FORM 10-SB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS Under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934
Inet Commerce Conduit Corp.
(Name of Small Business Issuer in Its Charter)
Florida 65-0705830
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
615 Mount Pleasant Road, Suite 318, Toronto, Ontario, Canada M4S3C5
(Address of Principal Executive Offices) (Zip Code)
(416) 482-3191
Issuer's Telephone Number
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
None
Securities to be registered pursuant to Section 12(g) of the Act:
$.001 Per Share Par Value Common Stock
<PAGE>
PART I
The Issuer, Inet Commerce Conduit Corp., a Florida corporation, is electing to
furnish the information required by Items 6-12 of Model B of Form 1-A under
Alternative 2 of Form 10-SB.
Item 1A. Company Risk Factors.
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The Issuer and its outstanding securities are subject to risks
including those set out in this Item 1A.
WE ARE ENTERING INTO A NEW BUSINESS AND HAVE NO PRESENT CLIENTS OR
REVENUE. The Issuer is initiating operations into a new business of acting as a
business and financial consultant to, or investing in, new or emerging business
engaged in an Internet related enterprise. The Issuer presently has no clients
or any source of significant revenue. Unless its efforts to develop the new
business are successful, the Issuer will have to acquire additional capital or
cease operations.
WE WILL NEED ADDITIONAL CAPITAL TO BE ABLE TO MAKE VENTURE CAPITAL
INVESTMENTS IN DEVELOPING INTERNET COMPANIES. The Issuer does not presently have
sufficient capital to make material investments in new or emerging Internet
ventures. To be able to implement this portion of its business plan, it will
have to develop such capital from revenue or acquire additional investment
capital. There is no assurance the Issuer will have any future operating
revenue; and there are no arrangements for or assurances of any additional
capital.
WE WILL HAVE TO DEVELOP A CONSULTING AND MANAGEMENT TEAM TO BE ABLE TO
SERVICE ANY FUTURE BUSINESS. The Issuer's only present employee is its
President. To be able to adequately service any future clients and business it
may acquire, the Issuer will have to develop an adequate team of consultants or
employees. The Issuer is presently in discussions with prospective consultants
experienced in the requisite areas.
THE FILING OF THIS REGISTRATION STATEMENT WILL INCREASE OUR OVERHEAD
AND ASSET DEPLETION. The cost of filing this registration statement and in
complying with the reporting requirements created by this filing will materially
increase the Issuer's administrative overhead and accelerate the depletion of
its assets.
WE HAVE NO PRESENT ARRANGEMENTS TO ACQUIRE ANY ADDITIONAL CAPITAL
NEEDED TO CONTINUE OUR EXISTENCE. The Issuer has no present arrangement under
which it might acquire any additional capital needed to continue its existence.
There is no assurance that it will be able to develop any such capital source.
WE HAVE NO ASSURANCE THAT ANY BUSINESS COMBINATION OR ASSET ACQUISITION
WE MIGHT MAKE WILL BE SUCCESSFUL. There is no assurance that any business
combination or asset acquisition entered into by the Issuer will result in
successful income producing operations.
Item 1. Description of the Business
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(Item 6 of Model B of Form 1A)
The Issuer was organized on September 20, 1996 as a Florida corporation
named Cosmetics Consultants Corporation. Its name was changed to Lomillo
Consultants Corp. on November 25, 1996 and then to Inet Commerce Conduit Corp.
on July 17, 1997. On July 17, 1997 the Issuer also completed a reorganization in
which its then outstanding 1,034,4000 shares of Common Stock were reverse split
into 517,200 shares on the basis of one new share for each two old shares. All
references to outstanding Common Stock contained herein have been adjusted to
reflect this reverse stock split.
The Issuer was formed to provide advice and sales support services to
retail sellers of cosmetic products. These services involved staff training,
in-house promotions, mail order sales programs and arrangement of joint
promotions between the cosmetic suppliers and the retail sellers, all designed
to increase the retailer's cosmetic sales.
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<PAGE>
In September of 1996, the Issuer sold 500,000 shares to its then
President and director for $10,000.00. During the period from October of 1996
through February, the Issuer sold an additional 17,200 shares of Common Stock at
$0.30 per share for total proceeds of $5,160.00. These shares were sold pursuant
to the exemption from the registration requirements of Section 5 of the
Securities Act of 1933 provided in Rule 504 of Regulation D adopted under that
Act.
The issuer continued to pursue the marketing of its sales development
and support services to retailers of cosmetic products through 1997 without
material results.
From February 10, 1999 through April 1, 1999, the Issuer sold 6,000,000
shares of its Common Stock at $.05 per share for total proceeds of $300,000.00.
These shares were sold pursuant to the exemption from the registration
requirements of Section 5 of the Securities Act of 1933 provided in Rule 504 of
Regulation D adopted under that Act.
In September of 1999, the Issuer terminated its efforts to market its
sales and support services to retailers of cosmetic products, due to a lack of
sales. In November of 1999, Paul H. Stone, President of the Issuer, became its
sole officer and director. Mr. Stone was so engaged to initiate the Issuer's
activities in its new business venture related to the Internet. The Issuer acts
as a consultant to Internet related enterprises that are seeking capital. It
may, in the future, act as a venture capital firm and make direct investments in
Internet companies
The Issuer is presently negotiating consulting arrangements with
experienced venture capitalists, investment bankers, systems analysts and
technical Internet consultants to put together a team able to evaluate and
assist emerging Internet companies and introduce them to potential capital
sources. The Issuer will only be paid for its services if its client is
successful in acquiring capital. The Issuer's activities will include: (i)
reviewing and evaluating the client's business plan, business operations,
personnel and facilities; (ii) advising the client as to its business and
capital structure; (iii) assisting the client in developing information and
documentation on its company, operations and an investment therein; and (iv)
introducing the client to capital sources interested in an investment in such a
business venture. The Issuer may take steps to facilitate negotiations between a
client and prospective capital sources; but will not engage in selling
activities as such.
If sufficient capital becomes available to the Issuer, it may also
acquire and hold direct venture capital investments in Internet related
companies it has evaluated. There are no present arrangements under which the
Issuer can acquire such capital, nor any assurance that such capital will become
available. It is the present intention of the Issuer, that most venture capital
investments will result in the Issuer holding a majority voting interest in the
company in which the investment is made and to otherwise conduct its operations
so that the Issuer does not become an Investment Company under the Investment
Company Act of 1940.
Item 2. Description of Property
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(Item 7 of Model B of Form 1A)shares of Common Stock
The Issuer has no materially important physical properties. Its only
material assets are its cash or cash equivalents in the appropriate amount of
$230,000, as of November 30, 1999.
The Issuer's present operations are conducted at the residence office
of its President and through the use of a mail drop at 615 Mount Pleasant Road,
Suite 318, Toronto, Ontario, Canada M4S3C5. The Issuer's President has not
previously and will not in the future charge the Issuer for its use of these
facilities. The Issuer is in the process of locating its initial office facility
to be located in Toronto, Ontario. Additional offices may be located in other
areas, as and if, the Issuer's business develops.
Item 3. Directors, Executive Officers and Significant Employees.
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(Item 8 of Model B of Form 1A)
The following table sets forth information regarding the sole director
and executive officer of the Company.
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Beginning
of
Name Age Positions Term
---- --- --------- ---------
Paul H. Stone 41 President and Director 11/99
Paul H. Stone became the President and sole director if the Issuer on
November 1, 1999. From 1980 to 1997, Mr. Stone was a "money market" broker for
various companies working in monetary and securities transactions between banks
and investment banking firms in Toronto, Canada. These employers and employment
periods were: (I) 1980-1983 / Euro-Brokers Harlow, Ltd.; (ii) 1983-1988 / Prebon
Yamane; (iii) 1988-1989 / Garvin, Guy, Butler; (iv) 1989-1993 / Prebon Yamane;
(v) 1993-1995 / Tullet and Tokyo Forex, Inc.; and (vi) 1995-1997 / Contor
Fitzgerald. From 1997 to May of 1999, Mr. Stone operated his own company,
Protective Products in Toronto, Ontario. That company was engaged in importing
into Canada and distributing skin care products.
It is anticipated that as the activities of the issuer increase in its
new business, additional officers, directors and employees will be appointed or
employed. The identity of such persons in not now known.
Item 4. Remuneration of Directors and Officers.
- ------- ---------------------------------------
(Item 9 of Model B to Form 1A)
<TABLE>
<CAPTION>
Information with respect to the only remuneration paid to any of the
former officers and directors of the Issuer during 1998 and from January 1, 1999
through October 31, 1999 is as follows:
<S> <C> <C> <C>
1998 Patti Cooke (1) Administrative Fee (1) $12,000.00
1/1/99 to 9/30/99 Patti Cooke (1) Administrative Fee (1) $ 5,000.00
----------
Total $17,000.00
</TABLE>
(1) These administrative fees were paid to Wellington Cooke Gallery for
services performed for the Issuer by Patti Cooke who was then Secretary
of the Issuer. She is the sole owner of that company.
In addition, the Issuer paid cellular telephone charges for mobile
telephones used by its former officers and directors during 1998 and from
January 1, 1999 through October 31, 1999 as follows:
- --------------------------------------------------------------------------------
Period Name of Individual Telephone Charges (1)
- --------------------------------------------------------------------------------
1998 Patti Cooke $1,528.14
1998 Bradley R. Wilson $1,731.44
---------
Total 1998 $3,259.58
=========
- --------------------------------------------------------------------------------
1/1/99 to 8/31/99 Patti Cooke $2,248.87
1/1/99 to 8/31/99 Bradley R. Wilson $1,235.61
---------
Total 1/1/99 to 8/31/99 $3,484.48
=========
- --------------------------------------------------------------------------------
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(1) It is estimated that approximately 90% of these charges were for
calls on the Issuer's business. Accordingly, approximately $700.00
of the total paid of $6,744.06 could be deemed to be compensation
to the named officers and directors.
Paul H. Stone will receive a salary, commencing December 1, 1999 at a
rate of $250.00 per month. If the Issuer's business develops and it begins to
generate revenue, the salary may be increased in an amount not now determinable.
Item 5. Security Ownership of Management and Certain Securityholders.
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(Item 10 to Model B of Form 1A)
The following table sets forth information as of November 30, 1999 with respect
to the ownership of the Issuer's Common Stock by its sole officer and director,
and any person owning more than 10% of the Issuer's Common Stock:
There are no outstanding options, warrants or other rights to acquire
shares of the Issuer's Common Stock.
Item 6. Interest of Management and Others in Certain Transactions.
- ------- ----------------------------------------------------------
(Item 11 to Model B of Form 1A)
In April of 1999, Hatchment Holdings, Inc., an Ontario corporation
wholly owned by the then President and sole director of the Issuer purchased
300,000 shares of its Common Stock for $0.05 per share. In addition, Wellington
Cooke Gallery, a company wholly owned by the then Secretary of the Issuer, also
purchased 300,000 shares at $0.05 per share. These shares were purchased in an
offering made by the Issuer under Rule 504 of Regulation D adopted under the
Securities Act of 1933. They were purchased on the same terms and conditions as
the non-affiliated purchasers in the offering.
In May of 1999, the Issuer loaned Hatchment Holdings, Inc. $70,000 on
an unsecured demand loan. The loan was repaid in October of 1999 in full
together with $2,041 in interest.
Item 7. Description of Securities.
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(Item 12 of Model B of Form 1A)
The Issuer's authorized capitalization consists of 50,000,000 shares of
$.001 par value common stock ("Common Stock"). As of October 1, 1999, there were
6,517,200 shares of Common Stock outstanding and there are no outstanding
options, warrants or other rights to acquire shares of Common Stock. Under
applicable Florida law and its Articles of Incorporation, the Issuer's Board of
Directors may issue additional shares of its stock to bring its outstanding
stock up to the total amount of authorized Common Stock without approval of its
shareholders.
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<PAGE>
On July 18, 1997 the Issuer completed a recapitalization in which its
them outstanding 1,034,400 shares of Common Stock were reverse split on the
basis of one new share for each two old shares. Thus the then outstanding
1,034,400 shares became 517,200 shares. All references to outstanding Common
Stock contained in this Form 10-SB have been adjusted to give effect to this
reverse stock split.
The shares of Common Stock currently outstanding are fully paid and
non-assessable. The holders of Common Stock do not have any preemptive rights to
acquire shares of any capital stock of the Company. In the event of liquidation
of the Company, assets then legally available for distribution to the holders of
Common Stock (assets remaining after payment or provision for payment of all
debts and of all preferential liquidation payments to holders of any outstanding
Preferred Stock) will be distributed in pro rata shares among the holders of
Common Stock and the holders of any outstanding Preferred Stock with liquidation
participation rights in proportion to their stock holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if,
declared by the Board of Directors out of funds legally available therefore; and
then, only after all preferential dividends have been paid on any outstanding
Preferred Stock. The Company has not had any earnings and it does not presently
contemplate the payment of any cash dividends in the foreseeable future.
The Issuer's Common Stock does not have any mandatory redemptive
provisions, sinking fund provisions or conversion rights.
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<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Related Shareholder Matters.
- ------- -----------------------------------------------------------------------
The Issuer's Common Stock has been quoted on the OTC Bulletin Board
under the symbol ICMC since May of 1997. To the knowledge of the Issuer there
have been very few trading transactions in its Common Stock
The following table sets forth high and low bid prices of the Common
Stock on the OTC Bulletin Board for the periods indicated. The bid prices
represent prices between dealers, which do not indicate retail markups,
markdowns or commissions and the bid prices may not represent actual
transactions:
Quarter Ending: High Low
-------------- ---- ---
May - June, 1997 5 1/2
June - September, 1997 5 3/4
October - December, 1997 5 3/8 1/2
January - March, 1998 6 1/2
April - June, 1998 5 1/2
July - September, 1998 5 3/4
October - December, 1998 5 1/2
January - March, 1999 4 1/2
April - June, 1999 4 13/16 11/16
July - September, 1999 4 13/16 11/16
The number of record holders of Common Stock of the Issuer at September
30, 1999 was 33. Additional owners of the Common stock hold their shares at
street name with various brokerage and depository firms (there are three such
firms included in the list of record owners).
The holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors out of funds legally available therefore. The
Issuer had never had any material earnings and does not presently have any
capability to generate any such earnings. The Issuer has never declared any
dividend. It does not anticipate declaring and paying any cash dividend in the
foreseeable future. See Item 7 in Part I.
Item 2. Legal Proceedings.
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Neither the Issuer nor any of its property is a party or subject to any
pending legal proceeding. The Issuer is not aware of any contemplated or
threatened legal proceeding against it by any governmental authority or other
party.
Item 3. Changes in and Disagreements with Accountants.
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No principal independent accountant of the Issuer or any subsidiary
thereof has ever resigned, been dismissed or declined to stand for re-election.
Item 4. Recent Sales of Unregistered Securities.
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Information with respect to all securities sold by the Issuer since
September 1, 1996, the offer and sale of which was not subject to an effective
registration statement filed under the Securities Act is as follows:
1. (a) On September 22, 1996 the Issuer sold 500,000 shares of its
$.001 par value Common Stock.
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(b) No person acted as principal underwriter with respect to the
offer or sale of these shares. The Issuer sold these 500,000
shares to Laurie Lomillo, its then sole director and
executive officer of the Issuer.
(c) The 500,000 shares were sold for cash at $0.02 per share for
total proceeds of $10,000.00. No commission was paid on the
sale.
(d) In this sale the Issuer relied upon the exemption from the
registration requirements of Section 5 of the Securities Act
provided in Section 4(2) as a transaction by an Issuer not
involving a public offering. The purchaser of the shares is
owned by an officer or director of the Issuer and thoroughly
familiar with it and its operations. The purchaser acquired
the shares for investment. The shares were issued as
"restrictive securities" as such are defined under the
Securities Act. An appropriate restrictive legend was placed
in the certificate representing these shares and a stop
transfer order on them was placed with the Issuer's Transfer
Agent.
2. (a) During the period from October of 1996 through February of
1997, the Issuer sold 17,200 shares of its $.001 par value
Common Stock.
(b) No person acted as a principal underwriter for the sale of
these shares. The Common Stock was offered directly by the
Issuer through its officer and director. The Common Stock
was offered to investors primarily in Florida.
(c) The 17,200 shares of the Common Stock were sold for cash at
$0.30 per share (U.S. Funds) for gross proceeds of
$5,160.00. No commissions or discounts were paid on any of
the sales.
(d) In the sale of these shares of Common Stock the Issuer
relied upon the exemption from the registration requirements
of Section 5 of the Securities Act provided in Rule 504 of
Regulation D adopted by the Securities and Exchange
Commission. The Issuer was not then an Issuer of the types
specified in subsection (a)(1)(2) and (3) of Rule 504 and
thus eligible to use the exemption. The applicable
provisions of Rules 501 and 502 were met by the Issuer on
offering the subject shares. The only other securities sold
by the Issuer during the 12-month period before the start of
or during this Rule 504 offering were the 500,000 shares of
Common Stock sold to its President and director on September
22, 1996 (see Item 4. (1) above).
3. (a) During the period from February 10, 1999 through April 1,
1999, the Issuer sold 6,000,000 shares of its $.001 par
value Common Stock.
(b) No person acted as a principal underwriter for the sale of
these shares. The Common Stock was offered directly by the
Issuer through its officer and director. The Common Stock
was offered to investors primarily in Ontario, Canada.
(c) The 6,000,000 shares of the Common Stock were sold for cash
at $0.05 per share (U.S. Funds) for gross proceeds of
$300,000.00. No commissions or discounts were paid on any of
the sales.
(d) In the sale of these shares of Common Stock the Issuer
relied upon the exemption from the registration requirements
of Section 5 of the Securities Act provided in Rule 504 of
Regulation D adopted by the Securities and Exchange
Commission. The Issuer was not then an Issuer of the types
specified in subsection (a)(1)(2) and (3) of Rule 504 and
thus eligible to use the exemption. The applicable
provisions of Rules 501 and 502 were met by the Issuer on
offering the subject shares. The Issuer did not sell any
other securities during the 12-month period before the start
of or during this Rule 504 offering.
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Item 5. Indemnification of Directors and Officers.
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Section 607.085 of the Florida Business Corporation Act provides:
(1) A corporation shall have power to indemnify any person who
was or is a party to any proceeding (other than an action by. or in
the right of the corporation by reason of the fact that he or she is
or was a director, officer, employees, or agent of the corporation or
is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against liability in connection
with such proceeding. including any appeal thereof. 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. The termination of any
proceeding by judgment, order, settlement, or conviction or upon a
plea of nolo contendere or its equivalent shall not, in or of itself,
create a presumption that the person did not act in good faith and in
a manner which he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation or, with respect to any
unlawful action or proceeding, had reasonable cause to believe that
his or her conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who
was or is a party to any proceeding by or in the right of the
corporation to procure a judgement in its favor by reason of the fact
that the person is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement nor exceeding, in the
judgement of the board of directors, the estimated expenses of
litigating the proceeding to the conclusion, actually and reasonably
incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall
be authorized if such person 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 cooperation, except that no indemnification shall be
made under this subsection in respect to any claim, issue or manner as
to which such person shall have been adjudged to be liable unless, and
only to the extent that, the court in which such proceeding was
brought, or any other court of competent jurisdiction, shall determine
upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnify for such expenses which such court
shall deem proper.
(3) To the extent that a director, officer, employee, or agent of
a corporation has been successful in the merits or otherwise in
defense of any proceeding referred to in subsection (1) or subsection
(2), or in defense of any claim, issue, or manner therein, he or she
shall be indemnified against expenses actually and reasonably incurred
by him or her in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2),
unless pursuant to a determination by a court, shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee,
or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
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(b) If such a quorum is not obtainable or, even if
obtainable, by a majority vote of a committee duly designated by
the board of directors who are parties may participate,
consisting solely of two or more directors nor at the time
parties to the proceeding;
(c) By independent legal counsel:
1. Selected by the board of directors prescribed in
paragraph (a) or the committee prescribed in paragraph (b);
or
2. If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designated under
paragraph (b), selected by majority vote of the full board
of directors (in which directors who are parties may
participate; or
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such
proceeding or, if no such quorum is obtainable, by a majority
vote of the shareholders who were not parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and
authorization of indemnification be made in the same manner as the
determination that indemnification is permissible. However, if the
determination of permissibility is made by independent legal counsel
person specified by paragraph (4)(c) shall evaluate the reasonableness
of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the corporation on advance
on the final disposition of such preceding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount of he or she is ultimately found not to e entitled to
indemnification by the corporation pursuant to this section. Expenses
incurred by other employees and agents may be paid in advance upon
such terms or conditions that the board of directors deems
appropriate.
(7) The indemnification and advancement of expenses provided
pursuant to this section are not exclusive, and a corporation may make
any other or further indemnification or advancement of expenses of any
of its directors, officers, employees, or agents, under any bylaw,
agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to
action in another capacity while holding such office. However,
indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee or agent if a judgement or
other final adjudication establishes that his or her actions, or
omissions to act, were material to the cause of action so adjudicated
and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe his
or her conduct was lawful or had nor reasonable cause to believe
his or her conduct was unlawful.
(b) A transaction from which the director, officer,
employee, or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which
the liability provisions of ss.607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interest of the corporation in a proceeding by or in the right of
the corporation to procure a judgement in its favor or in a
proceeding by or in the right of the shareholder.
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(8) Indemnification and advancement of expenses as provided in
this section shall continue as, unless otherwise provided when
authorized or ratified, to a person who has ceased to be a director,
officer, employee, or agent and shall incur to the benefit of the
heirs, executors, and administrators of such a person, unless
otherwise provided when authorized or ratified.
(9) Unless the corporation's articles of incorporation provide
otherwise, notwithstanding the failure of a corporation to provide
indemnification, and despite any contrary determination of the board
or of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a
proceeding may apply for indemnification or advancement of expenses,
or both, to the court conducting the proceeding, to the circuit court,
or to any other court of competent jurisdiction. On receipt of an
application, the court, after giving any notice that it considers
necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification
or advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case the
court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered
indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of
the exercise by the corporation of its power pursuant to
subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of
expenses, or both, in view of all the relevant circumstances,
regardless of whether such person met the standard of conduct set
forth in subsection (1), subsection (2), or subsection (7).
(10) For purposes of this section, the term "corporation"
includes, in addition to the resulting corporation, any constituent
corporation (including and constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director,
officer, employee, or agent of a constituent corporation, or is or was
serving at the request of a constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, is in the same position under
this section with respect to the resulting or surviving corporation as
he or she would have with respect to such constituent corporation if
its separate existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit
plans:
(b) The term "expenses" includes counsel fees, including
those for appeal:
(c) The term "liability" includes obligations to pay a
judgement, settlement, penalty, fine (including an excise tax
assessed with respect to any employee benefit plan), and expenses
actually and reasonably incurred with respect to an proceeding;
(d) The term "proceeding" includes any threatened, pending,
or completed action, suit, or other type of proceeding, whether
civil, criminal, administrative, or investigative and, whether
formal or informal;
(e) The term "agent" includes a volunteer;
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(f) The term "serving at the request of the corporation"
includes any service as a director, officer, employee, or agent
of the corporation that imposes duties or such persons, including
duties related to an employee benefit plan and its participants
or beneficiaries; and
(g) The term "not opposed to the best interests of the
corporation" describes the actions of a person who acts in good
faith and in a manner he or she reasonably believes to be in the
best interests of the participants and beneficiaries of an
employee benefit plan.
(12) A corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation or is or was serving as the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against the person and
incurred by him or her in any capacity or arising out of his or her
status as such, whether or not the corporation would have the power to
indemnify that person against such liability under the provisions of
this section.
ARTICLE X of the Issuer's Articles of Incorporation provides:
"ARTICLE X
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of
the Corporation shall be personally liable to the Corporation or its
shareholders for damages for breach of any duty owed to the
Corporation or its shareholders. In addition, the Corporation shall
have the power, in its By-laws or in any resolution of its
stockholders or directors, to undertake to indemnify the officers and
directors of this corporation against any contingency or peril as may
be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense,
policies of insurance."
ARTICLE F of the Issuers Bylaws provides:
"INDEMNIFICATION OF DIRECTORS AND OFFICERS
------------------------------------------
The Corporation shall indemnify any person made 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), brought to impose a liability or penalty on such person
in his capacity of Director, officer, employee or agent of this
Corporation, or of any other corporation which such person serves as
such at the request of this Corporation, against judgments, fines,
amounts paid in settlement and expenses, including attorney's fees,
actually and reasonably incurred as a result of such action, suit or
proceeding, or any appeal thereof, if they acted in good faith in the
reasonable belief that such action was in the best interest of this
Corporation, and in criminal actions or proceedings without reasonable
ground for belief that such action was unlawful. The termination of
any such civil or criminal action, suit or proceedings by judgment,
settlement, conviction or upon a plea of nolo contendere shall not in
itself create a presumption that any Director or officer did not act
in good faith in the reasonable belief that such action was in the
best interests of this Corporation or that they had reasonable ground
for belief that such action was unlawful. The foregoing rights of
indemnification shall apply to the heirs and personal representatives
of any such Director, officer, employee or agent and shall not be
exclusive of other rights to which they may be entitled."
Insofar as indemnification for liabilities raising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy and is therefor unenforceable.
12
<PAGE>
INET COMMERCE CONDUIT CORP.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1998
DECEMBER 31, 1997
DECEMBER 31, 1996
TABLE OF CONTENTS
Page
----
Accountants' Report on Financial Statements.............................. F-2
Financial Statements:
Balance Sheet................................................... F-3
Statement of Operations......................................... F-4
Statement of Stockholders' Equity............................... F-5
Statement of Cash Flows......................................... F-6
Notes to Financial Statements................................... F-7
F-1
<PAGE>
Joseph F. Janusz Certified Public Accountant
MEMBER: AMERICAN AND FLORIDA INSTITUTES OF CERTIFIED PUBLIC ACCOUNTANTS
7204 Jacaranda Lane
Miami Lakes, Florida 33014
--------
(305) 558-2272
Fax: (305)362-3118
Independent Auditors' Report
----------------------------
The Board of Directors
INET Commerce Conduit Corp.
I have audited the accompanying balance sheets of INET Commerce Conduit Corp. as
of December 31, 1998, 1997, and 1996, and the related statements of operations,
stockholders' equity, and cash flows for the years 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 audits.
I conducted my audits 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 audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of INET Commerce Conduit Corp. as of
December 31, 1998, 1997, and 1996 and the results of its operations and its cash
flows for the years ended in conformity with generally accepted accounting
principles.
Miami Lakes, Florida
September 30, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
INET Commerce Conduit Corp.
(Formerly Known As Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
------
December 31, December 31, December 31,
1998 1997 1996
------------ ------------ ------------
CURRENT ASSETS
- --------------
<S> <C> <C> <C>
Cash held in Escrow Account $ 0 $ 0 $15,160
-------- -------- -------
Total Current Assets $ 0 $ 0 $15,160
-------- -------- -------
OTHER ASSETS
Total Other Assets $ 0 $ 0 $ 0
-------- -------- -------
TOTAL ASSETS $ 0 $ 0 $15,160
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts Payable $ 17,089 $ $ 0
-------- -------- -------
Total current liabilities $ 17,089 $ $ 0
-------- -------- -------
STOCKHOLDER'S EQUITY (DEFICIT)
- ------------------------------
Common stock - par value $.001,
authorized 50,000,000 shares, issued
and outstanding 1,034,400 shares
at December 31, 1996 and 517,200
shares at December 31, 1997 and
517,200 shares at December 31,1998 $ 517 $ 517 $ 1,034
Additional paid-in capital 14,643 14,643 14,126
Deficit accumulated during
the development stage (32,249) (15,160)
-------- -------- -------
Total stockholder's equity
(deficit) $(17,089) $ 0 $15,160
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 0 $ 0 $15,160
======== ======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
INET Commerce Conduit Corp.
(Formerly Known as Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Period
For the Year For the Year For the Year September 20, 1996
Ended Ended Ended (Inception)
December 31, December 31, December 31, to December 31,
1998 1997 1996 1998
------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Revenue $ 0 $ 0 $ 0 $ 0
Total Revenue 0 0 0 0
-------- -------- -------- --------
Development stage
expenses 17,089 15,160 0 32,249
-------- -------- -------- --------
Total expenses 17,089 15,160 0 32,249
-------- -------- -------- --------
Net loss $(17,089) $(15,160) $ 0 $(32,249)
======== ======== ======== ========
Net loss per share $ (.004) $( .003) $ .000
======== ======== ========
Weighted average
common shares
outstanding 495,247 517,200 1,034,400
======== ======== =========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
INET Commerce Conduit Corp.
(Formerly Known as Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
------------------------- PAID-IN DEVELOPMENT STOCKHOLDERS
SHARES AMOUNT CAPITAL STAGE EQUITY (DEFICIT)
-------- -------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Common stock issued for
capital contribution by stockholder 1,000,000 $1,000 $ 9,000 $ 10,000
Common stock issued in connection
with 504 offering 34,400 34 5,126 5,160
Net loss
--------- ------- -------- -------- --------
Balance, December 31, 1996 1,034,400 $1,034 $ 14,126 $ 0 $ 15,160
========= ======= ======== ======== ========
Common stock reverse stock
split 1 share for 2 shares 517,200 (517) 517 0
Net loss (15,160) (15,160)
--------- ------- -------- -------- --------
Balance, December 31, 1997 517,200 $ 517 $ 14,643 $(15,160) $ 0
========= ======= ======== ======== ========
Net loss (17,089) (17,089)
--------- ------- -------- -------- --------
Balance, December 31, 1998 517,200 $ 517 $ 14,643 $(32,249) $(17,089)
========= ======= ======== ======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
INET Commerce Conduit Corp.
(Formerly Known as Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS
For the Period
For the Year Ended September 20, 1996
December 31, (Date of Inception)
1998 1997 1996 to December 31, 1998
------------------------------------------- --------------------
<S> <C> <C> <C> <C>
CASH FLOW FROM
OPERATING ACTIVITIES:
Net loss $(17,089) $(15,160) $ 0 $(32,249)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Change in operating assets and liabilities:
Accounts payable 17,089 0 17,089
-------- -------- -------- --------
Net cash used in
operating activities 0 (15,160) 0 (15,160)
CASH FLOWS FROM INVESTING
INVESTING ACTIVITIES
Net cash used in
investing activities 0 0 0 0
-------- -------- -------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance of
common stock - - 10,000 10,000
Proceeds from sales of
common stock 0 0 5,160 5,160
-------- -------- -------- --------
Net cash provided
by financing activities 0 0 15,160 15,160
-------- -------- -------- --------
Net (decrease)increase in cash 0 (15,160) 15,160 0
Cash at Beginning of period 0 15,160 0 0
-------- -------- -------- --------
Cash at End of Period $ 0 $ 0 $ 15,160 $ 0
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-6
<PAGE>
INET Commerce Conduit Corp.
(Formerly Known as Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND ORGANIZATION
INET Commerce Conduit Corp. (the Company), a development stage company, was
incorporated in the State of Florida on September 20, 1996 as Cosmetics
Consultants Corp. for the purpose of acquiring or merging with an existing
operating company.
On November 25, 1996, Cosmetics Consultants Corp. changed its name to Lomillo
Consultants Corp.
On July 17, 1997, the Company amended and restated its articles of incorporation
for Lomillo Consultants Corp. which changed its name to Inet Commerce Conduit
Corp.
DEVELOPMENT STAGE
The Company has operated as a development stage enterprise since its inception
by devoting substantially all of its efforts with the ongoing development of the
Company.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31, year end.
LOSS PER SHARE
The computation of loss per share of common stock is based upon the weighted
average common shares outstanding during each period.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the company to
continue as a going concern. It is management's plan to seek additional capital
through a merger with an existing operating company and raising capital.
NOTE 3 - CAPITAL STOCK ACTIVITY
The Company has issued 1,000,000 shares of its common stock, par value $.001 for
$10,000, on September 22, 1996.
F-7
<PAGE>
Inet Commerce Conduit Corp.
(Formerly Known as Lomillo Consultants Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK ACTIVITY (con't)
In December 1996, the Company completed a private offering of 34,400 shares of
common stock at a price of $.15 per share, amounting to gross proceeds of
$5,160.
On July 18, 1997, the Company reverse split the outstanding shares of the
Company's common stock 1 for 2.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. An officer/stockholder
provided office services without charge. Such costs are immaterial to the
financial statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities.
F-8
<PAGE>
PART III
1. Index to Exhibits
-----------------
Exhibit No. Description of Exhibits
----------- -----------------------
2(a) Issuer's Bylaws
2(b) Issuer's Articles of Incorporation, as amended
Signatures:
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Issuer has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized.
INET COMMERCE CONDUIT CORP.
Dated: November 30, 1999 By: /s/ Paul H. Stone
-----------------------------------
Paul H. Stone, President
13
Exhibit 2(a)
BYLAWS OF
INET COMMERCE CONDUIT CORPORATION
ARTICLE A.
OFFICES
-------
The principal office of the Corporation shall be established and
maintained in the State of Florida. The Corporation may also have offices at
such places within or without the State of Florida as the board may, from time
to time, establish.
ARTICLE B.
SHAREHOLDERS
------------
1. ANNUAL MEETING. The annual meeting of the Shareholders of this
Corporation shall be held annually on a date and a time and place designated
from time to time by the Board of Directors of the Corporation. Business
transacted at the annual meeting shall include the election of Directors of the
Corporation and the transaction of any other proper business. If the designated
day shall fall on a Sunday or legal holiday, then the meeting shall be held on
the first business day thereafter.
2. SPECIAL MEETINGS. Special Meetings of the Shareholders shall be held
when directed by the President or the Board of Directors, or when requested in
writing by the holders of not less than ten percent (10%) of all the shares
entitled to vote at the meeting. Such written request must be signed, dated and
delivered to the Secretary of the Corporation. A meeting requested by
Shareholders shall be called for a date not less than ten (10) nor more than
sixty (60) days after the request is made unless the Shareholders requesting the
meeting designate a later date. The call for the Special Meeting shall be issued
by the Secretary, unless the President, Board of Directors, or Shareholders
requesting the Special Meeting shall designate another person to do so. Such a
request for a Special Meeting shall state the purpose of the proposed Special
Meeting. Business transacted at any Special Meeting shall be limited to the
purpose stated in the notice thereof.
3. PLACE OF MEETING. Meetings of Shareholders shall be held at the
principal place of business of the Corporation or at such other place as may be
designated by the Board of Directors.
4. NOTICE OF MEETING. Written notice to each Shareholder of record
entitled to vote stating the place, day and hour of the meeting and, in the case
of a Special Meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten (10) nor more than sixty (60) days before
the meeting either personally, by mail, telegram or overnight carrier. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the Shareholder at the Shareholder's address as it
appears on the stock transfer books of the Corporation, with postage prepaid. If
notice is given by telegram or overnight courier, such notice shall be deemed to
be delivered when the telegram or overnight carrier is delivered to the
telegraph company or overnight carrier. If any Shareholder shall transfer such
Shareholder's stock after notice, it shall not be necessary to notify the
transferee. Any Shareholder may waive notice of any meeting either before,
during or after the meeting. The attendance of a Shareholder at a meeting shall
constitute a waiver of notice of such meeting, except where a Shareholder
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
5. NOTICE OF ADJOURNED MEETING. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken; and any business may be
transacted at the adjourned meeting that might have been transacted on the
original date of the meeting. If, however, after adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in paragraph 4 of this Article to
each Shareholder of record on the new record date entitled to vote at such
meeting.
1
<PAGE>
6. VOTING LISTS. The officer or agent having charge of the stock
transfer book of the Corporation shall make, at least ten (10) days before each
meeting of Shareholders, a complete list of Shareholders entitled to vote at
such meeting, or any adjournment thereof, arranged in alphabetical order, with
the address and number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, shall be kept on file at the principal office
of the Corporation and shall be subject to inspection by any Shareholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any Shareholder during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to who are the Shareholders
entitled to examine such list or to vote at any meeting of the Shareholders.
7. TRANSFER BOOK AND RECORD DATE. For the purposes of determining
Shareholders entitled to notice of, or to vote at any meeting, or entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other purpose, the Board of Directors may close the stock
transfer book of the Corporation as provided by law.
8. QUORUM. Except as otherwise provided in these Bylaws, or as required
by the Articles of Incorporation, the majority of the shares entitled to vote
(50% + 1), represented in person or by Proxy, shall constitute a Quorum at a
meeting of Shareholders, but in no event shall a Quorum consist of less than
one-third (1/3) of the shares entitled to vote at the meeting.
After a Quorum has been established at a Shareholders' meeting, the
subsequent withdrawal of Shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a Quorum, shall
not effect the validity of any action taken at the meeting or any adjournment
thereof.
9. VOTING OF SHARES. Each Shareholder entitled to vote shall at every
meeting of Shareholders be entitled to one (1) vote for each share of voting
stock held by them.
10. PROXY. Every Shareholder entitled to vote at a meeting of
Shareholders, or to express consent or dissent without a meeting, or the
Shareholder's duly authorized attorney-in-fact, may authorize another person or
persons to act for the Shareholder by Proxy. The Proxy must be signed by the
Shareholders or their attorney-in-fact. No Proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the Proxy or by Florida law.
11. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided by law
or by the Articles of Incorporation, any action required to be taken at a
regular meeting of the Shareholders, or any other action which may be taken at
a Special Meeting of the Shareholders may be taken without a meeting if a
consent in writing setting forth the action so taken shall be signed by holders
of outstanding stock having not less than the minimum number of votes that
would be necessary to authorize such action at a meeting at which all shares
entitled to vote thereon were present and voted. Within ten (10) days after
obtaining such authorization by written consent, notice must be given to those
Shareholders who have not consented in writing. The notice shall fairly
summarize the material features of the authorized action and, if the action
shall nave been such that dissenters' rights are provided under Florida law,
the notice shall contain a clear statement of the right of Shareholders
dissenting therefrom to be paid the fair value of their shares upon compliance
with certain further provisions of such Florida law regarding the rights of
dissenting Shareholders.
ARTICLE C.
BOARD OF DIRECTORS
------------------
1. GENERAL POWERS. The business of the Corporation shall be managed and
its corporate powers exercised by its Board of Directors.
2. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors shall
consist of at least one (1) director. The number may be altered from time to
2
<PAGE>
time by either the Directors or the Shareholders. Directors shall be elected at
the annual meeting of Shareholders and each Director elected shall hold office
until such Director's successor has been elected and qualified, or until their
prior resignation or removal. It shall not be necessary for Directors to be
Shareholders.
3. VACANCIES. If the office of any Director, member of a committee or
other officer becomes vacant, the remaining Directors in office, by a majority
(50% + 1) vote, though this may constitute less than a quorum of the Board of
Directors, may appoint any qualified person to fill such vacancy, who shall hold
office for the unexpired term and until their successor shall be duly elected
and has qualified.
4. REMOVAL OF DIRECTORS. Any or all of the Directors may be removed
with or without cause by vote of a majority (50% + 1) of all of the shares
outstanding and entitled to vote at a Special Meeting of Shareholders called for
that purpose.
5. RESIGNATION. A Director may resign at any time by giving written
notice to the Board, the President or the Secretary of the Corporation. Unless
otherwise specified in the notice, the resignation shall take effect upon
receipt thereof by the Board of Directors or of such officer, and the acceptance
of the resignation shall not be necessary to make it effective.
6. QUORUM OF DIRECTORS. A majority of the Directors (50% + 1) shall
constitute a quorum for the transaction of business. If at any meeting of the
Board there shall be less than a quorum present, a majority of those present may
adjourn the meeting from time to time until a quorum is obtained, and no further
notice thereof need be given other than by announcement at the meeting which
shall be so adjourned. 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.
7. PLACE AND TIMING OF BOARD MEETINGS. The Board may hold its meetings
at the office of the Corporation or at such other place, either within or
without the State of Florida as it may, from time to time, determine.
8. NOTICE OF MEETINGS OF THE BOARD. A regular annual meeting of the
Board may be held without notice at such time and place as it shall, from time
to time, determine. Special Meetings of the Board shall be held upon notice to
the Directors and may be called by the President upon two (2) days, notice to
each Director, either personally or by mail or by wire. Special Meetings shall
be called by the President or by the Secretary in a like manner on written
request of a Director. Any Special Meeting may be held by telephone conference
as set forth in Section 11 hereof. Notice of a meeting need not be given to any
Director who submits a waiver of notice whether before or after the meeting, or
who attends the meeting without protesting prior thereto, or at its
commencement, the lack of notice to him.
9. ANNUAL MEETING. An annual meeting of the Board shall be held
immediately following, and at the same place as, the annual meeting of
Shareholders.
10. COMPENSATION. No compensation shall be paid to Directors, as such,
for their services, but by resolution of the Board, a fixed sum and expenses for
actual attendance, at each regular or Special Meeting of the Board may be
authorized. Nothing herein contained shall be construed to preclude any Director
authorized from serving the Corporation in any other capacity and receiving
compensation therefor.
11. ACTION BY TELEPHONIC CONFERENCE. The Directors may act at a meeting
by means of a conference by telephone or similar communications equipment by
means of which all persons participating in the meeting can communicate with
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
12. PRESUMPTION OF ASSENT. A Director of the Corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action unless he voted
against such action or abstains from voting in respect thereto because of an
asserted conflict of interest.
3
<PAGE>
13. INFORMAL ACTION BY BOARD. Any action required or permitted to be
taken by any provision of law, of the Articles of Incorporation or of these
Bylaws at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be.
ARTICLE D.
OFFICERS
--------
1. OFFICERS, ELECTION AND TERM. The Board may elect or appoint a
President, one or more Vice Presidents, a Secretary, a Treasurer, and such other
officers as it may determine, who shall have such duties and powers as
hereinafter provided.
All officers shall be elected or appointed to hold office until the
meeting of the Board following the next annual meeting of Shareholders and until
their successors have been elected or appointed and qualified.
Any two (2) or more offices may be held by the same person.
2. REMOVAL, RESIGNATION, SALARY, ETC. Any officer elected or appointed
by the Board may be removed by the Board with or without cause.
In the event of the death, resignation or removal of an officer, the
Board, in its discretion, may elect or appoint a successor to fill the unexpired
term.
Any officer elected by the Shareholders may be removed only by vote of
the Shareholders unless otherwise provided by the Shareholders.
The salaries of all officers shall be fixed by the Board.
The Directors may require any officer to give security for the faithful
performance of his duties.
3. DUTIES. The officers of this Corporation shall have the following
duties:
The President shall be the chief executive officer of the Corporation
and shall have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the Shareholders and Board of Directors.
The Vice-President shall possess and may exercise, such power and
authority, and shall perform such duties as may from time to time be assigned to
him or her by the Board of Directors or the President.
The Secretary shall have custody of and maintain all of the corporate
records except the financial records; shall record the minutes of all meetings
of the Shareholders and Board of Directors, and send all notices of all meetings
and perform such other duties as may be prescribed by the Board of Directors or
the President and shall perform such duties as may from time to time be assigned
to him or her by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and maintain
all of the financial records and shall keep accurate financial records and shall
render reports thereof of the annual meetings of Shareholders and at other times
when requested to do so by the Board of Directors and shall perform such duties
as may from time to time be assigned to him or her by the Board of Directors or
the President.
4. REMOVAL OF OFFICERS. An officer or agent elected or appointed by the
Board of Directors may be removed with or without cause by the Board whenever in
the Board's judgment, the best interests of the Corporation will be served
thereby.
4
<PAGE>
Any vacancy in any office may be filled by the Board of Directors for
the unexpired term.
ARTICLE E.
EXECUTIVE AND OTHER COMMITTEES
------------------------------
1. CREATION OF COMMITTEES. The Board of Directors may, by resolution,
passed by a majority of the Board, designate an executive committee and one or
more other committees.
2. EXECUTIVE COMMITTEE. The executive committee, if there shall be one,
shall consult with and advise the officers of the Corporation in the management
of its business and shall have and may exercise, to the extent provided in the
resolution of the Board of Directors creating such executive committee, such
powers of the Board of Directors as can be lawfully delegated by the Board.
3. OTHER COMMITTEES. Such other committees shall have such functions
and may exercise the powers of the Board of Directors as can be lawfully
delegated and to the extent provided in the resolution or resolutions creating
such committee or committees.
4. MEETINGS OF COMMITTEES. Regular meetings of the executive committee
and other committees may be held without notice at such time and at such place
as shall from time to time be determined by the executive committee or such
other committees, and Special meetings of the executive committee or such other
committees may be called by any member thereof upon two (2) days' notice to each
of the other members of such committee, or on such shorter notice as may be
agreed to in writing by each of the members of such committee, given either
personally or in the manner provided in Section 8 of Article III of these Bylaws
(pertaining to notice for Directors, meetings).
5. VACANCIES ON COMMITTEES. Vacancies on the executive committee or on
such other committees shall be filled by the Board of Directors then in office
at any regular or Special meeting.
6. QUORUM ON COMMITTEES. At all meetings of the executive committee or
such other committees, a majority (50% + 1) of the committee's members then in
office shall constitute a quorum for the transaction of business.
7. MANNER OF ACTION OF COMMITTEES. The acts of a majority (50% + 1) of
the members of the executive committee or such other committees. present at any
meeting at which there is a quorum, shall be the act of such committee.
8. MINUTES OF COMMITTEES. The executive committee, if there shall be
one, and such other committees shall keep regular minutes of their proceedings
and report the same to the Board of Directors when requested.
9. COMPENSATION. Members of the executive committee and such other
committees may be paid compensation in accordance with the provisions of
Articles III, Section 10 of these bylaws (pertaining to compensation of
Directors).
ARTICLE F.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Corporation shall indemnify any person made 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), brought to impose a liability or
penalty on such person in his capacity of Director, officer, employee or agent
5
<PAGE>
of this Corporation, or of any other corporation which such person serves as
such at the request of this Corporation, against judgments, fines, amounts paid
in settlement and expenses, including attorney's fees, actually and reasonably
incurred as a result of such action, suit or proceeding, or any appeal thereof,
if they acted in good faith in the reasonable belief that such action was in the
best interest of this Corporation, and in criminal actions or proceedings
without reasonable ground for belief that such action was unlawful. The
termination of any such civil or criminal action, suit or proceedings by
judgment, settlement, conviction or upon a plea of nolo contendere shall not in
itself create a presumption that any Director or officer did not act in good
faith in the reasonable belief that such action was in the best interests of
this Corporation or that they had reasonable ground for belief that such action
was unlawful. The foregoing rights of indemnification shall apply to the heirs
and personal representatives of any such Director, officer, employee or agent
and shall not be exclusive of other rights to which they may be entitled.
ARTICLE G.
CERTIFICATE OF STOCK
--------------------
1. ISSUANCE. Unless otherwise determined by the Board of Directors,
every holder of shares in this Corporation shall be entitled to have a
certificate representing all shares of which they are entitled. No certificate
shall be issued for any share until such share is fully paid.
2. FORM. Certificates representing shares in this Corporation shall be
signed by the President or Vice President and the Secretary or an Assistant
Secretary and may be sealed with the seal of this Corporation or a facsimile
thereof; or in any other manner as prescribed by law.
3. TRANSFER OF SHARES. Transfers of shares of the Corporation shall be
made upon the Corporation's books by the holder of the shares in person or by
the holder's lawfully constituted representative, upon surrender of the
certificate of stock for cancellation. 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 and the Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person whether or not the Corporation shall have express or other notice
thereof, unless otherwise provided by the laws of the State of Florida. Every
certificate representing shares which are restricted as to sale, disposition or
other transfer shall state that such shares are restricted as to such transfer
or disposition and shall set forth or fairly summarize upon the certificate, or
state that the Corporation will furnish to any holder thereof, upon request and
without charge, a full statement of such restrictions.
4. FACSIMILE SIGNATURE. Where a certificate is signed (1) by a transfer
agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf
of the Corporation and a registrar, the signature of any such Chairman of the
Board, President, Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be facsimile. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been used on, any such
certificate or certificates and have ceased to be such officer or officers then
such certificate or certificates may nevertheless be adopted by the Corporation
and be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the Corporation.
5. LOST, STOLEN OR DESTROYED CERTIFICATES. If a Shareholder shall claim
to have lost or destroyed a certificate of shares issued by the Corporation, a
new certificate shall be issued upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or destroyed,
and, at the discretion of the Board of Directors, upon the deposit of a bond or
other indemnity in such amount and with such sureties, if any, as the Board may
reasonable require.
ARTICLE H.
BOOKS AND RECORDS
-----------------
1. GENERAL. This Corporation shall keep correct and complete books and
records of account and shall keep minutes of the proceedings of its
Shareholders, Board of Directors and committees.
6
<PAGE>
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
2. INSPECTION. All Shareholders who are entitled to inspect the
Corporation's books and records pursuant to Florida law shall have such
inspection rights as prescribed by the most recent Florida law available when
the request is made.
ARTICLE I.
DISTRIBUTIONS
-------------
The Board of Directors of the Corporation may, from time to time,
declare, and the Corporation may make, distributions to the Shareholders,
subject to the restrictions of applicable law.
ARTICLE J.
CORPORATE SEAL
--------------
The seal of the Corporation shall be circular in form and bear the name
of the Corporation, the year of its organization and the words "CORPORATE SEAL,
FLORIDA." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be facsimile, engraved or printed.
ARTICLE K.
EXECUTION
---------
All corporate instruments and documents shall be signed or
countersigned, executed, verified or acknowledged by such officer or officers or
other person or persons as the Board may, from time to time, designate.
ARTICLE L.
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be the 12-month period
selected by the Board of Directors as the taxable year of the Corporation for
federal income tax purposes.
ARTICLE M.
NOTICE AND WAIVER OF NOTICE
---------------------------
Whenever any notice is required by these Bylaws to be given, personal
notice is not meant unless expressly so stated, and any notice so required shall
be deemed to be sufficient if given by depositing the same in the post office
box in a sealed post-paid wrapper, addressed to the person entitled thereto at
his last known post office address, and such notice shall be deemed to have been
given on the day of such mailing. Shareholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
Florida Law.
Whenever any notice is required to be given under the provisions of any
law, or under the provisions of the Articles of Incorporation of the
Corporation, or these Bylaws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
7
<PAGE>
ARTICLE N.
CONSTRUCTION
------------
Whenever a conflict arises between the language of these Bylaws and the
Articles of Incorporation, the Articles of Incorporation shall govern.
ARTICLE O.
BUSINESS
--------
1. CONDUCT OF BUSINESS WITHOUT MEETINGS. Any action of the
Shareholders, Directors and any committee may be taken without a meeting if
consent in writing setting forth the action so taken shall be signed by all
persons who would be entitled to vote on such action at a meeting and filed the
Secretary of the Corporation as part of the proceedings of the Shareholders,
Directors or committees, as the case may be.
2. MANAGEMENT BY SHAREHOLDERS. In the event the Shareholders are named
in the Articles of Incorporation and are empowered therein to manage the affairs
of the Corporation in lieu of Directors, the Shareholders of the Corporation
shall be deemed Directors for the purposes of these Bylaws, and wherever the
words "directors," "Board of Directors" or "Board" appear in these Bylaws, those
words shall be taken to mean Shareholders.
The Shareholders may, by majority vote (50% + 1), create a Board of
Directors to manage the business of the Corporation and exercise its corporate
powers.
ARTICLE P.
AMENDMENTS
----------
1. BY SHAREHOLDERS. The Bylaws shall be subject to alteration or
repeal, and new Bylaws may be made, by the affirmative vote of Shareholders
holding of record in the aggregate at least a majority of the outstanding shares
entitled to vote in the election of Directors at any annual or Special Meeting
of Shareholders, provided that the notice or waiver of notice of such meeting
shall have summarized or set forth in full therein the proposed amendment
2. BY DIRECTORS. The Board of Directors shall have the power to make,
adopt, alter, amend and repeal from time to time, the Bylaws of the Corporation.
ARTICLE Q
ELECTION OUT OF CONTROL - SHARE ACQUISION REGULATION
----------------------------------------------------
The Corporation hereby elects not to be governed by the provisions of
Florida Statutes ss. 607.0902.
CERTIFICATE
The undersigned, Secretary of Inet Commerce Conduit Corporation, a Florida
corporation ("Corporation") does hereby certify and affirm that the foregoing
set of Bylaws are the Bylaws of the Corporation adopted on October 4, 1999.
/s/ Patti Cooke
--------------------
Patti Cooke
8
Exhibit 2(b)
FILED
SECRETARY OF STATE
DIVISION OF CORPORATIONS
96 SEP 20 PM 1:09
ARTICLES OF INCORPORATION
OF
COSMETIC CONSULTANTS CORP.
The undersigned, desiring to form a corporation (the "Corporation")
under the laws of Florida, hereby adopts the following Articles of
Incorporation:
ARTICLE I
CORPORATION NAME
The name of the Corporation is COSMETICS CONSULTANTS CORP.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized
under the laws of the state of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000
shares of common stock, $.001 par value.
ARTICLE V
PLACE OF BUSINESS
The initial address of the principal place of business of this
corporation in the State of Florida shall be 1428 Brickell Avenue, 8th Floor,
Miami, FL 33131. The Board of Directors may at any time and from time to time
move the principal office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall be not less than one (1) and,
1
<PAGE>
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws. The number of persons constituting the initial
Board of Directors shall be 1. The Board of Directors shall be elected by the
stockholders of the corporation at such time and in such manner as provided in
the By-Laws. The name and address of the Initial Board of Directors and officers
are as follows:
Laurie Lomillo President/Director
1772 N.W. 91 Avenue
Plantation, FL 33322
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have the right to acquire shares or other
securities of the Corporation except to the extent such right may be granted by
an amendment to these Articles of Incorporation or by a resolution of the board
of Directors.
ARTICLE VIII
AMENDMENT OF BYLAWS
Anything in these Articles of Incorporation, the Bylaws, or the Florida
Corporation Act, notwithstanding, bylaws shall be adopted, modified, amended or
repealed by the shareholders of the Corporation except upon the affirmative vote
of a simple majority vote of the holders of all the issued and outstanding
shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9.1 Inspection of Books. The board of directors shall make reasonable
rules to determine at what time and places and under what conditions the books
of the Corporation shall be open to inspection by shareholders or a duly
appointed representative of the shareholder.
9.2 CONTROL SHARE ACQUISITION. The provisions relating to any control
share acquisition as contained in Florida Statutes now, or hereinafter amended,
and any successor provision shall not apply to the Corporation.
9.3 QUORUM. The holders of shares entitled to one-third of the votes at
a meeting of shareholder's shall constitute a quorum.
2
<PAGE>
9.4 REQUIRED VOTE. Acts of shareholders shall require the approval of
holders of 50.01% of the outstanding votes of the shareholders.
ARTICLE X
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation or its shareholders.
In addition, the Corporation shall have the power, in its By-laws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this corporation against any contingency or peril as
may be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense, policies of
insurance.
ARTICLE XI
SUBSCRIBER
The name and address of the person signing these Articles of
Incorporation as subscriber is:
Eric P. Littman
1428 Brickell Avenue, 8th Floor
Miami, FL 33131
ARTICLE XII
CONTRACTS
No contracts or other transaction between this corporation and any
person, firm or corporation shall be affected by the fact that any officer or
director of this corporation is such other party or is, or at some time in the
future becomes, an officer, director or partner of such other contracting party,
or has now or hereafter a direct and indirect interest is such contract.
ARTICLE XIII
RESIDENT AGENT
The name and address of the initial resident agent of this corporation
is:
Eric P. Littman
1428 Brickell Avenue, 8th Floor
Miami, FL 33131
3
<PAGE>
IN WITNESS WHEREOF, I have hereunto subscribed to and executed these
Articles of Incorporation this September 16, 1996.
/s/ Eric P. Littman
---------------------------
Eric P. Littman, Subscriber
Subscribed and Sworn on September 16, 1996 Before me:
(SEAL)
/s/ Isabel Cantera
- -----------------------------
Isabel Cantera, Notary Public
My Commission Expires:
February 28, 1999
4
<PAGE>
FILED
SECRETARY OF STATE
DIVISION OF CORPORATIONS
96 SEP 20 PM 1:09
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR
DOMICILE FOR SERVICE OF PROCESS WITHIN THIS STATE
NAMING THE AGENT UPON WHOM PROCESS MAY BE SERVED
Having been named to accept service of process for COSMETICS
CONSULTANTS CORP. at the place designated in the Articles of Incorporation, the
undersigned is familiar with and accepts the obligations of that position
pursuant to F.S. 607.0501(3).
/s/ Eric P. Littman
--------------------
Eric P. Littman
<PAGE>
FILED
96 NOV 25 AM 11:30
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
COSMETICS CONSULTANTS CORP.
THE UNDERSIGNED, being the sole director of COSMETICS CONSULTANTS
CORP., does hereby amend the Articles of Incorporation of the Company as
follows:
ARTICLE I
NAME
The name of this corporation shall be LOMILLO CONSULTANTS CORP.
I hereby certify that the following was adopted by a majority vote of
the shareholders and directors of the corporation on October 10, 1996 and that
the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this October 10, 1996.
/s/ Laurie Lomillo
- -------------------------------------------
Laurie Lomillo, President and Sole Director
The foregoing instrument was acknowledged before me on October 10, 1996
by Laurie Lomillo, who is personally known to me, or who has produced a Drivers'
License as identification.
/s/ Richard Leon Newberg
------------------------
Notary Public
My commission expires: (SEAL) RICHARD LEON NEWBERG
COMMISSION AND CC 42585R
EXPIRES DEC 12, 1998
BONDED THRU
ATLANTIC BONDING CO., INC.
<PAGE>
FILED
97 JUL 17 PM 12:26
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
LOMILLO CONSULTANTS CORP.
THE UNDERSIGNED, being the sole director of LOMILLO CONSULTANTS CORP.,
does hereby amend the Articles of Incorporation of the Company as follows:
ARTICLE I
NAME
The name of this corporation shall be INET COMMERCE CONDUIT CORP.
I hereby certify that the following was adopted by a majority vote of
the shareholders and directors of the corporation on July 7, 1997 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this July 7, 1997.
/s/ Laurie Lomillo
- -------------------------------------------
Laurie Lomillo, President and Sole Director
The foregoing instrument was acknowledged before me on July 7, 1997 by
Laurie Lomillo, who is personally known to me, or who has produced a Drivers'
License as identification.
/s/ Richard Leon Newberg
------------------------
Notary Public
My commission expires: (SEAL) RICHARD LEON NEWBERG
COMMISSION AND CC 42585R
EXPIRES DEC 12, 1998
BONDED THRU
ATLANTIC BONDING CO., INC.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INET
COMMERCE CONDUIT CORP.'S FORM 10-SB AND IS QUALIFIED IN ITS ENTIRETY TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 17,089
<BONDS> 0
0
0
<COMMON> 517
<OTHER-SE> (17,606)
<TOTAL-LIABILITY-AND-EQUITY> (17,089)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,089
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17,089)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,089)
<EPS-BASIC> (.004)
<EPS-DILUTED> (.004)
</TABLE>
