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(g) of
The Securities Exchange Act of 1934
ANNEX BUSINESS RESOURCES, INC.
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(Name of Small Business Issuer in its charter)
Nevada 98-0204280
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1460 Pandosy Street
Suite 106
Kelowna, British Columbia V1Y 1P3
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (250) 868-8177
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of Class)
Page One of Seventy Two Pages
Exhibit Index is Located at Page Thirty Six
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . 8
Item 3. Description of Property. . . . . . . . . . . . . . 14
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . 16
Item 6. Executive Compensation . . . . . . . . . . . . . . 19
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . 20
Item 8. Description of Securities. . . . . . . . . . . . . 20
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . . . . 22
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . 23
Item 3. Changes in and Disagreements with Accountants. . . 24
Item 4. Recent Sales of Unregistered Securities. . . . . . 24
Item 5. Indemnification of Directors and Officers. . . . . 25
PART F/S
Financial Statements . . . . . . . . . . . . . . . 26
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . 36
Item 2. Description of Exhibits. . . . . . . . . . . . . . 38
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PART I
Item 1. Description of Business
Annex Business Resources, Inc. (the "Company") was incorporated on May 16,
1997, under the laws of the State of Nevada to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage since inception and has no
operations to date. Other than issuing shares to its original shareholders, the
Company never commenced any operational activities. As such, the Company can be
defined as a "shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The Board of Directors
of the Company has elected to commence implementation of the Company's principal
business purpose, described below under "Item 2 - Plan of Operation."
The Company is filing this Registration Statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any offering of the
Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient, there can be no assurances that the procedures established
relevant herein will unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
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The Company's business is subject to numerous risk factors, including the
following:
Going Concern; No Operating History or Revenue and Minimal Assets. The
Company's financial statements accompanying this Registration Statement have
been prepared assuming that the Company will continue as a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty. The Company
has had no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company will, in
all likelihood, sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase continuously until
the Company can consummate a business combination with a profitable business
opportunity. There is no assurance that the Company can identify such a business
opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be no
assurance, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of small
private and public entities. 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 target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in seeking merger or
acquisition candidates with numerous other small public companies.
No Agreement for Business Combination or Other Transaction-No Standards for
Business Combination. The Company has no
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arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. There
can be no assurance the Company will be successful in identifying and evaluating
suitable business opportunities or in concluding a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation by the Company. There is no assurance the
Company will be able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have achieved, and
without which the Company would not consider a business combination in any form
with such business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited assets, negative
net worth or other negative characteristics.
Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting up to twenty hours per
month to the business of the Company. None of the Company's officers has entered
into a written employment agreement with the Company and none is expected to do
so in the foreseeable future. The Company has not obtained key man life
insurance on any of its officers or directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
any of these individuals would adversely affect development of the Company's
business and its likelihood of continuing operations. See "Item 5 - Directors,
Executive Officers, Promoters and Control Persons."
Conflicts of Interest - General. Officers and directors of the Company may
in the future participate in business ventures which could be deemed to compete
directly with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the Company
transacts business. Management has adopted a policy that the Company will not
seek a merger with, or acquisition of, any entity in which management serve as
officers, directors or partners, or in which they or their family members own or
hold any ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13 and
15(d) of the Securities Exchange Act of 1934 (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 some target
entities to prepare such statements may significantly
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delay or essentially preclude consummation of an otherwise desirable acquisition
by the Company. Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for acquisition so long
as the reporting requirements of the 1934 Act are applicable.
Lack of Market Research or Marketing Organization. The Company has neither
conducted, nor have others made available to it, results of market research
indicating that market demand exists for the transactions contemplated by the
Company. Moreover, the Company does not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by the Company, there is no assurance the Company will
be successful in completing any such business combination.
Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, the Company's activities
may be limited to those engaged in by business opportunities which the Company
merges with or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
the Company's operations.
Regulation. Although the Company will be subject to regulation under the
Securities Exchange Act of 1934, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
Probable Change in Control and Management. A business combination involving
the issuance of the Company's Common Shares will, in all likelihood, result in
shareholders of a private company obtaining a controlling interest in the
Company. Any such business combination may require management of the Company to
sell or transfer all or a portion of the Company's Common Shares held by them,
or resign as members of the Board of Directors of the Company. The resulting
change in control of the Company could result in removal of one or more present
officers and directors of
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the Company and a corresponding reduction in or elimination of their
participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business Combination. The
Company's primary plan of operation is based upon a business combination with a
private concern which, in all likelihood, would result in the Company issuing
securities to shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity may attempt to avoid what it deems
to be adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
and the inability or unwillingness to comply with various federal and state laws
enacted for the protection of investors.
Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as to
minimize the federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such business combination
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.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
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Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this Registration Statement.
The Company has no full time employees. The Company's President and
Secretary and Treasurer have agreed to allocate a portion of their time to the
activities of the Company, without compensation. These officers anticipate that
the business plan of the Company can be implemented by their devoting minimal
time per month to the business affairs of the Company and, consequently,
conflicts of interest may arise with respect to the limited time commitment by
such officers. See "Item 5 - Directors, Executive Officers, Promoters and
Control Persons - Resumes."
The Company's officers and directors were formerly involved with other
"blank check" companies. The Company's officers and directors may, in the
future, become involved with other companies who have a business purpose similar
to that of the Company. As a result, additional potential conflicts of interest
may arise in the future. If such a conflict does arise and an officer or
director of the Company is presented with business opportunities under
circumstances where there may be a doubt as to whether the opportunity should
belong to the Company or another "blank check" company they are affiliated with,
they will disclose the opportunity to all such companies. If a situation arises
in which more than one company desires to merge with or acquire that target
company and the principals of the proposed target company has no preference as
to which company will merger or acquire such target company, the company which
first filed a registration statement with the Securities and Exchange Commission
will be entitled to proceed with the proposed transaction. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons - Prior 'Blank
Check' Experience."
The Articles of Incorporation of the Company provides that the Company
shall possess and may indemnify officers and/or directors of the Company for
liabilities, which can include liabilities arising under the securities laws.
Therefore, assets of the Company could be used or attached to satisfy any
liabilities subject to such indemnification. See "Part II - Item 5
Indemnification of Directors and Officers."
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General Business Plan
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The Company will not restrict its search to
any specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See "Part F/S -
Financial Statements." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. 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 occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the
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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-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the "34 Act")
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the 34 Act. Nevertheless, the officers and directors of the Company have not
conducted market research and are not aware of statistical data which would
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company, none of whom is a
professional business analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be brought to its
attention through present associations of the Company's officers and directors,
or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition of acceptance of products, services, or trades;
name identification; and other relevant factors. Officers and directors of the
Company expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible, the
Company intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, shall rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company. It is not anticipated that
any outside consultants or advisors will be utilized by the Company to
effectuate its business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned by such party
will need to be paid by the prospective merger/ acquisition candidate, as the
Company has no cash assets with which
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to pay such obligation. There have been no contracts or agreements with any
outside consultants and none are anticipated in the future.
The Company will not restrict its search for any specific kind of firms,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However, the Company
does not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company. However, the only opportunity which management has to have these
loans repaid will be from a prospective merger or acquisition candidate.
Management has agreed among themselves that the repayment of any loans made on
behalf of the Company will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its
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transaction, the Company may agree to register all or a part of such securities
immediately after the transaction 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 the Company has successfully
consummated a merger or acquisition and the Company is no longer considered a
"shell" company. Until such time as this occurs, the Company 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
the Company's securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of which there is
no assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a
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significant dilutive effect on the percentage of shares held by the Company's
then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 34 Act. Included
in these requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or acquisition,
as well as the Company's audited financial statements included in its annual
report on Form 10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters necessary to
insure the Company's compliance with the requirements of the 34 Act, or if the
audited financial statements provided do not conform to the representations made
by the candidate to be acquired in the closing documents, the closing documents
will provide that the proposed transaction will be voidable, at the discretion
of the present management of the Company. If such transaction is voided, the
agreement will also contain a provision providing for the acquisition entity to
reimburse the Company for all costs associated with the proposed transaction.
Year 2000 Disclosure
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. As a result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has no assets, including any
personal property such as computers, it is not anticipated that the Company will
incur any negative impact as a result of this potential problem. However, it is
possible that this issue may have an impact on the Company after the Company
successfully consummates a merger or acquisition. Management intends to address
this potential problem with any prospective
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merger or acquisition candidate. There can be no assurances that new management
of the Company will be able to avoid a problem in this regard after a merger or
acquisition is so consummated.
Competition
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to acquire
any properties. The Company intends to attempt to acquire assets or a business
in exchange for its securities which assets or business is determined to be
desirable for its objectives.
The Company operates from its offices at 1460 Pandosy Street, Suite 106,
Kelowna, British Columbia, Canada V1Y 1P3. This space is provided to the Company
on a rent free basis by Devinder Randhawa, an officer and director and a
principal shareholder of the Company, and it is anticipated that this
arrangement will remain until such time as the Company successfully consummates
a merger or acquisition. Management believes that this space will meet the
Company's needs for the foreseeable future.
Item 4. Security Ownership of Certain Beneficial Owners and
Management
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
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Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -------------- ----- ----- -----
Common Devinder Randhawa(1) 304,000 30.4%
1460 Pandosy Street
Suite 106
Kelowna, British Columbia
Canada V1Y 1P3
Common Ron Schlitt(1) 304,000 30.4%
1890 Ranchmont Crescent
Kelowna, British Columbia
Canada V1V 1T3
Common All Officers and 608,000 60.8%
Directors as a
Group (2 persons)
- ------------------------------
(1) Officer and Director.
The balance of the Company's outstanding Common Shares are held by 8
persons.
(b) Security Ownership of Management.
The following table sets forth the beneficial ownership for each class of
equity securities of the Company beneficially owned by all directors and
officers of the Company.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- -------------- ----- ----- --------
Common Devinder Randhawa(1) 304,000 30.4%
1460 Pandosy Street
Suite 106
Kelowna, British Columbia
Canada V1Y 1P3
Common Ron Schlitt(1) 304,000 30.4%
1890 Ranchmont Crescent
Kelowna, British Columbia
Canada V1V 1T3
Common All Officers and 608,000 60.8%
Directors as a
Group (2 persons)
15
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Devinder Randhawa 39 President and Director
Ron Schlitt 39 Secretary, Treasurer
and Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There is no family relationship between any
executive officer and director of the Company.
Resumes
Devinder Randhawa, is President and a director of the Company, positions he
has held since May 1997. In addition to his positions with the Company, since
October 1994, Mr. Randhawa has been President and principal shareholder of RD
Capital, Inc., Kelowna, British Columbia, Canada, a corporation engaged in
corporate finance activities. Prior, from November 1990 through June 1993, Mr.
Randhawa was employed by Canaccord Capital, Inc., a stock brokerage company
located in Vancouver, British Columbia, where his principal responsibilities
included providing investment advice. Mr. Randhawa received a Bachelor of Arts
degree with honors from Trinity Western University in 1983 and also received a
Masters degree in Business Administration from the University of British
Columbia in 1985. Mr. Randhawa devotes only such time as necessary to the
business of the Company, which time is not expected to exceed 20 hours per
month.
Ron Schlitt is Secretary, Treasurer and a director of the Company,
positions he has held since May 1997. In addition to his positions with the
Company, since September 1992, Mr. Schlitt has also been the owner and manager
of Epicenter Resources, Inc., Kelowna, B.C., Canada, where he administers
employment and re-employment programs. Mr. Schlitt devotes only such time as
necessary to the business of the Company, which time is not expected to exceed
10 hours per month.
Prior "Blank Check" Experience
Mr. Randhawa was an officer and director of LBF Corporation, a Nevada
corporation ("LBF"), whose principal business was
16
<PAGE>
consistent with the business of the Company as outlined hereinabove. LBF filed a
registration statement with the SEC on Form 10-SB, which became effective in
March 1998. Effective June 19, 1998, pursuant to a definitive agreement, LBF
acquired certain patent application rights from FES Innovations, Inc. ("FES"), a
privately held British Columbia, Canada corporation. The terms of the
transaction provided that LBF undertook a forward split of its issued and
outstanding common stock, whereby 10 shares of common stock were issued in
exchange for each share of common stock then issued and outstanding in order to
establish the number of issued and outstanding common shares at closing to be
5,000,000 shares, and LBF issued an aggregate of 12,500,000 "restricted" shares
of its Common Stock to FES and its assigns. LBF also changed its name to
"International Fuel Solutions, Inc." ("IFS"). Mr. Randhawa resigned his
positions as an officer and director upon closing of the aforesaid transaction.
Subsequently, and on or about March 19, 1999, IFS rescinded the transaction with
FES, but did not rescind the forward split or name change undertaken as a result
of that transaction. At that time Mr. Randhawa resumed his positions as an
officer and director of IFS. On April 17, 1999, pursuant to a definitive
agreement, IFS acquired certain assets including an electronic commerce web site
and rights to business names from Michael Levine in exchange for the issuance of
2,500,000 "restricted" shares of its Common Stock and changed its name to
"Retail Highway.com, Inc." Upon the closing of that transaction, effective April
17, 1999, Mr. Randhawa again resigned his positions as an officer and director
of IFS.
Mr. Randhawa is also an officer, director and principal shareholder of
Eastern Management Corporation, a Nevada corporation ("Eastern"), whose
principal business is consistent with the business of the Company as outlined
hereinabove. Eastern filed a registration statement with the SEC on Form 10-SB
in June 1999, which became effective in August 1999.
Mr. Randhawa is also an officer, director and principal shareholder of
Tripacific Development Corporation, a Nevada corporation ("Tripacific"), whose
principal business is consistent with the business of the Company as outlined
hereinabove. Tripacific filed a registration statement with the SEC on Form 10-
SB in July 1999, which became effective in September 1999.
Mr. Randhawa is also an officer, director and principal shareholder of
Solid Management Corporation, a Nevada corporation ("Solid"), whose principal
business is consistent with the business of the Company as outlined hereinabove.
Solid filed a registration statement with the SEC on Form 10-SB in August 1999.
Mr. Randhawa is also an officer, director and principal shareholder of
Triwest Management Resources Corporation, a Nevada corporation ("Solid"), whose
principal business is consistent with
17
<PAGE>
the business of the Company as outlined hereinabove. Solid filed a registration
statement with the SEC on Form 10-SB in August 1999.
The foregoing is a complete description of all "blank check" companies with
whom management of the Company has been, or is, involved.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the future
become shareholders, officers or directors of other companies which may be
formed for the purpose of engaging in business activities similar to those
conducted by the Company. Accordingly, additional direct conflicts of interest
may arise in the future with respect to such individuals acting on behalf of the
Company or other entities. Moreover, additional conflicts of interest may arise
with respect to opportunities which come to the attention of such individuals in
the performance of their duties or otherwise. The Company does not currently
have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
18
<PAGE>
Investment Company Act of 1940
Although the Company will be subject to regulation under the Securities Act
of 1933 and the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 via Regulation 3a-2
thereto.
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any compensation
for their respective services rendered unto the Company, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Company has generated revenues from operations after consummation of a
merger or acquisition. As of the date of this Registration Statement, the
Company has no funds available to pay directors. Further, none of the directors
are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
19
<PAGE>
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this Registration Statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
Item 7. Certain Relationships and Related Transactions.
The Company's principal place of business is provided to the Company on a
rent free basis by Devinder Randhawa, an officer and director and a principal
shareholder of the Company. There are no other related party transactions, or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 75,000,000 shares, of
which 25,000,000 shares are Preferred Shares, par value $0.001 per share, and
50,000,000 are Common Shares, par value $0.001 per share. There are 1,000,000
Common Shares issued and outstanding as of the date of this filing. There are no
preferred shares issued or outstanding.
Common Stock. All shares of Common Stock have equal voting rights and, when
validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued only
as fully-paid and nonassessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be
20
<PAGE>
able to elect the entire Board of Directors if they so choose and, in such
event, the holders of the remaining shares of Common Stock will not be able to
elect any directors. In the event of liquidation of the Company, each
shareholder is entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders after the payment of liabilities and
after distribution in full of preferential amounts, if any. All shares of the
Company's Common Stock issued and outstanding are fully-paid and nonassessable.
Holders of the Common Stock are entitled to share pro rata in dividends and
distributions with respect to the Common Stock, as may be declared by the Board
of Directors out of funds legally available therefor.
Preferred Shares. Shares of Preferred Stock may be issued from time to time
in one or more series as may be determined by the Board of Directors. The voting
powers and preferences, the relative rights of each such series and the
qualifications, limitations and restrictions thereof shall be established by the
Board of Directors, except that no holder of Preferred Stock shall have
preemptive rights. The Company has no shares of Preferred Stock outstanding, and
the Board of Directors does not plan to issue any shares of Preferred Stock for
the foreseeable future, unless the issuance thereof shall be in the best
interests of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient, there can be no assurances that the procedures established
relevant herein will unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
21
<PAGE>
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted at the present
time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
22
<PAGE>
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to be
traded on a national exchange. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its securities for
listing on NASDAQ or some other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued listing. The failure of the
Company to qualify its securities or to meet the relevant maintenance criteria
after such qualification in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such event,
trading, if any, in the Company's securities may then continue in the OTC
Bulletin Board operated by the NASD or another low volume market, presuming that
such a listing is approved, of which there can be no assurance. As a result, a
shareholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
b. Holders. There are ten (10) holders of the Company's Common Stock. In
May 1997, the Company issued 1,000 of its Common Shares at $0.50 per share for
an aggregate of $500 in services. In August 1999, the Board of Directors
authorized a forward split, issuing 1,000 shares for each share issued and
outstanding, establishing the present issued and outstanding Common Stock of
1,000,000 shares. All of the issued and outstanding shares of the Company's
Common Stock were issued in accordance with the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933.
As of the date of this Registration Statement, 1,000,000 shares of the
Company's Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain limitations included
in said Rule. In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
c. Dividends. The Company has not paid any dividends to date and has no
plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
23
<PAGE>
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities.
In May 1997, the Company issued 1,000 shares of its common stock to 10
persons at a price of $0.50 per share, and in August 1999, declared a 1,000 for
one forward split. These shares were issued pursuant to exemption from the
registration requirements included under the Securities Act of 1933, as amended,
including but not necessarily limited to Section 4(2) of said Act. Each
shareholder was either an "accredited investor" (as that term is defined in the
1933 Act) or a sophisticated investor, and each shareholder was provided all
information necessary in order to allow each investor to exercise their
respective business judgment as to the merits of the investment. All of the
shares of Common Stock of the Company previously issued have been issued for
investment purposes in a "private transaction" and are "restricted" shares as
defined in Rule 144 under the Securities Act of 1933, as amended (the "Act").
These shares may not be offered for public sale except under Rule 144, or
otherwise, pursuant to the Act.
As of the date of this Registration Statement, all of the issued and
outstanding shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. However, all of the shareholders of
the Company have executed and delivered a "lock-up" letter agreement which
provides that each such shareholder shall not sell their respective securities
until such time as the Company has successfully consummated a merger or
acquisition. Further, each shareholder has placed their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who has
agreed not to release any of the certificates until the Company has closed a
merger or acquisition. Any liquidation by the current shareholders after the
release from the "lock-up" selling limitation period may have a depressive
effect upon the trading prices of the Company's securities in any future market
which may develop.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two
24
<PAGE>
year holding period and who is not, and has not been for the preceding three
months, an affiliate of the Company.
Item 5. Indemnification of Directors and Officers.
The Company's Articles of Incorporation incorporate the provisions of the
Nevada Revised Statutes providing for the indemnification of officers and
directors and other persons against expenses, judgments, fines and amounts paid
in settlement in connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having served as
officers, directors or in other capacities, except in relation to matters with
respect to which such persons shall be determined not to have acted in good
faith and in the best interests of the Company. With respect to matters as to
which the Company's officers and directors and others are determined to be
liable for misconduct or negligence, including gross negligence in the
performance of their duties to the Company, Nevada law provides for
indemnification only to the extent that the court in which the action or suit is
brought determines that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to officers, directors or persons controlling the Company pursuant
to the foregoing, the Company has been informed that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act, and is therefore unenforceable.
PART F/S
Financial Statements.
The following financial statements are attached to this Registration
Statement and filed as a part thereof. See page 26.
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheet
4) Statement of Operations
5) Statement of Cash Flows
6) Statement of Shareholders' Equity
7) Notes to Financial Statements
25
<PAGE>
Annex Business Resources, Inc.
Audited Financial Statements
For the Years Ended June 30, 1999 and 1998
and the Period May 16, 1997 (Inception)
through June 30, 1999
26
<PAGE>
ANNEX BUSINESS RESOURCES, INC.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Changes in Stockholders' Equity 5
Notes to Financial Statements 6 to 8
27
<PAGE>
KISH, LEAKE & ASSOCIATES P.C.
7901 E BELLEVIEW AVE - SUITE 220
ENGLEWOOD, COLORADO 80111
303.779.5006
Independent Auditors' Report
----------------------------
We have audited the accompanying balance sheet of Annex Business Resources, Inc.
(a development stage company) as of June 30, 1999 and the related statements of
income, shareholders' equity, and cash flows for the fiscal years ended June 30,
1999 and 1998 and period May 16, 1997 (inception) through June 30, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Annex Business Resources, Inc.,
at June 30, 1999 and the results of its operations and its cash flows for the
fiscal years ended June 30, 1999 and 1998 and the period May 16, 1997
(Inception) through June 30, 1999 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5, the Company is
in the development stage and has no operations as of June 30, 1999. The
deficiency in working capital as of June 30, 1999 raises substantial doubt about
its ability to continue as a going concern. Management's plans concerning these
matters are described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
s/Kish, Leake & Associates, P.C.
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
August 26, 1999
-1-
28
<PAGE>
<TABLE>
Annex Business Resources, Inc.
(A Development Stage Company)
Balance Sheet
- ------------------------------------------------------------------------------
<CAPTION>
June
30, 1999
--------
<S> <C>
ASSETS $ 0
--------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES - Due to related entity 235
--------
SHAREHOLDERS' EQUITY
Preferred Stock, $.001 Par Value
Authorized 25,000,000 Shares; Issued
And Outstanding -0- Shares 0
Common Stock, $.001 Par Value
Authorized 75,000,000 Shares; Issued
And Outstanding 1,000,000 Shares 1,000
Additional Paid In Capital On Common Stock (500)
Deficit Accumulated During The Development Stage (735)
--------
TOTAL SHAREHOLDERS' EQUITY (235)
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 0
========
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-2-
29
<PAGE>
<TABLE>
Annex Business Resources, Inc.
(A Development Stage Company)
Statement Of Operations
- ------------------------------------------------------------------------------
<CAPTION>
May
16, 1997
Fiscal Fiscal (Inception)
Year Ended Year Ended Through
June June June
30, 1999 30, 1998 30, 1999
--------- --------- --------
<S> <C> <C> <C>
Revenue: $ 0 $ 0 $ 0
Expenses:
Licenses & Fees 235 0 235
Office 0 0 500
--------- --------- --------
Total 235 0 735
--------- --------- --------
Net (Loss) $ (235) $ 0 $ (735)
========= ========= ========
Basic (Loss) Per Common Share $ (0.00) $ 0.00
========= =========
Basic Common Shares Outstanding * 1,000,000 1,000,000
========= =========
* Restated to reflect forward 1,000 to 1 forward split in August 1999.
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-3-
30
<PAGE>
<TABLE>
Annex Business Resources, Inc.
(A Development Stage Company)
Statement Of Cash Flows
- ------------------------------------------------------------------------------
<CAPTION>
May
16, 1997
Fiscal Fiscal (Inception)
Year Ended Year Ended Through
June June June
30, 1999 30, 1998 30, 1999
-------- -------- --------
<S> <C> <C> <C>
Net Income (Loss) Accumulated During
The Development Stage $ (235) $ 0 $ (735)
-------- -------- --------
Issuance of Common Stock For
Services 0 0 500
-------- -------- --------
Net Cash Flows From Operations (235) 0 (235)
-------- -------- --------
Cash Flows From Investing Activities: 0 0 0
-------- -------- --------
Cash Flows From Financing Activities:
Expenses paid by related entity 235 0 235
-------- -------- --------
Net Cash Flows From Financing 235 0 235
-------- -------- --------
Net Increase In Cash 0 0 0
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 0 $ 0 $ 0
======== ======== ========
Non-Cash Activities:
Stock Issued For Services $ 0 $ 500 $ 500
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-4-
31
<PAGE>
<TABLE>
Annex Business Resources, Inc.
(A Development Stage Company)
Statement Of Shareholders' Equity
- ------------------------------------------------------------------------------
<CAPTION>
Deficit
Accumulated
Number Of Capital Paid During The
Common Common In Excess Development
Shares Stock Of Par Value Stage Total
--------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Balance At May 16, 1997 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common Stock:
May 16, 1997 for Services Valued
at $.001 Per Share * 1,000,000 1,000 (500) 0 500
Net Loss (500) (500)
--------- -------- ------------ -------- --------
Balance At June 30, 1997 and 1998 * 1,000,000 1,000 (500) (500) 0
Net Loss (235) (235)
--------- -------- ------------ -------- --------
Balance At June 30, 1999 * 1,000,000 $ 1,000 $ (500) $ (735) $ (235)
========= ======== ============ ======== ========
* Restated to reflect forward 1,000 to 1 forward split in August 1999.
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-5-
32
<PAGE>
Annex Business Resources, Inc.
(A Development Stage Company)
Notes to Financial Statements
For the Fiscal Years Ended June 30, 1999 and 1998
- -------------------------------------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Organization:
On May 16, 1997, Annex Business Resources, Inc. (the Company) was incorporated
under the laws of Nevada to engage in any lawful business or activity for which
corporations may be organized under the laws of the State of Nevada.
Development Stage:
The company entered the Development stage in accordance with SFAS No. 7 on May
16, 1997. Its purpose is to evaluate, structure and complete a merger with, or
acquisition of a privately owned corporation.
Statement of Cash Flows:
For the purpose of the statement of cash flows, the company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest in fiscal year ended June 30, 1999 and 1998 was $-0-.
Cash paid for income taxes in fiscal year ended June 30, 1999 and 1998 was $-0-.
Basic (Loss) Per Common Share:
Basic (loss) per common share is computed by dividing the net loss for the
period by the weighted average number of shares outstanding at June 30, 1999 and
June 30, 1998.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts. Actual results could differ from those estimates.
-6-
33
<PAGE>
Annex Business Resources, Inc.
(A Development Stage Company)
Notes to Financial Statements
For the Fiscal Years Ended June 30, 1999 and 1998
- -------------------------------------------------
Note 2 - Capital Stock and Capital In Excess of Par Value
- ---------------------------------------------------------
The Company initially authorized 25,000 shares of no par value common stock. On
August 11, 1999 the Board of Directors approved an increase in authorized shares
to 75,000,000 and changed the par value to $.001 (See Note 6 - Subsequent
Events). On May 16, 1997 the Company issued 1,000 shares of common stock for
services valued at $.50 per share or $500.
Note 3 - Related Party Events
- -----------------------------
The Company maintains a mailing address at an officers place of business. This
address is located at Suite 106, 1460 Pandosy Street, Kelowna, B.C., Canada, V1Y
1P3. At this time the Company has no need for an office. As of June 30, 1999
management has incurred a minimal amount of time and expense on behalf of the
Company.
Note 4 - Income Taxes
- ---------------------
At June 30, 1999, the company had a net operating loss carryforward available
for financial statement and Federal income tax purposes of approximately $735
which, if not used, will expire in the year 2019.
The Company follows Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes" (SFAS #109), which requires, among other things,
an asset and liability approach to calculating deferred income taxes. As of June
30, 1999, the Company has a deferred tax asset of $47 which has been fully
reserved through the valuation allowance. The change in the valuation allowance
for 1999 is $47.
Note 5 - Basis of Presentation
- ------------------------------
In the course of its development activities the Company has sustained continuing
losses and expects such losses to continue for the foreseeable future. The
Company's management plans on advancing funds on an as needed basis and n the
longer term, revenues from operations of a merger candidate, if found. The
Company's ability to continue as a going concern is dependent on these
additional management advances, and, ultimately, upon achieving profitable
operations through a merger candidate.
-7-
34
<PAGE>
Annex Business Resources, Inc.
(A Development Stage Company)
Notes to Financial Statements
For the Fiscal Years Ended June 30, 1999 and 1998
- -------------------------------------------------
Note 6 - Subsequent Events
- --------------------------
On August 11, 1999 the Company filed amended articles with the state of Nevada
to change the total authorized shares to 75,000,000 shares of common stock $.001
par value and 25,000,000 shares of preferred stock $.001 par value.
On August 16, 1999, the Board of directors approved a 1,000 to 1 forward split.
This increases outstanding common shares from 1,000 to 1,000,000. The financial
statements take into account this split.
The Company will be filing a form 10 SB with the Securities and Exchange
Commission thereby electing to be a reporting company under the Securities Act
of 1934.
-8-
35
<PAGE>
PART III
Item 1. Exhibit Index
No. Sequential
- --- Page No.
--------
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation and Amendments 38
3.2 Bylaws 50
(4) Instruments Defining the Rights of Holders
4.1 Form of Lock-up Agreements Executed
by the Company's Shareholders 69
(27) Financial Data Schedule
27.1 Financial Data Schedule 71
36
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
ANNEX BUSINESS RESOURCES, INC.
(Registrant)
Date: September 20, 1999
By:/s/ Devinder Randhawa
------------------------------
Devinder Randhawa
President
37
<PAGE>
ANNEX BUSINESS RESOURCES, INC.
------------------------------
EXHIBIT 3.1
------------------------------
ARTICLES OF INCORPORATION
AND AMENDMENTS
------------------------------
38
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAY 16, 1997
No. C 10361-97
-------------
s/Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
ANNEX BUSINESS RESOURCES, INC.
FIRST. The name of the corporation is:
ANNEX BUSINESS RESOURCES, INC.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 and this Corporation may maintain
an office, or offices, in such other place within or without the State of Nevada
as may be from time to time designated by the Board of Directors, or by the
By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, but not limited to the following: (A) Shall have such
rights, privileges and powers as may be conferred upon corporations by any
existing law. (B) May at any time exercise such rights, privileges and powers,
when not inconsistent with the purposes and objects for which this corporation
is organized.
17084 1
39
<PAGE>
C) Shall have power to have succession by its corporate name for the period
limited in its certificate or articles of incorporation, and when no period is
limited, perpetually, or until dissolved and its affairs wound up according to
law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its franchises.
The power to hold real and person estate shall include the power to take the
same by devise or bequest in the State of Nevada, or in any other state,
territory or country.
(G) Shall have power to appoint such officers and agents as the affairs of
the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the constitution
or laws of the United States, or of the State of Nevada, for the management,
regulation and government of its affairs and property, the transfer of its
stock, the transaction of its business, and the calling and holding of meetings
of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter the
same at pleasure. The use of a seal or stamp by the corporation on any corporate
document is not necessary. The corporation may use a seal or stamp, if it
desires, but such use or nonuse shall not in any way affect the legality of the
document.
(K) Shall have power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate rights,
privileges, or franchises,
2
40
<PAGE>
or for any other lawful purpose of its incorporation; to issue bonds, promissory
notes, bills of exchange, debentures, and other obligations and evidences of
indebtedness, payable at a specified time or times, or payable upon the
happening of a specified event or events, whether secured by mortgage, pledge or
otherwise, or unsecured, for money borrowed, or in payment for property
purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock of, or
any bonds, securities or evidences of indebtedness created by, any other
corporation or corporations of the State of Nevada, or any other state or
government, and, while owners of such stock, bonds, securities or evidences of
indebtedness, to exercise all rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own
capital stock, and use therefor its capital, capital surplus, surplus, or other
property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for the
accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the
3
41
<PAGE>
objects of the corporation, whether or not such business is similar in nature to
the objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as maybe allowed by
law.
FOURTH. That the total number of common stock authorized that may be issued
by the Corporation is TWENTY FIVE THOUSAND (25,000) shares of stock without
nominal par value and no other class of stock shall be authorized. Said shares
may be issued by the corporation from time to time for such consideration as may
be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the By-Laws of this Corporation, providing
that the number of directors shall not be reduced to fewer than one (1). The
name and post office address of the first Board of Directors shall be one (1) in
number and listed as follows:
NAME POST OFFICE ADDRESS
---- ----------- -------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the debts
of the corporation.
4
42
<PAGE>
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for the corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter
or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above it
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1)
or more committees, each committee to consist of one or more of the Directors of
the Corporation,
5
43
<PAGE>
which, to the extent provided in the resolution, or in the By-Laws of the
Corporation, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation. Such committee,
or committees, shall have such name, or names, as may be stated in the By-Laws
of the Corporation, or as may be determined from time to time by resolution
adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a Stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter or right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether nor or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or
6
44
<PAGE>
officer (i) for acts or omissions which involve intentional misconduct, fraud or
a knowing violation of the law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of
this Article by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of officer of the Corporation for act or omissions prior to such repeal
or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation, and
all rights conferred upon Stockholders herein are granted subject to this
reservation.
7
45
<PAGE>
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 30th day of April, 1997.
s/Robert Seligman
------------------------------
Robert Seligman
STATE OF NEVADA )
) SS.
CARSON CITY )
On this 30th day of April, 1997 in Carson City, Nevada,
before me, the undersigned, a Notary Public in and for Carson City, State of
Nevada, personally appeared:
Robert Seligman
Known to me to be the person whose name is subscribed to the foregoing
document and acknowledged to me that he executed the same.
MARK SHATAS
NOTARY PUBLIC - NEVADA
Appt. Recorded in CARSON CITY
My Appt. Exp. March 12, 2000
No. 92-2370-3 s/Mark Shatas
------------------------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously
named Corporation.
April 30, 1997 s/R. Seligman
- --------------- ------------------------------
Date Executive Vice President
8
46
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
FILED (After Issuance of Stock)
In the Office of the
Secretary of State of the
STATE OF NEVADA
AUG 11 1999
No. C10361-97
--------------
Dean Heller, Secretary of State
ANNEX BUSINESS RESOURCES, INC.
---------------------------------------------
We, the undersigned Devinder Randhawa and
-------------------------------------------------
President or Vice President
Ron Schlitt of Annex Business Resources, Inc.
- --------------------------------------- ------------------------------------
Secretary or Assistant Secretary Name of Corporation do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 23rd day of July 19 99 , adopted a resolution
-------- ----------- ----
to amend the original articles as follows:
Article Fourth is hereby amended to read as follows:
------
See Annexed.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 1,000 ; that the said
------
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
ANNEX BUSINESS RESOURCES, INC.
s/Devinder Randhawa
------------------------------------
President or Vice President
Devinder Randhawa
s/Ron Schlitt
------------------------------------
Secretary or Assistant Secretary
Ron Schlitt
xxxxxx Province of British )
-------------------- )
Columbia, Canada : ss.
xxxxxx )
--------------------
Devinder Randhawa
On August 3, 1999 and Ron Schlitt , personally appeared before me, a
--------------------------------
Notary Public, Devinder Randhawa and Ron Schlitt , who
-----------------------------------------------------------
acknowledged that they executed the above instrument.
s/Lee C. Turner
------------------------------------
Signature of Notary
LEE C. TURNER
Barrister & Solicitor
(Notary Stamp or Seal) 200 - 537 Leon Avenue
Kelowna, B.C. V1Y 2A9
Tel: (604) 264-8899
47
<PAGE>
FOURTH. The amount of the total authorized capital stock of the corporation
shall be seventy five million (75,000,000) shares divided into fifty million
(50,000,000) shares of Common Stock, $0.001 par value each, and twenty five
million (25,000,000) shares of Preferred Stock, $0.001 par value each, and the
designations, preferences, limitations and relative rights of the shares of each
such class are as follows:
A. Preferred Shares
The corporation may divide and issue the Preferred
Shares into series. Preferred Shares of each series,
when issued, shall be designated to distinguish it from
the shares of all other series of the class of Preferred
Shares. The Board of Directors is hereby expressly
vested with authority to fix and determine the relative
rights and preferences of the shares of any such series
so established to the fullest extent permitted by these
Articles of Incorporation and Nevada Revised Statutes in
respect to the following:
(a) The number of shares to constitute such
series, and the distinctive designations thereof;
(b) The rate and preference of dividend, if any,
the time of payment of dividend, whether dividends are
cumulative and the date from which any dividend shall
accrue;
(c) Whether the shares may be redeemed and, if
so, the redemption price and the terms and conditions of
redemption;
(d) The amount payable upon shares in the event of
involuntarily liquidation;
(e) The amount payable upon shares in the event of
voluntary liquidation;
48
<PAGE>
(f) Sinking fund or other provisions, if any,
for the redemption or purchase of shares;
(g) The terms and conditions on which shares may
be converted, if the shares of any series are issue
with the privilege of conversion;
(h) Voting powers, if any; and
(i) Any other relative rights and preferences of
shares of such series, including, without limitation,
any restriction on an increase in the number of shares
of any series theretofore authorized and any limitation
or restriction of rights or powers to which shares of
any further series shall be subject.
B. Common Shares
(a) The rights of holders of the Common Shares to
receive dividends or share in the distribution of assets in
the event of liquidation, dissolution or winding up of the
affairs of the Corporation shall be subject to the
preferences, limitations and relative rights of the Preferred
Shares fixed in the resolution or resolutions which may be
adopted from time to time by the Board of Directors of the
corporation providing for the issuance of one or more series
of the Preferred Shares.
(b) The holders of the Common Shares shall be
entitled to one vote for each share of Common Shares held by
them of record at the time for determining the holders thereof
entitled to vote.
49
<PAGE>
ANNEX BUSINESS RESOURCES, INC.
------------------------------
EXHIBIT 3.2
------------------------------
BYLAWS
------------------------------
50
<PAGE>
INDEX TO THE BYLAWS OF
ANNEX BUSINESS RESOURCES, INC.
ARTICLE 1 - OFFICES....................................................... 1
SECTION 1.1 PRINCIPAL OFFICE........................................ 1
SECTION 1.2 REGISTERED OFFICE....................................... 1
ARTICLE 2 - SHAREHOLDERS.................................................. 1
SECTION 2.1 ANNUAL MEETING.......................................... 1
SECTION 2.2 SPECIAL MEETINGS........................................ 1
SECTION 2.3 PLACE OF MEETINGS....................................... 1
SECTION 2.4 NOTICE OF MEETING ...................................... 2
SECTION 2.5 MEETING OF ALL SHAREHOLDERS ............................ 2
SECTION 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE...... 2
SECTION 2.7 VOTING RECORD........................................... 2
SECTION 2.8 QUORUM.................................................. 3
SECTION 2.9 MANNER OF ACTING........................................ 3
SECTION 2.10 PROXIES................................................ 3
SECTION 2.11 VOTING OF SHARES....................................... 3
SECTION 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS............... 3
SECTION 2.13 INFORMAL ACTION BY SHAREHOLDERS........................ 4
SECTION 2.14 VOTING BY BALLOT....................................... 4
SECTION 2.15 CUMULATIVE VOTING...................................... 4
ARTICLE 3 - BOARD OF DIRECTORS............................................ 4
SECTION 3.1 GENERAL POWERS.......................................... 4
SECTION 3.2 PERFORMANCE OF DUTIES................................... 4
SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS....................... 5
SECTION 3.4 REGULAR MEETINGS........................................ 5
SECTION 3.5 SPECIAL MEETINGS........................................ 5
SECTION 3.6 NOTICE.................................................. 5
SECTION 3.7 QUORUM.................................................. 6
SECTION 3.8 MANNER OF ACTING........................................ 6
SECTION 3.9 INFORMAL ACTION BY DIRECTORS............................ 6
SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS...................... 6
SECTION 3.11 VACANCIES.............................................. 6
SECTION 3.12 RESIGNATION............................................ 6
SECTION 3.13 REMOVAL................................................ 7
SECTION 3.14 COMMITTEES............................................. 7
SECTION 3.15 COMPENSATION........................................... 7
SECTION 3.16 PRESUMPTION OF ASSENT.................................. 7
i
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<PAGE>
ARTICLE 4 - OFFICERS...................................................... 7
SECTION 4.1 NUMBER.................................................. 7
SECTION 4.2 ELECTION AND TERM OF OFFICE............................. 7
SECTION 4.3 REMOVAL................................................. 8
SECTION 4.4 VACANCIES............................................... 8
SECTION 4.5 PRESIDENT............................................... 8
SECTION 4.6 VICE PRESIDENT.......................................... 8
SECTION 4.7 SECRETARY............................................... 8
SECTION 4.8 TREASURER............................................... 9
SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.......... 9
SECTION 4.10 BONDS.................................................. 9
SECTION 4.11 SALARIES............................................... 9
ARTICLE 5 - CONTRACTS, LOANS, CHECKS AND DEPOSITS......................... 9
SECTION 5.1 CONTRACTS............................................... 9
SECTION 5.2 LOANS................................................... 9
SECTION 5.3 CHECKS, DRAFTS, ETC..................................... 9
SECTION 5.4 DEPOSITS................................................ 10
ARTICLE 6 - SHARES, CERTIFICATES FOR SHARES AND
TRANSFER OF SHARES.............................................. 10
SECTION 6.1 REGULATION.............................................. 10
SECTION 6.2 CERTIFICATES FOR SHARES................................. 10
SECTION 6.3 CANCELLATION OF CERTIFICATES............................ 10
SECTION 6.4 LOST, STOLEN OR DESTROYED CERTIFICATES.................. 10
SECTION 6.5 TRANSFER OF SHARES...................................... 11
ARTICLE 7 - FISCAL YEAR................................................... 11
ARTICLE 8 - DIVIDENDS..................................................... 11
ARTICLE 9 - CORPORATE SEAL................................................ 11
ARTICLE 10 - WAIVER OF NOTICE............................................. 11
ARTICLE 11 - AMENDMENTS................................................... 11
ARTICLE 12 - EXECUTIVE COMMITTEE.......................................... 12
SECTION 12.1 APPOINTMENT............................................ 12
SECTION 12.2 AUTHORITY.............................................. 12
SECTION 12.3 TENURE AND QUALIFICATIONS.............................. 12
SECTION 12.4 MEETINGS............................................... 12
SECTION 12.5 QUORUM................................................. 12
SECTION 12.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE................. 12
ii
52
<PAGE>
SECTION 12.7 VACANCIES.............................................. 13
SECTION 12.8 RESIGNATIONS AND REMOVAL............................... 13
SECTION 12.9 PROCEDURE.............................................. 13
ARTICLE 13 - INDEMNIFICATION.............................................. 13
SECTION 13.1 INDEMNIFICATION........................................ 13
SECTION 13.2 RIGHT TO INDEMNIFICATION............................... 14
SECTION 13.3 GROUPS AUTHORIZED TO MAKE INDEMNIFICATION
DETERMINATION.................................................... 14
SECTION 13.4 PAYMENT AND ADVANCE OF EXPENSES........................ 14
CERTIFICATE............................................................... 15
iii
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<PAGE>
BYLAWS
OF
ANNEX BUSINESS RESOURCES, INC.
ARTICLE 1 - OFFICES
SECTION 1.1 PRINCIPAL OFFICE
The initial principal office of the corporation in the state of Nevada
shall be located in Carson City. The corporation may have such other offices,
either within or outside of the state of Nevada as the board of directors may
designate, or as the business of the corporation may require from time to time.
SECTION 1.2 REGISTERED OFFICE
The registered office of the corporation, required by Chapter 78 of the
Nevada Revised Statutes to be maintained in the state of Nevada, may be, but
need not be, identical with the principal office in the state of Nevada, and the
address of the registered office may be changed from time to time by the board
of directors.
ARTICLE 2 - SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING
The annual meeting of the shareholders shall be held on the 20th day of
July of each year, commencing with the year 1998, at the hour of 10:00 a.m., or
at such other time on such other day as shall be fixed by the board of directors
for the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the day fixed for the annual meeting
shall be a legal holiday in the state of Nevada, such meeting shall be held on
the next succeeding business day. If the election of directors shall not be held
on the day designated herein for any annual meeting of the shareholders, or at
any adjournment thereof, the board of directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as may be
convenient.
SECTION 2.2 SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the board
of directors, and shall be called by the president at the request of the holders
of not less than one-tenth of all outstanding shares of the corporation entitled
to vote at the meeting.
SECTION 2.3 PLACE OF MEETINGS
The board of directors may designate any place, either within or outside of
the state of Nevada, as the place of meeting for any annual meeting or for any
special meeting called by the board of directors. If no designation is made, or
if a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation in the state of Nevada.
1
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<PAGE>
SECTION 2.4 NOTICE OF MEETING
Written notice stating the place, day and hour of the meeting of
shareholders and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall, unless otherwise prescribed by statute, be
delivered not less than ten nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the direction of the president,
or the secretary, or the officer or other 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 or her address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
SECTION 2.5 MEETING OF ALL SHAREHOLDERS
Except as provided by law, if a majority of the shareholders meet at any
time and place, either within or outside of the state of Nevada, and consent to
the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any corporate action may be taken.
SECTION 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other purpose, the board of directors of the corporation
may provide that the share transfer books shall be closed for a stated period
but not to exceed, in any case, sixty days. If the share transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ten
days immediately preceding such meeting. In lieu of closing the share transfer
books, the board of directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than sixty days and, in case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the share transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the board of directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this Section, such determination shall apply to any adjournment thereof.
SECTION 2.7 VOTING RECORD
The officer or agent having charge of the stock transfer books for shares
of the corporation shall make, at least ten days before such meeting of
shareholders, a complete record of the shareholders entitled to vote at each
meeting of shareholders or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each. The record,
for a period of ten days prior to such meeting, shall be kept on file at the
principal office of the corporation, whether within or outside of the state of
Nevada, and shall be subject to inspection by any shareholder for any purpose
germane to the meeting at any time during usual business hours. Such record
shall 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 for the purposes thereof.
The original stock transfer books shall be the prima facie evidence as to
who are the shareholders entitled to examine the record or transfer books or to
vote at any meeting of shareholders.
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SECTION 2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, except as otherwise provided by Chapter 78 of the Nevada Revised
Statutes and the Articles of Incorporation. In the absence of a quorum at any
such meeting, a majority of the shares so represented may adjourn the meeting
from time to time for a period not to exceed sixty days without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
during such meeting of that number of shareholders whose absence would cause
there to be less than a quorum.
SECTION 2.9 MANNER OF ACTING
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders, unless the vote of a greater proportion or number
or voting by classes is otherwise required by statute or by the Articles of
Incorporation or these bylaws.
SECTION 2.10 PROXIES
At all meetings of shareholders a shareholder may vote in person or by
proxy executed in writing by the shareholder or by a duly authorized
attorney-in-fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
six months from the date of its execution, unless otherwise provided in the
proxy.
SECTION 2.11 VOTING OF SHARES
Unless otherwise provided by these bylaws or the Articles of Incorporation,
each outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to vote at a meeting of shareholders, and each fractional share
shall be entitled to a corresponding fractional vote on each such matter.
SECTION 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS
Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe, or, in
the absence of such provision, as the board of directors of such other
corporation may determine.
Shares standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by an administrator, executor, court appointed
guardian or conservator, either in person or by proxy without a transfer of such
shares into the name of such administrator, executor, court appointed guardian
or conservator. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares standing in the name of a receiver may be voted by such receiver and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into the trustee name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
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A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither shares of its own stock belonging to this corporation, nor shares
of its own stock held by it in a fiduciary capacity, nor shares of its own stock
held by another corporation if the majority of shares entitled to vote for the
election of directors of such corporation is held by this corporation may be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time.
Redeemable shares which have been called for redemption shall not be
entitled to vote on any matter and shall not be deemed outstanding shares on and
after the date on which written notice of redemption has been mailed to
shareholders and a sum sufficient to redeem such shares has been deposited with
a bank or trust company with irrevocable instruction and authority to pay the
redemption price to the holders of the shares upon surrender of certificates
therefor.
SECTION 2.13 INFORMAL ACTION BY SHAREHOLDERS
Except as provided by law, any action required or permitted to be taken at
a 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 a majority of the
shareholders entitled to vote with respect to the subject matter thereof.
SECTION 2.14 VOTING BY BALLOT
Voting on any question or in any election may be by voice vote unless the
presiding officer shall order or any shareholder shall demand that voting be by
ballot.
SECTION 2.15 CUMULATIVE VOTING
Cumulative voting shall not be permitted in the election of officers or
directors, or in any other matter.
ARTICLE 3 - BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by its board
of directors.
SECTION 3.2 PERFORMANCE OF DUTIES
A director of the corporation shall perform his or her duties as a
director, including his or her duties as a member of any committee of the board
upon which he or she may serve, in good faith, in a manner he or she reasonably
believes to be in the best interests of the corporation, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances. In performing his or her duties, a director shall be entitled to
rely on information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented by
persons and groups listed in paragraphs A, B, and C of this Section 3.2; but he
or she shall not be considered to be acting in good faith if he or she has
knowledge concerning the matter in question that would cause such reliance to be
unwarranted. A person who so performs his or her duties shall not have any
liability by reason of being or having been a director of the corporation. Those
persons and groups on whose information, opinions, reports, and statements a
director is entitled to rely upon are:
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A. One or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matter presented;
B. Counsel, public accountants, or other persons as to matters which the
director reasonably believes to be within such persons' professional or expert
competence; or
C. A committee of the board upon which he or she does not serve, duly
designated in accordance with the provision of the Articles of Incorporation or
the bylaws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS
The number of directors of the corporation shall be fixed from time to time
by resolution of the board of directors, but in no instance shall there be less
than one director or that number otherwise required by law. Each director shall
hold office until the next annual meeting of shareholders or until his or her
successor shall have been elected and qualified. Directors need not be residents
of the state of Nevada nor shareholders of the corporation.
There shall be a chairman of the board, who has been elected from among the
directors. He or she shall preside at all meetings of the stockholders and of
the board of directors. He or she shall have such other powers and duties as may
be prescribed by the board of directors.
SECTION 3.4 REGULAR MEETINGS
A regular meeting of the board of directors shall be held without other
notice than this bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The board of directors may provide, by resolution, the
time and place, either within or without the state of Nevada, for the holding of
additional regular meetings without other notice than such resolution.
SECTION 3.5 SPECIAL MEETINGS
Special meetings of the board of directors may be called by or at the
request of the president or any two directors. The person or persons authorized
to call special meetings of the board of directors may fix any place, either
within or without the state of Nevada, as the place for holding any special
meeting of the board of directors called by them. SECTION 3.6 NOTICE
Written notice of any special meeting of directors shall be given as
follows:
By mail to each director at his or her business address at least three days
prior to the meeting; or
By personal delivery or telegram at least twenty-four hours prior to the
meeting to the business address of each director, or in the event such notice is
given on a Saturday, Sunday or holiday, to the residence address of each
director. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice of
any meeting. The attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any 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 or waiver of notice of such
meeting.
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SECTION 3.7 QUORUM
A majority of the number of directors fixed by or pursuant to Section 3.2
of this Article 3 shall constitute a quorum for the transaction of business at
any meeting of the board of directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
SECTION 3.8 MANNER OF ACTING
Except as otherwise required by law or by the Articles of Incorporation,
the act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the board of directors.
SECTION 3.9 INFORMAL ACTION BY DIRECTORS
Any action required or permitted to be taken by the board of directors or
by a committee thereof at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all of the
directors or all of the committee members entitled to vote with respect to the
subject matter thereof.
SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS
Any members of the board of directors or any committee designated by such
board may participate in a meeting of the board of directors or committee by
means of telephone conference or similar communications equipment by which all
persons participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
SECTION 3.11 VACANCIES
Any vacancy occurring in the board 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 be
elected for the unexpired term of his or her predecessor in office. Any
directorship to be filled by reason of an increase in the number of directors
may be filled by election by the board of directors for a term of office
continuing only until the next election of directors by the shareholders.
SECTION 3.12 RESIGNATION
Any director of the corporation may resign at any time by giving written
notice to the president or the secretary of the corporation. The resignation of
any director shall take effect upon receipt of notice thereof or at such later
time as shall be specified in such notice; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. When one or more directors shall resign from the board, effective at
a future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective.
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SECTION 3.13 REMOVAL
Any director or directors of the corporation may be removed at any time,
with or without cause, in the manner provided in Chapter 78 of the Nevada
Revised Statutes.
SECTION 3.14 COMMITTEES
By resolution adopted by a majority of the board of directors, the
directors may designate two or more directors to constitute a committee, any of
which shall have such authority in the management of the corporation as the
board of directors shall designate and as shall be prescribed by Chapter 78 of
the Nevada Revised Statutes.
SECTION 3.15 COMPENSATION
By resolution of the board of directors and irrespective of any personal
interest of any of the members, each director may be paid his or her expenses,
if any, of attendance at each meeting of the board of directors, and may be paid
a stated salary as director or a fixed sum for attendance at each meeting of the
board of directors or both. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
SECTION 3.16 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 his or her dissent shall be entered in
the minutes of the meeting or unless he or she shall file his or her written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
ARTICLE 4 - OFFICERS
SECTION 4.1 NUMBER
The officers of the corporation shall be a president, a secretary and a
treasurer, each of whom shall be elected by the board of directors. Such other
officers and assistant officers as may be deemed necessary may be elected or
appointed by the board of directors. Any two or more offices may be held by the
same person.
SECTION 4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation to be elected by the board of directors
shall be elected annually by the board of directors at the first meeting of the
board of directors held after the annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as practicable. Each officer shall hold office until his
or her successor shall have been duly elected and shall have qualified or until
his or her death or until he or she shall resign or shall have been removed in
the manner hereinafter provided.
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SECTION 4.3 REMOVAL
Any officer or agent may be removed by the board of directors whenever in
its judgment the best interests of the corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not of
itself create contract rights.
SECTION 4.4 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the board of directors for the
unexpired portion of the term.
SECTION 4.5 PRESIDENT
The president shall be the chief executive officer of the corporation and,
subject to the control of the board of directors, shall in general supervise and
control all of the business and affairs of the corporation. He or she shall,
when present, and in the absence of a chairman of the board, preside at all
meetings of the shareholders and of the board of directors. He or she may sign,
with the secretary or any other proper officer of the corporation thereunto
authorized by the board of directors, certificates for shares of the corporation
and deeds, mortgages, bonds, contracts, or other instruments which the board of
directors has authorized to be executed, excepted in cases where the signing and
execution thereof shall be expressly delegated by the board of directors or by
these bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall perform
all duties incident to the office of president and such other duties as may be
prescribed by the board of directors from time to time.
SECTION 4.6 VICE PRESIDENT
If elected or appointed by the board of directors, the vice president (or
in the event there be more than one vice president, the vice presidents in the
order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall, in the absence of the
president or in the event of his or her death, inability or refusal to act,
perform all duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. Any vice
president may sign, with the treasurer or an assistant treasurer or the
secretary or an assistant secretary, certificates for shares of the corporation;
and shall perform such other duties as from time to time may be assigned to him
or her by the president or by the board of directors.
SECTION 4.7 SECRETARY
The secretary shall: (a) keep the minutes of the proceedings of the
shareholders and of the board of directors in one or more books provided for
that purpose; (b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents the execution of which on behalf of
the corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
secretary by such shareholder; (e) sign with the chairman or vice chairman of
the board of directors, or the president, or a vice president, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the board of directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of secretary and such other duties as from time to time
may be assigned to him or her by the president or by the board of directors.
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SECTION 4.8 TREASURER
The treasurer shall: (a) have charge and custody of and be responsible for
all funds and securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Article 5 of these bylaws; and (c) in general perform all of the
duties incident to the office of treasurer and such other duties as from time to
time may be assigned to him or her by the president or by the board of
directors.
SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS
The assistant secretaries, when authorized by the board of directors, may
sign with the chairman or vice chairman of the board of directors or the
president or a vice president certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of the board of
directors. The assistant secretaries and assistant treasurers, in general, shall
perform such duties as shall be assigned to them by the secretary or the
treasurer, respectively, or by the president or the board of directors.
SECTION 4.10 BONDS
If the board of directors by resolution shall so require, any officer or
agent of the corporation shall give bond to the corporation in such amount and
with such surety as the board of directors may deem sufficient, conditioned upon
the faithful performance of their respective duties and offices.
SECTION 4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the board
of directors and no officer shall be prevented from receiving such salary by
reason of the fact that he or she is also a director of the corporation.
ARTICLE 5 - CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS
The board of directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 5.2 LOANS
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the board of directors. Such authority may be general or confined to specific
instances.
SECTION 5.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the board of
directors.
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SECTION 5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the board of directors may select.
ARTICLE 6 - SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES
SECTION 6.1 REGULATION
The board of directors may make such rules and regulations as it may deem
appropriate concerning the issuance, transfer and registration of certificates
for shares of the corporation, including the appointment of transfer agents and
registrars.
SECTION 6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be respectively
numbered serially for each class of shares, or series thereof, as they are
issued, shall be impressed with the corporate seal or a facsimile thereof, and
shall be signed by the chairman or vice-chairman of the board of directors or by
the president or a vice president and by the treasurer or an assistant treasurer
or by the secretary or an assistant secretary; provided that such signatures may
be facsimile if the certificate is counter-signed by a transfer agent, or
registered by a registrar other than the corporation itself or its employee.
Each certificate shall state the name of the corporation, the fact that the
corporation is organized or incorporated under the laws of the state of Nevada,
the name of the person to whom issued, the date of issue, the class (or series
of any class), the number of shares represented thereby and the par value of the
shares represented thereby or a statement that such shares are without par
value. A statement of the designations, preferences, qualifications,
limitations, restrictions and special or relative rights of the shares of each
class shall be set forth in full or summarized on the face or back of the
certificates which the corporation shall issue, or in lieu thereof, the
certificate may set forth that such a statement or summary will be furnished to
any shareholder upon request without charge. Each certificate shall be otherwise
in such form as may be prescribed by the board of directors and as shall conform
to the rules of any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional shares
and shall not be obligated to make any transfers creating a fractional interest
in a share of stock. The corporation may, but shall not be obligated to, issue
scrip in lieu of any fractional shares, such scrip to have terms and conditions
specified by the board of directors.
SECTION 6.3 CANCELLATION OF CERTIFICATES
All certificates surrendered to the corporation for transfer shall be
canceled and no new certificates shall be issued in lieu thereof until the
former certificate for a like number of shares shall have been surrendered and
canceled, except as herein provided with respect to lost, stolen or destroyed
certificates.
SECTION 6.4 LOST, STOLEN OR DESTROYED CERTIFICATES
Any shareholder claiming that his or her certificate for shares is lost,
stolen or destroyed may make an affidavit or affirmation of that fact and lodge
the same with the secretary of the corporation, accompanied by a signed
application for a new certificate. Thereupon, and upon the giving of a
satisfactory bond of indemnity to the corporation not exceeding an amount double
the value of the shares as represented by such certificate (the necessity for
such bond and the amount required to be determined by the president and
treasurer of the corporation),
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a new certificate may be issued of the same tenor and representing the same
number, class and series of shares as were represented by the certificate
alleged to be lost, stolen or destroyed.
SECTION 6.5 TRANSFER OF SHARES
Subject to the terms of any shareholder agreement relating to the transfer
of shares or other transfer restrictions contained in the Articles of
Incorporation or authorized therein, shares of the corporation shall be
transferable on the books of the corporation by the holder thereof in person or
by his or her duly authorized attorney, upon the surrender and cancellation of a
certificate or certificates for a like number of shares. Upon presentation and
surrender of a certificate for shares properly endorsed and payment of all taxes
therefor, the transferee shall be entitled to a new certificate or certificates
in lieu thereof. As against the corporation, a transfer of shares can be made
only on the books of the corporation and in the manner hereinabove provided, and
the corporation shall be entitled to treat the holder of record of any share as
the owner thereof and 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 it shall have express or other notice thereof, save as expressly provided by
the statutes of the state of Nevada.
ARTICLE 7 - FISCAL YEAR
The fiscal year of the corporation shall end on the last day of June in
each calendar year. The fiscal year of the corporation may be changed by the
affirmative vote of a majority of the board of directors.
ARTICLE 8 - DIVIDENDS
The board of directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.
ARTICLE 9 - CORPORATE SEAL
The board of directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL."
ARTICLE 10 - WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of these
bylaws or under the provisions of the Articles of Incorporation or under the
provisions of the Chapter 78 of the Nevada Revised Statutes, or otherwise, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the event or other circumstance requiring such
notice, shall be deemed equivalent to the giving of such notice.
ARTICLE 11 - AMENDMENTS
These bylaws may be altered, amended or repealed and new bylaws may be
adopted by a majority of the directors present at any meeting of the board of
directors of the corporation at which a quorum is present.
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ARTICLE 12 - EXECUTIVE COMMITTEE
SECTION 12.1 APPOINTMENT
The board of directors by resolution adopted by a majority of the full
board, may designate two or more of its members to constitute an executive
committee. The designation of such committee and the delegation thereto of
authority shall not operate to relieve the board of directors, or any member
thereof, of any responsibility imposed by law.
SECTION 12.2 AUTHORITY
The executive committee, when the board of directors is not in session,
shall have and may exercise all of the authority of the board of directors
except to the extent, if any, that such authority shall be limited by the
resolution appointing the executive committee and except also that the executive
committee shall not have the authority of the board of directors in reference to
amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of the
corporation otherwise than in the usual and regular course of its business,
recommending to the shareholders a voluntary dissolution of the corporation or a
revocation thereof, or amending the bylaws of the corporation.
SECTION 12.3 TENURE AND QUALIFICATIONS
Each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until his or her successor is designated as a member of the
executive committee and is elected and qualified.
SECTION 12.4 MEETINGS
Regular meetings of the executive committee may be held without notice at
such time and places as the executive committee may fix from time to time by
resolution. Special meetings of the executive committee may be called by any
member thereof upon not less than one day's notice stating the place, date and
hour of the meeting, which notice may be written or oral, and if mailed, shall
be deemed to be delivered when deposited in the United States mail addressed to
the member of the executive committee at his or her business address. Any member
of the executive committee may waive notice of any meeting and no notice of any
meeting need be given to any member thereof who attends in person. The notice of
a meeting of the executive committee need not state the business proposed to be
transacted at the meeting.
SECTION 12.5 QUORUM
A majority of the members of the executive committee shall constitute a
quorum for the transaction of business at any meeting thereof, and action of the
executive committee must be authorized by the affirmative vote of a majority of
the members present at a meeting at which a quorum is present.
SECTION 12.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE
Any action required or permitted to be taken by the executive committee at
a meeting may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof.
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SECTION 12.7 VACANCIES
Any vacancy in the executive committee may be filled by a resolution
adopted by a majority of the full board of directors.
SECTION 12.8 RESIGNATIONS AND REMOVAL
Any member of the executive committee may be removed at any time with or
without cause by resolution adopted by a majority of the full board of
directors. Any member of the executive committee may resign from the executive
committee at any time by giving written notice to the president or secretary of
the corporation, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 12.9 PROCEDURE
The executive committee shall elect a presiding officer from its members
and may fix its own rules of procedure which shall not be inconsistent with
these bylaws. It shall keep regular minutes of its proceedings and report the
same to the board of directors for its information at the meeting thereof held
next after the proceedings shall have been taken.
ARTICLE 13 - INDEMNIFICATION
SECTION 13.1 INDEMNIFICATION
The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he 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, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct as unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe his conduct was unlawful.
The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he 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, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the corporation. Indemnification may not be made for any
claim, issue or matter as to which such person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the corporation, unless
and only to the extent that the court in which the action or suit was brought or
other competent jurisdiction determines upon application that in view of all the
13
66
<PAGE>
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
SECTION 13.2 RIGHT TO INDEMNIFICATION
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 13.1 and 13.2 of this
Article 13, or in defense of any claim, issue or matter therein, the corporation
shall indemnify him against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense.
SECTION 13.3 GROUPS AUTHORIZED TO MAKE INDEMNIFICATION DETERMINATION
Any indemnification under Sections 13.1 or 13.2 of this Article 13, unless
ordered by a court or advanced pursuant to Section 13.2, may 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. The determination must be made: (a) by the stockholders; (b) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding; (c) if a majority vote
of a quorum consisting of directors who were not parties to the action, suite or
proceeding so orders, by independent legal counsel in a written opinion; or (d)
if a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, by independent legal counsel in a written
opinion.
SECTION 13.4 PAYMENT AND ADVANCE OF EXPENSES
The expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the corporation as they are
incurred and in advance of the final disposition of such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this Section do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
14
67
<PAGE>
CERTIFICATE
I hereby certify that the foregoing bylaws, consisting of 15 pages,
including this page, constitute the bylaws of ANNEX BUSINESS RESOURCES, INC.
adopted by the board of directors of the corporation as of May 16, 1997.
s/Ron Schlitt
-------------------------------------
Ron Schlitt, Secretary
15
68
<PAGE>
ANNEX BUSINESS RESOURCES, INC.
------------------------------
EXHIBIT 4.1
------------------------------
FORM OF
SHAREHOLDER LOCK-UP LETTER
------------------------------
69
<PAGE>
, 1999
-----------------
Annex Business Resources, Inc.
106-1460 Pandosy Street
Kelowna, B.C. V1Y 1P3
Gentlemen:
The undersigned, a beneficial owner of the common stock of Annex
Business Resources, Inc. (the "Company"), $.001 par value per share (the "Common
Stock"), understands that the Company has filed with the U.S. Securities and
Exchange Commission a registration statement on Form 10-SB (File No. ) (the
"Registration Statement"), for the registration of the Company's Common Stock.
As part of the disclosure included in the Registration Statement, the Company
has affirmatively stated that there will be no trading of the Company's
securities until such time as the Company successfully implements its business
plan as described in such Registration Statement, consummating a merger or
acquisition.
In order to insure that the aforesaid disclosure is adhered to, the
undersigned agrees, for the benefit of the Company, that he/she will not offer
to sell, assign, pledge, hypothecate, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of the Common Stock of
the Company owned by him/her, or subsequently acquired through the exercise of
any options, warrants or rights, or conversion of any other security, grant
options, rights or warrants with respect to any such shares of Common Stock,
until the Company successfully closes a merger or acquisition. Furthermore, the
undersigned will permit all certificates evidencing his/her shares to be
endorsed with the appropriate restrictive legends and will consent to the
placement of appropriate stop transfer orders with the transfer agent of the
Company.
Very truly yours,
- - - - - - - - - - - - - - - - - - - - - -
[Signature of Holder]
___________________________________________
[Please Print Name(s)]
___________________________________________
[Number of Shares of Common Stock Owned]
70
<PAGE>
ANNEX BUSINESS RESOURCES, INC.
------------------------------
EXHIBIT 27.1
------------------------------
FINANCIAL DATA SCHEDULE
------------------------------
71
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FNANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1999, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 235
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (1,235)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 235
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (235)
<INCOME-TAX> 0
<INCOME-CONTINUING> (235)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (235)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
