UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
2
E-COMMERCE GROUP INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0293704
(State of organization) (I.R.S. Employer Identification No.)
3675 Pecos-McLeod, Suite 1400, Las Vegas, NV 89121
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 866-2500
Registrant's Attorney: Daniel G. Chapman, Esq., 2080 E. Flamingo
Road, Suite 112, Las Vegas, NV 89119
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
e-commerce group Inc. (the "Company") is a Nevada corporation
formed on January 7, 1993 as Advanced Suspension Technologies,
Inc. Its principal place of business is located at 3675 Pecos-
McLeod, Suite 1400, Las Vegas, NV 89121. On December 27, 1996,
the Company changed its name to Dalton International Resources,
Inc. On August 23, 1999, the Company once again changed its name
to "e-commerce group Inc." in order to reflect its current
operating plan (see "Item 2"). The Company was organized to
engage in any lawful corporate business, including but not
limited to, participating in mergers with and acquisitions of
other companies. The Company has been in the developmental stage
since inception and has no operating history other than
organizational matters.
The Company was incorporated by Kenneth Coleman. He no longer
holds any position with the Company since resigning from the
Company's Board of Directors in 1996, and, although he is the
beneficial owner of 270,000 of the Company's 6,000,000 issued
shares of common stock, he has had no involvement in the
Company's business since that time. The Company has never had any
operations.
Initially, 2,000,000 shares of common stock were issued to Mr.
Kenneth Coleman, the incorporator, as founders shares. Mr.
Coleman sold or gifted a portion of his shares to twelve friends
and business acquaintances in private transactions exempt from
registration pursuant to section 4 of the Securities Act of 1933,
as amended (the "Securities Act"). One of those individuals was
Lidya Balfe, who was then the corporate Secretary and a director.
Mr. Coleman transferred 1,240,000 of his shares to Ms. Balfe on
February 1, 1993. Ms. Balfe then sold or gifted a portion of her
shares to a total of 17 individuals in transactions that were
also exempt from registration pursuant to section 4. All such
transactions took place prior to or during April, 1993.
On December 27, 1996, Mr. Coleman resigned from the Company, in
order to concentrate on the business of another company of which
he was an officer/director. Ms. Balfe also resigned. The board,
upon Mr. Coleman's and Ms. Balfe's resignation, consisted of
Roger Bennett, Julie Bennett, and David Shefford. The new board
authorized an increase in the number of authorized common shares
to 100,000,000, and authorized a 3:1 forward split, thereby
increasing the number of issued and outstanding shares to
6,000,000.
On February 12, 1999, a special meeting of the Company's Board of
Directors was held for the purpose of narrowing the Company's
focus in searching for acquisition candidates. The then-existing
directors, Roger Bennett, Julie Bennett, and David Shefford, who
were unable to devote the required amount of time necessary to
complete this search, resigned in order to devote their time to
their other business interests. David Wood, who was appointed as
President, and David Wong, who was appointed as Secretary and
Treasurer, were appointed by the outgoing directors as the new
member of the Board. While the primary activity of the Company
currently involves seeking a company or companies in any business
or industry that it can acquire or with whom it can merge, the
Company has narrowed its focus to companies in the electronic
commerce industry, and has had preliminary talks with two
companies in that industry. The Company's plans are in the
conceptual stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item
2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, to increase the Company's access to
financial markets, and to comply with the NASD's Eligibility
Rule. In order to comply with the NASD's Eligibility Rule, the
Company was required to become fully reporting and have cleared
all of the SEC's comments, by November 3. The Company is fully
reporting, but did not clear the SEC's comments by that date. The
Company's stock, therefore, was removed from the Over the Counter
Bulletin Board (the "OTC-BB") and is presently quoted on the
"Pink Sheets." The Company intends to reapply for quotation on
the OTC-BB, and filed its "15c2-11 Exemption Request Form" in a
timely manner. That form enables the Company's stock to be quoted
on the OTC-BB after the SEC's comments have been cleared without
having to initiate a new application.
Risk Factors
The Company's business, as a blank check, is subject to numerous
risk factors, including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it completes a business combination. This may result
in the Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will identify a business opportunity or complete
a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the identified business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete
with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company is negotiating
the acquisition of two companies currently operating in the
electronic commerce industry (see "Item 2"). There is no
assurance, however, that these acquisitions will take place. If
they do not, there can be no assurance the Company will
successfully identify and evaluate suitable business
opportunities or conclude a business combination. Management has
not identified any other industry or specific business within an
industry for evaluations. The Company has been in the
developmental stage since inception and has no operations to
date. Other than issuing shares to its original shareholders, the
Company never commenced any operational activities. There is no
assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has
not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have
achieved, and without which the Company would not consider a
business combination in any form with such business opportunity.
Accordingly, the Company may enter into a business combination
with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited
assets, negative net worth, or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and
non "arms-length" transactions may also arise in the event the
Company's officers or directors are involved in the management of
any firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this
policy could be changed while current management is in control of
the Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act") must 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 entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that 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. If
there is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity or with multiple
entities involved in a single business. Consequently, the
resulting activities will be limited to that entity's business.
The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within
a particular business or industry, thereby increasing the risks
associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors
of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a
public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business
combination with the Company. The perceived adverse consequences
may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders, and
the inability or unwillingness to comply with various federal and
state securities laws enacted for the protection of investors.
These securities laws primarily relate to registering securities
and full disclosure of the Company's business, management, and
financial statements. Note, however, that any public offering of
securities for which there is no exemption under the Securities
Act, including those issued in a business combination with the
Company, must be registered.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize
the federal and state tax consequences to both the Company and
the target entity. Management cannot assure that a business
combination will meet the statutory requirements for a tax-free
reorganization, or that the parties will obtain the intended tax-
free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes, which may have an adverse effect on both
parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than incur
the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. Some
states may restrict the trading or resale of blind-pool or "blank-
check" securities. Accordingly, investors should consider any
potential secondary market for the Company's securities to be a
limited one.
In addition to the above risk factors, if the Company enters the
electronic commerce field, as discussed in Item 2 below, it will
be subject to the following additional risk factors:
NEED FOR ADDITIONAL CAPITAL - The Company plans to raise
approximately $7,500,000 to complete the acquisitions. This will
occur in the form of a private placement of common stock. As a
result, the current equity holders will have their ownership
interests reduced. Based upon the Company's initial investigation
of the target companies, it believes that this will provide
sufficient capital to fund operations for at least the next 12
months. Because of Management's expected rapid growth in
electronic commerce and the internet and improvements in
technologies, it may be necessary to raise additional funds after
that time so that the Company can continue to compete by
upgrading its equipment and its product line.
COMPETITION - There are many competitors in the electronic
commerce field, many of them much larger than the Company, with
significant financial resources. While Management believes that
the electronic-commerce industry will continue its rapid growth,
and that the Company's product offerings (as described in Item 2,
"Proposed Plan of Operation - Electronic Commerce") will fill a
niche within that industry, there is no guarantee that another
company, one that is larger and has more capital at its disposal,
will not duplicate these offerings in an effort to attract
customers to it, or to keep its customers from becoming customers
of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This registration statement contains statements that are forward-
looking statements within the meaning of the federal securities
laws. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by
words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "believe" and similar language. These statements
involve known and unknown risks, including those resulting from
economic and market conditions, the regulatory environment in
which we operate, competitive activities, and other business
conditions, and are subject to uncertainties and assumptions set
forth elsewhere in this registration statement. Our actual
results may differ materially from results anticipated in these
forward-looking statements. We base our forward-looking
statements on information currently available to us, and we
assume no obligation to update these statements.
Plan of Operation
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation.
The Company has identified two potential business partners, and
has entered into negotiations with them. While the Company is not
required to restrict its search to any specific business,
industry, or geographical location, and may participate in
business ventures of virtually any kind or nature, for the short
term it will concentrate on these companies which are in the
electronic commerce business. In the event that the Company does
not proceed with a combination with either of these businesses,
it will revert to its general operating plan as discussed in the
following sections under the headings "Plan of Operation -
General", and "Sources of Opportunities". Discussion of the
proposed business under this caption and throughout this
Registration Statement is purposefully general and is not meant
to restrict the Company's virtually unlimited discretion to
search for and enter into a business combination.
Proposed Plan of Operation - Electronic Commerce
The Company has entered into discussions to acquire two privately-
held companies that presently are engaged in the electronic
commerce industry. If the Company decides to complete these
acquisitions, it will need to raise approximately Seven Million
Five-Hundred Thousand Dollars ($7,500,000) in a private placement
for the Company's common stock. This private placement would take
place during the fourth quarter of 1999. Based upon the Company's
initial investigation of the target companies, it believes that
this will provide sufficient capital to fund operations for at
least the next 12 months, although additional capital may be
required after that time. A portion of the amount raised in 1999
will be used to repay funds ($50,000) advanced to the Company by
its president, David Wood.
The Company views the electronic commerce industry as a huge
opportunity for providing value to the Company's shareholders.
The Company believes that because of the internet we will see a
profound difference in the way both businesses and individuals
engage in trade, and consumers will use various implementations
of e-commerce trading in their everyday activities - from grocery
shopping to buying a new car, from telephone calls to interactive
video conferencing in our own homes, and from manually adjusted
home appliances to totally automated homes and offices. Consumers
will accept these changes and adopt them in the same manner we
adjusted to the telephone, the television and the cash machines
at the bank. This technology and social revolution may very well
change the balance of our social and working lives providing more
time for social pursuits.
Already it is estimated that more than 215 million people around
the world use the Internet (Source: Global Reach and Yahoo!).
Management expects that both the business-to-business and
individual use of electronic commerce will continue to increase
significantly.
It is Management's belief that the use of the Internet and
electronic commerce trade will be supported by a rapid and
diversified development of new products and services, and that
the Internet itself will develop to provide substantial
improvements in speed and bandwidth, as are already being seen as
the result of the use of cablemodems and ISDN and DSL telephone
lines.
The Company will be formed from existing businesses that already
operate in the electronic commerce and internet services
businesses. The newly combined Company will focus on creating
"full service" electronic commerce solutions to capitalize on
Management's anticipated huge market growth as indicated above.
While different segments of the Company's business face
competition from others, the Company has not identified any
competitor who provides the "full service" electronic commerce
solution described below. For example, many companies have ISPs.
Many have electronic commerce sites. Some, like America OnLine
have both the sites and the ISPs. Other companies manufacture and
sell terminals that are suitable for electronic kiosks. No one,
however, to Management's knowledge, provides the ISP, the web
sites, and the terminals in a packaged solution.
The term "full service," as used with respect to electronic
commerce solutions, means that a consumer can subscribe through
the Company for internet access, can then search for vendors
offering merchandise for sale on-line, and can complete their
purchase using credit card information. Another example of a
"full service" electronic commerce solution is the Company
supplying "e-commerce kiosks" consisting of a touch-screen
terminal featuring on-line catalogs. Customers can browse the
offerings and then purchase products by means of an integrated
coin/credit card/smart card/bank-note collection-payment system.
There will be different models and configurations of the systems,
depending upon the nature of the business in which they are
installed. The initial focus will be on the retail and consumer
point of sale/service market on a world-wide basis where
electronic commerce integration into the retail and professional
services businesses is required. Typical installations would be
in the following areas;
Retail stores and shopping malls/centers
Financial Services companies
Hotels / Leisure Centers
Public transport centers such as stations and
airports
E-Business / Internet Cafes and Bars
On board Trains, airplanes, boats and buses etc.
Integrated electronic commerce Kiosks &
telephone/videophone
The second area will be that of the `Home Interface' for
electronic commerce. In this case, elegant `fashion style' models
of electronic commerce terminals would be deployed into homes
(normally the kitchens) for everyday domestic uses such as the
following;
On line shopping from sponsoring supermarkets and
retailers with home delivery supported by in home
bar code reading of previously purchased items
Full multi-media interface with news and domestic
services providers
On-line recipes, video instructions for food
preparation and instruction on the use of domestic
equipment
Food manufactures services including nutritional
information
Full Internet access from through an
environmentally suitable touch screen with the
usual e-mail and browsing facilities
Full multimedia video conferencing and video
message services
The target companies already operate in these areas. At present,
they operate a full service Internet Service Provider to over
7,000 corporate dial up users, providing, among other features,
web mail, web news, domain name reservations, and hosting the web-
sites for over 1,000 clients. In addition, one of the target
companies designs, builds, and implements Windows-based touch
screen and keyboard-based Internet Kiosks, and provides a pay-as-
you-go internet payment systems programmable to recognize
multiple currencies and credit cards.
The product is ready to go shortly after completion of the
acquisitions. The Company will continue to develop and enhance
both the product itself and its offerings. As an example, the
Company intends to develop a telephone handset with enhanced
features which will assist in on-line payments. In the future,
the Company intends to develop new software and to increase the
bandwith it provides for internet access, thereby enabling
additional usage of its electronic commerce features.
In addition to the internet-kiosk features, the Company will also
act as an ISP (Internet Service Provider), providing e-mail,
internet domain names, and other internet offerings to
subscribers. The Company will also offer web-site programming and
hosting, and will provide a "Games World" feature, in which
individuals can play a number of the most popular compute games,
either against the computer or as part of a real-time community,
playing against a number of other individuals on-line.
To become a world-class full-service electronic commerce
provider, effort must be placed on the continued development of
the current hardware, software, and network architecture, and
must replace the companies' dependence on software suppliers with
higher quality, customized software developed in-house.
Because of limited financial resources, their ability to complete
their business plans is constrained. By completing the
combination, not only will the companies have an influx of
capital to complete their plans, but the combination of the
companies will have a synergistic effect upon them.
Plan of Operation - General
Assuming that the acquisitions described above are not completed,
the Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common
stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid
technological advances being made in some industries, and
shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of any
acquired business opportunity until such time as the Company has
successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management, while not especially experienced in matters relating
to the new business of the Company, will rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants
or advisors, other than the Company's legal counsel and
accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future.
As is customary in the industry, the Company may pay a finder's
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors and
will be in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably
down to 1% in a $4,000,000 transaction. Management has adopted a
policy that such a finder's fee or real estate brokerage fee
could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such
person plays a material role in bringing a transaction to the
Company. With respect to the two companies with which the Company
is currently negotiating, no employees, officers, or directors
played a material role in finding these target companies, and no
one is to be paid a finder's fee.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Item 5"). In the event that the electronic commerce
opportunity does not complete, management intends to concentrate
on identifying prospective business opportunities which may be
brought to its attention through present associations with
management. With respect to the current electronic commerce
opportunity, management has evaluated the prospects in the manner
set forth below. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may
be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel
of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate
the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business
in its development stage (in that it has not generated
significant revenues from its principal business activities prior
to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in control
of the Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity,
which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event
the Company acquires a target company with substantial assets.
Any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares
held by the Company's then shareholders, including purchasers in
this offering.
Management has advanced, and will continue to advance, funds
which shall be used by the Company in identifying and pursuing
agreements with target companies. Management anticipates that
these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds. To date,
the Company's president has advanced approximately $50,000 in
this regard. That amount will be repaid from the proceeds of the
private placement if the combination currently in negotiation
closes. If it does not close, there is no agreement for repayment
of these funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
With respect to the business of the companies with which the
Company is currently negotiation, and assuming that the
combination takes place, the Company will still be faced with
potential competition. Management believes that it has identified
a niche within the electronic commerce marketplace (as described
in "Proposed Plan of Operation - Electronic Commerce"). There are
not, however, many barriers to entry into this market. The
Company will work to enter into contracts so that its product
will be available first and will have the most sought-after
offerings made available to its clients. There is no guarantee,
however, that other companies will not enter this market. As many
of these potential competitors have expertise in the internet
and, in particular, the electronic commerce industry, and as they
have significantly more working capital at their disposal, the
Company is at a competitive disadvantage other than with respect
to early entry into this market.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company and the target companies. The Company itself has
no computers or business, so the direct impact of the Year 2000
problem is minimal. With respect to the potential target
companies with whom the Company is in negotiations, the Company
has audited all of the critical computer-based servers and
workstations, using the Norton 2000 Utilities Software. In all
cases, the systems have passed the BIOS, Real Time Clock, and
System Clock tests, indicating a high degree of assurance
concerning their compliance.
Additionally, the communications equipment have been updated to
conform to the manufacturers' latest specifications for
compliance. In each case, the manufacturers have provided
compliance statements for their products and services. These
manufacturers include Compaq, Digital Equipment Corp., Dell,
Cisco, 3Com, Livingston/Ascend, Quicken, Netshift, and Microsoft.
While the companies' suppliers and internal engineers may
discover Year 2000 issues, Management believes that both
companies are compliant.
Regulation and Taxation
The Investment Company Act of 1940 classifies as an "investment
company" an issuer which (a) is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities, or (b) is engaged or proposes to engage in
the business of investing, reinvesting, owning, holding, or
trading in securities, and owns or proposes to acquire investment
securities having a value exceeding 40 percent of the value of
its total assets. While the Company does not intend to engage in
such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Item 5").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space from its Resident Agent, Incorp Services, Inc., at no cost
to the Company, and Management expects this arrangement to
continue. The Company pays its own charges for long distance
telephone calls and other miscellaneous secretarial,
photocopying, and similar expenses. This is a verbal agreement
between the Resident Agent and the Board of Directors. Neither
Incorp Services, Inc. nor any of its officers or directors serve
as officers or directors of the Company, or are holders of 5% or
more of the Company's common stock.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
There are no persons known to the Company, as of June 11, 1999,
to be a beneficial owner of five percent (5%) or more of the
Company's common stock, and none of the directors or officers own
any of the Company's common stock.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
David A. Wood 44 President /
1322 Wellington Drive Director
North Vancouver, B.C.
V7K 1L5
David Wong 44 Secretary/Treasurer/Director
680 East Fifth Avenue
#215
Vancouver, B.C. V5T 1J2
</TABLE>
Mr. David Wood; President
Mr. Wood has been the President/ of the Company since February
12, 1999. He was elected to the Company's Board of Directors on
February 12, 1999 and his current term expires at the next annual
meeting. Mr. Wood holds a Bachelor of Commerce Degree from the
University of Alberta in 1982. He has also received a Diploma in
Urban Land Economics from the University of British Columbia in
1994. He is also a Real Estate Agent.
Mr. Woods was a Board Member of the Canadian Ski Instructors'
Alliance (C.S.I.A.), British Columbia Committee, from 1985 to
1987. In 1987, he became a Director of C.S.I.A., National Board,
which he held until 1992. He then became a Financial Planner for
Principal Consultants, Edmonton from 1982 to 1983. There he was
promoted from sales to Branch Manager, in which he was
responsible for recruiting, training and management of an
investment sales group. From 1983 to 1984, he was a Managing
Partner at Hidden Ridge Recreations, Ltd. (Downhill and Cross
Country Ski Area). Mr. Woods was responsible for pull program
design, implementation and management for the operation of new
ski venture. He was also responsible for recruiting, training and
staff management, marketing and promotion, and all general area
operations. From 1984 to 1990, Mr. Woods was the Assistant
Director of the Ski School at Grouse Mountain Resorts, Ltd. There
he was responsible for recruitment, staff training and
development, staff scheduling, public relations and general
operations, where he also managed 12 supervisors and, in turn,
oversaw 120 instructors and staff. From 1991 to 1996, he was self-
employed as a Real Estate Agent, with direct experience in staff
training and development, real estate sales organization,
recruitment, sales, and business development. In 1996, he was a
Mortgage Broker with Bank of Montreal. From 1996 through 1997,
Mr. Woods was employed as a Mortgage Broker with Canada Trust,
trust company. From 1997 to 1998, he was employed at Cypress Bowl
Recreations, Ltd. in Off Mountain Sales and Marketing. Since
1998, he has been the Sales and Leasing Representative with Don
Docksteader, an automobile dealer.
Mr. David Wong, Secretary/Treasurer;
Mr. Wong has been the Secretary and Treasurer of the Company
since he was elected to the Company's Board of Directors on
February 12, 1999. His current term expires at the next annual
meeting. Mr. Wong received designations as a Chartered Accountant
in 1986 and a Certified Management Accountant in 1985. He holds a
Bachelor of Science degree in Biology form Simon Fraser
University in 1976, and in 1981 received a Masters of Science in
Genetics and a Masters of Business Administration form the
University of British Columbia. In 1996, he completed the four
year program in Urban Land Economics from the Real estate
Division of the University of British Columbia.
After holding a number of auditing positions, in 1987 Mr. Wong
was appointed as Chief Financial Officer and Corporate Secretary
of Detroit Diesel - Allison British Columbia, Ltd., a private
company with annual sales of approximately $45,000,000. In 1992,
Mr. Wong became a self-employed Financial Consultant, working
with public companies that traded on the Vancouver Stock
Exchange. In 1994, he took a position as Controller, CFO, and
Corporate Secretary with Global Teleworks Corp., a start-up
public company in Vancouver. He left in 1996 to accept a position
as Controller with UAP/NAPA Auto Marine Electric, Ltd., a public
auto-parts company with annual sales of approximately
$800,000,000. Since 1998, Mr. Wong has been the Controller of
Hollyburn Lumber Company, a private company that distributes
lumber and building supplies.
Blank Check Experience
Neither of the officers and directors have experience with blank-
check companies. There is no family relationship between any of
the officers and directors of the Company. The Company's Board of
Directors has not established any committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs. The officers and
directors of the Company may in the future become shareholders,
officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a
right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph, if a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company have no preference as to which company
will merge or acquire such target company, the company of which
the President first became an officer and director will be
entitled to proceed with the transaction. Except as set forth
above, the Company has not adopted any other conflict of interest
policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They both have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to
occur until the Registrant has generated revenues from operations
after consummation of a merger or acquisition. As of the date of
this registration statement, the Company has no funds available
to pay directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
However, with respect to the ongoing negotiations with the
electronic-commerce companies, management will be compensated
with stock options and/or salary, if the business combination is
completed. The details of the stock options and/or salary have
not yet been completed. It is expected that these details will be
one of the items to be negotiated as part of the combination.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors but will be submitted to a vote of the shareholders as
a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will receive
any finders fee, either directly or indirectly, as a result of
their respective efforts to implement the Company's business plan
outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Until November 3, 1999, the Company's common stock was quoted on
the Over-the-Counter Bulletin Board (the "OTC-BB") in the United
States under the symbol ECGM. The stock was quoted previously
under the symbol DIRI, and is currently quoted on the "Pink
Sheets". As discussed at page 3, the Company will seek to be
quoted on the OTC-BB upon completion by the SEC of its review of
this registration statement. Only a small trading volume has
existed during the last two years. According to Yahoo!, the stock
last traded on October 6, 1999 at a price of $3.25, and currently
has a bid price of $3.00 with an asked price of $4.00. These
quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission, and may not represent actual
transactions. Quarterly high and low bid prices are as follows
(Source: America OnLine):
<TABLE>
<S> <C> <C>
Quarter Ended Low High
Bid Bid
June 30, 1998 $0.3 $0.40
7
September 30, $0.3 $0.4
1998 7 3
December 31, $0.3 $0.4
1998 7 3
March 31, 1999 $0.3 $0.5
4 8
June 30, 1999 $0.3 $0.9
1 3
September 30, $1.5 $8.0
1999 0 0
</TABLE>
While management has not undertaken any discussions, preliminary
or otherwise, with any prospective market maker concerning the
participation of such market maker in the after-market for the
Company's securities, it does intend to initiate such discussions
during the negotiations concerning a business combination. There
is no assurance that a trading market will ever develop or, if
such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of
the Company's officers and directors will most likely be the
persons to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The most recent price for the Company's common stock is $3.25 on
October 6, 1999. The stock has been lightly traded, as discussed
previously in this Item 9.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny 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 NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
There are 34 holders of the Company's Common Stock. Initially,
the incorporator was issued 2,000,000 shares, which were
subsequently sold or gifted to a total 19 persons. The then
underwent a 3:1 forward stock split, resulting in 6,000,000
shares issued and outstanding. 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.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the transfers of stock from Mr. Coleman and Ms.
Balfe during 1993, the Registrant relied on Section 4(2) of the
Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the shares. The securities
were offered for investment only and not for the purpose of
resale or distribution, and the transfer thereof was
appropriately restricted.
Of the 6,000,000 shares presently outstanding, a total of 540,000
still bear restrictive legends. Management believes, however,
that these restrictions have lapsed, pursuant to Rule 144, as
those shares belong to former officers and directors who resigned
in 1996. If the restrictions still apply, those shares may not be
sold other than pursuant to a registration statement being in
effect, pursuant to an exemption from registration, or in
accordance with Rule 144. In general, under Rule 144, a person
(or persons whose shares are aggregated) who has satisfied a one
year holding period, under certain circumstances, may sell within
any three-month period a number of shares which does not exceed
the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation
by a person who has satisfied a two-year holding period and who
is not, and has not been for the preceding three months, an
affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 100,000,000 shares of Common Stock, $0.001 par value per
share, of which 6,000,000 are issued and outstanding. The shares
are non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Barry L. Friedman, P.C.
dated August 18, 1999
Balance Sheet as of 6 Months Ended June 30, 1999, and
December 31, 1998
Statement of Operation for the 3 Months Ended June 30,
1999, and the 3 Months Ended June 30, 1998; for the
6 Months Ended June 30, 1999, and June 30, 1998; for
the Year Ended December 31, 1998, and December 31,
1997; for the period January 7, 1993 (inception) to
June 30, 1999.
Statement of Stockholders' Equity
Statement of Cash Flows for the 3 Months Ended June 30,
1999, and the 3 Months Ended June 30, 1998; for the
6 Months Ended June 30, 1999, and June 30, 1998; for
the Year Ended December 31, 1998, and December 31,
1997; for the period January 7, 1993 (inception) to
June 30, 1999.
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
Board of Directors August 18,
1999
Dalton International Resources, Inc.
Las Vegas, Nevada
I have audited the Balance Sheets of Dalton International
Resources, Inc., (A Development Stage Company), as of June 30,
1999, and December 31, 1998, and the related Statements of
Stockholders' Equityfor June 30, 1999, and December 31, 1998, and
Statements of Operations and Cash Flows for the three months
ending June 30, 1999, and June 30, 1998, for the six months ended
June 30,1 999, and June 30, 1998, and the two years ended
December 31, 1998, and December 31, 1997, and the period January
7, 1993 (inception), to June 30, 1999. These financial
statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform my 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 management, as well as evaluating the
overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Dalton International Resources, Inc., (A Development Stage
Company), as of June 30, 1999, and December 31, 1998, and the
related statements of Stockholders' Equity for June 30, 1999, and
December 31, 1998, and the Statements of Operations and Cash
Flows for the three months ending June 30, 1999, and June 30,
1998, for the six months ended June 30, 1999, and June 30, 1998,
and the two years ended December 31, 1998, and December 31, 1997,
and the period January 7, 1993 (inception), to June 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 #3 to the financial statements, the Company has no
established source of revenue. This raises substantial doubt
about its ability to continue as a going concern. Management's
plan inregard to these matters are also described in Note #3.
The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<S> <C> <C>
6 Months Ended Year Ended
June 30, 1999 December 31,
1998
ASSETS
CURRENT ASSETS: 0 0
TOTAL CURRENT ASSETS 0 0
OTHER ASSETS; 0 0
TOTAL OTHER ASSETS 0 0
TOTAL ASSETS 0 0
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES;
Officers Advances (Note #6) $2,755 0
TOTAL CURRENT LIABILITIES $2,755 0
STOCKHOLDERS' EQUITY;
Common stock, $0.001 par value, $6,000
authorized 100,000,000 shares
issued and outstanding
December 31, 1998 - 6,000,000
shares
June 30, 1999 - 6,000,000 shares $6,000
Additional paid-in Capital -3,500 -3,500
Accumulated loss -5,255 -2,500
TOTAL STOCKHOLDERS' EQUITY $2,755 0
TOTAL LIABILITIES AND 0 0
STOCKHOLDERS' EQUITY
</TABLE>
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF OPERATION
<TABLE>
<S> <C> <C> <C> <C>
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
INCOME:
Revenue 0 0 0 0
EXPENSES:
General, Selling $120 0 $2,755 0
and
Administrative
Total Expenses $120 0 $2,755 0
Net Profit/Loss(-$ -120 0 $ -2,755 0
)
Net Profit/Loss NIL NIL $ -.0005 NIL
(-) Per weighted
Share (Note 2)
Weighted average 6,000,000 6,000,00 6,000,000 6,000,000
Number of common 0
Shares
outstanding
</TABLE>
See accompanying notes to financial statements & audit report
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS (continued)
<TABLE>
<S> <C> <C> <C>
Year Year Jan. 7,
Ended Ended 1993
Dec. 31, Dec. 31, (inceptio
1998 1997 n) to
June 30,
1999
INCOME:
Revenue 0 0 0
EXPENSES:
General, Selling 0 0 $5,255
and
Administrative
Total Expenses 0 0 $5,255
Net Profit/Loss(-0 0 $ -5,255
)
Net Profit/Loss NIL NIL $ -.0009
(-) Per weighted
Share (Note 2)
Weighted average 6,000,000 6,000,000 6,000,000
Number of common
Shares
outstanding
</TABLE>
See accompanying notes to financial statements & audit report
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Common Shares Stock Amount Additional paid- Accumulated
in Capital Deficit
Balance, 6,000,000 $6,000 $ -3,500 $ -2,500
December 31, 1997
Net loss year ended 0
December 31, 1998
Balance, 6,000,000 $6,000 $ -3,500 $ -2,500
December 31, 1998
Net loss, January -2,755
1, 1999 to June 30,
1999
Balance, 6,000,000 $6,000 $ -3,500 $ -5,255
June 30, 1999
</TABLE>
See accompanying notes to financial statements & audit report.
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C>
3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
Cash Flows from
Operating Activities:
Net Loss $ -120 0 $ -2,755 0
Adjustment to 0 0 0 0
Reconcile net loss to
cash provided by
operating activities:
Changes in Assets and
Liabilities:
Increase in current
Liabilities:
Officers Advances +120 0 +2,755 0
Cash Flows from 0 0 0 0
Investing Activities
Cash Flows from
Financing Activities:
Issuance of common 0 0 0 0
stock
Net increase 0 0 0 0
(decrease) in cash
Cash, Beginning of 00 0 0 0
period
Cash, end of period 0 0 0 0
</TABLE>
See accompanying notes to financial statements & audit report
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (continued)
<TABLE>
<S> <C> <C> <C>
Year Ended Dec. Year Ended Dec. Jan. 7, 1993
31, 1998 31, 1997 (inception) to
June 30, 1999
Cash Flows from
Operating Activities:
Net Loss 0 0 $ -5,255
Adjustment to
Reconcile net loss to
cash provided by
operating activities:
Changes in Assets and
Liabilities:
Increase in current
Liabilities:
Officers Advances 0 0 +2,755
Cash Flows from 0 0 0
Investing Activities
Cash Flows from
Financing Activities:
Issuance of common 0 0 +2,500
stock
Net increase 0 0 0
(decrease) in cash
Cash, Beginning of 0 0 0
period
Cash, end of period 0 0 0
</TABLE>
See accompanying notes to financial statements & audit report
DALTON INTERNATIONAL RESOURCES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 7, 1993, under the laws of the
State of Nevada as Advanced Suspension Technologies, Inc. The
Company currently has no operations and in accordance with SFAS
#7, is considered a development company.
On January 7, 1993, the company issued 2,000,000 shares of its
$0.001 par value common stock for services of $2,500.00
On June 21, 1996, the State of Nevada approved the Company's
restated Articles of Incorporation, which increase its
capitalization from 3,000,000 common shares to 50,000,000 common
shares, the par value remained unchanged at $.001.
On December 27, 1996, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its
capitalization from 50,000,000 common shares to 100,000,000
common shares, the par value remained unchanged at $.001.
On December 27, 1996, the company forward split its common stock
3:1, thus increasing the number of outstanding common stock
shares from 2,000,000 shares to 6,000,000 shares.
On December 27, 1996, the Company changed its name to Dalton
International Resources, Inc.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined
except as follows
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average
number of shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment
of dividends. No dividends have been paid since inception.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company has no current source of revenue. Without
realization of additional captial, it would be unlikely for the
Company to continue as a going concern. It is management's plan
to seek additional capital through a merger with an existing
operating company.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal
property. Office services are provided without charge by a
director. Such costs are immaterial to the financial statements
and accordingly, have not been reflected therein. The officers
and directors of the Company are involved in other business
activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional share of common stock.
NOTE 6 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger
with an existing operating company, an officer of the Company has
advanced funds to the Company to pay for any costs incurred by
it. These funds are interest free.
EXHIBITS
3.1AOriginal Articles of Incorporation
3.1BAmended Articles of Incorporation
3.1CAmended Articles of Incorporation
3.2 By-Laws
ARTICLES OF INCORPORATION
OF
ADVANCED SUSPENSION TECHNOLOGIES, INC.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, have this day voluntarily associated
ourselves together for the purpose of forming a corporation under
the laws of the State of Nevada and we do hereby certify:
I.
The name of this corporation is ADVANCED SUSPENSION TECHNOLOGIES,
INC.
II.
The resident agent of said corporation shall be Pacific Stock
Transfer, 7631 Bermuda Ave., Las Vegas, NV 89123 and such other
offices as may be determined by the By-Laws in and outside of the
State of Nevada.
III.
The objects to be transacted, business and pursuit and nature of
the business, promoted or carried on by this corporation are and
shall continue to be engaged in any lawful activity.
IV.
The members of the governing board shall be styled Directors and
the first Board of Directors shall consist of one (1) The number
of stockholders of said corporation shall consist of one (1) .
The number of directors and shareholders of this corporation may,
from time to time, be increased or decreased by an amendment to
the By-Laws of this Corporation in that regard, and without the
necessity of amending these Articles of Incorporation. The name
and address of the first Board of Directors and of the
incorporator signing these Articles is as follows:
Kenneth Coleman P.O. Box
93385
Las Vegas,
NV 89193
V.
The Corporation is to have perpetual existence.
VI.
The total authorized capitalization of this Corporation shall be
and is the sum of 3,000,000 shares Common stock at $.001 par
value, said stock to carry full voting power and the said shares
shall be issued fully paid at such times as the Board of
Directors may designate in exchange for cash, property, or
services, the stock of other corporations or other values, rights
or things, and the judgment of the Board of Directors as to the
value thereof shall be conclusive.
VII.
The capital stock shall be and remain non-assessable. The
private property of the stockholders shall not be liable for the
debts or liabilities of the Corporation.
IN WITNESS WHEREOF, I have set my hand this 5th day of January,
1993
/s/ Kenneth P. Coleman
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
Advanced Suspension Technologies, Inc
(the "Corporation")
We the undersigned, Dr. Kenneth Coleman (President) and Lidiya
Balfe (Treasurer) of the Corporation do hereby certify:
That the board of Directors of the Corporation at a meeting duly
convened and held on the 18th day of December, 1996, adopted a
resolution to amend the original articles as follows:
Article I is hereby amended to read as follows:
"The name of the Corporation is (hereinafter
known as the corporation) is Dalton
International Resources, Inc."
Article IV is hereby amended to read as follows:
"The authorized capital shares of common
stock shall be 100,000,000 shares with a par
value of $0.001 per share. All voting rights
of the corporation shall be exercised by the
holders of the Common Stock, with each share
of the Common Stock being entitled to one
vote. Cumulative voting will not be allowed.
All shares of Common Stock shall have equal
rights in the event of dissolution or final
liquidation. The issued and outstanding
shares of 2,000,000 (two-million) are hereby
forward split 3 to 1 (three to one) making
the issued and outstanding shares 6,000,000
which is part of the total 100,000,000
authorized capital common shares."
The number of shares of the Corporation outstanding and entitled
to vote on an amendment to the Articles of Incorporation are
2,000,000, that the said change(s) and amendment ahs been
consented to and approved by a majority vote of the stockholders
holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
/s/ Kenneth P. Coleman /s/ Lidiya Balfe
Dr. Kenneth Coleman, President Lidiya Balfe, Treasurer
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
OF
Dalton International Resources, Inc
(the "Corporation")
I, David Wood, certifies that:
1. The original articles were filed with the Office of the
Secretary of State on January 7, 1993
2. As of the date of this certificate, 6,000,000 shares of
stock of the corporation have been issued.
3. Pursuant to a consent of the shareholders in lieu of a
meeting, in which 3,073,200 votes, representing 51% of the
outstanding voting shares, approved the action taken by the
directors in favor of the following amendment, the company hereby
adopts the following amendment to the Articles of Incorporation
of this Corporation:
First: Name of Corporation.
The name of the corporation is e-commerce group Inc.
(the "Corporation")
/s/ David Wood /s/ David Wong
David Wood, President David Wong, Secretary
Bylaws
Of
Advanced Suspension Technologies, Inc.
(the "Corporation")
Article I
Office
The Board of Directors shall designate and the Corporation shall
maintain a principal office. The location of the principal office
may be changed by the Board of Directors. The Corporation also
may have offices in such other places as the Board may from time
to time designate. The location of the initial principal office
of the Corporation shall be designated by resolution.
Article II
Shareholders Meetings
1. Annual Meetings
The annual meeting of the shareholder s )f the Corporation shall
be held at such place within or without the State of Nevada as
shall be set forth in compliance with these Bylaws. The meeting
shall be held on the first Thursday of January of each year. If
such day is a legal holiday, the meeting shall be on the next
business day. This meeting shall be for the election of Directors
and for the transaction of such other business as may properly
come before it.
2. Special Meetings
Special meetings of shareholders, other than those regulated by
statute, may be called by the President upon written request of
the holders of 50% or more of the outstanding shares entitled to
vote at such special meeting. Written notice of such meeting
stating the place, the date and hour of the meeting, the purpose
or purposes for which it is called, and the name of the person by
whom or at whose direction the meeting is called shall be given.
3. Notice of Shareholders Meeting
The Secretary shall give write notice stating the place, day, and
hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, which shall
be delivered not less than ten or more than fifty days before the
date of the meeting, either personally or by mail to each
shareholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder
at his address as it appears on the books of the Corporation,
with postage thereon prepaid. Attendance at the meeting shall
constitute a waiver of notice thereof.
4. Place of Meeting
The Board of Directors may designate any place, either within or
without the State of Nevada, as the place of meeting 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
without the State of Nevada, as the place for the holding of such
meeting. If no designation is made, or if a special meeting is
otherwise called, the place of meeting shall be the principal
office of the Corporation.
5. Record Date
The Board of Directors may fix a date not less than ten nor more
than fifty days prior to any meeting as the record date for the
purpose of determining shareholders entitled to notice of and to
vote at such meetings of the shareholders. The transfer books may
be closed by the Board of Directors for a stated period not to
exceed fifty days for the purpose of determining shareholders
entitled to receive payment of and dividend, or in order to make
a determination of shareholders for any other purpose.
6. Quorum
A majority of the outstanding shares of the Corporation entitled
to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If less than a majority of
the outstanding shares are represented at a meeting, a majority
of the shares so represented may adjourn the meeting from time to
time without further notice. At a meeting resumed after any such
adjournment ,it which a quorum shall be present or represented,
any business may be transacted, which might have been transacted
at the meeting as originally noticed.
7. Voting
A holder of an outstanding shares, entitled to vote at a meeting,
may vote at such meeting in person or by proxy. Except as may
otherwise be provided in the currently filed Articles of
Incorporation, every shareholder shall be entitled to one vote
for each share standing in his name on the record of
shareholders. Except as herein or in the currently filed Articles
of Incorporation otherwise provided, all corporate action shall
be determined by a majority of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote thereon.
8. Proxies
At all meeting of shareholders, a shareholder may vote in person
or by proxy executed in writing by the shareholder or by 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 six months from the date
of it's execution.
9. Informal Action by Shareholders
Any action required to be taken at a meeting of the shareholders,
may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a majority of the
shareholders entitled to vote with respect to the subject matter
thereof.
Article III
Board Of Directors
1. General Powers
The business and affairs of the Corporation shall be managed by
it's Board of Directors. The Board if Directors may adopt such
rules and regulations for the conduct of their meetings and the
management of the Corporation as they appropriate under the
circumstances. The Board shall have authority to authorize
changes in the Corporation's capital structure.
2. Number, Tenure and Qualification
The number of Directors of the Corporation shall be a number
between one and five, as the Directors may by resolution
determine from time to time. Each of the Directors shall hold
office until the next annual meeting of shareholders and until
his successor shall have been elected and qualified.
3. Regular Meetings
A regular meeting of the Board of Directors shall be held without
other notice than by this Bylaw, immediately after and, at the
same place as the annual meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place for the
holding of additional regular meetings without other notice than
this resolution.
4. Special Meetings
Special meetings of the Board of Directors may be called by order
of the Chairman of the Board or the President. The Secretary
shall give notice of the time, place and purpose or purposes of
each special meeting by mailing the same at least two days before
the meeting or by telephone, telegraphing or telecopying the same
at least one day before the meeting to each Director. Meeting of
the Board of Directors may be held by telephone conference call.
5. Quorum
A majority of the members of the Board of Directors shall
constitute a quorum for the transaction of business, but less
than a quorum may adjourn any meeting from time to time until a
quorum shall be present, whereupon the meeting may be held, as
adjourned, without further notice. At any meeting at which every
Director shall be present, even though without any formal notice,
any business may be transacted.
6. Manner of Acting
At all meetings of the Board of Directors, each Director shall
have one vote. The act of a majority of Directors present at a
meeting shall be the act of the full Board of Directors, provided
that a quorum is present.
7. Vacancies
A vacancy in the Board of Directors shall be deemed to exist in
the case of death, resignation, or removal of any Director, or if
the authorized number of Directors is increased, or if the
shareholders fall, at any meeting of the shareholders, at which
any Director is to be elected, to elect the full authorized
number of Directors to be elected at that meeting.
8. Removals
Directors may be removed, at any time, by a vote of the
shareholders holding a majority of the shares outstanding and
entitled to vote. Such vacancy shall be filled by the Directors
entitled to vote. Such vacancy shall be filled by the Directors
then in office, though less than a quorum, to hold office until
the next annual meeting or until his successor is duly elected
and qualified, except that any directorship to be filled by
election by the shareholders at the meeting at which the Director
is removed. No reduction of the authorized number of Directors
shall have the effect of removing any Director prior to the
expiration of his term of office.
9. Resignation
A director may resign at any time by delivering written
notification thereof to the President or Secretary of the
Corporation. A resignation shall become effective upon it's
acceptance by the Board of Directors; provided, however, that if
the Board of Directors has not acted thereon within ten days from
the date of it's delivery, the resignation shall be deemed
accepted.
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(s) taken
unless his dissent shall be placed in the minutes of the meeting
or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered
mail to the secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply
to a Director who voted in favor of such action.
11. Compensation
By resolution of the Board of Directors, the Directors may be
paid their expenses, if any, of attendance at each meeting of the
Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the Corporation
in any other capacity and receiving compensation therefor.
12. Emergency Power
When, due to a national disaster or death, a majority of the
Directors are incapacitated or otherwise unable to attend the
meetings and function as Directors, the remaining members of the
Board of Directors shall have all the powers necessary to
function as a complete Board, and for the purpose of doing
business and filling vacancies shall constitute a quorum, until
such time as all Directors can attend or vacancies can be filled
pursuant to these Bylaws.
13. Chairman
The Board of Directors may elect from it's own number a Chairman
of the Board, who shall preside at all meetings of the Board of
Directors, and shall perform such other duties as may be
prescribed from time to time by the Board of Directors. The
Chairman may by appointment fill any vacancies on the Board of
Directors.
Article IV
Officers
1. Number
The officers of the Corporation shall be a President, one or more
Vice Presidents, and a Secretary Treasurer, each of whom shall be
elected by a majority of the Board of Directors. Such other
Officers and assistant Officers as may be deemed necessary may be
elected or I appointed by the Board of Directors. In it's
discretion, the Board of Directors may leave unfilled for any
such period as it may determine any office except those of
President and Secretary. Any two or more offices may be held by
the same person. Officers may or may not be Directors or
shareholders of the Corporati6n.
2. Election and Term of Office
The Officers of the Corporation to be elected by the Board of
Directors shall be elected annually by the Board of Directors at
the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of Officers
shall not be held at such meeting, such election shall be held as
soon thereafter as convenient. Each Officer shall hold office
until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.
3. Resignations
Any Officer may resign at any time by delivering a written
resignation either to the President or to the Secretary. Unless
otherwise specified therein, such resignation shall take effect
upon delivery.
4. Removal
Any Officer or agent may be removed by the Board of Directors
whenever in it's judgment the best interests Corporation will be
served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Election
or appointment of an Officer or agent shall not of itself create
contract rights. Any such removal shall require a majority vote
of the Board of Directors, exclusive of the Officer in question
if he is also a Director.
5. Vacancies
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, or is a new office shall be
created, may be filled by the Board of Directors for the
unexpired portion of the term.
6. President
The president shall be the chief executive and administrative
Officer of the Corporation. He shall preside at all meetings of
the stockholders and, in the absence of the Chairman of the
Board, at meetings of the Board of Directors. He shall exercise
such duties as customarily pertain to the office of President and
shall have general and active supervision over the property,
business, and affairs of the Corporation and over it's several
Officers, agents, or employees other than those appointed by the
Board of Directors. He may sign, execute and deliver in the name
of the Corporation powers of attorney, contracts, bonds and other
obligations, and shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
Bylaws.
7. Vice President
The Vice President shall have such powers and perform such duties
as may be assigned to him by the Board of Directors or the
President. In the absence or disability of the President, the
Vice President designated by the Board or the President shall
perform the duties and exercise the powers of the President. A
Vice President may sign and execute contracts any other
obligations pertaining to the regular course of his duties.
8. Secretary
The Secretary shall keep the minutes of all meetings of the
stockholders and of the Board of Directors and, to the extent
ordered by the Board of Directors or the President, the minutes
of meeting of all committees. He shall cause notice to be given
of meetings of stockholders, of the Board of Directors, and of
any committee appointed by the Board. He shall have custody of
the corporate seal and general charge of the records, documents
and papers of the Corporation not pertaining to the performance
of the duties vested in other Officers, which shall at all
reasonable times be open to the examination of any Directors. He
may sign or execute contracts with the President or a Vice
President thereunto authorized in the name of the Corporation and
affix the seal of the Corporation thereto. He shall perform such
other duties as may be prescribed from time to time by the Board
of Directors or by the Bylaws.
9. Treasurer
The Treasurer shall have general custody of the collection and
disbursement of funds of the Corporation. He shall endorse on
behalf of the Corporation for collection check, notes and other
obligations, and shall deposit the same to the credit of the
Corporation in such bank or banks or depositories as the Board of
Directors may designate. He may sign, with the President or such
other persons as may be designated for the purpose of the Board
of Directors, all bills of exchange or promissory notes of the
Corporation. He shall enter or cause to be entered regularly in
the books of the Corporation full and accurate account of all
monies received and paid by him on account of the Corporation;
shall at all reasonable times exhibit his books and accounts to
any Director of the Corporation upon application at the office of
the Corporation during business hours; and, whenever required by
the Board of Directors or the President, shall render a statement
of his accounts. He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
Bylaws.
10. Other Officers
Other Officers shall perform such duties and shall have such
powers as may be assigned to them by the Board of Directors.
11. Salaries
Salaries or other compensation of the Officers of the Corporation
shall be fixed from time to time by the Board of Directors,
except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other
compensation of any subordinate Officers or agents. No Officer
shall be prevented from receiving any such salary or compensation
by reason of the fact the he is also a Director of the
Corporation
12. Surety Bonds
In case the Board of Directors shall so require, any Officer or
agent of the Corporation shall execute to the Corporation a bond
in such sums and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful performance
of his duties to the Corporation, including responsibility for
negligence and for the accounting for all property, monies or
securities of the Corporation, which may come into his hands.
Article V
Contracts, Loans, Checks and Deposits
1. Contracts
The Board of Directors may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the
Corporation and such authority may be general or confined to
specific instances.
2. Loans
No loan or advance shall be contracted on behalf of the
Corporation, no negotiable paper or other evidence of it's
obligation under any loan or advance shall be issued in it's
name, and no property of the Corporation shall be mortgaged,
pledged, hypothecated or transferred as security for the payment
of any loan, advance, indebtedness or liability of the
Corporation unless and except as authorized by the Board of
Directors. Any such authorization may be general or confined to
specific instances.
3. Deposits
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in
such banks, trust companies or other depositories as the Board of
Directors may select, or as may be selected by an Officer or
agent of the Corporation authorized to do so by the Board of
Directors.
4. Checks and Drafts
All notes, drafts, acceptances, checks, endorsements and evidence
of indebtedness of the Corporation shall be signed by such
Officer or Officers or such agent or agents of the Corporation
and in such manner as the Board of Directors from timer to time
may determine. Endorsements for deposits to the credit of the
Corporation in any of it's duly authorized depositories shall be
made in such manner as the Board of Directors may from time to
time determine.
5. Bonds and Debentures
Every bond or debenture issued by the Corporation shall be in the
form of an appropriate legal writing, which shall be signed by
the President or Vice President and by the Treasurer or by the
Secretary, and sealed with the seal of the Corporation. The seal
may be facsimile, engraved or printed. Where such bond or
debenture is authenticated with the manual signature of an
authorized Officer of the Corporation or other trustee designated
by the indenture of trust or other agreement under which such
security is issued, the signature of any of the Corporation's
Officers named th6reon may be facsimile. In case any Officer who
signed, or whose facsimile signature has been used on any such
bond or debenture, shall cease to be an Officer of the
Corporation for any reason before the same has been delivered by
the Corporation, such bond or debenture may nevertheless by
adopted by the Corporation and issued and delivered as though the
person who signed it or whose facsimile signature has been used
thereon had not ceased to be such Officer.
Article VI
Capital Stock
1. Certificate of Share
The shares of the Corporation shall be represented by
certificates prepared by the Board of Directors and signed by the
President. The signatures of such Officers upon a certificate may
be facsimiles if the certificate is countersigned by a transfer
agent or registered by a registrar other than the Corporation
itself or one of it's employees. All certificates for shares
shall be consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented thereby
are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be
canceled except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
2. Transfer of Shares
Transfer of shares of the Corporation shall be made only on the
stock transfer books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the
Secretary of the Corporation, and on surrender for cancellation
of the certificate for such shares. The person in whose name
shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes.
3. Transfer Agent and Registrar
The Board of Directors of the Corporation shall have the power to
appoint one or more transfer agents and registrars for the
transfer and registration of certificates of stock of any class,
and may require that stock certificates shall be countersigned
and registered by one or more of such transfer agents and
registrars.
4. Lost or Destroyed Certificates
The Corporation may issue a new certificate to replace any
certificate theretofore issued by it alleged to have been lost or
destroyed. The Board of Directors may require the owner of such a
certificate or his legal representative to give the Corporation a
bond in such sum and with such sureties as the Board of Directors
may direct to indemnify the Corporation as transfer agents and
registrars, if any, against claims that may be made on account of
the issuance of such new certificates. A new certificate may be
issued without requiring any bond.
5. Registered Shareholders
The Corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder thereof, in fact,
and shall not be bound to recognize any equitable or other claim
to or on behalf of this Corporation to any and all of the rights
and powers incident to the ownership of such stock at any such
meeting, and shall have power and authority to execute and
deliver proxies and consents on behalf of this Corporation in
connection with the exercise by this Corporation of the rights
and powers incident to the ownership of such stock. The Board of
Directors, from time to time, may confer like powers upon any
other person or persons.
Article VII
Indemnification
No Officer or Director shall be personally liable for any
obligations of the Corporation or for any duties or obligations
arising out of any acts or conduct of said Officer or Director
performed for or on behalf of the Corporation. The Corporation
shall and does hereby indemnify and hold harmless each person and
his heirs and administrators who shall serve at any time
hereafter as a Director or Officer of the Corporation from and
against any and all claims, Judgments and liabilities to which
such persons shall become sub'ect by reason of his having
heretofore or hereafter been a Director or Officer of the
Corporation, or by reason of any action alleged to have
heretofore or hereafter taken or omitted to have been taken by
him as such Director or Officer, and shall reimburse each such
person for all legal and other expenses reasonably incurred by
him in connection with any such claim or liability, including
power to defend such persons from all suits or claims as provided
for under the provisions of the Nevada Revised Statutes;
provided, however, that no such persons shall be indemnified
against, or be reimbursed for, any expense incurred in connection
with any claim or liability arising out of his own negligence or
willful misconduct. The rights accruing to any person under the
foregoing provisions of this section shall not exclude any other
right to which he may lawfully be entitled, nor shall anything
herein contained restrict the right of the Corporation to
indemnify or reimburse such person in any proper case, even
though not specifically herein provided for. The Corporation,
it's Directors, Officers, employees and agents shall be fully
protected in taking any action or making any payment, or in
refusing so to do in reliance upon the advice of counsel.
Article VIII
Notice
Whenever any notice is required to be given to any shareholder or
Director of the Corporation under the provisions of- the Articles
of Incorporation, or under the provisions of the Nevada Statutes,
a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
Attendance at any meeting shall constitute a waiver of notice of
such meetings, except where attendance is for the express purpose
of objecting to the holding of that meeting.
Article IX
Amendments
These Bylaws may be altered, amended, repealed, or new Bylaws
adopted by a majority of the entire Board of Directors at any
regular or special meeting. Any Bylaw adopted by the Board may be
repealed or changed by the action of the shareholders.
Article X
Fiscal Year
The fiscal year of the Corporation shall be fixed and may be
varied by resolution of the Board of Directors.
Article XI
Dividends
The Board of Directors may at any regular or special meeting, as
they deem advisable, declare dividends payable out of the surplus
of the Corporation.
Article XII
Corporate Seal
The seal of the Corporation shall be in the form of a circle and
shall bear the name of the Corporation and the year of
incorporation per sample affixed hereto.
Thursday, January 7, 1993 Advanced Suspension Technologies,
Inc.
By: /s/ Lidiya Balfe,
Lidiya Balfe, Secretary
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
e-commerce group Inc.
By: /s/ David Wong
David Wong, Secretary/Treasurer
Dated: November 4, 1999
