As filed with the Securities and Exchange Commission on July __, 1999.
Registration No.__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INSIDER TRAVEL DEALS.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-063399
(State or jurisdiction of ________________________ (I.R.S.
incorporation or organization) (Primary Standard Industrial Identification)
Classification Code Number)
5252 Edgewood Drive
Provo, UT 84604
(801) 222-9414
(Address, including zip code, and telephone number, including area code,
of principal executive offices)
James E. Solomon
5252 Edgewood Drive
Provo, UT 84604
(801) 222-9414
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Gregory E. Lindley
Ray, Quinney & Nebeker
79 South Main, Suite 500
Salt Lake City, UT 84111
(801) 532-1500
Approximate date of proposed sale to the public: As soon as practicable
following effectiveness of
the Registration
Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------- ---------------------- ----------------------- ---------------------- --------------------
Proposed Proposed
Title of Each Maximum Maximum
Class of Securities Dollar Amount Offering Price Aggregate Amount of
to be Registered to be Registered Per Unit Offering Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock $200,000 $0.05 $200,000 $100*
- --------------------------- ---------------------- ----------------------- ---------------------- --------------------
</TABLE>
*Minimum Fee
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registration shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
PROSPECTUS
INSIDER TRAVEL DEALS.COM, INC.
5252 North Edgewood Drive, Suite 210
Provo, UT 84060
(801) 222-9414
4,000,000 Shares of Common Stock
Price per security (share): $0.05 per share
Maximum Number of Minimum Number of
Securities Offered: Securities Offered:
4,000,000 shares 2,000,000 shares
Investing in Insider Travel Deals.Com involves significant risks.
Investors need to read the "Risk Factors" beginning on page 3.
<TABLE>
<CAPTION>
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Offering Proceeds
Price to Public Commissions to Company
<S> <C> <C> <C>
Per Share $0.05 $0.00 0.05
Total Minimum $100,000 $0.00 $100,000
Maximum $200,000 $0.00 $200,000
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
o At least 2,000,000 shares of common stock must be sold for this
offering to close. If at least 2,000,000 shares are not sold, the
offering will be canceled and all investor funds will be refunded
without interest or deduction of any kind.
o Insider Traveler Deals.Com's officers and directors will attempt
to offer and sell all of the shares. No commissions will be paid.
o The net proceeds to Insider Travel Deals.Com shown above is before
deduction of offering expenses estimated at $38,000, including
legal and accounting fees and printing costs.
o There is no public market for our common stock.
The date of this prospectus is July ___, 1999.
1
<PAGE>
PROSPECTUS SUMMARY
This is a brief summary of the information in this prospectus. We encourage
you to read the entire prospectus before you decide whether and how to invest in
the shares offered.
Insider Travel Deals.Com
- ------------------------
Insider Travel Deals.Com was organized as a Nevada corporation on June 11,
1999 to market several travel-related products, including our flagship product,
the ITD Travel Club. The ITD Travel Club differs from most travel clubs because
it will notify its members via e-mail and fax about new, discounted travel
opportunities several times each week. Members will also receive a monthly
newsletter, discounts on most airlines, a free resort stay and discount coupons
for rental cars, etc. For these services, ITD Travel Club members will pay a
monthly subscription fee. Members will be secured directly through the Internet
or indirectly through associations and large groups who wish to promote ITD
Travel Club as a member benefit. From its customer base of club members, ITD
will market other travel-related products.
The Offering
- ------------
o Securities Up to 4,000,000 shares of Insider Travel
Deals.Com common stock.
o Use of Proceeds: Net proceeds from this offering of up to
$162,000 will be used to repay a loan from
James Solomon, Insider Travel Deals.Com's
Secretary/Treasurer, and for product
purchases, general and administrative
expenses, and marketing and promotion of
products.
o Escrow Account: Subscription proceeds will be deposited into
an escrow account pending receipt of
subscriptions totaling $100,000 or
termination of the offering.
o This Offering This offering will close whenever at least
Will Expire: 2,000,000 shares of common stock are sold, or
on November 30, 1999.
o Summary Financial Insider Travel Deals.Com was only recently
Data: formed and has had no revenues. We have cash
on hand of $1,300 as of July 21, 1999.
o No Brokerage The officers of Insider Travel Deals.Com will
Commissions: offer the shares and will not use a broker-
dealer for this purpose. This will help
Insider Travel Deals.Com save the cost of
broker-dealer help.
2
<PAGE>
RISK FACTORS RELATING TO OUR BUSINESS
o Insider Travel Deals.Com's limited operating history increases the risk of
loss to investors.
We were organized in June 1999 and have only been in operation for a few
weeks. To date, our activities have been limited to acquiring and developing
data and information dissemination systems, establishing relationships inside
the travel industry, and commencing initial marketing and sales efforts. We have
not been in business long enough to enable an investor to make an informed
judgment as to our future performance. We expect to operate at a loss for a
period of at least several months, until we have established a network for the
marketing of our products. Even then it will still be uncertain as to whether we
can continue to implement our business plan or that we will ever operate
profitably.
o If Insider Travel Deals.Com does not obtain enough money to continue to
operate, investors will lose their investment.
Our ability to implement business activities is dependent on obtaining
funding through this offering. The net proceeds from this offering will only be
sufficient to fund our operations for a period of six months, if the entire
offering is sold, and three months, if only the minimum offering is sold. While
we believe the funds from the offering will be sufficient to fund a portion of
the initial operating equipment, to cover certain general and administrative
expenses and marketing costs, for a period of up to six months, and to repay all
of our debt to James E. Solomon, Secretary/Treasurer, the proceeds will be
insufficient to cover expanded marketing efforts or to fund any of these costs
thereafter. Unless we achieve a positive cash flow from the sale of ITD Travel
Club memberships within a few months from the date of this prospectus, we will
be in need of additional funds. We cannot be sure that such profitability will
be achieved, and unforeseen circumstances could occur which could compel us to
seek additional funds, particularly if only the minimum offering is sold. Even
if we do achieve a positive cash flow within a few months from the date of this
prospectus, of which we are uncertain, we will have very limited funds available
for expanded operations. Additional financing may not be available if needed, or
if available, may not be available on favorable terms.
o Investors' money will be used to repay debt an officer.
James E. Solomon, Secretary/Treasurer, has loaned up to $20,000 to Insider
Travel Deals.Com. If the minimum offering is sold, this indebtedness will be
repaid, without interest, from the proceeds of this offering.
o Investors must rely on management of Insider Travel Deals.Com for the
success of their investment.
We will be particularly dependent on I. Mark Faldmo, President, and James E.
Solomon, Secretary/Treasurer, in the development and management of our business.
Mark Faldmo and James E. Solomon will devote five to twenty hours a week to our
affairs, but both Mr. Faldmo and Mr. Solomon have other business interests which
will require a substantial portion of their time. While these individuals have a
varied business background, neither one of them has extensive experience in the
particular business we are undertaking. In addition to these individuals, our
success will also depend, in large part, on the efforts of Rick L. Haviland,
vice president of research and development, in developing and implementing our
services. Rick Haviland will devote 40 hours a week to our business. We have not
obtained keyman insurance on the lives of any of these individuals, and do not
intend to do so in the foreseeable future. The loss of the services of any one
of these individuals could have a substantial detrimental impact.
3
<PAGE>
o Investors' money may be lost if Insider Travel Deals.Com's products and
services are not accepted in the market place.
We have not conducted any formal independent research or market study to
ascertain whether, and to what extent, our products will be accepted by
consumers. Our business is being undertaken solely on management's evaluation
that we have a product which will be attractive to consumers in the travel
market. It is uncertain whether our products will be well received in the
marketplace, or that we will be able to create, through our marketing efforts, a
demand for our products.
o Investors must rely on Insider Travel Deals.Com's ability to introduce new
products for the success of their investment.
Our success is dependent upon our ability to design and deliver new
products, and to successfully introduce our products into the marketplace.
Demand and market acceptance of new products are subject to substantial
uncertainty. Achieving market acceptance for our products may require
substantial marketing and other efforts and the expenditure of significant funds
to create product appeal and acceptance. We have very limited funding for such
purposes. The failure of any of our products to gain market acceptance could
adversely affect our image and demand for other products.
o Insider Travel Deals.Com must be able to compete with larger, more
established travel companies to be successful.
Competition in the travel industry is intense. We will be competing with
over twenty sizable companies marketing travel clubs in the United States, which
are extremely large and financially healthy companies, have a substantial market
share and name recognition, and easy access to marketing outlets and capital and
capital markets. Many of these companies are able to frequently update and
expand products and services and introduce new products and services, and to
diversify product and service offerings. Because of the uniqueness of actively
disseminating time sensitive travel bargain information, we believe there is a
good possibility that we will be able to initially capture a portion of this
"niche" market for members-only travel bargain information. However, these other
companies with substantially greater financial, creative and marketing
resources, and proven histories, may decide to enter and effectively compete in
this market.
o Insider Travel Deals.Com does not have long-term agreements with suppliers
of discount travel products and services.
Our primary resource is travel bargain information. We will rely on
transportation carriers, lodging properties and resort properties to supply
travel bargain information. We do not have any or expect to have any long-term
information supply contracts with any entity in the travel industry.
4
<PAGE>
GENERAL RISKS RELATING TO INVESTMENT
o Investors will not have use of their subscription amounts until the
offering closes or is terminated.
The common stock we are offering is offered on a "best efforts" basis, and
no individual, firm, or corporation has agreed to purchase any of the offered
shares. We are not certain that any or all of the shares will be sold.
Provisions have been made to deposit the funds received from the purchase of
shares in escrow, and in the event $100,000 is not received by November __,
1999, proceeds so collected will be promptly refunded to investors without
paying interest and without deducting expenses. During this escrow period, you
will not have use of or derive benefits from your escrowed funds.
o Investors may have to hold their stock indefinitely because there is no
public market for the stock.
At the present time, there is no public market for our securities. We do not
know if a public market for our common stock will develop following the
offering. As a result, purchasers of the common stock offered hereby may not be
able to liquidate their investment readily, if at all. We have not engaged the
services of an underwriter with respect to this offering and, as a result, there
is a greater risk that no market for our securities will develop following the
offering.
o Future sales of our common stock in the public market could adversely
affect our stock price and our ability to raise funds in new stock offerings.
All of our 13,000,000 shares of common stock presently outstanding are
"restricted securities" within the meaning of the Securities Act of 1933. As
such, in the event a public market for the common stock develops in the future,
a portion of such stock may be sold as early as June 11, 2000, in reliance on
Rule 144 adopted under the Securities Act, if certain specific requirements are
met. Investors should be aware that sales under Rule 144 may have a depressive
effect on the price of the stock in any market, which may develop.
o Investors who purchase shares will benefit present stockholders.
Collectively, the existing stockholders now own 13,000,000 shares of Insider
Travel Deals.Com's common stock, for which they paid an aggregate total of
$1,300 in cash. If all 4,000,000 shares are sold, the current stockholders will
still own approximately 76% of the common stock, and the other purchasers in
this offering will own the other 24%, for which they will have paid $200,000
cash. Thus, purchasers in this offering will contribute to the capital of
Insider Travel Deals.Com a disproportionately greater percentage than the
ownership they receive. Present stockholders will benefit from a greater share
of Insider Travel Deals.Com if successful, while investors in the offering risk
a greater loss of cash invested if Insider Travel Deals.Com is not successful.
5
<PAGE>
o The "penny stock" rules could make it more difficult for investors who
want to resell their shares.
Insider Travel Deals.Com common stock might be defined as a "penny stock"
pursuant to Rule 3a51-1 under the Securities and Exchange of Act if the shares
were to be traded at a price less than $5 per share, if Insider Travel Deals.Com
had not yet met certain financial size and volume levels, and if the shares were
not registered on a national securities exchange or quoted on the NASDAQ system.
A "penny stock" is subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Commission. Those rules require securities broker-dealers, before
effecting transactions in any "penny stock," to (1) deliver to the customer and
obtain a written receipt for a disclosure document set forth in Rule 15g-10
(Rule 15g-2), (2) disclose certain price information about the stock (Rule
15g-3), (3) disclose the amount of compensation received by the broker-dealer
(Rule 15g-4) or any "associated person" of the broker-dealer (Rule 15g-5), and
(5) send monthly statements to customers with market and price information about
the "penny stock" (Rule 15g-6). Insider Travel Deals.Com's common stock could
also become subject to Rule 15g-9, which requires the broker-dealer, in some
circumstances, to approve the "penny stock" purchaser's account under certain
standards and deliver written statements to the customer with information
specified in the rules. (Rule 15g-9) These requirements discourage
broker-dealers from effecting transactions in "penny stocks" and may limit the
ability of purchasers in this offering to sell their shares into any secondary
market for Insider Travel Deals.Com's common stock.
DILUTION
As of June 23, 1999, our net tangible book value (total tangible assets less
total liabilities) was $1,300, or approximately $0.0001 per share. The following
table sets forth the dilution to persons purchasing shares in this offering
without taking into account any changes in our net tangible book value after
June 23, 1999, except the sale of the minimum and maximum number of shares
offered at the public offering price and receipt of the net proceeds therefrom.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------- ---------------------- -------------------
Assuming Assuming
Minimum Maximum
Shares Sold Shares Sold
- --------------------------------------------------------------------------- ---------------------- -------------------
<S> <C> <C>
Public offering price per share $0.050 $0.050
Net tangible book value before offering1 $0.0001 $0.0001
Increase attributable to purchase of shares by new investors $0.006 $0.012
Pro forma net tangible book value after offering2, 3,4 $0.0042 $0.0096
Dilution per share to new investors $0.049 $0.0404
Percent dilution to new investors 98% 85%
- --------------------------------------------------------------------------- ---------------------- -------------------
</TABLE>
1 Determined by dividing the number of shares of common stock outstanding into
the net tangible book value.
2 After deduction of offering expenses estimated at
$38,000.
6
<PAGE>
3 These figures do not take into account any events after June 23, 1999,
including the loan by our Secretary/Treasurer of additional funds. A substantial
portion of such borrowed funds have been used for start-up expenses including
salaries and wages. (See "BUSINESS" and "INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS").
COMPARATIVE DATA
The following chart illustrates percentage ownership held by the
present stockholders and by the public investors in this offering and sets forth
a comparison of the amounts paid by the present stockholders and by the public
investors.
<TABLE>
<CAPTION>
- --------------------------------------- ------------------------------ ---------------------------- -----------------
Total Shares Purchased Total Consideration Average
Price
Per Share*
------------------------------ ---------------------------- -----------------
Number Percent Amount Percent
----------------- ------------ --------------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Present Shareholders
Minimum Offering 13,000,000 86.7 $1,300 1.3 $0.0001
Maximum Offering 13,000,000 76.4 $1,300 0.6 $0.0001
New Investors
Minimum Offering 2,000,000 13.3 $140,000 98.7 $0.0505
Maximum Offering 4,000,000 23.6 $200,000 99.35 $0.0505
- --------------------------------------- ----------------- ------------ --------------- ------------ -----------------
</TABLE>
* The price per share of the present stockholders considers only the cash
contribution by such stockholders, and does not take into account other
contributions by such stockholders, including the contribution of products
and services contributed.
USE OF PROCEEDS
We estimate net proceeds from the sale of all 4,000,000 shares of common
stock to be approximately $162,000, if the entire offering is sold, after
deducting expenses of this offering. If only the minimum offering is sold, we
will receive net proceeds of approximately $62,000, after deduction of such
offering expenses.
The Company proposes to use the net proceeds from this offering in the
following general amounts and order of priority:
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------- ------------------------------ ----------------------------
Assuming Minimum Assuming Maximum
Shares Sold(1) Shares Sold(1)
------------------------------ ----------------------------
Number Percent Amount Percent
----------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
1. General administrative expenses, telephone,
reproduction, and general office costs (2,3) $20,000 32.2 $ 92,000 56.8
2. Repayment of indebtedness to officer and director (4) $20,000 32.2 $ 20,000 12.3
3. Marketing and promotional costs (5) $7,000 11.3 $ 20,000 12.3
4. Management compensation $15,000 24.3 $ 30,000 18.6
------- ---- --------- ----
TOTAL $62,000 100% $ 162,000 100%
- --------------------------------------------------------- ----------------- ------------ ---------------- -----------
</TABLE>
1 These expenditures represent estimates based on our present intentions for
the first six months of our operations. We may make minor changes in the use
of proceeds if dictated by market conditions.
2 We contemplate these costs will increase proportionately if more than the
minimum offering is sold, in order to cover additional general and
administrative costs necessary as a result of expanded operations.
3 Our current overhead is limited to telephone, telefax, reproduction, mailing
and other miscellaneous expenses.
4 James E. Solomon, Secretary/Treasurer, has loaned Insider Travel Deals.Com
the sum up to $20,000, which has been used to fund start-up operations. Mr.
Solomon will be repaid in full, without interest, from the net proceeds of
the offering. (See "INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS").
5 Represents amounts for travel to establish a distributor network; the
preparation and production of promotional materials; and other general
marketing and promotional activities. (See "BUSINESS--Marketing").
The net proceeds from this offering will fund operations for period of up to
six months. If only the minimum offering is sold, the net proceeds will fund
Insider Travel Deals.Com for an even shorter period. Therefore, within a few
months from the completion of the offering, we will either need to be operating
profitably so as to fund our operations from cash flow, or be required to seek
additional debt or equity capital. In addition, financial circumstances could
occur that could compel us to seek additional funds even sooner. Moreover, we
will need additional capital should we decide to significantly expand
operations. We cannot be certain that additional funds will be available when
needed, or if available, on favorable terms.
We do not intend to become an investment company under the Investment
Company Act of 1940 and, therefore, may be limited in the temporary investments
we can make with the proceeds of this offering. To the extent that the net
proceeds of this offering are not utilized immediately, they will be invested in
money market accounts, savings deposits, short-term obligations of the United
States government, or other temporary interest bearing investments in commercial
financial institutions.
8
<PAGE>
BUSINESS
General
- -------
Insider Travel Deals.Com is a Nevada corporation organized for the purpose
of marketing several travel-related products, including our flagship ITD Travel
Club. The ITD Travel Club differs from most travel clubs because it will
actively notify its members via e-mail and fax about new, discounted travel
opportunities several times each week. Members will also receive a monthly
newsletter, discounts on most airlines, a free resort stay and discount coupons
for rental cars, etc. For these services, ITD Travel Club members will pay a
monthly subscription fee. Insider Travel Deals.Com will attempt to secure
members directly through the Internet or indirectly through associations and
large groups who wish to promote the ITD Travel Club as a member benefit. From
our customer base of club members, we will market other travel-related products.
Our service is delivery of travel bargain information. We have completed the
development of our initial products and services, and have established
relationships with transportation carriers, lodging properties and resort
properties, and suppliers of the travel bargain information. We believe that we
will be able to provide travel bargain information to our customers. However, we
may not be successful in any of these efforts. We are a newly organized
corporation and have no history of operations.
Plan of Operations
- ------------------
We have completed the development of our initial products and services. We
plan to devote our efforts in the next twelve months to marketing and promoting
our products and services for the purpose of establishing them in the market
place. Prospective sources of information, such as, transportation carriers,
lodging properties and resort properties have been identified and management is
undertaking initial discussions with such entities. As soon as reasonably
practicable following this offering, we plan to enter into additional travel
bargain information supply arrangements with selected carriers and properties in
the industry. At the same time, we will continue with efforts to directly market
our products and services.
If the maximum offering is completed, we believe we will have sufficient
funding to satisfy our cash requirements for the next six months. If only the
minimum offering is sold, our funds will be very limited, and we may need to
seek additional debt or equity capital to meet our cash requirements unless net
revenue from sales of products generates sufficient capital. Revenue from
operations may not be sufficient to provide us with funds to meet our cash
requirements.
9
<PAGE>
Industry and Market Overview
- ----------------------------
The travel industry is an approximately $500 billion industry. Travel
revenues have increased 41% over the past decade. Approximately six million
travelers currently book trips online each year. Some estimates anticipate that
number to double in the next three years.
Although we have not conducted any formal market studies or analyses of the
travel industry in undertaking our business, management believes a few trends
are apparent. First, the travel industry in general has enjoyed eight
consecutive years of growth and it appears that it will continue to grow.
Secondly, the use of the Internet to obtain information regarding travel and to
book trips has expanded considerably over the past several years. Consequently,
management believes that up-to-the-minute supply of travel bargain information
over the Internet has profit potential.
The travel industry is cyclical with consumer spending tending to decline
during periods of recession when discretionary income decreases. Our travel
products could be considered as luxury items. With any decline in consumer
spending, there exists the possibility that we may not be able to successfully
market our products. Our industry and the market for the end products we develop
are also subject to changing consumer demands and trends and while travel has
grown significantly over the past several years, we cannot be certain that such
growth will continue or that these trends will not be reversed. Our success will
depend on our ability to anticipate and respond to changing consumer demands and
trends and other factors affecting the travel industry. Failure to respond to
such factors in a timely manner could have a material adverse effect.
Products
- --------
Travel clubs normally provide their members with a directory of hotels
offering discounted rates as well as some coupons for savings on rental cars and
theme parks. Members receive these printed materials for an annual membership
fee. We will provide similar services, plus, the additional service of actively
supplying our members with updates of travel bargain information of which the
public is generally unaware. Many travel carriers, lodging properties and resort
properties will only offer discounted prices through 'quiet' distribution
channels for fear that public advertising of dramatic discounts would generate a
fury from the travelers who already paid full price. We, as a 'quiet'
distributor, intend to supply our customers with such discounted prices. We will
also supply to our customers non-commissionable discounts that are usually not
sold by conventional agencies.
Insider Travel Deals.Com believes that these types of travel bargains will
be continually found by its research staff through their numerous industry
contacts. New travel bargains will be communicated to the ITD Travel Club
members via e-mail or fax transmission as soon as they become available, often
several times each week. Customers will also receive monthly, multi-page
newsletters listing hundreds of travel bargains plus travel suggestions and
hints, a one time, free three day, two night stay at one of 140 luxury resorts
and discounts of 5-50% off most airline tickets.
10
<PAGE>
We do not currently have, and do not expect to have, any long-term contracts
with any transportation carriers, lodging properties, resort properties or other
sources of travel bargain information and deals. We cannot be certain that our
relationships with transportation carriers, lodging properties, resort
properties or other sources of travel bargain information will continue or that
alternative sources can be established.
Marketing
- ---------
The profile of the targeted club member is an individual who takes more than
two trips per year other than by automobile. Travel Institute of America
indicate 104.2 million Americans take two such trips annually. Industry data
shows that the average American family of four makes 2.4 trips per year with an
average stay of 7.4 nights and that 25% of travelers in this category already
use the Internet. This trend of Internet usage is expected to increase to 65% by
2002. Insider Travel Deals.Com will attempt to reach these targeted individuals
via the following three major distribution channels:
o direct to consumers via the Internet;
o indirectly through associations/groups that use the Club as a member
benefit; and
o indirectly through independent distributors who wish to own their own
Internet-based, travel-related business.
We will offer a free, thirty-day membership in the Club. Members may keep
the benefits they have received, including the free three day, two night resort
stay even if they do not extend beyond the free period. To assure high
retention, the ITD Travel Club will capture the member's credit card information
upon the initial enrollment. Under those terms, if the member wishes to continue
his or her membership, he or she does not have to take any action. Rather, the
credit card is automatically charged each month until membership is canceled.
Internet Sales. The Internet is impacting the travel industry because of the
ease of obtaining information. Twenty-five percent of our target market uses the
Internet for travel information. We intend to profit from this trend by directly
enrolling members via the Internet. Display ads in numerous magazines read by
frequent travelers and website banners on travel related websites will be used
to attract traffic to our website. We will also seek free publicity through
press releases and editorial features.
Sales Through Associations and Groups. We will attempt to attract new
customers through existing associations and groups. Such entities may give us
access to large databases and provide endorsements of our services. We will seek
to have details of our services included on existing communiques of such
entities--an inexpensive source of exposure for the ITD Travel Club. As an
incentive, we may offer commissions to associations and groups that promote the
ITD Travel Club as a benefit to their members.
Sales Through Independent Distributors. We will also utilize home-based
businesses to market our services by recruiting independent distributors who
wish to own their own travel-related business. Those distributors can purchase a
11
<PAGE>
distributorship kit for under $200 that will allow them to enroll new members
utilizing the free thirty-day membership. Distributors receive ongoing
commissions of 20% of membership fees of people they enroll. These distributors
will be recruited via display ads in business opportunity magazines as well as
direct mailings to targeted mailing lists.
We may be unsuccessful in our efforts to establish sales via print and
Internet advertising, through associations and groups or through a network or
broker representatives, as described above. Due to our extremely limited
resources, we may not be able to pursue many of these marketing strategies
simultaneously without substantial additional capital.
Pricing and Profit. We will attempt to price our products so as to achieve a
gross profit margin of 30% or more. We anticipate that a monthly membership will
cost $9.99.
Competition
- -----------
Competition in the travel industry is intense. We will be competing with
over twenty sizable companies marketing travel clubs in the United States, which
are extremely large and financially healthy companies, that have a substantial
market share and name recognition, and easy access to marketing outlets and
capital and capital markets. Many of these companies are able to frequently
update and expand products and services and introduce new products and services,
and to diversify product and service offerings. Because of the uniqueness of
actively disseminating time sensitive travel bargain information, we believe
there is a good possibility we will be able to initially capture a portion of
this "niche" market for members-only travel bargain information. However, other
companies with substantially greater financial, creative and marketing
resources, and proven histories, may enter into and effectively compete in this
market.
Our method of actively disseminating time sensitive travel bargain
information via the Internet and fax is almost identical to the method used by a
travel club developed in 1998 and owned by Columbus Companies, Inc. in
Bountiful, Utah. Columbus Companies sends e-mail and fax messages regarding time
sensitive travel bargain information to approximately 700 members. We will be in
direct competition with Columbus companies. We believe that our marketing
efforts and services will be superior to Columbus Companies' travel club and we
should be able to establish a membership base. However, Columbus Companies may
improve its marketing efforts and services and maintain its market position or
its current marketing efforts and services maybe sufficient to maintain its
market position regardless of our efforts.
Employees
- ---------
We presently employ our officers and directors, and certain clerical staff
on an "as needed" basis. As our business grows, we anticipate that we will need
to employ additional salaried clerical staff and sales personnel.
Offices
- -------
We are presently negotiating to lease approximately 1,000 square feet of
office space and related equipment and resources, including computers, a
12
<PAGE>
web/e-mail server, a blast fax, printers, typewriters, desk, conference table
and cabinets. The monthly lease rate will be approximately $1,500 per month. We
believe this office space and related equipment is adequate for our foreseeable
needs.
Computer and Internet Services
- ------------------------------
We will need a web/e-mail server to send e-mail to our members. In the event
we cannot lease such equipment, we will need to allocate $2,500 to $15,000 for a
web/e-mail server that can adequately disseminate information to up to 50,000
members while simultaneously supporting our set site.
MANAGEMENT'S DISCUSSION
AND ANALYSIS OR PLAN OF OPERATION
Overview of Business Plan
- -------------------------
Insider Travel Deals.Com's purpose is to market travel-related products,
including the ITD Travel Club. The ITD Travel Club will notify its members via
e-mail and fax about new, discounted travel opportunities several times each
week. ITD Travel Club members will also receive a monthly newsletter, a free
resort stay, and discounts on airline travel and rental cars. For these
services, ITD Travel Club members will pay a monthly subscription fee.
Insider Travel Deals.Com believes that a significant portion of the public
uses the Internet in making travel arrangements. While no formal market studies
have been completed, we believe there is a market "niche" for a business that
can provide up-to-the-minute discount travel information. Because Insider Travel
Deals.Com has little operating capital, it has not entered into any agreements
with travel companies nor has it recruited any members.
Results of Operations
- ---------------------
Insider Travel Deals.Com was organized on June 11, 1999 and has not had any
revenues. It has used shareholder equity and borrowed funds to provide cash for
ongoing expenses.
Financial Condition
- -------------------
Insider Travel Deals.Com had cash of $1,300 on hand at June 23, 1999, far
less than it requires to pay the expenses of this offering and other operating
costs it may incur. Since June 23, 1999, it has used borrowed funds to pay
operating costs.
If Insider Travel Deals.Com is unsuccessful at raising the $200,000 sought
from this offering, it will appear to be unable to continue in the development
and implementation of its business without some other source of equity funding.
It is unlikely that debt funding will be possible in amounts necessary to
achieve the business plan.
13
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN SECURITYHOLDERS
The following table sets forth, as of the date of this prospectus, the
aggregate number of shares of common stock owned of record or beneficially by
each person who owned of record, or is known by us to own beneficially, more
than 5% of our common stock, and the name and shareholdings of each officer and
director and all officers and directors as a group:
<TABLE>
<CAPTION>
- ----------------------------------------------------------- --------------- -------------- ---------------------------
Number of After Offering
Name/Address of 5% Shares Before
Shareholders, Officers & Directors Owned1 Offering Minimum Maximum
- ----------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Principal Shareholders:
I. Mark Faldmo 6,500,000 50.0% 43.3% 38.1%
5252 North Edgewood Drive
Suite 210
Provo, UT 84604
James E. Solomon
5252 North Edgewood Drive 6,500,000 50.0% 43.3% 38.1%
Suite 210
Provo, UT 84604
Officers and Directors:
I. Mark Faldmo
See above
James E. Solomon " " " "
See above
All officers and directors as a group (3 persons)
" " " "
13,000,000 100% 86.6% 76.4%
- ----------------------------------------------------------- --------------- -------------- ------------- -------------
</TABLE>
1 All shares are held beneficially and of record, and each record shareholder
has sole voting, investment, and dispositive power.
14
<PAGE>
DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES AND PARTIES
Officers And Directors
- ----------------------
The following table sets forth the names, age, and position of each of our
directors and executive officers.
Name Age Position and Office Held
---- --- ------------------------
I. Mark Faldmo 48 President and Director
James E. Solomon 49 Secretary/Treasurer and Director
Rick L. Haviland 39 Vice President
Each of the above individuals, became an officer and director in connection
with our organization. The term of office of each officer and director is one
year or until his successor is elected and qualified.
Biographical Information
- ------------------------
Set forth below is biographical information for each officer and director.
No person other than officers and directors will currently perform any
management functions for the Company.
James E. Solomon
----------------
James E. Solomon is a successful entrepreneur specializing in business
startups, turn arounds, mergers and acquisitions. He is a Certified Public
Accountant and holds Series 6 and 63 Securities Licenses. He is currently the
Principal in Solomon Advisory Services as well as Tarkenton & Solomon (a
marketing firm with Fran Tarkenton). Mr. Solomon serves as an Adjunct Professor
in the Graduate School of Business at the University of Utah where he teaches
entrepreneurism. Mr. Solomon is also a Director of Hart Technologies (a publicly
held scientific measurement company).
From 1995 to 1997, he was President of Borges Lamont, an Inc. 500 company.
From 1985 to 1988, Mr. Solomon was President of Rich Automation, a manufacturer
of factory automation equipment. Prior to that, he was General Manager of
Fountain Fresh, Inc., a producer of beverage dispensing equipment from 1984 to
1985. From 1980 to 1983, Mr. Solomon was a Vice President of Farm Management
Company, the world's largest agricultural company. From 1972 to 1980, Mr.
Solomon held several management positions at Exxon Corporation. Mr. Solomon
graduated in Finance, magna cum laude, from the University of Utah.
15
<PAGE>
I. Mark Faldmo
--------------
I. Mark Faldmo's travel career began at a young age with his family's
travel agency. He expanded this agency to include commercial travel services to
business travelers as well as individual vacation travel packages. In 1983, he
and four other partners merged their businesses, which grew into a $30 million
company. This led them to an opportunity to merge with Morris Travel in Salt
Lake City. Mr. Faldmo was a principal owner of Morris Travel, the 20th largest
travel agency in the U.S. with annual revenues in excess of $150 million at the
time it was sold. At Morris, Mr. Faldmo was the Chief Operating Officer. During
this time, he developed many sources for discount travel opportunities. Mr.
Faldmo's expertise is in the operational and financial aspect of travel. He has
served on the boards of several leading travel companies in the United States,
including a four-year term as Chairman of Carlson Travel's National Advisory
Board, a member of Disney's Travel Advisory Board as well as a Chamber of
Commerce President. Mr. Faldmo received a degree in Business Administration from
Utah State University.
Rick L. Haviland
----------------
Rick L. Haviland brings nearly seventeen years of experience in travel and
tourism to the Company. His career began overseas where he managed the corporate
travel for a multi-national organization. Mr. Haviland is also able to provide
invaluable insight into current and emerging trends and developments in the
highly volatile world of travel through his continued analysis of the industry.
Prior to joining the Company, he was Director of Supplier Relations for a large
national travel network. Mr. Haviland holds a degree in Business Administration
and Management from the University of Phoenix.
Remuneration of Officers and Directors
- --------------------------------------
We have employment agreements with Rick Haviland and Mark Faldmo.
Compensation will be based on the Company's number of customers. A customer is a
member who has paid the monthly membership fee in the most recent month.
Compensation calculations shall be as follows:
<TABLE>
<CAPTION>
- ---------------------------------------- -------------------------------------- --------------------------------------
Total
Officer Number of Customers Monthly Compensation
- ---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Mark Faldmo 0 - 5,000 $5,000
President 5,000 - 10,000 $5,500
over 10,000 $6,000
Rick Haviland 0 - 5,000 $ 0
Vice President 5,000 - 10,000 $2,500
10,000 - 20,000 $3,500
over 20,000 $5,000
- ---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
16
<PAGE>
There are no other agreements or arrangements, express or implied, between
us and any other officer or director, regarding any other form of compensation,
including stock options, warrants, employment incentives, or the like.
Significant Employee
- --------------------
Except for its officers and directors, the Company has no significant
employees.
Significant Parties
- -------------------
Set forth below are the names and business and residential addresses, as
applicable, for the following "significant parties":
<TABLE>
<CAPTION>
- ---------------------------------------------- -----------------------------------------------------------------------
(1) Officers and Directors Address
- ---------------------------------------------- -----------------------------------------------------------------------
<S> <C> <C>
I. Mark Faldmo Business: 5252 North Edgewood Drive, Suite 210
Provo, UT 84604
Residence: 163 West Canyon View Drive
Farmington, UT 84025
- ---------------------------------------------- -----------------------------------------------------------------------
James E. Solomon Business: 5252 North Edgewood Drive, Suite 210
Provo, UT 84604
Residence: 2051 North Kingston Road
Farmington, UT 84025
- ---------------------------------------------- -----------------------------------------------------------------------
Rick L. Haviland Business: 5252 North Edgewood Drive, Suite 210
Provo, UT 84604
Residence: 11086 Sandy Dunes Drive
Sandy, UT 84094
- ---------------------------------------------- -----------------------------------------------------------------------
(2) Record owners and beneficial owners of See "SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS".
5 percent or more of any class of the
Company's securities:
(3) Promoters: None, except for officers and directors.
(4) Affiliates of the Company: None, except for officers and directors.
</TABLE>
17
<PAGE>
(5) Counsel to the Issuer: Ray, Quinney & Nebeker
79 South Main
Salt Lake City, UT 84145
Craig Wangsgard
3106 Homestead
Park City, UT 84098
INTEREST OF MANAGEMENT AND
OTHERS IN CERTAIN TRANSACTIONS
Purchase of Stock at Organization and Capital Contributions
- -----------------------------------------------------------
All of the shares of common stock presently issued and outstanding are
"restricted securities" as that term is defined under the Securities Act and, as
such, may not be sold in the absence of registration under the Securities Act or
the availability of an exemption therefrom. Under current law, such shares could
not be sold for a period of at least one year from the date on which they are
purchased, and then only under limited circumstances. (See "DESCRIPTION OF
SECURITIES.")
There have been no additional capital contributions since the purchase of
the 13,000,000 shares of stock.
Loans From Secretary/Treasurer
- ------------------------------
From the date of organization of the Company, James E. Solomon,
Secretary/Treasurer, has loaned to the Company up to $20,000 in cash, to fund
Company operations. The Company will repay this indebtedness, without interest,
to Mr. Solomon if the offering is sold.
DESCRIPTION OF SECURITIES
General
- -------
Insider Travel Deals.Com is authorized to issue 105,000,000 shares,
consisting of 100,000,000 shares of common stock, par value $0.0001 per share,
of which 13,000,000 shares are issued and outstanding, and 5,000,000 shares of
preferred stock, par value $0.01 (the "preferred stock"), of which no shares
have been issued.
Common Stock
- ------------
Holders of common stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of stockholders. Shares of common stock do
not carry cumulative voting rights and, therefore, holders of a majority of the
18
<PAGE>
outstanding shares of common stock will be able to elect the entire board of
directors, and, if they do so, minority stockholders would not be able to elect
any members to the board of directors. Our board of directors has authority,
without action by the stockholders, to issue all or any portion of the
authorized but unissued shares of common stock, which would reduce the
percentage ownership of the stockholders and which may dilute the book value of
the common stock.
Shareholders have no pre-emptive rights to acquire additional shares of
common stock. The common stock is not subject to redemption and carries no
subscription or conversion rights. In the event of liquidation, the shares of
common stock are entitled to share equally in corporate assets after
satisfaction of all liabilities. The shares of common stock, when issued, will
be fully paid and non-assessable.
Holders of common stock are entitled to receive such dividends as the board
of directors may from time to time declare out of funds legally available for
the payment of dividends. We have not paid dividends on common stock and do not
anticipate that we will pay dividends in the foreseeable future.
Preferred Stock
- ---------------
The board of directors has authority, without action by the stockholders,
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
the common stock.
We do not have any plans to issue any shares of preferred stock. However,
we consider it desirable to have one or more classes of preferred stock to
provide us with greater flexibility in the future in the event that we elect to
undertake an additional financing and in meeting corporate needs that may arise.
If opportunities arise that would make it desirable to issue preferred stock
through either public offerings or private placements, the provision for these
classes of stock in our certificate of incorporation would avoid the possible
delay and expense of a shareholder's meeting, except as may be required by law
or regulatory authorities. Issuance of the preferred stock would result,
however, in a series of securities outstanding that may have certain preferences
with respect to dividends, liquidation, redemption, and other matters over the
common stock which would 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 that may be attached to the preferred stock may also result in
the dilution of the net income per share and 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
factors existing at the time of issuance. Therefore, it is not possible at this
time to determine the respects in which a particular series of preferred stock
will be superior to Insider Travel Deals.Com's common stock. 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 such stock on terms which it
deems are not in our best interest or the best interests of our stockholders.
19
<PAGE>
Resale of Outstanding Shares
- ----------------------------
All 13,000,000 shares of the common stock presently issued and outstanding
are "restricted securities" as that term is defined in Rule 144 adopted under
the Securities Act. Rule 144 provides, in essence, that as long as there is
publicly available current information about an issuer, a person holding
restricted securities for a period of at least one year may sell in each 90-day
period, provided he is not part of a group acting in concert, an amount equal to
the greater of the average weekly trading volume of the stock during the four
calendar weeks preceding the sale or 1% of the issuer's outstanding common
stock. Consequently, in June 2000, shares of common stock currently issued and
outstanding will have been held for one year within the meaning of Rule 144 and
may be eligible for resale in accordance with such volume restrictions. In
addition, in June 2001, all 13,000,000 shares now issued and outstanding will be
eligible for resale without regard to such restrictions if the holders of such
shares are not then affiliates of the issuer and have not been so for three
months prior to such sale. We contemplate that Mark Faldmo and James E. Solomon,
officers and directors and holders of the outstanding shares, will continue to
be our affiliates over the next several years, and will be, therefore, subject
to the restrictions described above. Sales under Rule 144 or otherwise may, in
the future, have a depressive effect on the price of the common stock in any
market which may develop.
Transfer and Warrant Agent
- --------------------------
Our transfer agent is Interwest Transfer Company, Inc., 1981 East
Murray-Holladay Road, Holladay, UT 84117.
PLAN OF DISTRIBUTION
We are offering the common stock to the public on a "best efforts,
2,000,000 share minimum 4,000,000 share maximum" basis. There can be no
assurance that any of the shares will be sold. If we fail to sell at least
2,000,000 shares within the offering period (four months from the date of this
prospectus), the offering will be terminated and subscription payments will be
promptly refunded in full to subscribers, without paying interest or deducting
expenses. If the minimum number of shares is sold within the specified period,
the offering will continue until five months following the date of this
prospectus, all offered shares are sold, or terminated by us, whichever occurs
first.
All subscription payments should be made payable to "Brighton Bank--
INSIDER TRAVEL DEALS.COM, Inc. Escrow Account." We will deposit subscription
payments no later than noon of the next business day following receipt in the
escrow account maintained by Brighton Bank, 311 South State Street, Salt Lake
City, UT 84111, as escrow agent, pending the sale of at least 2,000,000 shares
within the specified period. Such subscription payments will only be released
from the escrow account if the minimum number of shares is sold or for the
purpose of refunding subscription payments to the subscribers. Subscribers will
not have the use or right to return of such funds during the escrow period,
which may last as long as four months.
20
<PAGE>
The shares of common stock in this offering will be offered and sold by our
officers and directors who will receive no compensation therefor, except
reimbursement of expenses actually incurred in connection with such activities.
We have no plans, proposals, arrangements or understandings with any potential
sales agent with respect to participating in the distribution of the common
stock. If we later decide to seek the participation of any potential sales
agent, the registration statement of which this prospectus is a part, will be
appropriately amended to identify such persons.
There are no formal arrangements between us and our officers and directors
pursuant to which shares in the offering will be reserved for sale to person(s)
designated by such officers and directors or their affiliates. However, officers
and directors and their affiliates, may purchase shares in the offering in an
aggregate amount of not more than 20% of all offered shares. Since shares may be
offered and sold by officers and directors, it is likely that officers,
directors, or their affiliates desiring to purchase shares in the offering will
be able to do so.
Since we are not utilizing the services of an underwriter for the offer and
sale of the shares in this offering, the independent "due diligence" review of
our affairs and financial condition that is usually performed by an underwriter
has not been performed with respect to this offering. In addition, since the
offering is not being underwritten by a broker-dealer which would ordinarily be
expected to publish quotations for and make a market in the offered securities
following the offering, no assurance can be given that any market for the common
stock will develop following the offering or, that if such a market should
develop, it will be maintained. We have not had any discussions with any
broker-dealer firms regarding the possibility of making a market in the common
stock following the offering.
Prior to this offering, there has been no established market for our common
stock. Until __________, 1999 (90 days after the date of this prospectus) all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions. We have arbitrarily determined the initial public offering price
of the shares and it bears no relationship to our book value, earnings, or any
other recognized criteria of value.
LEGAL PROCEEDINGS
We are not a party to any pending legal proceedings, or governmental agency
proceedings, and no such action by or, to the best of our knowledge, against us
has been threatened.
EXPERTS
We have not engaged any expert or attorney on a contingent basis, nor is
any expert or attorney to receive a direct or indirect interest in our
securities. In addition, no expert or attorney is, or was, a promoter,
underwriter, voting trustee, director, officer or employee.
21
<PAGE>
Ray, Quinney & Nebeker, 79 South Main, Salt Lake City, UT 84145, our
securities counsel, will render an opinion that the common stock being offered
hereby, when issued, will be fully paid and non-assessable under the Nevada
Revised Statutes.
The financial statements included in this prospectus, to the extent and for
the periods indicated in its report, has been included herein and in the
Registration Statement in reliance on the report of Child & Company, PC, our
independent certified public accountants, given on the authority of such firm as
experts in accounting and auditing.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers, and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities
(other than our payment of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
FURTHER INFORMATION
We have filed with the Securities and Exchange Commission ("Commission"), a
Registration Statement on Form SB-1, SEC File No. _________ under the Securities
Act with respect to the securities offered by this prospectus. This prospectus
omits certain information contained in the Registration Statement. For further
information, reference is made to the Registration Statement and to the exhibits
and other schedules filed therewith. Statements contained in this prospectus as
to the contents of any contract or other document referred to are not
necessarily complete, and where such contract or other document is an exhibit to
the Registration Statement, each such statement is deemed to be qualified and
amplified in all respects by the provisions of the exhibit. Copies of the
complete Registration Statement, including exhibits may be examined at the
office of the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, or copies may be obtained from this office on payment of
the usual fees for reproduction. In addition, the Commission maintains a web
site (address: http. //www.sec.gov), that contains reports, proxy and
information statements and other information regarding issuers, including
Insider Travel Deals.Com, Inc., that file electronically with the Commission.
22
<PAGE>
Until ___________, 1999 (90 days after the date of this prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions. 483089
23
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Audited Financial Statements
For the period from June 11, 1999 (date of inception)
to June 23, 1999
with Report of Independent Auditors
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Audited Financial Statements
June 23, 1999
Contents
Report of Independent Auditors................................................F1
Audited Financial Statements
Balance Sheet.................................................................F2
Statement of Operations and Retained Earnings.................................F3
Statements of Cash Flows......................................................F4
Notes to Financial Statements.................................................F5
<PAGE>
Child & Company
A Professional Corporation of CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
265 EAST 100 SOUTH, SUITE 300, SALT LAKE CITY, UT 84111
PHONE: (801) 534-0774 FAX: (801) 359-2320
INDEPENDENT AUDITORS' REPORT
----------------------------
Shareholders and Officers
Insider Travel Deals.Com, Inc.
We have audited the accompanying balance sheet of Insider Travel Deals.Com, Inc.
(a development stage enterprise) as of June 23, 1999, and the related statement
of operations and retained earnings and cash flows for the period from June 11,
1999 (date of inception) to June 23, 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Insider Travel Deals.Com, Inc.
as of June 23, 1999, and the results of its operations and its cash flows for
the period from June 11, 1999 (date of inception) to June 23, 1999 in conformity
with generally accepted accounting principles.
/s/ Child & Company
June 24, 1999
F1
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Balance Sheet
June 23, 1999
Assets
Current Assets:
Cash and cash equivalents $ 1,300
-----------
Total assets $ 1,300
===========
Stockholders' equity
Stockholders' equity - Note 2
Common stock, $.0001 par value 100,000,000
shares authorized, 13,000,000 shares
issued and outstanding 1,300
-----------
Total stockholders' equity $ 1,300
===========
See notes to financial statements
F2
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Statement of Operations and Retained Earnings
For the period from June 11, 1999 (date of inception)
to June 23, 1999
Revenues $ 0
Expenses 0
-----------
Net Income/loss 0
-----------
Retained earnings during development stage $ 0
===========
See notes to financial statements
F3
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
For the period from June 11, 1999 (date of inception)
to June 23, 1999
Cash flows from operating activities
Net income/loss $ 0
-----------
Net cash provided by operating activities 0
Cash flows from investing activities 0
Cash flows from financing activities
Capital contributions from shareholders 1,300
-----------
Net cash provided by financing activities 1,300
-----------
Net increase in cash 1,300
Cash at beginning of period 0
-----------
Cash at June 23, 1999 $ 1,300
===========
Supplemental disclosures
Cash interest paid $ 0
Income taxes paid $ 0
Non-cash investing and financing activities $ 0
See notes to financial statements
F4
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Notes to financial statements
June 23, 1999
Note 1 - Summary of Significant Accounting Policies and Business Activity
The summary of significant accounting policies of Insider Travel Deals.Com, Inc.
(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management, which is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
Business Activity
The Company was organized in the state of Nevada on June 11, 1999 for the
purpose of providing wholesale travel services over the Internet. The Company
has adopted a December 31 accounting year end.
The Company has not realized revenues from the sale of products or services and,
accordingly, is considered to be in its development stage. Management makes no
representations regarding the Company's ability to continue as a going concern
if, or when, it commences its primary business activity. The Company's business
is expected to take place primarily in the state of Utah where its headquarters
will be located.
Significant Accounting Policies
Revenue Recognition
The Company records revenues as services are performed and as the customer is
billed or payment received.
Cash and Cash Equivalents
The Company considers all highly liquid short-term investments with a maturity
of three months or less to be cash equivalents.
Fixed Assets
Depreciable fixed assets will be stated at cost and depreciated using the
straight-line method based on estimated useful lives.
Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets and liabilities as well as footnote disclosures
included in the financial statements.
F5
<PAGE>
Insider Travel Deals.Com, Inc.
(A Development Stage Enterprise)
Notes to financial statements
June 23, 1999
Significant Accounting Policies (continued)
Taxes Bases on Income
Deferred taxes are provided for items recognized in different periods for
financial and tax reporting purposes in accordance with Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes.
Recently Issued Pronouncements
In June 1997, the FASB issued SFAS 130, Reporting Comprehensive Income. The
Statement establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
SFAS 130 is effective for fiscal years beginning after December 15, 1997. The
Company has adopted SFAS 130 with no financial statement impact.
In June 1997, the FASB issued SFAS 131, Disclosures about Segments of an
Enterprise and Related Information. The Statement requires public business
enterprises to report certain information about operation of segments in
complete sets of financial statements of the enterprise and in condensed
financial statements of interim periods issued to shareholders. It also requires
that public business enterprises report certain information about their products
and services, the geographic areas in which they operate, and their major
customers. SFAS 131 will be effective for fiscal years beginning after December
15, 1997. The Company had adopted SFAS 131.
Credit Risk
The Company's customers may include individuals and companies that may be
affected by changing economic conditions. The Company will establish policies
that will mitigate its credit risk.
Note 2 - Shareholders' Equity
The Company has issued 13,000,000 shares of common stock in return for $1,300
cash equal to par value.
The Company is authorized to issue 5,000,000 shares of .001 par value preferred
stock. The Company's board of directors has not yet designated voting rights,
liquidation preferences or redemption rights as well as convertibility features
with regards to the preferred stock. To date, no shares of preferred stock have
been issued.
F6
<PAGE>
No dealer, salesman or other person is authorized to give any information or to
make any representations other than those contained in this Prospectus in
connection with the offer made hereby. If given or made, such information or
representations must not be relied upon as having been authorized by Insider
Travel Deals. Com. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities covered hereby in any
jurisdiction or to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, in any circumstances, create any implication that
there has been no change in the affairs of Insider Travel Deals. Com since the
date hereof.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY.............................................................2
RISK FACTORS RELATING TO OUR BUSINESS..........................................3
GENERAL RISKS RELATING TO INVESTMENT...........................................5
DILUTION.......................................................................6
COMPARATIVE DATA...............................................................7
USE OF PROCEEDS................................................................7
BUSINESS.......................................................................9
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....................13
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS..................14
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES AND PARTIES...........14
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.....................18
DESCRIPTION OF SECURITIES.....................................................18
PLAN OF DISTRIBUTION..........................................................20
LEGAL PROCEEDINGS.............................................................21
EXPERTS.......................................................................21
INDEMNIFICATION OF OFFICERS AND DIRECTORS.....................................22
FURTHER INFORMATION...........................................................22
Insider Travel Deals.Com, Inc.
4,000,000 shares of common stock
PROSPECTUS
July __, 1999
30
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------- -----------------------------------------
Section 78.7502 of the Nevada Revised Statutes provides in relevant part as
follows:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
31
<PAGE>
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense. The Company's articles of incorporation do not
contain a specific indemnification provision for its officers, directors and
employees. However, Article V of the Company's articles of incorporation
provides that an officer and director of the Company does not have any personal
liability to the Corporation or its stockholders for breach of fiduciary duty as
a director or officer, except for damages for breach of fiduciary duty resulting
from (a) acts or omissions which involve intentional misconduct, fraud, or a
knowing violation of law; or (b) the payment of dividends in violation of
section 78.300 of the Nevada Revised Statutes as amended from time to time.
Accordingly, the Company intends to limit the liability of its officers and
directors to the full extent allowed under Nevada corporate law.
Insofar as indemnification by the Company for liabilities arising under the
Securities Act may be permitted to officers and directors of the Company the
Company is aware that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by an officer or director in the successful defense of any
action, suit, or proceeding) is asserted by such officer or director in
connection with the securities being registered hereby, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(See "ITEM 26. UNDERTAKINGS").
ITEM 2. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
- ------- -------------------------------------------
The following table sets forth an itemized estimate of expenses to be
incurred in connection with the sale and distribution of the securities being
registered, other than discounts and commissions:
1. SEC filing fee $ 100
2. Auditing fees* 2,000
3. Legal fees* 25,000
4. Blue Sky fees and expenses (including counsel fees)* 3,000
5. Transfer agent's fees* 1,900
6. Printing, including registration statement and prospectus* 4,000
7. Miscellaneous costs and expenses** 2,000
-------
TOTAL $38,000
* Except for the SEC filing fees, all of the foregoing items are estimates.
** Includes fees for electronic (Edgar) filings
32
<PAGE>
ITEM 3. UNDERTAKINGS
- ------- ------------
POST-EFFECTIVE AMENDMENTS [Regulation S-B, Item 512(a)]
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act;
(ii) To reflect in the prospectus any fact or events
arising after the effective date of the Registration
Statement (or the most recent post- effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement,
including (but not limited to) addition or deletion
of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
33
<PAGE>
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 4. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR
- ------- ------------------------------------------------------
The Company sold 13,000,000 shares of its Common Stock to Mark Faldmo and
James E. Solomon, officers and directors in connection with organization of the
Company. The Common Stock was sold for cash at an aggregate price of $ 1,300,
and no commissions or discounts were paid or given in connection therewith. See
prospectus under the caption, "INTRODUCTION" and "CERTAIN TRANSACTIONS: Purchase
of Stock at Organization," which is incorporated herein by reference.
The Common Stock was issued in the transactions described above in reliance
on the exemption from registration and the prospectus delivery requirements of
the Securities Act provided in Section 4(2) thereof and applicable exemptions
thereunder. The two persons who purchased Common Stock of the Company in these
transactions were officers and directors, and are sophisticated and experienced
investors. Both purchasers were aware at the time of their purchase of all
material information concerning the Company's proposed business and financial
affairs at the time of the transactions and were, in fact, in possession of all
pertinent information regarding the Company. These two individuals were
instrumental in organizing the Company and creating all such information. Both
of these individuals executed an investment letter in connection with his
purchase of shares of the Company, whereby each of them acknowledged that he was
obtaining "restricted securities" as defined in Rule 144 under the Securities
Act; that such shares cannot be transferred without appropriate registration or
exemption therefrom; that they must bear the economic risk of the investment for
an indefinite period of time; that they would not sell the securities without
registration or exemption therefrom; and that the Company would restrict the
transfer of the securities in accordance with such representations. Each person
agreed that any certificate representing such shares would be stamped with the
usual legend restricting the transfer of such shares. Each certificate
representing such shares bears a legend prohibiting the sale of such shares
pursuant to Rule 144 until one year after the purchase of such shares and full
payment therefor.
ITEM 5. INDEX TO EXHIBITS
- ------- -----------------
Copies of the following documents are included as exhibits to this
Registration Statement pursuant to Item Part III of Form I-A and Item 6 of Part
II.
34
<PAGE>
- --------------------------------------------------------------------------------
Exhibit No. SEC Reference No. Title of Document
----------- ----------------- -----------------
3.1 Articles of Incorporation
3.2 Bylaws
5 Opinion Regarding Legality on Shares
23.1 Consents
23.1 Consent of Counsel to Issuer
99.1 Subscription Agreement
99.2 Escrow Agreement
- --------------------------------------------------------------------------------
ITEM 6. DESCRIPTION OF EXHIBITS
- ------- -----------------------
Exhibit No. Description of Exhibit
----------- ----------------------
3.1 Articles of Incorporation
3.2 Bylaws
5 Opinion on Legality of Shares
23.1 Consent of Child & Co.
23.2 Consent of Counsel to Issuer (included in Exhibit 5)
99.1 Subscription Agreement
99.2 Escrow Agreement
SIGNATURES
- ----------
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Provo,
State of Utah, on July __, 1999.
REGISTRANT:
By: /s/ I. Mark Faldmo
--------------------------------
I. Mark Faldmo, President
35
<PAGE>
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/ I. Mark Faldmo
--------------------------------
I. Mark Faldmo, President
Officer and Director
Date: 08/09/99
/s/ James E. Solomon
--------------------------------
James E. Solomon, Secretary/Treasurer
Officer and Director
Date: 08/09/99
Dated Filed: July __, 1999
SEC File No. ___________
483089
36
ARTICLES OF INCORPORATION
OF
INSIDER TRAVEL DEALS.COM, INC.
THE UNDERSIGNED, acting as an incorporator of a corporation under the
Nevada Revised Statutes, as amended, adopts the following Articles of
Incorporation for such corporation:
1. The name of the Corporation is Insider Travel Deals.com, Inc.
2. The name of the person designated as the Corporation's resident
agent and the street address of the resident agent where process may be served
upon the Corporation are as follows:
AA Resident Agents, Inc.
333 North Rancho Drive, Suite 410
Las Vegas, NV 89106
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Nevada Revised
Statutes, as amended ("NRS").
4. The aggregate number of shares of stock which the Corporation shall
have the authority to issue is 100,000,000 shares of the par value of $0.000l
per share designated as Common Stock and 5,000,000 shares of the par value of
$0.001 per share designated as Preferred Stock. The Board of Directors is
expressly authorized, prior to issuance, to prescribe the classes, series and
the number of each class or series of stock and the voting powers, designations,
preferences, limitations, restrictions and relative rights of each class or
series of stock, as follows:
(a) The Preferred Stock may be issued from time to time by the
Board of Directors, as provided in NRS Sections 78.195, 78.1955 and 78.196, as
shares of one or more series of Preferred Stock, and the Board of Directors is
expressly authorized, prior to issuance, to prescribe the following in the
resolution or resolutions providing for the issuance of shares of each
particular series:
(i) The distinctive serial designation of such series
which shall distinguish it from other series;
(ii) The number of shares included in such series,
which number may be increased or decreased from time to time unless
otherwise provided by the Board of Directors in creating the series;
1
<PAGE>
(iii) The annual dividend rate (or method of
determining such rate) for shares of such series and the date or dates
upon which such dividends shall be payable;
(iv) Whether dividends on the shares of such series
shall be cumulative, and, in the case of shares of any series having
cumulative dividend rights, the date or dates or method of determining
the date or dates from which dividends on the shares of such series
shall be cumulative;
(v) The amount or amounts which shall be paid out of
the assets of the Corporation to the holders of the shares of such
series upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
(vi) The price or prices at which, the period or
periods within which, and the terms and conditions upon which the
shares of such series may be redeemed, in whole or in part, at the
option of the Corporation;
(vii) The obligation, if any, of the Corporation to
purchase or redeem shares of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or periods
within which, and the terms and conditions upon which the shares of
such series shall be redeemed, in whole or in part, pursuant to such
obligation;
(viii) The period or periods within which and the
terms and conditions, if any, including the price or prices or the rate
or rates of conversion and their terms and conditions of any
adjustments thereof, upon which the shares of such series shall be
convertible at the option of the holder into shares of any class of
stock or into shares of any other series of Preferred Stock or other
securities;
(ix) The voting rights, if any, of the shares of such
series in addition to those required by law, including the number of
votes per share and any requirement for the approval by the holders of
a certain percentage of all Preferred Stock, or of the shares of one or
more series, or of both, as a condition to specified corporate action
or amendments to the articles of incorporation;
(x) The ranking of the shares of the series as
compared with shares of other series of the Preferred Stock in respect
of the right to receive dividends; and
(xi) Any other voting powers, designations,
preferences, limitations, restrictions and relative rights of each
class or series of stock not inconsistent herewith or with applicable
law.
(b) All shares of Preferred Stock shall rank senior to the
Common Shares in respect of the right to receive dividends and the right to
receive payments out of the assets of the Corporation upon voluntary or
involuntary liquidation, dissolution or winding up of the Corporation. Shares of
any class or series may be issued as a share dividend in respect of shares of
another class or series. The Corporation may issue uncertificated shares of some
or all of the shares of any or all of its classes or series. All shares of
2
<PAGE>
Preferred Stock redeemed, purchased or otherwise acquired by the Corporation
(including shares surrendered for conversion) shall be canceled and thereupon
restored to the status of authorized but unissued shares of Preferred Stock
undesignated as to series.
(c) Except as otherwise provided by the Board of Directors in
accordance with paragraph a. above in respect of any series of the Preferred
Stock, all voting rights of the Corporation shall be vested in the holders of
the Common and Preferred Stock who shall be entitled to one vote per share.
5. The members of the governing board of the Corporation are styled as
directors of the Corporation. The number of directors of the Corporation which
constitutes the first board of directors is one (1). The bylaws of the
Corporation shall specify or fix the number of individuals which shall
constitute the board of directors of the Corporation which number may be
increased or decreased by amendment to the bylaws of the Corporation. The name
and address of the member of the first board of directors of the Corporation is
as follows:
James E. Solomon 2051 North, Kingston Road
Farmington, UT 84025
The name and mailing address of the incorporator are as
follows:
Craig Wangsgard 5252 N. Edgewood Dr., Suite 210
Provo, UT 84604
7. The board of directors of the Corporation is expressly authorized to
adopt, amend or repeal bylaws of the Corporation.
No director or officer of the Corporation shall be personally liable to
the Corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer of the Corporation. The foregoing sentence,
notwithstanding, the liability of a director or officer is not eliminated or
limited for (i) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of distributions in violation of
NRS Section 78.300.
The period of duration of the Corporation is perpetual.
ACKNOWLEDGEMENT
The undersigned, AA Resident Agents, Inc., acknowledges its appointment
as agent for services of process for Insider Travel Deals.Com, Inc.
DATED this ____ day of June, 1999.
AA Resident Agents, Inc.
333 North Rancho Drive, Suite 410
Las Vegas, NV 89106
3
<PAGE>
By:______________________________
---------------------------------
Print Name
---------------------------------
Title
IN WITNESS WHEREOF, the undersigned has signed these Articles of
Incorporation as of this ____ day of June, 1999.
INCORPORATOR
/s/ Craig Wangsgard
---------------------------------
Craig Wangsgard
STATE OF UTAH )
: ss:
COUNTY OF UTAH )
The foregoing instrument was acknowledged before me on this ____ day of
June, 1999, by Craig Wangsgard, the incorporator of Insider Travel Deals.com,
Inc.
/s/ John R. Reed
---------------------------------
NOTARY PUBLIC
485966
4
BYLAWS OF
INSIDER TRAVEL DEALS.COM, INC.,
A NEVADA CORPORATION
ARTICLE I
OFFICES
1.1 Registered Office
-----------------
The registered office of the corporation in the State of Nevada shall
be in the City of Reno, County of Washoe.
1.2 Other Offices
-------------
The corporation shall also have and maintain an office or principal
place of business at 600 West 1470 South, Bountiful, Utah 84010, and may also
have offices at other places both within and without the State of Nevada or the
United States as the Board of Directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
2.1 Meetings
--------
All meetings of stockholders shall be held at the office of the
corporation maintained pursuant to Section 1.2 of Article I hereof, or at any
other place within or without the State of Nevada or the United States as the
Board of Directors may designate.
2.2 Telephonic/Electronic Meetings
------------------------------
Stockholders may participate in a meeting of stockholders by means of a
telephone conference or similar method of communication by which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this Section constitutes presence in person at the meeting.
1
<PAGE>
ARTICLE III
ANNUAL MEETINGS
3.1 Stockholders
------------
The annual meeting of the stockholders of the corporation shall be held
on the second Tuesday of June in each year at 10:00 am. Mountain Standard Time,
or on such other date and time as may be designated by the Board of Directors.
Actions to be taken at the annual meeting of the stockholders may be taken by
consent of stockholders in lieu of meeting pursuant to Section 9.2 of Article
IX.
3.2 Board of Directors
------------------
The annual meeting of the Board of Directors of the corporation shall
be held on the second Tuesday of June in each year immediately following the
annual meeting of the stockholders of the corporation, or on such other date and
time as may be designated by the Board of Directors. Actions to be taken at the
annual meeting of the Board of Directors may be taken by consent to action by
directors pursuant to Section 9.3 of Article IX.
ARTICLE IV
SPECIAL MEETINGS OF STOCKHOLDERS
Except as otherwise provided by law, special meetings of the
stockholders of this corporation shall be held whenever called by the president
or by a majority of the Board of Directors.
ARTICLE V
NOTICE
5.1 Notice Of Stockholders' Meetings
--------------------------------
The president, a vice president or the secretary shall give written
notice of all stockholders' meetings stating the time, place and purpose of the
meeting. The notice shall be given by U.S. mail, postage prepaid, not less than
ten (10), nor more than sixty (60) days prior to the date of the meeting, to
each stockholder of record at his or her address as it appears in the stock
ledger of the corporation.
Notice need not be given of an adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken, provided
that such adjournment is for less than thirty (30) days and further provided
that a new record date is not fixed for the adjourned meeting.
2
<PAGE>
5.2 Stockholder Nominees
--------------------
Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the discretion of
the Board of Directors, by any nominating committee or person appointed by the
Board of Directors, or by any stockholder of the corporation entitled to vote in
the election of directors at the meeting. Any nomination by a stockholder shall
be given in writing to the secretary of the corporation prior to the meeting.
5.3 Stockholder Business
--------------------
At the annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be (a) as specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise brought before the meeting
by a stockholder giving notice of such business to the secretary of the
corporation prior to the meeting.
ARTICLE VI
QUORUM OF STOCKHOLDERS
Except as hereinafter provided or otherwise provided by the Articles of
Incorporation or Bylaws, at any meeting of the stockholders, the holders of a
majority of the stock issued, outstanding and entitled to vote thereat,
represented by stockholders in person or by proxy, shall constitute a quorum for
the transaction of business. When a quorum is present at any meeting, a majority
vote of the shares present shall decide any question brought before such
meeting, unless the question is one upon which by express provision of law or of
the Articles of Incorporation or of these Bylaws a larger or different vote is
required, in which case such express provision shall govern and control the
decision of such question.
The stockholders present at a duly called or convened meeting, at which
a quorum is present, may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. In the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, by vote of the holders of a majority of the shares
represented thereat, but no other business shall be transacted at such meeting.
At such adjourned meeting at which a quorum is present or represented any
business may be transacted which might have been transacted at the original
meeting.
ARTICLE VII
PROXY AND VOTING
Except as otherwise provided by law, only persons in whose names shares
entitled to vote stand on the stock ledger of the corporation on the record date
for determining the stockholders entitled to vote at said meeting shall be
entitled to vote at such meeting. Stockholders of record entitled to vote may
vote at any meeting either in person or by proxy or proxies and shall have, for
each share of stock registered in his, her or its name, the number of votes
3
<PAGE>
provided by the Articles of Incorporation or these Bylaws for the particular
class of such stock. Stockholders shall not have cumulative voting rights with
respect to the election of Directors. Without limiting the manner in which a
stockholder may authorize another person or persons to act for him as proxy, the
following shall constitute valid means by which a stockholder may grant such
authority (1) a stockholder may execute a writing authorizing another person or
persons to act for the stockholder as proxy. Execution may be accomplished by
the signing of the writing by the stockholder or his authorized officer,
director, employee or agent or by causing the signature of the stockholder to be
affixed to the writing by any reasonable means, including but not limited to, a
facsimile signature. (2) A stockholder may authorize another person or persons
to act for him by proxy by transmitting or authorizing the transmission of a
telegram, cablegram or other means of electronic transmission, provided that the
validity of such transmission can be determined by reference to information set
forth thereon. Any copy, communication by telecopier, or other reliable
reproduction of the writing or transmission may be substituted for the original
writing or transmission, if the copy, communication by telecopier, or other
reproduction is a complete reproduction of the entire original writing or
transmission. Such writing or transmission shall be filed with the secretary of
the meeting before being voted. In the event that any such writing or
transmission shall designate two or more persons to act as proxies, a majority
of such persons present at the meeting, or, if only one shall be present, then
that one, shall have and may exercise all of the powers conferred by such
writing or transmission upon all of the persons so designated unless such
writing or transmission shall otherwise provide.
No proxy shall be valid after the expiration of six (6) months from the
date of its execution unless coupled with an interest, or unless the person
executing it specifies therein the length of time for which it is to continue in
force, which in no case shall exceed seven (7) years from the date of its
execution. Subject to the above, any proxy duly executed is not revoked and
continues in full force and effect until an instrument revoking it or a duly
executed proxy bearing a later date is filed with the secretary of the
corporation.
ARTICLE VIII
VOTING PROCEDURES
The procedures for voting on any matter brought before a meeting of
stockholders shall be determined by the chairman of the meeting. All votes and
proxies shall be counted by the secretary of the corporation, or if the
secretary of the corporation is absent then by an assistant secretary or a
designated secretary for the meeting who shall be selected by the chairman of
the meeting, and such rules and proxies shall be recorded in the minutes of the
meeting.
ARTICLE IX
WAIVER AND CONSENT
9.1 Waiver of Notice
----------------
Whenever any notice whatsoever is required to be given by these Bylaws,
or the Articles of Incorporation of this corporation, or any of the corporation
4
<PAGE>
laws of the State of Nevada, 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 thereto. Without limiting the foregoing, to
the extent permitted by law, notice of any meeting will be waived by any person
or persons entitled to notice thereof; by his or her attendance thereat, in
person or by proxy (except when he or she attends the meeting for the express
purpose of objecting to the transaction of business because the meeting is not
lawfully called or convened). Any person or persons waiving notice of a meeting
shall be bound by the proceedings of such meeting in all respects as if due
notice thereof had been given.
9.2 Consent Of Stockholders In Lieu Of Meeting
------------------------------------------
Any action required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting without notice and without a vote,
if a consent in writing setting forth the action so taken, is signed by the
holders of outstanding stock having not less than the number of votes that would
have been necessary to authorize such action at a meeting at which all shares
entitled to vote were present and voted.
9.3 Consent To Action By Directors
------------------------------
Any action required or permitted to be taken at any meeting of the
Board, body or committee may be taken without a meeting if; before or after such
action, a written consent thereto is signed by all members of the Board, body,
or committee.
ARTICLE X
BOARD OF DIRECTORS
The Board of Directors shall be chosen by ballot at the annual meeting
of the stockholders or at any meeting held in place thereof as provided by law.
The authorized number of directors of this corporation shall be no less than one
and no more than nine. Subject to any limitation set forth in the provisions of
the Articles of Incorporation, the Board of Directors may, by resolution
adopted, increase or decrease the number of the directors of this corporation,
provided that no such reduction of the authorized number of directors shall have
the effect of removing any director before that director's term of office
expires.
Each director shall serve until his or her successor is duly elected
and qualified or until his or her death, resignation or removal. Directors need
not be stockholders in the corporation. Directors shall be over the age of
eighteen (18).
ARTICLE XI
POWERS OF DIRECTORS
In the management and control of the property, business, and affairs of
the corporation, the Board of Directors is hereby vested with all the powers
possessed by the corporation itself; as far as this delegation of authority is
not inconsistent with the Nevada General Corporation Law, with the Articles of
Incorporation of the corporation, or with these Bylaws. Directors and members of
5
<PAGE>
committees may receive such compensation, if any, for their services in any
capacity, and such reimbursement for expenses, as may be fixed or determined by
resolution of the Board of Directors.
ARTICLE XII
LIMITATIONS OF POWER
The enumeration of the powers and duties of the directors in these
Bylaws shall not be construed to exclude all or any powers and duties, except
insofar as the same are expressly prohibited or restricted by the provisions of
these Bylaws or the Articles of Incorporation. The directors may exercise all
other powers and perform all such duties as may be granted by the Nevada General
Corporation Law and as do not conflict with the provisions of these Bylaws or
the Articles of Incorporation.
ARTICLE XIII
MEETINGS OF DIRECTORS
13.1 Regular and Special Meetings
----------------------------
Regular meetings of the Board of Directors shall be held at such places
and at such times as the Board by vote may determine, and if so determined no
notice thereof need be given. Special meetings of the Board of Directors may be
held at any time or place, whenever called by the chairman of the Board of
Directors or a majority of directors, notice thereof being given to each
director by the secretary or an assistant secretary or an officer calling the
meeting, or at any time without formal notice provided all the directors are
present or those not present shall waive or have waived notice thereof. Notice
of special meetings, stating the time and place thereof; shall be given by U.S.
mail, postage prepaid, to each director at his or her residence or business
address at least four (4) days before the meeting, or by delivering the same to
him or her personally or telegraphing or transmitting by facsimile the same to
him or her at his or her residence or business address not later than
forty-eight (48) hours before the time at which the meeting is to be held,
unless, in case of emergency, the chairman of the Board of Directors shall
prescribe a shorter notice to be given personally or by telegraphing or
transmitting by facsimile to each director at his or her residence or business
address.
13.2 Telephonic Electronic Meetings
------------------------------
Members of the Board of Directors or of any committee designated by the
Board of Directors or body, may participate in a meeting of the Board of
Directors or such committee by means of a telephone conference or similar method
of communication by which all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this Section constitutes presence
in person at such meeting.
6
<PAGE>
ARTICLE XIV
QUORUM OF DIRECTORS
Unless the Articles of Incorporation or these Bylaws provide for a
different proportion, a majority of members of the Board of Directors of the
corporation, at a meeting duly assembled, shall constitute a quorum for the
transaction of business. Unless a different vote be required by law, the
Articles of Incorporation or these Bylaws, when a quorum is present at any
meeting, the act of directors holding a majority of the voting power of the
directors present shall be the act of the Board of Directors. In the absence of
a quorum at a meeting, a majority of directors present thereat may adjourn such
meeting from time to time to another time and place, without notice other than
announcement at the meeting, until a quorum shall be present thereat.
ARTICLE XV
COMMITTEES
15.1 Committees of Directors
-----------------------
The Board of Directors may, by resolution passed by a majority of the
whole Board of Directors, designate one or more committees, and each committee
shall have as a member at least one (1) director and such other natural persons
as the Board of Directors may select. The Board of Directors may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors or in these Bylaws of the corporation,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers that may
require it; but no such committee shall have the power or authority to (i) amend
the Articles of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors as provided in Section 78.195 of the
Nevada General Corporation Law, fix the designations and any of the preferences
or rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series), (ii) adopt an agreement or plan of
merger, consolidation or share exchange under the Nevada General Corporation
Law, (iii) recommend to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, (iv) recommend to
the stockholders a dissolution of the corporation or a revocation of a
dissolution, or (v) amend the Bylaws of the corporation; and, unless the Board
resolution establishing the committee, the Bylaws or the Articles of
7
<PAGE>
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, or to authorize the issuance of stock.
15.2 Committee Minutes
-----------------
Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.
15.3 Meetings and Action of Committees
---------------------------------
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of these Bylaws applicable to the full
Board of Directors, with such changes in the context of those Bylaws as are
necessary to substitute the committee and its members for the Board of Directors
and its members; provided, however, that (i) the time of regular meetings of
committees may be determined either by resolution of the Board of Directors or
by resolution of the committee, and (ii) special meetings of committees may also
be called by resolution of the Board of Directors and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The Board of Directors
may adopt rules not inconsistent with the provisions of these Bylaws for the
government of any committee.
ARTICLE XVI
OFFICERS
The officers of this corporation shall include, without limitation, a
president, a secretary, and a treasurer. The Board of Directors, in its
discretion, may elect a chairman of the Board of Directors, who, when present,
shall preside at all meetings of the Board of Directors, and who shall have such
other powers as the Board of Directors shall prescribe.
The officers of the corporation shall be elected by the Board of
Directors after its election by the stockholders, and a meeting may be held
without notice for this purpose immediately after the annual meeting of the
stockholders and at the same place. Any person may hold two or more offices at
once. Each officer shall hold office until his or her successor is duly elected
or until his or her earlier death, resignation or removal in the manner
hereinafter provided.
ARTICLE XVII
ELIGIBILITY OF OFFICERS
The chairman of the Board of Directors need not be a stockholder. The
president, secretary, treasurer, and such other officers as may be elected or
appointed need not be stockholders or directors of the corporation. Any person
may hold more than one office, provided the duties thereof can be consistently
performed by the same person.
8
<PAGE>
ARTICLE XVIII
ADDITIONAL OFFICERS AND AGENTS
The Board of Directors, at its discretion, may appoint one or more vice
presidents, assistant secretaries, assistant treasurers, and such other officers
or agents as it may deem advisable, and prescribe the duties thereof.
ARTICLE XIX
CHIEF EXECUTIVE OFFICER
The chief executive officer shall have such powers and duties as may be
prescribed by the Board of Directors.
ARTICLE XX
PRESIDENT
The president of the corporation, when present, shall preside at all
meetings of the stockholders and, unless a chairman of the Board of Directors
has been elected and is present, shall preside at meetings of the Board of
Directors. The president, unless some other person is specifically authorized by
vote of the Board of Directors, shall sign all certificates of stock, bonds,
deeds, mortgages, extension agreements, modification of mortgage agreements,
leases, and contracts of the corporation. He or she shall perform all of the
duties commonly incident to the office of president and shall perform such other
duties as the Board of Directors shall designate.
ARTICLE XXI
CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. He or she shall perform all of the duties
commonly incident to the office of Chief Financial Officer and such other duties
as the Board of Directors shall designate. The books of account shall at all
reasonable times be open to inspection by any director.
ARTICLE XXII
SECRETARY
The secretary shall keep accurate minutes of all meetings of the
stockholders and the Board of Directors, and shall perform all the duties
commonly incident to the office of secretary, and shall perform such other
duties and have such other powers as the Board of Directors shall designate. The
secretary shall have power, together with the president to sign stock
9
<PAGE>
certificates of the corporation. In the secretary's absence at any meeting an
assistant secretary or a secretary pro tempore shall perform the secretary's
duties.
ARTICLE XXIII
TREASURER
The treasurer, subject to the order of the Board of Directors, shall
have the care and custody of the money, funds, valuable papers, and documents of
the corporation (other than the treasurer's own bond, if any, which shall be in
the custody of the president), and shall have and exercise, under the
supervision of the Board of Directors, all the powers and duties commonly
incident to the office of treasurer, and shall give bond in such form and with
such sureties as shall be required by the Board of Directors. The treasurer
shall deposit all funds of the corporation in such bank or banks, trust company
or trust companies, or with such firm or firms, doing a banking business, as the
directors shall designate. The treasurer may endorse for deposit or collection
all checks and notes payable to the corporation or to its order, may accept
drafts on behalf of the corporation, and together with the president may sign
certificates of stock. The treasurer shall keep accurate books of account of the
corporation's transactions which shall be the property of the corporation, and,
together with all property in his or her possession, shall be subject at all
times to the inspection and control of the Board of Directors. All checks,
drafts, notes, or other obligations for the payment of money shall be signed by
such officer or officers or agent or agents as the Board of Directors shall by
general or special resolution direct. The Board of Directors may also in its
discretion require, by general or special resolutions, that checks, drafts,
notes, and other obligations for the payment of money shall be countersigned or
registered as a condition to their validity by such officer or officers or agent
or agents as shall be directed in such resolution.
ARTICLE XXIV
ASSISTANT OFFICERS
Any persons elected as assistant officers shall assist in the
performance of the duties of the designated office and such other duties as
shall be assigned to such assistant officer by any vice president, the secretary
or the treasurer, as the case may be, or by the Board of Directors, the chairman
of the Board, the chief executive officer or the president.
ARTICLE XXV
RESIGNATIONS AND REMOVALS
Any director or officer of the corporation may resign at any time by
giving written notice to the corporation, to the Board of Directors, or to the
chairman of the Board, or to the president, or to the secretary of the
corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified therein, upon its acceptance by the
Board of Directors.
Any director may be removed from office by the vote of stockholders
representing not less than two-thirds (2/3) of the issued and outstanding
10
<PAGE>
capital stock entitled to vote. Any officer may be removed from office at any
time, either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by unanimous written consent of the
directors in office at the time, or by any committee of superior officers upon
whom such power for removal may have been conferred by the Board of Directors.
ARTICLE XXVI
VACANCIES
Vacancies in the Board of Directors, including those caused by an
increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum and each director so elected
shall hold office for the unexpired portion of the term of the director whose
place shall be vacant, and until such director's successor shall have been duly
elected and qualified. Vacancies in the Board of Directors may be filled for the
unexpired term by the stockholders at a meeting called for that purpose, unless
such vacancy shall have been filled by the directors. Vacancies occurring in an
office of the corporation by death, resignation or removal shall be filled for
the unexpired portion of the term thereof by the Board of Directors.
ARTICLE XXVII
STOCK CERTIFICATES
Every stockholder shall be entitled to a certificate or certificates of
the capital stock of the corporation in such form as may be prescribed by the
Board of Directors, duly numbered and sealed with the corporate seal of the
corporation and setting forth the number and class of shares. Such certificates
shall be signed by the president and by the treasurer or an assistant treasurer
or the secretary or an assistant secretary.
ARTICLE XXVIII
TRANSFER OF STOCK
Unless limited by the Articles of Incorporation, shares of stock may be
transferred by delivery of the stock certificate, representing the shares to be
transferred, accompanied either by an assignment in writing on the back of the
stock certificate or by a written power of attorney to sell, assign, and
transfer the same on the books of the corporation, duly signed by the person
appearing by the certificate to be the owner of the shares represented thereby,
together with all necessary federal and state transfer tax stamps affixed, and
shall be transferable on the books of the corporation upon surrender thereof so
executed. The person registered on the books of the corporation as the owner of
any shares of stock shall be entitled to all the rights of ownership with
respect to such shares. It shall be the duty of every stockholder to notify the
corporation of such stockholder's post office address.
11
<PAGE>
ARTICLE XXIX
INDEMNITY
29.1 Indemnification of Officers and Directors in Advance
----------------------------------------------------
To the maximum extent and in the manner permitted by Sections 78.7502
and 78.751 of the Nevada General Corporation Law, the corporation shall
indemnify each of its directors and officers against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation. For
purposes of this Article, an "officer" or "director" of the corporation includes
any person (i) who is or was a director or officer of the corporation, (ii) is
or was serving at the request of the corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise, or
(iii) was a director or officer of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.
To the maximum extent and in the manner permitted by Sections 78.7502
and 78.751 of the Nevada General Corporation Law, the corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or was a director or
officer of a corporation which was a predecessor corporation of the corporation
or of another enterprise at the request of such predecessor corporation against
expenses, including amounts paid in settlement and attorneys' fees.
The corporation shall pay the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding as they are
incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the officer or
director to repay the amount if it is ultimately determined by a court of
competent jurisdiction that such officer or director is not entitled to be
indemnified by the corporation.
29.2 Indemnification Of Employees And Agents
---------------------------------------
The corporation shall have the power, to the maximum extent and in the
manner permitted by Sections 78.7502 and 78.751 of the Nevada General
Corporation Law, to indemnify each of its employees and agents against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation. For
purposes of this Article, an "employee" or "agent" any person (i) who is or was
an employee or agent of the corporation, (ii) is or was serving at the request
of the corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (iii) was an employee or agent of a
12
<PAGE>
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
The corporation shall have the power, to the maximum extent and in the
manner permitted by Sections 78.7502 and 78.751 of the Nevada General
Corporation Law, to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that such person is or was an employee or agent of the corporation, or
is or was serving at the request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
was an employee or agent of a corporation which was a predecessor corporation of
the corporation or of another enterprise at the request of such predecessor
corporation against expenses, including amounts paid in settlement and
attorneys' fees.
29.3 Indemnity Not Exclusive
-----------------------
The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under the Articles of Incorporation, any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.
29.4 Indemnification For Successful Defense
--------------------------------------
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2 of Section 78.7502
of the Nevada General Corporation Law, or in defense of any claim, issue or
matter therein, the corporation shall indemnify such person against expenses,
including attorneys' fees, actually and reasonably incurred by such person in
connection with the defense.
29.5 Continuing Right to Indemnification
-----------------------------------
The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to Section 78.751 of the Nevada General Corporation
Law continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of
such person.
29.6 Insurance and Other Financial Arrangements
------------------------------------------
The corporation shall have the power, to the maximum extent and in the
manner permitted by Section 78.752 of the Nevada General Corporation Law, to
purchase and maintain insurance or make other financial arrangements on behalf
of 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 a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or was a director, officer, employee or
13
<PAGE>
agent of a corporation which was a predecessor corporation of the corporation or
of another enterprise at the request of such predecessor corporation for any
liability asserted against such person and liability and expenses incurred by
such person in his capacity as a director, officer, employee or agent, or
arising out of his status as such, whether or not the corporation has the
authority to indemnify him against such liability and expenses.
29.7 Subrogation
-----------
If the corporation shall make payment pursuant to this Article XXIX, it
shall be subrogated to the extent of such payment to all rights of recovery of
the indemnified person, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the corporation effectively to bring suit
to enforce such rights.
ARTICLE XXX
RECORD DATES
30.1 Record Date For Notice And Voting
---------------------------------
The Board of Directors may prescribe a period not exceeding sixty (60)
days before any meeting of the stockholders during which no transfer of stock on
the books of the corporation may be made, or may fix a day not more than sixty
(60) days before the holding of any such meeting as the day as of which
stockholders entitled to notice of and to vote at such meetings must be
determined. Only stockholders of record on that day are entitled to notice or to
vote at such meeting.
If the Board of Directors does not so fix a record date:
1. The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business on
the business day next preceding the day on which notice is given or, if notice
is waived, at the close of business on the business day next preceding the day
on which the meeting is held; and
2. The record date for determining stockholders entitled to give
consent to corporate action in writing without a meeting, (i) when no prior
action by the board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action by the board has been taken, shall
be at the close of business on the day on which the board adopts the resolution
relating to that action, or the sixtieth (60th) day before the date of such
other action, whichever is later.
30.2 Record Date For Purposes Other Than Notice and Voting
-----------------------------------------------------
For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any other lawful
action (other than action by stockholders by written consent without a meeting),
14
<PAGE>
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty (60) days before any such action. In that case, only
stockholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except as
otherwise provided in the Nevada General Corporation Law. If the Board of
Directors does not so fix a record date, then the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the applicable resolution or the sixtieth
(60th) day before the date of that action, whichever is later.
ARTICLE XXXI
LOSS OF CERTIFICATES
In case of loss, mutilation, or destruction of a certificate of stock,
a duplicate certificate may be issued upon such terms as the Board of Directors
shall prescribe.
ARTICLE XXXII
CORPORATE AUTHORITY
32.1 Checks; Drafts; Evidences of Indebtedness
-----------------------------------------
From time to time, the Board of Directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
32.2 Corporate Contracts and Instruments; How Executed
-------------------------------------------------
The Board of Directors, except as otherwise provided in these Bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to cause the corporation to be bound by any contract or engagement or
to pledge its credit or to render it liable for any purpose or for any amount.
ARTICLE XXXIII
AMENDMENTS
The Bylaws of the corporation, regardless of whether made by the
stockholders or by the Board of Directors, may be amended, added to, or repealed
by the stockholders of the issued and outstanding capital stock of this
corporation, at any meeting of the stockholders, provided notice of the proposed
change is given in the notice of meeting, or notice thereof is waived in
writing.
15
<PAGE>
Subject to the Bylaws, if any, adopted by the stockholders of the issued and
outstanding capital stock of this corporation, the Board of Directors may amend,
add to, or repeal the Bylaws of the corporation.
CERTIFICATE OF SECRETARY
I, James E. Solomon, the duly elected, qualified and acting Secretary
of Insider Travel Deals.com, Inc., a Nevada corporation, do hereby certify that
the foregoing Bylaws, comprising of a Table of Contents and pages 1-16,
constitute the Bylaws of this Corporation duly and regularly adopted by the
Board of Directors by Unanimous Written Consent.
DATED this 9th day of August, 1999.
/s/ James E. Solomon
-----------------------------
James E. Solomon, Secretary
485970
16
Wangsgard
& Associates, LLC
Attorneys at Law
P.O. Box 982194-2194
Park City, UT 84098
Phone/Fax (435) 647-3063
Phone (801) 222-0883
Fax (801) 222-9414
August 2, 1999
The Board of Directors
Insider Travel Deals.Com, Inc.
5252 Edgewood Drive
Provo, UT 84604
Re: Insider Travel Deals.Com, Inc.
Gentlemen:
We have been retained by Insider Travel Deals.Com, Inc. (the "Company") in
connection with the Registration Statement on Form SB-l filed by the Company
with the Securities and Exchange Commission (the "Registration Statement")
relating to 2,000,000 shares of Common Stock (the "Common Stock"). You have
requested that we render an opinion as to whether the Common Stock to be issued
upon the terms set forth in the Registration Statement will be validly issued,
fully paid and non-assessable.
In connection with this agreement we have examined the following:
1. Articles of Incorporation of the Company;
2. The Bylaws of the Company; and
3. Unanimous consents of the board of directors.
We have examined such other corporate records and documents and have made such
other examinations as we deemed relevant.
Based upon the above examination, we are of the opinion that the Common Stock to
be issued pursuant to the Registration Statement, are validly authorized and,
when issued in accordance with the terms set forth therein, will be validly
issued, fully paid, and non-assessable.
We hereby consent to being named in the Prospectus included in the Registration
Statement as having rendered the foregoing opinion and as having represented the
Company in connection with the Registration Statement.
Sincerely yours,
/s/ Craig J. Wangsgard
Wangsgard & Associates, LLC
485977
Child & Company
A Professional Corporation of CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
265 EAST 100 SOUTH, SUITE 300, SALT LAKE CITY, UT 84111
PHONE: (801) 534-0774 FAX: (801) 359-2320
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form SB-1 of our
report dated June 24, 1999 on our audits of the financial statement of Insider
Travel Deals.com, Inc.
CHILD & COMPANY, PC
Salt Lake City, Utah
August 3, 1999
SUBSCRIPTION AGREEMENT
OF
INSIDER TRAVEL DEALS.COM, INC.
1. PURCHASE
--------
The undersigned hereby subscribes for the purchase of
__________________ shares of INSIDER TRAVEL DEALS.COM, INC., a Nevada
corporation (the "Company"). With this document the undersigned is submitting
the sum of $ ____________________ in cash, check, money order, or equivalent, as
payment for said shares at the price of $0.05 per share. Checks or money orders
are to be made payable to "Brighton Bank-Escrow Agent for Insider Travel
Deals.Com, Inc." until the offering closes.
2. REPRESENTATIONS
---------------
The undersigned hereby represents and warrants that:
(a) He/she is aware that, pursuant to Section 14 of the Securities Act
of 1933, any provision is void that binds a person acquiring a security to waive
compliance with any provision under the federal securities law;
(b) The undersigned, if a natural person, is over the age of twenty-one
years;
(c) The undersigned has received and read a copy of the prospectus of
the Company;
(d) The undersigned acknowledges that neither the United States
Securities and Exchange Commission, nor any other state or federal agency has
made any determination as to the merits of purchasing any of such shares, and
that the purchase of any interest involves a very high degree of risk;
(e) The undersigned acknowledges that the application of purchase may
be accepted in whole or in part or rejected by the Company, and that, to the
extent the application may be rejected, the accompanying payment will be
refunded without the deduction of expenses;
(f) The offer and sale of these shares to the undersigned were made by
means of the Company's prospectus only, and no other documents or advertisements
were used in connection therewith; and
(g) The undersigned was offered and is purchasing these shares within
the state of
<PAGE>
3. TYPE OF OFFERING
----------------
The undersigned hereby further acknowledges that these shares are
being offered and sold pursuant to a registration statement on Form SB-l under
the Securities Act of 1933, as amended, and that such shares may only be offered
and sold in states in which the securities have been qualified for sale.
AFFIRMATION
THE UNDERSIGNED HEREBY SWEARS AND AFFIRMS THAT HE OR SHE HAS READ THE FOREGOING
SUBSCRIPTION AGREEMENT OF INSIDER TRAVEL DEALS.COM, INC. AND IS FAMILIAR WITH
THE CONTENTS THEREOF AND THAT ALL OF THE REPRESENTATIONS CONTAINED THEREIN ARE
TRUE AND ACCURATE
- ----------------------------- ------------------------------------
[Printed Name of Subscriber] [Signature]
------------------------------------
[Street Address and Number]
------------------------------------
[City, State and Zip Code]
------------------------------------
[Tax Identification or Social
Security Number of Subscriber]
The Company is requested to issue the stock certificate(s) as follows:
Name(s):____________________________________ Number of Shares:_____________
[Please Print]
Name(s):____________________________________ Number of Shares:_____________
[Please Print]
485980
Exhibit ____
PROCEEDS ESCROW AGREEMENT
THIS PROCEEDS ESCROW AGREEMENT (this "Agreement") is made and entered
into this _____ day of July, 1999, by and between Insider Travel Deals.Com,
Inc., a Nevada corporation (the "Company"), and Brighton Bank, a National
banking corporation (the "Escrow Agent")
PREMISES
The Company proposes to offer for sale to the general public in certain
states a total of Shares of common stock (the "Common Stock"), par value
$0.0001, at an offering price of $0.05 per Share in accordance with the
registration provisions of the Securities Act of 1933, as amended, and pursuant
to a registration statement on form SB-l (the "Registration Statement")on file
with the Securities and Exchange Commission. The Company agrees herein to offer
for sale the Common Stock in accordance with the terms of the prospectus
contained in the Registration Statement. In accordance with the terms of the
Registration Statement, the Company desires to provide for the escrow of the
gross subscription payments for Common Stock until the amount, as set forth
below, has been received.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Company or any officer or representative of the Company from
subscriptions for the purchase of Common Stock in the subject offering shall be
deposited promptly with the Escrow Agent, but in any event no later than noon of
the next business day following receipt.
2. Concurrently with transmitting funds to the Escrow Agent, the
Company shall also deliver to the Escrow Agent a schedule setting forth the name
and address of each subscriber whose funds are included in such transmittal, the
number of Shares subscribed for, and the dollar amount paid. All funds so
deposited shall remain the property of the subscriber and shall not be subject
to any lien or charges by the Escrow Agent, or judgments or creditors' claims
against the Company until released to it in the manner hereinafter provided.
3. If at any time prior to the expiration of the minimum offering
period, as specified in paragraph 4, $100,000 has been deposited pursuant to
this Agreement, the Escrow Agent shall confirm the receipt of such funds to the
Company.
4. If, within four (4) months after the effective date of the
Registration Statement the Company and its agents have not deposited $100,000 in
good funds with the Escrow Agent, the Escrow Agent shall so notify the Company
1
<PAGE>
and shall promptly transmit to those investors who subscribed for the purchase
of Shares the amount of money each such investor so paid. The Escrow Agent shall
furnish to the Company an accounting for the refund in full to all subscribers.
5. If at any time prior to the termination of this escrow the Escrow
Agent is advised by the Securities and Exchange Commission that a stop order has
been issued with respect to the Registration Statement, the Escrow Agent shall
thereon return all funds to the respective subscribers.
6. It is understood and agreed that the duties of the Escrow Agent are
entirely ministerial, being limited to receiving monies from the Company and its
agents and holding and disbursing such monies in accordance with this Agreement.
7. The Escrow Agent is not a party to, and is not bound by, any
agreement between the Company and any other party which may be evidenced by or
arise out of the foregoing instructions.
8. The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatsoever for the sufficiency, correctness,
genuineness, or validity of any instrument deposited with it, or with respect to
the form or execution of the same, or the identity, authority, or rights of any
person executing or depositing the same.
9. The Escrow Agent shall not be required to take or be bound by notice
of any default of any person or to take any action with respect to such default
involving any expense or liability, unless notice in writing is given to an
officer of the Escrow Agent of such default by the undersigned or any of them,
and unless it is indemnified in a manner satisfactory to it against any expense
or liability arising therefrom.
10. The Escrow Agent shall not be liable for acting on any notice,
request, waiver, consent, receipt, or other paper or document believed by the
Escrow Agent to be genuine and to have been signed by the proper party or
parties.
11. The Escrow Agent shall not be liable for any error of judgment or
for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, or for anything which it may do or refrain from doing in
connection herewith, except its own willful misconduct.
12. The Escrow Agent shall not be answerable for the default or
misconduct of any agent, attorney, or employee appointed by it if such agent,
attorney, or employee shall have been selected with reasonable care.
13. The Escrow Agent may consult with legal counsel in the event of any
dispute or question as to the consideration of the foregoing instructions or the
Escrow Agent's duties hereunder, and the Escrow Agent shall incur no liability
and shall be fully protected in acting in accordance with the opinion and
instructions of such counsel.
2
<PAGE>
14. In the event of any disagreement between the undersigned or any of
them, the person or persons named in the foregoing instructions, and/or any
other person, resulting in adverse claims and/or demands being made in
connection with or for any papers, money, or property involved herein or
affected hereby, the Escrow Agent shall be entitled at its option to refuse to
comply with any such claim, or demand so long as such disagreement shall
continue and, in so refusing, the Escrow Agent shall not be or become liable to
the undersigned or any of them or to any person named in the foregoing
instructions for the failure or refusal to comply with such conflicting or
adverse demands, and the Escrow Agent shall be entitled to continue to so
refrain and refuse to so act until:
(a) the rights of adverse claimants have been finally
adjudicated in a court assuming and having jurisdiction of the parties and the
money, papers, and property involved herein or affected hereby; and/or
(b) all differences shall have been adjusted by agreement and
the Escrow Agent shall have been notified thereof in writing signed by all of
the persons interested.
15. The fee of the Escrow Agent is $ 750.00, receipt of which is hereby
acknowledged. In addition, if a minimum of $100,000 is not received in escrow
within the escrow period and the Escrow Agent is required to return funds to
investors as provided in section 4, the Escrow Agent shall receive a fee of $
5.00 per check for such service. The fee agreed on for services rendered
hereunder is intended as full compensation for the Escrow Agent's services as
contemplated by this Agreement; however, in the event that the conditions of
this Agreement are not fulfilled, the Escrow Agent renders any material service
not contemplated by this Agreement, there is any assignment of interest in the
subject matter of this Agreement, there is any material modification hereof, any
material controversy arises hereunder, or the Escrow Agent is made a party to or
justifiably intervenes in any litigation pertaining to this Agreement or the
subject matter hereof, the Escrow Agent shall be reasonably compensated for such
extraordinary expenses, including reasonable attorneys' fees, occasioned by any
delay, controversy, litigation, or event and the same may be recoverable only
from the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, as of the date first
above written.
By___________________________________
Duly Authorized Officer
3
<PAGE>
Brighton Bank hereby acknowledges receipt of this Agreement and agrees
to act in accordance with said Agreement and on the terms and conditions above
set forth this ____ day of July, 1999.
BRIGHTON BANK
By __________________________________
Duly Authorized Officer
485984
4
