U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small
business issuers Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
Big Daddy's Auto Sales, Inc.
(Name of Small Business Issuer in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
59-3567558
(I.R.S. Employer Identification No.)
1008 Royal Aberdeen Way, Orlando, Florida 32828
(Address of principal executive offices) (Zip Code)
(407) 650-0333
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act: _X_
Title of each class to be so registered: Common Stock
Name of each exchange on which each class is to be registered:
National Quotation Bureau Pink Sheets
Page 1
<PAGE>
To simplify the language in this Registration Statement Big Daddy's Auto Sales,
Inc. is referred to herein as "the Company" or "We".
Item 1. Description of Business.
Business Development.
We were incorporated under the name Big Daddy's Auto Sales, Inc. on December 6,
1994. We were an inactive corporation from August 25, 1995, until we were
reinstated with the State of Florida on October 2, 1998.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Business of Issuer.
We are a development stage company and have had no operations. Other than
issuing shares to our shareholders, we have never commenced any operational
activities. As such, we have no specific products, services, or business.
We can be defined as a "shell" company whose sole purpose at this time is to
locate and consummate a merger or acquisition with an unidentified private
entity (hereinafter referred to as the "business opportunity").
We are registering a class of our securities on this Form 10-SB registration
statement on a voluntary basis. We have no obligation to file a Form 10-SB
registration statement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We believe that by filing this Form 10-SB and
being obligated to file reports subject to Section 13 of the Exchange Act, we
can attract a business opportunity candidate. We believe a business opportunity
will involve a transaction with a corporation not requiring cash or assets, but
which desires to establish both a public market for its common stock and the
perceived advantages of status as an Exchange Act registered corporation. There
is no assurance that our assumption is correct.
Competition.
We are and will continue to be a limited competitor in the business of seeking
business opportunities with private companies. A large number of established and
well-financed entities, including venture capital firms, are active in mergers
and acquisitions of companies which may be desirable business opportunity
candidates for us. Nearly all such entities have significantly greater
experience and financial resources, technical expertise and managerial
capabilities than we have. Consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business opportunity.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
Page 2
<PAGE>
Government Regulation.
The proposed business activities described herein classify us as a "blank
check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their states. We
do not intend to undertake any offering of our securities, either debt or
equity, until such time as we have successfully implemented our business plan
that we describe herein.
Relevant thereto, James Bailey, the principal shareholder of the Company, has
expressed an intention not to sell his respective shares until we have
successfully completed a business opportunity, and we are no longer classified
as a "blank check" company.
Transferability of our shares of Common Stock is very limited because a
significant number of states have enacted regulations or "blue sky" laws
restricting or, in many instances, prohibiting the initial sale and subsequent
resale of securities of "blank check" companies, such as us, within that
state. In addition, many states, while not specifically prohibiting or
restricting securities of "blank check" companies, would not register our
securities for sale or resale in their states. Because of these regulations,
we currently have no plan to register any of our securities with any state. To
ensure that no state laws are violated through the resale of our securities,
we will refuse to register the transfer of any of our securities to residents
of any state which prohibits such resale if no exemption is available for such
resale. We do not anticipate that a secondary trading market for our
securities will develop in any state until after consummation of a business
opportunity, if at all.
Although we will be subject to regulation under the Exchange Act, we believe
we will not be subject to regulation under the Investment Company Act of 1940,
insofar as we will not be engaged in the business of investing or trading in
securities.
Federal and state tax consequences will likely be major considerations in any
business opportunity that we may undertake. Currently, such transactions may
be structured so as to result in tax-free treatment to the parties to the
transaction, pursuant to various federal and state tax provisions. We intend
to structure any business opportunity so as to minimize the federal and state
tax consequences to both ourselves and the target entity; however, there can
be no assurance that such business opportunity will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on both parties to the
transaction.
Sections 13 and 15(d) of the Exchange Act, require companies subject thereto
to provide certain information about significant acquisitions, including
certified financial statements for the company acquired, covering one, two or
Page 3
<PAGE>
three years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by the owners of some business
opportunities to prepare such statements may preclude our consummation of an
otherwise desirable business opportunity. Business opportunity prospects that
do not have or are unable to obtain the required audited financial statements
may not be appropriate for consummation of a business opportunity with us as
long as the reporting requirements of the Exchange Act are applicable.
Market Research.
We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions
contemplated by us. Moreover, we do not have, and do not plan to have, and do
not plan to establish, a marketing organization. Even in the event a company
is identified for a business opportunity contemplated by us, there is no
assurance we will be successful in completing any such business opportunity.
Employees.
We currently have no full-time employees. There are no collective bargaining
agreements or employment agreements with James Bailey, our sole Officer and
Director. Mr. Bailey is involved in other full-time business activities. Mr.
Bailey participates in the running of the Company on a part-time basis as
needed without compensation. We do not plan to make any change in the number
of employees of the Company in order to evaluate business opportunities. The
need for additional employees and their availability will be addressed in
connection with our decision of whether or not to pursue a business
opportunity.
Item 2. Plan of Operation.
We have never had revenues from operations. We had no operating expenses from
1995 through 1997 due to our period of inactivity. Upon reinstatement in 1998,
operating expenses resumed. The losses accumulated since inception were
incurred for formation and reinstatement costs of the Company and operating
expenses since formation. We do not expect costs of this nature, with the
exception of the minimal operating expenses, to continue in the future, but
there can be no assurance that similar expenses will not be incurred.
In the next twelve months, we plan to seek out business opportunity
candidates. To date, we have not undertaken any efforts to locate business
opportunity candidates. We believe that this plan of operations can be
conducted through the efforts of current management and will not require any
additional funds. We anticipate that business opportunities will be available
to us through the contacts of James Bailey. We anticipate that the
investigation of specific business opportunities and the negotiation, drafting
and execution of relevant agreements, and other instruments will be done by
James Bailey or under his direction. We plan to investigate, to the extent
believed reasonable by us, such potential business opportunities. Due
Page 4
<PAGE>
to our limited experience in business analysis, we may not discover or
adequately evaluate adverse facts about a potential business opportunity.
Inasmuch as we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete
and exhaustive investigation of potential business opportunities. We
anticipate that we will incur nominal expenses in the implementation of our
business plan described herein. Because we have no capital with which to pay
these expenses, our present management, which consists only of James Bailey,
has paid all charges to date with his personal funds as interest free loans to
the Company. These loans are without repayment terms and are non-interest
bearing demand promissory notes. However, the only opportunity we will have
for repayment of these loans will be from consummation of a business
opportunity. The repayment of any loans made to the Company will not impede,
or be made conditional in any manner to, consummation of a business
opportunity.
Our present management has no future obligation to provide future loans to us.
The failure of our management to provide loans in the future could prevent our
plan to seek out business opportunities.
We have no particular business opportunity in mind and have not entered into
any negotiations regarding any business opportunity. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement. We will not restrict our search to
any specific business, industry, or geographical location, and we may
participate in a business opportunity of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant
to be restrictive of our virtually unlimited discretion to search for and
enter into potential business opportunities. We anticipate that we will be
able to participate in only one potential business opportunity because we have
no assets and limited financial resources.
To date, we have not developed any criteria for the selection of business
opportunities, and we may not develop such criteria in the future. We will
seek to expand through consummation of a business opportunity which is not
currently identified and which entails risks that you will not have a basis to
evaluate. We may seek to expand our operations by acquiring companies in
businesses that we believe will complement or enhance our business. We cannot
assure you that we will be able to ultimately effect any business opportunity,
successfully integrate any business into our operations or otherwise
successfully develop our operations. We have not established any minimum
criteria for any business opportunity, and our management may have complete
discretion in determining the terms of any business opportunity. Consequently,
there is no basis for you to evaluate the specific merits or risks of any
potential business opportunity that we may undertake.
Page 5
<PAGE>
In the future, we do not plan to develop criteria for the selection of
potential business opportunities. As such, we anticipate that James Bailey,
our President and sole Director will investigate, to the extent believed
necessary by him, the business opportunity.
Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, we believe that there are
numerous firms seeking the perceived benefits of a fully reporting public
company. Such perceived benefits may include facilitating or improving the
terms on which additional equity financing may be sought, providing liquidity
for incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all
shareholders and other factors.
Potentially, available business opportunities may arise in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities
extremely difficult and complex. We do not and will not have capital to
provide the owners of business opportunities with any significant cash or
other assets. However, we believe that we can offer owners of business
opportunity candidates the chance to acquire a controlling ownership interest
in a publicly-held, registered company without incurring the cost and time
required to become a fully reporting company or to conduct an initial public
offering. The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-Ks, 10-Ks or
10-KSBs, agreements and related reports and documents. The Exchange Act
specifically requires that any business opportunity candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings required to comply with
the Exchange Act. Nevertheless, we have not conducted market research and are
not aware of statistical data which would support the perceived benefits for
the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that are publicly-held registered companies. We believe that
demand for shells has increased dramatically since the Securities and Exchange
Commission imposed burdensome requirements on "blank check" companies pursuant
to Regulation 419 of the Securities Act of 1933 (the "Act"). We believe that
the foregoing regulation has substantially decreased, the number of "blank
check" offerings filed with the Commission and, as a result, has stimulated an
increased demand for shell corporations. We have made the foregoing
assumption, but there is no assurance that the same is accurate or correct and
accordingly, no assurance can be made that we will be successful in locating a
business opportunity.
Prior to making a decision regarding a business opportunity, we plan to
request that we be provided with written materials regarding the business
opportunity containing such items as a description of products, services and
Page 6
<PAGE>
company history; management resumes; financial information; available
projections with related assumptions upon which they are based; evidence of
existing patents, trademarks or service marks or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between the prospective entity and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risk and
competitive conditions; and other information deemed relevant.
Upon the consummation of a business opportunity, we anticipate that our
present management and shareholders will no longer be in control of the
Company. In addition, our Director may, as part of the terms of the
acquisition transaction, sell his stock in the Company or resign and be
replaced by new directors without a vote of our shareholders. We do not plan
to raise any capital at the present time, by private placement, public
offerings, pursuant to Regulation S promulgated under the Act, as amended, or
by any means whatsoever. Further, there are no plans, proposals, arrangements
or understandings with respect to the sale or issuance of additional
securities prior to the location of a business opportunity.
We anticipate that any securities issued as a result of our consummation of a
business opportunity will be issued in reliance upon an exemption from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of our transaction, we may
agree to register all or a part of such securities immediately after the
business opportunity is consummated or at specified times thereafter. If such
registration occurs, of which there can be no assurance, it will be undertaken
by the surviving entity after we have successfully consummated a business
opportunity and we are no longer considered a "shell" company. Until such time
as this occurs, we will not attempt to register any additional securities. The
issuance of substantial additional securities and their potential sale into
any trading market which may develop in our securities may have a depressive
effect on the value of our securities in the future, if such a market
develops, of which there is no assurance. The completion of any business
opportunity may result in a significant issuance of shares and substantial
dilution to our present stockholders.
We do not plan to make any changes in the number of employees of the Company.
We are aware of the issues associated with the programming code in existing
computer systems as the year 2000 approaches ("Y2K problem"). The Y2K problem
is the result of computer programs being written using two digits rather that
four to define the applicable year. As a result, computer programs that have
time sensitive software may recognize a date using "00" to designate the year
as 1900 rather than 2000. This could result in systems failure or
miscalculation causing disruption of operations. We do not currently have any
business operations and, as such, do not directly face any Y2K compliance
issues. We do not and may not know the Y2K compliance status of any potential
business opportunities, but we believe that there will be no material adverse
impact upon us if a business opportunity is not Y2K compliant. It is not
possible to be certain that all aspects of the Y2K
Page 7
<PAGE>
problem affecting us, including those related to the efforts of any future
customers, suppliers, or other third parties, will be fully resolved.
Item 3. Description of Property.
We currently have no material assets, and we do not own or lease any real or
personal property. We currently operate without charge out of space donated by
the Company's President, and sole Director, James Bailey, at 1008 Royal
Aberdeen Way, Orlando, Florida 32828. We believe that this space is sufficient
for us at this time. We have indicated a capital contribution of $50 per month
of activity for the donation of such space on our financial statements.
We have are no preliminary agreements or understandings with respect to the
office facility subsequent to the completion of a business opportunity. Upon
closure of a business opportunity, we plan to relocate our office to that of
the business opportunity candidate.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate
mortgages. Further, we have no policy with respect to investments in
securities of or interests in persons primarily engaged in real estate
activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
As of June 24, 1999 there were 1,000,000 shares of our common stock, $0.001
par value outstanding. The following tabulates holdings of our shares of
common stock by each person who, as of June 24, 1999, holds of record or is
known by management to own beneficially more than 5.0% of the common shares
and, in addition, by all of our directors and officers individually and as a
group. Each named beneficial owner has sole voting and investment power with
respect to the shares set forth opposite his name.
Security Ownership of Beneficial Owners(1)(2):
Title of Class Name & Address Amount Nature Percent
Common Stock James Bailey 975,000 Direct 97.5%
1008 Royal Aberdeen Way
Orlando, Florida 32828
Security Ownership of Management(2):
Title of Class Name & Address Amount Nature Percent
Common Stock James Bailey 975,000 Direct 97.5%
1008 Royal Aberdeen Way
Orlando, Florida 32828
(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or
Page 8
<PAGE>
shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract, arrangement,
understanding, relationship or otherwise. Unless otherwise indicated, each
person indicated above has sole power to vote, or dispose or direct the
disposition of all shares beneficially owned, subject to applicable unity
property laws.
(2) This table is based upon information obtained from our stock records.
Unless otherwise indicated in the footnotes to the above table and subject to
community property laws where applicable, we believe that each shareholder
named in the above table has sole or shared voting and investment power with
respect to the shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements that would result in a change of control
of the Company. A business opportunity involving the issuance of our common
shares will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in our Company. Any such business opportunity
may require our management to sell or transfer all or a portion of our common
shares held by him, or resign as a member of our Board of Directors. The
resulting change in control of the Company could result in the removal of our
present management and a corresponding reduction or elimination of their
participation in the future affairs of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
James Bailey, 37 years of age, is our sole Officer and Director. Mr. Bailey
has served as our President/Secretary/Treasurer and Director since June 5,
1995 and his terms expire on January 15, 2000.
From 1985 through 1997, Mr. Bailey worked as an investment banker. Since 1997,
he has served as President of Capital Leasing, Inc. Mr. Bailey graduated from
St. Cloud State University in 1984 and holds no directorships in any reporting
companies.
We currently have no significant employees, and we do not anticipate hiring
any in the future. There are no family relationships among directors,
executive officers, or nominees for such positions. In the last five years, no
director, executive officer, promoter or control person of the Company has
been involved in any legal proceedings material to the evaluation of the
ability or integrity of any of the aforementioned persons.
Item 6. Executive Compensation.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Name Position Year Salary Bonus Other Stock Options L/TIP All Other
James Bailey President 1999 0 0 0 0 0 0 0
</TABLE>
Item 7. Certain Relationships and Related Transactions.
Because we have no capital with which to pay expenses associated with our plan
to consummate a business opportunity, James Bailey, our sole officer and
Page 9
<PAGE>
director, has paid all charges to date with his personal funds as interest
free loans to the Company. These loans are without repayment terms and are
non-interest bearing demand promissory notes. Other than these loans, we have
not and do not intend to enter into any transactions with our management or
any nominees for such positions. We have not and do not intend to enter into
any transactions with beneficial owners of the Company. We are not a
subsidiary of any parent company. Since inception, we have not entered into
any transactions with promoters.
Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between our business and their other business interests. We have not and do
not intend in the future to formulate a policy for the resolution of such
conflicts.
Item 8. Legal Proceedings.
We are not a party to any pending legal proceeding, and we are not aware of
any contemplated legal proceeding by a governmental authority involving the
Company.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
There is no established public trading market for our securities. Our common
stock cleared its request for an unpriced quotation on the National Quotation
Bureau Pink Sheets on February 17, 1999. There has been no bid or ask for the
securities, since they were initially quoted on the pink sheets. None of our
common stock is subject to outstanding options or warrants to purchase shares of
the Company.
There are 975,000 shares of the common stock of the Company held by James
Bailey, an affiliate, and 25,000 shares of our common stock held by
non-affiliates. All of these securities are restricted securities as defined
under Rule 144 of the Securities Act and may only be sold under Rule 144 or
otherwise under an effective registration statement or an exemption from
registration, if available. Rule 144 generally provides that a person who has
satisfied a one year holding period for the restricted securities and is not
an affiliate of the Company may sell such securities subject to the Rule 144
provisions. Under Rule 144, directors, executive officers, and persons or
entities they control or who control them may sell shares that have satisfied
the one year holding period for the restricted securities in an amount limited
to, in any three-month period, the greater of 1% of our outstanding shares of
common stock or the average of the weekly trading volume in our common stock
during the four calendar weeks preceding a sale. Consequently, the 975,000
shares held by James Bailey are restricted securities that may not be freely
tradable and are subject to volume limitations.
Page 10
<PAGE>
All sales under Rule 144 must also be made without violating the
manner-of-sale provisions, notice requirements, and the availability of public
information about our Company. A sale of shares by security holders, whether
under Rule 144 or otherwise, may have a depressing effect upon the price of
our common stock in any market that might develop.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued by blank
check or shell corporations. We are considered a "blank check" or "shell"
corporation for the purpose of state securities laws. Accordingly, it is
possible that our current shareholders may be unable to resell their
securities in other states. Additionally, because each state has a series of
exempt securities predicated upon the particular facts of each transaction, it
is not possible to determine if a proposed transaction by an existing
shareholder would violate the securities laws of any particular state. In the
event an existing shareholder or broker/dealer resells our securities in a
state where such resale is prohibited, we believe that the seller thereof may
be liable criminally or civilly under that particular state's laws. Our
existing shareholders should exercise caution in the resale of their shares of
common stock in light of the foregoing.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
generally require that prior to a transaction in a penny stock, the
broker-dealer make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to
the penny stock rules. Our shares will likely be subject to such penny stock
rules, and our shareholders will, in all likelihood, find it difficult to sell
their securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder,
in all likelihood, therefore, will not be able to resell the securities
referred to herein should he or she desire to do so. Furthermore, it is
unlikely that a lending institution will accept our securities as
Page 11
<PAGE>
pledged collateral for loans unless a regular trading market develops. There are
no plans, proposals, arrangements or understandings with any person in regard to
the development of a trading market in any of our securities.
As of the date of this registration, we had twenty-six (26) holders of record
of our common stock. We currently have one class of common stock outstanding.
We have not paid any dividends since our incorporation. There are no
restrictions that limit our ability to pay dividends, but we do not anticipate
paying dividends in the near future.
Item 10. Recent Sales of Unregistered Securities.
The following sets forth information relating to all of our previous sales of
securities which were not registered under the Securities Act of 1933. On June
5,1995, we issued 4,875 shares of our common stock to James Bailey for
services rendered in the formation of the Company and gifted 10 shares of our
common stock to each of twenty-five (25) other persons. The 5,000
aforementioned securities were issued under an exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended. On
September 15, 1998, we forward-split our common stock 200:1 resulting in
1,000,000 shares of our common stock being issued and outstanding.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any
securities.
Item 11. Description of Securities.
Qualification.
The following statements constitute brief summaries of our Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
our Articles of Incorporation and Bylaws.
Common Stock.
Our amended Articles of Incorporation authorize us to issue up to 50,000,000
Common Shares, $0.001 par value per common share. As of June of 1999, there
are 1,000,000 shares of our common stock outstanding. We are not authorized to
issue preferred stock.
Liquidation Rights.
Upon our liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares of
stock in cash, property, or our own shares, except when we are insolvent or
Page 12
<PAGE>
when the payment thereof would render us insolvent subject to the provisions
of the Florida Statutes. We have not paid dividends to date, and we do not
anticipate that we will pay any dividends in the foreseeable future.
Voting Rights.
Holders of our Common Shares are entitled to cast one vote for each share held
of record at all shareholders meetings for all purposes.
Other Rights.
Common Shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional Common
Shares in the event of a subsequent offering.
There are no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of us. We have not issued debt
securities.
Item 12. Indemnification of Directors and Officers.
Our Articles of Incorporation provide that, to the fullest extent permitted by
law, none of our directors or officers shall be personally liable to us or our
shareholders for damages for breach of any duty owed to us or our
shareholders. In addition, we shall have the power, by our by-laws or in any
resolution of our stockholders or directors, to undertake to indemnify the
officers and directors of ours against any contingency or peril as may be
determined to be in our best interest and in conjunction therewith, to
procure, at our expense, policies of insurance.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of any of our
controlling persons, directors or officers which would affect his or her
liability in that capacity.
Item 13. Financial Statements
See Item 15(a) below.
Item 14. Changes in and Disagreements with Accountants.
During the two most recent fiscal years and the subsequent interim period, the
Company has had no disagreement, resignation or dismissal of the principal
independent accountant for the Company. The accountant for the Company at this
time is James Scheifley of James Scheifley & Associates.
Page 13
<PAGE>
Item 15(a) Financial Statements
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Big Daddy's Auto Sales, Inc.
We have audited the balance sheet of Big Daddy's Auto Sales, Inc. as of
December 31, 1998 and the related statements of operations, changes in
stockholders' equity, and cash flows for each of the years in the two year
period ended December 31, 1998 and for the period from inception to December
1, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position Big Daddy's Auto Sales, Inc. as
of December 31, 1998 and the results of its operations and cash flows for each
of the years in the two year period ended December 31, 1998 and for the period
from inception to December 31, 1998, in conformity with generally accepted
accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
June 26, 1999
Page 14
<PAGE>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
12/31 06/30
1998 1999
----------------------------
CURRENT ASSETS: (Unaudited)
TOTAL CURRENT ASSETS $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
----------------------------
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES $ 0 $ 0
----------------------------
STOCKHOLDERS EQUITY:
Common stock, $0.001 par value
Authorized 50,000,000 shares
1,000,000 shares issued &
Outstanding $ 1,000 $ 1,000
Additional paid in Capital $ 5,844 $ 6,144
Unpaid Stock Subscriptions $ 0 $ 0
(Deficit) Accumulated during
development stage $ (6,844) $ (7,144)
----------------------------
$ 0 $ 0
-----------------------------
$ 0 $ 0
-----------------------------
See accompanying notes to financial statements.
Page 15
<PAGE>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Years Ended December 31, 1998 and 1997
Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
Six Months Year Year Inception Inception
Ended Ended Ended to to
6/30/99 12/31/98 12/31/97 12/31/98 6/30/99
- ------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Operating Expenses
Consulting Services $ 0 $ 0 $ 0 $ 5,000 $ 5,000
Corporate Reinstatement Fee $ 0 $ 1,244 $ 0 $ 1,244 $ 1,244
Administrative Expenses $ 300 $ 600 $ 0 $ 600 $ 900
(Loss from Operations)
and Net (loss) $ (300) $ (1,844) $ 0 $ (6,844) $ (7,144)
--------------------------------------------------------------------------
Per Share Information:
Basic & Diluted (loss)
per common share $ 0 $ 0 $ 0 $ 0 $ 0
---------------------------------------------------------------------------
Weighted average
number of common
shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
---------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Page 16
<PAGE>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period From Inception (December 6, 1994)
to December 31, 1998
<TABLE>
<CAPTION>
Deficit
Additional Accumulated:
Common Stock Paid-in Development
Shares Amount Capital Stage Total
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued for
services on 6/15/95
at $.005 per share 1,000,000 $ 1,000 $ 4,000 $ 0 $ 5,000
Net loss for the
Period ended 12/31/95 $ 0 $ 0 $ 0 $ (5,000) $ (5,000)
--------------------------------------------------------------------------
Balance 12/31/95
Through 1997 1,000,000 $ 1,000 $ 4,000 $ (5,000) $ 0
Contribution of Capital
by major shareholder $ 1,844 $ 1,844
Net (loss) for year
ended 12/31/98 $ 0 $ 0 $ 0 $ (1,844) $ (1,844)
--------------------------------------------------------------------------
Balance, 12/31/98 1,000,000 $ 1,000 $ 5,844 $ (6,844) $ 0
--------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Page 17
<PAGE>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1998 and 1997
Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
Six Months Year Year Inception Inception
Ended Ended Ended to to
6/30/99 12/31/98 12/31/97 12/31/98 6/30/99
- ------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net Income (Loss) $ (300) $ (1,844) $ 0 $ (6,844) $ (7,144)
Adjustments to reconcile net
income to net cash by
operating activities:
Services provided as capital
contribution $ 300 $ 1,844 $ 0 $ 6,844 $ 7,144
-------------------------------------------------------------------------
Total Adjustments $ 300 $ 1,844 $ 0 $ 6,844 $ 7,144
-------------------------------------------------------------------------
Net cash provided by
operating activities $ 0 $ 0 $ 0 $ 0 $ 0
Increase (decrease)in cash $ 0 $ 0 $ 0 $ 0 $ 0
Cash & Cash Equivalents
beginning of period $ 0 $ 0 $ 0 $ 0 $ 0
-------------------------------------------------------------------------
Cash & Cash Equivalents
end of period $ 0 $ 0 $ 0 $ 0 $ 0
-------------------------------------------------------------------------
Supplemental Information:
Cash paid for Interest $ 0 $ 0 $ 0 $ 0 $ 0
Cash paid for Income Taxes $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
See accompanying notes to financial statements.
Page 18
<PAGE>
Big Daddy's Auto Sales, Inc.
Notes to Financial Statements
December 31, 1998
Note 1. Organization and Summary of Significant Accounting Policies.
The Company was incorporated in Florida on December 6, 1994. The Company is in
its development stage and to date its activities have been limited to
organization and capital formation.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available
to common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common
stock shares outstanding during the year plus potential dilutive instruments
such as stock options and warrants. The effect of stock options on diluted EPS
is determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price
during the period. Loss per share is unchanged on a diluted basis since the
Company has no potentially dilutive securities outstanding.
Intangible Assets:
The Company makes reviews for the impairment of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Under SFAS No.
121, an impairment loss would be recognized when estimated future cash flows
expected to result from the use of the asset and its eventual disposition is
less than its carrying amount. No such impairment losses have been identified
by the Company to date.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
these estimates
Fair value of financial instruments:
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximates fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration
of credit risk consist principally of cash. During the year the Company did
not maintain cash deposits at financial institutions in excess of the $100,000
limit covered by the
Page 19
<PAGE>
Federal Deposit Insurance Corporation. The Company does not hold or issue
financial instruments for trading purposes nor does it hold or issue interest
rate or leveraged derivative financial instruments
Stock-based Compensation:
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's
first quarter of 1996. Upon adoption of FAS 123, the Company continued to
measure compensation expense for its stock-based employee compensation plans
using the intrinsic value method prescribed by APB No. 25, Accounting for
Stock Issued to Employees. The Company did not pay any stock based
compensation during any period presented.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions
which would result in any significant difference between its reported net loss
and comprehensive net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides
authoritative guidance on when internal-use software costs should be
capitalized and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company has not
incurred costs to date which would require evaluation in accordance with the
SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information
about operating segments in interim financial reports. SFAS 131 also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. The adoption of SFAS 131 did not affect
results of operations or financial position. To date, the Company has not
operated in any business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No.
132, Employers' Disclosures about Pensions and Other Post-retirement Benefits
("SFAS 132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting
for Post-retirement Benefits Other Than Pensions. The overall objective of
SFAS 132 is to improve and standardize disclosures about pensions and other
post-
Page 20
<PAGE>
retirement benefits and to make the required information more understandable.
The adoption of SFAS 132 did not affect results of operations or financial
position.
The Company has not initiated benefit plans to date which would require
disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. Stockholders' Equity.
On June 5, 1995 the Company issued 1,000,000 shares of its common stock to its
founders in exchange for services valued at $5,000. During October 1998, the
Company's principal shareholder paid expenses of the Company amounting to
$1,244 to reinstate the Company in the State of Florida. Additionally, the
officer provides office services to the Company which were valued at $600 for
the year ended December 31, 1998. No such costs were provided in the periods
prior to the year ended December 31, 1998 as the Company was dormant. The
stockholder does not expect repayment of the expenses paid and the Company has
recorded the expenses as a contribution to its capital by the shareholder.
Note 3. Related Party Transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer of the Company. The fair
value of such costs have been estimated to be approximately $50 per month and
have been reflected in the accompanying financial statements. The officers and
directors of the Company are involved in other business activities and may
become involved in other business activities in the future. Such business
activities may conflict with the activities of the Company. The Company has
not formulated a policy for the resolution of any such conflicts that may
arise.
Note 4. Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with
Page 21
<PAGE>
generally accepted accounting principles for interim financial information and
with the instructions incorporated in Regulation 10-SB of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's
financial statements for the year ended December 31, 1998.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
Page 22
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
/s/ James Bailey
--------------------
By: James Bailey
Title: President
Date: July 7, 1999
Page 23
<PAGE>
Item 15(b) Exhibits
INDEX TO EXHIBITS PAGE
- ----------------- ----
Exhibit 1 Underwriting Agreement N/A
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, Etc. N/A
Exhibit 3 Articles of Incorporation 25
By-laws (as amended) 27
Exhibit 4 Instruments Defining the Rights of Security Holders Above
Exhibit 5 Voting Trust Agreement N/A
Exhibit 6 Material Contracts N/A
Exhibit 7 Letter on Accountant Change N/A
Exhibit 8 Information on Subsidiaries N/A
Exhibit 9 Power of Attorney N/A
Page 24
Exhibit 3 (i)
RESTATED ARTICLES OF INCORPORATION OF
BIG DADDY'S AUTO SALES, INC.
THE UNDERSIGNED, being the sole director and president of Big Daddy's Auto
Sales, Inc. does hereby amend its Articles of incorporation to reflect as
follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be Big Daddy's Auto Sales, Inc.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized under
the laws of the state of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000 shares of
common stock, $0.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this corporation in the
State of Florida shall be 1008 Royal Aberdeen Way, Orlando, Florida 32828. The
board of directors may at any time and from time to time move the principal
office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of Directors.
The number of such directors shall not be less than one (1) and, subject to
such minimum may be increased or decreased from time to time in the manner
provided in the By-Laws.
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire share or other securities of
the corporation except to the extent to such right may be granted by an
amendment to these Articles of Incorporation or by a resolution of the Board
of Directors.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Anything in these Articles of Incorporation, the By-Laws, or the Florida
Corporation Act notwithstanding, by-laws not be adapted, modified, amended or
repealed by the shareholders of the Corporation except upon the affirmative
vote
Page 25
<PAGE>
of a simple majority vote of the holders of all the issued and outstanding
shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9.1 Inspection of books. The Board of Directors shall make the reasonable
rules to determine at what times and place and under what conditions
the books of the Corporation shall be open to inspection by
shareholders or a duly appointed representative of a shareholder.
9.2 Control Share Acquisition. The provisions relating to any control
share acquisition as contained in Florida Statutes now, or
hereinafter amended, and any successor provision shall not be applied
to the Corporation.
9.3 Quorum. The holders of shares entitled to one-third of the votes at a
meeting of shareholders shall constitute a quorum.
9.4 Required Vote. Acts of shareholders shall require the approval of
holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNEFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
fir damages for breach of any duty owed to the Corporation or its
shareholders. In addition, the Corporation shall have the power, in its
by-laws or in any resolution of its stockholders or directors, to undertake to
indemnify the officers and directors of this corporation against any
contingency or peril as may be determined to be in the best interest of this
corporation, and in conjunction therewith, to procure, at this corporation's
expense policies of insurance.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person, or
any corporation shall be affected by the fact that any officer or director of
this corporation is such other party or is, of at some time in the future
becomes, an officer, director or partner of such other contracting party, or
has now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on August 26,1998 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF I have hereunto subscribed to and executed the Articles of
Incorporation on this 28th day of September, 1998.
/s/ James Bailey
----------------------------
President and Sole Director.
Page 26
Exhibit 3 (ii)
BY-LAWS of BIG DADDY'S AUTO SALES, INC.
ARTICLE I. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held on the 15th day of January of each year or at such
other time and place designated by the Board of Directors of the corporation.
Business transacted at the annual meeting shall include the election of
directors of the corporation. If the designated day shall fall on a Sunday or
legal holiday, then the meeting shall be held on the first business day
thereafter.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than 10% of all the shares
entitled to vote at the meeting. A meeting requested by shareholders shall be
called for a date not less than 3 nor more than 30 days after the request is
made, unless the shareholders requesting the meeting designate a later date.
The call for the meeting shall be issued by the Secretary, unless the
President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders shall be held at the principal place
of business of the corporation or at such other place as may be designated by
the Board of Directors.
Section 4. Notice. Written notice stating the place, day and hour of the
meeting and in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 3 nor more than
30 days before the meeting, either personally or by first class mail, or by
the direction of the President, the Secretary or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meeting. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced
at the meeting at which the adjournment is taken, and at the adjourned meeting
any business may be transacted that might have been transacted on the original
date of the meeting. If, however, after the adjournment the Board of Directors
fixes a new record date for the adjourned meeting, a notice of the adjourned
meeting shall be given as provided in this Article to each shareholder of
record on a new record date entitled to vote at such meeting.
Section 6. Shareholder Quorum and Voting. A majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at a
meeting of shareholders. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders unless otherwise provided
by law.
Page 27
<PAGE>
Section 7. Voting of Shares. Each outstanding share shall be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders.
Section 8. Proxies. A shareholder may vote either in person or by proxy
executed in writing by the shareholder or his duly authorized
attorney-in-fact. No proxy shall be valid after the duration of 11 months from
the date thereof unless otherwise provided in the proxy.
Section 9. Action by Shareholders Without a Meeting. Any action required by
law or authorized by these by-laws or the Articles of Incorporation of this
corporation or taken or to be taken at any annual or special meeting of
shareholders, or any action which may be taken at any annual or special
meeting of shareholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
ARTICLE II. DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state or
shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to fix the
compensation of directors.
Section 4. Presumption of Assent. A director of the corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because
of an asserted conflict of interest.
Section 5. Number. This corporation shall have a minimum of 1 director but no
more than 7.
Section 6. Election and Term. Each person named in the Articles of
Incorporation as a member of the initial Board of Directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death. At the first annual meeting of shareholders and at each
annual meeting thereafter the shareholders shall elect directors to hold
office until the next succeeding annual meeting. Each director shall hold
office for a term for which he is elected and until his successor shall have
been elected and qualified or until his earlier resignation, removal from
office or death.
Page 28
<PAGE>
Section 7. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
Directors, may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors. A
director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders.
Section 8. Removal of Directors. At a meeting of shareholders called expressly
for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 9. Quorum and Voting. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for the transaction of business. The
act of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 10. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except as is provided by
law.
Section 11. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the corporation or
as otherwise determined by the Directors.
Section 12. Time. Notice and Call of Meetings. Regular meetings of the Board
of Directors shall be held without notice on the first Monday of the calendar
month two (2) months following the end of the corporation's fiscal, or if the
said first Monday is a legal holiday, then on the next business day. Written
notice of the time and place of special meetings of the Board of Directors
shall be given to each director by either personal delivery, telegram or
cablegram at least three (3) days before the meeting or by notice mailed to
the director at least three (3) days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or
convened, except when a director states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Neither the business to be transacted at, nor the purpose, of any regular or
special meeting of the Board of Directors need be specified in the notice of
waiver of notice of such meeting. A majority of the directors present, whether
or not a quorum exists, may adjourn any meeting of the Board of Directors to
another time and place. Notice of any such adjourned meeting shall be given to
the directors who were not present at the time of the adjournment, and unless
the
Page 29
<PAGE>
time and place of adjourned meeting are announced at the time of the
adjournment, to the other directors. Meetings of the Board of Directors may be
called by the chairman of the board, by the president of the corporation or by
any two directors.
Members of the Board of Directors may participate in a meeting of such board
by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 13. Action Without a Meeting. Any action, required to be taken at a
meeting of the Board of Directors, or any action which may be taken at a
meeting of the Board of Directors or a committee thereof, may be taken without
a meeting if a consent in writing, setting forth the action so to be taken, is
signed by such number of the directors, or such number of the members of the
committee, as the case may be, as would constitute the requisite majority
thereof for the taking of such actions, is filed in the minutes of the
proceedings of the board or of the committee. Such actions shall then be
deemed taken with the same force and effect as though taken at a meeting of
such board or committee where at all members were present and voting
throughout and those who signed such action shall have voted in the
affirmative and all others shall have voted in the negative. For informational
purposes, a copy of such signed actions shall be mailed to all members of the
board or committee who did not sign said action, provided however, that the
failure to mail said notices shall in no way prejudice the actions of the
board or committee.
ARTICLE III. OFFICERS
Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers and agents as
may be deemed necessary may be elected or appointed by the Board of Directors
from time to time. Any two or more offices may be held by the same person.
Section 2. Duties. The officers of this corporation shall have the following
duties:
The President shall be the chief executive officer of the corporation, shall
have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the shareholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the shareholders and Board of directors, send all notices of all meetings
and perform such other duties as may be prescribed by the Board of Directors
or the President.
The Treasurer shall have custody of all corporate funds and financial
Page 30
<PAGE>
records, shall keep full and accurate accounts of receipts and disbursements
and render accounts thereof at the annual meetings of shareholders and
whenever else required by the Board of Directors or the President, and shall
perform such other duties as may be prescribed by the Board of Directors or
the President.
Section 3. Removal of Officers. An officer or agent elected or appointed by
the Board of Directors may be removed by the board whenever in its judgment
the best interests of the corporation will be served thereby. Any vacancy in
any office may be filed by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is
fully paid.
Section 2. Form. Certificates representing shares in this corporation shall be
signed by the President or Vice President and the Secretary or an Assistant
Secretary and may be sealed with the seal of this corporation or a facsimile
thereof.
Section 3. Transfer of Stock. The corporation shall register a stock certificate
presented to it for transfer if the certificate is properly endorsed by the
holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen or Destroyed Certificates. If the shareholder shall
claim to have lost or destroyed a certificate of shares issued by the
corporation, a new certificate shall be issued upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost,
stolen or destroyed, and, at the discretion of the Board of Directors, upon
the deposit of a bond or other indemnity in such amount and with such
sureties, if any, as the board may reasonably require.
ARTICLE V. BOOKS AND RECORDS
Section 1. Books and Records. This corporation shall keep correct and complete
books and records of account and shall keep minutes of the proceedings of its
shareholders, Board of Directors and committee of directors. This corporation
shall keep at its registered office, or principal place of business a record
of its shareholders, giving the names and addresses of all shareholders and
the number of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have been a
holder of record of shares of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of,
or the holder of record of voting trust certificates for, at least five
percent of the outstanding shares of the corporation, upon written demand
stating the purpose thereof, shall have the right to examine, in person or by
agent or
Page 31
<PAGE>
attorney, at any reasonable time or times, for any proper purpose its relevant
books and records of accounts, minutes and records of shareholders and to make
extracts therefrom.
Section 3. Financial Information. Not later than four months after the close
of each fiscal year, this corporation shall prepare a balance sheet showing in
reasonable detail the financial condition of the corporation as of the close
of its fiscal year, and a profit and loss statement showing the results of the
operations of the corporation during the fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to each
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement. The balance sheets and
profit and loss statements shall be filed in the registered office of the
corporation in this state, shall be kept for at least five years, and shall be
subject to inspection during business hours by any shareholder or holder of
voting trust certificates, in person or by agent.
ARTICLE VI. DIVIDENDS
The Board of Directors of this corporation may, from time to time, declare and
the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent subject to the provisions of the
Florida Statutes.
ARTICLE VII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be in
circular form.
ARTICLE VIII. AMENDMENT
These by-laws may be altered, amended or repealed, and new by-laws may be
adopted by the a majority vote of the directors of the corporation.
Page 32
