UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
ANSEL PROJECT, INC.
-----------------------------
(Name of Small Business Issuer)
Colorado 84-1493151
------------------ ---------------
(State or Other I.R.S. Employer
Jurisdiction of Identification Number
Incorporation or
Organization)
7899 West Frost Drive, Littleton, CO 80128
------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
303/979-3224
_____________
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under
Section 12(g) of the Act: Common Stock, No Par Value
(Title of Class)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Ansel Project, Inc. (the "Company"), was incorporated on April 9, 1998
under the laws of the State of Colorado to engage in any lawful corporate
undertaking, including selected mergers and acquisitions. The Company has been
in the developmental stage since inception and has no operations to date; its
only activity has been issuing shares to its original shareholders.
The Company will attempt to locate and negotiate with a business entity
for the merger of that target company into the Company. Such a target company
may wish to become a subsidiary of the Company or may wish to contribute
assets to the Company rather than merge. No assurances can be given that the
Company will be successful in locating, negotiating, or merging with any
target company, or that the terms of a proposed business combination may be
acceptable.
The Company has been formed to provide a method for a foreign or domestic
private company to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market.
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These benefits are commonly thought to
include the following:
* the ability to use registered securities to acquire
assets or businesses;
* increased visibility in the marketplace;
* ease of borrowing from financial institutions;
* improved stock trading efficiency;
* shareholder liquidity;
* facilitating the raising of additional capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a public presence in the United States capital market.
Target companies interested in a business combination with the Company
may include:
* a company for whom a primary purpose of becoming
public is the use of its securities for the
acquisition of other assets or businesses;
* a company which is unable to find an underwriter of
its securities or is unable to find an underwriter
of securities on terms acceptable to it;
* a company which desires to become public with less
dilution of its common stock than would occur upon
an underwriting;
* a company which believes that it will be able to obtain
investment capital on more favorable terms after it
has become public;
* a foreign company which may wish an initial entry
into the United States securities market;
* a special situation company, such as a company
seeking a public market to satisfy redemption
requirements under a qualified Employee Stock Option
Plan;
* a company seeking one or more of the other mentioned
perceived benefits of becoming a public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the election by the target business of its
own management and board of directors.
The proposed business activities described herein classify the Company as
a "blank check" company. See "GLOSSARY". The Securities and Exchange
Commission and many states have enacted statutes, rules and regulations
limiting the sale of securities of blank check companies. Other than
applying for a trading symbol and pre-clearing of the Company's shares for
trading, management does not intend to undertake any efforts to cause a market
to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. All of the
shares currently issued are restricted and are not presently eligible for
trading.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under
the Securities Exchange Act of 1934.
The Company's business is subject to numerous risk factors, including the
following:
WE HAVE NO OPERATING HISTORY, NO REVENUES, AND MINIMAL ASSETS. The
Company has had no operating history nor any revenues or earnings from
operations. The Company has no significant assets or financial resources.
The Company will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss
which will increase continuously until the Company can consummate a business
combination with a target company. There is no assurance that the Company can
identify such a target company and consummate such a business combination.
THE NATURE OF OUR PROPOSED OPERATIONS IS SPECULATIVE. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target
company. While management intends to seek business combinations with entities
having established operating histories, there can be no assurance that the
Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination the success of the
Company's operations may be dependent upon the management, operations, and
financial condition of the target company. These and numerous other factors
are beyond the Company's control.
THERE IS A SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of
business entities. A large number of established and well-financed entities,
including venture capital firms, are active in mergers and acquisitions of
companies which may be merger or acquisition target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company.
Consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete with numerous other
small public companies in seeking merger or acquisition candidates.
WE HAVE NO AGREEMENT FOR ANY BUSINESS COMBINATION OR OTHER TRANSACTION.
The Company has no arrangement, agreement or understanding with respect to
engaging in a merger with or acquisition of a business entity. There can be
no assurance the Company will be successful in identifying and evaluating
suitable business opportunities or in concluding a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation by the Company. There is no assurance the
Company will be able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have achieved to
consider a business combination with it. Accordingly, the Company may enter
into a business combination with a business entity having no significant
operating history, losses, limited or no potential for earnings, limited
assets, negative net worth or other negative characteristics.
OUR MANAGEMENT HAS ONLY A LIMITED TIME COMMITMENT TO THE COMPANY. Our
president has several business interests and will devote a limited amount of
his time to the Company's business. While seeking a business combination,
management anticipates devoting up to ten hours per month to the business of
the Company. The Company's sole officer has not entered into a written
employment agreement with the Company and he is not expected to do so in the
foreseeable future. We have not obtained key man life insurance on our officer
and director. Notwithstanding the combined limited experience and time
commitment of management, loss of the services of this individual would
adversely affect development of the Company's business and its likelihood of
continuing operations. See "MANAGEMENT."
OUR SOLE OFFICER AND DIRECTOR MAY HAVE CONFLICTS OF INTEREST WITH THE
BUSINESS OF OUR COMPANY. The Company's officer and director participates in
other business ventures which may compete directly with the Company.
Additional conflicts of interest and non-arms length transactions may also
arise in the future. Management has adopted a policy that the Company will
not seek a merger with, or acquisition of, any entity in which any member of
management serves as an officer, director or partner, or in which they or
their family members own or hold any ownership interest. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - CONFLICTS OF
INTEREST."
BEING A REPORTING COMPANY COMPLICATES AND COULD DELAY AN ACQUISITION.
Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act")
requires us to provide certain information about significant acquisitions
including certified financial statements for the company acquired covering one
or two years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target companies to prepare such
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
WE HAVE A LACK OF MARKET RESEARCH AND NO MARKETING ORGANIZATION. We have
neither conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have, and does not
plan to establish, a marketing organization. Even in the event demand is
identified for the type of merger or acquisition contemplated by the Company,
there is no assurance the Company will be successful in completing any such
business combination.
WE WILL ONLY ENGAGE IN A SINGLE ACQUISITION. The Company's proposed
operations, even if successful, will in all likelihood result in the Company
engaging in a business combination with only one business entity.
Consequently, the Company's activities will be limited to those engaged in by
the business entity which the Company merges with or acquires. Our inability
to diversify our activities into a number of areas may subject us to economic
fluctuations within a particular business or industry and therefore increase
the risks associated with those operations.
CERTAIN REGULATIONS MAY APPLY TO OUR OPERATIONS. Although the Company
will be subject to regulation under the Exchange Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940, insofar as the Company will not be engaged in the business of investing
or trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests
in a number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required
to register as an investment company and could be expected to incur
significant registration and compliance costs. We have not obtained a formal
determination from the Securities and Exchange Commission as to the status of
the Company under the Investment Company Act of 1940. If we inadvertently
violate such Act, we could be subjected to material adverse consequences.
THERE WILL BE A CHANGE IN MANAGEMENT. A business combination involving
the issuance of the Company's common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in the
Company. Any such business combination may require our Management to sell or
transfer all or a portion of the Company's common stock held by them, and to
resign as directors and officers of the Company. The resulting change in
control of the Company will likely result in removal of the present officer
and director of the Company and a corresponding reduction in or elimination of
his participation in the future affairs of the Company.
THE PLAN OF OPERATION PROVIDES FOR SUBSTANTIAL DILUTION TO OUR EXISTING
SHAREHOLDERS AS A RESULT OF A MERGER. Our plan of operation is based upon a
business combination with a business entity which, in all likelihood, will
result in the Company issuing securities to shareholders of such business
entity. The issuance of previously authorized and unissued common stock of
the Company would result in a reduction in percentage of shares owned by the
present shareholders of the Company and would most likely result in a change
in control or management of the Company.
WE MAY NOT BE ABLE TO ENGAGE IN A TAX FREE ACQUISITION. We intend to
structure any business combination so as to minimize the federal and state tax
consequences to both the Company and the target entity. However, there can be
no assurance that such a business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on the parties to the transaction
and therefore the transaction itself.
THE REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management of the Company will require any potential business
combination entity to provide audited financial statements. One or more
attractive prospects may choose to forego the possibility of a business
combination with the Company rather than incur the expenses associated with
preparing audited financial statements.
Such audited financial statements may not be immediately available. In
such case, the Company intends to obtain certain assurances as to the target
company's assets, liabilities, revenues and expenses prior to consummating a
business combination, with further assurances that an audited financial
statement will be provided after closing of such a transaction. Closing
documents relative thereto will include representations that the audited
financial statements will not materially differ from the representations
included in such closing documents.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in
exchange for the Company's securities. The Company has no particular
acquisitions in mind and has not entered into any negotiations regarding such
an acquisition. The Company's sole officer and director has not engaged in
any negotiations with any representative of any entity regarding the
possibility of an acquisition or merger between the Company and such other
entity.
The Company anticipates seeking out a target business through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting
firms, investment bankers, financial advisors and similar persons, the use of
one or more World Wide Web sites and similar methods. No estimate can be made
as to the number of persons who will be contacted or solicited. Such persons
will have no relationship to management.
The Company has no full time employees. The Company's president has
agreed to allocate a portion of his time to the activities of the Company,
without compensation. The president anticipates that the business plan of the
Company can be implemented by his devoting approximately 10 hours per month to
the business affairs of the Company and, consequently, conflicts of interest
may arise with respect to the limited time commitment by such officer. See
"ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
Management is currently involved in creating other blank check companies
which have a business purpose similar to that of the Company. A conflict may
arise in the event that another blank check company with which management is
affiliated is formed and actively seeks a target business. Management
anticipates that target businesses will be located for the Company and other
blank check companies in chronological order of the date of formation of such
blank check companies. A target business may be more suitable for or may
prefer a certain blank check company formed after the Company. In such case,
a business combination might be negotiated on behalf of the more suitable or
preferred blank check company regardless of date of formation. See "ITEM 5,
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--CONFLICTS OF
INTEREST."
The Articles of Incorporation of the Company provide that the Company may
indemnify officers and/or directors of the Company for liabilities, which can
include liabilities arising under the securities laws. Therefore, assets of
the Company could be used or attached to satisfy any liabilities subject to
such indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities
registered under the Exchange Act. The Company will not restrict its search
to any specific business, industry, or geographical location and the Company
may participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into
potential business opportunities. Management anticipates that it will be able
to participate in only one potential business venture because the Company has
nominal assets and limited financial resources. See "FINANCIAL STATEMENTS."
This lack of diversification should be considered a substantial risk to the
shareholders of the Company because it will not permit the Company to offset
potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some
industries and shortages of available capital, management believes that there
are numerous firms seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key employees,
and providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and
complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any cash or other assets.
However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. The officer and director of
the Company has not conducted market research and is not aware of statistical
data to support the perceived benefits of a merger or acquisition transaction
for the owners of a business entity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officer and director of the Company, who is not
a professional business analyst. In analyzing prospective business
opportunities, management will consider such matters as available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature
of present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the
potential for further research, development, or exploration; specific risk
factors not now foreseeable, but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition or acceptance of
products, services, or trades; name identification; and other relevant
factors. Management will meet personally with management and key personnel of
the target business entity as part of its investigation. To the extent
possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Exchange Act requires that
any merger or acquisition candidate comply with all certain reporting
requirements, which include providing audited financial statements to be
included in the reporting filings made under the Exchange Act. The Company
will not acquire or merge with any company for which audited financial
statements cannot be obtained at or within a reasonable period of time after
closing of the proposed transaction.
Management of the Company will in all likelihood not be experienced in
matters relating to the business of a target company, and will rely upon its
own experience in accomplishing the business purposes of the Company. It is
anticipated that outside consultants or advisors may be utilized by the
Company to assist in the search for qualified target companies. If the
Company does retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective merger/acquisition
candidate, as the Company has limited cash assets with which to pay such an
obligation.
The Company will not restrict its search to any specific kind of firm,
but may acquire a venture which is in its preliminary or development stage,
one which is already in operation, or in a more mature stage of its corporate
existence. The acquired business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer. However, the Company does not intend
to obtain funds to finance the operation of any acquired business opportunity
until such time as the Company has successfully consummated the merger or
acquisition transaction.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction
it is probable that the present Management and shareholders of the Company
will no longer be in control of the Company. In addition, the Company's
director, as part of the terms of the acquisition transaction, likely will be
required to resign and be replaced by one or more new directors without a vote
of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all
or a part of such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs, of which there
can be no assurance, it will be undertaken by the surviving entity after the
Company has entered into an agreement for a business combination or has
consummated a business combination and the Company is no longer considered a
blank check company. Until such time as this occurs, the Company will not
attempt to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market may
have a depressive effect on the market value of the Company's securities in
the future if such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a "tax-free" reorganization under
Sections 351 or 368 of the Internal Revenue Code of 1986, as amended (the
"Code").
With respect to any merger or acquisition, negotiations with target
company management are expected to focus on the percentage of the Company
which the target company shareholders would acquire in exchange for all of
their shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, the Company's
shareholders will in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or acquisition. The
percentage ownership may be subject to significant reduction in the event the
Company acquires a target company with substantial assets. Any merger or
acquisition effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's shareholders
at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of
such agreements cannot be predicted, generally such agreements will require
certain representations and warranties of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by the parties prior to and after such closing, will
outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, and will include miscellaneous other
terms.
The Company will not acquire or merge with any entity which cannot
provide audited financial statements at or within a reasonable period of time
after closing of the proposed transaction. The Company is subject to all of
the reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements
as part of its Form 8-K to be filed with the Securities and Exchange
Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations
made by the target company, the closing documents may provide that the
proposed transaction will be voidable at the discretion of the present
management of the Company.
Shareholder Corporate Management Services, Inc. has agreed that it will
advance to the Company any additional funds which the Company needs for
operating capital and for costs in connection with searching for or completing
an acquisition or merger. Such advances will be made without expectation of
repayment unless the owners of the business which the Company acquires or
merges with agree to repay all or a portion of such advances. There is no
minimum or maximum amount such shareholder will advance to the Company. The
Company will not borrow any funds for the purpose of repaying advances made by
such shareholder, and the Company will not borrow any funds to make any
payments to the Company's promoters, management or their affiliates or
associates.
The Company has adopted a policy that it will not seek an acquisition or
merger with any entity in which the Company's officer, director, and
controlling shareholder or any affiliate or associate serves as an officer or
director or holds any ownership interest.
COMPETITION
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's extremely limited financial resources and
limited management availability, it will continue to be at a significant
competitive disadvantage compared to its competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently occupies offices in the home
of its sole officer and director at no cost to the Company. Mr. Andrews has
agreed to continue this arrangement until the Company completes an acquisition
or merger.
The Company has no present plans to acquire any assets or make any
investments prior to completing a business combination.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of April 30, 1999, each person known
by the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all directors individually and all directors and
officers of the Company as a group. Except as noted, each person has sole
voting and investment power with respect to the shares shown.
Amount and Nature
Name and Address of Beneficial Percentage
of Beneficial Owner Ownership of Class
- ------------------ ------------ -----------
Corporate Management Services, Inc. (1) 1,000,000 81.3%
7899 West Frost Dr.
Littleton, CO 80128
George G. Andrews (2) 1,010,000 82.1%
7899 West Frost Dr.
Littleton, CO 80128
Barbara Davidson (3) 1,010,000 82.1%
2171 Jonathan Pl.
Boulder, CO 80304
All Executive Officers
and Directors as a
Group (1 Person) 1,010,000 82.1%
(1) Corporate Management Services, Inc. ("CMS") is controlled by George
Andrews and Barbara Davidson each of whom own 50% of the outstanding stock.
(2) Includes the shares of CMS and 5,000 shares owned by his spouse.
(3) Includes the shares of CMS and 5,000 shares owned by her spouse.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
- -------- --- -------------------------------
George G. Andrews 73 President and Director
There are no agreements or understandings for the officer and director to
resign at the request of another person. Said officer and director is not
acting on behalf of or at the direction of any other person.
George Andrews has been the sole officer, director, and employee of the
Company since its inception, and is now serving his second consecutive
one-year term. Mr. Andrews has been a director of GREKA Energy Corporation, a
publicly traded company since April, 1998. Mr. Andrews has been a consultant
and private investor since his retirement from the oil and gas industry in
1987. From 1982 until 1987 he was employed as corporate Vice President of
Intercontinental Energy Corporation of Englewood, Colorado directing the
company's land acquisition, lease and management operations. Between June
1981 and November 1982 Mr. Andrews was Vice President of Shelter Hydrocarbons,
Inc. of Denver, Colorado where he directed all land management and operation
procedures including contract systems and negotiations of acquisition
agreements. From 1979 to June of 1981 Mr. Andrews was Senior Landman for the
National Cooperative Refinery Association in Denver, Colorado where he was
responsible for negotiation and acquisition of oil and gas leases, certifying
title requirements and ongoing daily operations. Mr. Andrews obtained his
Bachelor of Science degree from the University of Tulsa, Tulsa, Oklahoma in
1947 where he majored in Economics.
Mr. Andrews is involved with other blank check companies filing under the
Securities Act or under the Exchange Act.
CONFLICTS OF INTEREST
The Company's officer and director has organized other companies of a
similar nature and with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an officer and
director of the Company. Since the officer and director is engaged in other
business activities, Management anticipates that it will devote only a minor
amount of time to the Company's affairs. The Company does not have a right of
first refusal for opportunities that come to Management's attention insofar as
such opportunities may relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check company with
which Management is affiliated is formed and actively seeks a target business.
It is anticipated that target businesses will be located for the Company and
other blank check companies in chronological order of the date of formation of
such blank check companies. A target business may be more suitable for or may
prefer a certain blank check company formed after the Company. In such case,
a business combination might be negotiated on behalf of the more suitable or
preferred blank check company regardless of date of formation.
Mr. Andrews intends to devote as much time to the activities of the
Company as required. However, should such a conflict arise, there is no
assurance that Mr. Andrews would not attend to other matters prior to those of
the Company. Mr. Andrews projects that initially approximately ten hours per
month of his time may be spent locating a target business. This amount of
time would increase when the analysis of, and negotiations and consummation
with, a target business are conducted.
The terms of a business combination may provide for a payment by cash or
otherwise to CMS for the purchase of its common stock of the Company by a
target business. Mr. Andrews would directly benefit from such payment. Such
benefits may influence Mr. Andrews' choice of a target business.
Management may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target business to the Company where that
reference results in the consummation of a business combination. The amount
of any finder's fee will be subject to negotiation and cannot be estimated at
this time. No finder's fee of any kind will be paid to the management of the
Company or to their associates or affiliates. No loans of any type have, or
will be, made to management or promoters of the Company or to any of their
associates or affiliates.
The Company's officer and director and his affiliates and associates have
not had any negotiations with any representatives of the owners of any target
business or company regarding the possibility of a business combination.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management or promoters of the
Company or any affiliates or associates have any interest, direct or indirect.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management or their affiliates or associates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such
persons prior to a business combination;
(iii) Entering into any business combination or
acquisition of assets in which such persons have any
interest, direct or indirect; or
(iv) The payment of any finder's fees to such persons.
These policies have been adopted by the Board of Directors of the
Company, and any changes in these provisions would require the approval of the
Board of Directors. Management does not intend to propose any such changes
and does not anticipate that any such changes to these policies will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest
in favor of the Company could result in liability of management to the
shareholders. However, any attempt by shareholders to enforce a liability of
management to the Company would most likely be prohibitively expensive and
time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities
Act of 1933 and the Securities Exchange Act of 1934, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing
or trading in securities. In the event the Company engages in a business
combination which results in the Company holding passive investment interests
in a number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required
to register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940. Any violation
of such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole officer and director does not receive any compensation
for services rendered to the Company, nor has he received such compensation in
the past. As of the date of this registration statement, the Company has no
funds available to pay its officer and director. Further, the officer and
director is not accruing any compensation pursuant to any agreement with the
Company.
The officer and director of the Company will not receive any finder's
fee, either directly or indirectly, as a result of his efforts to implement
the Company's business plan outlined herein.
No retirement, pension, profit sharing, stock option, insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On April 11, 1998, the Company issued a total of 1,000,000 shares of
Common Stock to the following persons for a total of $500 in cash:
NAME NUMBER OF TOTAL SHARES CONSIDERATION
- ------ --------------------- -------------
Corporate Management Services, Inc. 1,000,000 $500
The Board of Directors has passed a resolution which contains a policy
that the Company will not seek an acquisition or merger with any entity in
which the Company's officer, director, or shareholders or their affiliates
or associates will serve as an officer or director or hold any ownership
interest. The proposed business activities described herein classify the
Company as a "blank check" company. See "GLOSSARY". The Securities and
Exchange Commission and many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 20,000,000 shares
of common stock, no par value and 5,000,000 shares of preferred stock, no par
value. The following statements relating to the capital stock are summaries
and do not purport to be complete. Reference is made to the more detailed
provisions of, and such statements are qualified in their entirety by
reference to, the Articles of Incorporation and the By-laws, copies of which
are filed as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by
the Board of Directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are, and the shares of common stock offered by the
Company pursuant to this offering will be, when issued and delivered, fully
paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company's Articles of Incorporation authorizes the issuance of
5,000,000 shares of preferred stock, no par value, of which no shares have
been issued. The Board of Directors is authorized to provide for the issuance
of shares of preferred stock in series and, by filing a certificate pursuant
to the applicable law of Colorado, to establish from time to time the number
of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof without any further vote
or action by the shareholder. Any shares of preferred stock so issued would
have priority over the common stock with respect to dividend or liquidation
rights. Any future issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the shareholder and may adversely affect the voting and
other rights of the holders of common stock. At present, the Company has no
plans to issue any preferred stock nor adopt any series, preferences or other
classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required
percentage vote of the stockholders. In addition, under certain
circumstances, the issuance of preferred stock could adversely affect the
voting power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such stock based on
its judgment as to the best interests of the stockholders of the Company, the
Board of Directors could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of the stockholders
might believe to be in their best interests or in which stockholders might
receive a premium for their stock over the then market price of such stock.
The Board of Directors does not at present intend to seek stockholder approval
prior to any issuance of currently authorized stock, unless otherwise required
by law or stock exchange rules. The Company has no present plans to issue any
preferred stock.
DIVIDENDS
The Company does not expect to pay dividends. Dividends, if any, will be
contingent upon the Company's revenues and earnings, if any, capital
requirements and financial conditions. The payment of dividends, if any, will
be within the discretion of the Company's Board of Directors. The Company
presently intends to retain all earnings, if any, for use in its business
operations and accordingly, the Board of Directors does not anticipate
declaring any dividends in the foreseeable future.
Glossary
"Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "Blank Check"
Company is a development stage
company that has no specific
business plan or purpose or has
indicated that its business plan is
to engage in a merger or acquisition
with an unidentified company or
companies and is issuing "penny
stock" securities as defined in Rule
3a51-1 of the Exchange Act.
Exchange Act The Securities Exchange Act of 1934,
as amended.
Securities Act The Securities Act of 1933, as
amended.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
There is no trading market for the Company's common stock at present and
there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop, that it
will continue.
(a) Market Price. The Company's common stock is not quoted at the
present time.
The Securities and Exchange Commission has adopted Rule 15g-9 which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require:
(i) that a broker or dealer approve a person's account for
transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:
(i) obtain financial information and investment experience and
objectives of the person; and
(ii) make a reasonable determination that the transactions in
penny stocks are suitable for that person and that person
has sufficient knowledge and experience in financial matters
to be capable of evaluating the risks of transactions in
penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form:
(i) sets forth the basis on which the broker or dealer made the
suitability determination; and
(ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading, and about commissions payable
to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers the NASDAQ Stock Market, has recently adopted changes in the
criteria for initial and continued eligibility for listing on the NASDAQ Stock
Market. In order to qualify for listing on the NASDAQ SmallCap Market, a
company must have at least:
(i) net tangible assets of $4,000,000 or market capitalization
of $50,000,000 or net income for two of the last three years
of $750,000;
(ii) public float of 1,000,000 shares with a market value of
$5,000,000;
(iii)a bid price of $4.00;
(iv) three market makers;
(v) 300 shareholders; and
(vi) an operating history of one year or, if less than one year,
$50,000,000 in market capitalization.
For continued listing on the NASDAQ SmallCap Market, a company must have at
least:
(i) net tangible assets of $2,000,000 or market capitalization
of $35,000,000 or net income for two of the last three years
of $500,000;
(ii) a public float of 500,000 shares with a market value of
$1,000,000;
(iii)a bid price of $1.00;
(iv) two market makers; and
(v) 300 shareholders.
There can be no assurances that, upon a successful merger or acquisition,
the Company will qualify its securities for listing on the NASDAQ SmallCap
Market or a national or regional exchange, or be able to sustain the
maintenance criteria necessary to insure continued listing. The failure of
the Company to qualify its securities or to meet the relevant maintenance
criteria after such qualification may result in the discontinuance of the
inclusion of the Company's securities in such listing. In such event,
trading, if any, in the Company's securities may then continue in the over-
the-counter market. In such case, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, the
Company's securities.
(b) Holders. As of April 30, 1999, there were 47 shareholders of the
Company's Common Stock. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933.
(c) Dividends. The Company has not paid any dividends to date, and has
no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities which were
not registered as follows:
DATE NAME NUMBER OF CONSIDERATION
SHARES
(1) April 11,
1998 CMS (1) 1,000,000 $ 500
(2) April 22,
1998
August 26,
1998 46 Shareholders 230,000 $2,300
________
(1) Mr. Andrews, the sole officer and director of the Company, is the
sole director and a 50% shareholder of CMS.
With respect to the sales made, the Company relied on Section 4(2) of the
Securities Act of 1933, as amended and qualified under the Blue Sky laws of
the various limited number of states in which investors resided.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-109-102 of the Business Corporation Act of the State of
Colorado provides that a Colorado corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents,
against expenses incurred in any action, suit or proceeding. The Articles of
Incorporation and the By-Laws of the Company provide for indemnification of
directors and officers to the fullest extent permitted by the Business
Corporation Act of the State of Colorado.
The Business Corporation Act of the State of Colorado provides that
articles of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director:
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii)under Section 7-106-401 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends
on, capital stock) of the Business Corporation Act of the
State of Colorado; or
(iv) for any transaction from which the director derived an
improper personal benefit.
The Company's Articles of Incorporation contain such a provision.
PART F/S
Financial Statements.
Attached are audited financial statements for the Company for the period
ended April 30, 1999. The following financial statements are attached to this
report and filed as a part thereof.
1) Index to Financial Statements
2) Independent Auditor's Report
3) Balance Sheet
4) Statements of Operations
5) Statement of Shareholders' Equity
6) Statements of Cash Flows
7) Notes to Financial Statements
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-laws:
2.1 Articles of Incorporation
2.2 By-laws
____
* filed herewith.
INDEX TO FINANCIAL STATEMENTS
ANSEL PROJECT, INC.
(A Development Stage Company)
Page
Independent auditors' report F-2
Balance sheet, April 30, 1999 F-3
Statements of operations for the year ended April 30, 1999, from
April 9, 1998 (inception) through April 30, 1998 and from
April 9, 1998 (inception) through April 30, 1999 F-4
Statement of shareholders' equity, from April 9, 1998 (inception)
through April 30, 1999 F-5
Statements of cash flows for the year ended April 30, 1999, from
April 9, 1998 (inception) through April 30, 1998 and from
April 9, 1998 (inception) through April 30, 1999 F-6
Notes to financial statements F-7
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by
the undersigned thereunto duly authorized.
Ansel Project, Inc.
By:/s/ George G. Andrews
George G. Andrews, President
ANSEL PROJECT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
With
INDEPENDENT AUDITORS' REPORT
April 30, 1999
Prepared By:
Cordovano and Harvey, P.C.
Certified Public Accountants
Denver, Colorado
ANSEL PROJECT, INC.
(A Development Stage Company)
Index to Financial Statements
Page
Independent auditors' report F-2
Balance sheet, April 30, 1999 F-3
Statements of operations for the year ended April 30, 1999, from
April 9, 1998 (inception) through April 30, 1998 and from
April 9, 1998 (inception) through April 30, 1999 F-4
Statement of shareholders' equity, from April 9, 1998 (inception)
through April 30, 1999 F-5
Statements of cash flows for the year ended April 30, 1999, from
April 9, 1998 (inception) through April 30, 1998 and from
April 9, 1998 (inception) through April 30, 1999 F-6
Notes to financial statements F-7
To the Board of Directors and Shareholders
Ansel Project, Inc.
Independent Auditors' Report
We have audited the balance sheet of Ansel Project, Inc. (a development stage
company) as of April 30, 1999 and the related statements of operations,
shareholders' equity and cash flows for the year ended April 30, 1999, from
April 9, 1998 (inception) through April 30, 1998 and from April 9, 1998
(inception) through April 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ansel Project, Inc. as of
April 30, 1999, and the related statements of operations and cash flows for
the year ended April 30, 1999, from April 9, 1998 (inception) through April
30, 1998 and from April 9, 1998 (inception) through April 30, 1999 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note A to the financial
statements, the Company has no operations and limited working capital at April
30, 1999. These factors raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans regarding those matters
are also described in Note A. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Cordovano and Harvey, P.C
Denver, Colorado
June 30, 1999
ANSEL PROJECT, INC.
(A Development Stage Company)
Balance Sheet
April 30, 1999
ASSETS
CURRENT ASSETS
Cash $ 2,084
_______________
TOTAL CURRENT ASSETS $ 2,084
===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 101
Acccrued liabilities 1,667
_______________
TOTAL CURRENT LIABILITIES 1,768
_______________
SHAREHOLDERS' EQUITY
Preferred Stock, no par value, 5,000,000 shares
authorized, -0- shares issued and outstanding -
Common stock, no par value, 20,000,000 shares
authorized, 1,230,000 shares issued and
outstanding, 2,673
Deficit accumulated during the development stage (2,357)
_______________
TOTAL SHAREHOLDERS' EQUITY 316
_______________
$ 2,084
===============
See accompanying notes to financial statements
ANSEL PROJECT, INC.
(A Development Stage Company)
Statements of Operations
April 9, 1998 April 9, 1998
(Inception) (Inception)
Year Ended Through Through
April 30, 1999 April 30, 1998 April 30, 1999
COSTS AND EXPENSES
Legal fees $ 218 $ 88 $ 306
Accounting fees 1,500 - 1,500
General and
administrative 51 - 51
Organizational Costs - 500 500
______________ ______________ ______________
LOSS FROM OPERATIONS (1,769) (588) (2,357)
______________ ______________ ______________
INCOME TAX BENEFIT
(EXPENSE) (NOTE C)
Current tax benefit 372 116 488
Deferred tax expense (372) (116) (488)
______________ ______________ ______________
NET LOSS $ (1,769) $ (588) $ (2,357)
============== ============== ==============
BASIC LOSS PER COMMON
SHARE $ * $ * $ *
============== ============== ==============
BASIC WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 1,230,000 1,000,000 1,230,000
============== ============== ==============
* Less than .01 per share
See accompanying notes to financial statements
ANSEL PROJECT, INC.
(A Development Stage Company)
Statement of Shareholders' Equity
April 9, 1998 (inception) through April 30, 1999
Common Stock
Shares Amount
Beginning balance, April 9, 1998 - $ -
Common stock issued in exchange for services 1,000,000 500
Net loss for the period ended April 30, - -
____________ ___________
BALANCE, APRIL 30, 1998 1,000,000 500
Common stock issued for cash, net of $127
offering costs 230,000 2,173
Net loss for year ended April 30, 1999 - -
____________ ___________
BALANCE, APRIL 30, 1999 1,230,000 $ 2,673
============ ===========
See accompanying notes to financial statements
ANSEL PROJECT, INC.
(A Development Stage Company)
Statement of Shareholders' Equity (Continued)
April 9, 1998 (inception) through April 30, 1999
Deficit
Accumulated
During
Development
Stage Total
Beginning balance, April 9, 1998 $ - $ -
Common stock issued in exchange for services - 500
Net loss for the period ended April 30, (588) (588)
____________ ___________
BALANCE, APRIL 30, 1998 (588) (88)
Common stock issued for cash, net of $127
offering costs - 2,173
Net loss for year ended April 30, 1999 (1,769) (1,769)
____________ ___________
BALANCE, APRIL 30, 1999 $ (2,357) $ 316
============ ===========
See accompanying notes to financial statements
ANSEL PROJECT, INC.
(A Development Stage Company)
Statements of Cash Flows
April 9, 1998 April 9, 1998
(Inception) (Inception)
Year Ended through through
April 30, 1999 April 30, 1998 April 30, 1999
OPERATING ACTIVITIES
Net loss $ (1,769) $ (588) $ (2,357)
Non-cash transactions:
Common stock issued
for services - 500 500
Changes in operating
assets and liabilities:
Accounts payable and
accrued liabilities 1,680 88 1,768
______________ ______________ ______________
NET CASH (USED IN)
OPERATING ACTIVITIES (89) - (89)
______________ ______________ ______________
FINANCING ACTIVITIES
Sale of common stock 2,300 - 2,300
Offfering costs incurred (127) (127)
______________ ______________ ______________
NET CASH PROVIDED BY
(USED IN)FINANCING
ACTIVITIES 2,173 - 2,173
______________ ______________ ______________
NET INCREASE IN CASH 2,084 - 2,084
Cash, beginning of
period - - -
______________ ______________ ______________
CASH, END OF PERIOD $ 2,084 $ - $ 2,084
============== ============== ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the
period for:
Interest $ - $ - $ -
============== ============== ==============
Income taxes $ - $ - $ -
============== ============== ==============
Non-cash financing activities:
1,000,000 shares of
common stock issued
for services $ - $ 500 $ 500
============== ============== ==============
See accompanying notes to financial statements
ANSEL PROJECT, INC.
(A Development Stage Company)
Notes to Financial Statements
Note A: Organization and summary of significant accounting policies
Organization
Ansel Project, Inc. (the "Company") was incorporated under the laws of
Colorado on April 9, 1998 to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. The Company
is a development stage enterprise in accordance with Statement of Financial
Accounting Standard (SFAS) No. 7.
The Company has been in the development stage since inception and has no
operations to date.
As of April 30, 1999, the Company has no operating history nor any revenues
or earnings from operations. The Company has no significant assets or
financial resources. The Company's success is dependent upon locating and
consummating a business combination with an operating company. There is no
assurance that the Company can identify such a target company and consummate
such a business combination. These factors, among others, raise substantial
doubt about its ability to continue as a going concern.
From April 9, 1998 (inception) through April 30, 1999, the Company raised
initial working capital through the sale of its common stock. The Company's
ability to continue as a going concern is dependent upon raising additional
capital and achieving profitable operations. There is no assurance that the
Company will be successful in its efforts to raise additional working capital
or achieve profitable operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Summary of significant accounting policies
Cash equivalents
The Company's financial instruments consist of accounts payable and accrued
liabilities. For financial accounting purposes and the statement of cash
flows, cash equivalents include all highly liquid debt instruments purchased
with an original maturity of three months or less.
Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities;
disclosure of contingent assets and liabilities at the date of the financial
statements; and the reported amounts of revenues and expenses during the
reporting period. Accordingly, actual results could differ from those
estimates.
Income Taxes
The Company reports income taxes in accordance with SFAS No. 109, "Accounting
for Income Taxes", which requires the liability method in accounting for
income taxes. Deferred tax assets and liabilities arise from the difference
between the tax basis of an asset or liability and its reported amount on the
financial statements. Deferred tax amounts are determined by using the tax
rates expected to be in effect when the taxes will actually be paid or refunds
received, as provided under currently enacted law. Valuation allowances are
established when necessary to reduce the deferred tax assets to the amounts
expected to be realized. Income tax expense or benefit is the tax payable or
refundable, respectively, for the period plus or minus the change during the
period in the deferred tax assets and liabilities.
Loss per common share
The Company reports loss per share using a dual presentation of basic and
diluted loss per share. As of April 30, 1999, there were no common stock
equivalents. Pursuant to the SEC staff policy, common stock issued during the
twelve-month period prior to the offering for consideration below the offering
price have been included in the calculation of weighted average number of
shares as if they were outstanding for the entire period presented.
Organization costs
Costs related to the organization of the Company have been expensed as
incurred.
Fiscal year
The Company operates on a fiscal year ending on April 30.
Note B: Related party transactions
The Company has issued an affiliate 1,000,000 shares of common stock in
exchange for services related to management and organization costs of $500.00.
The affiliate will provide administrative and marketing services as needed.
The affiliate may, from time to time, advance to the Company any additional
funds that the Company needs for operating capital and for costs in connection
with searching for or completing an acquisition or merger.
On behalf of the Company, an affiliate sold 230,000 shares of the Company's
common stock in a private placement for $2,300. The private placement also
included the offering of common shares in nineteen other corporations. The
costs related to the offering and certain legal fees and general and
administrative fees were allocated to each of the twenty companies
participating in the offering. The Company's pro rata one twentieth share of
the costs and expenses were deducted from the gross proceeds from the sale of
the Company's common shares. The gross proceeds of $2,300 were transferred to
the Company net of offering costs of $127 and certain general and
administrative costs incurred by the affiliate of $89, resulting in a cash
balance of $2,084 at April 30, 1999.
Additionally, the affiliate incurred further legal fees on behalf of the
Company, along with other companies mentioned above totaling $5,358. The
Company's pro rata share of those fees is $268 and is included in accounts
payable ($101) and accrued liabilities ($167) in the accompanying financial
statements.
Note C: Income taxes
A reconciliation of U.S. statutory federal income tax rate to the effective
rate for the period from April 9, 1998 (inception) through April 30, 1999 is
as follows:
April 9, 1998 April 8, 1998
Year (Inception) (Inception)
Ended Through Through
April 30, 1999 April 30, 1998 April 30, 1999
U.S. statutory federal
rate 15.00% 15.00% 15.00%
State income tax rate,
net of federal benefit 4.75% 4.75% 4.75%
Offering costs, permanent
difference 1.27% 0.00% 0.95%
Net operating loss (NOL)
for which no tax benefit
is currently available -21.02% -19.75% -20.70%
______________ ______________ ______________
0.00% 0.00% 0.00%
============== ============== ==============
The valuation allowance offsets the net deferred tax asset for which there is
no assurance of recovery. The change in the valuation allowance for the
period from April 9, 1998 (inception) through April 30, 1999 was $488. NOL
carryforwards at April 30, 1999 will begin to expire in 2018. The valuation
allowance will be evaluated at the end of each year, considering positive and
negative evidence about whether the asset will be realized. At that time, the
allowance will either be increased or reduced; reduction could result in the
complete elimination of the allowance if positive evidence indicates that the
value of the deferred tax asset is no longer impaired and the allowance is no
longer required.
Should the Company undergo an ownership change, as defined in Section 382 of
the Internal Revenue Code, the Company's tax net operating loss carryforwards
generated prior to the ownership change will be subject to an annual
limitation which could reduce or defer the utilization of those losses.
Note D: Shareholders' equity
Proposed offering of common stock
On April 11, 1998, the Company's Board of Directors approved an offering of up
to 250,000 shares of the Company's no par value common stock at $.01 per
share. (See Note B.)
Preferred Stock
The preferred stock may be issued in series as determined by the Board of
Directors. As required by law, each series must designate the number of
shares in the series and each share of a series must have identical rights of
(1) dividend, (2) redemption, (3) rights in liquidation, (4) sinking fund
provisions for the redemption of the share, (5) terms of conversion and (6)
voting rights.
Note E: The Year 2000 Issue
The Y2K issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer and telecommunications programs that have date sensitive software may
recognize a date using "00" as the year 1900 instead of 2000. This could
result in system failure or miscalculations causing disruptions of operations,
including, among other things an inability to process transactions, send
invoices, or engage in similar normal business activities. The Company does
not own its own computer equipment but does depend on computer services
provided by an affiliate. There is no certainty that the Company will not
experience Y2K issues.
The Company cannot determine the extent to which the Company is vulnerable to
third parties' failure to remediate their own Y2K problems. As a result,
there can be no guarantee that the systems of other companies on which the
Company's business relies will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would have a material adverse effect on the Company. In
view of the foregoing, there can be no assurance that the Y2K issue will not
have a material adverse effect on the Company's business.
ARTICLES OF INCORPORATION
OF
ANSEL PROJECT, INC.
The undersigned, who if a natural person, is more than eighteen
years of age, hereby establishes a corporation pursuant to the Statutes of
Colorado and adopts the following Articles of Incorporation:
FIRST: The name of the corporation is Ansel Project, Inc.
SECOND: The corporation shall have perpetual existence.
THIRD: (a) Purposes. The nature, objects and purposes of the
business to be transacted shall be to transact all lawful business for which
corporations may be incorporated pursuant to the Colorado Business Corporation
Act.
(b) Powers. In furtherance of the foregoing purposes, the
corporation shall have and may exercise all of the rights, powers and
privileges now or thereafter conferred upon corporations organized under the
laws of Colorado. In addition, it may do everything necessary, suitable or
proper for the accomplishment of any of its corporation purposes.
FOURTH: (a) The aggregate number of shares which the corporation
shall have authority to issue is 20,000,000 shares of common stock having no
par value per share. The shares of this class of common stock shall have
unlimited voting rights and shall constitute the sole voting group of the
corporation, except to the extent any additional voting group or groups may
hereafter be established in accordance with the Colorado Business Corporation
Act.
(b) The corporation may also issue up to 5,000,000 shares
of non-voting preferred stock having no par value. The preferred stock of the
corporation shall be issued in one or more series as may be determined from
time to time by the Board of Directors. In establishing a series, the Board
of Directors shall give to it a distinctive designation so as to distinguish
it from the shares of all other series and classes, shall fix the number of
shares in such series, and the preferences, rights and restrictions thereof.
All shares in a series shall be alike. Each series may vary in the following
respects: (1) the rate of the dividend; (2) the price at the terms and
conditions on which shares shall be redeemed; (3) the amount payable upon
shares in the event of involuntary liquidation; (4) the amount payable upon
shares in the event of voluntary liquidation; (5) sinking fund provisions for
the redemption of shares; (6) the terms and conditions on which shares may be
converted if the shares of any series are issued with the privilege of
conversion; and (7) voting powers.
(c) Each shareholder of record shall have one vote for each
share of stock standing in his name on the books of the corporation and
entitled to vote. Cumulative voting shall not be permitted in the election of
directors or otherwise.
(d) At all meetings of shareholders, a majority of the
shares of a voting group entitled to vote at such meeting, represented in
person or by proxy, shall constitute a quorum of that voting group.
(e) Shareholders of the corporation shall not have
preemptive rights to subscribe for any additional unissued or treasury shares
of stock or for other securities of any class, or for rights, warrants or
options to purchase stock, or for scrip, or for securities of any kind
convertible into stock or carrying stock purchase warrants or privileges.
FIFTH: The number of directors of the corporation shall be fixed by
the bylaws. One director shall constitute the initial board of directors.
The name and address of the initial director is as follows:
George G. Andrews 7989 Frost Drive
Littleton, CO 80123
SIXTH: The address of the initial registered office of the
corporation is 1700 Lincoln Street, Suite 1800, Denver, Colorado 80203. The
name of its initial registered agent at such address is Roger V. Davidson.
The corporation may conduct part or all of its business in any other part of
Colorado, of the United States or of the world. It may hold, purchase,
mortgage, lease and convey real and personal property in any of such places.
SEVENTH: The address of the initial principal office of the
corporation is 7989 Frost Drive, Littleton, Colorado 80123.
EIGHTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the corporation, and the
same are in furtherance of and not in limitation or exclusion of the powers
conferred by law.
(a) Conflicting Interest Transactions. As used in this
paragraph, "conflicting interest transaction" means any of the following: (i)
a loan or other assistance by the corporation to a director of the corporation
or to an entity in which a director of the corporation is a director or
officer or has a financial interest; (ii) a guaranty by the corporation of an
obligation of a director of the corporation or of an obligation of an entity
in which a director of the corporation is a director or officer or has a
financial interest; or (iii) a contract or transaction between the corporation
and a director of the corporation or between the corporation and an entity in
which a director of the corporation is a director or officer or has a
financial interest. No conflicting interest transaction shall be void or
voidable, be enjoined, be set aside or give rise to an award of damages or
other sanctions in a proceeding by a shareholder or by or in the right of the
corporation, solely because the conflicting interest transaction involves a
director of the corporation or an entity in which a director of the
corporation is a director or officer or has a financial interest, or solely
because the director is present at or participates in the meeting of the
corporation's board of directors or of the committee of the board of directors
which authorizes, approves or ratifies a conflicting interest transaction, or
solely because the director's vote is counted for such purpose if: (A) the
material facts as to the director's relationship or interest and as to the
conflicting interest transaction are disclosed or are known to the board of
directors or the committee, and the board of directors or committee in good
faith authorizes, approves or ratifies the conflicting interest transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors are less than a quorum; or (B) the material facts
as to the director's relationship or interest and as to the conflicting
interest transaction are disclosed or are known to the shareholders entitled
to vote thereon, and the conflicting interest transaction is specifically
authorized, approved or ratified in good faith by a vote of the shareholders;
or (C) a conflicting interest transaction is fair as to the corporation as of
the time it is authorized, approved or ratified by the board of directors, a
committee thereof or the shareholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes, approves or ratifies the
conflicting interest transaction.
(b) Loans and Guaranties for the Benefit of Directors.
Neither the board of directors nor any committee thereof shall authorize a
loan by the corporation to a director of the corporation or to an entity in
which a director of the corporation is a director or officer or has a
financial interest, or a guaranty by the corporation of an obligation of a
director of the corporation or of an obligation of an entity in which a
director of the corporation is a director or officer or has a financial
interest, until at least ten days after written notice of the proposed
authorization of the loan or guaranty has been given to the shareholders who
would be entitled to vote thereon if the issue of the loan or guaranty were
submitted to a vote of the shareholders. The requirements of this paragraph
(b) are in addition to, and not in substitution for, the provisions of
paragraph (a) of Article EIGHTH.
(c) Indemnification. The corporation shall indemnify, to
the maximum extent permitted by law, any person who is or was a director,
officer, agent, fiduciary or employee of the corporation against any claim,
liability or expense arising against or incurred by such person made party to
a proceeding because he is or was a director, officer, agent, fiduciary or
employee of the corporation or because he is or was serving another entity as
a director, officer, partner, trustee, employee, fiduciary or agent at the
corporation's request. The corporation shall further have the authority to
the maximum extent permitted by law to purchase and maintain insurance
providing such indemnification.
(d) Limitation on Director's Liability. No director of
this corporation shall have any personal liability for monetary damages to the
corporation or its shareholders for breach of his fiduciary duty as a
director, except that this provision shall not eliminate or limit the personal
liability of a director to the corporation or its shareholders for monetary
damages for: (i) any breach of the director's duty of loyalty to the
corporation or its shareholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii)
voting for or assenting to a distribution in violation of Colorado Revised
Statutes Sec. 7-106-401 or these Articles of Incorporation if it is established
that the director did not perform his duties in compliance with Colorado
Revised Statutes Sec. 7-108-401, provided that the personal liability of a
director in this circumstance shall be limited to the amount of the
distribution which exceeds what could have been distributed without violation
of Colorado Revised Statutes Sec. 7-106-401 or these Articles of Incorporation;
or (iv) any transaction from which the director directly or indirectly derives
an improper personal benefit. Nothing contained herein will be construed to
deprive any director of his right to all defenses ordinarily available to a
director nor will anything herein be construed to deprive any director of any
right he may have for contribution from any other director or other person.
(e) Negation of Equitable Interests in Shares or Rights.
Unless a person is recognized as a shareholder through procedures established
by the corporation pursuant to Colorado Revised Statutes Sec. 7-107-204 or any
similar law, the corporation shall be entitled to treat the registered holder
of any shares of the corporation as the owner thereof for all purposes
permitted by the Colorado Business Corporation Act including without
limitation all rights deriving from such shares, and the corporation shall not
be bound to recognize any equitable or other claim to or interest in such
shares or rights deriving from such shares on the part of any other person,
including without limitation a purchaser, assignee or transferee of such
shares, unless and until such other person becomes the registered holder of
such shares or is recognized as such, whether or not the corporation shall
have either actual or constructive notice of the claimed interest of such
other person. By way of example and not of limitation, until such other
person has become the registered holder of such shares or is recognized
pursuant to Colorado Revised Statutes Sec. 7-107-204 or any similar applicable
law, he shall not be entitled: (i) to receive notice of the meetings of the
shareholders; (ii) to vote at such meetings; (iii) to examine a list of the
shareholders; (iv) to be paid dividends or other distributions payable to
shareholders; or (v) to own, enjoy and exercise any other rights deriving from
such shares against the corporation. Nothing contained herein will be
construed to deprive any beneficial shareholder, as defined in Colorado
Revised Statutes Sec. 7-113-101(1), of any right he may have pursuant to Article
113 of the Colorado Business Corporation Act or any subsequent law.
NINTH: The name and address of the incorporator is:
Cheryl L. Jett 1700 Lincoln St., Suite 1800
Denver, CO 80203
DATED the 8 day of April, 1998.
/s/ Cheryl L. Jett
Cheryl L. Jett, Incorporator
Roger V. Davidson hereby consents to the appointment as the initial
registered agent for the corporation.
/s/ Roger V. Davidson
Roger V. Davidson
Initial Registered Agent
BYLAWS
OF
ANSEL PROJECT, INC.
ARTICLE I
Offices
Section 1. Offices. The principal office of the corporation shall
be located in Littleton, Colorado. The corporation may have such other
offices, either within or outside Colorado, as the board of directors may
designate or as the business of the corporation may require from time to time.
Section 2. Registered Office and Agent. The registered office of
the corporation required by the Colorado Business Corporation Act to be
maintained in Colorado may be, but need not be, identical with the principal
office if in Colorado. The registered agent or the address of the registered
office, or both, may be changed from time to time by the board of directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held at ____ _.m. on the ______ _______ in the month of ____ in each
year, beginning with the year 1999, for the purpose of electing directors and
for the transaction of such other business as may come before the meeting. If
the day fixed for the annual meeting shall be a legal holiday in Colorado,
such meeting shall be held on the next succeeding business day. If the
election of directors shall not be held on the day designated herein for any
annual meeting of the shareholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the shareholders,
for any purpose, unless otherwise prescribed by statute, may be called by the
president or by the board of directors, and shall be called by the president
at the request of the holders of not less than one-tenth of all the
outstanding shares of the corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The board of directors may designate
any place, either within or outside Colorado, as the place for any annual
meeting or for any special meeting called by the board of directors. A waiver
of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or outside Colorado, as the place for such
meeting. If no designation is made, or if a special meeting shall be called
otherwise than by the board, the place of meeting shall be the registered
office of the corporation in Colorado.
Section 4. Notice of Meeting. Written or printed notice stating
the place, day and hour of the meeting, and, in case of a special meeting or
as otherwise required by the Colorado Business Corporation Act, the purposes
for which the meeting is called, shall be delivered not less than ten nor more
than sixty days before the date of the meeting, either personally or by mail,
private carrier, telegraph, teletype, electronically transmitted facsimile or
other form of wire or wireless communication, by or at the direction of the
president, the secretary or the officer or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting, except that (i)
if the number of authorized shares is to be increased, at least thirty days'
notice shall be given, or (ii) any other longer notice period is required by
the Colorado Business Corporation Act. If mailed and in comprehensible form,
such notice shall be deemed to be given and effective when deposited in the
United States mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the corporation, with postage thereon prepaid.
If notice is given other than by mail, and provided that such notice is in
comprehensible form, the notice is given and effective on the date received by
the shareholder. If requested by the person or persons lawfully calling such
meeting, the secretary shall give notice thereof at corporate expense. No
notice need be sent to any shareholder of record if three successive letters
mailed to the last known address of such shareholder have been returned as
undeliverable until such time as another address for such shareholder is made
known to the corporation. In order to be entitled to receive notice of any
meeting, a shareholder shall advise the corporation in writing of any change
in such shareholder's mailing address as shown on the corporation's books and
records.
Section 5. Fixing of Record Date. For the purpose of determining
shareholders entitled to (i) notice of or vote at any meeting of shareholders
or any adjournment thereof, (ii) receive distributions or share dividends, or
(iii) demand a special meeting, or to make a determination of shareholders for
any other proper purpose, the board of directors may fix a future date as the
record date for any such determination of shareholders, such date in any case
to be not more than seventy days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If no
record date is fixed by the directors, the record date shall be the date on
which notice of the meeting is given to shareholders, or the date on which the
resolution of the board of directors providing for a distribution is adopted,
as the case may be. When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof unless the board of
directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.
Notwithstanding the above, the record date for determining the
shareholders entitled to take action without a meeting or entitled to be given
notice of action so taken shall be the date a writing upon which the action is
taken is first received by the corporation. The record date for determining
shareholders entitled to demand a special meeting shall be the date of the
earliest of any of the demands pursuant to which the meeting is called.
Section 6. Shareholders' Lists. The officer or agent having charge
of the stock transfer books for shares of the corporation shall make, at the
earlier of ten days before each meeting of shareholders or two business days
after notice of the meeting has been given, a complete list of the
shareholders entitled to be given notice of such meeting, or any adjournment
thereof, arranged by voting groups and within each voting group by class of
series of shares, in alphabetical order within each class or series, with the
address of and the number of shares of each class or series held by each
shareholder. The shareholders' list shall be available for inspection by any
shareholder, beginning the earlier of ten days before the meeting for which
the list was prepared or two business days after notice of the meeting is
given and continuing through the meeting, and any adjournment thereof, at the
principal office of the corporation, whether within or outside Colorado, at
any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder or his agent or attorney during the whole time
of the meeting or any adjournment thereof. The original stock transfer books
shall be prima facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at any meeting of shareholders.
Section 7. Chairman of Meetings. The president shall call meetings
of shareholders to order and act as chairman of such meetings. In the absence
of the president, an appropriate officer, any shareholder entitled to vote at
that meeting or any proxy of any such shareholder may call the meeting to
order and a chairman shall be elected. In the absence of the secretary and
any assistant secretary of the corporation, any person appointed by the
chairman shall act as secretary of such meetings.
Section 8. Quorum. One-third of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than one-third of
the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further
notice, for a period not to exceed 120 days for any one adjournment. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, unless the
meeting is adjourned and a new record date is set for the adjourned meeting.
If a quorum exists, action on a matter other than election of
directors by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast within the voting group
opposing the action, unless a greater number of affirmative votes is required
by law or the Articles of Incorporation.
Section 9. Proxies. At all meetings of shareholders, a shareholder
may vote by proxy executed in writing by the shareholder or his duly
authorized attorney in fact. Such proxy shall be filed with the secretary of
the corporation before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided
in the proxy.
Section 10. Voting of Shares. Each outstanding share, regardless
of class, shall be entitled to one vote, except in the election of directors,
and each fractional share shall be entitled to a corresponding fractional vote
on each matter submitted to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or classes are
limited or denied by the Articles of Incorporation as permitted by the
Colorado Business Corporation Act. In the election of directors, each record
holder of stock entitled to vote at such election shall have as many votes for
each of the shares owned by him as there are directors to be elected and for
whose election he has the right to vote. At each election of directors, that
number of candidates equaling the number of directors to be elected, having
the highest number of votes cast in favor of their election, shall be elected
to the board of directors. Cumulative voting shall not be allowed.
Section 11. Voting of Shares by Certain Holders. Except as
otherwise ordered by a court of competent jurisdiction upon a finding that the
purpose of this section would not be violated in the circumstances presented
to the court, the shares of the corporation are not entitled to be voted if
they are owned, directly or indirectly, by a second corporation, domestic or
foreign, and the first corporation owns, directly or indirectly, a majority of
the shares entitled to vote for directors of the second corporation except to
the extent the second corporation holds the shares in a fiduciary capacity.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the shares
has been deposited with a bank, trust company or other financial institution
under an irrevocable obligation to pay the holders the redemption price on
surrender of the shares.
Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy, without a transfer of such
shares into his name. All other shares may be voted only by the record holder
thereof, except as may be otherwise required by the laws of Colorado.
Section 12. Informal Action by Shareholders. Any action required to
be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a meeting if a
consent (or counterparts thereof) in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with
respect to the subject matter thereof. Such consent shall have the same force
and effect as a unanimous vote of the shareholders, and may be stated as such
in any articles or document filed with the Secretary of State of Colorado
under the Colorado Business Corporation Act. Action taken under this Section
12 is effective as of the date the last writing necessary to effect the action
is received by the corporation, unless all the writings specify a different
effective date, in which case such specified date shall be the effective date
for such action. Any shareholder who has signed a writing describing and
consenting to action taken pursuant to this Section 12 may revoke such consent
by a writing signed by the shareholder describing the action and stating that
the shareholder's prior consent is revoked, if such writing is received by the
corporation before the effectiveness of the action.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of the
corporation shall be managed by its board of directors, except as otherwise
provided in the Colorado Business Corporation Act or the Articles of
Incorporation.
Section 2. Number, Tenure and Qualifications. The number of
directors of the corporation shall be fixed from time to time by the board of
directors, provided that the number of directors shall not be more than nine
nor less than one. No decrease in the number of directors shall have the
effect of shortening the terms of any incumbent director. Directors shall be
elected at each annual meeting of shareholders. Each director shall hold
office until the next annual meeting of shareholders and thereafter until his
successor shall have been elected and qualified. Directors need not be
residents of Colorado or shareholders of the corporation. Directors shall be
removable in the manner provided by the statutes of Colorado.
Section 3. Vacancies. Any director may resign at any time by
giving written notice to the president or to the secretary of the corporation.
Such resignation shall take effect at the time the notice is received by the
corporation unless the notice specifies a later effective date; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Any vacancy occurring in the board of
directors may be filled by the shareholders or by the affirmative vote of a
majority of the remaining directors though less than a quorum. If elected by
the directors, the director shall hold office until the next annual
shareholders' meeting at which directors are elected. If elected by the
shareholders, the director shall hold office for the unexpired term of his
predecessor in office; except that if the director's predecessor was elected
by the directors to fill a vacancy, the director elected by the shareholders
shall hold office for the unexpired term of the last predecessor elected by
the shareholders.
Section 4. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw immediately after
and at the same place as the annual meeting of shareholders. The board of
directors may provide by resolution the time and place, either within or
outside Colorado, for the holding of additional regular meetings without other
notice than such resolution.
Section 5. Special Meetings. Special meetings of the board of
directors may be called by or at the request of the president or any two
directors. The person or persons authorized to call special meetings of the
board of directors may fix any place, either within or outside Colorado, as
the place for holding any special meeting of the board of directors called by
them.
Section 6. Notice. Notice of any special meeting shall be given at
least two days previously thereto by written notice either delivered
personally or mailed to each director at his business address, or by notice
transmitted by telegraph, telex, electronically transmitted facsimile or other
form of wire or wireless communication. If mailed, such notice shall be
deemed to be delivered three days after such notice is deposited in the United
States mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. If notice be given by telex,
electronically transmitted facsimile or similar form of wire or wireless
communication, such notice shall be deemed to be given and to be effective
when sent. Any director may waive notice of any meeting. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting
unless at the beginning of the meeting, or promptly upon his later arrival,
the director objects to holding the meeting or transacting business at the
meeting because of lack of notice or defective notice and does not thereafter
vote for or assent to action taken at the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
Section 7. Quorum. A majority of the number of directors fixed by
Section 2 shall constitute a quorum for the transaction of business at any
meeting of the board of directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
Section 8. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the board of directors.
Section 9. Compensation. By resolution of the board of directors,
any director may be paid any one or more of the following: his expenses, if
any, of attendance at meetings; a fixed sum for attendance at each meeting; a
stated salary as director; or such other compensation as the corporation and
the director may reasonably agree upon. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
Section 10. Presumption of Assent. A director of the corporation
who is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless (i) the director objects at the beginning of the meeting, or
promptly upon his arrival, to the holding of the meeting or the transaction of
business at the meeting and does not thereafter vote for or assent to any
action taken at the meeting, (ii) the director contemporaneously requests that
his or her dissent or abstention as to any specific action taken be entered in
the minutes of the meeting or (iii) the director shall cause written notice of
his or her dissent or abstention as to any specific action to be received by
the presiding officer of the meeting or by the corporation promptly after
adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 11. Removal. The shareholders may, at a meeting called for
the express purpose of removing directors, by a majority vote of the shares
entitled to vote at an election of directors, remove the entire board of
directors or any lesser number, with or without cause. However, if less than
the entire board of directors is to be removed, no one of the directors may
be removed if the vote cast against his removal would be sufficient to elect
him if then cumulatively voted at an election of the entire board of
directors. Notwithstanding, the board of directors, by a majority vote, may
remove a director, with or without cause, provided that such director was
appointed by the board of directors and not elected or approved by the
shareholders.
Section 12. Executive Committee. The board of directors, by
resolution adopted by a majority of the number of directors fixed by Section
2, may designate one or more directors to constitute an executive committee,
which shall have and may exercise all of the authority of the board of
directors or such lesser authority as may be set forth in said resolution, to
the extent permitted by the Colorado Business Corporation Act. No such
delegation of authority shall operate to relieve the board of directors or any
member of the board from any responsibility imposed by law.
Section 13. Other Committees. The board of directors, by
resolution duly adopted, may designate other committees and appoint members
thereof, but no such designation of a committee shall operate to relieve the
board of directors or any members of the board from any responsibility imposed
by law.
Section 14. Informal Action by Directors. Any action required or
permitted to be taken at a meeting of the directors or any committee
designated by the board may be taken without a meeting if a consent (or
counterparts thereof) in writing, setting forth the action so taken, shall be
signed by all of the directors entitled to vote with respect to the subject
matter thereof. Such consent shall have the same force and effect as a
unanimous vote of the directors, and may be stated as such in any articles or
documents filed with the Secretary of State under the Colorado Business
Corporation Act. Unless the consent specifies a different effective date,
action taken under this Section 14 is effective at the time the last director
signs a writing describing the action taken, unless before such time any
director has revoked his consent by a writing signed by the director and
received by the president or secretary of the corporation.
Section 15. Telephonic Meetings. Members of the board of directors
or any committee designated by the board may participate in a meeting of the
board of directors or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear one another at the same time. Such participation shall constitute
presence in person at the meeting.
ARTICLE IV
Officers and Agents
Section 1. General. The officers of the corporation shall be a
president, one or more vice presidents, a secretary and a treasurer. The
board of directors may appoint such other officers, assistant officers,
committees and agents, including a chairman of the board, assistant
secretaries and assistant treasurers, as they may consider necessary, who
shall be chosen in such manner and hold their offices for such terms and have
such authority and duties as from time to time may be determined by the board
of directors. The salaries of all the officers of the corporation shall be
fixed by the board of directors. One person may hold two or more offices,
except that no person may simultaneously hold the offices of president and
secretary. In all cases where the duties of any officer, agent or employee
are not prescribed by the bylaws or by the board of directors, such officer,
agent or employee shall follow the orders and instructions of the president.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected by the board of directors annually at the first
meeting of the board held after each annual meeting of the shareholders. If
the election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer shall
hold office until the first of the following to occur: until his successor
shall have been duly elected and shall have qualified; or until his death; or
until he shall resign; or until he shall have been removed in the manner
hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the
board of directors or by the executive committee whenever in its judgment the
best interests of the corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not in itself
create contract rights.
Any officer may resign at any time by giving written notice thereof
to the corporation. Such resignation is effective when the notice is received
by the corporation unless the notice specifies a later effective date. Unless
otherwise stated in the notice, no acceptance of the resignation shall be
necessary to render such resignation effective.
Section 4. Vacancies. A vacancy in any office, however occurring,
may be filled by the board of directors for the unexpired portion of the term.
Section 5. President. The president shall, subject to the
direction and supervision of the board of directors, be the chief executive
officer of the corporation and shall have general and active control of its
affairs and business and general supervision of its officers, agents and
employees. He shall, unless otherwise directed by the board of directors,
attend in person or by substitute appointed by him, or shall execute on behalf
of the corporation written instruments appointing a proxy or proxies to
represent the corporation, at all meetings of the shareholders of any other
corporation in which the corporation shall hold any stock. He may, on behalf
of the corporation, in person or by substitute or by proxy, execute written
waivers of notice and consents with respect to any such meetings. At all such
meetings and otherwise, the president, in person or by substitute or proxy as
aforesaid, may vote the stock so held by the corporation and may execute
written consents and other instruments with respect to such stock and may
exercise any and all rights and powers incident to the ownership of said
stock, subject however to the instructions, if any, of the board of directors.
The president shall have custody of the treasurer's bond, if any.
Section 6. Vice Presidents. The vice presidents shall assist the
president and shall perform such duties as may be assigned to them by the
president or by the board of directors. In the absence of the president, the
vice president, if any (or, if there be more than one, the vice presidents in
the order designated by the board of directors, or if the board makes no such
designation, then the vice president designated by the president, or if
neither the board nor the president makes any such designation, the senior
vice president as determined by first election to that office), shall have the
powers and perform the duties of the president.
Section 7. The Secretary. The secretary shall: (a) keep the
minutes of the proceedings of the shareholders, executive committee and the
board of directors; (b) see that all notices are duly given in accordance with
the provisions of these bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and affix the seal to all
documents when authorized by the board of directors; (d) keep at its
registered office or principal place of business within or outside Colorado a
record containing the names and addresses of all shareholders and the number
and class of shares held by each, unless such a record shall be kept at the
office of the corporation's transfer agent or registrar; (e) sign with the
president, or a vice president, certificates for shares of the corporation,
the issuance of which shall have been authorized by resolution of the board of
directors; (f) have general charge of the stock transfer books of the
corporation, unless the corporation has a transfer agent; and (g) in general,
perform all duties incident to the office of secretary and such other duties
as from time to time may be assigned to him by the president or by the board
of directors. Assistant secretaries, if any, shall have the same duties and
powers, subject to supervision by the secretary.
Section 8. Treasurer. The treasurer shall be the principal
financial officer of the corporation, shall have the care and custody of all
funds, securities, evidences of indebtedness and other personal property of
the corporation and shall deposit the same in accordance with the instructions
of the board of directors. He shall receive and give receipts and
acquittances for money paid in on account of the corporation, and shall pay
out of the funds on hand all bills, payrolls and other just debts of the
corporation of whatever nature upon maturity. He shall perform all other
duties incident to the office of the treasurer and, upon request of the board,
shall make such reports to it as may be required at any time. He shall, if
required by the board, give the corporation a bond in such sums and with such
sureties as shall be satisfactory to the board, conditioned upon the faithful
performance of his duties and for the restoration to the corporation of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation. He shall have
such other powers and perform such other duties as may from time to time be
prescribed by the board of directors or the president. The assistant
treasurers, if any, shall have the same powers and duties, subject to the
supervision of the treasurer.
The treasurer shall also be the principal accounting officer of the
corporation. He shall prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and records of account, prepare
and file all local, state and federal tax returns, prescribe and maintain an
adequate system of internal audit and prepare and furnish to the president and
the board of directors statements of account showing the financial position of
the company and the results of its operations.
ARTICLE V
Stock
Section 1. Certificates. The board of directors shall be
authorized to issue any of its classes of shares with or without certificates.
The fact that the shares are not represented by certificates shall have no
effect on the rights and obligations of shareholders. If the shares are
represented by certificates, such certificates shall be consecutively numbered
and signed, either manually or by facsimile, in the name of the corporation by
one or more persons designated by the board of directors. In case any officer
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue. Certificates of stock shall be in such
form consistent with law as shall be prescribed by the board of directors. If
shares are not represented by certificates, within a reasonable time following
the issue or transfer of such shares, the corporation shall send the
shareholder a complete written statement of all information required to be
provided to holders of uncertificated shares by the Colorado Business
Corporation Act. Certificated or uncertificated shares shall not be issued
until the shares represented thereby are fully paid.
Section 2. Consideration for Shares. Shares shall be issued for
such consideration, expressed in dollars as shall be fixed from time to time
by the board of directors. Such consideration may consist in whole or in part
of money, other property, tangible or intangible, negotiable, recourse
promissory notes secured by collateral other than the shares being purchased,
or labor or services actually performed for the corporation. Future services
shall not constitute payment or part payment for shares.
Section 3. Lost Certificates. In case of the alleged loss,
destruction or mutilation of a certificate of stock the board of directors may
direct the issuance of a new certificate in lieu thereof upon such terms and
conditions in conformity with law as it may prescribe. The board of directors
may in its discretion require a bond in such form and amount and with such
surety as it may determine, before issuing a new certificate.
Section 4. Transfer of Shares. Upon surrender to the corporation
or to a transfer agent of the corporation of a certificate of stock duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, and such documentary stamps as may be required by law
and evidence of compliance with applicable securities laws and other
restrictions, the corporation shall issue a new certificate to the person
entitled thereto and cancel the old certificate. Every such transfer of stock
shall be entered on the stock book of the corporation which shall be kept at
its principal office or by its registrar duly appointed.
The corporation shall be entitled to treat the holder of record of
any share of stock as the holder in fact thereof, and accordingly shall not be
bound to recognize any equitable or other claim to or interest in such share
on the part of any other person whether or not it shall have express or other
notice thereof, except as may be required by the laws of Colorado or as
otherwise provided in these bylaws.
Section 5. Transfer Agent, Registrars and Paying Agents. The board
may at its discretion appoint one or more transfer agents, registrars and
agents for making payment upon any class of stock, bond, debenture or other
security of the corporation. Such agents and registrars may be located either
within or outside Colorado. They shall have such rights and duties and shall
be entitled to such compensation as may be agreed.
ARTICLE VI
Indemnification of Certain Persons
Section 1. Indemnification Against Third Party Claims. 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 (other than 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, shall be
indemnified by the corporation against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and, in the case of conduct in his official capacity, in a
manner he reasonably believed to be in the best interests of the corporation
or, in all other cases, in a manner that was at least not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 2. Indemnification Against Derivative Claims. 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,
shall be indemnified by the corporation against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and, in the
case of conduct in his official capacity, in a manner he reasonably believed
to be in the best interests of the corporation or, in all other cases, in a
manner that was at least not opposed to the corporation's best interests, but
no indemnification shall be made in connection with a proceeding in which such
person has been adjudged to be liable to the corporation.
Section 3. Indemnification Against Claims Involving Improper
Personal Benefit. Notwithstanding the provisions of Sections 1 and 2 of this
Article VI, no indemnification shall be made to any director in connection
with any proceeding charging improper personal benefit to the director,
whether or not involving action in his official capacity, in which he was
adjudged liable on the basis that he or she derived an improper personal
benefit.
Section 4. Rights to Indemnification. To the extent that a
director, officer, employee or agent of the corporation has been successful on
the merits in defense of any action, suit or proceeding referred to in Section
1, 2 or 3 of this Article VI or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith without the
necessity of any action being taken by the corporation other than the
determination in good faith that such defense has been successful. In all
other cases, any indemnification under Section 1, 2 or 3 of this Article VI
(unless ordered by a Court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in this
Article VI. Such determination shall be made by (a) the board of directors by
a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (b) if a quorum cannot be obtained, by a
majority vote of a committee of the board designated by the board, which
committee shall consist of two or more directors not parties to the
proceeding, except that directors who are parties to the proceeding may
participate in the designation of directors for the committee, or (c) if the
quorum cannot be obtained or the committee cannot be established under
Subsection (b) of this Section 4 or, even if a quorum is obtained or a
committee designated, if a majority of the directors constituting such quorum
or committee so directs, the determination required to be made by this Section
4 shall be made by (i) independent legal counsel selected by a vote of the
board of directors or the committee in the manner specified in Subsection (b)
or (c) of this Section 4 or, if a quorum of the full board cannot be obtained
and a committee cannot be established, by independent legal counsel selected
by a majority of the full board or (ii) by the shareholders.
Section 5. Indemnification by Court Order. A director, officer,
employee or agent who is or was a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice the court considers necessary, may order indemnification in the
following manner: (a) if it determines the person is entitled to mandatory
indemnification under Section 4 of this Article VI, the court shall order
indemnification, in which case the court shall also order the corporation to
pay the person's reasonable expenses incurred to obtain court-ordered
indemnification; or (b) if it determines that the person is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not he met the standard of conduct set forth in
Section 1 or 2 of this Article VI or was adjudged liable in the circumstances
described in Section 2 or 3 of this Article VI, the court may order such
indemnification as the court deems proper; except that the indemnification
with respect to any proceeding in which liability shall have been adjudged in
the circumstances described in Section 2 or 3 of this Article VI is limited to
reasonable expenses incurred in connection with the proceeding and reasonable
expenses incurred to obtain court-ordered indemnification.
Section 6. Effect of Termination of Action. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction or
upon a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person seeking indemnification did not act in good faith
and in a manner which he reasonably believed to be in the best interests of
the corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. Entry of a
judgment by consent as part of a settlement shall not be deemed a final
adjudication of liability, nor of any other issue or matter.
Section 7. Advance of Expenses. Expenses (including attorney fees)
incurred in defending a civil or criminal action, suit or proceeding may be
paid by the corporation in advance of the final disposition of such action,
suit or proceeding as authorized in Section 4 of this Article VI if: (a) the
director, officer, employee or agent furnishes the corporation a written
affirmation of his good-faith belief that he has met the standard of conduct
described in Sections 1 and 2 of this Article VI, (b) the director, officer,
employee or agent furnishes the corporation a written undertaking, executed
personally or on his behalf, to repay the advance if it is determined that he
did not meet such standard of conduct and (c) a determination is made that the
facts then known to those making the determination would not preclude
indemnification under this Article VI.
Section 8. Other Indemnification Rights. The indemnification
provided hereby shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, and any procedure
provided for by any of the foregoing, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of heirs, executors and
administrators of such a person. However, the indemnification provisions
provided hereby or otherwise concerning the corporation's indemnification of
or advance for expenses to directors (except for insurance policies) shall be
valid only if and to the extent the provision is consistent with the
provisions of Sections 7-109-101 through 7-109-110 of the Colorado Business
Corporation Act.
Section 9. Report to Shareholders. Any indemnification of or
advance of expenses to a director in accordance with this Article VI, if
arising out of a proceeding by or on behalf of the corporation, shall be
reported in writing to the shareholders with or before the notice of the next
shareholders' meeting. If the next shareholder action is taken without a
meeting at the instigation of the board of directors, such notice shall be
given to the shareholders at or before the time the first shareholder signs a
writing consenting to such action.
ARTICLE VII
Provision of Insurance
By action of the board of directors, notwithstanding any interest of
the directors in the action, the corporation may purchase and maintain
insurance, in such amounts as the board of directors deems appropriate, on
behalf of any person who is or was a director, officer, employee, fiduciary or
agent of the corporation or who is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, fiduciary or
agent of another domestic or foreign corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of Article VI of
these bylaws. Any such insurance may be procured from any insurance company
designated by the board of directors, whether such insurance company is formed
under the laws of Colorado or any other jurisdiction of the United States or
elsewhere, including any insurance company in which the corporation has an
equity or any other interest through stock ownership or otherwise.
ARTICLE VIII
Miscellaneous
Section 1. Waivers of Notice. Whenever notice is required by law,
by the Articles of Incorporation or by these bylaws, a waiver thereof in
writing signed by the director, shareholder or other person entitled to said
notice, whether before or after the time stated therein, or his appearance at
such meeting in person or (in the case of a shareholders' meeting) by proxy,
shall be equivalent to such notice.
Section 2. Seal. The corporate seal of the corporation shall be
circular in form and shall contain the name of the corporation and the words
"Seal, Colorado."
Section 3. Fiscal Year. The fiscal year of the corporation shall
be as established by the board of directors.
Section 4. Amendments. The board of directors shall have power, to
the maximum extent permitted by the Colorado Business Corporation Act, to
make, amend and repeal the bylaws of the corporation at any regular or special
meeting of the board unless the shareholders, in making, amending or repealing
a particular bylaw, expressly provide that the directors may not amend or
repeal such bylaw. The shareholders shall also have the power to make, amend
or repeal the bylaws of the corporation at any annual meeting or any special
meeting called for that purpose.
Section 5. Gender. The masculine gender is used in these bylaws as
a matter of convenience only and shall be interpreted to include the feminine
and neuter genders as the circumstances indicate.
Section 6. Conflicts. In the event of any irreconcilable conflict
between these bylaws and either the corporation's articles of incorporation or
applicable law, the latter shall control.
Section 7. Definitions. Except as otherwise specifically provided
in these bylaws, all terms used in these bylaws shall have the same definition
as in the Colorado Business Corporation Act.
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