U.S. 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 (g) of the Securities Exchange Act of 1934
Kennsington Capital & Equity Corporation
(Name of Small Business Issuer in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
------------
(I.R.S. Employer Identification No.)
162 E. Riverbend Drive, Altamonte Springs, Florida 32779
(Address of principal executive offices) (Zip Code)
(407) 786-3701
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act: _X_
Title of each class to be so registered: Common
Stock Name of each exchange on which each class is to be registered:
National Quotation Bureau Pink Sheets
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To simplify the language in this Registration Statement Kennsington Capital &
Equity Corporation is referred to herein as "the Company" or "We".
Item 1. Description of Business.
- --------------------------------
Business Development.
We were incorporated under the name Kennsington Capital & Equity Corporation
on January 24, 1996. After a short period of inactivity, the Company was
reinstated with the State of Florida on September 16, 1998.
We have not been involved in any bankruptcy, receivership or similar
proceeding. We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in
the ordinary course of business.
Business of Issuer.
We are a development stage company and have had no operations. Other than
issuing shares to our shareholders, we have never commenced any operational
activities. As such, we have no specific products, services, or business.
We can be defined as a "shell" company whose sole purpose at this time is to
locate and consummate a merger or acquisition with an unidentified private
entity (hereinafter referred to as the "business opportunity").
We are registering a class of its securities on this Form 10-SB registration
statement on a voluntary basis. We have no obligation to file a Form 10-SB
registration statement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We believe that by filing this Form 10-SB and
being obligated to file reports subject to Section 13 of the Exchange Act, we
can attract a business opportunity candidate. We believe a business
opportunity will involve a transaction with a corporation not requiring cash
or assets, but which desires to establish both a public market for its common
stock and the perceived advantages of status as an Exchange Act registered
corporation. There is no assurance that our assumption is correct.
Competition.
We are and will continue to be a limited competitor in the business of seeking
business opportunities with private companies. A large number of established
and well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies which may be desirable business
opportunity candidates for us. Nearly all such entities have significantly
greater experience and financial resources, technical expertise and managerial
capabilities than we have. Consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business opportunity.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
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Government Regulation.
The proposed business activities described herein classify us as a "blank check"
company. Many states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their states. We do not intend
to undertake any offering of our securities, either debt or equity, until such
time as we have successfully implemented our business plan that we describe
herein.
Relevant thereto, Roy Meadows, the principal shareholder of the Company, has
expressed an intention not to sell his respective shares until we have
successfully completed a business opportunity, and we are no longer classified
as a "blank check" company.
Transferability of our shares of Common Stock is very limited because a
significant number of states have enacted regulations or "blue sky" laws
restricting or, in many instances, prohibiting the initial sale and subsequent
resale of securities of "blank check" companies, such as us, within that state.
In addition, many states, while not specifically prohibiting or restricting
securities of "blank check" companies, would not register our securities for
sale or resale in their states. Because of these regulations, we currently have
no plan to register any of our securities with any state. To ensure that no
state laws are violated through the resale of our securities, we will refuse to
register the transfer of any of our securities to residents of any state which
prohibits such resale if no exemption is available for such resale. We do not
anticipate that a secondary trading market for our securities will develop in
any state until after consummation of a business opportunity, if at all.
Although we will be subject to regulation under the Exchange Act, we believe we
will not be subject to regulation under the Investment Company Act of 1940,
insofar as we will not be engaged in the business of investing or trading in
securities.
Federal and state tax consequences will likely be major considerations in any
business opportunity that we may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to the parties to the
transaction, pursuant to various federal and state tax provisions. We intend to
structure any business opportunity so as to minimize the federal and state tax
consequences to both ourselves and the target entity; however, there can be no
assurance that such business opportunity will meet the statutory requirements of
a tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non- qualifying reorganization
could result in the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
Sections 13 and 15(d) of the Exchange Act, require companies subject thereto to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by the owners of some business opportunities to prepare
such statements may preclude our consummation of an otherwise desirable business
opportunity. Business opportunity prospects that do not have or are unable to
obtain the required audited financial statements may not be appropriate for
consummation of a business opportunity with us as long as the reporting
requirements of the Exchange Act are applicable.
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We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions contemplated
by us. Moreover, we do not have, and do not plan to have, and do not plan to
establish, a marketing organization. Even in the event a company is identified
for a business opportunity contemplated by us, there is no assurance we will be
successful in completing any such business opportunity.
We currently have no full or part-time employees. There are no collective
bargaining agreements or employment agreements with Roy Meadows, our sole
Officer and Director. Mr. Meadows is involved in other full-time business
activities. Mr. Meadows participates in the running of the Company on a
part-time basis as needed without compensation. We do not plan to make any
change in the number of employees of the Company in order to evaluate business
opportunities. The need for additional employees and their availability will be
addressed in connection with our decision of whether or not to pursue a business
opportunity.
Item 2. Plan of Operation.
- --------------------------
We have never had revenues from operations. In the next twelve months, we plan
to seek out business opportunity candidates. We believe that this plan of
operations can be conducted through the efforts of current management and will
not require any additional funds. We anticipate that business opportunities will
be available to us through the contacts of Roy Meadows. We anticipate that the
investigation of specific business opportunities and the negotiation, drafting
and execution of relevant agreements, and other instruments will be done by Roy
Meadows or under his direction. We plan to investigate, to the extent believed
reasonable by us, such potential business opportunities. Due to our limited
experience in business analysis, we may not discover or adequately evaluate
adverse facts about a potential business opportunity.
Inasmuch as we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete and
exhaustive investigation of potential business opportunities. We anticipate that
we will incur nominal expenses in the implementation of our business plan
described herein. Because we have no capital with which to pay these expenses,
our present management, which consists only of Roy Meadows, will pay any charges
with his personal funds as interest free loans to the Company. However, the only
opportunity we will have for repayment of these loans will be from consummation
of a business opportunity. The repayment of any loans made to the Company will
not impede, or be made conditional in any manner to, consummation of a business
opportunity.
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We have no particular business opportunity in mind and have not entered into any
negotiations regarding any business opportunity. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement. We will not restrict our search to any
specific business, industry, or geographical location, and we may participate in
a business opportunity of virtually any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to be restrictive of
our virtually unlimited discretion to search for and enter into potential
business opportunities. We anticipate that we will be able to participate in
only one potential business opportunity because we have no assets and limited
financial resources. To date, we have not developed any criteria for the
selection of business opportunities. We will seek to expand through consummation
of a business opportunity which are not currently identified and which entail
risks that you will not have a basis to evaluate. We may seek to expand our
operations by acquiring companies in businesses that we believe will complement
or enhance our business. We cannot assure you that we will be able to ultimately
effect any business opportunity, successfully integrate any business into our
operations or otherwise successfully develop our operations. We have not
established any minimum criteria for any business opportunity, and our
management may have complete discretion in determining the terms of any business
opportunity. Consequently, there is no basis for you to evaluate the specific
merits or risks of any potential business opportunity that we may undertake.
We anticipate that Roy Meadows, our President and sole Director will
investigate, to the extent believed necessary by him, the business opportunity.
Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, we believe that there are
numerous firms seeking the perceived benefits of a fully reporting public
company. Such perceived benefits may include facilitating or improving the terms
on which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders
and other factors.
Potentially, available business opportunities may arise in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not and will not have capital to provide the owners
of business opportunities with any significant cash or other assets. However, we
believe that we can offer owners of business opportunity candidates the chance
to acquire a controlling ownership interest in a publicly-held, registered
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company without incurring the cost and time required to become a fully reporting
company or to conduct an initial public offering. The owners of the business
opportunities will, however, incur significant legal and accounting costs in
connection with acquisition of a business opportunity, including the costs of
preparing Form 8-Ks, 10-Ks or 10-KSBs, agreements and related reports and
documents. The Exchange Act specifically requires that any business opportunity
candidate comply with all applicable reporting requirements, which include
providing audited financial statements to be included within the numerous
filings required to comply with the Exchange Act. Nevertheless, we have not
conducted market research and are not aware of statistical data which would
support the perceived benefits for the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that are publicly-held registered companies. We believe that demand
for shells has increased dramatically since the Securities and Exchange
Commission imposed burdensome requirements on "blank check" companies pursuant
to Regulation 419 of the Securities Act of 1933 (the "Act"). We believe that the
foregoing regulation has substantially decreased, the number of "blank check"
offerings filed with the Commission and, as a result, has stimulated an
increased demand for shell corporations. We have made the foregoing assumption,
but there is no assurance that the same is accurate or correct and accordingly,
no assurance can be made that we will be successful in locating a business
opportunity.
Prior to making a decision regarding a business opportunity, we plan to request
that we be provided with written materials regarding the business opportunity
containing such items as a description of products, services and company
history; management resumes; financial information; available projections with
related assumptions upon which they are based; evidence of existing patents,
trademarks or service marks or rights thereto; present and proposed forms of
compensation to management; a description of transactions between the
prospective entity and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risk and competitive conditions;
and other information deemed relevant.
Upon the consummation of a business opportunity, we anticipate that our present
management and shareholders will no longer be in control of the Company. In
addition, our Director may, as part of the terms of the acquisition transaction,
sell his stock in the Company or resign and be replaced by new directors without
a vote of our shareholders. We do not plan to raise any capital at the present
time, by private placement, public offerings, pursuant to Regulation S
promulgated under the Act, as amended, or by any means whatsoever. Further,
there are no plans, proposals, arrangements or understandings with respect to
the sale or issuance of additional securities prior to the location of a
business opportunity.
We anticipate that any securities issued as a result of our consummation of a
business opportunity will be issued in reliance upon an exemption from
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registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of our transaction, we may agree
to register all or a part of such securities immediately after the business
opportunity is consummated or at specified times thereafter. If such
registration occurs, of which there can be no assurance, it will be undertaken
by the surviving entity after we have successfully consummated a business
opportunity and we are no longer considered a "shell" company. Until such time
as this occurs, we will not attempt to register any additional securities. The
issuance of substantial additional securities and their potential sale into any
trading market which may develop in our securities may have a depressive effect
on the value of our securities in the future, if such a market develops, of
which there is no assurance. The completion of any business opportunity may
result in a significant issuance of shares and substantial dilution to our
present stockholders.
We do not plan to make any changes in the number of employees of the Company.
Item 3. Description of Property.
- --------------------------------
We currently have no material assets, and we do not own or lease any real or
personal property. We currently operate without charge out of space donated by
the Company's President, and sole Director, Roy Meadows, at 162 East Riverbend
Drive, Altamonte Springs, Florida 32779. We believe that this space is
sufficient for us at this time.
We have are no preliminary agreements or understandings with respect to the
office facility subsequent to the completion of a business opportunity. Upon
closure of a business opportunity, we plan to relocate our office to that of the
business opportunity candidate.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- -----------------------------------------------------------------------
As of May 24, 1999 there were 1,000,000 shares of our common stock, $0.001 par
value outstanding. The following tabulates holdings of our shares of common
stock by each person who, as of May 24, 1999, holds of record or is known by
management to own beneficially more than 5.0% of the common shares and, in
addition, by all of our directors and officers individually and as a group. Each
named beneficial owner has sole voting and investment power with respect to the
shares set forth opposite his name.
Security Ownership of Beneficial Owners(1)(2):
Title of Class Name & Address Amount Nature Percent
- -------------- -------------- ------ ------ -------
Common Stock Roy Meadows 975,000 Direct 97.5%
162 East Riverbend Drive
Altamonte Springs, Florida
32779
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Security Ownership of Management(2):
Title of Class Name & Address Amount Nature Percent
- -------------- -------------- ------ ------ -------
Common Stock Roy Meadows 975,000 Direct 97.5%
162 East Riverbend Drive
Altamonte Springs, Florida
32779
(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements that would result in a change of control of
the Company. A business opportunity involving the issuance of our common shares
will, in all likelihood, result in shareholders of a private company obtaining a
controlling interest in our Company. Any such business opportunity may require
our management to sell or transfer all or a portion of our common shares held by
him, or resign as a member of our Board of Directors. The resulting change in
control of the Company could result in the removal of our present management and
a corresponding reduction or elimination of their participation in the future
affairs of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ---------------------------------------------------------------------
Roy Meadows, 58 years of age, is our sole Officer and Director. Mr. Meadows has
served as our President/Secretary/Treasurer and Director since March 1, 1996 and
his terms expire on December 15, 1999.
From 1992 through 1998, Mr. Meadows served as the President of Stock Broker
Relations, Grant Douglas Publishing, and Corporate Media Production. All three
companies are in the business of financial publication. He currently has no
directorships in any reporting companies.
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We currently have no significant employees, and we do not anticipate hiring any
in the future. There are no family relationships among directors, executive
officers, or nominees for such positions. In the last five years, no director,
executive officer, promoter or control person of the Company has been involved
in any legal proceedings material to the evaluation of the ability or integrity
of any of the aforementioned persons.
Item 6. Executive Compensation.
- -------------------------------
<TABLE>
<CAPTION>
Name Position Year Salary Bonus Other Stock Options L/TIP All Other
- ---- -------- ---- ------ ----- ----- ----- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Roy Meadows President 1999 0 0 0 0 0 0 0
</TABLE>
Item 7. Certain Relationships and Related Transactions.
- -------------------------------------------------------
We have not and do not intend to enter into any transactions with our management
or any nominees for such positions. We have not and do not intend to enter into
any transactions with beneficial owners of the Company. We are not a subsidiary
of any parent company. Since inception, we have not entered into any
transactions with promoters.
Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between our business and their other business interests. We have not and do not
intend in the future to formulate a policy for the resolution of such conflicts.
Item 8. Legal Proceedings.
- --------------------------
We are not a party to any pending legal proceeding, and we are not aware of any
contemplated legal proceeding by a governmental authority involving the Company.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
- ---------------------------------------------------------------------------
Other Shareholder Matters.
- --------------------------
There is no established public trading market for our securities. Our common
stock cleared its request for an unpriced quotation on the National Quotation
Bureau Pink Sheets on February 12, 1999. There has been no bid or ask for the
securities, since they were initially quoted on the pink sheets. None of our
common stock is subject to outstanding options or warrants to purchase shares of
the Company.
There are 975,000 shares of the common stock of the Company held by Roy Meadows,
an affiliate, and 25,000 shares of our common stock held by non-affiliates. All
of these securities are restricted securities as defined under Rule 144 of the
Securities Act and may only be sold under Rule 144 or otherwise under an
effective registration statement or an exemption from registration, if
available. Rule 144 generally provides that a person who has satisfied a one
year holding period for the restricted securities and is not an affiliate of the
Company may sell such securities subject to the Rule 144 provisions. Under Rule
144, directors, executive officers, and persons or entities they control or who
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control them may sell shares that have satisfied the one year holding period for
the restricted securities in an amount limited to, in any three-month period,
the greater of 1% of our outstanding shares of common stock or the average of
the weekly trading volume in our common stock during the four calendar weeks
preceding a sale. All sales under Rule 144 must also be made without violating
the manner-of-sale provisions, notice requirements, and the availability of
public information about our Company. All 1,000,000 shares of our common stock
outstanding are restricted shares for which the one year holding period has
expired. A sale of shares by such security holders, whether under Rule 144 or
otherwise, may have a depressing effect upon the price of our common stock in
any market that might develop.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued by blank check
or shell corporations. We are considered a "blank check" or "shell" corporation
for the purpose of state securities laws. Accordingly, it is possible that our
current shareholders may be unable to resell their securities in other states.
Additionally, because each state has a series of exempt securities predicated
upon the particular facts of each transaction, it is not possible to determine
if a proposed transaction by an existing shareholder would violate the
securities laws of any particular state. In the event an existing shareholder or
broker/dealer resells our securities in a state where such resale is prohibited,
we believe that the seller thereof may be liable criminally or civilly under
that particular state's laws. Our existing shareholders should exercise caution
in the resale of their shares of common stock in light of the foregoing.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules,
and our shareholders will, in all likelihood, find it difficult to sell their
securities.
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No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder,
in all likelihood, therefore, will not be able to resell the securities referred
to herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person in regard to the development of a
trading market in any of our securities.
As of the date of this registration, we had twenty-six (26) holders of record of
our common stock. We currently have one class of common stock outstanding.
We have not paid any dividends since our incorporation. There are no
restrictions that limit our ability to pay dividends, but we do not anticipate
paying dividends in the near future.
Item 10. Recent Sales of Unregistered Securities.
- -------------------------------------------------
The following sets forth information relating to all of our previous sales of
securities which were not registered under the Securities Act of 1933. On March
1, 1996, we issued 9,750 shares of our common stock to Roy Meadows for services
rendered in the formation of the Company and gifted 10 shares of our common
stock to each of twenty-five (25) other persons. The 10,000 aforementioned
securities were issued under an exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended. On September 10, 1998, we
forward-split our common stock 100:1 resulting in 1,000,000 shares of our common
stock issued and outstanding.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
Item 11. Description of Securities.
- -----------------------------------
Qualification.
The following statements constitute brief summaries of our Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
our Articles of Incorporation and Bylaws.
Common Stock.
Our amended Articles of Incorporation authorize us to issue up to 50,000,000
Common Shares, $0.001 par value per common share. As of May 24, 1999, there are
1,000,000 shares of our common stock outstanding. All outstanding Common Shares
are legally issued, fully paid and non-assessable. We are not authorized to
issue preferred stock.
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Liquidation Rights.
Upon our liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares of stock
in cash, property, or our own shares, except when we are insolvent or when the
payment thereof would render us insolvent subject to the provisions of the
Florida Statutes. We have not paid dividends to date, and we do not anticipate
that we will pay any dividends in the foreseeable future.
Voting Rights.
Holders of our Common Shares are entitled to cast one vote for each share held
of record at all shareholders meetings for all purposes.
Other Rights.
Common Shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional Common Shares
in the event of a subsequent offering.
There are no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of us. We have not issued debt
securities.
Item 12. Indemnification of Directors and Officers.
- ---------------------------------------------------
Our Articles of Incorporation provide that, to the fullest extent permitted by
law, none of our directors or officers shall be personally liable to us or our
shareholders for damages for breach of any duty owed to us or our shareholders.
In addition, we shall have the power, by our by-laws or in any resolution of our
stockholders or directors, to undertake to indemnify the officers and directors
of ours against any contingency or peril as may be determined to be in our best
interest and in conjunction therewith, to procure, at our expense, policies of
insurance.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of any of our controlling
persons, directors or officers which would affect his or her liability in that
capacity.
Item 13. Financial Statements
- -----------------------------
See Item 15(a) below.
Item 14. Changes in and Disagreements with Accountants.
- -------------------------------------------------------
During the two most recent fiscal years and the subsequent interim period, the
Company has had no disagreement, resignation or dismissal of the principal
independent accountant for the Company. The accountant for the Company at this
time is James Scheifley of James Scheifley & Associates.
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Item 15(a) Financial Statements
-------------------------------
KENNSINGTON CAPITAL & EQUITY CORPORATION
(A Development Stage Company)
BALANCE SHEET
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
1999 1998
----------------------------
<S> <C> <C>
CURRENT ASSETS:
TOTAL CURRENT ASSETS $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
----------------------------
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES $ 0 $ 0
----------------------------
STOCKHOLDERS EQUITY:
Common stock, $0.001 par value
Authorized 50,000,000 shares
1,00O,OOO shares issued &
Outstanding $ 1,000 $ 1,000
Additional paid in Capital $ 9,944 $ 9,944
Unpaid Stock Subscriptions $ 0 $ 0
(Deficit) Accumulated during
development stage $ (10,944) $ (10,944)
----------------------------
$ 0 $ 0
----------------------------
$ 0 $ 0
----------------------------
</TABLE>
See accompanying notes to financial statements.
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KENNSINGTON CAPITAL & EQUITY CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998 and
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
(unaudited)
1/1/99 Year Year Inception
to Ended Ended to
3/31/99 12/31/98 12/31/97 3/31/99
------------------------------------------------
<S> <C> <C> <C> <C>
Operating Expenses $ 0 $ 944 $ 0 $ 10,944
(Loss from Operations)
and Net (loss) $ 0 $ (944) $ 0 $ (10,944)
------------------------------------------------
Per Share Information:
Basic & Diluted (loss)
per common share $ 0 $ 0 $ 0 $ 0
------------------------------------------------
Weighted average
number of common
shares outstanding 1,000,000 1,000,O0O 1,000,000 1,000,000
------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
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KENNSINGTON CAPITAL & EQUITY CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period From Inception (January 24, 1996) to December 31, 1998
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Paid-in Development
Shares Amount Capital Stage Total
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued for
services on 1/1/90
at $.01 per share 1,000,000 $ 1,000 $ 9,000 $ 0 $ 10,000
Net loss for the
Period ended 12/31/96 $ 0 $ 0 $ (10,000) $(10,000)
--------------------------------------------------------------------------
Balance 12/31/96 & 97 1,000,000 $ 1,000 $ 9,000 $ (10,000) $ 0
Contribution of Capital
by major shareholder $ 944 $ 944
Net (loss) for year
ended 12/31/98 $ (944) $ (944)
--------------------------------------------------------------------------
Balance, 12/31/98 1,000,000 $ 1,000 $ 9,944 $ (10,944) $ 0
--------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Page 15
<PAGE>
KENNSINGTON CAPITAL & EQUITY CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1999 and
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1/1/99 Year Year 5/19/88
to Ended Ended to
3/31/99 12/31/98 12/31/97 3/31/99
--------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Income (Loss) $ 0 $ (944) $ 0 $(10,944)
Adjustments to reconcile net
income to net cash by
operating activities:
Services provided as capital
contribution $ 0 $ 944 $ 0 $ 10,944
--------------------------------------------
Total Adjustments $ 0 $ 944 $ 0 $ 10,944
--------------------------------------------
Net cash provided by
operating activities $ 0 $ 0 $ 0 $ 0
Increase (decrease)in cash $ 0 $ 0 $ 0 $ 0
Cash & Cash Equivalents
beginning of period $ 0 $ 0 $ 0 $ 0
--------------------------------------------
Cash & Cash Equivalents
end of period $ 0 $ 0 $ 0 $ 0
--------------------------------------------
Supplemental Information:
Cash paid for Interest $ 0 $ 0 $ 0 $ 0
Cash paid for Income Taxes $ 0 $ 0 $ 0 $ 0
</TABLE>
See accompanying notes to financial statements.
Page 16
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Kennsington Capital and Equity Corporation
We have audited the balance sheet of Kennsington Capital and Equity Corporation
as of December 31, 1998 and the related statements of operations, changes in
stockholders' equity, and cash flows for the and each of the years in the two
year period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position Kennsington Capital and Equity
Corporation as of December 31, 1998 and the results of its operations and cash
flows for each of the years in the two year period ended December 31, 1998, in
conformity with generally accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
May 21, 1999
Page 17
<PAGE>
Kennsington Capital & Equity Corporation
Notes to Financial Statements
December 31, 1998
Note 1. Organization and Summary of Significant Accounting Policies.
- --------------------------------------------------------------------
The Company was incorporated in Florida on January 24, 1994. The Company is in
its development stage and to date its activities have been limited to
organization and capital formation.
On September 10, 1998 the Company amended its Articles of Incorporation to
increase its authorized capitalization from 10,000 shares to 50,000,000 shares
of common stock and to change the par value thereof from $1 per share to $.001
per share. Additionally, the Company effected a forward stock split of 100
shares for 1 share of outstanding common stock. All share and per share
information included in the accompanying financial statements and the notes
thereto have been restated to give effect to the changes described above and the
stock split.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the Company has
no potentially dilutive securities outstanding.
Intangible Assets:
The Company makes reviews for the impairment of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Under SFAS No. 121,
an impairment loss would be recognized when estimated future cash flows expected
to result from the use of the asset and its eventual disposition is less than
its carrying amount. No such impairment losses have been identified by the
Company to date.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates
Page 18
<PAGE>
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximates fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration of
credit risk consist principally of cash. During the year the Company did not
maintain cash deposits at financial institutions in excess of the $100,000 limit
covered by the Federal Deposit Insurance Corporation. The Company does not hold
or issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996. Upon adoption of FAS 123, the Company continued to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees. The Company did not pay any stock based compensation during any
period presented.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions which
would result in any significant difference between its reported net loss and
comprehensive net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides
authoritative guidance on when internal-use software costs should be capitalized
and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company has not
incurred costs to date which would require evaluation in accordance with the
SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers. The adoption of SFAS 131 did not affect results of
operations or financial position. To date, the Company has not operated in any
business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No. 132,
Employers' Disclosures about Pensions and Other Post-retirement Benefits ("SFAS
Page 19
<PAGE>
132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting for
Post-retirement Benefits Other Than Pensions. The overall objective of SFAS 132
is to improve and standardize disclosures about pensions and other
post-retirement benefits and to make the required information more
understandable. The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would require
disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. Stockholders' Equity.
On March 1, 1996 the Company issued 1,000,000 shares of its common stock to its
founders in exchange for services valued at $10,000. During September 1998, the
Company's principal shareholder paid expenses of the Company amounting to $944.
The stockholder does not expect repayment of the expenses paid and the Company
has recorded the expenses as a contribution to its capital by the shareholder.
Page 20
<PAGE>
Note 3. Related Party Transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer of the Company. 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 become involved in other business activities
in the future. Such business activities may conflict with the activities of the
Company. The Company has not formulated a policy for the resolution of any such
conflicts that may arise.
Note 4. Interim Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions incorporated in Regulation 10-SB of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements for the year ended December 31, 1998.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
Page 21
<PAGE>
Item 15(b) Exhibits
-------------------
<TABLE>
<CAPTION>
INDEX TO EXHIBITS PAGE
- ----------------- ----
<S> <C> <C>
Exhibit 1 Underwriting Agreement N/A
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, Etc. N/A
Exhibit 3 Articles of Incorporation 23
By-laws (as amended) 26
Exhibit 4 Instruments Defining the Rights of Security Holders Above
Exhibit 5 Voting Trust Agreement N/A
Exhibit 6 Material Contracts N/A
Exhibit 7 Letter on Accountant Change N/A
Exhibit 8 Information on Subsidiaries N/A
Exhibit 9 Power of Attorney N/A
</TABLE>
Page 22
Exhibit 3 (i)
ARTICLES OF INCORPORATION of KANNSINGTON CAPITAL & EQUITY CORPORATION
The undersigned incorporator, for the purpose of forming a corporation under the
Florida Business Corporation Act, hereby adopts the following Articles of
Incorporation.
ARTICLE I - NAME
- ----------------
The name of the Corporation shall be KENNSINGTON CAPITAL & EQUITY CORPORATION.
ARTICLE II - PRINCIPAL PLACE OF BUSINESS AND MAILING ADDRESS
- ------------------------------------------------------------
The principal place of business and the mailing address of the corporation shall
be: 162 Riverbend Drive, Unit E, Altamonte Springs, Florida 32714.
ARTICLE III - PURPOSE, POWERS, AND EXISTENCE
- --------------------------------------------
This corporation shall have those powers as may be provided, authorized or
permitted by law, or otherwise, it being the intention that this corporation
shall have the right to engage in any business or activity not especially
prohibited by applicable law of the State of Florida.
ARTICLE IV - CAPITAL STOCK
- --------------------------
The maximum number of shares of stock of this corporation which the corporation
is authorized to have outstanding at any one time is ten-thousand (10,000)
shares of common capital stock having a par value of one dollar ($1.00) per
share.
ARTICLE V - INITIAL REGISTERED AGENT AND STREET ADDRESS
- -------------------------------------------------------
The name and street address of the initial registered agent is Roy Meadows, 162
Riverbend Drive, Unit E, Altamonte Springs, Florida 32714.
ARTICLE VI - INCORPORATOR
- -------------------------
The name and street address of the incorporator for these articles of
incorporation is: Roy Meadows, 162 Riverbend Drive, Unit E, Altamonte Springs,
Florida 32714.
The undersigned incorporator has executed these Articles of Incorporation this
24th day of January, 1996.
/s/ Roy Meadows
-----------------------------
Incorporator/Registered Agent
Page 23
<PAGE>
ARTICLES OF AMENDMENT TO
KENNSINGTON CAPITAL & EQUITY CORPORATION
THE UNDERSIGNED, being the sole director and president of Kennsington Capital &
Equity Coporation, does hereby amend its Articles of incorporation as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be Kennsington Capital & Equity Corporation.
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 perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000 shares of
common stock, $0.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this corporation in the State
of Florida shall be 162 East Riverbend Drive Altamonte Springs, FL 32779. 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 not be less than one (1) and, subject to such
minimum may be increased or decreased from time to time in the manner provided
in the By-Laws.
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire share or other securities of the
corporation except to the extent to 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 BY-LAWS
Anything in these Articles of Incorporation, the By-Laws, or the Florida
Corporation Act notwithstanding, by-laws not be adapted, 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.
Page 24
<PAGE>
ARTICLE IX
SHAREHOLDERS
9.1 Inspection of books. The Board of Directors shall make the reasonable
rules to determine at what times and place and under what conditions
the books of the Corporation shall be open to inspection by
shareholders or a duly appointed representative of a 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 be applied to the
Corporation.
9.3 Quorum. The holders of shares entitled to one-third of the votes at a
meeting of shareholders shall constitute a quorum.
9.4 Required Vote. Acts of shareholders shall require the approval of
holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNEFICATION 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
fir 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 interest of this corporation, and in
conjunction therewith, to procure, at this corporation's expense policies of
insurance.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person, or any
corporation shall be affected by the fact that any officer or director of this
corporation is such other party or is, of at some time in the future becomes, an
officer, director or partner of such other contracting party, or has now or
hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on September 10,1998 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF I have hereunto subscribed to and executed the Articles of
Incorporation on this 10th day of September, 1998.
/s/ Roy Meadows
---------------------------
President and Sole Director.
Page 25
Exhibit 3 (ii)
BY-LAWS of KENNSINGTON CAPITAL & EQUITY CORPORATION
ARTICLE I. MEETINGS OF SHAREHOLDERS
-----------------------------------
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held on the 15th day of December of each year or at such
other time and place designated by the Board of Directors of the corporation.
Business transacted at the annual meeting shall include the election of
directors of the corporation. If the designated day shall fall on a Sunday or
legal holiday, then the meeting shall be held on the first business day
thereafter.
Section 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 10% of all the shares entitled to vote
at the meeting. A meeting requested by shareholders shall be called for a date
not less than 3 nor more than 30 days after the request is made, unless the
shareholders requesting the meeting designate a later date. The call for the
meeting shall be issued by the Secretary, unless the President, Board of
Directors, or shareholders requesting the meeting shall designate another person
to do so.
Section 3. Place. 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.
Section 4. Notice. Written notice 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 3 nor more than 30 days
before the meeting, either personally or by first class mail, or by the
direction of the President, the Secretary or the officer or persons calling the
meeting to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
Section 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 at the adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the 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 this Article to each shareholder of record on a
new record date entitled to vote at such meeting.
Section 6. Shareholder Quorum and Voting. A majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. If a quorum is present, the affirmative vote of a majority of
the shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
Page 26
<PAGE>
Section 7. Voting of Shares. Each outstanding share shall be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders.
Section 8. Proxies. A shareholder may vote either in person or by proxy executed
in writing by the shareholder or his duly authorized attorney-in-fact. No proxy
shall be valid after the duration of 11 months from the date thereof unless
otherwise provided in the proxy.
Section 9. Action by Shareholders Without a Meeting. Any action required by law
or authorized by these by-laws or the Articles of Incorporation of this
corporation or taken or to be taken at any annual or special meeting of
shareholders, or any action which may be taken at any annual or special meeting
of shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted.
ARTICLE II. DIRECTORS
---------------------
Section 1. Function. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of, the Board of Directors.
Section 2. Qualification.
Directors need not be residents of this state or shareholders of this
corporation.
Section 3. Compensation. The Board of Directors shall have authority to fix the
compensation of directors.
Section 4. Presumption of Assent. A director of the corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action taken unless he votes
against such action or abstains from voting in respect thereto because of an
asserted conflict of interest.
Section 5. Number. This corporation shall have a minimum of 1 director but no
more than 7.
Section 6. Election and Term. Each person named in the Articles of Incorporation
as a member of the initial Board of Directors shall hold office until the first
annual meeting of shareholders, and until his successor shall have been elected
and qualified or until his earlier resignation, removal from office or death. At
the first annual meeting of shareholders and at each annual meeting thereafter
the shareholders shall elect directors to hold office until the next succeeding
annual meeting. Each director shall hold office for a term for which he is
elected and until his successor shall have been elected and qualified or until
his earlier resignation, removal from office or death.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors, including
any vacancy created by reason of an increase in the number of Directors, may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall hold office only until the next election of directors by the
shareholders.
Page 27
<PAGE>
Section 8. Removal of Directors. At a meeting of shareholders called expressly
for that purpose, any director or the entire Board of Directors may be removed,
with or without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 9. Quorum and Voting. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for the transaction of business. The act
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 10. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except as is provided by
law.
Section 11. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the corporation or
as otherwise determined by the Directors.
Section 12. Time. Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held without notice on the first Monday of the calendar month
two (2) months following the end of the corporation's fiscal, or if the said
first Monday is a legal holiday, then on the next business day. Written notice
of the time and place of special meetings of the Board of Directors shall be
given to each director by either personal delivery, telegram or cablegram at
least three (3) days before the meeting or by notice mailed to the director at
least three (3) days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any director
who signs a waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting, the time of the
meeting, or the manner in which it has been called or convened, except when a
director states, at the beginning of the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose, of any regular or
special meeting of the Board of Directors need be specified in the notice of
waiver of notice of such meeting. A majority of the directors present, whether
or not a quorum exists, may adjourn any meeting of the Board of Directors to
another time and place. Notice of any such adjourned meeting shall be given to
the directors who were not present at the time of the adjournment, and unless
the time and place of adjourned meeting are announced at the time of the
adjournment, to the other directors. Meetings of the Board of Directors may be
called by the chairman of the board, by the president of the corporation or by
any two directors.
Members of the Board of Directors may participate in a meeting of such board by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
Page 28
<PAGE>
Section 13. Action Without a Meeting. Any action, required to be taken at a
meeting of the Board of Directors, or any action which may be taken at a meeting
of the Board of Directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action so to be taken, is signed by
such number of the directors, or such number of the members of the committee, as
the case may be, as would constitute the requisite majority thereof for the
taking of such actions, is filed in the minutes of the proceedings of the board
or of the committee. Such actions shall then be deemed taken with the same force
and effect as though taken at a meeting of such board or committee where at all
members were present and voting throughout and those who signed such action
shall have voted in the affirmative and all others shall have voted in the
negative. For informational purposes, a copy of such signed actions shall be
mailed to all members of the board or committee who did not sign said action,
provided however, that the failure to mail said notices shall in no way
prejudice the actions of the board or committee.
ARTICLE III. OFFICERS
---------------------
Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person.
Section 2. Duties. The officers of this corporation shall have the following
duties:
The President shall be the chief executive officer of the corporation, 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 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, send all notices of all meetings and
perform such other duties as may be prescribed by the Board of Directors or the
President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. An officer or agent elected or appointed by the
Board of Directors may be removed by the board whenever in its judgment the best
interests of the corporation will be served thereby. Any vacancy in any office
may be filed by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
------------------------------
Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 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.
Page 29
<PAGE>
Section 3. Transfer of Stock. The corporation shall register a stock certificate
presented to it for transfer if the certificate is properly endorsed by the
holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen or Destroyed Certificates. If the 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 reasonably require.
ARTICLE V. BOOKS AND RECORDS
----------------------------
Section 1. Books and Records. 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 committee of directors. This corporation
shall keep at its registered office, or principal place of business a record of
its shareholders, giving the names and addresses of all shareholders and the
number of the shares held by each.
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.
Section 2. Shareholders' Inspection Rights. Any person who shall have been a
holder of record of shares of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five percent of
the outstanding shares of the corporation, upon written demand stating the
purpose thereof, shall have the right to examine, in person or by agent or
attorney, at any reasonable time or times, for any proper purpose its relevant
books and records of accounts, minutes and records of shareholders and to make
extracts therefrom.
Section 3. Financial Information. Not later than four months after the close of
each fiscal year, this corporation shall prepare a balance sheet showing in
reasonable detail the financial condition of the corporation as of the close of
its fiscal year, and a profit and loss statement showing the results of the
operations of the corporation during the fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to each
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement. The balance sheets and profit
and loss statements shall be filed in the registered office of the corporation
in this state, shall be kept for at least five years, and shall be subject to
inspection during business hours by any shareholder or holder of voting trust
certificates, in person or by agent.
ARTICLE VI. DIVIDENDS
---------------------
The Board of Directors of this corporation may, from time to time, declare and
the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent subject to the provisions of the Florida
Statutes.
ARTICLE VII. CORPORATE SEAL
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The Board of Directors shall provide a corporate seal which shall be in circular
form.
ARTICLE VIII. AMENDMENT
-----------------------
These by-laws may be altered, amended or repealed, and new by-laws may be
adopted by the a majority vote of the directors of the corporation.
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Signatures
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In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
/s/ Roy Meadows
----------------
By: Roy Meadows
Title: Director
Date:
Page 31
