As filed with the Securities and Exchange Commission on July 9, 1999
Registration No. ___________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRANTS OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
GLENNAIRE FINANCIAL SERVICES, INC.
(Name of Small Business Issuer in its charter)
Utah 87-0632335
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 240, Costa Mesa, California 92626
(Address of principal executive officers) (Zip Code)
Issuer's telephone number: (949) 770-2578
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
(Title of Class)
GLENNAIRE FINANCIAL SERVICES, INC.
FORM 10-SB
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business. . . . . . . . . . . . . . . . . 3
ITEM 2. Management's Discussion and Analysis or
Plan of Operation. . . . . . . . . . . . . . . . . . . 8
ITEM 3. Description of Property. . . . . . . . . . . . . . . . . 21
ITEM 4. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . 21
ITEM 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . . 21
ITEM 6. Executive Compensation . . . . . . . . . . . . . . . . . 23
ITEM 7. Certain Relationships and Related Transactions . . . . . 24
ITEM 8. Description of Securities. . . . . . . . . . . . . . . . 25
PART II
ITEM 1. Market Price of and Dividends on Registrant's
Common Equity and Other Shareholder Matters. . . . . . 27
ITEM 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 29
ITEM 3. Changes in and Disagreements with Accountants. . . . . . 30
ITEM 4. Recent Sales of Unregistered Securities. . . . . . . . . 30
ITEM 5. Indemnification of Directors and Officers. . . . . . . . 30
PART F/S
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 31
PART III
ITEM 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . . 38
ITEM 2. Description of Exhibits. . . . . . . . . . . . . . . . . 38
Signatures . . . . . . . . . . . . . . . . . . . . . . . 39
ITEM 1. DESCRIPTION OF BUSINESS
Background
Glennaire Financial Services, Inc. (the Company) is a Utah
corporation formed on March 22, 1999. Its principal place of
business is located at 3158 Redhill Avenue, Ste 240, Costa Mesa,
California 92626. The Company was organized to engage in any
lawful corporate business, including but not limited to,
participating in mergers with and acquisitions of other companies
and/or businesses. The Company has been a developmental stage
since inception and has no operating history other than
organizational matters.
The Company was incorporated by Mr. James Barber. He no longer
holds any position with the Company, and holds none of the
Company's outstanding common stock. The Company has never had any
operations. On March 25, 1999, founders shares of the Company's
common stock were issued to Vincent Van Den Brink, the Company's
sole officer and director. The shareholder has held his stock
since that time. The primary activity of the Company currently
involves seeking a business or businesses that it can acquire or
with whom it can merge.
The Company has not selected any specific business or entity
as an acquisition target or merger partner. The Company does not
intend to limit potential candidates to any particular field or
industry, but does retain the right to limit candidates, if it so
chooses, to a particular field or industry.
The Board of Directors has begun to implement the Company's
principal business plan, described below under Item 2. Therefore,
the Company can be defined as a "shell" or "blank check" company
whose sole purpose, at this time, is to locate and consummate a
merger or acquisition with a private entity or business.
The Company's business plan classifies it 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.
The Company is filing this registration statement on a
voluntary basis, pursuant to section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in order to
ensure that public information is readily accessible to all
shareholders and potential investors, and to increase the Company's
access to financial markets. The Company anticipates that it will
continue to file such reports, notwithstanding the fact that it may
not otherwise be required to file a registration statement under
Section 12(g) of the Exchange Act.
Risk Factors
The Company's business is subject to numerous risk factors
including, but not limited to, the following:
No Operating History or Revenues and Minimal Assets. The
Company has had no operating history and has received no revenues
or earnings from operations. The Company has no significant assets
or financial resources and, in all likelihood, will sustain
operating expenses without corresponding revenues at least until it
completes a business combination. This may result in the Company
incurring a net operating loss which will increase continuously
until the Company completes a business combination with a
profitable business opportunity. There is no assurance that the
Company will successfully identify a business opportunity or
complete 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. Although
management intends to seek business combinations with entities
having established operating histories, it cannot be assured that
the Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture partner
firm together with 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 and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of
companies which may also be desirable target candidates for the
Company. Nearly all such entities have significantly greater
financial resources, technical expertise, and managerial
capabilities than the Company. The Company is, consequently, at a
competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will compete with numerous other small public
companies in seeking merger or acquisition candidates.
No Agreement for Business Combination or Other Transaction
No Standards for Business Combination. The Company has no
arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be no
assurance the Company will successfully identify and evaluate
suitable business opportunities or conclude a business combination.
Management has not identified any particular industry or specific
business within an industry for evaluations. The Company has been
in the developmental stage since inception and has no operations to
date. Other than issuing shares to its original shareholder, the
Company has not commenced any operational activities. 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 from five to ten hours per month to the business of the
Company on an as-needed basis. The Company's sole officer and
director has not entered into a written employment agreement with
the Company and is not expected to do so in the foreseeable future.
The Company has not obtained key man life insurance on its sole
officer and director. Notwithstanding the combined limited
experience and time commitment of management, loss of the services
of any of this individual 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. The Company's sole officer
and director participates in other business ventures which may
compete directly with the Company. Additional conflicts of
interest and non arms-length transactions may also arise in the
event any Company director is involved in the management of any
firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management may serve as officers, directors or partners, or in
which they or their family members own or hold any ownership
interest. Management is not aware of any circumstances under which
this policy could be changed while current management is in control
of the Company. See Item 5 - "Directors, Executive Officers,
Promoters and Control Persons".
Reporting Requirements May Delay or Preclude Acquisition.
Companies subject to Section 13 of the Exchange Act must provide
certain information about significant acquisitions including, but
not limited to, certified financial statements for the company
acquired covering up to two years. The time and additional costs
that may be incurred by some target entities to prepare such
statements may significantly delay or even preclude the Company
from completing an otherwise desirable acquisition. 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 not conducted or received results of market research
indicating that a market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have
nor does it plan to establish a marketing organization. If there
is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
Lack of Diversification. In all likelihood, the Company's
proposed operations, even if successful, will result in a business
combination with only one entity. Consequently, the resulting
activities will be limited to that entity's business. 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, thereby increasing the risks
associated with the Company's operations.
Government Regulations. Although the Company will be subject
to regulation under the Exchange Act, management believes the
Company will not be subject to regulation under the Investment
Company Act of 1940(the "Investment Company Act"), 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 become subject
to regulation under the Investment Company Act. 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 (the "Commission") as to the
status of the Company under the Investment Company Act and,
consequently, any violation of such Act could subject the Company
to material adverse consequences.
Probable Change in Control And Management. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in owners of a private business or
entity 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 stock 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 current officers and directors of 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 such private business or entity. Issuing
previously authorized and unissued common stock of the Company will
reduce the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
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 target company
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. The perceived adverse 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 to comply with various federal and state securities laws
enacted for the protection of investors. These securities laws
primarily relate to registering securities and full disclosure of
the Company's business, management, and financial statements.
Taxation. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Typically, these transactions may be
structured 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. Management cannot assure that a business
combination will meet the statutory requirements for 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 believes that any potential
target must provide audited financial statements for review, and
for the protection of all parties to the business combination. One
or more attractive business opportunities may forego a business
combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
Necessity of Additional Registration Upon Making an
Acquisition or Merger. Because the Company currently has only one
shareholder, it may be necessary to register additional shares of
the Company's common stock upon the completion of any acquisition
or merger. This may be accomplished by filing a new registration
statement with the Commission under the terms of the Securities Act
of 1933, as amended. As a result, shares issued by the Company
pursuant to the transaction would be deemed registered and the
recipients, presumably the shareholders of the acquired entity,
would receive tradeable shares, unless such shareholders become
affiliates or control persons of the Company. The registration
process will take considerable time and the Company will most
likely incur additional expenses. This may make a potential
acquisition seem less attractive by the principals and owners of
the business opportunity.
Blue Sky Considerations. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state and the Company has no current plans to register
or qualify its shares in any state, holders of these shares and
persons who desire to purchase them in any trading market that
might develop in the future, should be aware that there may be
significant state blue sky restrictions upon the ability of new
investors to purchase the securities. Some states may restrict
the trading or resale of blind-pool or blank-check securities.
Accordingly, investors should consider any potential secondary
market for the Company's securities that may develop to be a
limited one.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The following information should be read in conjunction with
the consolidated financial statements and notes thereto appearing
elsewhere in the Form 10-SB.
The Company is considered a development stage company with
nominal or no assets or capital and with no operations or income
since its inception. The costs and expenses associated with the
preparation and filing of this registration statement have been
paid for by an advance from a shareholder of the Company. It is
anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company and necessary funds
will most likely be provided by the Company's officers and
directors in the immediate future. However, unless the Company is
able to facilitate an acquisition of or merger with an operating
business or is able to obtain significant outside financing, there
is substantial doubt about its ability to continue as a going
concern.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking
statements. The Company wishes to advise readers that actual
results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company to
search for appropriate business opportunities and subsequently
acquire or merge with such entity, to meet its cash and working
capital needs, the ability of the Company to maintain its existence
as a viable entity, and other risks that may be detailed in the
Company's periodic report filings with the Commission.
Plan of Operation
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more business
opportunities. At this time, the Company has no plan, proposal,
agreement, understanding, or arrangement to acquire or merge with
any specific business or entity, and the Company has not identified
any specific business or entity for investigation and evaluation.
No member of management or any promoter of the Company, or an
affiliate of either, has had any material discussions with any
other business or entity with respect to any acquisition of that
business or entity. The Company will not restrict its search to
any specific business, industry, or geographical location, and may
participate in business ventures of virtually any kind or nature.
Discussion of the proposed business under this caption and
throughout this Registration Statement 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.
The Company's potential success is heavily dependant on the
Company's management, which will have virtually unlimited
discretion in searching for and entering into a business
combination. The Company's sole officer and director has not had
any experience in the proposed business of the Company.
Management anticipates that it will only participate in one
potential business venture. This lack of diversification should
be considered a substantial risk in investing in 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 combination with a business
that (i) only recently commenced operations; (ii) is a developing
company in need of additional funds to expand into new products or
markets; (iii) is seeking to develop a new product or service; or
(iv) is an established business which may be experiencing financial
or operating difficulties and needs additional capital. In some
instances, a business combination may involve acquiring or merging
with a corporation which does not need substantial additional cash
but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish
wholly-owned subsidiaries in various businesses or purchase
existing businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available
capital, management believes that there are a number of firms
seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include
(i) facilitating or improving the terms on which additional equity
financing may be sought; (ii) providing liquidity for the
principals of a business; (iii) creating a means for providing
incentive stock options or similar benefits to key employees; and
(iv) providing liquidity, subject to restrictions of applicable
statues, for all shareholders. 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.
Management believes that the Company may be able to benefit
from the use of leverage to acquire a target company. Leveraging
a transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds, if
any funds are available, to acquire a target company. Therefore,
the Company could commit those funds to the operations of the
business, to combinations with other target companies, or to other
activities. The borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired business. If
that business is not able to generate sufficient revenues to make
payments on the debt incurred by the Company to acquire that
business, the lender would be able to exercise the remedies
provided by law or by contract. These leveraging techniques, while
reducing the amount of funds that the Company must commit to
acquire a business, may correspondingly increase the risk of loss
to the Company. No assurance can be given as to the terms or
availability of financing for any acquisition by the Company.
During periods when interest rates are relatively high, benefits of
leveraging are not as great as during periods of lower interest
rates. This is because the investment in the business held on a
leveraged basis will only be profitable if it generates sufficient
revenues to cover the related debt and other costs of the
financing.
Lenders from which the Company may obtain funds for purposes
of a leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company. It
is not possible at this time to predict the restrictions, if any,
which lenders may impose, or the impact thereof on the Company.
As part of any transactions, the acquired entity may require
the Company's management or other shareholders of the Company to
sell all or a portion of their shares to the acquired entity or the
principles thereof. It is anticipated that the sales price of such
shares will be lower than the current market price or anticipated
market price of the Company's Common Stock. The Company's funds
are not expected to be used for any stock purchase from insiders.
The Company shareholders will not be provided the opportunity to
approve or consent to such sale. The opportunity to sell all or a
portion of their shares in connection with an acquisition may
influence management's decision to enter into a specific
transaction. However, management believes that since the
anticipated sales price will be less than the market value, the
potential of a stock sale by management will be a material factor
in their decision to enter a specific transaction.
The above description of potential sales of management stock
is not based upon any corporate bylaw, shareholder or board
resolution, or contract or agreement. No other payment of cash or
property ix expected to be received by management in connection
with any acquisition.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in the
Company at substantially less cost than is required to conduct an
initial public offering. The owners of the businesses will,
however, incur significant post-merger or acquisition registration
costs in the event they wish to register a portion of their shares
for subsequent sale. The Company will also incur significant legal
and accounting costs in connection with the acquisition of a
business opportunity, including the costs of preparing post-
effective amendments, Forms 8-K, agreements, and related reports
and documents. 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.
The Company does not intend to make any loans to any prospective
merger or acquisition candidates or to unaffiliated third parties.
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.
Sources of Opportunities
The Company anticipates that business for possible acquisition
will be referred by various sources, including its Board of
Directors, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and others
who may present unsolicited proposals.
The Company will seek a potential business opportunity from
all known sources, but will rely principally on personal contacts
of its Board of Directors as well as indirect associations between
them and other business and professional people. It is not
presently anticipated that the Company will engage professional
firms specializing in business acquisitions or reorganizations.
The Company's sole director is currently employed in other
endeavors and, until such time as an acquisition has been
determined to be highly favorable, will devote only a portion of
his time to the business affairs of the Company. If a business
opportunity is considered promising, management will spend
additional time, on an as-needed basis, to consummate an
acquisition. In addition, in the face of competing demands for his
time, the director may grant priority to his full-time position
rather than to the Company.
Management, while not particularly experienced in matters
relating to the new business of the Company, will 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, other than the Company's legal counsel and accountants,
will be used 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 presently has no cash assets with which
to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside
consultants and none are anticipated in the future. In the past,
the Company's management has never used outside consultants or
advisors in connection with a merger or acquisition.
As is customary in the industry, the Company may pay a finders
fee for locating an acquisition prospect. If any such fee is paid,
it will be approved by the Company's Board of Directors and will be
in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction, based
upon a sliding scale of the amount involved. Management has
adopted a policy that such a finders fee or real estate brokerage
fee could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such person
plays a material role in bringing a transaction to the Company.
Any such prospective fee will be negotiated in connection with any
potential acquisition or merger. It is not possible at this time
to estimate the terms of any such arrangement.
Most likely the Company will not have sufficient funds to
undertake any significant development, marketing, and manufacturing
of any products which may be acquired. Accordingly, if it acquires
the rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product. There
is no assurance that the Company will be able either to obtain
additional financing or to interest third parties in providing
funding for the further development, marketing and manufacturing of
any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken
by or under the supervision of the Board of Directors. See Item 5
- - "Directors, Executive Officers, Promoters and Control Persons".
Management intends to concentrate on identifying prospective
business opportunities which may be brought to its attention
through their present associations and business contacts. In
analyzing prospective business opportunities, management will
consider, among other factors, such matters as:
1. Available technical, financial and managerial resources.
2. Working capital and other financial requirements.
3. History of operation, if any.
4. Prospects for the future.
5. Present and expected competition.
6. Quality and experience of management services which may
be available and the depth of that management.
7. Potential for further research, development or
exploration.
8. Specific risk factors not now foreseeable, but which may
be anticipated to impact the proposed activities of the
Company.
9. Potential for growth or expansion.
10. Potential for profit.
11. Perceived public recognition or acceptance of products,
services or trades.
12. Name identification.
The Company's management will meet personally with management
and key personnel of the firm sponsoring the business opportunity
as part of their investigation. To the extent possible, the Company
intends to use written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge
with any business or entity for which audited financial statements
cannot be obtained.
It is likely that any opportunity in which the Company
participates will present certain risks. Many of these risks
cannot be adequately identified prior to selection of the specific
opportunity, and the Company's shareholders must, therefore, depend
on the ability of management to identify and evaluate such risk.
In the case of some of the opportunities available to the company,
it may be anticipated that the promoters thereof have been unable
to develop a going concern or that such business is in its
development state in that it has not generated significant revenues
from its principal business activities prior to the Company's
participation.
There is a risk as to whether, even after the Company becomes
involved in an opportunity, the combined enterprises will be able
to become a going concern or advance beyond the development stage.
Many of the potential opportunities may involve new and untested
product, processes, or market strategies which may not succeed.
Such risks will be assumed by the Company and, therefore, its
shareholders.
The Company will not restrict its search for any specific kind
of business, 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 currently
impossible to predict the status of any business in which the
Company may become engaged, in that such business may need
additional capital, may merely desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and
substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business
opportunity the cost therefore incurred in the related
investigation would, most likely, not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction
may result in the loss of the Company of the related costs
incurred. Opportunities in which the Company participates will
present certain risks, many of which cannot be identified
adequately prior to selecting a specific opportunity.
The Company's shareholders must, therefore, depend on
management to identify and evaluate such risks. Promoters of some
opportunities may have been unable to develop a going concern or
may present a business in its development stage, one that has not
generated significant revenues from its principal business
activities prior to the Company's participation. Even after the
Company's participation, there is a risk that the combined
enterprise may not become a going concern or advance beyond the
development stage. Other opportunities may involve new and
untested products, processes, or market strategies which may not
succeed. Such risks will be assumed by the Company and, therefore,
its shareholders.
There is the additional risk that the Company may not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction with
a suitable target company. If no such target is found, therefore,
no return on an investment in the Company will be realized, and
there will not, most likely, be a market for the Company's stock.
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, franchise, or
licensing agreement with the business or entity. It may also
purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that present management and
shareholders of the Company will not be in control of the Company.
In addition, a majority or all of the Company's officers and
directors may, as part of the terms of the transaction, resign and
be replaced by new officers and directors without a vote of the
Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into any
trading market which may develop in the Company's Common Stock may
have a depressive effect on such market.
Although the actual terms of a future transaction cannot be
predicted, it may be expected that the parties to the transaction
will find it desirable to avoid the creation of a taxable event
and, thereby, structure the transaction as a so called tax free
reorganization under Sections 368(a)(1) or 351 of the Internal
Revenue Code of 1986, as amended (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, including investors in this offering, would retain
less than 20% of the issued and outstanding shares of the surviving
entity, which could result in significant dilution in the equity of
such shareholders.
As part of the Company's investigation, the Board of Directors
may meet personally with management and key personnel, may visit
and inspect material facilities, obtain independent analysis or
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 with a target
opportunity will depend on (i) the nature of the opportunity;
(ii) the respective needs and desires of the Company and other
parties; (iii) management of the opportunity; and (iv) the relative
negotiating strength of management of the two entities.
With respect to any merger or acquisition, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for 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 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 significant dilutive effect on the percentage of shares held
by the Company's then shareholders, including purchasers in this
offering.
Management intends to advance funds which shall be used by the
Company in identifying and pursuing agreements with target
companies. Management anticipates that these funds will be repaid
from the proceeds of any agreement with the target company, and
that any such agreement may, in fact, be contingent upon the
repayment of those funds.
Rights of Shareholders
It is presently anticipated by management that prior to
consummating a possible acquisition or merger, the Company, if
required by relevant state laws and regulations, will seek to have
the transaction ratified by shareholders in the appropriate manner.
However, under Utah law, certain actions that would routinely be
taken at a meeting of shareholders, may be taken by written consent
of shareholders having not less than the minimum number of votes
that would be necessary to authorize or take the action at a
meeting of shareholders. Thus, if shareholders holding a majority
of the Company's outstanding shares decide by written consent to
consummate an acquisition or a merger, minority shareholders would
not be given the opportunity to vote on the issue. The Board of
Directors will have the discretion to consummate an acquisition or
merger by written consent if it is determined to be in the best
interest of the Company to do so. Regardless of whether an action
to acquire or merge is ratified by written consent or by holding a
shareholders' meeting, the Company will provide to its shareholders
complete disclosure documentation concerning a potential target
business opportunity including the appropriate audited financial
statements of the target. This information will be disseminated by
proxy statement in the event a shareholders' meeting is held, or by
subsequent report to the shareholders if the action is taken by
written consent.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of development-
stage enterprises. There are many established management and
financial consulting companies and venture capital firms which have
significantly greater financial and personal resources, technical
expertise and experience than the Company. In view of the
Company's limited financial resources and management availability,
the Company will continue to be at a significant competitive
disadvantage with its competitors.
Inflation
In the opinion of management, inflation has not and will not
have a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition
or merger. At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.
Year 2000
Year 2000 issues may arise if computer programs have been
written using two digits (rather than four) to define the
applicable year. In such case, programs that have time-sensitive
logic may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations or system
failures.
Because the Company currently does not have any operations
except for its search for viable business opportunities, it does
not own or use any computer equipment. The Company does not
anticipate doing a full assessment of the potential Year 2000 issue
until it has made an acquisition of or merged with an operating
entity. The Company does not believe that the cost of addressing
the issue will have a material adverse impact on its financial
position. Further, the Company believes that no third parties with
whom it may have a material relationships will be materially
affected by the Year 2000 issues.
Regulation and Taxation
The Investment Company Act defines an investment company as an
issuer which is or holds itself out as being engaged primarily in
the business of investing, reinvesting or trading securities.
Although the Company does not intend to engage in such activities,
the Company may, through business combinations, obtain and hold a
minority interest in a number of development stage enterprises.
The Company could be expected to incur significant
registration and compliance costs if required to register under the
Investment Company Act. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an investment company.
The Company intends to structure any future merger or
acquisition in such manner as to minimize Federal and state tax
consequences to the Company and to any target company.
Employees
The Company's only employee at the present time is its sole
officer and director, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company.
Recent Accounting Pronouncements
The Financial Accounting Standards Board ("FASB") has issued
Statement of Financial Accounting Standard ("SFAS") No. 128,
"Earnings Per Share" and Statement of Financial Accounting
Standards No. 129 "Disclosures of Information About an Entity's
Capital Structure." SFAS No. 128 provides a different method of
calculating earnings per share than is currently used in accordance
with Accounting Principles Board Opinion No. 15, "Earnings Per
Share." SFAS No. 128 provides for the calculation of "Basic" and
"Dilutive" earnings per share. Basic earnings per share includes
no dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted earnings per share.
SFAS No. 129 establishes standards for disclosing information about
an entity's capital structure. SFAS No. 128 and SFAS No. 129 are
effective for financial statements issued for periods ending after
December 15, 1997. Their implementation is not expected to have a
material effect on the financial statements.
The FASB has also issued SFAS No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting
from investments by owners and distributions to owners. Among
other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as
components of comprehensive income be reported in a financial
statement that displays with the same prominence as other financial
statements. SFAS No. 131 supersedes SFAS No. 14 "Financial
Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards on the way that public companies report
financial information about operating segments in annual financial
statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public. It also establishes standards for disclosure regarding
products and services, geographic areas and major customers. SFAS
No. 131 defines operating segments as components of a company about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.
SFAS 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and requires comparative
information for earlier years to be restated. Management believes
the adoption of this statement will have no material impact on the
Company's financial statements.
The FASB has also issued SFAS No 132. "Employers' Disclosures
about Pensions and other Postretirement Benefits," which
standardizes the disclosure requirements for pensions and other
Postretirement benefits and requires additional information on
changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis. SFAS No. 132 is effective
for years beginning after December 15, 1997 and requires
comparative information for earlier years to be restated, unless
such information is not readily available. Management believes the
adoption of this statement will have no material impact on the
Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" which requires
companies to record derivatives as assets or liabilities, measured
at fair market value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge
accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. Management believes the adoption of this statement
will have no material impact on the Company's financial statements.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company presently neither owns nor leases any real
property. Office facilities and services are provided without
charge by a director. Such costs are immaterial to the financial
statements, and accordingly, have not been reflected therein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the
Company, as of June 6, 1999, to be a beneficial owner of five
percent (5%) or more of the Company's common stock, by the
Company's directors individually, and by all of the Company's
directors and executive officers as a group. Except as noted, each
person has sole voting and investment power with respect to the
shares shown. Presently, the only such beneficial holder is also
an executive officer and director. Therefore, only one table is
included.
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Vincent van den Brink 1,000,000 100%
3158 Redhill Ave.
Ste. 240
Costa Mesa, CA 92626
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS.
Members of the Company's Board of Directors of the Company
serve until the next annual meeting of the shareholders, or until
their successors have been elected. Executive officers serve at
the pleasure of the Board of Directors.
There are no agreements for any officer or director to resign
at the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the direction
of, any other person.
The Company's sole officer and director will devote time to
the business on an as-needed basis, which is expected to require
five to ten hours per month.
Under the Revised Business Corporation Act of Utah, as long as
a corporation has fewer than three shareholders, its Board of
Directors may consist of a number of individuals equal to or
greater than the number of those shareholders. If a corporation
has three or more shareholder, it must have a minimum of three
shareholders. Thus, as the Company acquires additional
shareholders, it will have to expand its Board of Directors to at
least three persons.
Information as to the sole director and executive officer of
the Company is as follows:
Name/Address Age Position
Vincent van den Brink 52 President/Secretary/Director
3158 Redhill Ave., Ste. 240
Costa Mesa, CA 92626
Vincent van den Brink has been President, Secretary and
Director of the Issuer since March 25, 1999. Since October 1997 to
present, he has been a Financial Consultant with Airway Capital,
Costa Mesa, California, providing asset based lending, factoring,
equipment leasing, and export financing for various businesses.
From June 1985 until May 1997, he was a Business Consultant writing
business plans and business development plans for companies across
the country. Since 1978 to present, in addition to working for the
above companies, he has been operating an export business providing
export consulting, export products and sourcing products for
international clients. He holds a Bachelor's degrees in automotive
engineering from the Auto Technische School in Apeldoorn,
Netherlands. He is fluent in English, Dutch, German and Afrikaans.
Blank Check Experience
Mr. van den Brink is President, Director, and sole shareholder
of Theinternetcorp.net, Inc., a Nevada blank check company, formed
in May, 1999 and which has filed a Registration Statement with the
Commission on Form 10-SB. It is possible that Mr. van den Brink
may establish additional blind pool or blank check companies in the
future. See "Conflicts of Interest."
Conflicts of Interest
Insofar as the sole officer and director is engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs. The sole officer
and director of the Company may in the future become a shareholder,
officer or director of other companies which may be formed for the
purpose of engaging in business activities similar to those
conducted by the Company. 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.
Directors and executive officers of the Company will be
subject to the doctrine of corporate opportunities only insofar as
it applies to business opportunities in which the Company has
indicated an interest, either through its proposed business plan or
by way of an express statement of interest contained in the
Company's minutes. Any opportunity contemplated by the Company
which may come to the attention of an officer or director, either
in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company.
A breach of this requirement will be a breach of the fiduciary
duties of the officer or director. If a director is presented with
business opportunities that may conflict with business interests
identified by the Company, such opportunities must be promptly
disclosed to the Board of Directors and made available to the
Company. In the event the Board shall reject an opportunity so
presented and only in that event, any of the Company's officers and
directors may avail themselves of such an opportunity. Every
effort will be made to resolve any conflicts that may arise in
favor of the Company. There can be no assurance, however, that
these efforts will be successful.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933, as amended ("Securities Act"), and the
Exchange Act, 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. 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 Commission as to the status of the Company under the
Investment Company Act and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole director does not receive any compensation
for his services rendered to the Company, nor has he received such
compensation in the past. He has 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 consummating a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to pay
directors. Further, the sole director is not 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 more 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. Management has agreed to
disclose to the Company's Board of Directors any discussions
concerning possible compensation to be 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 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 finders 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 finder's fee, either
directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein. Persons
associated with management is meant to refer to persons with whom
management may have had other business dealings, but who are not
affiliated with or relatives of management.
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 Board of Directors has passed a resolution which contains
a policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers, Directors,
principal shareholders or their affiliates or associates serve as
officer or director or hold any ownership interest. Management is
not aware of any circumstances under which this policy may be
changed through their own initiative.
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.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorized the
issuance of 140,000,000 shares consisting of 100,000,000 shares of
common stock, $0.001 par value, and 40,000,000 shares of preferred
stock, $0.001 par value, of which 1,000,000 shares of common stock
were issued and are now outstanding. All shares are
non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled to
one vote for each share on all matters to be voted on by
shareholders. Also, common shareholders are entitled to share
ratably in dividends, if any, as may be declared by the Company
from time-to-time, from funds legally available. In the event of
a liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which
additional shares of any class or series of the Company's stock
would be issued to management or promoters, or affiliates or
associates of either.
Preferred Stock
The Company's Articles of Incorporation authorizes the
issuance of 40,000,000 shares of preferred stock, $0.001 par value,
none of which have been issued. The Company currently has no plans
to issue any preferred stock. The Company's Board of Directors has
the authority, without action by the shareholders, to issue all or
any portion of the authorized but unissued preferred stock in one
or more series and to determine the voting rights, preferences as
to dividends and liquidation, conversion rights, and other rights
of such series. The preferred stock, if and when issued, may carry
rights superior to those of common stock; however no preferred
stock may be issued with rights equal or senior to the preferred
stock without the consent of a majority of the holders of then-
outstanding preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring possible
future acquisitions and financings, and in meeting corporate needs
which may arise. If opportunities arise that would make the
issuance of preferred stock desirable, either through public
offering or private placements, the provisions for preferred stock
in the Company's Certificate of Incorporation would avoid the
possible delay and expense of a shareholders meeting, except as may
be required by law or regulatory authorities. Issuance of the
preferred stock could result, however, in a series of securities
outstanding that will have certain preferences with respect to
dividends and liquidation over the common stock. This could result
in dilution of the income per share and net book value of the
common stock.
Issuance of additional common stock pursuant to any conversion
right which may be attached to the terms of any series of preferred
stock may also result in dilution of the net income per share and
the net book value of the common stock. The specific terms of any
series of preferred stock will depend primarily on market
conditions, terms of a proposed acquisition or financing, and other
factor existing at the time of issuance. Therefore it is not
possible at this time to determine in what respect a particular
series of preferred stock will be superior to the Company's common
stock or any other series of preferred stock which the Company may
issue. The Board of Directors does not have any specific plan for
the issuance of preferred stock at the present time, and does not
intend to issue any preferred stock at any time except on terms
which it deems to be in the best interest of the Company and its
shareholders.
The issuance of preferred stock could have the effect of
making it more difficult for a third party to acquire a majority of
the outstanding voting stock of the Company. Further, certain
provisions of Utah law could delay or make more difficult a merger,
tender offer, or proxy contest involving the Company. Although
such provisions are intended to enable the Board of Directors to
maximize shareholder value, they may have the effect of
discouraging takeovers which could be in the best interests of
certain shareholders. There is no assurance that such provisions
will not have an adverse effect on the market value of the
Company's stock in the future.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED SHAREHOLDER MATTERS.
The Company's common stock is not quoted on the over-the-
counter market or on any other recognized market or exchange.
Management has not undertaken any discussions, preliminary or
otherwise, with any prospective market maker concerning the
participation of such market maker in the after-market 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.
After a business combination, merger or acquisition has been
completed, the Company's sole director will most likely be the
person to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The ability of an individual shareholder to trade their shares
in a particular state may be subject to various rules and
regulations of that state. A number of states require that an
issuer's securities be registered in their state or appropriately
exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to
register its securities in any particular state.
Although there is presently no market for the Company's shares
of common stock, if a marked does develop it is likely that the
shares will be subject to the provisions of Section 15(g) and
Rule 15g-9 of the Exchange Act, commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements
for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act.
The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:
registered and traded on a national securities exchange meeting
specified criteria set by the Commission; authorized for quotation
on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or
exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares will
be subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with assets
in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must
make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the first transaction, of a risk
disclosure document relating to the penny stock market. A broker-
dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current
quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held
in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in the Company's
common stock and may affect the ability of shareholders to sell
their shares.
The National Association of Securities Dealers, Inc. ("NASD"),
which administers The Nasdaq Stock Market, has recently made
changes in the criteria for initial listing on The Nasdaq Small Cap
Market and for continued listing. For initial listing, a company
must have net tangible assets of $4 million, market capitalization
of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For
initial listing, the common stock must also have a minimum bid
price of $4.00 per share. In order to continue to be included on
The Nasdaq Stock Market, a company must maintain $2,000,000 in net
tangible assets and a $1,000,000 market value of its publicly-
traded securities. In addition, continued inclusion requires two
market-makers and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will
allow the Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on The Nasdaq Stock Market 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 events, trading, if any, in the
Company's securities may then continue in the over-the-counter
market. 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.
As of the date hereof, the Company has issued and outstanding
1,000,000 shares of common stock, all of which are deemed
"restricted securities" as defined by the Securities Act. These
shares are held by one person, an officer and director of the
Company.
Presently, no outstanding shares are eligible for sale
pursuant to Rule 144. However, restricted shares that have been
beneficially owned for more than one year may be eligible for sale
under Rule 144, subject to the volume and other limitations set
forth by such Rule. In general, under Rule 144 as currently in
effect, a person (or persons whose shares are aggregated) who has
beneficially owned restricted shares of the Company for at least
one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined
under the Act), is entitled to sell, within any three-month period,
an amount of shares that does not exceed the greater of (i) the
average weekly trading volume in the Company's common stock, as
reported through the automated quotation system of a registered
securities association, during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding. A person who
is not deemed to be an "affiliate" of the Company and has not been
an affiliate for the most recent three months, and who has held
restricted shares for at least two years would be entitled to sell
such shares without regard to the resale limitations of Rule 144.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that
it will pay cash dividends or make distributions in the foreseeable
future. The Company currently intends to retain and invest future
earnings, if any, to finance its operations.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by or
against the Company has been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
This Item is not applicable to the Company.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
All shares of the Company's common stock presently outstanding
were issued to the founder of the Company on March 25, 1999. These
shares were issued in a private transaction in accordance with the
exemption from registration afforded by Section 4(2) of the
Securities Act. No transfers of stock have occurred since May 25,
1999. No advertising or general solicitation was employed in
offering the shares. The securities were offered for investment
only and not for the purpose of resale or distribution, and the
transfer thereof was appropriately restricted.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the provisions of the Utah Revised Business
Corporation Act (the "Utah Act"), the Company has the power to
indemnify an individual made a party to a proceeding because they
are or were a director, against liability incurred in the
proceeding, if such individual acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interest
of the Company and, in a criminal proceeding, they had no
reasonable cause to believe their conduct was unlawful.
Indemnification under this provision is limited to reasonable
expenses incurred in connection with the proceeding. The Company
must indemnify a director or officer who is successful, on the
merits of otherwise, in the defense of any proceeding or in defense
of any claim, issue, or matter in the proceeding, to which they are
a party to because they are or were a director of officer of the
Company, against reasonable expenses incurred by them in connection
with the proceeding or claim with respect to which they have been
successful. Pursuant to the Utah Act, the Company's Board of
Directors may indemnify its officers, directors, agents, or
employees against any loss or damage sustained when acting in good
faith in the performance of their corporate duties.
The Company may pay for or reimburse reasonable expenses
incurred by a director, officer employee, fiduciary or agent of the
Company who is a party to a proceeding in advance of final
disposition of the proceeding provided the individual furnishes
the Company with a written affirmation that their conduct was in
good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and undertake to
repay the advance if it is ultimately determined that they did not
meet such standard of conduct.
Also pursuant to the Utah Act, a corporation may set forth in
its articles of incorporation, by-laws or by resolution, a
provision eliminating or limiting in certain circumstances,
liability of a director to the corporation or its shareholders for
monetary damages for any action taken or any failure to take action
as a director. This provision does not eliminate or limit the
liability of a director (i) for the amount of a financial benefit
received by a director to which they are not entitled; (ii) an
intentional infliction of harm on the corporation or its
shareholders; (iii) for liability for a violation of Section
16-10a-842 of the Utah Act (relating to the distributions made in
violation of the Utah Act); and (iv) an intentional violation of
criminal law. To date, the Company has not adopted such a
provision in its Articles of Incorporation, By-Laws, or by
resolution. A corporation may not eliminate or limit the liability
of a director for any act or omission occurring prior to the date
when such provision becomes effective. The Utah Act also permits
a corporation to purchase and maintain liability insurance on
behalf of its directors, officers, employees, fiduciaries or
agents.
Transfer Agent
The Company is presently acting as its own transfer agent. It
is likely that following a business combination, merger or
acquisition, the Company will engage a transfer agent.
PART F/S
The Company's financial statements for the period from
inception on March 22, 1999 through March 31, 1999 have been
examined to the extent indicated in their reports by Jones, Jensen
& Company, independent certified public accountants, and have been
prepared in accordance with generally accepted accounting
principles and pursuant to Regulation S-B as promulgated by the
Commission.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Glennaire Financial Services, Inc.
Costa Mesa, California
We have audited the accompanying balance sheet of Glennaire
Financial Services, Inc. (a development stage company) as of March
31, 1999 and the related statements of operations, stockholders'
equity and cash flows from inception on March 22, 1999 through
March 31, 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Glennaire Financial Services, Inc. (a development stage company) as
of March 31, 1999 and the results of its operations and its cash
flows from inception on March 22, 1999 through March 31, 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 3 to the financial statements, the Company is a development
stage company with no significant operating revenues to date which
together raises substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are
also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
June 14, 1999
GLENNAIRE FINANCIAL SERVICES, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
March 31,
1999
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIE
Accounts payable $ -
Total Liabilities -
STOCKHOLDERS' EQUITY
Common stock: 100,000,000 shares authorized at
par value of $0.001;
1,000,000 shares issued and outstanding 1,000
Subscription stock receivable (900)
Deficit accumulated during the development stage (100)
Total Stockholders' Equity -
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -
GLENNAIRE FINANCIAL SERVICES, INC.
(A Development Stage Company
Statement of Operations
From
Inception on
March 22,
1999 Through
March 31,
1999
REVENUE $ -
EXPENSES
General and administrative 100
Total Expenses 100
NET LOSS $ (100)
BASIC LOSS PER SHARE $ (0.00)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 1,000,000
GLENNAIRE FINANCIAL SERVICES, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
From Inception on March 22, 1999 Through March 31, 1999
Deficit
Accumulated
Stock During the
Common Stock Subscription Development
Shares Amount Receivable Stage
Inception March 22, 1999 - $ - $ - $ -
Common stock issued for
cash at $.001 per share 1,000,000 100 (900) $ -
Net (loss) from inception
on March 22, 1999 through
March 31, 1999 - - - (100)
Balance, March 31, 1999 1,000,000 $ 100 $ (900) $ (100)
<PAGE>
GLENNAIRE FINANCIAL SERVICES, INC.
(A Development Stage Company)
Statement of Cash Flows
From
Inception on
March 22,
1999 Through
March 31,
1999
CASH FLOWS FROM OPERATING ACTIVITIES
Loss from operations $ (100)
Net Cash (Used) by Operating Activities (100)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 100
Net Cash Provided by Financing Activities 100
INCREASE IN CASH AND CASH EQUIVALENTS -
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD -
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Paid For:
Interest $ -
Income taxes $ -
GLENNAIRE FINANCIAL SERVICES, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
On March 22, 1999, Glennaire Financial Services, Inc. (the
Company) was incorporated under the laws of the State of
Utah to engage in any lawful business, but primarily to
provide business consulting services.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has elected a
December 31, year end.
b. Provision for Taxes
At March 31, 1999, the Company had net operating loss
carryforward of $100 that may be offset against future
taxable income through 2014. No tax expense or benefit has
been reported in the financial statements.
c. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
d. Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
e. Basic Loss Per Share
The computations of basic loss per share of common stock
are based on the weighted average number of common shares
outstanding during the period of the consolidated financial
statements.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of assets
and liquidation of liabilities in the normal course of
business. The Company has not established revenues
sufficient to cover its operating costs and allow it to
continue as a going concern. Currently management is
committed to covering all operating and other costs until
sufficient revenues are generated.
NOTE 4 - STOCK TRANSACTIONS
On March 25, 1999, the Board of Directors authorized a
stock issuance totaling 1,000,000 shares to an officer of
the Company for cash consideration of $100 and a $900 stock
subscription receivable.
PART III
ITEM 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3.1 Articles of Incorporation
3.2 By-Laws
4. See Exhibit No. 3.1, Articles of Incorporation,
Article Fifth
27. Financial Data Schedule
________________
2. Description of Exhibits
See Item I above.
SIGNATURES
In accordance with Section 12 of the Securities and Exchange
Act of 1934, the registrant caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
organized.
GLENNAIRE FINANCIAL SERVICES, INC.
(Registrant)
Date: July 9, 1999 By: /S/ Vincent van den Brink
Vincent van den Brink, President
ARTICLES OF INCORPORATION
OF
GLENNAIRE FINANCIAL SERVICES, INC.
The undersigned, a natural person at least eighteen years old,
does hereby act as incorporator in adopting the following Articles
of Incorporation for the purpose of organizing the business
corporation hereinafter named GLENNAIRE FINANCIAL SERVICES, INC.,
pursuant to the provisions of the Utah Revised Business Corporation
Act.
FIRST: The name of the corporation is GLENNAIRE FINANCIAL
SERVICES, INC. (the "Corporation").
SECOND: The principal office of the Corporation in the State
of Utah is located at 3909 S. Alberly Way, Salt Lake City, Utah
84124-810. The name and address of the registered agent of the
Corporation is Mr. James Barber, 3909 S. Alberly Way, Salt Lake
City, Utah 84124-810. The signature of the said registered agent is
set forth in the last Article of these Articles of Incorporation.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized
under the Utah Revised Business Corporation Act and the duration of
the Corporation shall be perpetual.
FOURTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the
Corporation, and for further definition, limitation and regulation
of the powers of the Corporation and of its directors and
stockholders:
A. The governing board of this Corporation shall be known
as the board of directors (the "Board of Directors" or the "Board")
and its members all be known as directors, and the number of
directors may from time to time be increased or decreased by
resolution of the Board of Directors, provided that the number of
directors shall not be reduced to less than three (3). The Board of
Directors shall be divided into three classes, as nearly equal in
number as possible, and the term of office for each respective
class of directors shall be so arranged that the term of office of
directors of one class shall expire at each successive annual
meeting of stockholders, and in all cases as to each director until
their successor shall be elected and shall qualify, or until his
earlier resignation, removal from office, death or incapacity. At
each annual meeting of stockholders after the first annual meeting,
the number of directors equal to the number of directors of the
class whose term expires at the time of such meeting (or such
greater or lesser number as would be required by an increase or
decrease in the size of the Board of Directors) shall be elected to
hold office until the third succeeding annual meeting of
stockholders after their election. This Article FOURTH may not be
amended or repealed without the affirmative vote of at least sixty-
six and two-thirds percent (66-2/3%) of the voting power of the
shares entitled to vote thereon.
B. Special meetings of stockholders of the Corporation
may be called only by the Chairman of the Board or the President or
by the Board of Directors acting pursuant to a resolution adopted
by a majority of the Whole Board. For purposes of these Articles of
Corporation, the term "Whole Board" shall mean the total number of
authorized directors whether or not there exists any vacancies in
previously authorized directorships.
FIFTH: A. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is One
Hundred Forty Million (140,000,000), consisting of One Hundred
million (100,000,000) shares of common stock, par value one-tenth
of one cent ($0.001) per share (the "Common Stock") and Forty
million (40,000,000) shares of preferred stock, par value one-
tenth of one cent ($0.001) per share (the "Preferred Stock").
B. COMMON STOCK. The shares of Common Stock shall have no
pre-emptive or preferential rights of subscription concerning
further issuance or authorization of any securities of the
Corporation. Each share of Common Stock shall entitle the holder
thereof to one vote, in person or by proxy. The holders of the
Common Stock shall be entitled to receive dividends if, as and when
declared by the Board of Directors.
The Common Stock may be issued from time to time in one or
more series and shall have such other relative, participant,
optional or special rights, qualifications, limitations or
restrictions thereof as shall be stated and expressed in the
resolution or resolutions providing for the issuance of such Common
Stock from time to time adopted by the Board of Directors pursuant
to authority so to adopt which is hereby vested in the Board of
Directors.
C. PREFERRED STOCK. The Preferred Stock may be issued
from time to time in one or more series and (a) may have such
voting powers, full or limited, or may be without voting powers;
(b) may be subject to redemption at such time or times and at such
prices; (c) may be entitled to receive dividends (which may be
cumulative or non-cumulative) at such rate or rates, on such
conditions, and at such times, and payable in preference to, or in
such relation to, the dividends payable on any other class or
classes or series of stock; (d) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the
Corporation; (e) may be made convertible into, or exchangeable for,
shares of any other class or classes or of any other series of the
same or any other class or classes of stock of the Corporation, at
such price or prices or at such rates of exchange, and with such
adjustments and (f) shall have such other relative, participating,
optional or special rights, qualifications, limitations or
restrictions thereof as shall hereafter be stated and expressed in
the resolution or resolutions providing for the issuance of such
Preferred Stock from time to time adopted by the Board of Directors
pursuant to authority so to do which is hereby vested in the Board
of Directors.
At any time from time to time when authorized by resolution of
the Board of Directors and without any action by its shareholders,
the Corporation may issue or sell any shares of its stock of any
Class or series, whether out of the unissued shares thereof
authorized by these Articles of Incorporation, as amended, or out
of shares of its stock acquired by it after the issue thereof, and
whether or not the shares thereof so issued or sold shall confer
upon the holders thereof the right to exchange or convert such
shares for or into other shares of stock of the Corporation of any
class or classes or any series thereof. When similarly authorized,
but without any action by its shareholders, the Corporation may
issue or grant rights, warrants or options, in bearer or registered
or such other form as the Board of Directors may determine, for the
purchase of shares of the stock of any class or series of the
Corporation within such period of time, or without limit as to
time, of such aggregate number of shares, and at such price per
share, as the Board of Directors may determine. Such rights,
warrants or options may be issued or granted separately or in
connection with the issue of any bonds, debentures, notes,
obligations or other evidences of indebtedness or shares of the
stock of any class or series of the Corporation and for such
consideration and on such terms and conditions as the Board of
Directors, in its sole discretion, may determine. In each case, the
consideration to be received by the Corporation for any such shares
so issued or sold shall be such as shall be fixed from time to time
by the Board of Directors.
D. The capital stock, after the amount of the
subscription price, or par value, has been paid in, shall not be
subject to assessment.
E. No holder of shares of stock of the Corporation shall
be entitled as of right to purchase or subscribe for any part of
any unissued stock of this Corporation or of any new or additional
authorized stock of the Corporation of any class whatsoever, or of
any issue of securities of the Corporation convertible into stock,
whether such stock or securities be issued for money or for a
consideration other than money or by way of dividend, but any such
unissued stock or such new or additional authorized stock or such
securities convertible into stock may be issued and disposed of to
such persons, firms, corporations and associations, and upon such
terms as may be deemed advisable by the Board of Directors without
offering to stockholders of record or any class of stockholders
upon the same terms or upon any terms.
SIXTH: A. Subject to the rights of the holders of any
series of Preferred Stock to elect additional directors under
specified circumstances, the number of directors shall be fixed
from time to time exclusively by the Board of Directors pursuant to
a resolution adopted by a majority of the Whole Board.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, newly created directorships
resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or
other cause shall, unless otherwise provided by law or by
resolution of the Board of Directors, be filled only by a majority
vote of the directors then in office, though less than a quorum,
and directors so chosen shall hold office for a term expiring at
the annual meeting of stockholders at which the term of office of
the class to which they have been chosen expires. No decrease in
the authorized number of directors shall shorten the term of any
incumbent director.
C. Advance notice of stockholder nominations for the
election of directors and of business to be brought by stockholders
before any meeting of the stockholders of the Corporation shall be
given in the manner provided in the by-laws of the Corporation.
D. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any directors, or the entire
Board of Directors, may be removed from office at any time, but
only for cause and only by the affirmative vote of the holders at
least fifty percent (50%) of the voting power of all of the then-
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors, voting together as a
single class.
SEVENTH: The Board of Directors is expressly empowered to
adopt, amend or repeal by-laws of the Corporation. Any adoption,
amendment or repeal of the by-laws of the Corporation by the Board
of Directors shall require the approval of a majority of the Whole
Board. The stockholders shall also have power to adopt, amend or
repeal the by-laws of the Corporation; provided, however, that, in
addition to any vote of the holders of any class or series of stock
of the Corporation required by law or by these Articles of
Corporation, the affirmative vote of the holders of at least fifty
percent (50%) of the voting power of all of the then-outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single
class, shall be required to adopt, amend or repeal any provision of
the by-laws of the Corporation.
EIGHTH: The Corporation reserves the right to amend or repeal
any provision contained in these Articles of Incorporation in the
manner prescribed by the laws of the State of Utah and all rights
conferred upon stockholders are granted subject to this
reservation; provided, however, that, notwithstanding any other
provision of these Articles of Incorporation or any provision of
law that might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the
stock of this Corporation required by law or by these Articles of
Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of
all the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of
Directors, voting together as a single class, shall be required to
amend or repeal this Article EIGHTH, Article SIXTH, Article
SEVENTH, or Article NINTH.
NINTH: The Board of Directors of the Corporation, when
evaluating any offer of another party to (a) make a tender or
exchange offer for any equity security of the Corporation, (b)
merge or consolidate the Corporation with another corporation or
(c) purchase or otherwise acquire all or substantially all of the
properties and assets of the Corporation, may, in connection with
the exercise of its judgment in determining what is in the best
interests of the Corporation and its stockholders, give due
consideration to (i) all relevant factors, including without
limitation the social, legal, environmental and economic effects on
the employees, customers, suppliers and other affected persons,
firms and corporations, and on the communities and geographical
areas in which the Corporation and its subsidiaries operate or are
located and on any of the businesses and properties of the
Corporation or any of its subsidiaries, as well as such other
factors as the directors deem relevant, (ii) not only the
financial consideration being offered in relation to the then
current market price for the Corporation's outstanding shares of
capital stock, but also in relation to the then current value of
the Corporation in a freely negotiated transaction and in relation
to the Board of Directors' estimate of the future value of the
Corporation (including the unrealized value of its properties and
assets) as an independent going concern, and (iii) the obligations
of the Corporation, and any of its subsidiaries, to provide stable,
reliable services on a continuing or long term basis.
TENTH: A director or officer of the Corporation shall have no
personal liability to the Corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer,
except for (a) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law; or (b) the payment
of dividends in violation of the applicable statutes of Utah. If
the Utah Revised Business Corporation Act is amended after approval
by the stockholders of this Article TENTH to authorize corporate
action further eliminating or limiting the personal liability of
directors or officers, the liability of a director or officer of
the Corporation shall be eliminated or limited to the fullest
extent permitted by the Utah General Corporation Law, as so amended
from time to time. No repeal or modification of this Article TENTH
by the stockholders shall adversely affect any right or protection
of a director or officer of the Corporation existing by virtue of
this Article TENTH at the time of such repeal or modification.
ELEVENTH: A. The Corporation shall indemnify and hold harmless
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, by reason of the fact that he or she is or was or
has agreed to become a director or officer of the Corporation or is
serving at the request of the Corporation as a director or officer
of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise or by reason of actions alleged to
have been taken or omitted in such capacity or in any other
capacity while serving as a director or officer. The
indemnification of directors and officers by the Corporation shall
be to the fullest extent authorized or permitted by applicable law,
as such law exists or may hereafter be amended (but only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than permitted prior to the
amendment). The indemnification of directors and officers shall be
against all loss, liability and expense (including attorneys fees,
costs, damages, judgments, fines, amounts paid in settlement and
ERISA excise taxes or penalties) actually and reasonably incurred
by or on behalf of a director or officer in connection with such
action, suit or proceeding, including any appeal; provided,
however, that with respect to any action, suit or proceeding
initiated by a director or officer, the Corporation shall indemnify
such director or officer only if the action, suit or proceeding was
authorized by the Board of Directors of the Corporation, except
with respect to a suit for the enforcement of rights to
indemnification or advancement of expenses in accordance with
Section C below.
B. The expenses of directors and officers incurred as a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative shall be paid by the Corporation as they are incurred
and in advance of the final disposition of the action, suit or
proceeding; provided, however, that if applicable law so requires,
the advance payment of expenses shall be made only upon receipt by
the Corporation of an undertaking by or on behalf of the director
or officer to repay ail amounts so advanced in the event that it is
ultimately determined by a final decision, order or decree of a
court of competent jurisdiction that the director or officer is not
entitled to be indemnified for such expenses under this Article
ELEVENTH.
C. Any director or officer may enforce his or her rights
to indemnification or advance payments for expenses in a suit
brought against the Corporation if his or her request for
indemnification or advance payments for expenses is wholly or
partially refused by the Corporation or if there is no
determination with respect to such request within 60 days from
receipt by the Corporation of a written notice from the director or
officer for such a determination. If a director or officer is
successful in establishing in a suit his or her entitlement to
receive or recover an advancement of expenses or a right to
indemnification, in whole or in part, he or she shall also be
indemnified by the Corporation for costs and expenses incurred in
such suit. It shall be a defense to any such suit (other than a
suit brought to enforce a claim for the advancement of expenses
under Section B of this Article ELEVENTH where the required
undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct set forth in the Utah
Revised Business Corporation Act. Neither the failure of the
Corporation to have made a determination prior to the commencement
of such suit that indemnification of the director or officer is
proper in the circumstances because the director or officer has met
the applicable standard of conduct nor a determination by the
Corporation that the director or officer has not met such
applicable standard of conduct shall be a defense to the suit or
create a presumption that the director or officer has not met the
applicable standard of conduct. In a suit brought by a director or
officer to enforce a right under this Section C or by the
Corporation to recover and advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that a director or
officer is not entitled to be indemnified or is not entitled to an
advancement of expenses under this Section C or otherwise, shall be
on the Corporation.
D. The right to indemnification and to the payment of
expenses as they are incurred and in advance of the final
disposition of the action, suit or proceeding shall not be
exclusive of any other right to which a person may be entitled
under these Articles of Incorporation or any by-law, agreement,
statute, vote of stockholders or disinterested directors or
otherwise. The right to indemnification under Section A above shall
continue for a person who has ceased to be a director or officer
and shall inure to the benefit of his or her heirs, next of kin,
executors, administrators and legal representatives.
E. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any loss, liability or
expense, whether or not the Corporation would have the power to
indemnify such person against such loss, liability or expense under
the Utah General Corporation Law.
F. The Corporation shall not be obligated to reimburse
the amount of any settlement unless it has agreed to such
settlement. If any person shall unreasonably fail to enter into a
settlement of any action, suit or proceeding within the scope of
Section A above, offered or assented to by the opposing party or
parties and which is acceptable to the Corporation, then,
notwithstanding any other provision of this Article ELEVENTH, the
indemnification obligation of the Corporation in connection with
such action, suit or proceeding shall be limited to the total of
the amount at which settlement could have been made and the
expenses incurred by such person prior to the time the settlement
could reasonably have been effected.
G. The Corporation may, to the extent authorized from
time to time by the Board of Directors, grant rights to
indemnification and to the advancement of expenses to any employee
or agent of the Corporation or to any director, officer, employee
or agent of any of its subsidiaries to the fullest extent of the
provisions of this Article ELEVENTH subject to the imposition of
any conditions or limitations as the Board of Directors of the
Corporation may deem necessary or appropriate.
TWELFTH: In the event of a conflict between the terms of these
Articles of Incorporation and the By-Laws of the Corporation, the
terms and provisions of these Articles of Incorporation shall
govern.
THIRTEENTH: The signature of the aforesaid registered agent
of the corporation is as follows:
___________________________
JAMES BARBER
THE UNDERSIGNED, being the incorporator of this Corporation,
for the purpose of adopting these Articles of Incorporation under
the laws of the State of Utah do make, file and record these
Articles of Incorporation, do certify that the facts herein stated
are true, and, accordingly, have hereto set my hand and seal this
____th day of March, 1999.
_________________________________
JAMES BARBER, Incorporator
3909 S. Alberly Way
Salt Lake City, Utah 84124-810
BYLAWS
OF
GLENNAIRE FINANCIAL SERVICES, INC.
ARTICLE I: OFFICES
The principal office of the Corporation in the State of
Utah shall be located in Salt Lake City; the Corporation may
have such other offices, either within or without the State of
Utah, as the Board of Directors my designate or as the
business of the Corporation may require from time to time.
ARTICLE II: SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the 15th day in the month of
December in each year, beginning with the transaction of such
other business as my come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in the
State of Utah, such meeting shall be held on the next
succeeding business day. If the election of Directors shall
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 conveniently
may be.
SECTION 2. Special Meetings. Special meeting 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 ten percent
(10%) of all the outstanding shares of the Corporation
entitled to vote at the meeting.
SECTION 3. Place of Meeting. The Board of Directors my
designate any place, either within or without the State of
Utah, unless otherwise prescribed by statute, as the place of
meeting for any annual meeting or for any special meeting. A
waiver of notice signed by all shareholders entitled to vote
at a meeting may designate any place, either within our
without the State of Utah, unless otherwise prescribed by
statute, as the place for the holding of such meeting. If no
designation is made, the place of meeting shall be the
principal office of the Corporation.
SECTION 4. Notice of Meeting. Written notice stating
the place, day and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting
is called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60) days
before the date of 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. Closing of Transfer Books or Fixing of
Record. 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 proper purpose, the Board of
Directors of the Corporation may provide that the stock
transfer books shall be closed for a stated period, but not to
exceed in any case fifty (50) days. If the stock 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 fifteen
(15) days immediately preceding such meeting. In lieu of
closing the stock 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 thirty (30) days and, in case of a meeting of
shareholders, not less than ten (10) days, prior to the date
on which the particular action requiring such determination of
shareholders is to be taken. If the stock 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 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the
corporation shall make a complete list of 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. Such lists
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.
SECTION 7. Quorum. A majority of the outstanding shares
of the Corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of
shareholders. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a
quorum shall be 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 of enough
shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing
by the shareholder or by his or duly authorized attorney-in-
fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. A meeting
of the Board of Directors may be had by means of telephone
conference or similar communications equipment by which all
persons participating in the meeting can hear each other, and
participation in a meeting under such circumstances shall
constitute presence at the meeting.
SECTION 10. Voting of Shares by Certain Holders. 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 corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him either in person or by proxy,
without a transfer of such shares into his name. 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 without a transfer of such shares into
his 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 his name, if authority to do so be contained in
an appropriate order of the court by which such receiver was
appointed.
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.
Shares of its own stock belonging to the Corporation
shall not 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.
SECTION 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken at
a meeting of the shareholders, or any other action which may
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 all of the shareholders
entitled to vote with respect to the subject matter thereof.
ARTICLE III: BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of
the Corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The
number of directors of the Corporation shall be fixed by the
Board of Directors, but in no event shall be less than one (
1 ). Each Director shall hold office until the next annual
meeting of shareholder and until his successor shall have been
elected and qualified.
SECTION 3. 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 for the holding of
additional regular meetings without notice other than such
resolution.
SECTION 4. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of the
President or any two directors. The person or persons
authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board
of Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall
be given at least one (1) day previous thereto by written
notice delivered personally or mailed to each director at his
business address, or by telegram. If mailed, such notice
shall be deemed to be delivered when deposited in the United
Sates 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 directors may waive notice of any meeting. The
attendance of a director at a 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.
SECTION 6. Quorum. A majority of the number of
directors fixed by Section 2 of the Article III 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 7. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
SECTION 8. Action Without a Meeting. Any action that
may be taken by the Board of Directors at a meeting may be
taken without a meeting if a consent in writing, setting forth
the action so to be taken, shall be signed before such action
by all of the directors.
SECTION 9. 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, unless otherwise provided by law.
A director elected to fill a vacancy shall be elected for the
unexpired term of his 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 10. Compensation. By resolution of the Board of
Directors, each director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may
be paid a stated salary as a 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
thereof.
SECTION 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or
unless he shall file his 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.
ARTICLES IV: OFFICERS
SECTION 1. Number. The officers of the corporation
shall be a President, one or more vice Presidents, 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, including a Chairman of the Board. In its
discretion, the Board of Directors may leave unfilled for any
such period as it may determine any office except those of
President and Secretary. Any two or more offices may be held
by the same person. Officers may be directors or shareholders
of the Corporation.
SECTION 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 each 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 conveniently may be. Each officer shall
hold office until his successor shall have been duly elected
and shall have qualified, or until his death, or until he
shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed
by the Board of Directors whenever, in its judgement, 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,
and such appointment shall be terminable at will.
SECTION 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 5. President. The president shall be the
principal executive officer of the Corporation and, subject to
the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all meetings
of the shareholders and of the Board of Directors, unless
there is a Chairman of the Board, in which case the Chairman
shall preside. He may sign, with the Secretary or any other
proper officer of the Corporation thereunto authorized by the
Board of Directors, certificates for shares of the
Corporation, any deed, mortgages, bonds, contract, or other
instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors
or by there 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 6. Vice President. In the absence of the
president or in the event of his death, inability or refusal
to act, the Vice President shall perform the duties of the
President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
The Vice President shall perform such other duties as from
time to time may be assigned to him by the President or by the
Board of Directors, If there is more than one Vice President,
each Vice President shall succeed to the duties of the
President in order of rank as determined by the Board of
Directors. If no such rank has been determined, then each
Vice President shall succeed to the duties of the President in
order of date of election, the earliest date having the first
rank.
SECTION 7. Secretary. The Secretary shall: (a) keep
the minutes of the Board of Directors in one or more minute
books provided for the purpose; (b) see that all notices are
duly given in accordance with the provisions of the 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 President certificates
for share 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 the Secretary and such other duties as from time
to time may be assigned to him by the President or by the
Board of Directors.
SECTION 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 in such banks,
trust companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaw;
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 by the President or by the Board of
Directors. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such sureties as the Board of
Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the
Corporation.
ARTICLE V: INDEMNITY
The Corporation shall indemnify its directors, officers
and employees as follows:
(a) Every director, officer, or employee of the
Corporation shall be indemnified by the Corporation against
all expenses and liabilities, including counsel fees,
reasonable incurred by or imposed upon him in connection with
any proceeding to which he may become involved, by reason of
his being or having been 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 the corporation, partnership, joint venture, trust or
enterprise, or any settlement thereof, whether or not he is a
director, officer, employee or agent at the time such expenses
are incurred, except in such cases wherein the director,
officer, or employee is adjudged guilty of willful misfeasance
or malfeasance in the performance of his duties; provided that
in the event of a settlement the indemnification herein shall
apply only when the Board of Directors approves such
settlement and reimbursement as being for the best interests
of the Corporation.
(b) The Corporation shall provide to any person who is
or was a director, officer, employee, or agent of the
Corporation or is or was serving at the request of the
Corporation as director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise,
the indemnity against expenses of suit, litigation or other
proceedings which is specifically permissible under applicable
law.
(c) The Board of Directors may, in its discretion,
direct the purchase of liability insurance by way of
implementing the provisions of the Article V.
ARTICLE VI: CONTRACTS, LOANS, CHECKS, AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may
authorize any office 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 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 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.
SECTION 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 VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form
as shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by
the Board of Directors so to do, and sealed with the corporate
seal. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on
the stock transfer books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be cancelled
and no new certificate shall be issued until the former
certificate for a like number of shares shall have been
surrendered and cancelled, expect that in case of a lost,
destroyed or mutilated certificate a new one may be issued
therefore upon such terms and indemnity to the Corporation as
the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of
the Corporation shall be made only on the stock transfer books
of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized
by power of attorney duly executed and filed with the
Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof for
all purposes, Provided, however, that upon any action
undertaken by the shareholder to elect S Corporation status
pursuant to Section 1362 of the Internal Revenue Code and upon
any shareholders agreement thereto restricting the transfer of
said shares so as to disqualify said S Corporation status,
said restriction on transfer shall be made a part of the
Bylaws so long as said agreements is in force and effect.
ARTICLE VIII: FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each
year.
ARTICLE IX: 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 condition provided by law
and its Articles of Incorporation.
ARTICLE X: 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 XI: WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or director of the
Corporation under the provision of the Articles of
Incorporation or under the provisions of the applicable
Business Corporation Act, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XII: AMENDMENTS
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any regular
or special meeting of the Board of Directors.
The above Bylaws are certified to have been adopted by
the Board of Directors of the Corporation on the _____ day of
March, 1999.
Vincent van den Brink, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE GLENNAIRE FINANCIAL
SERVICES, INC. FINANCIAL STATEMENTS FOR THE PERIOD
ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<PERIOD-END> MAR-31-1999
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0
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<COMMON> 1,000
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<TOTAL-LIABILITY-AND-EQUITY> 0
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