
Statement of Operations
<CAPTION>
From
Inception on
March 17,
1999 Through
April 30,
1999
<S> <C>
REVENUES $ -
EXPENSES
General and administrative 122
Total Expenses 122
NET LOSS $ (122)
BASIC LOSS PER SHARE (0.00)
</TABLE>
<TABLE>
HIGHWAY ONE-OWEB, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance at inception on
March 17, 1999 - $ - $ - $ -
Issuance of common stock for
cash at $0.0025 per share 2,000,000 2,000 3,000 -
Issuance of common stock
for cash at $0.10 per share 348,000 348 34,452 -
Net loss from inception on
March 17, 1999 through
April 30, 1999 - - - (122)
Balance, April 30, 1999 2,348,000 $2,348 $ 37,452 $ (122)
</TABLE>
<TABLE>
HIGHWAY ONE-OWEB, INC.
(A Development Stage Company)
Statement of Cash Flows
<CAPTION>
From
Inception on
March 17,
1999 Through
April 30,
1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (122)
Net Cash (Used) by Operating Activities (122)
CASH FLOWS FROM INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash 39,800
Net Cash Provided by Financing Activities 39,800
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 39,678
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 39,678
CASH PAID FOR:
Interest $ -
Income taxes $ -
</TABLE>
HIGHWAY ONE-OWEB, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Highway One-OWeb,
Inc. is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles an have been consistently applied in the
preparation of the financial statements.
a. Organization and Business Activities
The name of the Company is Highway One-OWeb, Inc. (the Company). The
Company was incorporated in the State of Utah on March 17, 1999 to
engage in any lawful activity, but more particularly to assist
companies in marketing their goods and services on the internet.
b. Fiscal Year
The Company operates on a calendar year basis.
c. Basis of Operation
The Company prepares its financial statements and federal income taxes
on the accrual basis of accounting.
d. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
e. Income Taxes
No provision for income taxes has been accrued because the Company has
net operating losses from inception. The net operating loss
carryforwards of approximately $100 at April 30, 1999 will expire in
2013. No tax benefit has been reported in the financial statements
because the Company is uncertain if the carryforwards will expire
unused. Accordingly, the potential tax benefits are offset by a
valuation account of the same amount.
f. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
g. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of common shares outstanding during the
period of the consolidated financial statements.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company has not established
revenues sufficient to cover its operating costs. The Company is
seeking the acquisition of, or merger with, an existing operating
company. Currently, management has committed to covering all operating
and other costs until sufficient revenues are generated.
ARTICLES OF INCORPORATION
OF
HIGHWAY ONE-OWEB, INC.
The undersigned natural person acting as the incorporator of a
corporation under the Utah Revised Business Corporation Act, adopts the
following Articles of Incorporation for such corporation.
ARTICLE I. NAME
The name of the corporation is HIGHWAY ONE-OWEB, INC.
ARTICLE II. PURPOSE
The purpose of the corporation is to engage in any lawful act or
activity for which any corporation may be organized under the Utah Revised
Business Corporation Act.
ARTICLE III. CAPITALIZATION
The aggregate number of shares which this corporation shall have
authority to issue is 100,000,000 at $.001 par value. All stock of the
corporation shall be of the same class, common, and shall have the same rights
and preferences.
ARTICLE IV. REGISTERED OFFICE
The address of the corporations initial registered office and the name
of its original registered agent at such address is:
Pete Chandler
430 4th Street
Ogden, UT. 84404
ARTICLE V. INCORPORATORS
The name and address of the incorporator is:
Pete Chandler
430 4th Street
Ogden, UT. 84404
DATED this 17th day of March, 1999
/s/ Pete Chandler
-----------------
Pete Chandler
Incorporator & Registered Agent
BY-LAWS
of
HIGHWAY ONE-OWEB, INC.
ARTICLE I - OFFICES
Section 1. The principal office of the corporation in the State of Utah
shall be at 430 4th Street, Ogden, Utah 84404. The registered office of the
corporation in Utah shall be 430 4th Street, Ogden, Utah 84404. The registered
agent at that address shall be Pete Chandler.
Section 2. The corporation may have such other offices within or without
the state as the board of directors may from time to time designate.
ARTICLE II - STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of the stockholders shall
be held at the corporate office on the third Friday of August of each year
beginning in 1999, at the hour of 10:00 a.m., or at such other time as may be
fixed by the board of directors, for the purpose of electing directors and for
the transaction of such other business as may come before the meeting. If the
election of directors shall not be held on the day designated herein for the
annual meeting or at any adjournment thereof, the board of directors shall cause
the election to be held at a special meeting of the stockholders as soon
thereafter as may be convenient.
Section 2. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the president or by any director, and shall be called by the president at the
written request of twenty-five percent of all outstanding shares of the
corporation entitled to vote at the meeting. Unless requested by stockholders
entitled to cast a majority or all the votes entitled to be cast at the meeting,
a special meeting need not be called to consider any matter which is
substantially the same as a matter voted on at any meeting of stockholders held
during the preceding twelve months.
Section 3. Place of Meeting. The board of directors may designate any
place, either within or without the State of Utah, as the place of any annual or
special meeting of stockholders.
Section 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall, unless otherwise prescribed by statute,
be delivered not less than ten nor more than fifty days before the meeting,
either personally or by mail, to each stockholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered ten days
after it has been deposited in the United States Mail, addressed to the
stockholder at his address as it appears on the share registry of the
corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For any
purpose requiring identification of shareholders, the record date shall be
established by the board of directors, and shall be not more than twenty days
from the date on which any such purpose is to be accomplished. Absent a
resolution establishing any such date, the record date shall be deemed to be the
date on which any such action is accomplished.
Section 6. Voting List. The corporation shall maintain a stock ledger
which contains:
(1) The name and address of each stockholder.
(2) The number of shares of stock of each class which the
stockholder holds.
The stock ledger shall be in written form and available for visual inspection.
The original or a duplicate of the stock ledger shall be kept at the principal
office of the corporation.
Section 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be presented or represented,
any business may be transacted which might have been transacted at the meeting
as originally noticed. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to reduce the number of stockholders present to less than
a quorum.
Section 8. Proxies. At all meetings of stockholders, a stockholder may
vote in person or by proxy executed in writing by the stockholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the secretary of
the corporation before or at the time of the meeting. A proxy shall be void one
year after it is executed unless it shall, prior to the expiration of one year,
have been renewed in writing. All proxies shall be revocable.
Section 9. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a meeting
of stockholders.
Section 10. Informal Action by Stockholders. Any action required or
permitted to be taken at a meeting of the stockholders, except matters as to
which dissenting stockholders may hold a statutory right of appraisal, may be
taken without a meeting if a consent in writing, setting forth the action so
take, shall be signed by all of the stockholders entitled to vote with respect
to the subject matter thereof.
Section 11. Cumulative Voting. There shall be no cumulative voting of
shares.
Section 12. Removal of Directors. At a meeting called expressly for that
purpose, directors may be removed with or without cause, by a vote of the
holders of a majority of the shares entitled to vote at an election of
directors.
ARTICLE III - DIRECTORS
Section 1. The business and affairs of this corporation shall be managed
by its Board of Directors, which may be no less than one nor more than three in
number. The directors need not be residents of this state or stockholder in the
corporation. They shall be elected by the stockholders at the annual meeting of
stockholder of the corporation. Each director shall be elected for the term of
one year, and until his successor shall have been elected and accepted his
election to the Board in writing.
Section 2. The number of directors may be increased or decreased from time
to time by the vote of a majority of the outstanding shares of the corporation.
Section 3. Regular meetings. A regular meeting of the board of directors
shall be held without any notice other than this by-law immediately after, and
at the same place as, the annual meeting of stockholders. The board of
directors may provide, by resolution, the time and place for the holding of
additional regular meetings without notice other than such resolution.
Section 4. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the president or any director. The person
or persons calling any such meeting may fix the time and place of the meeting.
Section 5. Notice. Notice of any special meeting shall be given at least
five days previously thereto by written notice delivered personally, mailed or
delivered by fax to each director at his business address. Notices shall be
deemed to have been delivered when transmitted personally or by fax, and two
days after mailed. Any director may waive notice of any meeting so long as such
waiver is in writing. The business to be conducted at any special meeting need
not be specified in the notice.
Section 6. Quorum. A majority of the duly elected board of directors
shall constitute a quorum of the board of directors for the transaction of
business at any meeting of the board of directors.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors.
Section 8. Informal Action by Directors. Action consented to by a
majority of the board of directors without a meeting is nevertheless board
action so long as (a) a written consent to the action is signed by all the
directors of the corporation and (b) a certificate or resolution detailing the
action taken is filed with the minutes of the corporation. Any one or more
directors may participate in any meeting of the board of directors by means of
conference telephone or other similar communications device which permits all
directors to hear the comments made by the others at the meeting.
Section 9. Executive and other committees. The board of directors may,
from time to time, as the business of the corporation may demand, delegate its
authority to committees of the board of directors under such terms and
conditions as it may deem appropriate. The appointment of any such committee,
the delegation of authority to it or action by it under that authority does not
constitute of itself, compliance by any director not a member of the committee,
with the standard provided by statute for the performance of duties of
directors.
Section 10. Compensation. By resolution of the board of directors, each
director may be paid his expenses, if any, of attendance at each meeting of the
board of directors, and may be paid a stated salary as director or a fixed per
diem for attendance at each such meeting of the board of directors, or both. No
such payments shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 11. Presumption of Assent. A director of the corporation who is
present at a meeting of the board of directors at which action on any corporate
action is taken shall be presumed to have assented to the action taken unless he
shall announce his dissent at the meeting and his dissent is entered in the
minutes and he shall forward such dissent by registered mail to the secretary of
the corporation immediately after the adjournment of the meeting.
Section 12. Certificates of Resolution. At any such time as there shall
be only one duly elected and qualified director, actions of the corporation may
be manifest by the execution by such director of a Certificate of Resolution
specifying the corporate action taken and the effective date of such action.
ARTICLE IV - OFFICERS
Section 1. Number. Officers of the corporation shall be a president and
a secretary, each of whom shall be elected by the board of directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the board of directors. Any two or more offices may be held by
the same person, except that no officer may act in more than one capacity where
action of two or more officers is required by law.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors after each annual meeting of
the stockholders. Each officer shall hold office for a period of one year and
until his successor shall have been duly elected and shall have accepted his
election as an officer of the corporation in writing.
Section 3. Removal. Any officer or agent may be removed by the board of
directors whenever in its judgment, the best interests of the corporation will
be served thereby. Election to an office in the corporation shall not create
any contractual right of any type or sort in the person elected.
Section 4. Vacancies. A vacancy in any office may be filled by the board
of directors for the unexpired portion of the term.
Section 5. President. The president shall be a director of the
corporation and shall be the principal executive officer of the corporation, and
subject to the control of the board of directors, shall in general supervise and
control all of the business and affairs of the corporation. The president shall
have authority to institute or defend legal proceedings when the directors are
deadlocked. He shall, when present, preside at all meetings of the stockholders
and of the board of directors. He may sign, with the secretary or any other
proper officer of the corporation thereunto authorized by the board of
directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the board of directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the board of directors or by these by-
laws to some other officer or agent of the corporation, or shall be required by
law to be otherwise signed or executed; and in general shall perform all duties
incident to the office of president and such other duties as may be prescribed
by the board of directors from time to time.
Section 6. Secretary. The secretary shall: (a) keep the minutes of the
proceedings of the stockholders and of the board of directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation, if any;
(d) keep a register of the post office address of each stockholder which shall
be furnished to the secretary by such stockholder; (e) sign, with the president,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the board of directors; (f) have general charge
of the stock registry of the corporation; (g) have charge and custody of and be
responsible for all funds and securities of the corporation; (h) Receive and
give receipts for moneys due and payable to the corporation and deposit all such
moneys in the name of the corporation in such bank accounts as may be
established for that purposed; and (i) in general, perform all duties incident
to the office of secretary, as well as such duties as generally devolve upon
treasurers of corporations.
Section 7. Salaries. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V - INDEMNIFICATION OF DIRECTORS
AND OFFICERS OF THE CORPORATION.
Section 1. The corporation shall indemnify any person who was or is a
party or threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director or officer of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendre or its equivalent shall not, without more, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
ARTICLE VI - CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The board of directors may authorize any officer
or officers or agents to enter into any contract or execute and deliver any
instrument, including loans, mortgages, checks, drafts, deposits, deeds and
documents evidencing other transactions, in the name of the corporation. Such
authority may be general or confined to specific instances.
ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in the form approved in the organizational resolutions
of the corporation. They shall be signed by the president and secretary of the
corporation. Each certificate shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on each certificate and on the stock registry of the corporation. All
certificates surrendered to the corporation for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and cancelled, except in the case
of a lost, destroyed or mutilated certificate, a new one may be issued therefor
upon such terms of indemnity to the corporation as the board of directors may
prescribe.
Section 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock registry of the corporation by the holder of
record thereof or by his legal representative, who shall furnish proper evidence
of authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
ARTICLE VIII - FISCAL YEAR
Section 1. The fiscal year of the corporation shall begin on the first day
of January of each year and expire on the thirty-first day of December of each
year.
ARTICLE IX - CORPORATE SEAL
Section 1. Use of the corporate seal adopted by the board of directors
shall be optional with the officer or agent of the corporation signing any
document on behalf of the corporation. No duly executed corporate document
shall be void because it does not bear the imprint of a seal.
ARTICLE X - WAIVER OF NOTICE
Section 1. Whenever any notice is required to be given to any stockholder
or director of the corporation under these By-laws, by provisions of the
Articles of Incorporation, or by the statutes of the State of Utah, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE XI - AMENDMENTS
Section 1. The board of directors shall have the power to make, alter and
repeal by-laws; but by-laws made by the board may be altered or repealed, or new
by-laws made, by the stockholders.
ADOPTED by order of the sole director of the corporation on March 17, 1999.
HIGHWAY ONE-OWEB, INC.
By: /s/ Pete Chandler
------------------
Pete Chandler, Sole Director
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