SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant To Section 12(g) of the Securities Exchange Act of 1934
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NetJ.com Corp.
(formerly NetBanx.com Corp.)
(formerly Professional Recovery Systems, Ltd.)
December 20, 1999
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Nevada 91-1007473
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
24843 Del Prado, Suite 318, Dana Point, CA 92629
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-8933
The following Securities are to be registered pursuant to Section 12(g) of the
Act:
Class-A Common Voting Equity Stock
("Common Stock")
The EXHIBIT INDEX is located at page 37 of this Registration Statement
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PART I
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This Registration statement is voluntarily filed pursuant to Section 12(g)
of the Securities Exchange Act of 1934, in order to comply with the requirements
of National Association of Securities Dealers for submission for continuation of
quotation on the Over the Counter Bulletin Board, often called "OTCBB". This
Issuer's common stock is not presently quoted on the OTCBB or elsewhere and had
never traded in brokerage transaction. The requirements of the OTCBB are that
the financial statements and information about the Issuer be reported
periodically to the Commission and be and become information that the public can
access easily. This issuer wishes to report and provide disclosure voluntarily,
and will file periodic reports in the event that its obligation to file such
reports is suspended under the Exchange Act. If and when this 1934 Act
Registration is effective and clear of comments by the staff, this issuer will
be eligible for consideration for the OTCBB upon submission of one or more NASD
members for permission to publish quotes for the purchase and sale of the shares
of the common stock of the issuer.
This Registrant may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
company, by which the private company's shareholders acquire control of the
public company. The extent to which negotiations are in progress, or potential
targets have been identified, will be discussed in the body of this Registration
Statement. At present, the business plan of this Registrant is to find such a
target or targets, and attempt to acquire them for stock. It would be expected
that a reverse acquisition of a target company or business would be associated
with some private placements and/or limited offerings of common stock of this
Registrant for cash. Such placements, or offerings, if and when made or
extended, would be made with disclosure and reliance on the businesses and
assets to be acquired, and not upon the present condition of this Registrant.
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Item 1. Description of Business.
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(a) Business Development.
(1) Form and Year of Organization. The Registrant was incorporated in the
State of Texas on August 24, 1995, and was reincorporated in the State of Nevada
on January 23, 1998, as Professional Recovery Systems, Ltd., with the intent of
initiating an agency for the collection of past due accounts, in the medical
profession particularly. On or about August 1, 1999, the Registrant abandoned
that business plan. Shortly following its incorporation, the company issued
1,200,000 founders shares, at par value, for organizational costs, to a single
Founder, J. Dan Sifford Jr. From July of 1997 through March of 1999, the company
made four successive private placements, pursuant to Regulation D, Rule 504, as
then in force: 1,016,000 shares, at $0.125, to 11 sophisticated investors on
about July 7, 1997; 6,600 shares at $0.10 to a single sophisticated investor on
or about June 9, 1998; 90,000 shares, for services valued at $9,000.00 to a
single financial and corporate services provider on or about January 22, 1999;
and 69,000 shares to another financial and corporate services provider, valued
at $6,900.00, on or about March 3, 1999.
On July 16, 1999, the Registrant changed its corporate name to NetBanx.com
Corp., and on November 2, 1999, the Registrant changed its corporate name again
to NetBanx.com Corp. No change of control or management, acquisition, or
agreement for acquisition, merger or combination accompanied either of these
corporate situs or name changes. The second name change was occasioned by the
discovery of a conflict with the name of another unrelated company. The
transition from Texas to Nevada was occasioned by management's determination
that Nevada does not impose a corporate income tax, but only an annual fixed
franchise fee.
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These Issuances and all issuances to date, with the relevant exemption from
Registration, under ss.5 of the Securities Act of 1933, are displayed in the
following table. Please See Part II, Item 4, for additional information.
================================================================================
ISSUANCES/EXEMPTIONS FROM 1933 ACT SHARES
REGISTRATION BEFORE 1 TO 5 FORWARD SPLIT
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Founders shares, at par value, for organizational
costs, to a single Founder, J. Dan Sifford Jr [ss.4(2)
of the 1933 Securities Act] 1,200,000
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11 sophisticated investors on about July 7, 1997 at
$0.125 (Rule 504) 1,016,000
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1 sophisticated investor, June 9, 1998, at $0.10 (Rule
504) 6,600
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For services valued at $9,000.00 (Rule 504) 1/22/99 90,000
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For services valued at $6,900.00 (Rule 504) 3/3/99 69,000
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TOTAL COMMON STOCK ISSUED AND OUTSTANDING 2,381,600
(Before the forward Split of July 14, 1999)
================================================================================
On or about July 14, 1999, the Registrant directed a five for one forward
split of its shares of common stock, issued and outstanding, resulting in a
post-split total of 11,908,00 shares issued and outstanding.
================================================================================
ISSUANCES/EXEMPTIONS FROM 1933 ACT SHARES
REGISTRATION AFTER 1 TO 5 FORWARD SPLIT
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Founders shares, at par value, for organizational
costs, to a single Founder, J. Dan Sifford Jr [ss.4(2)
of the 1933 Securities Act] 6,000,000
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11 sophisticated investors on about July 7, 1997 at
$0.125 (Rule 504) 5,080,000
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1 sophisticated investor, June 9, 1998, at $0.10 (Rule
504) 33,000
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For services valued at $9,000.00 (Rule 504) 1/22/99 450,000
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For services valued at $6,900.00 (Rule 504) 3/3/99 345,000
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TOTAL COMMON STOCK ISSUED AND OUTSTANDING 11,908,000
(Before the forward Split of July 14, 1999)
================================================================================
This Registrant was not a "Blank Check Company", commonly called a "Blind
Pool", as referred to in either Rule 419 or Rule 504, at any time its founders
or others were offerred, purchased or acquired the outstanding securities of
this Registrant. After abandoning its business plan, it became a company whose
business plan was to find a profitable business combination. As a practical
matter, the Registrant is required to register its common stock pursuant to
ss.12(g) of the 1934 Act, and to pursue continuation of quotation on the OTCBB
if it is to have any chance to compete in with other issuers or registrants, for
business combinations by reverse acquisition. There are no lock-up or
shareholder
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pooling agreements between or among shareholders of this Registrant. All shares
are owned and controlled independently by the persons to whom they are issued.
This Registrant has no Internet address.
(2) Bankruptcy, Receivership or Similar Proceeding.. None from inception to
date. However, Special Securities Counsel is now Custodian of the affairs of
this Registrant for non-financial reasons. Please refer to Item 2, Management's
Discussion and Analysis for further information.
(b) Business of the Registrant. This Company has no current business. Its
business plan is to seek one or more profitable business combinations or
acquisitions to secure profitability for shareholders. It has no day to day
operations at the present time. Its officers and directors devote only
insubstantial time and attention to the affairs of this issuer at the present
time, for the reason that only such attention is presently required. Management
has adopted a conservative and patient policy of seeking opportunities of
exceptional quality, in management's view, and to accept that it may have to
wait longer, as a result, before consummating any transactions to create
profitability for its shareholder. Management recognizes that the higher the
standards it imposes upon itself, the greater may be it competitive
disadvantages with other more attractive acquiring interests or entities.
Limited Scope and Number of Possible Acquisitions: The Company does not
intend to restrict its consideration to any particular business or industry
segment, and the Company may consider, among others, finance, brokerage,
insurance, transportation, communications, research and development, service,
natural resources, manufacturing or high-technology. Of course, because of the
Company's limited resources, the scope and number of suitable candidate business
ventures available will be limited accordingly, and most likely the Company will
not be able to participate in more than a single business venture. Accordingly,
it is anticipated that the Company will not be able to diversify, but may be
limited to one merger or acquisition because of limited financing. This lack of
diversification will not permit the Company to offset potential losses from one
business opportunity against profits from another. To a large extent, a decision
to participate in a specific business opportunity may be made upon management's
analysis of the quality of the other firm's management and personnel, the
anticipated acceptability of new products or marketing concepts, the merit of
technological changes and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria. In
many instances, it is anticipated that the historical operations of a specific
firm may not necessarily be indicative of the potential for the future because
of the necessity to substantially shift a marketing approach, expand operations,
change product emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the management of a business
opportunity to identify such problems and to implement, or be primarily
responsible for the implementation of, required changes. Because the Company may
participate in a business opportunity with a newly organized firm or with a firm
which is entering a new phase of growth, it should be emphasized that the
Company may incur further risk due to the failure of the target's management to
have proven its abilities or effectiveness, or the failure to establish a market
for the target's products or services, or the failure to prove or predict
profitability.
Probable Industry Segments for Acquisition. While the Company does not
intend to rule out its consideration to any particular business or industry
segment, Management has determined to focus its principal interest in evaluating
development stage companies in the electronic commerce, high- technology,
communication technologies, information services and internet industry segments.
It is nevertheless possible that an outstanding opportunity may develop in other
industry segments, such as finance, brokerage, insurance, transportation,
communications, research and development, service, natural resources,
manufacturing or other high-technology areas.
Reporting under the 1934 Act. Following the effectiveness of this 1934 Act
Registration of the common stock of this Registrant, certain periodic reporting
requirements will be applicable. First and
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foremost, a 1934 Registrant is required to file an Annual Report on Form 10-K or
10-KSB, 90 days following the end of its fiscal year. The key element of such
annual filing is Audited Financial Statement prepared in accordance with
standards established by the Commission. A 1934 Act Registrant also reports on
the share ownership of affiliates and 5% owners, initially, currently and
annually. In addition to the annual reporting, a Registrant is required to file
quarterly reports on Form 10-Q or 10-QSB, containing audited or un-audited
financial statements, and reporting other material events. Some events are
deemed material enough to require the filing of a Current Report on Form 8- K.
Any events may be reported currently, but some events, like changes or
disagreements with auditors, resignation of directors, major acquisitions and
other changes require aggressive current reporting. All reports are filed and
become public information. The practical effects of the foregoing requirements
on the criteria for selection of a target company are two-fold: first, the
target must have audited or auditable financial statements, and the target must
complete an audit for filing promptly upon the consummation of any acquisition;
and, second, that the target management must be ready, willing and able to carry
forth those reporting requirements or face de-listing from the OTCBB, if listed,
and delinquency and possible liability for failure to report.
Transactions with Management. There is no present or foreseeable potential
that this Registrant will acquire a target business or company in which its
present management or principal shareholder, or affiliates, have an ownership
interest. Consideration has been given to corporate policy in this regard, and
it has been determined not to permit any transaction in other than an arm's
length acquisition of business assets owned and controlled by unrelated third
party interests. The basis for this policy is two fold: first, that related
party transactions are unnecessary in the judgment of management and involve
risks not necessary to invite; and second that related party transactions do not
offer the potential profitability for shareholders, that management believes
exists presently in the market place for public issuers amenable to reverse
merger transactions.
Finders feed for Management. No finder's fees will be payable to Management
in connection with any forseeable reverse acquisition. Management is identified
with the principal shareholder. The Principal Shareholder's remaining share
ownership following any reverse acquisition, and the Principal Shareholder might
be expected to sell its controlling interest for consideration from the
acquiring shareholders of the acquisition target. Depending on the quality of
the target company, the principal shareholder may sell all, some or none of the
control block, as matters for arm's length deal-making, when it comes to that
stage. Additionally, the Principal Shareholder is the Principal Consultant and
provides, has provided and may provide corporate services to the Registrant,
billable hourly in an established and customary manner. No finders fees,
commissions or other bonuses to Management, Principal Shareholder, or
affiliates, for securing or in connection with any acquisition, will be paid or
payable, as a matter of both current economic conditions and corporate policy.
Management has determined that in its view of the current market for such
transactions, such fees or bonuses are not justifiable.
Loan Financing not anticipated. There are no foreseeable circumstances
under which loan financing will be sought or needed during Registrant's present
development stage.
Dependence on Management. This Company is required to rely on Management's
skill, experience and judgement, both in regard to extreme selectivity, and in
any final decision to pursue any particular business venture, as well as the
form of any business combination, should agreement be reached at some point to
acquire or combine. Please see Item 2 of this Part, MANAGEMENTS DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION, and also Item 7 of this Part, CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.
(1) Principal Products or Services and their Markets. None.
(2) Distribution Methods of the products or services. None.
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(3) Status of any publicly announced new product or service. None.
(4) Competitive business conditions and the small business issuer's
competitive position in the industry. Other better capitalized firms are engaged
in the search for acquisitions or business combinations which firms may be able
to offer more and may be more attractive to acquisition candidates. This
Registrant became a candidate for reverse acquisition transactions only this
past October. Management, in evaluating market conditions and unsolicited
proposals, has formed the estimate that the selection of a business combination
is probable within the next twelve months. There is no compelling reason why
this Registrant should be preferred over other reverse-acquisition public
corporation candidates. It has no significant pool of cash it can offer and no
capital formation incentive for its selection. It has a limited shareholder base
insufficient for acquisition target wishing to proceed for application to
NASDAQ. In comparison to other "public shell companies" this Registrant is
unimpressive, in the judgement of management, and totally lacking in unique
features which would make it more attractive or competitive that other "public
shell companies". While management believes that the competition of other
"public shell companies" is intense and growing, it has no basis on which to
quantify its impression. This Registrant is not desperate or overly eager to
find a business partner, and its management has resolved to allow such time as
may be required to find an opportunity of superior value and potential.
Notwithstanding the confidence of management in its knowledge, skill and that of
its consultants and principal shareholder, there can be no assurance that this
issuer will prove competitively attractive to the kinds of transactions it
seeks. Please See the Item 2 of this part, MANAGEMENT DISCUSSION AND ANALYSIS,
for more information and disclosure.
(5) Sources of and availability of raw Materials and the names of principal
suppliers. Not Applicable
(6) Dependence on one or a few major customers. Not Applicable
(7) Patents, Trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts. None.
(8) Need for any government approval of principal products or services and
status. Not Applicable
(9) Effect of existing or probable governmental regulations on the
business. Not Applicable. However, this issuer would expect to maintain its
corporate status with the State of its incorporation, and would file its tax
returns and reports required to be filed with the Commission. This issuer wishes
to report and provide disclosure voluntarily, and will file periodic reports in
the event that its obligation to file such reports is suspended under the
Exchange Act. If and when this 1934 Act Registration is effective and clear of
comments by the staff, this issuer will be eligible for consideration for the
OTCBB upon submission of one or more NASD members for permission to publish
quotes for the purchase and sale of the shares of the common stock of the
issuer. In connection with such submission and any continuation on the OTCBB,
this Registrant would expect to comply with NASD regulations, to the extent that
any such regulations are applicable to the conduct of the Registrant's affairs.
(10) Estimate of amount spent on research and development in each of last
two years. None.
(11) Costs and effects of compliance with environmental laws. Not
Applicable
(12) Number of total employees and full-time employees. None.
(13) Year 2000 Compliance, effect on customers and suppliers. None. The
issuer has no computers or digital equipment of its own, no suppliers or
customers. Accordingly, the issuer has determined that it is faced with no year
2000 compliance issues other than those shared by the public in general.
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(c) Risk Factors. In any business venture, there are substantial risks specific
to the particular enterprise and which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however, at
a minimum, the Company's present and proposed business operations will be highly
speculative and subject to the same types of risks inherent in any new or
unproven venture, and will include those types of risk factors outlined below.
(1) General Uncertainties. Regardless, the results of operations of any
specific entity may not necessarily be indicative of what may occur in the
future, by reason of changing market strategies, plant or product expansion,
changes in product emphasis, future management personnel and changes in
innumerable other factors. Further, in the case of a new business venture or one
that is in a research and development mode, the risks will be substantial, and
there will be no objective criteria to examine the effectiveness or the
abilities of its management or its business objectives. Also, a firm market for
its products or services may yet need to be established, and with no past track
record, the profitability of any such entity will be unproven and cannot be
predicted with any certainty. Management or its legal counsel and authorized
representatives will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management and minimal
resources to engage others, these activities may be limited. The Company is
unable to predict the time as to when and if it may actually participate in any
specific business endeavor. The Company anticipates that proposed business
ventures will be made available to it through personal contacts of directors,
executive officers and principal stockholders, professional advisors,
broker-dealers in securities, venture capital personnel, members of the
financial community and others who may present unsolicited proposals.
Nevertheless, there can be no assurance that the Company will be successful in
locating a business with which to merge or to acquire. In certain cases, the
Company may agree to pay a finder's fee or to otherwise compensate the persons
who submit a potential business endeavor in which the Company eventually
participates. Such persons may not include the Company's directors, executive
officers, beneficial owners or their affiliates. In this event, such fees may
become a factor in negotiations regarding a potential acquisition.
(2) Extremely Limited Assets; No Source of Revenue. Any corporation without
business, substantial assets or sources of revenue are at risk for uncertain
contingencies. It is management's plan to raise additional funds to begin its
intended operations, or find an operating company to merge with. The Company has
virtually no assets and has had no revenue for the past fiscal years or to the
date hereof. Nor will the Company receive any revenues until it completes an
acquisition, reorganization or merger, at the earliest. It follows that the
issuer will be dependent upon management and management consultants to provide
services, and possible advances for filing fees, legal, professional and
auditing fees, and to do so by either deferring reimbursement and compensation,
or by accepting such reimbursement and compensation in the form of common stock.
The Company can provide no assurance that any acquired venture will produce any
material revenues for the Company or its stockholders or that any such venture
will operate on a profitable basis. Except as indicated, in this paragraph, and
under the caption "Management's Discussion and Analysis or Plan of Operation,"
Part I, Item 2, herein, there are no plans, proposals, agreements or
understandings with respect to the sale or issuance of additional securities by
the Company prior to the location of an acquisition or merger candidate or over
the next twelve month period.
(3) Discretionary Use of Proceeds; "Blank Check" Company. Because the
Company is not currently engaged in any substantive business activities, as well
as management's broad discretion with respect to the acquisition of assets,
property or business, the Company may be deemed to be a "blank check" company.
The acquisition of a Target company may involve offerings of securities or debt
based upon the specific conditions, business plan and prospects of such a Target
company. There can
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be no assurance at this time that, subject to the criteria identified above,
such proceeds will not otherwise be designated for any specific purpose. The
Company can provide no assurance that any allocation of such proceeds will allow
it to achieve its business objectives to achieve profitability for existing of
future shareholders.
(4) Competition. Management believes that there are literally thousands of
"blank check" companies, many of which may have substantially greater financial
and management resources and capabilities, which are searching for similar
business opportunities. Each of these entities will present competition to the
Company in its search for a suitable transaction candidate. This highly
competitive environment may make it more difficult for the Company to locate and
enter into a reorganization transaction with a suitable company.
(5) Absence of Substantive Disclosure Relating to Prospective Acquisitions.
Because the Company has not yet identified any assets, property or business that
it may acquire, potential investors in the Company will have virtually no
substantive information upon which to base a decision of whether to invest in
the Company. Potential investors would have access to significantly more
information if the Company had already identified a potential acquisition or if
the acquisition target had made an offering of its securities directly to the
public. The Company can provide no assurance that any investment in the Company
will not ultimately prove to be less favorable than such a direct investment.
(6) Unspecified Industry and Acquired Business; Unascertainable Risks. To
date, the Company has not identified any particular industry or business in
which to concentrate its acquisition efforts. Accordingly, prospective investors
currently have no basis to evaluate the comparative risks and merits of
investing in the industry or business in which the Company may invest. To the
extent that the Company may acquire a business in a high risk industry, the
Company will become subject to those risks. Similarly, if the Company acquires a
financially unstable business or a business that is in the early stages of
development, the Company will become subject to the numerous risks to which such
businesses are subject. Although management intends to consider the risks
inherent in any industry and business in which it may become involved, there can
be no assurance that it will correctly assess such risks.
(7) Uncertainty as to Ability to Locate Suitable Business. The Company
anticipates that proposed business ventures will be made available to it through
personal contacts of directors, executive officers and principal stockholders,
professional advisors, broker-dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. Nevertheless, there can be no assurance that the Company will be
successful in locating a business with which to merge or to acquire.
(8) Uncertain Structure of Acquisition. Management has had no preliminary
contact or discussions regarding, and there are no present plans, proposals or
arrangements to acquire any specific assets, property or business, except as may
be mentioned in Part I, Item 2 of this Registration Statement. Accordingly, it
is unclear whether such an acquisition would take the form of an exchange of
capital stock, a merger or an asset acquisition. However, because the Company
has virtually no resources as of the date of this Registration Statement,
management expects that any such acquisition would take the form of an exchange
of capital stock.
(9) State Restrictions on "Blank Check" Companies. A majority of states
prohibit or substantially restrict the registration and sale of "blank check"
companies within their borders or use "merit review powers" to exclude
securities offerings from their borders in an effort to screen out offerings of
highly dubious quality. The Company intends to comply fully with all state
securities laws, and plans to take the steps necessary to ensure that any future
offering of its securities is limited to those states in which such offerings
are allowed. However, these legal restrictions may have a material adverse
impact on the Company's ability to raise capital because potential purchasers of
the
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Company's securities must be residents of states that permit the purchase of
such securities. These restrictions may also limit or prohibit stockholders from
reselling shares of the Company's common stock within the borders of regulating
states.
(10) Possible Termination of Filings under the 1934 Act. The Company has
determined to register its securities under the 1934 Act on a voluntary basis.
Several factors may cause the Company to terminate such filings. These include,
for example, inability to locate a suitable merger or acquisition candidate and
lack of sufficient funds to pay for audited financial statements and filing
support; or the termination of the requirement that companies seeking a listing
on NASDAQ or a national securities exchange make such filings. In the event that
it decides to terminate its filings under the 1934 Act, stockholders will be at
a disadvantage in obtaining current information about the Company and its
financial status. In addition, holders of "unregistered" and "restricted"
securities who wish to sell them under Rule 144 of the Commission may find it
more difficult to sell such securities because it will be more difficult to
determine whether current information about the Company is publicly available,
as required by Rule 144(c).
(11) Dependence on Management. The Company will be entirely dependent upon
its management in locating any suitable acquisition or merger candidate. The
Company has no employment agreements with management and does not maintain "key
man" life insurance for such individuals.
(12) Management to Devote Insignificant Time to Activities of the Company.
Members of the Company's management are not required to devote their full time
to the affairs of the Company. Because of their time commitments, as well as the
fact that the Company has no business operations, the members of management
anticipate that they will devote less than 10% of their working hours to the
activities of the Company, at least until such time as the Company has
identified a suitable acquisition target.
(13) Loss of Corporate Control. Due to the fact that the Company has no
assets, management anticipates that any merger or acquisition transaction will
require the Company to issue shares of its common stock as the sole
consideration for such transaction. Such an issuance would almost certainly
result in a change in control of the Company and may also result in substantial
dilution of the shares of current stockholders.
(14) Voting Control. Due to its ownership of a majority of the Company's
outstanding voting securities, Management has the ability to elect all of the
Company's directors, who in turn elect all executive officers, without regard to
the votes of other stockholders. See Part I, Item 4.
(15) No Market for Common Stock; No Market for Shares. Although the Company
intends to maintain its listing of its common stock on the OTC Bulletin Board of
the National Association of Securities Dealers, Inc. (the "NASD"), there is
currently no market for such shares; and there can be no assurance that such a
market will ever develop or be maintained. Any market price for shares of common
stock of the Company is likely to be very volatile, and numerous factors beyond
the control of the Company may have a significant effect. In addition, the stock
markets generally have experienced, and continue to experience, extreme price
and volume fluctuations which have affected the market price of many small
capital companies and which have often been unrelated to the operating
performance of these companies. These broad market fluctuations, as well as
general economic and political conditions, may adversely affect the market price
of the Company's common stock in any market that may develop. There has been no
"established public market" for the Company's common stock during the past years
and to date. At such time as the Company completes an acquisition,
reorganization or merger transaction, if at all, it may attempt to qualify for
listing on either NASDAQ or a national securities exchange. However, at least
initially, any trading in its common stock will most likely be conducted in the
over-the-counter market in the "Pink Sheets" or the OTC Bulletin Board of the
NASD.
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(16) Risks of "Penny Stocks". The Company's common stock may be deemed to
be "penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ-listed stocks must still meet requirement (i) above);
or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer
has been in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than $6,000,000 for the last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker- dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
(17) Year 2000. Because the Company is not presently engaged in any
substantial business operations, management does not believe that computer
problems associated with the change of year to the year 2000 will have any
material effect on its operations. However, the possibility exists that the
Company may merge with or acquire a business that will be negatively affected by
the "year 2000" problem. The effect of such problem or the Company in the future
can not be predicted with any accuracy until such time as the Company identifies
a merger or acquisition target.
- - --------------------------------------------------------------------------------
Item 2. Managements Discussion and Analysis or Plan of Operation.
- - --------------------------------------------------------------------------------
(a) Plan of Operation for the Next Twelve Months. This Registrant is now under
the Custodianship of it Special Counsel, for the limited purposes of maintaining
its corporate franchise in the State of Nevada, and of preserving its
entitlement for quotation on the Over the Counter Bulletin Board (OTCBB), or in
default thereof, on the Pink Sheets, both in accordance with the regulation of
the National Association of Securities Dealers. The Custodian will not engage in
any search for or evaluation of potential acquisition targets during the
indefinite period of Custodianship; nor will the Custodian engage in any capital
formation activities during such period. The reasons for the Custodianship is
discussed is provided in section (b) of this Item.
The Company has not engaged in any material operations or had any revenues
from operations since inception. The Company's plan of operation for the next 12
months was to continue to seek the acquisition of assets, property or business
that may benefit the Company and its stockholders. Under its present
Custodianship, the search for acquisition targets has been suspended and is
deferred indefinitely. The reasons for the Custodianship and deferral of search
are discussed in section (b) of this Item 7. It is forseeable that a normal
corporate management and resumption of search might
10
<PAGE>
commence in about six months. There can be no assurance of that date or any
other. If and when such a program of search for and acquisition target may be
resumed, because the Company has virtually no resources, the Custodian
anticipates that to achieve any such acquisition, the Company would be required
to issue shares of its common stock as the sole consideration for any such
venture.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to two areas: maintaining the Company in good standing with a valid
corporate franchise in the State of Nevada, and such expenses as may arise from
the effectiveness of this 1934 Act Registration of its common stock. Such
expenses would consist of legal and professional fees for preparation and filing
reports required under the Securities Exchange Act of 1934, including, at a
minimum an annual audit of the financial statements of this Registrant. These
expenses may be advanced by management or principal stockholders as loans to the
Company, and may or may not be settled, reimbursed or compensated by the
issuance of common stock. Because the Company has not identified any such
venture as of the date of this Registration Statement, it is impossible to
predict the amount of any such loans, if any, or the amounts of common stock
which may be issued, for such services or advances. However, there are no
preliminary agreements or understandings with respect to loan agreements or
issuances by officers, directors, principals or affiliates of the Company, and
any such loan or settlement will be on terms no less favorable to the Company
than would be available from a commercial lender in an arm's length transaction.
As of the date of this Registration Statement, the Company has not actively
begun to seek any such venture. It is not the intention of the Custodian to
approve any such arrangements at any time before the appointment of new
management, which new management would evaluate the merits of any such
arrangements.
(b) Results of Operations. The Registrant has had no material operations since
inception, losses of $29,777, 92,374 and $240 respectively, for the fiscal years
ended 1998, 1997 and 1996, and $5,400 for the eleven months ended November 30,
1999. The Company has accumulated a deficit calculated of $132,671 giving effect
to the five for one forward split of July 14, 1999. That forward split had the
technical effect of increasing the deficit slightly.The reason for the
difference in the resulting calculations is due to the fact that the Registrant
did not change the par value in connection with the forward split. The funding
of the payments that account for these deficits resulted substantially from the
issuance of shares of common stock of the Company for services rendered and
advances, in lieu of cash. These services primarily related to maintaining the
Company in good standing with the State of Nevada, including legal and
professional fees for its name changes and reincorporation, as well as the
expenses of its current audit, and "due diligence" activities with respect to
its history and past operations. These activities have included, for example,
confirming good standing, reviewing stock transfer records and Articles of
Incorporation, as amended, and arranging for the preparation and auditing of
financial statements. These activities were undertaken to qualify the
Registrant's common stock for quotation on the OTC Bulletin Board, and in
contemplation of the preparation of this Registration Statement.
On or about September 3, 1999, this Registrant made and announcement
indicating that Netbanx.com (its former Name) had entered into a letter of
intent for the acquisition of Western Connections Ltd. for $1.75 million and the
issuance of $400,000 of warrants at a strike price of $5 per share, as well as
the licensing of X-PAY to Automatic Communications Ltd. for an annual fee of
$175,000. While this statement was true, that letter of intent did not ripen
into an agreement, and no such transactions occurred. It was the decision of
this Management to place this Registrant in Custodianship for a period of time
to cool-off, to allow the NASD to inquire and satisfy itself concerning the
circumstances of that announcement, and generally to prevent any
misunderstandings by the public as to the actual state of affairs of this
registrant. The principal purpose of the Custodianship is prevent any person
from misunderstanding the affairs of this Registrant during its 1934 Act
Registration of its common stock, and for a reasonable time following the
effectiveness of such registration.
11
<PAGE>
(c) Liquidity. The Registrant had limited and diminishing liquidity during the
fiscal years ended 1998, 1997 and 1996, and virtually no liquidity following the
eight months ended August 31, 1999. Except as stated under the heading "Plan of
Operation," above, the Company does not contemplate raising capital over the
next twelve months by issuance of debt or equity securities. The Company has no
loan agreements with any officer or director. Foreseeably, in the absence of
cash to maintain this company current in required filings, legal, professional
expenses, the practice of providing compensation by issuing stock is probable,
with the significant exception of the Company's independent auditor, who may not
properly be compensated in such a manner. Accordingly, in the absence of
corporate liquidity, the principal shareholder is expected to advance those fees
which are not appropriate for settlement, compensation or reimbursement in
stock. While the Custodian will allow the Principal Shareholder to advance
amounts to defer minimal expenses as indicated, the no decision whether or not
to settle such advances in stock will be made during the period of the
Custodianship.
- - --------------------------------------------------------------------------------
Item 3. Description of Property.
- - --------------------------------------------------------------------------------
The Registrant has no property and enjoys the non-exclusive use of offices
and telephone of its officers, consultants and attorneys. The Company has no
assets, property or business; its principal executive office address and
telephone number are the home address and telephone number of its Principal
Shareholder and are provided at no cost. Because the Company has no current
business operations, its activities have been limited to keeping itself in good
standing in the State of Nevada, and with preparing this Registration Statement
and the accompanying financial statements. These activities have consumed an
insignificant amount of time or other burden, such that, the costs of such
non-exclusive uses have been minimal and without significant negative impact on
the financial condition of the Registrant. These uses have had the positive
impact of relieving the Registrant from the burden of maintaining non-productive
assets.
- - --------------------------------------------------------------------------------
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- - --------------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners. To the best of Registrant's
knowledge and belief the following disclosure presents the total security
ownership of all persons, entities and groups, known to or discoverable by
Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. More than one person, entity or group
could be beneficially interested in the same securities, so that the total of
all percentages may accordingly exceed one hundred percent of some or any
classes. Please refer to explanatory notes if any, for clarification or
additional information.
(b) Security Ownership of Management. To the best of Registrant's knowledge and
belief the following disclosure presents the total beneficial security ownership
of all Directors and Nominees, naming them, and by all Officers and Directors as
a group, without naming them, of Registrant, known to or discoverable by
Registrant. More than one person, entity or group could be beneficially
interested in the same securities, so that the total of all percentages may
accordingly exceed one hundred percent of some or any classes. Please refer to
explanatory notes if any, for clarification or additional information.
THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK
12
<PAGE>
TABLE A/B
COMMON STOCK
OFFICERS AND DIRECTORS AND OWNERS OF 5% OR MORE
<TABLE>
<CAPTION>
=====================================================================================================================
Name and Address of Beneficial Owner Actual Attributed
Ownership % Ownership %
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William Stocker Special Counsel/Custodian (1) -0- 0.00 7,035,000 59.08
=====================================================================================================================
All Officers and Directors as a Group 0 0.00 7,035,000 59.08
=====================================================================================================================
J. Dan Sifford, Jr., Former Officer (1)
3131 Southwest Freeway 5,000,000 41.99 7,035,000 59.08
Suite 46
Houston, Texas 77098
- - ---------------------------------------------------------------------------------------------------------------------
Laurencio Jaen O., Former Officer (1) -0- 0.00 7,035,000 59.08
P. O. Box 8807
Panama City 5
Republic of Panama
- - ---------------------------------------------------------------------------------------------------------------------
Intrepid International, S.A. (1) 345,000 2.90 7,035,000 59.08
P. O. Box 8807
Panama City 5
Republic of Panama
- - ---------------------------------------------------------------------------------------------------------------------
HJS Financial Services, Inc. (1) 1,450,000 12.18 7,035,000 59.08
24843 Del Prado #318
Dana Point CA 92629
===================================================================================
Total Other 5% Owners 7,035,000 59.08
===================================================================================
TOTAL ALL AFFILIATES 7,035,000 59.08
===================================================================================
Total Shares Issued and Outstanding 11,908,000 100.00
===================================================================================
</TABLE>
(1) In the foregoing table, the share ownership of each of the listed
shareholders are attributed to and each other and to all of them. The reason for
this attribution is that there is sufficient commonality between and among them,
and one or more officers of the other entities, such that all are deemed to be
affiliates of the issuer. Mr. Stocker, is Custodian of this Registrant, and
Counsel to Intrepid and HJS. The former officers are officers of Intrepid.
Please see Item 7, Relationships and Transactions, for more disclosure about
Intrepid and its owners, officers and persons.
(c) Changes in Control. There are no arrangements known to Registrant, including
any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Registrant. The Registrant
is searching for a profitable business opportunity. The acquisition of such an
opportunity could and likely would result in some change in control of the
Registrant at such time. Any such changes would be reported promptly in the form
of a Current Report on Form 8-K, filed with the Securities and Exchange
Commission and made public information.
13
<PAGE>
- - --------------------------------------------------------------------------------
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- - --------------------------------------------------------------------------------
The following persons are the Directors of Registrant, having taken office
from the inception of the issuer, to serve until their successors might be
elected or appointed. The time of the next meeting of shareholders has not been
determined and is not likely to take place before a targeted acquisition or
combination is identified. This Registrant is now under the Custodianship of it
Special Counsel, for the limited purposes of maintaining its corporate franchise
in the State of Nevada, and of preserving its entitlement for quotation on the
Over the Counter Bulletin Board (OTCBB), or in default thereof, on the Pink
Sheets, both in accordance with the regulation of the National Association of
Securities Dealers. The Custodian will not engage in any search for or
evaluation of potential acquisition targets during the indefinite period of
Custodianship; nor will the Custodian engage in any capital formation activities
during such period.
At the present time William Stocker, attorney at law, is Custodian of the
affairs of this Registrant. As such he is a fiduciary charged with the powers of
Sole Officer and Director. Mr. Stocker is General United States Counsel to
Intrepid International, S.A., the principal shareholder of this corporation. Mr.
Stocker is charged with maintenance of the corporate franchise, and of the
Registrant's eligibility for quotation on the Over the Counter Bulletin Board or
OTCBB, or in default thereof, on the Pink Sheets, both in accordance with
regulations of the National Association of Securities Dealers. The Custodian
will not engage in evaluating possible acquisition targets or in capital
formation activities. It is anticipated that the Custodian will appoint
successors at some future time to engage in the fuller range of management
functions.
Mr. Stocker was appointed Custodian on October 14, 1999, by the two former
Officer/Directors J. Dan Sifford and Laurencio Jaen O., who retired from office
without comment following the appointment. They were and remain affiliates of
the Principal shareholder and their biographical information is found here and
in Item 7, Relationships and Transactions. The reasons for the Custodianship and
retirement is discussed in Item 2, of this Part, in section (b) of that Item.
Previous Officers and Directors, having taken office on June 23, 1997 and
retired on October 14, 1999, were as follows:
J. Dan Sifford, Jr., age 61, grew up in Coral Gables, Florida, where he
attended Coral Gables High School and the University of Miami. After leaving the
University of Miami, Mr. Sifford formed a wholesale consumer goods distribution
company which operated throughout the southeastern United States and all of
Latin America. In 1965, as an extension of the operations of the original
company, he founded Indiasa Corporation (Indiasa), a Panamanian company which
was involved in supply and financing arrangements with many of the Latin
American Governments, in particular, their air forces and their national
airlines. As customer requirements dictated, separate subsidiaries were
established to handle specific activities, among them: Indiasa Securities
Corporation, to structure the financing necessary to facilitate the
transactions; Indiasa Aviation Corporation, to serve as an all cargo airline
operating large cargo aircraft throughout Latin America; and Overseas Aviation
Corporation, to buy, sell, lease and broker aircraft, and to provide services to
Indiasa Aviation Corporation and to other airlines. Indiasa, which is the parent
company of all the Panamanian companies formed by Mr. Sifford, operates, through
its partially owned subsidiary, Robmar International, S. A., plants in Argentina
and Brazil which produce high temperature, high pressure lubricants and
sealants. For twelve years ending in 1982, it operated, through its partially
owned subsidiaries Indiasa Aviation Corporation and Overseas Aviation
Corporation, an all cargo airline based at Miami International Airport and
serving points throughout Central and South America and Africa. In addition to
his general aviation experience, Mr. Sifford, an Airline Transport rated pilot,
has twenty two years experience in the airline business, and was recently the
President of Airline of the Virgin Islands, Ltd. a commuter passenger airline
operating in the Caribbean. For the past two years, Mr. Sifford has been
14
<PAGE>
the United States Managing Director for Intrepid International, S.A. (Panama),
an international financial and corporate service provider. He is fluent in the
Spanish Language.
Laurencio Jaen O., age 70, resides in Panama City, Republic of Panama. He
is, and has been for the past twenty five years, Vice President of Indiasa
Corporation ("Indiasa"), a Panamanian corporation, which, through one of its
subsidiaries, Robmar International, is involved in the manufacture and
distribution of chemical products in Argentina and Brazil and which, through its
former subsidiary Indiasa Aviation Corporation, was, for eight years ending in
1981, engaged in aviation consulting, the leasing, purchase and sale of
aircraft, and the operation of a cargo airline, primarily in Latin America. Mr.
Jaen was a founder of PAISA, Panama's international airline, served as president
of the Colon Free Zone (the world's largest free trade zone), and as Director of
Panama's Social Security Administration. He has also served as the President of
the Panamanian Chamber of Commerce, and as a member of the Board of Presidential
Advisors of the Republic of Panama.
- - --------------------------------------------------------------------------------
Item 6. Executive Compensation.
- - --------------------------------------------------------------------------------
Since the inception of this Registrant, it has paid no cash compensation to
its officers or directors. Officers and directors of the Registrant may be
reimbursed for out-of-pocket expenses and may be compensated for the time they
devote to the Registrant at some time in the future, pursuant to some
arrangement to be determined on the basis of the nature and extent of the
services which may be required and will be, if adopted, no less favorable to the
Registrant than the charges for similar services made or offered by independent
third parties similarly qualified. No officer or director is required to make
any specific amount or percentage of his or her business time available to the
Registrant. No options, plans or arrangements for deferred compensation, or
future compensation have been adopted and none are contemplated at this time.
The former Officers and Directors of this Registrant are Officers or
Directors of the Principal Shareholder, Intrepid International S.A. ("Intrepid
Panama") and/or its United States Subsidiary, Intrepid International Ltd.
("Intrepid US"). They are or may be indirectly compensated or benefited by that
certain Financial Services Agreement, Exhibit 6.1., by which Intrepid bills the
Registrant, on a time/fee basis, with varying hourly rates for various personnel
levels. This billings when and if paid will address general operating expenses
of Intrepid and are not directly payable or translatable to direct compensation
of the Former Officers or any specific person.
The Custodian and Special Counsel accrues compensation at $250.00 per hour,
pursuant to that certain Special Counsel Agreement, attached as Exhibit 6.2.
These billings are accrued and accruing, are unpaid, and payment has been
deferred generally.
- - --------------------------------------------------------------------------------
Item 7. Certain Relationships and Related Transactions.
- - --------------------------------------------------------------------------------
There are certain relationships and transactions among and between the
Registrant and its present and former officers, and certain affiliated
shareholders which are deemed material and which are the subject of the
following disclosure. Specific disclosure is directed to two of the affiliate
shareholders, Intrepid International, S. A., and HJS Financial Services, Inc.
The Custodian of this Registrant is Counsel to both of these shareholder
entities.
HJS Financial Services, Inc. ("HJS") was incorporated in Nevada in April of
1991. It is wholly-owned and managed by its President Kirt W. James. The
Custodian of this Registrant, William Stocker, is Counsel to HJS. HJS is
substantially inactive. Its activities consist in winding up its affairs and
managing its remaining assets, and providing occasional management services of a
limited nature.
15
<PAGE>
This disclosure is deemed material for the reason that Mr. James is also an
affiliate of Intrepid International, S.A. His biographical information is found
below in this Item.
Intrepid International, S. A. ("Intrepid Panama") was incorporated in the
Republic of Panama in 1984 to offer financial services to natural resource
companies, primarily those engaged in the production of oil and gas. Following
the world wide collapse of oil prices in the mid-eighties, the Intrepid Panama
broadened the focus of its universe of support services to include a wider range
of companies, with an emphasis on public companies and private companies,
companies engaged in the transition from privately held to publicly held, and
development stage companies, whether public or private, requiring professional
business and corporate guidance. In August of 1997 the Intrepid Panama sought a
United States Representative and entered into a relationship with a group of
corporate and business specialists who, after contracting with the Intrepid
Panama, incorporated as Intrepid International, Ltd. ("Intrepid US") to provide
the required representation and agency for the Panama company in North America
and Europe. Intrepid US is incorporated in the State of Nevada. Intrepid is not
an investment banker, nor a broker or dealer in securities. Intrepid is a
provider of technical support services to client companies, generally, and an
occasional investor for its own account.
This disclosure is deemed material for the reasons that the former Officers
of this Registrant are affiliates of Intrepid Panama, that the Custodian of this
Registrant is also Counsel to Intrepid Panama and Intrepid US, and for the
further reason that the Intrepid entities are related to the Registrant by those
certain consulting and service agreements, attached hereto as Exhibits 6.1 and
6.2, respectively. As reflected in the consulting and service agreements
referred, services are provided on a time-fee basis, with particular rates for
appropriate levels of personnel. All parties to these agreements and related
transactions believe that there were and are on terms that are no more
detrimental to the Registrant, nor more favorable to the other parties, than
those that would have been agreed upon by third parties on an arm's length
basis.
Laurencio Jaen O., an original incorporator who has served as President and
Director of Intrepid Panama since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world's largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Panama company, has,
for thirty years, been a specialist in maritime and aviation law. Mr. Franco is
a partner in Franco and Franco, one of the most prestigious law firms in Panama
with offices around the world. In addition to his law practice he has served as
Panamanian Consul to Liverpool, England and for the past five years as
Ambassador to Great Britain. The firm of Franco and Franco is regarded with the
highest degree of integrity and professionalism in the business and political
community in Panama with its partners and several of its associates holding or
having held public office. Teodoro Franco's brother and partner, Dr. Juaquin F.
Franco, Jr., has held many public offices over the past four decades, most
recently as the Governor of Colon Province, the state containing the Atlantic
entrance to the Panama Canal and the Colon Free Zone. His nephew and associate
in the firm, Juaquin F. Franco, III, has served as the Minister of Commerce and
is currently a member of the House of Representatives and a candidate for
President of the Republic. The firm practices maritime, aviation and commercial
law and currently is the legal firm for: IBERIA (the Spanish national airline),
KLM (the Dutch national airline), VIASA (the Venezuelan national airline),
Aeroflot (the Russian national airline) and various smaller Latin
16
<PAGE>
American national airlines as well as being the registered agents for thousands
of ocean going ships around the world flying the Panamanian flag. Mr. Franco
brings to the Intrepid Panama a wealth of international legal, commercial and
diplomatic experience.
Leopoldo Kennion G., Treasurer and a Director of the Panama company, is,
and has for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biography has been provided in Item 5 above. The officers and directors of
Intrepid International, Ltd. (Nevada) ("Intrepid US") are two individuals; KIRT
W. JAMES, and J. DAN SIFFORD, JR. Mr. Sifford's biography is found in Item 5 of
this part and also follows: He is, Secretary-Treasurer of Intrepid US, grew up
in Coral Gables, Florida, where he attended Coral Gables High School and the
University of Miami. After leaving the University of Miami, Mr. Sifford formed a
wholesale consumer goods distribution company which operated throughout the
southeastern United States and all of Latin America. In 1965, as an extension of
the operations of the original company, he founded Indiasa Corporation
(Indiasa), a Panamanian company which was involved in supply and financing
arrangements with many of the Latin American Governments, in particular, their
air forces and their national airlines. As customer requirements dictated,
separate subsidiaries were established to handle specific activities, among
them: Indiasa Securities Corporation, to structure the financing necessary to
facilitate the transactions; Indiasa Aviation Corporation, to serve as an all
cargo airline operating large cargo aircraft throughout Latin America; and
Overseas Aviation Corporation, to buy, sell, lease and broker aircraft, and to
provide services to Indiasa Aviation Corporation and to other airlines. Indiasa,
which is the parent company of all the Panamanian companies formed by Mr.
Sifford, operates, through its partially owned subsidiary, Robmar International,
S. A., plants in Argentina and Brazil which produce high temperature, high
pressure lubricants and sealants. For twelve years ending in 1982, it operated,
through its partially owned subsidiaries Indiasa Aviation Corporation and
Overseas Aviation Corporation, an all cargo airline based at Miami International
Airport and serving points throughout Central and South America and Africa. In
addition to his general aviation experience, Mr. Sifford, an Airline Transport
rated pilot, has twenty two years experience in the airline business, and is
currently the President of Airline of the Virgin Islands, Ltd. a commuter
passenger airline operating in the Caribbean.
Kirt W. James, age 40, the President of Intrepid US, has a lifelong
background in marketing and sales. From 1972 to 1987, Mr. James was responsible
for sales and business administrative matters for Glade N. James Sales Co., Inc.
and from 1987 to 1990 Mr. James built retail markets for American International
Medical Supply Co., a publicly traded company. In 1990 he formed and became
President of HJS Financial Services, Inc., and was responsible for the day to
day business operations of the firm as well as consultation with Clients
concerning their business and Product Development. During the past five years
Mr. James has been involved in the valuation, sale and acquisition of numerous
private businesses and planning for the entry of private corporations into the
public market place.
17
<PAGE>
- - --------------------------------------------------------------------------------
PART II
- - --------------------------------------------------------------------------------
Item 1.
Market Price of and Dividends on Registrant's Common Equity
and Shareholder Matters Equity and Shareholder Matters.
- - --------------------------------------------------------------------------------
(a) Market Information. The Common Stock of this Registrant is quoted Over the
Counter on the Bulletin Board ("OTCBB"). There was no substantial market
activity before December 1998. Based upon standard reporting sources, the
following information is provided:
=============================================================================
PERIOD HIGH BID LOW BID PERIOD HIGH BID LOW BID
- - -----------------------------------------------------------------------------
3rd 1998 N/A N/A 2nd 1999 5.375 2.00
- - -----------------------------------------------------------------------------
4th 1998 3.25 3.00 3rd 199 3.88 0.84
- - -----------------------------------------------------------------------------
1st 1999 4.25 2.00
=============================================================================
The foregoing price information is based upon inter-dealer prices without
retail mark-up, mark- down or commissions and may not reflect actual
transactions. The source of this information is commercial internet reporting
services.
(b) Holders. There are about 50 holders of the common stock of this Registrant.
(c) Dividends. No cash dividends have been paid by the Registrant on its common
stock or other Stock and no such payment is anticipated in the foreseeable
future.
- - --------------------------------------------------------------------------------
Item 2. Legal Proceedings.
- - --------------------------------------------------------------------------------
There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Registrant.
- - --------------------------------------------------------------------------------
Item 3. Changes in and Disagreements with Accountants.
- - --------------------------------------------------------------------------------
There have been no disagreements of any sort or kind with Auditors or
Accountants respecting any matter or item reflected in the financial statements
of this Registrant.
- - --------------------------------------------------------------------------------
Item 4. Recent Sales of Unregistered Securities.
- - --------------------------------------------------------------------------------
Provided in this Item is disclosure of Recent Sales of Unregistered
Securities: (a) The date, title and amount of securities sold; (b) There were no
underwriters, under writings or commissions. The small business issuer not
having publicly offer any securities, the persons or class of persons to whom
the small business issuer sold the securities; (c) For securities sold for cash,
the total offering price; for securities sold other than for cash, the
transaction and the type and amount of consideration received by the small
business issuer; (d) The Section of the Securities Act or the rule of the
Commission under which the small business issuer claimed exemption from
registration and the facts relied upon to make the exemption available; (e) No
securities sold are convertible or exchangeable into equity securities, or are
warrants or options representing equity securities.
The following presentation of placement of securities occurred before the 1
to 5 forward split of July 14, 1999.
18
<PAGE>
==============================================================================
Date Title Exemption Price Amount Cash
- - ------------------------------------------------------------------------------
8/24/1995 Common Stock ss.4(2) $1,200.00 1,200,000 No.
- - ------------------------------------------------------------------------------
Founders shares, issued at par value, for organizational costs, to a single
Founder, J. Dan Sifford Jr.
================================================================================
================================================================================
Date Title Exemption Price Amount Cash
- - --------------------------------------------------------------------------------
7/7/97 Common Stock Rule 504 $0.125 1,016,000 $127,000
- - --------------------------------------------------------------------------------
The Offering was opened on June 24, 1997 and closed July 7, 1997, to a limited
number of persons with pre-existing relationships with management. 11
sophisticated investors, with preexisting relationships with management, were
the purchasers. These sophisticated investors had, and these relationships
afforded, the kind and sort of information about the Registrant which
registration would have provided. The offering was extended to such 11 persons,
and all 11 offerees subscribed.
================================================================================
================================================================================
Date Title Exemption Price Amount Cash
- - --------------------------------------------------------------------------------
6/9/98 Common Stock Rule 504 $0.05 6,000 $330.00
- - --------------------------------------------------------------------------------
Sold informally on an unsolicited basis to a single sophisticated investor, with
preexisting relationships to Management, and who was provided, informally, with
the kind and sort of information about the Registrant which registration would
have provided. That single investor was Vegas Publications, Inc. No publication,
public announcement or shareholder solicitation by or for this Registrant was
involved in this investment, and no additional shares were solicited to placed
or were placed by this Registrant in connection with this investment by Vegas
Publications.
================================================================================
================================================================================
Date Title Exemption Price Amount Cash
- - --------------------------------------------------------------------------------
6/9/98 Common Stock Rule 504 $0.10 90,000 No.
- - --------------------------------------------------------------------------------
For Legal, Accounting and Professional services and advances to or for the
Registrant, provided by a single financial and corporate service provider. This
provider was HJS Financial Services, Inc., a sub-contractor of Intrepid
International S.A./ Intrepid International Ltd. Please see Exhibit 6.1.
================================================================================
================================================================================
Date Title Exemption Price Amount Cash
- - --------------------------------------------------------------------------------
3/3/99 Common Stock Rule 504 $0.10 69,000 No.
- - --------------------------------------------------------------------------------
For Legal, Accounting and Professional services and advances to or for the
Registrant, provided by a single financial and corporate service provider. This
provider was Intrepid International S.A./ Intrepid International Ltd. Please see
Exhibit 6.1.
================================================================================
On or about July 14, 1999, the Registrant directed a five for one
forward split of it common stock. There have been no issuances since that
direction, and all numbers reported above were pre-split numbers. The following
table co-ordinates the forgoing by translation into post-split numbers.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
19
<PAGE>
=====================================================================
ISSUANCES/EXEMPTIONS FROM 1933 ACT SHARES
REGISTRATION AFTER 1 TO 5 FORWARD SPLIT
- - ---------------------------------------------------------------------
Founders shares, at par value, for organizational
costs, to a single Founder, J. Dan Sifford Jr [ss.4(2)
of the 1933 Securities Act] 6,000,000
- - ---------------------------------------------------------------------
11 sophisticated investors on about July 7, 1997 at
$0.125 (Rule 504) 5,080,000
- - ---------------------------------------------------------------------
1 sophisticated investor, June 9, 1998, at $0.10 (Rule
504) 33,000
- - ---------------------------------------------------------------------
For services valued at $9,000.00 (Rule 504) 1/22/99 450,000
- - ---------------------------------------------------------------------
For services valued at $6,900.00 (Rule 504) 3/3/99 345,000
- - ---------------------------------------------------------------------
TOTAL COMMON STOCK ISSUED AND OUTSTANDING 11,908,000
(Before the forward Split of July 14, 1999)
=====================================================================
- - ---------------------------------------------------------------------
Item 5. Indemnification of Officers and Directors.
- - ---------------------------------------------------------------------
There is no provision in the Articles of Incorporation, now the By-Laws of
the Corporation, nor any Resolution of the Board of Directors, providing for
indemnification of Officers or Directors. The Registrant is aware of no
provision of Nevada Corporate Law which creates or imposes any provision for
indemnity of Officers or Directors.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
20
<PAGE>
- - --------------------------------------------------------------------------------
PART F/S
- - --------------------------------------------------------------------------------
(a) Selected Financial Information. The following selected information is
presented for an overview. Please see sub-item (c) below for coordination of the
audited and un-audited financial statements. On July 14, 1999, the issuer
directed a five for one forward split of its common stock. For convenient
comparison all figures in the following table are indicated in pre-split share
amounts.
================================================================================
8/31/99 12/31/98 12/31/97 12/31/96
================================================================================
Total Assets $ 1,229 $ 5,729 $ 34,866 $ 880
- - --------------------------------------------------------------------------------
Revenues 0 0 0 0
- - --------------------------------------------------------------------------------
Operating Expenses 5,160 29,777 92,374 240
- - --------------------------------------------------------------------------------
Net Earnings or (Loss (5,160) (29,777) (92,374) (240)
- - --------------------------------------------------------------------------------
Per Share Earnings
or (Loss) (0.00217) (0.01) (0.06) (0.00)
- - --------------------------------------------------------------------------------
Average Common
Shares Outstanding 2,381,600 2,216,000 1,581,000 1,200.000
================================================================================
If Post-Forward Split numbers were used in the foregoing table, the 8/31/99
figures would have differed as follows:
================================================================================
8/31/99 12/31/98 12/31/97
================================================================================
- - --------------------------------------------------------------------------------
Per Share Earnings
or (Loss) (0.00043) (0.00262) (0.0596)
- - --------------------------------------------------------------------------------
Average Common
Shares Outstanding 11,908,000 11,080,000 7,905,000
================================================================================
(b) Financial Statements.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
- - ------------------------------------------------------------------------------------------------------------
<S> <C>
F-1 AUDITED FINANCIAL STATEMENTS for the years ended December 31, 1998, 1997, 1996 20
- - ------------------------------------------------------------------------------------------------------------
F-2 UN-AUDITED FINANCIAL STATEMENTS for the eight months ended August 31, 1999 30
============================================================================================================
</TABLE>
(c) Co-ordination of Financial Statements.
There is an apparent inconsistency between the audited financial statements
for the years ended December 31, 1999, and the un-audited financial statements
for the months ended August 31, 1999. The reason for the apparent difference is
the five to one forward split of July 14, 1999. The audited financial statements
speak as of the close of the fiscal year before the forward split. The
un-audited financial statements speak as of the month ended August 31, 1999,
following the forward split.
21
<PAGE>
- - --------------------------------------------------------------------------------
F-1
AUDITED FINANCIAL STATEMENTS
FOR THE
YEARS ENDED December 31, 1998, 1997, 1996
- - --------------------------------------------------------------------------------
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Financial Statements
December 31, 1998, 1997 and 1996
<PAGE>
C O N T E N T S
Independent Auditors' Report .............................................. 3
Balance Sheets ............................................................ 4
Statements of Operations .................................................. 5
Statements of Stockholders' Equity ........................................ 6
Statements of Cash Flows .................................................. 7
Notes to the Financial Statements ......................................... 8
2
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Professional Recovery Systems, Ltd.
We have audited the accompanying balance sheets of Professional Recovery
Systems, Ltd. (a Development Stage Company) as of December 31, 1998, 1997 and
1996 and the related statements of operations, stockholders' equity and cash
flows for the years ended December 31, 1998, 1997 and 1996 and from inception on
August 24, 1995 through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Professional Recovery Systems,
Ltd. (a Development Stage Company) as of December 31, 1998, 1997 and 1996 and
the results of its operations and cash flows for the years ended December 31,
1998, 1997 and 1996 and from inception on August 24, 1995 through December 31,
1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has minimal assets and no operations and is
dependent upon financing to continue operations. These factors raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in the Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Salt Lake City, Utah /s/ Crouch, Bierwolf & Chisholm
April 7, 1999
3
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Balance Sheets
Assets
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Current assets
Cash $ 5,329 $ 34,866 $ --
--------- --------- ---------
Total Current Assets 5,329 34,866 --
--------- --------- ---------
Other assets
Organization costs (Net of amortization) 400 640 880
--------- --------- ---------
Total Other Assets 400 640 880
--------- --------- ---------
Total Assets $ 5,729 $ 35,506 $ 880
========= ========= =========
Liabilities and Stockholders' Equity
Current Liabilities -- -- --
--------- --------- ---------
Stockholders' Equity
Common Stock, authorized
50,000,000 shares of $.001 par value,
issued and outstanding 2,216,000,2,216,000
and 1,200,000 shares respectively 2,216 2,216 1,200
Additional Paid in Capital 125,984 125,984 --
Deficit Accumulated During the
Development Stage (122,471) (92,694) (320)
--------- --------- ---------
Total Stockholders' Equity 5,729 35,506 880
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 5,729 $ 35,506 $ 880
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Deficit
Accumulated
For the years ended December 31, during the
----------------------------------------- development
1998 1997 1996 Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues: $ -- $ -- $ -- $ --
Expenses:
General & Administrative (29,777) (92,374) (240) (122,471)
----------- ----------- ----------- -----------
Total Expenses (29,777) (92,374) (240) (122,471)
----------- ----------- ----------- -----------
Net (Loss) $ (29,777) $ (92,374) $ (240) $ (122,471)
=========== =========== =========== ===========
Net Loss Per Share $ (0.01) $ (0.06) $ (0.00) $ (0.08)
=========== =========== =========== ===========
Weighted average shares outstanding 2,216,000 1,581,000 1,200,000 1,619,519
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Additional Deficit
Paid-in Accumulated
Capital During the
Common Stock (Discount on Development
Shares Amount Stock) Stage
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance at beginning of development
stage - August 24, 1995 -- $ -- $ -- $ --
Shares issued for organizational costs 1,200,000 1,200 -- --
Net loss December 31, 1995 -- -- -- (80)
--------- --------- --------- ---------
Balance, December 31, 1995 1,200,000 1,200 -- (80)
Net loss December 31, 1996 -- -- -- (240)
--------- --------- --------- ---------
Balance, December 31, 1996 1,200,000 1,200 -- (320)
July 15, 1997 - issued at $0.125 per share 1,016,000 1,016 125,984 --
Net loss December 31, 1997 -- -- -- (92,374)
--------- --------- --------- ---------
Balance, December 31, 1997 2,216,000 2,216 125,984 (92,694)
Net loss December 31, 1998 -- -- -- (29,777)
--------- --------- --------- ---------
Balance, December 31, 1998 2,216,000 $ 2,216 $ 125,984 $(122,471)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Statement of Cash Flows
<TABLE>
<CAPTION>
August 24,
1995 (inception
of the
development
For the years ended December 31, stage) to
--------------------------------------- December 31,
1998 1997 1996 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash Flows form Operating
Activities
Net loss $ (29,777) $ (92,374) $ (240) $(122,471)
Adjustments to reconcile
net loss to net cash
provided by operations
Amortization 240 240 240 800
--------- --------- --------- ---------
Net Cash Flows used in
Operating Activities (29,537) (92,134) -- (121,671)
--------- --------- --------- ---------
Cash Flows from Investment
Activities: -- -- -- --
--------- --------- --------- ---------
Cash Flows from Financing
Activities:
Issuance of stock -- 127,000 -- 127,000
--------- --------- --------- ---------
Net increase (decrease) in cash (29,537) 34,866 -- 5,329
Cash, beginning of year 34,866 -- -- --
--------- --------- --------- ---------
Cash, end of year $ 5,329 $ 34,866 $ -- $ 5,329
========= ========= ========= =========
Supplemental Cash Flow Information
Cash Paid for:
Interest $ -- $ -- $ -- $ --
Taxes $ -- $ -- $ -- $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1998, 1997 and 1996
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Professional Recovery Systems, Ltd., ("the Company") was originally
incorporated in Texas on August 24, 1995. On January 23, 1998, the Company
reincorporated in Nevada. The Company intends to specialize in the
collection of delinquent medical accounts receivable for hospitals and
clinics.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards totaling approximately $122,471 that will be offset
against future taxable income. Since the Company is in the development
stage, no provision for income taxes has been made.
Deferred tax assets and the valuation account is as follows at
December 31, 1998, 1997 and 1996.
December 31,
1998 1997 1996
-------- -------- --------
Deferred tax asset:
NOL carrryforward $ 41,640 $ 31,407 $ 82
Valuation allowance (41,640) (31,407) (82)
-------- -------- --------
Total $ -- $ -- $ --
======== ======== ========
f. Organization Costs
In 1995, Organization costs were paid by shareholders and
exchanged for 1,200,000 shares of common stock having a par value of
$1,200. These costs are being amortized over a period of 60 months and
will be recovered only if the Company is able to generate a positive
cash flow from operations.
8
<PAGE>
Professional Recovery Systems, Ltd.
(a Development Stage Company)
Notes to the Financial Statements
December 31, 1998, 1997 and 1996
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company is
dependent upon raising capital to continue operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty. It is management's plan to raise
additional funds to begin its intended operations, or find an
operating company to merge with.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in
Financial Accounting Standards Board Statement No. 7. It is
concentrating substantially all of its efforts in raising capital and
developing its business operations in order to generate significant
revenues.
NOTE 4 - Related Party Transactions
During 1998 and 1997, $10,000 and $22,000, respectively, was paid
in consulting fees to shareholders and officers of the Company.
9
<PAGE>
- - --------------------------------------------------------------------------------
F-2
Un-Audited Financial Statements
for the
Eleven Months ended November 30, 1999
- - --------------------------------------------------------------------------------
<PAGE>
NETJ.COM CORP.
BALANCE SHEETS (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended November 30, 1999
<TABLE>
<CAPTION>
December 31,
November 30, ------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 329 $ 5,329 $ 34,923
Accounts receivable 660
--------- --------- ---------
Total Current Assets 989 5,329 34,866
OTHER ASSETS
Organization Costs (Note 2) 400 640
--------- ---------
Total Other Assets 400 640
TOTAL ASSETS $ 989 $ 5,729 $ 35,506
========= ========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 50,000,000
shares; issued and outstanding, 11,080,000 shares,
11,080,000 shares and 11,908,000 shares respectively 11,908 11,080 11,080
Additional paid-in Capital 121,752 121,920 121,920
Accumulated Surplus (Deficit) (132,671) (127,271) (97,494)
--------- --------- ---------
Total Stockholders' Equity 989 5,729 35,506
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 989 $ 5,729 $ 35,506
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-2
<PAGE>
NETJ.COM CORP.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended November 30, 1999
<TABLE>
<CAPTION>
December 31,
November 30, --------------------------
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
Revenues $ -0- $ -0- $ -0-
Expenses
Amortization 240 240
Organizational costs 400
Professional Fees 5,000 28,435 79,801
Travel 12,333
Miscellaneous expenses 1,102
----------- ----------- ----------
Total Expenses 5,400 29,777 92,374
=========== =========== ==========
Net Income (Loss) $ (5,400) $ (29,777) $ (92,374)
Weighted average number of shares outstanding 11,908,000 11,080,000 7,905,000
Earnings (Loss) per Share $ (0.00045) $ (0.00269) $ (0.0569)
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-3
<PAGE>
NETJ.COM CORP.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
for the period from inception of the Development Stage on August 24, 1995,
for the fiscal years ended December 31, 1995 through 1998
and the period ended November 30, 1999
<TABLE>
<CAPTION>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Inception (August 24, 1995) -0- $ -0- $ -0- $ -0- $ -0-
Inception through December
31, 1995: Stock issued for
cash and services 6,000,000 6,000 -0- (4,800) 1,200
Net gain (loss) for year 1995 (80)
----------- ----------- ----------- ----------- -----------
Balances December 31, 1995 6,000,000 6,000 -0- (4,880) 1,120
Net gain (loss) for year 1996 (240)
----------- ----------- ----------- ----------- -----------
Balances December 31, 1996 6,000,000 6,000 -0- (5,120) 880
Common Stock issued for cash
at $0.125 per share 5,080,000 5,080 121,920
Net gain (loss) for period
ended December 31, 1997 (92,374)
----------- ----------- ----------- ----------- -----------
Balances December 31, 1997 11,080,000 11,080 121,920 (97,494) 35,506
Net gain (loss) for period
ended December 31, 1998 (29,777)
----------- ----------- ----------- ----------- -----------
Balances June 30, 1998 11,080,000 11,080 121,920 (127,271) 5,729
Common Stock issued for cash
at $0.10 per share 33,000 33 627
Common Stock issued for services 795,000 795 (795)
Net gain (loss) for period
ended November 30, 1999 (5,400)
----------- ----------- ----------- ----------- -----------
Balances November 30, 1999 11,908,000 11,908 121,752 (132,671) 989
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-4
<PAGE>
NETJ.COM CORP.
STATEMENTS OF CASH FLOW (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended November 30, 1999
<TABLE>
<CAPTION>
December 31,
November 30, ------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Operating Activities
Net Income (Loss) $ (5,400) $ (29,777) $ (92,374)
Less items not effecting cash flow:
organization costs 400
amortization 240 240
--------- --------- ---------
Total working capital (used) (5,000) (29,537) (92,134)
Financing Activities
Proceeds from Sale
of Common Stock 660 127,000
(Increase) in accounts recrivable (660)
Increase (Decrease) in
working capital $ (5,000) $ (29,537) $ 34,866
========= ========= =========
Cash at Beginning of Period 5,329 34,866 -0-
Cash at End of Period $ 329 $ 5,329 $ 34,866
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-5
<PAGE>
NETJ.COM CORP
NOTES TO FINANCIAL STATEMENTS
for the years ended December 31, 1997 and 1998
and the period ended November 30, 1999
1 -- FORMATION AND OPERATIONS OF THE COMPANY
NetJ.com Corp. (the "Company") was incorporated on August 24, 1995 as
Professional Recovery Systems, Inc. in the State of Texas and and
subsequently reincorporated in Nevada on January 23, 1998 with the intent
of initiating an agency for the collection of past due accounts in the
medical field. The Company is authorized to issue 50,000,000 Common Shares
each with a par value of $0.001. In 1997 the Board of Directors and
Shareholders of the Company authorized the issuance of a minimum of
5,000,000, and a maximum of 5,500,000 of its Common Shares in a Regulation
D, 504 offering. As of the date of these statements, 5,908,000 shares have
been issued pursuant to that offering and additional 504 offerings.
On July 16, 1999, the Company changed its corporate name to NetBanx.com
Corp., and on November 2, 1999 the Company changed its corporate name again
to NetJ.com Corp., No change of control or management, acquisition, merger
or combination accompanied either of these corporate situs or name changes.
The transition from Texas to Nevada was occasioned by management's
determination that Nevada does not impose a corporate income tax, but only
an annual fixed franchise fee. The second name change was occasioned by the
discovery of a conflict with the name of another unrelated company.
2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
Accounting records of the Company and financial statements are
maintained and prepared on an accrual basis.
(b) FISCAL YEAR
The Company's proposed fiscal year for accounting and tax purposes is
December 31.
(c) ORGANIZATION COSTS
The Company incurred $1,200 of organization costs in 1995. These
costs, which were paid by shareholders of the Company and which were
exchanged for 6,000,000 shares of common stock which was valued by
management at $1,200. On January 1, 1999, due to changes in accounting
principals, remaining organization costs were expensed.
(d) CASH EQUIVALENTS
For Financial Accounting Standards purposes, the Statement of Cash
Flows, Cash Equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less. Whenever cash amounts are to be
included on the Company's Statements of Cash Flow, however, they will
be comprised exclusively of cash.
page F-6
<PAGE>
NetJ.com Corp.
Notes to Financial Statements
for the years ended December 31, 1997 and 1998
and the period ended November 30, 1999
continued
3 -- PROPERTY AND EXECUTIVE COMPENSATION
(a) PROPERTY:
The Company's offices and all of its records are located at 3131
Southwest Freeway, Suite 46, Houston, Texas 77098.
(b) EXECUTIVE COMPENSATION:
Since inception, the Company has paid no cash compensation to its
officers or directors. Officers of the Company will be reimbursed for
out-of-pocket expenses and may be compensated for the time they devote
to the Company. In addition, Officers may receive compensation for
services performed on behalf of the Company. The terms of any such
compensation will be determined on the basis of the nature and extent
of the services which may be required and will be no less favorable to
the Company than the charges for similar services made by independent
third parties who are similarly qualified. No officer or director is
required to make any specific amount or percentage of his business
time available to the Company.
4 -- STOCKHOLDERS' EQUITY.
The Company is authorized to issue 50,000,000 shares of common stock having
a par value of $0.001. In August 1995, 6,000,000 shares of Common Stock,
were issued in exchange for organizational costs which were valued by
management at a total of $1,200. During 1997, 5,080,000 shares were issued
in exchange for $127,000 in cash. During 1999, 33,000 shares were issued in
exchange for $660 in cash. During 1999, 795,000 shares were issued in
exchange for services rendered which were valued by management at $15,900.
On July 14, 1999, the Company authorized a 5 for 1 forward split of its
common shares. For purposes of clarity, all share amounts and par values
have been stated as if the new capitalization had been in effect since
inception.
page F-7
<PAGE>
- - --------------------------------------------------------------------------------
PART III
- - --------------------------------------------------------------------------------
Item 1. Index to Exhibits.
- - --------------------------------------------------------------------------------
Exhibit Index
================================================================================
<TABLE>
<CAPTION>
EXHIBIT TABLE CATEGORY / DESCRIPTION OF EXHIBIT PAGE
TABLE NUMBER
#-
- - ----------------------------------------------------------------------------------------------------------
[2] ARTICLES/CERTIFICATES OF INCORPORATION, AND BY-LAWS
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 ARTICLES OF INCORPORATION: (Texas) 39
- - ----------------------------------------------------------------------------------------------------------
2.2 ARTICLES OF INCORPORATION: (Nevada) 42
- - ----------------------------------------------------------------------------------------------------------
2.3 ARTICLES OF MERGER: Change of Situs from Texas to Nevada 45
- - ----------------------------------------------------------------------------------------------------------
2.4 ARTICLES OF AMENDMENT: (Nevada Name Change) 53
- - ----------------------------------------------------------------------------------------------------------
2.5 BY-LAWS 56
==========================================================================================================
</TABLE>
37
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to signed on its behalf by the undersigned, thereunto
authorized.
NetJ.com Corp
(formerly NetBanx.com Corp.)
(formerly Professional Recovery Systems, Inc.)
by
J. Dan Sifford Jr. Laurencio Jaen O.
- - --------------------------- --------------------------
J. Dan Sifford Jr. Laurencio Jaen O.
PRESIDENT/DIRECTOR SECRETARY/DIRECTOR
38
- - --------------------------------------------------------------------------------
Exhibit 2.1
Articles of Incorporation: Texas
- - --------------------------------------------------------------------------------
<PAGE>
Articles of Incorporation
of
Professional Recovery Systems, Inc.
The undersigned natural person of the age of eighteen (18) years or
more acting as incorporator of a corporation under the Texas Business
Corporation Act, hereby adopts the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is Professional Recovery Systems, Inc.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLES THREE
The purpose for which the corporation is organized is the transaction of
any and all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR
The corporation shall have authority to issue Twenty Million (20,000,000)
common shares. The par value of each share shall be One Mil ($.001) (One Tenth
of a Cent).
ARTICLE FIVE
The corporation will not commence business until it has received for the
issuance of shares consideration of the value of One Thousand Dollars
($1,000.00) consisting of money, labor due or property actually received.
ARTICLE SIX
The street address of its initial registered office is 3131 Southwest
Freeway, Suite 46, Houston, Texas 77098, and the name of its initial registered
agent at such address is Sheryl Ann Dodson.
ARTICLE SEVEN
The number of directors constituting the initial board of directors is
One (1), and the name and address of the person who is to serve as director
until the first annual meeting of the shareholders or until his successor is
elected and qualified is:
Sheryl Ann Dodson
3131 S.W. Freeway, #46
Houston, Texas 77098
ARTICLE EIGHT
The name and address of the incorporator is:
Sheryl Ann Dodson
3131 S.W. Freeway, #46
Houston, Texas 77098
<PAGE>
ARTICLE NINE
A director of the corporation is not liable to the corporation or its
shareholders or members for monetary damages for an act or omission in the
director's capacity as director, unless the act or omission involves a breach of
a director's duty of loyalty to the corporation or its shareholders or members;
or the act or omission is not in good faith or involves intentional misconduct
or a knowing violation of the law; or the director engages in a transaction from
which he receives an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office; or the act or
omission is one in which the liability of the director is expressly provided for
by statute; or the director engages in an act related to an unlawful stock
repurchase or payment of dividend.
ARTICLE TEN
The shareholders of the corporation shall not have a preemptive right to
acquire additional unissued or treasury shares of the corporation, or securities
of the corporation convertible into or carrying a right to subscribe to or
acquire shares.
ARTICLE ELEVEN
The shareholders of the corporation by this Article are hereby
prohibited from cumulatively voting their shares at any election for Directors.
Signed this 23rd day of August, 1995.
/s/ Sheryl Dodson
-----------------
Sheryl Ann Dodson
Incorporator
- - --------------------------------------------------------------------------------
Exhibit 2.2
Articles of Incorporation: Nevada
- - --------------------------------------------------------------------------------
<PAGE>
ARTICLES OF INCORPORATION
OF
Professional Recovery Systems, Ltd.
Article I. The name of the Corporation is Professional Recovery Systems,
Ltd.
Article II. Its principal office in the State of Nevada is 774-180 Mays
Blvd, Incline Village NV 89451. The initial resident agent for services of
process at that address is N&R Ltd. Group, Inc..
Article III. The purposes for which the corporation is organized are to
engage in any activity or business not in conflict with the laws of the State of
Nevada or of the United States of America. The period of existence of the
corporation shall be perpetual.
Article IV. The corporation shall have authority to issue an aggregate of
50,000,000 shares of common voting equity stock of par value one mil ($0.001)
per share, and no other class or classes of stock, for a total capitalization of
$50,000. The corporation's capital stock may be sold from time to time for such
consideration as may be fixed by the Board of Directors, provided that no
consideration so fixed shall be less than par value.
Article V. No shareholder shall be entitled to any preemptive or
preferential rights to subscribe to any unissued stock or any other securities
which the corporation may now or hereafter be authorized to issue, nor shall any
shareholder possess cumulative voting rights at any shareholders meeting, for
the purpose of electing Directors, or otherwise.
Article VI. The name and address of the Incorporator of the corporation is
William Stocker attorney at law, 28202 Cabot Road, Suite 300, Laguna Niguel CA
92677. The affairs of the corporation shall be governed by a Board of Directors
of not less than one (1) nor more than (7) persons. The Incorporator shall act
as Sole Initial Director.
Article VII. The Capital Stock, after the amount of the subscription price
or par value, shall not be subject to assessment to pay the debts of the
corporation, and no stock issued, as paid up, shall ever be assessable or
assessed.
Article VIII. The initial By-laws of the corporation shall be adopted
by its Board of Directors. The power to alter, amend or repeal the By-laws, or
adopt new By-laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided in the By-laws.
<PAGE>
ARTICLES OF INCORPORATION OF
Professional Recovery Systems, Ltd.
I the undersigned, being the Incorporator hereinbefore named for the
purpose of forming a corporation pursuant the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have set my hand hereunto this Day,
Dated: January 20, 1998
/s/ William Stocker
----------------------------
WILLIAM STOCKER
ATTORNEY AT LAW
INCORPORATOR
- - --------------------------------------------------------------------------------
Exhibit 2.3
Articles of Merger: Change of Situs from Texas to Nevada
- - --------------------------------------------------------------------------------
<PAGE>
ARTICLES OF MERGER and SHARE EXCHANGE
BY WHICH
Professional Recovery Systems, Inc.
(a Texas corporation)
SHALL MERGE INTO AND EXCHANGE SHARES WITH
Professional Recovery Systems, Ltd.
(a Nevada corporation)
First, the Plan of Reorganization and Merger:
(1) That certain Plan of Reorganization and Merger, dated January 23, 1998, is
attached hereto and incorporated herein by this reference as though fully set
forth herein.
Second, information re Shareholder Action:
(2) Shareholder Action is not required, for the reason that the former
shareholders and the resulting shareholders are the same without dilution
or change, and that the exchange of shares is in effect merely an exchange
of situs. (Nevada: NRS 78.454)(Texas: TxBusCop Act Art 5.03).
Third, Corporate Authority:
(3) The Plan of Reorganization and Merger and the performance of the terms of
the Plan of Reorganization and Merger, by each and all of the parties and
entities mentioned in the Plan of Reorganization and Merger were duly authorized
by all action required by the laws under which each was incorporated or
organized and by its constituent documents, to which representation each of the
undersigned duly certifies and attests.
Fourth, Effective Date:
(4) The exchange shall become effective at the earliest date provided or allowed
by law, and not later than certification by each applicable State Official that
this document has been accepted for filing and filed.
Fifth Signing:
(5) These Articles of Exchange are signed by the duly authorized Officers of
each applicable entity as follows:
the remainder of this page is intentionally left blank
signatures appear on the following page or pages
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
Now, therefore these Articles of Merger and Share Exchange are executed by
the sole remaining Officer of both companies.
Professional Recovery Professional Recovery
Systems, Inc. Systems, Ltd.
(a Texas corporation) (a Nevada corporation)
by by
J. Dan Sifford J. Dan Sifford
- - --------------------- -------------------
J. Dan Sifford J. Dan Sifford
president/Secretary president/Secretary
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
Plan of Reorganization and Merger
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
PLAN OF REORGANIZATION AND MERGER
BY WHICH
Professional Recovery Systems, Inc.
(a texas corporation)
SHALL MERGE INTO AND BECOME
Professional Recovery Systems, Ltd.
(a nevada corporation)
This Plan of Reorganization is made effective and dated this day of January
23, 1998, by and between the above referenced corporations, sometimes referred
to herein as "the Public Company" and "the Private Company", respectively.
I. The Interested Parties
A. The Parties this Agreement
1. Professional Recovery Systems, Inc. ("the Public Company") is a Texas
Corporation.
2. Professional Recovery Systems, Ltd. ("the Private Company") is a Nevada
Corporation.
II. Recitals
A. The Capital of the Parties:
1. The Capital of the Public Company consists of 50,000,000 shares of common
voting stock of $.001 par value authorized, of which 2,216,000 shares are issued
and outstanding.
2. The Capital of the Private Company consisted of 50,000,000 shares of common
voting stock of $.001 par value authorized, of which no shares have been or are
issued or outstanding.
B. The Background for the Reorganization: The Public Company desires to
locate its Corporate Situs in Nevada, for the reason that its principal offices
and principal place of business is located in the western United States.
C. The Boards of Directors of both Corporations respectively have
determined that it is advisable and in the best interests of each of them and
both of
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
them that they merge with and into the Nevada Corporation, in order to change
the domicile of the resulting Company to Nevada in accordance with IRC ss.
368(a)(1)(F), to change the name of the resulting and surviving Nevada Company,
and to retain the operational history and continuity of the Public Texas
Company, its Tax ID Number, its SEC Number and other identification numbers and
filing statuses as may be permissible by law, subject to such reporting and
qualifying provisions as the law may require.
D. The Shareholders of The Public Company and the Incorporator and Initial
Directors of the Nevada Company, no stock having been issued, respectively, have
duly approved this merger and this Plan of Reorganization, each in the manner
provided by the laws of its own State or Territory, and its Constituent
Documents.
III. Plan of Reorganization
A. Reorganization and Merger: The Public Company (Texas) and the Private
Company (Nevada) are hereby reorganized and the Public Texas company is hereby
merged with and into the Private Nevada company
1. The Public Company: The former Professional Recovery Systems, Inc., of Texas
will become and thereafter be Professional Recovery Systems, Ltd., of Nevada.
The Public Company will retain its corporate personality and status, and will
continue its corporate existence uninterrupted, in and through, and only in and
through the Nevada Corporation.
2. The Private Company: The new private Company, formed or being formed in
Nevada, shall become and thereafter be the successor public Nevada corporation.
B. Effective Date: This Plan of Reorganization shall become effective
immediately approval and adoption by Corporate parties hereto, in the manner
provided by the law of its place of incorporation and its constituent corporate
documents, the time of such effectiveness being called the effective date
hereof.
C. Surviving Corporation: The Nevada Company, shall survive the merger
herein contemplated and shall continue to be governed by the laws of Nevada, and
the separate corporate existence of the Texas Company shall cease forthwith upon
the effective date hereof.
Rights of Dissenting Shareholders: the Nevada corporation is the entity
responsible for the rights of dissenting shareholders whether pursuant to
the laws of Texas, of Nevada or otherwise.
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
a. Service of Process in Texas: the Resulting Company may be served with
process in Texas in any proceeding for the enforcement of the rights of a
dissenting shareholder, if any, pursuant to any extent required by the laws
thereof. The President of the Nevada corporation hereby irrevocably
appoints the Secretary of State of Texas as agent to accept service of
process for the Nevada Company with respect to any such proceeding to the
extent required by the laws thereof.
b. Agent for Mailing Process to the Nevada Company: the Nevada Company
hereby further complies with the laws of Texas by designating a person to
whom process served upon the Secretary of that State may be forwarded and
mailed: Karl Rodriguez, Corporate Counsel, 34700 Pacific Coast Highway,
Suite 303, Capistrano Beach CA 92624.
D. Surviving Articles of Incorporation: the Articles of Incorporation of
the Nevada Company as filed and/or last amended shall be the Articles of
Incorporation of the surviving Nevada Company following the effective date
hereof unless and until such Articles be amended in accordance with the laws of
Nevada.
E. Surviving By-Laws: the By-Laws of the Nevada Company shall remain the
By-Laws of the Surviving Nevada Company until and unless they be amended in
accordance with the laws of Nevada.
F. Conversion of Outstanding Stock: Forthwith upon the effective date
hereof, each and every issued and outstanding share of Professional Recovery
Systems, Inc. common voting stock shall be converted into one share of the
Professional Recovery Systems, Ltd. The holders of certificates representing
shares of the Public Company may surrender them to the transfer agent for common
stock of the Resulting Company.
G. Further Assurance, Good Faith and Fair Dealing: the Directors of each
Company shall and will execute and deliver any and all necessary documents,
acknowledgments and assurances and to do all things proper to confirm or
acknowledge any and all rights, titles and interests created or confirmed
herein; and both companies covenant hereby to deal fairly and good faith with
each other and each others shareholders.
<PAGE>
ARTICLES OF EXCHANGE
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
This Reorganization Agreement is executed on behalf of each Company by its
duly authorized representatives, and attested to, pursuant to the laws of its
respective place of incorporation and in accordance with its constituent
documents.
Professional Recovery Systems, Inc. Professional Recovery Systems, Ltd.
by
/S/ J. Dan Sifford, Jr. /S/ J. Dan Sifford, Jr.
J. Dan Sifford, Jr., President J. Dan Sifford, Jr.,
President
- - --------------------------------------------------------------------------------
Exhibit 2.4
Articles of Amendment: (Nevada Name Change)
- - --------------------------------------------------------------------------------
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION
OF
Professional Recovery Systems, Ltd.
(after payment of capital and issuance of stock)
We the Undersigned, Officers of Professional Recovery Systems, Ltd. ("the
Corporation") hereby certify:
1. The Board of Directors of the Corporation at a meeting of duly convened
and held on July 14, 1999 adopted a resolution to amend the Articles of
Incorporation as Originally filed as follows:
================================================================================
The former Article I read: The name of the Corporation is Professional
Recovery Systems, Ltd.
- - --------------------------------------------------------------------------------
Article I is superseded and replaced as follows: The name of the Corporation is
NetBanx.com Corp.
================================================================================
================================================================================
The former Article IV read: The corporation shall have authority to issue an
aggregate of 50,000,000 shares of common voting equity stock of par value one
mil ($0.001) per share, and no other class or classes of stock, for a total
capitalization of $50,000. The corporation's capital stock may be sold from time
to time for such consideration as may be fixed by the Board of Directors,
provided that no consideration so fixed shall be less than par value.
- - --------------------------------------------------------------------------------
Article IV is superseded and replaced as follows: The corporation shall have
authority to issue an aggregate of 100,000,000 shares of common voting equity
stock of par value one mil ($0.001) per share, and no other class or classes of
stock, for a total capitalization of $100,000. The corporation's capital stock
may be sold from time to time for such consideration as may be fixed by the
Board of Directors, provided that no consideration so fixed shall be less than
par value.
================================================================================
The Remainder of this Page is Intentionally left Blank
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION OF
Professional Recovery Systems, Ltd.
July 14, 1999
2. The Action of the Board of Directors, as recited above was authorized
and empowered, pursuant to the Laws of Nevada: the number of shares of the
Corporation outstanding and entitled to vote on an amendment to the Articles of
Incorporation on July 14, 1999 was 2,381,600; and the foregoing changes and
amendment have 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, specifically 1,138,000 affirmative votes, representing
more than 55% of the total issued, outstanding and entitled to vote.
This amendment is signed and dated and notarized, as follows:
/s/ J. Dan Sifford /s/ William Stocker
- - --------------------- ----------------------
J. Dan Sifford William Stocker
PRESIDENT ASSISTANT SECRETARY
- - --------------------------------------------------------------------------------
Exhibit 2.5
By-Laws
- - --------------------------------------------------------------------------------
<PAGE>
By-Laws
OF
Professional Recovery Systems, Inc.
a nevada corporation
Article I
Corporate Offices
The principal office of the corporation in the State of Nevada shall be
located at 774 Mays Blvd. Suite 10, Incline Village NV 89451. The corporation
may have such other offices, either within or without the State of incorporation
as the board of directors may designate or as the business of the corporation
may from time to time require.
Article II
Shareholders' Meetings
Section 1. Place of Meetings
The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the State unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.
Section 2. Annual Meetings
The time and date for the annual meeting of the shareholders shall be set
by the Board of Directors of the Corporation, at which time the shareholders
shall elect a Board of Directors and transact any other proper business. Unless
the Board of Directors shall determine otherwise, the annual meeting of the
shareholders shall be held on the second Monday of March in each year, if not a
holiday, at Ten o'clock A.M., at which time the shareholders shall elect a Board
of Directors and transact any other proper business. If this date falls on a
holiday, then the meeting shall be held on the following business day at the
same hour.
Section 3. Special Meetings
Special meetings of the shareholders may be called by the President, the
Board of Directors, by the holders of at least ten percent of all the shares
entitled to vote at the proposed special meeting, or such other person or
persons as may be authorized in the Articles of Incorporation.
Section 4. Notices of Meetings
Written or printed notice stating the place, day and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
the direction of the president, or secretary, or the officer or persons calling
the meeting. If mailed, such notice shall be deemed to be delivered
<PAGE>
when deposited in the United States mail, addressed to the stockholder at his
address as it appears on the stock transfer books of the corporation, with
postage thereon prepaid. Closing of Transfer Books or Fixing Record Date.
(a) For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case twenty (20) days. If the stock transfer books be
closed for the purpose of determining stockholders entitled to notice or to vote
at a meeting of stockholders, such books shall be closed for at least twenty
(20) days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the directors may
prescribe a day not more than sixty (60) days before the holding of any such
meeting as the day as of which stockholders entitled to notice of the and to
vote at such meeting must be determined. Only stockholders of record on that day
are entitled to notice or to vote at such meeting
(c) The directors may adopt a resolution prescribing a date upon which the
stockholders of record are entitled to give written consent to actions in lieu
of meeting. The date prescribed by the directors may not precede nor be more
than ten (10) days after the date the resolution is adopted by directors.
Section 5. Voting List.
The officer or agent having charge of the stock transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of stockholders, a complete list of stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, shall be kept on file at the principal office
of the corporation and shall be subject to inspection by any stockholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any stockholder during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to who are the stockholders
entitled to examine such list or transfer books or to vote at the meeting of
stockholders.
Section 6. Quorum.
At any meeting of stockholders, a majority of fifty percent plus one vote,
of the outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders. If
less than said number of the outstanding shares are represented at a meeting, a
majority of the outstanding shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting originally notified. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
<PAGE>
Section 7. Proxies.
At all meetings of the stockholders, a stockholder may vote by proxy
executed in writing by the stockholder 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. Such proxies may be deposited by electronic
transmission.
Section 8. Voting.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such shareholder. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of Nevada.
Section 9. Order of Business.
The order of business at all meetings of the stockholders, shall be as
follows:
a. Roll Call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting.
d. Reports of Officers.
e. Reports of Committees.
f. Election of Directors.
g. Unfinished Business.
h. New Business.
Section 10. Informal Action by Stockholders.
Unless otherwise provided by law, any action required to be taken, or any
other action which may be taken, at a meeting of the stockholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof. Unless otherwise provided by law, any action required to
be taken, or any other action which may be taken, at a meeting of the
stockholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a Majority of all of the
stockholders entitled to vote with respect to the subject matter thereof at any
regular meeting called on notice, and if written notice to all shareholders is
promptly given of all action so taken.
Section 11. Books and Records.
The Books, Accounts, and Records of the corporation, except as may be
otherwise required by the laws of the State of Nevada, may be kept outside of
the State of Nevada, at such place or places as the Board of Directors may from
time to time appoint. The Board of Directors shall determine whether and to what
extent the accounts and the books of the corporation, or any of them, other than
the stock ledgers, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any account or book or document of
this Corporation, except as conferred by law or by resolution of the
stockholders or directors. In the event such right of inspection is granted to
the Stockholder(s) all fees associated with such inspection shall be the sole
expense of the Stockholder(s) demanding the inspection. No book, account, or
record of the Corporation may be inspected without the legal counsel and the
accountants of the Corporation being present. The fees charged by legal
<PAGE>
counsel and accountants to attend such inspections shall be paid for by the
Stockholder demanding the inspection.
Article III
Board of Directors
Section 1. General Powers.
The business and affairs of the corporation shall be managed by its board
of directors. The directors shall in all cases act as a board, and they may
adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
Section 2. Number, Tenure, and Qualifications.
The number of directors of the corporation shall be a minimum of one (l)
and a maximum of nine (7), or such other number as may be provided in the
Articles of Incorporation, or amendment thereof. Each director shall hold office
until the next annual meeting of stockholders and until his successor shall have
been elected and qualified.
Section 3. Regular Meetings.
A regular meeting of the directors, shall be held without other notice than
this by-law immediately after, and at the same place as, the annual meeting of
stockholders. The directors may provide, by resolution, the time and place for
holding of additional regular meetings without other notice than such
resolution.
Section 4. Special Meetings.
Special meetings of the directors may be called by or at the request of the
president or any two directors. The person or persons authorized to call special
meetings of the directors may fix the place for holding any special meeting of
the directors called by them.
Section 5. Notice.
Notice of any special meeting shall be given at least one day previously
thereto by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum.
At any meeting of the directors fifty (50) percent shall constitute a
quorum for the transaction of business, but if less than said number is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
Section 7. Manner of Acting.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
<PAGE>
Section 8. Newly Created Directorships and Vacancies.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of the majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
Section 9. Removal of Directors.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
Section 10. Resignation.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
Section 11. Compensation.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance at
each regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 12. Executive and Other Committees.
The board, by resolution, may designate from among its members an executive
committee and other committees, each consisting of one (l) or more directors.
Each such committee shall serve at the pleasure of the board.
Article IV
Officers
Section 1. Number.
The officers of the corporation shall be the president, a secretary and a
treasurer, each of whom shall be elected by the directors. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the directors.
Section 2. Election and Term of Office.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. 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. In the event that no election of officers be held by the directors at
that time, the existing officers shall be deemed to have been confirmed in
office by the directors.
<PAGE>
Section 3. Removal.
Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgement the best interest of the
corporation would be served thereby, but such removal shall be without prejudice
to contract rights, if any, of the person so removed.
Section 4. Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
Section 5. President.
The president shall be the principal executive officer of the corporation
and, subject to the control of the directors, shall in general supervise and
control all of the business and affairs of the corporation. He shall, when
present, preside at all meetings of the stockholders and of the directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the directors have authorized to be executed, except in cases where the
directors or by these by-laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the directors from time to time.
Section 6. Chairman of the Board.
In the absence of the president or in the event of his death, inability or
refusal to act, the chairman of the board of directors shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The chairman of the board of
directors shall perform such other duties as from time to time may be assigned
to him by the directors.
Section 7. Secretary.
The secretary shall keep the minutes of the stockholders' and of the
directors' meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
the duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the president or by the directors.
Section 8. Treasurer.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by- laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
<PAGE>
Section 9. Salaries.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of fact that he is also a director of the corporation.
Article V
Contracts, Loans, Checks and Deposits
Section 1. Contracts.
The 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.
Section 2. Loans.
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.
Section 3. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the directors.
Section 4. Deposits.
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the directors may select.
Article VI
Fiscal Year
The fiscal year of the corporation shall begin on the 1st day of January in
each year, or on such other day as the Board of Directors shall fix.
Article VII
Dividends
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
<PAGE>
Article VIII
Seal
The directors may provide a corporate seal which shall have inscribed
thereon the name of the corporation, the state of incorporation, year of
incorporation and the words, "Corporate Seal".
Article IX
Waiver of Notice
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these by-laws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
Article X
Amendments
These by-laws may be altered, amended or repealed and new by-laws may be
adopted in the same manner as their adoption, by the Board of Directors if so
adopted; by a vote of the stockholders representing a majority of all the shares
issued and outstanding, if so adopted or adopted by the Board of Directors; or,
in any case, at any annual stockholders' meeting or at any special stockholders'
meeting when the proposed amendment has been set out in the notice of such
meeting.
CERTIFICATION
The Secretary of the Corporation hereby certifies that the foregoing is a
true and correct copy of the By-Laws of the Corporation named in the title
thereto and that such By-Laws were duly adopted by the Board of Directors of
said Corporation on the date set forth below.
Executed, and Corporate Seal affixed, this day of July 15, 1999.
/s/ J.Dan Sifford
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J.Dan Sifford
President
