SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
- --------------------------------------------------------------------------------
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant To Section 12 (g) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------------------
NetBanx.com Corp
(formerly Professional Recovery Systems, Ltd.)
- --------------------------------------------------------------------------------
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")
1
<PAGE>
- --------------------------------------------------------------------------------
PART I
- --------------------------------------------------------------------------------
Item 1. Description of Business.
- --------------------------------------------------------------------------------
(a) Form and Year of Organization. The Issuer 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 Issuer 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 or about October 20, 1998, the Issuer changed its place of Incorporation
from Texas to Nevada, and, on July, 1999, the Issuer changed its corporate name
to NetBanx.com Corp. No change of control or management, acquisition, or
agreement for acquisition, merger or combination accompanied either of these
corporate changes.
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
11 sophisticated investors on about July 7, 1997 at
$0.125 (Rule 504) 1,016,000
- --------------------------------------------------------------------------------
1 sophisticated investor, June 9, 1998, at $0.10 (Rule
504) 6,600
- --------------------------------------------------------------------------------
For services valued at $9,000.00 (Rule 504) 1/22/99 90,000
- --------------------------------------------------------------------------------
For services valued at $6,900.00 (Rule 504) 3/3/99 69,000
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK ISSUED AND OUTSTANDING 2,381,600
(Before the forward Split of July 14, 1999)
================================================================================
On or about July 14, 1999, the Issuer directed a five for one forward split
of its shares of common stock, issued and outstanding, resulting in a post-split
total of 7,035,000 shares issued and outstanding.
(b) Business of the Issuer. The Company is not currently engaging in any
substantive business activity and has no plans to engage in any such activity in
the foreseeable future. In its present form, the Company may be deemed to be a
vehicle to acquire or merge with a business or company. The Company does not
intend to restrict its search to any particular business or industry, and the
areas in which it will seek out acquisitions, reorganizations or mergers may
include, but will not be limited to,
2
<PAGE>
the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields. The Company recognizes that the number
of suitable potential business ventures that may be available to it may be
extremely limited, and may be restricted to entities who desire to avoid what
may be deemed to be the adverse factors related to an initial public offering of
securities registered under the Securities Act of 1933. The most prevalent of
these factors include substantial time requirements, legal and accounting costs,
the inability to obtain an underwriter who is willing to publicly offer and sell
shares, the lack of or the inability to obtain the required financial statements
for such an undertaking, limitations on the amount of dilution to public
investors in comparison to the stockholders of any such entities, along with
other conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of their
prospects, would require the Company to issue a substantial number of shares of
its common stock to complete any such acquisition, reorganization or merger,
usually amounting to between 80 and 95 percent of the outstanding shares of the
Company following the completion of any such transaction; accordingly,
investments in any such private entity, if available, would be much more
favorable than any investment in the Company.
(1) Over the Counter Bulletin Board ("OTCBB"). Although the Company has not
communicated with any other entity with respect to any potential merger or
acquisition transaction, management has determined to file this Registration
Statement on a voluntary basis. Management intends to maintain itself for
quotations of its common stock on the OTC Bulletin Board of the National
Associates of Securities Dealers, Inc. ("NASD"), on which its common stock is
currently quoted. In order to have stock quotations for its common stock on the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ"), one of the requirements is that an issuer must have such securities
registered under the Securities and Exchange Act of 1934. Upon the effective
date of this Registration Statement, the Company's common stock became or will
become registered for purposes of the 1934 Act. Management believes that this
will make the Company more desirable for entities that may be interested in
engaging in a merger or acquisition transaction. To the extent that management
deems it advisable or necessary to maintain a quotation of its common stock on
any securities market, the Company will voluntarily file periodic reports in the
event its obligation to file such reports is terminated under the 1934 Act.
(2) Current Reports on Form 8-K. In the event that the Company engages in
any transaction resulting in a change of control of the Company and/or the
acquisition of a business by purchase, reorganization or merger, the Company
will file with the Securities and Exchange Commission a Current Report on Form
8-K. A filing on Form 8-K also contemplates the disclosure of financial
statements and information about the acquired venture, and may include such pro
forma financial information as may be material, meaningful and appropriate to
inform investors and others about any acquisition, transaction or change of
control involving this Issuer.
(3) Criteria for Acquisition Targets. Management intends to consider a
number of factors prior to making any decision as to whether to participate in
any specific business endeavor, none of which may be determinative or provide
any assurance of success. These may include, but will not be limited to an
analysis of the quality of the entity's management personnel; the anticipated
acceptability of any new products or marketing concepts; the merit of
technological changes; its present financial condition, projected growth
potential and available technical, financial and managerial resources; its
working capital, history of operations and future prospects; the nature of its
present and expected competition; the quality and experience of its management
services and the depth of its management; its potential for further research,
development or exploration; risk factors specifically related to its business
operations; its potential for growth, expansion and profit; the perceived public
recognition or acceptance of its products, services, trademarks and name
identification; and numerous other factors which are difficult, if not
impossible, to properly or accurately analyze, let alone describe or identify,
without referring to specific objective criteria.
3
<PAGE>
(4) Management's Experience in Target Evaluation. Management generally, and
Mr Sifford particularly, has substantial experience and expertise with analyzing
prospective business endeavors and will be the one to determine the viability of
a prospective business endeavor. Mr Sifford also serves as Managing United
States Director for Intrepid International S.A., a Panama Corporation, and as
Officer and Director of its United States subsidiary, Intrepid International
Ltd., a Nevada Corporation. Mr Laurencio Jaen O., is an Officer and Director of
the Panama Corporation. Intrepid International is a financial and corporate
services consultant to the Issuer, in the principal business of evaluating
possible target private businesses for possible acquisition, and providing, or
coordinating legal, professional and audit services for client companies.
Intrepid does not engage directly in fund rasing or capital formation, but
assists the Issuer in evaluating its due diligence with respect to capital
transactions and record keeping. In this case, both of the Officers and
Directors of this Issuer are Affiliates of Intrepid International
Further information about the Management of the Issuer, and also about
Intrepid International is found hereafter in this report. Particularly see Items
4 through 7 of this Part I.
(5) Inherent 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 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 and,
accordingly, may present a conflict of interest for such individuals.
The Company will not seek out a target company, but will use referrals from
previous business contacts for potential acquisition targets. Although the
Company has not identified any potential acquisition target, the possibility
exists that the Company may acquire or merge with a business or company in which
the Company's executive officers, directors, beneficial owners or their
affiliates may have an ownership interest. Current Company policy does not
prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
4
<PAGE>
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. It is not
anticipated that any such opportunity will be afforded to other stockholders. In
the event that such fees are paid, they may become a factor in negotiations
regarding any potential acquisition by the Company and, accordingly, may present
a conflict of interest for such individuals. Management may actively negotiate
or otherwise consent to the purchase of any portion of its common stock as a
condition to, or in connection with, a proposed merger or acquisition. In such
an event, the Company's remaining stockholders may not be afforded an
opportunity to approve or consent to any particular stock buy out transaction.
Although it is not formally prohibited by Company policy, it is not
expected that the Company will borrow funds in order to make payment to its
management, promoters or their affiliates or associates in connection with any
buy out transaction.
(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) Extremely Limited Assets; No Source of Revenue.. During the fiscal year
ended December 31, 1998 and the eight month period ended December 31, 1997, the
Company realized net losses of $29,777, 92,374 and $240 respectively, for the
fiscal years ended 1998, 1997 and 1996, and $5,160 for the eight months ended
August 31, 1999. The Company has accumulated a deficit of $127,631. In addition,
the Independent Auditors Report, for the Company's most recent audited financial
statements, mentions: "The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company is
dependant upon raising capital to continue operations.... 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.
(2) 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.
Although management intends to apply substantially all of the proceeds that it
may receive through the issuance of stock or debt to a suitable acquisition,
subject to the criteria identified above, such proceeds will not otherwise be
designated for any more specific purpose. The Company can provide no assurance
that any allocation of such proceeds will allow it to achieve its business
objectives.
5
<PAGE>
(3) 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.
(4) 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.
(5) 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.
(6) 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.
(7) 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. 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. See Part I, Item 2 of this Registration Statement.
(8) 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 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.
6
<PAGE>
By regulation or policy statement, several states place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing" registration
exemptions for secondary trading privileges and outright prohibition of public
offerings of such companies. In most jurisdictions, "blank check" and "blind
pool" companies are not eligible for participation in the Small Corporate
Offering Registration ("SCOR") program, which permits an issuer to notify the
Securities and Exchange Commission of certain offerings registered in such
states by filing a Form D under Regulation D of the Securities and Exchange
Commission. The majority of states have adopted some form of SCOR. States
participating in the SCOR program also allow applications for registration of
securities by qualification by filing a Form U-7 with the states' securities
commissions. Nevertheless, the Company does not anticipate making any SCOR
offering or other public offering in the foreseeable future, even in any
jurisdiction where it may be eligible for participation in SCOR despite its
status as a "blank check" or "blind pool" company. The National Securities
Markets Improvement Act of 1996 provides an exemption from state regulation of
offerings of "covered securities." "Covered securities" include, among other
things, transactions by persons other than issuers, underwriters or dealers, and
certain transactions by dealers, in securities of issuers that file reports with
the Securities and Exchange Act. Upon the effectiveness of this Registration
Statement, the Company became or will become subject to the reporting
requirements of Section 13 of the Exchange Act, and management believes that
such transactions will be exempt from state regulation, with the possible
exception of certain notice filings and payment of fees.
The net effect of the above-referenced laws, rules and regulations will be
to place significant restrictions on the Company's ability to register, offer
and sell and/or to develop a secondary market for shares of the Company's common
stock in virtually every jurisdiction in the United States. These restrictions
should cease once and if the Company acquires a venture by purchase,
reorganization or merger, so long as the business operations succeeded to
involve sufficient activities of a specific nature.
(9) 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).
(10) 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.
(11) 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.
(12) 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
7
<PAGE>
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.
(13) Conflicts of Interest; Related Party Transactions. Although the
Company has not identified any potential acquisition target, the possibility
exists that the Company may acquire or merge with a business or company in which
the Company's executive officers, directors, beneficial owners or their
affiliates may have an ownership interest. Such a transaction may occur if
management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A transaction
of this nature would present a conflict of interest to those parties with a
managerial position and/or an ownership interest in both the Company and the
acquired entity, and may compromise management's fiduciary duties to the
Company's stockholders. In addition, any remedy available under state corporate
law in the event that management's fiduciary duties are compromised will most
likely be prohibitively expensive and time consuming. An independent appraisal
of the acquired company may or may not be obtained in the event a related party
transaction is contemplated. Furthermore, because management and/or beneficial
owners of the Company's common stock may be eligible for finder's fees or other
compensation related to potential acquisitions by the Company, such compensation
may become a factor in negotiations regarding such potential acquisitions.
Members of management may also have and interest of office, form time to time,
in similar or other capacities for one or more other companies that may be
deemed to be "blank check" companies. In the event that a potential merger or
acquisition candidate is brought to management's attention, these other
relationships may present a conflict of interest. Management will attempt to
minimize such conflict by presenting a list of the various "blank check"
companies that are available for such a transaction and allowing management of
the candidate entity to select the company that best meets its needs. Factors
that differentiate such "blank check" companies from one another include, for
example, the state of incorporation (and, accordingly, the corporation laws to
which such company is subject); whether or not the company has filed a
Registration Statement on Form 10-SB and is subject to the periodic reporting,
proxy and other requirements of the 1934 Act; the authorized classes of stock
and number of shares; the number of shares issued and outstanding; the number of
stockholders; the amount and nature of any assets and liabilities; and whether
or not the company's securities are quoted on the OTC Bulletin Board of the
NASD. There are no current or proposed arrangements specifying the order in
which the Company and any other "blank check" companies will participate in any
business opportunity at such time as it may be identified.
(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. Management's present beneficial ownership
amounts to approximately 59.% of the outstanding voting securities of the
Company. 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
8
<PAGE>
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.
(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.
(d) 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.
(e) Principal Products and Services. The limited business operations of the
Company, as now contemplated, involve those of a "blank check" company. The only
activities to be conducted by the Company are to manage its current limited
assets and to seek out and investigate the acquisition of any viable business
opportunity by purchase and exchange for securities of the Company or pursuant
to a reorganization or merger through which securities of the Company will be
issued or exchanged.
(f) Distribution Methods of the Products or Services. Management will seek out
and investigate business opportunities through every reasonably available
fashion, including personal contacts, professionals, securities broker-dealers,
venture capital personnel, members of the financial community and others who may
present unsolicited proposals; the Company may also advertise its availability
as a vehicle to bring a company to the public market through a "reverse"
reorganization or merger.
(g) Status of any Publicly Announced New Product or Service. None; not
applicable.
9
<PAGE>
(h) Competitive Business Conditions. Management believes that there are
literally thousands of "blank check" companies engaged in endeavors similar to
those engaged in by the Company; many of these companies have substantial
current assets and cash reserves. Competitors also include thousands of other
publicly-held companies whose business operations have proven unsuccessful, and
whose only viable business opportunity is that of providing a publicly-held
vehicle through which a private entity may have access to the public capital
markets. Each of these entities may be deemed to present direct competition to
the Company in a search for a suitable merger or acquisition target. There is no
reasonable way to predict the competitive position of the Company or any other
entity in the strata of these endeavors; however, the Company, having limited
assets and cash reserves, will no doubt be at a competitive disadvantage in
competing with entities which have recently completed IPO's, have significant
cash resources and have recent operating histories when compared with the
complete lack of any substantive operations by the Company for the past several
years.
(i) Sources and Availability of Raw Materials and Names of Principal Suppliers.
None; not applicable.
(j) Dependence on One or a Few Major Customers. None; not applicable.
(k) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts. None; not applicable.
(l) Need for any Governmental Approval of Principal Products or Services.
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company engages in a merger or acquisition transaction with an
entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
(m) Effect of Existing or Probable Governmental Regulations on Business. The
integrated disclosure system for small business issuers adopted by the
Securities and Exchange Commission in Release No. 34-30968 and effective as of
August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority-owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more. The
Securities and Exchange Commission, state securities commissions and the North
American Securities Administrators Association, Inc. ("NASAA") have expressed an
interest in adopting policies that will streamline the registration process and
make it easier for a small business issuer to have access to the public capital
markets. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will substantially
limit the demand for "blank check" companies like the Company, and may make the
use of these companies obsolete.
(n) Research and Development. None; not applicable.
(o) Cost and Effects of Compliance with Environmental Laws. None; not
applicable. However, environmental laws, rules and regulations may have an
adverse effect on any business venture viewed by the Company as an attractive
acquisition, reorganization or merger candidate, and these factors may further
limit the number of potential candidates available to the Company for
acquisition, reorganization or merger.
(p) Number of total employees and full-time employees. None.
10
<PAGE>
- --------------------------------------------------------------------------------
Item 2. Managements Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
(a) Plan of Operation for the Next Twelve Months.
The Company has not engaged in any material operations or had any revenues
from operations during the past eight fiscal years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit the Company and its stockholders.
Because the Company has virtually no resources, management anticipates that to
achieve any such acquisition, the Company will 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 and expenses
associated with reviewing or investigating any potential business venture, which
expenses may be advanced by management or principal stockholders as loans to the
Company, and may 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.
While no assurance can be given when and if this Company will acquire
potentially profitable assets, management offers its guarded and cautionary
estimate, based on its intention, that a business combination will be identified
within the next twelve to eighteen months.
(b) Results of Operations.
The Company 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 $5,160 for the eight months ended August 31, 1999. The Company has
accumulated a deficit of $127,631, if calculated on pre-forward split numbers,
or $132,431 following the five for one forward split of July 14, 1999. The
reason for the difference in the resulting calculations is due to the fact that
the Issuer did not change the par value in connection with the forward split.
The funding of the payments that account for these deficits resulted
substantailly 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 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 Issuer's common stock for quotation on the OTC
Bulletin Board, and in contemplation of the preparation of this Registration
Statement.
(c) Liquidity.
The Company 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. Ordinarily any fees paid to management
in connection with any capital restructuring or corporate reorganization are
first used to pay liabilities. If there are no funds available, it is expected
that management would contribute these amounts to capital to pay these
11
<PAGE>
liabilities in hopes of enhancing the value of their stock ownership.
Alternatively, and 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, management is expected to advance those fees which are not
appropriate for settlement, compensation or reimbursement in stock.
- --------------------------------------------------------------------------------
Item 3. Description of Property.
- --------------------------------------------------------------------------------
The Issuer 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 President, David C.
Merrell, 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 Issuer. These uses have had the positive impact
of relieving the Issuer 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.
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>
J. Dan Sifford, Jr., President/Director 5,000,000 41.99 7,035,000 59.08
3131 Southwest Freeway
Suite 46
Houston, Texas 77098
============================================================================================================================
Laurencio Jaen O., Secretary/Treasurer/Director -0- -0- -0- 0.00
P. O. Box 8807
Panama City 5
Republic of Panama
============================================================================================================================
All Officers and Directors as a Group 5,000,000 41.99 7,035,000 59.08
============================================================================================================================
Intrepid International, S.A 345,000 2.90 7,035,000 59.08
P. O. Box 8807
Panama City 5
Republic of Panama
- ----------------------------------------------------------------------------------------------------------------------------
HJS Financial Services, Inc. 1,450,000 12.18 7,035,000 59.08
24843 Del Prado #318
Dana Point CA 92629
- ----------------------------------------------------------------------------------------------------------------------------
Anneius Equity Management Corp 240,000 2.02 7,035,000 59.08
34861 Spinnaker
Dana Point CA 92629
============================================================================================================================
Total Other 5% Owners 2,035,000 17.09
=========================================================================================
TOTAL ALL AFFILIATES 7,035,000 59.08
=========================================================================================
Total Shares Issued and Outstanding 7,035,000 59.08
=========================================================================================
</TABLE>
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 the
officers of this Issuer, and one or more officers of the other entities, such
that all are deemed to be affiliates of the issuer.
(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 Issuer. The Issuer 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
Issuer 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.
- --------------------------------------------------------------------------------
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 determined.
J. Dan Sifford, Jr., age 61, President/Director, 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
13
<PAGE>
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 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, Secretary/Treasurer/Director 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 Issuer, the Company has paid no cash
compensation to its officers or directors. Officers and directors of the Company
will be reimbursed for out-of-pocket expenses and may be compensated for the
time they devote to the Company 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
Company 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
Company. No options, plans or arrangements for deferred compensation, or future
compensation have been adopted and none are contemplated at this time.
- --------------------------------------------------------------------------------
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------------------------------
Intrepid International, S. A. ("Intrepid") 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 Company 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 Company sought a United States
Representative and entered into a relationship with a group of corporate and
business specialists who, after contracting with the Company, incorporated as
Intrepid International,
14
<PAGE>
Ltd. ("Intrepid US") to provide the required representation and agency for the
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.
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Panama Company since its inception in 1984, resides in Panama
City, Republic of Panama. His biography has been provided in Item 5 above.
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 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 Company 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.
Kirt W. James, 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.
J. Dan Sifford, Jr., Secretary-Treasurer of Intrepid US. His biography has
been provided in Item 5 above.
15
<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 Issuer 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:
<TABLE>
<CAPTION>
==========================================================================================================
PERIOD HIGH BID LOW BID PERIOD HIGH BID LOW BID
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3rd 1998 N/A N/A 1st 1999 4.25 2.00
- ----------------------------------------------------------------------------------------------------------
4th 1998 3.25 3.00 2nd 1999 5.375 2.00
==========================================================================================================
</TABLE>
The foregoing price information is based upon inter-dealer prices without
retail mark-up, markdown 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 Issuer.
(c) Dividends. No cash dividends have been paid by the Company 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 Issuer.
- --------------------------------------------------------------------------------
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 Issuer.
- --------------------------------------------------------------------------------
Item 4. Recent Sales of Unregistered Securities.
- --------------------------------------------------------------------------------
Provided in this Item are Recent Sales of Unregistered Securities: (a) The
date, title and amount of securities sold. (b) Principal Underwriters, if any.
If the small business issuer did not publicly offer any securities, identify 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 and the
total underwriting discounts or commissions. For securities sold other than for
cash, describe 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) If
the securities sold are convertible or exchangeable into equity securities, or
are warrants or options representing equity securities, disclose the terms of
conversion or exercise of the securities:
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
16
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Date Title Exemption Price Amount Cash
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 were the purchasers.
===================================================================================================================================
===================================================================================================================================
Date Title Exemption Price Amount Cash
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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.
===================================================================================================================================
===================================================================================================================================
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
Issuer, provided by a single financial and corporate service provider.
===================================================================================================================================
===================================================================================================================================
Date Title Exemption Price Amount Cash
- -----------------------------------------------------------------------------------------------------------------------------------
3/3/99 Common Stock Rule 504 $9,000.00 90,000 No.
- -----------------------------------------------------------------------------------------------------------------------------------
For Legal, Accounting and Professional services and advances to or for the
Issuer, provided by a single financial and corporate service provider.
===================================================================================================================================
===================================================================================================================================
Date Title Exemption Price Amount Cash
- -----------------------------------------------------------------------------------------------------------------------------------
3/31/99 Common Stock Rule 504 $0.10 6,600 $660.00
- -----------------------------------------------------------------------------------------------------------------------------------
Sold informally on an unsolicited basis to a single sophisticated investor, with
preexisting relationships to Management.
===================================================================================================================================
</TABLE>
On or about July 14, 1999, the Issuer 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.
17
<PAGE>
- --------------------------------------------------------------------------------
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 REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
18
<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.
<TABLE>
<CAPTION>
==============================================================================================
8/31/99 12/31/98 12/31/97 12/31/96
==============================================================================================
<S> <C> <C> <C> <C>
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
==============================================================================================
</TABLE>
If Post-Foreward Split numbers were used in the foregoing table, the
8/31/99 figures would have differed as follows:
<TABLE>
<CAPTION>
===========================================================================================
8/31/99 12/31/98 12/31/97
===========================================================================================
<S> <C> <C> <C>
Per Share Earnings
or (Loss) (0.00043) (0.00262) (0.0596)
- -------------------------------------------------------------------------------------------
Average Common
Shares Outstanding 11,908,000 11,080,000 7,905,000
===========================================================================================
</TABLE>
(b) Financial Statements.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
F-1 AUDITED FINANCIAL STATEMENTS for the years ended December 31, 1998, 1997, 1996
- ---------------------------------------------------------------------------------------------------------
F-2 UN-AUDITED FINANCIAL STATEMENTS for the eight months ended August 31, 1999
=========================================================================================================
</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.
19
<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
<PAGE>
[LETTERHEAD OF CROUCH, BIERWOLF & CHISHOLM]
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.
/S/ CROUCH, BIERWOLF & CHISHOLM
Salt Lake City, Utah
April 7, 1999
<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
stage) to
For the years ended December 31, 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
Eight Months ended August 31, 1999
- --------------------------------------------------------------------------------
<PAGE>
PROFESSIONAL RECOVERY SYSTEMS, INC.
BALANCE SHEETS (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended August 31, 1999
<TABLE>
<CAPTION>
December 31,
August 31, ----------------------
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) 240 400 640
--------- --------- ---------
Total Other Assets 240 400 640
TOTAL ASSETS $ 1,229 $ 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) (132,431) (127,271) (97,494)
--------- --------- ---------
Total Stockholders' Equity 1,229 5,729 35,506
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,229 $ 5,729 $ 35,506
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-2
<PAGE>
PROFESSIONAL RECOVERY SYSTEMS, INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended August 31, 1999
<TABLE>
<CAPTION>
December 31,
August 31, ---------------------------
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
Revenues $ -0- $ -0- $ -0-
Expenses
Amortization 160 240 240
Professional Fees 5,000 28,435 79,801
Travel 12,333
Miscellaneous expenses 1,102
------------ ------------ -----------
Total Expenses 5,160 29,777 92,374
============ ============ ===========
Net Income (Loss) $ (5,160) $ (29,777) $ (92,374)
Weighted average number of shares outstanding 11,908,000 11,080,000 7,905,000
Earnings (Loss) per Share $ (0.00043) $ (0.00269) $ (0.0569)
============ ============ ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-3
<PAGE>
PROFESSIONAL RECOVERY SYSTEMS, INC.
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 August 31, 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 August 31, 1999 (5,160)
-------------- -------- ------------ ----------- ------------
Balances August 31, 1999 11,908,000 11,908 121,752 (132,431) 1,229
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-4
<PAGE>
PROFESSIONAL RECOVERY SYSTEMS, INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
for the fiscal years ended December 31, 1997 and 1998
and the period ended August 31, 1999
December 31,
August 31, -----------------------
1999 1998 1997
--------- --------- ---------
Operating Activities
Net Income (Loss) $ (5,160) $ (29,777) $ (92,374)
Less items not effecting cash
flow (amortization) 160 240 240
--------- --------- ---------
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
========= ========= =========
The accompanying notes are an integral part
of these financial statements.
page F-5
<PAGE>
PROFESSIONAL RECOVERY SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
for the years ended December 31, 1997 and 1998
and the period ended August 31, 1999
1-FORMATION AND OPERATIONS OF THE COMPANY
Professional Recovery Systems, Inc. (the "Company") was incorporated on
August 24, 1995 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, 6,908,000 shares have been issued pursuant to
that offering and additional 504 offerings.
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, and which is being amortized on a straight line
method over a 60 month period. These costs will be recovered only if,
the Company is able to generate a positive cash flow from operations.
(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>
Professional Recovery Systems, Inc.
Notes to Financial Statements
for the years ended December 31, 19967 and 1998
and the period ended August 31, 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. 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
#
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
[2] Articles/Certificates of Incorporation, and By-Laws
- --------------------------------------------------------------------------------------------------------------------------
2.1 ARTICLES OF INCORPORATION: (Texas)
- --------------------------------------------------------------------------------------------------------------------------
2.2 ARTICLES OF INCORPORATION: (Nevada)
- --------------------------------------------------------------------------------------------------------------------------
2.3 ARTICLES OF MERGER: Change of Situs from Texas to Nevada
- --------------------------------------------------------------------------------------------------------------------------
2.4 ARTICLES OF AMENDMENT: (Nevada Name Change)
- --------------------------------------------------------------------------------------------------------------------------
2.5 BY-LAWS
- --------------------------------------------------------------------------------------------------------------------------
[3] INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS
- --------------------------------------------------------------------------------------------------------------------------
3 SPECIMEN CERTIFICATE: Common Voting Equity Stock
==========================================================================================================================
</TABLE>
<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.
NetBanx.com Corp
(formerly Professional Recovery Systems, Inc.)
by
/s/ J. Dan Sifford Jr. /s/ Laurencio Jaen O.
- ---------------------------------- ----------------------------------
J. Dan Sifford Jr. Laurencio Jaen O.
PRESIDENT/DIRECTOR SECRETARY/DIRECTOR
- --------------------------------------------------------------------------------
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.
Page 29
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
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 the 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 of
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 the
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 Page 32
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 Page 33
Professional Recovery Systems, Inc. and
Professional Recovery Systems, Ltd.
Plan of Reorganization and Merger
<PAGE>
ARTICLES OF EXCHANGE Page 34
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 Page 35
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 Page 36
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 Page 37
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 Page 40
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:
J. Dan Sifford 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 (l0) 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 (l0) 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
(l0) 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 lst 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 .
J.Dan Sifford
--------------------------------------------
J.Dan Sifford
President
- --------------------------------------------------------------------------------
Exhibit 3
Specimen Certificate: Common Voting Equity Stock
- --------------------------------------------------------------------------------
<PAGE>
NetBanx.com Corp.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
CUSIP NO 64108K 10 2
PAR VALUE: $0.001
Number Shares
COMMON VOTING STOCK COMMON VOTING STOCK
AUTHORIZED: 100,000,000 SHARES FULLY PAID AND NON-ASSESSABLE
THIS CERTIFIES THAT ____________________________________________________________
IS THE REGISTERED HOLDER OF ____________________________________________________
SHARES OF THE COMMON STOCK of NetBanx.com Corp., a Nevada Corporation,
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed. Witness the
facsimile Seal of the Corporation and the facsimile Signatures of its duly
authorized officers.
Not Valid Unless
Initialed by Transfer Agent
By Authorized Initial
MADISON STOCK TRANSFER, INC.
P.O. BOX 145
BROOKLYN NY 11229
J. Dan Sifford Jr. J. Dan Sifford
President Secretary
======================================
NetBanx.com Corp.
Corporate Seal
Nevada
======================================
